2004/05
GREENE KING PLC
ANNUAL REPORT GREENE KING ANNUAL REPORT 04/05
CONTENTS
HIGHLIGHTS OF THE YEAR 1
CHAIRMAN’S STATEMENT 3
FINANCIAL HIGHLIGHTS 7
CHIEF EXECUTIVE’S REVIEW 8
DIRECTORS’ BIOGRAPHIES 19
FINANCIAL REVIEW 20
CORPORATE AND SOCIAL RESPONSIBILITY 22
GROUP FINANCIAL RECORD 25
GROUP PROFIT AND LOSS ACCOUNT 26
BALANCE SHEETS 27
GROUP CASH FLOW STATEMENT 28
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 29
RECONCILIATION OF MOVEMENTS IN GROUP SHAREHOLDERS’ FUNDS 29
NOTE OF GROUP HISTORICAL COST PROFITS AND LOSSES 29
ACCOUNTING POLICIES 30
NOTES TO THE ACCOUNTS 31
DIRECTORS’ REPORT 47
DIRECTORS’ REMUNERATION REPORT 50
CORPORATE GOVERNANCE 58
INDEPENDENT AUDITORS’ REPORT 64
SHAREHOLDER INFORMATION 65
2004/05 HIGHLIGHTS OF THE YEAR
▲ Turnover +33 per cent to £732.6 million
▲ Profit before tax, goodwill and exceptionals 
+14 per cent to £94.0 million
▲ Adjusted earnings per share +14 per cent to 91.5 pence
▲ Excellent Pub Company trading profit increase at +65 per cent
▲ Average sales per managed pub up by 3 per cent
▲ Acquisition of Laurel Neighbourhood business 
successfully integrated
▲ Strong increase in profits of Brewing Company at +11 per cent
▲ Greene King IPA now the number one
cask beer brand in the UK
▲ Pub Partners trading margin +1.6 per cent
▲ Innovative refinancing undertaken at attractive interest rates
▲ Earnings per share have increased by more than 
10 per cent per annum compound over the last eleven years
▲ +10 per cent increase in dividends per share
GREENE KING ANNUAL REPORT 04/05 1 2 GREENE KING ANNUAL REPORT 04/05 Chairman
I would like to begin by paying tribute to
David McCall, who retired on 1 May
2005 after ten years as the chairman of
the company. Personally, I count myself
very fortunate to have served under
him. He was highly supportive of me in
my role as chief executive and has led
the company and the board with great distinction. We have all
come a long way together in the last decade and have done so
with a very happy board of directors under David’s leadership. Our
thanks are due to him in great measure and we will miss the
invaluable mixture of his cheerful style and shrewd business
sense. I am sure that he will be a hard act to follow and we all wish
David the very best in his retirement.
Results
I am delighted to be reporting on another year of strong profit
growth for the fifty-two weeks ended 1 May 2005. Our three
trading divisions have all played their part in producing these
record results and we have also benefited from the first 39 weeks
of trading contribution from our acquisition of the Laurel
neighbourhood estate. Turnover for the year was up 33 per cent
to £732.6 million and trading profit increased by 39 per cent to
£155.7 million. Our profit before tax, goodwill and exceptional
items rose by 14 per cent to £94.0 million and adjusted earnings
per share by 14 per cent to 91.5 pence. We have increased our
earnings per share by more than 10 per cent per annum
compound over the last eleven years.
Laurel acquisition
We acquired the 432 pubs which made up the Laurel
neighbourhood estate for £654 million last summer, completing
the deal on 6 August 2004. The integration process, named ‘The
best of both worlds’ to reflect our aim of recognising and retaining
the particular operational strengths of both our own Pub
Company and Laurel, was completed very successfully in
February, ahead of schedule. We have been able to transfer 117
pubs from Pub Company to our Pub Partners division as a result
of the Laurel deal, which has further helped to improve the quality
of our pub estate.
Dividend
The board recommends a final net dividend of 25.85 pence per
share, which will produce an increase of 10 per cent in the total
net dividend for the year to 36.3 pence per share. The final
dividend, if approved, will be paid on 12 September 2005 to those
shareholders on the register at the close of business on 5 August
2005.
Finance
We have a very strong balance sheet which is backed by our
extensive freehold pub assets and highly positive free cash flow.
This allowed us to finance the Laurel acquisition by raising extra
debt rather than having to resort to the more costly option of
issuing more equity. At the year-end our debt stood at £1020.2
million, equivalent to a debt to equity ratio of 149 per cent and an
interest cover multiple of 2.5 times, figures with which we feel very
comfortable. 
CHAIRMAN’S STATEMENT
GREENE KING ANNUAL REPORT 04/05 3 4 GREENE KING ANNUAL REPORT 04/05
CHAIRMAN’S STATEMENT
Securitisation
The initial funding for the Laurel deal was
arranged through a short-term bank
loan, with the intention that we would
renegotiate this quickly into a mixture of
securitised debt and a medium term
bank loan. We subsequently raised
£600 million through a securitisation
package, against 904 managed and
tenanted pubs, at very advantageous
terms and £450 million from a 5 year
bank loan. This complemented funding of £150 million already in
place. The re-financing exercise was completed in March 2005.
Assets
We sold 51 properties during the year, consisting of a mix of non-
strategic managed houses unsuitable for conversion to tenancy or
lease, non-sustainable smaller tenanted pubs, a few short
leasehold properties and some unlicensed properties. The asset
sales totalled £45.6 million, on which we made a surplus of £13.4
million over book value. 
Pub Company
Our managed house division began the year trading through 528
pubs. Pub Company then became the main beneficiary of the
Laurel acquisition and spent about six months in a climate of
considerable change, with the heavy responsibility of managing
the integration process. This was completed very successfully and
at the year-end, after a number of transfers to Pub Partners and
selective sales, Pub Company was running 820 managed houses.
The trading results were very solid, with positive like for like sales
and an increase in the trading profit margin across a much larger
business.
Pub Partners
Our tenanted and leased division started the year with 1153 and
finished with 1244 pubs after receiving the Pub Company transfers.
Their key task was to find the best possible new tenants and
lessees for the transferred pubs in considerable numbers within a
fairly short space of time. This has been done and the trading profit
for the division was well ahead of last year, not merely in quantum,
but in terms of average trading profit per pub.
Brewing Company
Our brewing division has had another great year and the reputation
of our own-brewed ale brands spreads ever wider.  Greene King IPA
became the biggest selling cask ale in Britain during the year, while
both Old Speckled Hen and Abbot Ale have seen their sales volumes
increase too. The fastest growing markets for us were our national
account sales to other pub groups and our take home sales to
supermarkets, but we also sold more beer through the independent
free trade and export markets. The trading profit and its percentage
margin to turnover have increased again.
Non-executive directors
Graham Greene retired from the board at last year’s AGM and we
included a valediction to him in our 2004 report. In March 2005
we were pleased to welcome Jane Scriven to our board as a non-
executive director. She was a director of Geest plc for the last 9
years running their continental European operations and is also a
qualified solicitor.  We believe she will be a great asset to us.
Since the year-end, we are equally pleased to have been joined by CHAIRMAN’S STATEMENT
GREENE KING ANNUAL REPORT 04/05 5
John Brady as our fifth non-executive director. He has been a
consultant with McKinsey & Co for twenty-four years and we look
forward to benefiting from his extensive marketing and retailing
experience.
People
This has been another great year for the company and I want to
thank our employees and licensees very much for their skill, hard
work, commitment and loyalty which have made it possible. We
have welcomed large numbers of people from Laurel into Greene
King and we respect the special talents which they have brought
to us, just as we hope that they will benefit from being part of a
fully integrated company with three increasingly profitable trading
divisions. Together we are stronger and we all look forward to the
future with confidence.  
Tim Bridge
Chairman
5 July 2005 6 GREENE KING ANNUAL REPORT 04/05 FINANCIAL HIGHLIGHTS
FOR THE FIFTY-TWO WEEKS ENDED 1ST MAY 2005
EBITDA (£m)
40
50
60
70
80
90
100
2001 2002 2003 2004 2005
80
100
120
140
160
180
200
2001 2002 2003 2004 2005
ADJUSTED EARNINGS PER SHARE (p) DIVIDEND PER SHARE (p)
20
30
40
2001 2002 2003 2004 2005
TURNOVER (£m)
70
90
110
130
150
2001 2002 2003 2004 2005
350
450
550
650
750
2001 2002 2003 2004 2005
TRADING PROFIT BEFORE GOODWILL
AND EXCEPTIONALS (£m)
PROFIT BEFORE TAX, GOODWILL
AND EXCEPTIONALS (£m)
50
60
70
80
90
100
2001 2002 2003 2004 2005
GREENE KING ANNUAL REPORT 04/05 7 8 GREENE KING ANNUAL REPORT 04/05
CHIEF EXECUTIVE’S REVIEW
I am pleased to announce another year
of record results for the company, further
building on our 30 year track record of
uninterrupted, profitable growth. All
three of our trading divisions performed
well growing revenue and trading profits,
benefiting from 39 weeks trading from
the Laurel Neighbourhood acquisition. In
2004/05, Greene King plc delivered +33% revenue growth and
+39% trading profit growth. These results demonstrate the high
quality of our assets, our brands and the calibre and commitment
of our people.  
Strategy
The results have been achieved by executing a clearly proven
strategy to deliver shareholder value. Our emphasis is on
achieving organic growth, supplemented by a prudent
acquisition strategy, through three, horizontally integrated trading
divisions. The integrated model provides us with financial and
operational synergies, as well as the opportunity to share
intellectual capital across the group. It allows flexibility to transfer
pubs between our two estates, helping to maximise the returns
on our assets, as well as giving us balance and an element of
natural hedging.  
All three divisions are characterised by being highly focused
operations with an overriding commitment to the delivery of
quality and service to the customer. The businesses are
underpinned by the quality of our assets and brands, and a clearly
able and motivated team. They are positioned to trade
successfully without employing low pricing or discounts as the
primary competitive tool. We prefer to target discerning
customers who demand a differentiated, quality offer. We have
positioned ourselves by:
• Operating in, and revitalising, traditional sectors of the
hospitality and drinks markets
• Raising the quality of our assets via focused investment
• Marketing brands which possess a strong consumer appeal
• Nurturing our talent pool and constantly developing our unique
culture
• Targeting our businesses on achieving sustainable investment
returns.
The consistency of this strategy, and its execution, has enabled us
to achieve well above average earnings per share and dividend
growth over many years and provides significant scope for future
increases in shareholder value.
Laurel Neighbourhood Pubs
The acquisition of Laurel’s Neighbourhood Business for a
consideration of £654 million was completed on 6 August 2004.
The Laurel estate is made up of 432 high quality, well-invested
and largely freehold pubs that are focused on community and
traditional town locations.  These pubs complement our existing
operations well and are delivering benefits to all three of our
operating divisions.
In Laurel, we acquired excellent pub assets, led by a strong
management team, sector-leading operating systems and a very
good cultural fit.  The opportunity for us, therefore, was to extract
the best practices and systems from both Greene King Pub
Company and Laurel, and then roll these out across the combined
business.  This was more important to us than achieving a more CHIEF EXECUTIVE’S REVIEW
rapid integration by imposing purely Greene King practices on
Laurel, although we were still able to complete the integration
ahead of schedule in February 2005.  As a result, we developed
the ‘best of both worlds’ strategy which has enabled us to
significantly improve, amongst other things, the planning and
execution of our promotions, the communication process
between our pubs and our managers and the quality of our liquor
and food offer across both estates.  We remain on track to
achieve £6 million of synergies within our first full year of
ownership, a testament to both the strategic and financial logic of
this quality acquisition.
At the time, the deal was funded with a short-term debt facility.
Since then, however, we have developed our debt strategy to
allow the company the financial flexibility to continue to invest for
future growth whilst taking advantage of longer-term and lower-
cost bond finance.  On 2 March 2005, we announced a £600
million bond issue that received an excellent response from
investors leading to very attractive interest rates.  The highly
innovative bond was securitised on just under half of the pub
estate, including both managed and tenanted formats, so that
we could retain the ability to transfer pubs between the two.
Through this re-financing, we have been able to save around £6
million a year in interest costs and enhance total returns to
shareholders.
Pub Company
Pub Company, our managed house division, reported an increase
in turnover of 50% to £495.9 million and an increase in trading
profit of 65% to £93.8 million.  As a result of the Laurel acquisition,
the average number of pubs trading during the period increased
from 551 to 801.  
GREENE KING ANNUAL REPORT 04/05 9
After the year end, in July 2005, we announced the
acquisition of Ridley's the Essex brewer.  Ridley's has a high
quality pub estate, some popular ale brands and a sound
local free trade business. The business is ideally located in a
strongly developing part of the country which is close to the
centre of our operations. We are delighted with the purchase
and believe Ridley's will benefit from Greene King's scale
and investment and our expertise in managing an integrated
tenanted and brewing business.  Some of the brands we will
continue to brew include Old Bob and Tolly Original. 10 GREENE KING ANNUAL REPORT 04/05 CHIEF EXECUTIVE’S REVIEW
GREENE KING ANNUAL REPORT 04/05 11
Our total like-for-like sales were up 1.7%.  This figure includes a
total of 398 pubs, all of which were in the estate at the start of the
year ended May 2004.
Both Pub Company and Pub Partners benefit from our ability to
transfer pubs between the two divisions, thereby enabling us to
maximise the profitability in each individual pub. During the year,
we transferred 117 outlets from Pub Company into the separate
division that was set up following the acquisition of Laurel.  These
pubs were smaller than our managed estate average and, in an
industry environment of rising overheads driven by external and
regulatory cost, their earnings fell below the threshold needed to
sustain this model. Conversely, their transfer into tenancies puts
them at the upper end of Pub Partners’ estate, providing a very
good business for the right tenants and a stronger, more
sustainable profit stream for the company. Over the year, the total
size of the Pub Company estate increased by 292 pubs to 820.
The average sales per pub increased by 3% and the average
trading profit per pub was up 13%. Trading margins improved 1.7
percentage points to 18.9%. This strong improvement in margin
was achieved by improved sourcing arrangements and tighter
product mix management.
During the year, we continued our strategy of effective capital
expenditure in our estate and invested £31.0 million in the
development of our estate. We further improved both the
targeting and execution of capital investment and, as a result, we
have been able to bring down the average spend per pub without
compromising on the final result. Consequently, the returns that
we achieved on this investment increased to 16%.
Pub Company continued its focus on improving the customer
offer and service. During the year, we launched a state of the art
system that allows house managers to promote activities tailored
specifically to their local markets. This system then enables all our
managers to share these initiatives, helping to increase levels of
best practice and drive organic growth. Ten new food menus were
also launched to ensure we remain at the forefront of consumer
tastes. The focus of these is on high quality, healthy food at
reasonable prices. Examples of our new dishes include smoked
haddock fishcakes and porcini mushroom risotto.
Pub Company is run in four divisions; Hungry Horse, Real Pubs
North and South, Town Local and Inns.
Hungry Horse is our only overtly branded format and the pubs are
mainly located in urban communities.  The outlets retain individuality
but are linked by the ‘Hungry Horse’ branding and great value food
menus.  The brand, which we acquired as part of the Magic Pub
Company in 1996, is a considerable success with consumers and
was recently named ‘Pub Retail Food Brand of the Year’ at the
Publican Awards.  At the year-end, we had 135 Hungry Horse outlets.
Following the acquisition of Laurel, we implemented an initiative to
classify the range of Real Pub sites in order to help streamline our
Trading Trading Trading
Pub Turnover profit profit change profit margin
Company (£m) (£m) (%) (%)
2004 331.6 56.9 +4 17.2
2005 495.9 93.8 +65 18.9 12 GREENE KING ANNUAL REPORT 04/05
CHIEF EXECUTIVE’S REVIEW
marketing and site development
processes going forward. The exercise
has helped us to identify a number of
formats or models that can be introduced
to other houses within this division and
include:
• Quality Local: a more upmarket pub
offer offering a traditional, quality 
pub feel
• Champion: a concept retained from
Laurel with a sport/activity-led offer
trading to a local community   
• M Series: a more modern interpretation of a community local
business providing appeal across the age-range.
Real Pubs continued to have a strong focus on sporting events
and are predominantly located at the heart of the communities in
which they are situated. These pubs operate more successfully
and efficiently without a collective branding. During the year we
introduced business models to help our managers clearly define
areas within our pubs where customers can play or watch sport
helping to increase the number of customers and profitability. 
Over the course of the year, we changed the name of our High
Street division to Town Local. The change reflects the more
traditional town image of the majority of our properties with very
few being on the competitive high street.  Inns, our fourth division,
is made up of traditional coaching inns and hotels that provide
accommodation, and a strong emphasis on high quality food and
a wide range of wines and cask ales. During the year we
implemented accommodation workshops for all hotels to teach
the latest techniques in driving room and yield management as
well as a new booking system allowing us to improve the
utilisation of room stock.
Pub Company’s success relies on its ability to attract customers and
provide them with an overall experience to ensure that they return.
Our strategy hinges on giving those who understand their customers
the best – our house managers – the flexibility to run their pubs in a
way that meets the expectations of the customers whilst, at the same
time, maximising the returns for our business.  This ability to harness
the talent and enterprise of our managers whilst maximising the
benefits of our scale is a key factor in our success.
Pub Company divisions Number of Number of 
outlets at outlets at 
2 May 2004 1 May 2005
Hungry Horse Branded pubs 137 135
with great value 
food business
Real Pubs Unbranded 129 357
community pubs
Town Local Unbranded town 127 171
centre and town
local pubs
Inns Mix of inns with 135 157
rooms and destination 
food businesses
T otal 528 820 CHIEF EXECUTIVE’S REVIEW
GREENE KING ANNUAL REPORT 04/05 13
Pub Partners
Pub Partners, our tenanted and leased pub business, delivered
another strong performance.  Turnover was up 8.8% to £125.1
million.  Trading profit increased by 13.0% to £54.0 million with
trading margins that improved by 1.6 percentage points to 43.2%.
Volume sales of beer increased by 2.5%, wines and spirits by
4.7% and soft drinks fell by 2.4%.
Pub Partners began the year with 1153 pubs.  During the period,
we transferred 84 pubs from Pub Company and 33 from the
Laurel acquisition and made one individual acquisition. A total of
27 outlets were sold during the year. At the year-end we had 1244
tenanted and leased properties.  Average trading profit per pub
increased by 8% based on an average number of pubs during the
period of 1187.
The capital investment in our estate totalled £10.4 million of which
£4.5 million related to property improvements and £5.9 million to
maintenance capital. In addition we spent £3.8 million on property
repairs through the revenue account. The improvement capital was
spread between 42 pubs at an average of £107k each. The returns
on investment remained strong.
We offer a number of different agreements to ensure the right
match for both the individual pub and lessee.  We do, however,
The industry leading Pub Partners “Extranet” ensures that
Greene King licensees have a clear advantage over their
competitors.  The “Extranet” is the most comprehensive
resource tool of its kind providing 24/7 access to legislation,
advice and business building support as well as
performance and trading information specific to each pub.
Trading Trading profit Trading profit
Pub Turnover profit change margin
Partners (£m) (£m) (%) (%)
2004 115.0 47.8 +9 41.6
2005 125.1 54.0 +13 43.2 14 GREENE KING ANNUAL REPORT 04/05
CHIEF EXECUTIVE’S REVIEW
differ from many other industry
operators in that, for the majority of our
pubs, we prefer shorter, non-assignable
tenancies to longer assignable leases.
The shorter tenancy is a better fit for our
high quality and well invested
community pubs and provides a
number of advantages for both our
tenants and ourselves.  For the tenants,
it allows a lower cost of entry and
commits us to sharing the costs of
maintaining the building. The main
benefit for us is that we retain the role of recruiting a new tenant if
our existing one decides to leave. These shorter tenancies
accounted for 78% of our estate.  The balance of the agreements
are longer–term assignable leases. These play an important role in
attracting talented lessees to those pubs where there is a higher
entry cost because they are more food-led or include letting
accommodation. Many of the original Old English Inns would fall
into this category.
The ability of our tenants and lessees to run successful businesses
is fundamental to Pub Partners’ performance. As a result, we have
focused on providing the very best information and infrastructure to
licensees. Our industry-leading support package has been
designed to add value to all areas of their businesses including
online systems to give them valuable customer information that they
need to maximise their takings; initiatives to protect them from
growing regulatory costs, and significant marketing support.  During
2004, we were proud to win the British Institute of Innkeeping’s
NITAS Award for best licensee induction programme, which was
deemed by the judges to be a ‘role model for the industry’. 
Pub Partners set up a specialist team that, following six months of
planning and preparation, has worked on behalf of all our tenants
and licensees to tackle the problems associated with the recent
licensing reforms. The team produced and distributed a full
briefing pack to them all, as well as visiting each one to help them
complete the premises’ licence and to give advice on how to
complete their personal licence application form. Pub Partners
invested a total of over £1.5 million in this initiative and has saved
each of our tenants and licensees up to £2.5k.
Pub Partners has updated its ‘Share and Save’ buying brochure
which now includes over 50 suppliers offering licensees discounts
and saving them between 10%-20% against trade prices across
all product areas. We have also introduced ‘Starline’, a dedicated
maintenance and repair customer service line to ensure tenants
can report issues as they occur and receive a fast and effective
response. This new service is achieving over 98.2% response rate
to tenant calls and continues to be seen as one of the
cornerstones of our support package. We have further enhanced
our product and marketing support with the launch of the
‘Business Builder Toolkit’, in addition to our seasonal and monthly
sales building offers. Finally an enhanced pub investment package
was launched, designed to make it easier for the tenant to plan
how they might develop and improve their facilities in the future. 
Pub Partners’ success is built on attracting the best tenants to its
high-quality pubs and helping them to develop their businesses
with an industry-leading support package.  We will continue to
invest in all aspects of our operations and are confident of a
profitable future for both our tenants and our company.  CHIEF EXECUTIVE’S REVIEW
GREENE KING ANNUAL REPORT 04/05 15
Brewing Company
Brewing Company produced another strong performance.  Total
own-brewed volume grew by 3% and this was achieved at
maintained prices in an overall cask ale market that declined by
4% in volume.  All of our brands performed strongly with volume
sales of Greene King IPA up by 4%, Old Speckled Hen by 6% and
Abbot Ale by 4%. The performance of our brands led to an
increase in turnover of 5.2% to £111.6 million. Trading profit grew
by 10.6% to £17.8 million with an increase to the trading margin
of 0.8 percentage points to 15.9%.
2004 was an historic year for the company. Greene King IPA won
gold in the Champion Beer of Britain Awards and soon afterwards
(according to AC Nielsen) overtook Tetley’s Bitter to become the
Number One cask beer brand in the UK. These are fantastic
achievements. They are testament to the pride shown in the
brand by members of the Brewing Company team, and to the
hard work they have put into product quality, marketing and sales.
Overall, our share of the UK cask ale market increased by 0.7
percentage points against a market that continues to show
decline of around 4% per year.  According to data from AC
Nielsen, Abbot Ale continues to be the number one premium cask
beer in the South East. Old Speckled Hen further cemented its
In August 2004, Greene King IPA won Gold in the bitter
category of the Champion Beer of Britain Awards. We 
have always been proud of the beer, and this tremendous
accolade from CAMRA was a welcome endorsement. 
Our focus on quality and consistency over the past few
years means that our beer is the best it ever has been and
this is reflected in the continued sales growth of all our
brands. In spring 2005 Abbot Ale won a silver award and
was the highest placed English beer in the prestigious
International Beer Competition.
Trading Trading profit Trading profit
Brewing Turnover profit change margin
Company (£m) (£m) (%) (%)
2004 106.1 16.1 +21 15.2
2005 111.6 17.8 +11 15.9 16 GREENE KING ANNUAL REPORT 04/05
CHIEF EXECUTIVE’S REVIEW CHIEF EXECUTIVE’S REVIEW
GREENE KING ANNUAL REPORT 04/05 17
position as the number one premium ale brand in the multiple
grocery market, selling 11.4 million bottles this year.
The sale of our brands in all four external channels continued to
perform well. These represent the independent free trade, on-
trade national accounts, the take home trade and exports. During
the year, sales to these channels accounted for 79% of total own
brewed sales and highlights the continued demand for our
premium cask ales.
The effective advertising and marketing of our brands played an
important role in developing customer appeal, whilst supporting
our position at the premium end of the market. We remain the
largest advertiser of cask ale in the United Kingdom, successfully
launching new advertising campaigns for Greene King IPA and
Abbot Ale. Other marketing initiatives have included an Abbot Ale
Perfect Pub competition that attracted over 10,000 entries, the
Promotion of Six Nations Rugby and the continued support of the
Wasps and Laurence Dallaglio.
There were significant developments with our ‘Beer to Dine For’.
This innovative beer was launched in 2003 as part of our campaign
to encourage people to drink beer with their meals. As a result of
successfully positioning the beer with a stylish and contemporary
image and of promoting it through experiential marketing activity,
the brand now sells in over 40% of UK supermarkets, including
Tesco, who, during the year, added this unique beer to its range of
Greene King products.
Further successful promotions designed to widen our consumer
base included the March 2005 launch of the national ‘Beer with
Food Week’ in partnership with the Morning Advertiser, activity with
the All Parliamentary Beer Group and the BBC Good Food Show. 
The brewery at Bury St Edmunds continued to run at maximum
efficiency and is currently at 95% capacity on a two-shift system.
Running the brewery in this way means we do not have to resort
to lower margin contract brewing. Capacity can be increased
when necessary and at minimal cost. We have planning
permission for additional fermenting vessels and we have started
to run trials on the introduction of a third shift.
Brewing Company continuously strives to have the best brands,
products and customer service in the sector. The progress that
we have made in all of these areas brings us closer to realising our
ambition of being Britain’s Best Beer Business.
Industry Challenges
Applications under the Licensing Act 2003 for all of our pubs, in both
estates, will be submitted by the end of July 2005. This is in advance
of the August deadline. The trading hours in the majority of our pubs
will not change substantially but, where there is specific customer
demand, we do expect to benefit from minor extensions to existing
trading hours. In the November 2004 White Paper, the Government
set out its proposals for a ban on smoking in public places at the end
Market share Greene Greene
King King
2004 2005
(%) (%)
On-trade cask ale – Great Britain 11.4 12.1
Take home trade – Great Britain
-   Ale 8.0 9.0
-   Premium bottled ale 15.1 15.6
(Source:  AC Nielsen, Grocery Multiples, 11/06/05, MAT value) 18 GREENE KING ANNUAL REPORT 04/05
CHIEF EXECUTIVE’S REVIEW
of 2008. Consultation for these proposals continues but, in the mean
time, our planning is already at an advanced stage.  This is built on
our commitment to providing all of our customers – non-smoking
and smoking – with continued choice and a memorable experience,
as well as ensuring a healthy working environment for our staff.  Our
estate is weighted towards food-led and family-orientated pubs and
these are perceived to be at less risk from the ban.
Within Pub Company, both smoking at the bar and back of house
will be removed from all of our pubs by the end of 2005.  We are
also committed to increasing the overall non-smoking floor space
going forward.  At the same time, 83% of our managed pubs have
external space that will enable us, with limited investment, to
provide an attractive environment for smokers after the ban is
introduced.  So far in 2005, we have invested in 80 outlets and we
will be continuing this initiative in the current financial year.  
In Pub Partners, our tenants and lessees will decide how best to
respond to the proposed ban in the context of their own businesses.
As with our managed pubs, this estate has a high proportion of outlets
with external space at 89%.  We expect to begin consultation in
October 2005 to support our tenants in advance of the smoking ban
and to explore relevant capital investment in their sites.
Lastly, there has been considerable recent attention on responsible
drinking and this has focused on promotional activity and issues
surrounding city centre pubs, in particular.  We are not at the
forefront of this debate because very few of our pubs are on the high
street and we do not use pricing as a primary competitive tool.
However, this has not distracted us from our ongoing commitment
to running a responsible and sustainable business. In Brewing
Company, the message ‘Please take as much care enjoying our
beers as we do brewing them – Drink Sensibly’ will be on all of our
packaging by the autumn.  In Pub Company, we have strict
guidelines to ensure that alcoholic drinks are marketed and priced
appropriately, supported by extensive training programmes for our
employees.  These efforts were rewarded during the year when
Greene King Pub Company was named as a finalist in the Morning
Advertiser, Responsible Retailing Awards.
Prospects
Last year was one of significant progress for the group leading to
record results. The acquisition of Laurel, its successful integration
and an improved funding structure have made Greene King a
stronger business. 
Trading in the current year has begun well for all three of our
divisions and is in line with expectations. In the first eight weeks,
total like-for-like sales in Pub Company, excluding the Euro 2004
effect, were up by 1.9%. In Pub Partners, beer sales have
improved by 8.0% and Brewing Company's total beer sales by
volume have improved by 3.0%. We have a proven strategy that
delivers value for our shareholders and there are exciting
opportunities to deliver further growth in the future
Rooney Anand
Chief Executive
5 July 2005 DIRECTOR’S BIOGRAPHIES
1 Tim Bridge, DL
Non-executive chairman (56). Joined the company in 1970 and
was appointed to the board in 1977. Became managing director in
1990, chief executive in 1994 and chairman in May 2005.
2 Rooney Anand
Chief executive (41). Joined the company from Sara Lee and
was appointed to the board as managing director, Brewing
Company, in 2001. Appointed as chief executive in May 2005.
3 Mark Angela
Managing director, Pub Company (41). Joined the company
from Colgate-Palmolive and was appointed to the board in 2004.
4 Alan Bowkett
Independent non-executive director (54). Appointed to the
board in 1993. Former chief executive of Berisford plc, now
chairman of Doncasters Group plc and Britax Group plc and a
director of Metzeler APS S.A..
5 John Brady
Independent non-executive director (53). Appointed to the
board in June 2005. Director of McKinsey and Company until
2004, having led their European retail and marketing practices. 
6 David Elliott
Managing director, Pub Partners (51). Joined the company
from Scottish & Newcastle Retail and was appointed to the
board in 1998. 
7 Norman Murray
Independent non-executive director (57). Appointed to the
board in 2004. Chairman of Cairn Energy plc and a non-
executive director of Robert Wiseman Dairies plc. Currently Vice
President of the Institute of Chartered Accountants of Scotland.
8 Howard Phillips
Senior independent non-executive director (64). Appointed to
the board in 1998. Former chief executive of Perkins Foods plc
and Golden Wonder Limited.
9 Jane Scriven
Independent non-executive director (45). Appointed to the
board in March 2005. Until recently a director of Geest plc
responsible for their continental European operations and
formerly a solicitor with Norton Rose.
10 Michael Shallow, FCA
Finance director (50). Joined the company from Kingfisher and
Accenture and was appointed to the board in 1991.
GREENE KING ANNUAL REPORT 04/05 19
6
1
7
2
8
3
9
4
10
5 20 GREENE KING ANNUAL REPORT 04/05
Adjusted earnings per share grew
strongly again this year, this time by 14%
and we increased the dividend again by
10%. This extends to eleven years our
record of increasing both comparable
earnings per share and dividends per
share at a rate in excess of 10% per
annum on average, as shown above.
Treasury
As a result of the acquisition of the Laurel Neighbourhood estate,
debt increased from £446.6m last year to £1,020.2m this. Sound
financing has been put in place to provide funds over the long-term
at fixed, competitive, rates of interest. 
Firstly £600m gross (£593.1m net) of 30 year securitised bond
finance was raised at a highly competitive overall fixed blended
rate of 5.6%. This finance is supported by the cashflows and
assets of slightly less than half our freehold pub estate. These
pubs were transferred to a new set of group companies to provide
ring-fenced security for the bond holders and other debt
providers. Secondly we arranged a £450m 5 year syndicated
bank facility against which £288.6m was drawn at the year-end.
This was swapped into a blended fixed rate of 6.3%. Finally we
have retained £149.7m of other earlier debenture and loan
financing at a fixed blended rate of 7.3%. 
We believe this combination provides us with the security of long-
term financing, competitive rates of interest and the flexibility we
need to take the business forward as opportunities arise. Our
fixed charge cover, which compares our income with our interest
and rent obligations, stood at 2.5 times. We believe this
demonstrates that we continue to have the financial strength to
support selective acquisitions where opportunities arise as well as
to buy back shares, where they do not. The aim remains to use
the power of our treasury to support growth in shareholder
income, taking carefully judged levels of risk.
Goodwill and exceptional items
The amortisation of goodwill and effect of exceptional items have
again been separated out in order to present the underlying
performance of the business. The amortisation of goodwill
amounted to £13.1m, the cost incurred this year integrating the
Laurel Neighbourhood business amounted to £7.3m, the cost of
terminating earlier loan facilities and interest rate swaps amounted
to £14.2m, whilst the profit arising from the disposal of surplus
property assets amounted to £13.4m. 
Taxation
The underlying tax charge, including deferred tax, amounted to
£28.6m, which represented 30.4% of  adjusted profits. The full tax
charge however was reduced due to £6.5m of credits relating to
exceptional items and a £3.4m credit arising following the
agreement of tax losses not previously recognised. Actual tax
payments amounted to just £9.5m, reduced as in previous years
by capital allowances exceeding depreciation.
100
90
80
70
60
50
40
30
20
10
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Comparable EPS
Dividends
Pence
FINANCIAL REVIEW New international accounting standards
The new international accounting standards apply from the
2005/06 financial year. There is likely to be little impact on our
adjusted profit and loss account as only small changes will be
made with regard to share option and pension costs, which
largely offset each other. There will, however, be a larger impact
on our total profit and loss account as goodwill amortisation,
which this year amounted to £13.1m, will no longer be required. 
The balance sheet will also be affected by the need for the first
time to provide for the capital gains tax that we would pay in the
highly unlikely circumstance of liquidating our entire property
portfolio at market value. The amount of additional deferred tax to
be provided will be of the order of £100m and this will be
deducted from our current reserves of £683.7m. Clearly
cashflows themselves will not be affected.
Summary
The strength of our finances has been demonstrated. We
acquired the Laurel business for cash, increased our borrowings
but retain full financial flexibility. We consider our finances to be
strong.
Michael Shallow
Finance Director
5 July 2005
FINANCIAL REVIEW
GREENE KING ANNUAL REPORT 04/05 21 22 GREENE KING ANNUAL REPORT 04/05
CORPORATE SOCIAL RESPONSIBILITY REPORT
We recognise the importance of
corporate social responsibility and aim to
act in a way that respects the social,
economic and environmental wellbeing
of the wider world.  Our actions take into
account our stakeholders - customers,
consumers, employees, suppliers,
distributors and local communities as
well as shareholders.
Alcohol advertising and promotions
In the current environment, issues such as binge drinking, under-
age drinking and the promotion of alcohol are very much in the
public arena. As producers and retailers of alcohol, we are
committed to acting responsibly at all times. Pubs provide an
excellent leisure opportunity and our aim is to ensure that whether
our customers are eating in one of our restaurants, drinking in one
of our bars or sleeping in one of our hotel beds, they have a safe,
comfortable and enjoyable experience. 
Our company has signed up to the Portman Group’s code of
practice on advertising and packaging of alcoholic drinks, and the
British Beer and Pub Association’s code on drinks promotions.
None of our brand advertising focuses on the alcoholic strength of
the beer, suggests any association with bravado or aggressive
behaviour nor implies that consumption can lead to social or
sexual success.  There is no encouragement for binge drinking
and drunkenness. Advertisements are not designed to appeal to
under 18s.  
Drinks promotions in Pub Company feature a responsible drinking
logo. Our managed pubs do not offer ‘all you can drink’
promotions nor heavily discounted prices. We operate a proof-of-
age scheme and track attempts by under-age drinkers to order
alcoholic drinks.  Our soft drinks are reasonably priced in order to
offer alternatives to alcohol.   
Our ‘Beer To Dine For’ campaign, encouraging the consumption of
beer as an accompaniment to food, promotes drinking in a
civilised, convivial environment. It is the antithesis of binge-drinking.
Smoking
In the Choosing Health White Paper, launched in June this year, the
Government set out its proposals for smoke-free public places and
workplaces by the end of 2008.  Consultation for these proposals
continues until September but in the meantime, our planning is already
at an advanced stage.  
We are preparing for the anticipated ban by increasing the amount
of no-smoking floor space in our pubs and investing in out-door
areas that smokers will be able to use. In the meantime, we
continue to provide customers, smoking and non-smoking, with
choice, as well as ensuring a healthy working environment for our
staff. Our estate is weighted towards food-led and family-
orientated pubs and these are perceived to be at less risk from the
ban, and further details are contained in the chief executive’s
report.
Anti disability-discrimination measures
We believe in equal opportunities for disabled customers - as well as
for disabled employees - and are working to improve our facilities in
pubs.  Independent audits have been carried out across the pub
estate to determine action on access and other issues. Where
ramps are not practical, our pubs will have signs indicating that staff CORPORATE SOCIAL RESPONSIBILITY REPORT
GREENE KING ANNUAL REPORT 04/05 23
will help people with disabilities to gain entry. Doorbells are being
installed accordingly. 
Pub managers are being trained on inclusion, to help improve the
hospitality we provide to people with disabilities. Managers and
tenants have been provided with all the information needed to
comply with the Disability Discrimination Act and have put in place
some positive measures for the benefit of disabled customers. 
Pub Staff
We take the safety of our staff very seriously and have installed
appropriate security systems, including CCTV, across the Pub
Company estate.  Staff awareness programmes train our
employees on how to deal with aggressive behaviour. All pub
managers are required to participate in the local Pub Watch
scheme and security training is an integral part of our
comprehensive induction programme for new managers.  We are
one of the first operators to offer our licensees a training scheme
approved by the Security Industry Authority. 
Tenants
As landlords we are committed to helping our licensees with a
broad spectrum of programmes, including training, marketing
and commercial initiatives.  We offer one of the best – if not the
best – support packages in the industry. There is no business
sense in charging rents so high that they leave no profit for
licensees so we charge commercial market rents, raised annually
in line with RPI and with rent reviews carried out every five years.
Our longer lease agreements include provisions for the
calculation of rent on a fair maintainable turnover basis.  The
code of practice we follow ensures that any agreements with our
licensees are transparent to them.  
Employees
We have a loyal, hardworking and motivated workforce, a
dynamic mixture of new and long-serving employees. 89% enjoy
their jobs and 83%, including retail staff, are proud to say they
work for the company.
Our aim is to treat people fairly, to provide them with the training,
support and equipment they need to do their jobs well and to
expect high standards of behaviour and commitment in return.
We involve them in every way possible in our activities and our
business, providing information on the company’s performance as
well as its activities. We communicate through regular team
meetings, specific briefings, conferences, e-mail, intranet, notice
boards and in-house magazines. We conduct employee attitude
surveys, and use the results to benchmark and improve our
management.
Our sharesave scheme is open to all, and everyone who has
participated in recent years has benefited from the increase in value
of the shares. The profit-sharing scheme is open to employees with
the requisite qualifying service. All are offered access to a
stakeholder-compliant defined contribution pension scheme and
there is a scheme for additional voluntary contributions for those
who wish to contribute.
Training and development help create a professional, highly
motivated workforce and ensure that we continually up-grade our
skills and are fully equipped for the challenges of a fast-changing
market and environment. There are opportunities for all
employees at head office and in pubs, ranging from bar skills to
personal development training.  A comprehensive induction
programme is in place for new bar staff.   24 GREENE KING ANNUAL REPORT 04/05
CORPORATE SOCIAL RESPONSIBILITY REPORT
We are also committed to the principle of equal opportunities for
all. The rationale for recruitment and selection is the ability and
aptitude of applicants. Employees who become disabled are
retained and retrained wherever possible.
Environment
Our aim is not only to comply with relevant environmental laws,
but also to actively limit any adverse effect our business may have
on the environment and to promote continuous improvement in
accordance with best practice. The adoption of responsible
standards is an integral part of our business operations and
includes contractors often being locally sourced to reduce
pollution resulting from travel. The overall responsibility for
environmental policy rests with the board, but the managing
directors of the divisions are responsible for the sound
environmental management of their particular divisions.
We have applied for a licence under the Integrated Pollution,
Prevention and Control (IPPC) legislation operated by the
Environment Agency.  The licence is given to manufacturing sites
that introduce an integrated approach to controlling pollution from
industrial sources, based on the use of best available technologies.
The aim of the IPPC is to reduce emissions and waste and, where
possible, prevent them entirely.
We have recently introduced more rigorous controls on the use of
water in the brewing process and have as a result significantly
reduced its consumption. Waste brewing materials - brewers’
grains and yeast - are recycled wherever possible for use as safe
and wholesome animal feed.  Other solid waste materials are
disposed of through reputable disposal companies. 
We benchmark ourselves for energy consumption under the climate
change levy agreement for the brewery sector and target ways to
reduce consumption.  We work closely with groups such as the
Brewery Engineers Association to share and implement best
practice ideas.  The recent installation of a new refrigeration plant on
site in the brewery not only replaced our ageing systems, but was
also responsible for the removal of CFC gases. The new plant was
chosen for its ability to deliver a more energy efficient system,
including significant electrical savings and improved insulation.  We
are currently working closely with a local company on an initiative
which has reduced steam usage by 50% on various applications
within the brewing process.
The site in Bury St Edmunds includes flood meadows, for which we
won a national conservation award in 2003, and which we continue
to manage for the benefit of wildlife, flora and fauna.
Health and safety
The health and safety of our employees and customers is
paramount.  Safety management is conducted in accordance with
models suggested by the Health and Safety Executive and
includes the use of detailed risk assessments, which are audited
to ensure compliance. Brewing Company won the RoSPA Gold
Award for Health and Safety for the 3rd year running. The food
safety programme in Pub Company has been advocated by the
Food Standards Agency as a template that the whole catering
trade should adopt. GREENE KING ANNUAL REPORT 04/05 25
Profit and loss account 2005 2004 2003 2002 2001
(53 weeks)
£m £m £m £m £m
Turnover 732.6 552.7 535.6 494.5 431.7 
Trading profit before goodwill and exceptionals 155.7 111.8 103.3 92.9 87.1 
Profit before taxation 72.8 73.7 66.8 62.7 59.7 
Profit before taxation, goodwill and exceptionals 94.0 82.6 75.0 69.2 62.8 
Basic earnings per share 75.7p 72.5p 60.6p 58.2p 54.6p
Adjusted earnings per share 91.5p 80.2p 71.1p 64.2p 58.2p
Dividends per share 36.3p 33.0p 29.9p 27.3p 24.8p
Adjusted trading profit / turnover 21.3% 20.2% 19.3% 18.8% 20.2%
Adjusted taxation / profit 30.4% 30.4% 30.5% 30.9% 31.0%
Adjusted interest cover (times) 2.5 3.8 3.7 3.9 3.6
Adjusted dividend cover (times) 2.5 2.4 2.4 2.4 2.3
Balance sheet £m £m £m £m £m
Intangible fixed assets 259.3 113.1 120.1 102.9 80.6 
Tangible fixed assets 1,581.5 1,073.5 985.6 810.8 688.4 
Investments 15.2 18.1 19.9 21.3 23.6 
Working capital (106.3) (66.2) (65.6) (68.9) (48.6)
Provisions (45.8) (37.8) (32.9) (25.0) (18.8)
Net debt (1,020.2) (446.6) (441.1) (387.9) (293.0)
Net assets 683.7 654.1 586.0 453.2 432.2 
Gearing 149% 68% 75% 86% 67%
Net assets per share 954p 919p 818p 612p 582p
Cash flow and investment £m £m £m £m £m
EBITDA before exceptionals 189.7 136.9 127.6 114.9 105.9 
Cash inflow from operations 214.7 135.6 118.8 115.2 107.6 
Interest, tax and dividends (110.8) (67.3) (63.2) (56.7) (43.3)
Fixed asset purchases (48.9) (75.1) (61.0) (48.8) (32.4)
Fixed asset sales 45.6 7.9 32.5 8.1 31.5 
Trade loans and investments (0.4) 1.5 1.4 2.3 4.2 
Acquisitions (674.4) - (63.4) (116.9) - 
Other 0.6 (8.1) (18.3) (2.1) 0.7 
(Increase) / decrease in debt (573.6) (5.5) (53.2) (98.9) 68.3 
Adjusted earnings per share, trading profit, taxation, interest cover and dividend cover exclude the effect of exceptional items and
the amortisation of goodwill.  Net assets per share exclude own shares held.
GROUP FINANCIAL RECORD 2005 2004
Before Goodwill
goodwill and and
Change exceptionals exceptionals Total Total
Note % £m £m £m £m
Turnover
Continuing operations 554.7 - 554.7 552.7
Acquisitions 177.9 - 177.9 -
Total + 33 732.6 - 732.6 552.7
Trading profit 2-4
Continuing operations 117.5 (7.4) 110.1 101.9
Acquisitions 38.2 (13.0) 25.2 -
Total 1 155.7 (20.4) 135.3 101.9
Disposal of fixed assets - 13.4 13.4 1.0
Profit before interest 155.7 (7.0) 148.7 102.9
Interest 7 (61.7) (14.2) (75.9) (29.2)
Profit before taxation 94.0 (21.2) 72.8 73.7
Taxation 8 (28.6) 9.9 (18.7) (21.7)
Profit after taxation 65.4 (11.3) 54.1 52.0
Dividends 10 (26.2) - (26.2) (23.8)
Retained profit 39.2 (11.3) 27.9 28.2
Trading profit before goodwill and exceptionals 2+ 39 155.7 111.8
Profit before taxation, goodwill and exceptionals + 14 94.0 82.6
Earnings per share
- adjusted 11 + 14 91.5p 80.2p
- basic 11 + 4 75.7 p 72.5p
- diluted 11 + 4 74.7 p 71.7p
Dividends per share + 10 36.3p 33.0p
Adjusted trading profit / turnover 21.3% 20.2%
Adjusted taxation / profit 30.4% 30.4%
Adjusted interest cover (times) 2.5 3.8
Adjusted dividend cover (times) 2.5 2.4
Adjusted earnings per share, trading profit, taxation, interest cover and dividend cover exclude the effect of exceptional items and
the amortisation of goodwill.
GROUP PROFIT AND LOSS ACCOUNT
FOR THE FIFTY-TWO WEEKS ENDED 1 MAY 2005
26 GREENE KING ANNUAL REPORT 04/05 GREENE KING ANNUAL REPORT 04/05 27
Group Parent 
2005 2004 2005 2004
Note £m £m £m £m
Fixed assets
Intangible assets 12 259.3 113.1 - -
Tangible assets 13 1,581.5 1,073.5 - -
Investments 14 15.2 18.1 1,658.8 990.5
1,856.0 1,204.7 1,658.8 990.5
Current assets
Stocks 15 14.2 11.6 - -
Debtors 16 31.0 31.0 - -
Cash at bank 34.4 7.5 - -
Creditors: due within one year
Short term debt 18 (26.0) (6.6) (11.0) (0.6)
Other creditors 17 (151.5) (108.8) (868.9) (214.6)
Net current liabilities (97.9) (65.3) (879.9) (215.2)
Total assets less current liabilities 1,758.1 1,139.4 778.9 775.3
Creditors: due after more than one year
Medium and long term debt 18 (1,028.6) (447.5) (380.8) (377.3)
Provisions for liabilities and charges
Pensions 20 (6.0) - - -
Deferred tax 20 (39.8) (37.8) - -
Net assets 683.7 654.1 398.1 398.0
Capital and reserves
Called-up share capital 22 18.1 18.0 18.1 18.0
Share premium account 23 192.2 189.2 192.2 189.2
Revaluation reserve 23 278.2 282.8 2.5 2.5
Other reserve 23 1.0 1.0 91.6 94.8
Own shares 23 (10.7) (8.5) (10.7) (8.5)
Profit and loss account 23 204.9 171.6 104.4 102.0
Equity shareholders' funds 23 683.7 654.1 398.1 398.0
Net debt 1,020.2 446.6
Gearing 149% 68%
Net assets per share (excluding own shares) 954p 919p
Signed on behalf of the board on 5 July 2005
T J W Bridge
R Anand
Directors
BALANCE SHEET
AS AT 1 MAY 2005 Change 2005 2004
Note % £m £m
EBITDA 24 +39 189.7 136.9 
Working capital and non cash movements 25 30.1 (1.3)
Exceptional items (5.1) - 
Cash inflow from operations 214.7 135.6 
Cash inflow from operations 214.7 135.6 
Returns on investments and servicing of finance
Interest paid (77.0) (30.2)
Financing issue costs (7.2) - 
(84.2) (30.2)
Taxation (9.5) (15.1)
Capital expenditure and financial investment
Purchase of fixed assets (48.9) (75.1)
Sales of fixed assets 45.6 7.9 
Advances and repayments of trade loans 14 (0.4) 1.5 
(3.7) (65.7)
Acquisition
Laurel Neighbourhood business 21 (205.4) - 
Cash acquired - Laurel Neighbourhood business 21 5.8 - 
(199.6) - 
Equity dividends paid (24.3) (22.0)
Cash (outflow)/inflow before financing (106.6) 2.6 
Management of liquid resources
Increase in short term deposits (13.5) - 
Financing
Issue of shares 4.7 6.2 
Purchase of own shares (3.8) (14.3)
Advance of loans 726.3 7.4 
Repayment of loans (600.0) - 
127.2 (0.7)
Increase in cash 7.1 1.9 
Reconciliation to movement in net debt
Increase in cash 7.1 1.9 
Net cash inflow from increase in debt (126.3) (7.4)
Cash outflow to short term deposits 13.5 - 
Net cash flow (105.7) (5.5)
Financing issue costs 7.2 - 
Increase in net debt resulting from cashflows (98.5) (5.5)
Debt acquired - Laurel Neighbourhood business 21 (463.4) - 
Debt issued - Laurel Neighbourhood business 21 (11.4) - 
Non-cash movement in net debt (0.3) - 
Increase in debt (573.6) (5.5)
Opening net debt (446.6) (441.1)
Closing net debt 26 (1,020.2) (446.6)
GROUP CASH FLOW STATEMENT
FOR THE FIFTY-TWO WEEKS ENDED 1 MAY 2005
28 GREENE KING ANNUAL REPORT 04/05 GREENE KING ANNUAL REPORT 04/05 29
2005 2004
£m £m
Profit after taxation 54.1 52.0 
Unrealised surplus on property revaluations - 61.3 
Unrealised deficit on property revaluations - (13.6)
Total gains and losses recognised since last annual report 54.1 99.7 
RECONCILIATION OF MOVEMENTS IN GROUP SHAREHOLDERS' FUNDS
FOR THE FIFTY-TWO WEEKS ENDED 1 MAY 2005
2005 2004
£m £m
Opening balance 654.1 586.0 
Total recognised gains and losses 54.1 99.7 
Ordinary dividends (26.2) (23.8)
Shares issued
- share capital 3.1 5.7 
- employee benefit trust 1.6 0.5 
Purchase of own shares
- share capital cancelled - (5.3)
- treasury shares - (4.7)
- employee benefit trust (3.8) (4.3)
Accrued share based payments 0.8 0.3 
Closing shareholders' funds 683.7 654.1 
NOTE OF GROUP HISTORICAL COST PROFITS AND LOSSES
FOR THE FIFTY-TWO WEEKS ENDED 1 MAY 2005
2005 2004
£m £m
Profit on ordinary activities before taxation 72.8 73.7 
Depreciation 0.3 0.4 
Realisation of property revaluation gains 4.3 0.7 
Historical cost profit on ordinary activities before taxation 77.4 74.8 
Historical cost profit for the period retained after taxation and dividends 32.5 29.3 
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE FIFTY-TWO WEEKS ENDED 1 MAY 2005 Basis of accounting and consolidation
The accounts are prepared in accordance with the Companies
Act 1985 and applicable accounting and financial reporting
standards. They are prepared under the historical cost
convention modified by the revaluation of property.  The group
accounts incorporate the accounts of the company and its
subsidiaries under the acquisition method.
Turnover
Turnover represents the value of goods and services supplied to
third parties, predominantly in the UK, net of discounts, excise
duty and excluding value added tax.
Revaluation of properties
Fixed asset licensed properties are revalued at least every five
years on an existing use basis and the surplus or deficit reflected
in the balance sheet. Interim valuations are performed in the third
year, or sooner if there is evidence of a material change in value.
Valuations of other fixed asset properties were undertaken in
1999 and earlier years and in accordance with FRS 15 are
retained but not updated.
Surpluses and deficits are taken directly to the revaluation
reserve, except to the extent that the valuation falls below both
historic cost and supportable value in use, when they are taken
to the profit and loss account, and on realisation are transferred
to the profit and loss account reserve.
Depreciation
Freehold land is not depreciated, freehold buildings are
depreciated to their estimated residual values over periods up to
fifty years, long leasehold properties are depreciated to their
estimated residual values over periods up to fifty years, short
leasehold properties are depreciated to their estimated residual
values over the remaining term of the lease and furniture, fixtures
and equipment assets are depreciated over their estimated lives
which range from three to twenty years.
Where the carrying value of assets may not be recoverable an
impairment in the value of fixed assets is charged to the profit
and loss account.
Stocks
Stocks are valued at the lower of cost and net realisable value
and, where applicable, include an element of production
overheads.
Loan capital
Loan capital and equivalent financial instruments include the
premium realised on issue, or recognised on acquisition, which
is amortised over the term of the loan to keep the effective
interest rate constant. 
Deferred taxation
Deferred tax is recognised in respect of all timing differences that
have originated but not been reversed by the balance sheet date.
Deferred tax is not recognised when an asset is sold if it is more
likely than not that the taxable gain will be rolled over.
Deferred tax assets are recognised to the extent that they are
regarded as recoverable when it is more likely than not there will
be suitable taxable profits against which to recover carried
forward tax losses and from which the future reversal of
underlying timing differences can be deducted.
Provisions for deferred tax are not discounted.
Deferred tax assets and liabilities are calculated using the tax
rates that have been enacted or substantively enacted by the
balance sheet date.
Financial instruments
Amounts payable or receivable in respect of interest rate swaps
are recognised as adjustments to the interest expense over the
period of the swap contracts.
Pensions
The cost of providing defined benefit pensions is charged
against profits on a systematic basis taking account of actuarial
surpluses and deficits arising which are allocated over the
remaining average service life of current qualifying employees.
The cost of providing defined contribution pensions amounts to
the value of contributions made.
Goodwill
Goodwill arising from the premium paid on businesses acquired
after 3 May 1998 is amortised over its estimated useful life of 20
years.
Previously goodwill was written off to reserves and has not been
re-instated.  The carrying values are reviewed for impairment if
events or changes in circumstances indicate that they may not
be recoverable.
Operating leases
Rental payments in respect of operating leases are charged
against trading profit on a straight line basis over the period of
the lease.
Own shares
Investments held in own shares are held at cost and shown as a
deduction from shareholders' funds.
ACCOUNTING POLICIES
FOR THE FIFTY-TWO WEEKS ENDED 1 MAY 2005
30 GREENE KING ANNUAL REPORT 04/05 GREENE KING ANNUAL REPORT 04/05 31
1 Business segment analysis
2005 Assets EBITDATradingTrading profit 
employed Turnover (note 25) profit change  
£m £m £m £m %
Pub Company 942.9 495.9 118.7 93.8 +65
Pub Partners 526.0 125.1 58.8 54.0 +13
Brewing Company 58.7 111.6 21.1 17.8 +11
Corporate 176.3 - (8.9) (9.9)
1,703.9 732.6 189.7 155.7 +39
Amortisation of goodwill and exceptionals (note 3) - - -  (20.4)
Net debt (1,020.2) - - - 
683.7 732.6 189.7 135.3 
2004 Assets Trading 
employed Turnover EBITDA profit  
£m £m £m £m
Pub Company 535.3 331.6 73.8 56.9 
Pub Partners 457.7 115.0 51.8 47.8 
Brewing Company 55.0 106.1 19.2 16.1 
Corporate 52.7 - (7.9) (9.0)
1,100.7 552.7 136.9 111.8 
Amortisation of goodwill and exceptionals (note 3) - - - (9.9)
Net debt (446.6) - - - 
654.1 552.7 136.9 101.9 
Pub Company covers the results of managed houses, Pub Partners covers the results of tenanted houses and Brewing Company
covers brewing beer, marketing and selling.
Laurel Neighbourhood has contributed turnover of £177.9 million, EBITDA of £46.4 million and trading profit of £38.2 million,
mainly within the Pub Company business segment.
Goodwill and exceptionals are detailed in note 3 and are analysed as follows:
Trading profit after goodwill
Goodwill and exceptionals and exceptionals
2005 2004 2005 2004
£m £m £m £m
Pub Company 13.0 5.0 80.8 51.9 
Pub Partners 4.5 3.2 49.5 44.6 
Brewing Company 2.1 1.7 15.7 14.4 
Corporate 0.8 - (10.7) (9.0)
20.4 9.9 135.3 101.9 
NOTES TO THE ACCOUNTS
FOR THE FIFTY-TWO WEEKS ENDED 1 MAY 2005 2 Trading expenses 2005 2004
Continuing Acquisition Total
£m £m
Changes in stocks of finished goods and work in progress 0.4 (0.7) (0.3) (0.3)
Raw materials, consumables and excise duty 190.5 50.3 240.8 191.7 
Employment costs (note 4) 118.2 41.9 160.1 117.9 
Depreciation 25.8 8.2 34.0 25.1 
Revaluation losses on tangible fixed assets - - - 2.9 
Amortisation of goodwill 7.1 6.0 13.1 7.0 
Other operating charges 102.6 47.0 149.6 106.5 
444.6 152.7 597.3 450.8 
Trading profit is stated after charging: 2005 2004
£m £m
Depreciation 34.0 25.1 
Amortisation of goodwill 13.1 7.0 
Operating lease rentals
- plant and machinery 3.1 3.3 
- property 7.8 5.6 
Auditor's fees
- audit services 0.3 0.2 
- taxation services 0.6 0.4 
- other services 0.1 - 
In addition £0.7 million of auditors fees in respect of acquisitions and financing have been capitalised.
3 Goodwill and exceptionals 2005 2004
£m £m
Amortisation of goodwill 13.1 7.0
Trading exceptional items
Integration of Laurel Neighbourhood business 7.3 -
Revaluation losses on tangible fixed assets - 2.9
20.4 9.9
Interest exceptional items
Termination of interest rate swaps 13.5 - 
Termination of loan facilities 0.7 - 
14.2 - 
NOTES TO THE ACCOUNTS
FOR THE FIFTY-TWO WEEKS ENDED 1 MAY 2005
32 GREENE KING ANNUAL REPORT 04/05 GREENE KING ANNUAL REPORT 04/05 33
4 Employment costs 2005 2004
£m £m
Pay costs 139.5 102.2 
Social security costs 11.6 9.0 
Other pension costs (see note 6)
- defined benefit 4.8 4.8 
- defined contribution 1.0 0.6 
Employee profit sharing scheme 1.7 1.3 
Exceptional integration costs (see note 3) 1.5 - 
160.1 117.9 
The average number of employees during the period was as follows: 2005 2004
Pub Company 15,163 8,778 
Pub Partners 102 83 
Brewing Company 658 678 
Corporate 100 93 
16,023 9,632 
The figures above include 8,100 (2004 - 4,520) part-time employees.
5 Directors' emoluments
Details of directors' emoluments are shown in the directors' remuneration report on pages 50 to 57.
6 Pensions
The group maintains a defined contribution scheme, which is open to all new employees, a Greene King defined benefit scheme
which closed to new entrants on 2 May 1997 and a Morland defined benefit scheme for former Morland employees which was
closed to new entrants on 12 December 2000.
During the year defined benefit pension obligations arising from Laurel employees have been incorporated into the Greene King
defined benefit scheme.
Member funds for the defined contribution scheme are held and administered by the Prudential Assurance Company.
Member funds for the defined benefit schemes are held in separate funds independently of the group's finances and are
administered by pension trustees.
Actuarial valuations of the defined benefit schemes were carried out by SBJ Benefit Consultants as at 5 April 2003 using the
projected unit method.  As the scheme is now closed to new members the current service cost, under the projected unit credit
valuation basis, will increase as a percentage of salary as members of the scheme approach retirement although the overall cost
will decrease as the number of members decreases. The principal assumptions were that retail price inflation would be 2.50% per
annum, pension increases would be in line with price inflation, real salary growth would be 1.75% per annum and the real
investment return would be 5.5% pre-retirement and 3.0% post-retirement per annum. The total market value of the schemes'
assets was £80.4 million, which represented 72% of the accrued members benefits. This shortfall is being funded by contributions
of £2.8 million per annum.  Contributions of 15.6% of pensionable salaries are being made in respect of current service.
For FRS 17 purposes, the most recent valuations have been updated to 1 May 2005, using the principal assumptions that price
inflation would be 2.80% per annum (2004 - 2.90%, 2003 - 2.50%), pension increases would be 2.60% per annum (2004 - 2.70%,
2003 - 2.50%), real salary growth would be 2.0% per annum (2004 - 2.0%, 2003 - 1.75%) and the discount rate would be 5.30%
per annum (2004 - 5.70%, 2003 - 5.40%).
NOTES TO THE ACCOUNTS
FOR THE FIFTY-TWO WEEKS ENDED 1 MAY 2005 The assets in the defined benefit schemes and their expected rates of return were:
Long-term rate Long-term rate Long-term rate Value at Value at Value at 
of return expected of return expected of return expected 1 May 2005 2 May 2004 4 May 2003 
at 1 May 2005 at 2 May 2004 at 4 May 2003 £m £m £m
Equities 8.1% 8.2% 7.9% 94.7 81.8 67.7 
Bonds 5.0% 5.0% 4.6% 19.8 10.7 13.2 
Property 8.1% 8.2% 6.7% 0.4 0.4 0.3 
Cash 4.8% 4.0% 3.8% 7.6 7.3 3.0 
Total market value of assets 7.4% 7.6% 7.2% 122.5 100.2 84.2 
Present value of scheme liabilities (160.3) (130.2) (136.9)
Deficit in the schemes (37.8) (30.0) (52.7)
Related deferred tax asset 11.3 9.0 15.8 
Net pension liability (26.5) (21.0) (36.9)
If FRS 17 had been adopted in the financial statements, year end net assets and profit and loss reserves would be:
Value at Value at 
1 May 2005 2 May 2004
£m £m
Net assets excluding pension provision 687.9 654.1 
FRS 17 pension liability (26.5) (21.0)
661.4 633.1 
Profit and loss reserve excluding pension provision 209.1 171.6 
FRS 17 pension reserve (26.5) (21.0)
182.6 150.6 
Analysis of the amount that would have been charged to the profit and loss account:
2005 2004
£m £m
Current service cost 1.8 2.0 
Past service cost - - 
Total that would have been charged to operating profit 1.8 2.0 
Expected return on pension scheme assets 7.6 6.1 
Interest on pension scheme liabilities (7.6) (7.3)
Net return that would have been (charged) / credited to other finance income - (1.2)
Total that would have been charged to the profit and loss account 1.8 3.2 
NOTES TO THE ACCOUNTS
FOR THE FIFTY-TWO WEEKS ENDED 1 MAY 2005
34 GREENE KING ANNUAL REPORT 04/05 GREENE KING ANNUAL REPORT 04/05 35
Analysis of the amount that would have been recognised in the statement of total recognised gains and losses (STRGL):
2005 2004
£m £m
Actual return less expected return on pension scheme assets 1.1 10.7 
Experience gains and losses arising on the scheme liabilities - 9.0 
Changes in assumptions underlying the present value of scheme liabilities (6.0) 1.9 
Actuarial (loss) / gain that would have been recognised in the STRGL (4.9) 21.6 
Analysis of the movement in scheme deficit during the year:
2005 2004
£m £m
Deficit at beginning of year (30.0) (52.7)
Current service cost (1.8) (2.0)
Contributions paid 4.9 4.3 
Past service costs - - 
Deficit acquired - Laurel Neighbourhood business (6.0) - 
Other finance (charge)/income - (1.2)
Actuarial (loss) / gain (4.9) 21.6 
Deficit at end of year (37.8) (30.0)
History of experience gains and (losses):
2005 2004 2003
Difference between the expected and actual return on scheme assets
Value (£m) 1.1 10.7 (23.9)
Percentage of scheme assets 1% 11% 28%
Experience gains and losses on scheme liabilities
Value (£m) - 9.0 1.1 
Percentage of the present value of the scheme liabilities 0% 7% 1%
Total amount that would have been recognised in the STRGL
Value (£m) (4.9) 21.6 (30.4)
Percentage of the present value of the scheme liabilities 3% 17% 22%
7 Interest 2005 2004
£m £m
Interest payable on bank loans and overdrafts 45.3 18.1 
Interest payable on other loans 16.4 11.1 
61.7 29.2 
Exceptional interest (note 3) 14.2 -
75.9 29.2 
NOTES TO THE ACCOUNTS
FOR THE FIFTY-TWO WEEKS ENDED 1 MAY 2005 8 Taxation 2005 2004
On profits 
before 
exceptional Exceptional
items items Total Total
£m £m £m £m
Current taxation
Corporation tax before exceptional items 22.2 - 22.2 21.7 
Exceptional credit - - - (3.4)
Recoverable on exceptional items - (6.5) (6.5) - 
Corporation tax 22.2 (6.5) 15.7 18.3 
Adjustment in respect of prior years 1.6 (3.4) (1.8) (1.5)
23.8 (9.9) 13.9 16.8 
Deferred taxation
Origination and reversal of timing differences 4.8 - 4.8 4.9 
Total 28.6 (9.9) 18.7 21.7 
The tax effect of non-trading exceptionals was £4.7 million (2004 - nil)
Factors affecting current taxation charge for year 2005 2004
The effective rate of taxation is lower than the full rate of corporation tax.  £m £m
The differences are explained below:
Profit on ordinary activities before tax 72.8 73.7 
Profit on ordinary activities multiplied by standard rate corporation tax 30% (2004 - 30%) 21.8 22.1 
Effects of:
Expenses not deductible for tax purposes
- Goodwill 3.9 2.1 
- Other 0.4 0.7 
Other permanent differences (1.1) (0.5)
Capital allowances in year in excess of depreciation (3.0) (3.2)
Rollover relief on profit on disposal of property (4.0) (0.4)
Revaluation losses - 0.9 
Utilisation of brought forward losses (2.3) - 
Exceptional credit - (3.4)
Exceptional adjustment in respect of prior years (3.4) - 
Adjustments to tax charge in respect of previous years 1.6 (1.5)
13.9 16.8 
The exceptional credit in the previous year was in respect of tax relief on intra-group transactions eliminated on consolidation.  The
exceptional adjustment in respect of prior years of £3.4 million is as a result of a favourable decision by the Special Commissioners.
Factors that may affect future tax charges
Based on current capital investment plans, it is anticipated that capital allowance claims will be in excess of depreciation in future
years. No provision has been made for deferred tax on gains recognised on revaluing property to its market value or on the sale
of properties where potentially taxable gains have been rolled over into replacement assets.  Such tax would become payable only
if the property were sold without it being possible to claim rollover relief.  The total amount unprovided for is £146.9 million 
(2004 - £93.8 million). At present it is not envisaged that any such tax will become payable in the foreseeable future.
NOTES TO THE ACCOUNTS
FOR THE FIFTY-TWO WEEKS ENDED 1 MAY 2005
36 GREENE KING ANNUAL REPORT 04/05 GREENE KING ANNUAL REPORT 04/05 37
9 Profit after taxation 2005 2004
£m £m
Attributable to parent company 25.4 33.1 
As permitted by the Companies Act 1985 the profit and loss account of the parent company has not been separately presented.
10 Dividends 2005 2004
£m £m
Interim 10.45p paid per share (2004 - 9.50p) 7.4 6.9 
Final 25.85p proposed per share (2004 - 23.50p) 18.8 16.9 
Total 36.30p per share (2004 - 33.0p) 26.2 23.8 
Dividends on own shares have been waived.
11 Earnings per share
Basic earnings per share has been calculated by dividing the profit after taxation of £54.1 million (2004 - £52.0 million) by the
weighted average number of shares in issue (excluding own shares held) of 71.5 million (2004 -  71.7 million). Adjusted earnings
per share excludes the effect of exceptional items and the amortisation of goodwill and is presented to show the underlying
performance of the group.
Earnings Earnings per share           
2005 2004 2005 2004
£m £m p p
Basic 54.1 52.0 75.7 72.5 
Goodwill and exceptionals 11.3 5.5 15.8 7.7 
Adjusted 65.4 57.5 91.5 80.2 
Diluted earnings per share has been calculated on a similar basis taking account of 0.9 million (2004 - 0.8 million) contingent
shares under option.
12 Intangible assets Goodwill
£m
Assets
Cost
At 2 May 2004 140.2 
Additions (note 21) 159.3 
At 1 May 2005 299.5 
Amortisation
At 2 May 2004 27.1 
Charged during the year 13.1 
At 1 May 2005 40.2 
Net book value
At 1 May 2005 259.3 
At 2 May 2004 113.1 
Goodwill is being amortised evenly over the estimated useful economic life of 20 years.
NOTES TO THE ACCOUNTS
FOR THE FIFTY-TWO WEEKS ENDED 1 MAY 2005 13 Tangible assets
Licensed estate Other
Group Land Fixtures, Land Fixtures, 
Cost or valuation and fittings and and fittings and
buildings equipment buildings equipment Total 
£m £m £m £m £m
Assets
Balances at 2 May 2004 893.4 202.6 41.0 61.1 1,198.1 
Acquisition - Laurel Neighbourhood (note 21) 426.6 93.5 1.4 - 521.5 
Additions during period 18.4 23.8 1.6 5.9 49.7 
Disposals during period (21.3) (8.0) (2.1) (2.5) (33.9)
Balances at 1 May 2005 1,317.1 311.9 41.9 64.5 1,735.4 
Depreciation
Balances at 2 May 2004 -  87.0 1.2 36.4 124.6 
Written back on disposals (0.1) (2.1) (0.1) (2.4) (4.7)  
Provided in these accounts 3.3 26.3 0.4 4.0 34.0 
Balances at 1 May 2005 3.2 111.2 1.5 38.0 153.9 
Net book value
At 1 May 2005 1,313.9 200.7 40.4 26.5 1,581.5 
At 2 May 2004 893.4 115.6 39.8 24.7 1,073.5 
The net book value of land and buildings comprises:
Group
2005 2004
£m £m
Freehold properties 1,266.3 891.7 
Long leasehold properties 61.1 35.5 
Short leasehold properties 26.9 6.0 
1,354.3 933.2 
Valuation
The licensed estate properties were valued by the group's own professionally qualified chartered surveyors, as at 20 December
2003, on the basis of existing use value, in accordance with the Royal Institution of Chartered Surveyors' Appraisal and Valuation
Standards.  A representative sample of properties was also valued by external valuers, Gerald Eve Chartered Surveyors and
Property Consultants, who confirmed that the values are consistent with their appraisal.
Up to 1999 the brewery and depots were valued at depreciated replacement cost and other  properties at open market value.
These valuations have been retained but they have not been updated.  Subsequent additions have been included at cost or, in
the case of acquisitions, at fair value.
NOTES TO THE ACCOUNTS
FOR THE FIFTY-TWO WEEKS ENDED 1 MAY 2005
38 GREENE KING ANNUAL REPORT 04/05 GREENE KING ANNUAL REPORT 04/05 39
Historical cost
The historical cost amounts for all land and buildings are:
Group            
2005 2004
£m £m
Historical cost 1,106.9 678.1 
Accumulated depreciation (15.9) (12.8)
Net book value 1,091.0 665.3 
Future capital expenditure Group          
2005 2004
£m £m
Contracted for 1.1 4.8 
14 Investments Group               Parent            
2005 2004 2005 2004
£m £m £m £m
Trade loans less provisions 15.2 15.1 - -  
Share of net assets of associates - 3.0 - -  
Shares in associates - -  - 0.7 
Shares in subsidiaries - -  1,074.2 474.8 
Loans to subsidiaries - -  584.6 515.0 
15.2 18.1 1,658.8 990.5 
Trade loans Group               Parent            
2005 2004 2005 2004
£m £m £m £m
Balances at 2 May 2004 15.1 16.9 - -  
Advances 4.4 6.1 - -  
Repayments and provisions (4.3) (7.9) - -  
Balances at 1 May 2005 15.2 15.1 -  -  
Trade loans are net of provisions of £2.6 million (2004 - £2.3 million).
Associates
The company owns a 33% holding in Pubco PLC, a company incorporated and operating in England, with an issued share capital
of £100,000. The results have not been included as the amounts are not material. During the year the investment in Butterfly
Hotels Limited was sold at book value.
NOTES TO THE ACCOUNTS
FOR THE FIFTY-TWO WEEKS ENDED 1 MAY 2005 Principal subsidiaries
Country of Principal 
operation activity Holding
Greene King Brewing and Retailing Limited United Kingdom Brewing and retailing 100%
Greene King Retailing Limited United Kingdom Pub retailing 100%
Greene King Acquisitions Limited United Kingdom Pub retailing 100%
Greene King Leasing No. 1 Limited United Kingdom Property 100%
Greene King Leasing No. 2 Limited United Kingdom Property 100%
Greene King Services Limited United Kingdom Employment 100%
Greene King Retail Services Limited United Kingdom Employment 100%
Shares in subsidiaries Parent            
2005 2004
£m £m
Cost or valuation and NBV at 2 May 2004 474.8 473.8 
Investment in subsidiary 599.4 -  
Revaluation of investment in subsidiary - 1.0 
Cost or valuation and NBV at 1 May 2005 1,074.2 474.8 
Loans to subsidiaries Parent           
2005 2004
£m £m
Cost and NBV at 2 May 2004 515.0 530.0 
Advances 69.6 60.0 
Repayments - (75.0)
Cost and NBV at 1 May 2005 584.6 515.0 
15 Stocks Group               Parent           
2005 2004 2005 2004
£m £m £m £m
Raw materials and work in progress 0.8 0.8 - -  
Finished goods and goods for resale 12.0 9.5 - -  
Consumable stores 1.4 1.3 - -  
14.2 11.6 - -  
16 Debtors Group               Parent           
2005 2004 2005 2004
£m £m £m £m
Trade debtors 22.7 23.6 - -  
Other debtors 5.5 2.8 - -  
Prepayments and accrued income 2.8 4.6 - -  
31.0 31.0 - -  
Included above are the following amounts falling due after more than one year:
Other debtors 0.3 0.3 - -  
NOTES TO THE ACCOUNTS
FOR THE FIFTY-TWO WEEKS ENDED 1 MAY 2005
40 GREENE KING ANNUAL REPORT 04/05 GREENE KING ANNUAL REPORT 04/05 41
17 Creditors: amounts falling due within one year
Other creditors Group               Parent            
2005 2004 2005 2004
£m £m £m £m
Trade creditors 44.1 31.4 - -  
Current corporation tax 18.5 14.1 - -  
Other taxation and social security costs 24.4 17.5 - -  
Proposed dividend 18.7 16.8 18.7 16.7 
Accruals and deferred income 45.8 29.0 1.7 1.9 
Amounts owed to subsidiaries - -  848.5 196.0 
151.5 108.8 868.9 214.6 
18 Borrowings
Group 2005 2004
Within After Total Within After Total
one year one year one year one year
£m £m £m £m £m £m
Bank overdrafts 10.8 -  10.8 4.5 -  4.5 
Bank loans - variable -  288.6 288.6 -  295.9 295.9 
Bank loan - fixed 2.4 67.3 69.7 2.1 70.2 72.3 
Securitised debt 12.6 580.5 593.1 -  -  -  
Loan from associate -  49.1 49.1 -  50.1 50.1 
Debenture -  30.9 30.9 -  31.0 31.0 
Loan notes 0.2 12.2 12.4 -  0.3 0.3 
26.0 1,028.6 1,054.6 6.6 447.5 454.1 
Company 2005 2004
Within After Total Within After Total
one year one year one year one year
£m £m £m £m £m £m
Bank overdrafts 11.0 -  11.0 0.6 -  0.6 
Bank loans - variable -  288.6 288.6 -  295.9 295.9 
Loan from associate -  49.1 49.1 -  50.1 50.1 
Debenture -  30.9 30.9 -  31.0 31.0 
Loan notes -  12.2 12.2 -  0.3 0.3 
11.0 380.8 391.8 0.6 377.3 377.9 
The loan from associate and debenture stock are secured by a first floating charge over the group's principal trading companies.
Other than the securitised debt, all other borrowings are unsecured.
Securitised debt
On 7 March 2005, £600 million of bonds were issued in connection with the securitisation of 904 of the group's pubs held in Greene
King Retailing Limited. The bonds are secured over the properties and their future income streams and were issued by Greene King
Finance plc, a company outside of the group. The funds were on-lent to the group on similar terms and used to repay existing bank
facilities. The securitisation is governed by various covenants, warranties and events of default, many of which apply to Greene
King Retailing Limited. These include covenants regarding the maintenance and disposal of securitised properties and restrictions
on its ability to move cash to other group companies.
NOTES TO THE ACCOUNTS
FOR THE FIFTY-TWO WEEKS ENDED 1 MAY 2005 19 Financial instruments and loan capital
The group's objectives and policies on the use of financial instruments can be found in the Financial Review.  All financial assets
and liabilities are denominated in sterling.
Repayment Nominal Facility Nominal Nominal Carrying Carrying
date interest amount value value value value
rate 2005 2004 2005 2004
£m £m £m £m £m
Securitised debt
Term Advance A1 2012 to 2031 Variable 150.0 -  150.0 -  
Term Advance A2 2005 to 2031 5.318% 320.0 -  320.0 -  
Term Advance B 2031 to 2034 5.702% 130.0 -  130.0 -  
Deferred issue costs - -  (6.9) -  
Secured
Loan from associate 2006 11.25% 47.5 47.5 49.1 50.1 
Debenture 2027 7.75% 25.0 25.0 30.9 31.0 
Unsecured
Bank loans 2009 Variable 450.0 290.0 295.0 288.6 295.9 
Bank loans 2004 to 2018 6.78% 72.2 74.5 69.7 72.3 
Loan notes 2006 Variable 12.2 -  12.2 -  
Loan notes 2005 Variable 0.2 0.3 0.2 0.3 
Overdraft On demand Variable 25.0 10.8 4.5 10.8 4.5 
1,054.6 454.1 
Maturity of financial liabilities and expiry of facilities
Expiry of undrawn facilities Maturity of financial liabilities
2005 2004 2005 2004
£m £m £m £m
Within one year or on demand 14.2 20.5 26.0 6.6 
Between one and two years - -  76.9 72.7 
Between two and five years 160.0 30.0 319.8 285.1 
After five years - 35.0 631.9 89.7 
174.2 85.5 1,054.6 454.1 
NOTES TO THE ACCOUNTS
FOR THE FIFTY-TWO WEEKS ENDED 1 MAY 2005
42 GREENE KING ANNUAL REPORT 04/05 GREENE KING ANNUAL REPORT 04/05 43
Analysis of interest rate exposure and fair values
Effective Period Fair Fair Carrying Carrying
interest rate value value value value
rate fixed 2005 2004 2005 2004
£m £m £m £m
Secured bond finance - fixed rate and swapped into fixed rate 5.6% 30 years 611.0 -  593.1 -  
Loan from associate - fixed rate 8.4% 1 year 51.0 53.8 49.1 50.1 
Debenture - fixed rate 5.8% 22 years 30.1 28.2 30.9 31.0 
Bank loans - fixed rate 7.2% 13 years 75.1 75.3 69.7 72.3 
Bank loans - swapped into fixed interest 6.3% 4 years 290.0 235.7 278.6 230.9 
1,057.2 393.0 1,021.4 384.3 
Bank loans - variable 10.0 65.0 10.0 65.0 
Loan notes - variable 12.4 0.3 12.4 0.3 
1,079.6 458.3 1,043.8 449.6 
Overdraft - variable 10.8 4.5 
Total borrowings 1,054.6 454.1 
Cash - variable (20.5) -  
Cash - nil interest (13.9) (7.5)
Net debt 1,020.2 446.6 
Fair values and effective interest rates have been calculated by discounting future cash flows by reference to the market yield curve
at the balance sheet date. The fair value of cash and trade loans is not materially different from book value.
The fair value liability of the interest rate swaps (included above) was £21.2 million (2004 - £4.2 million).  The expected loss to be
recognised in the profit and loss account in the following year was £2.9 million (2004 - £0.8 million).  The actual loss recognised
in the profit and loss account during the year was £3.3 million (2004 - £3.7 million), and £13.5 million relating to early termination.
The carrying value of interest rate swaps of £0.3 million (2004 - £0.9 million) is included within bank loans - variable.
The weighted average effective fixed interest rate is 6.7% (2004 - 7.0%), with weighted average maturity in 13 years (2004 - 7.6 years).
Interest on variable rate loans are all linked to LIBOR.
Short term debtors and creditors are excluded from the above.
Trade loans are advanced to customers on terms linked to supply terms such that returns are significantly greater than interest income.
The fixed rate trade loans amounted to £9.4 million (2004 - £11.5 million) and variable rate trade loans amounted to £5.8 million
(2004 - £3.6 million)
The fixed rate trade loans had weighted average interest rate of 0.4% (2004 - 0.4%) and a weighted average period of 1.7 years
(2004 - 1.2 years). Interest rates on variable rate trade loans are linked to base rate.
NOTES TO THE ACCOUNTS
FOR THE FIFTY-TWO WEEKS ENDED 1 MAY 2005 20 Provisions for liabilities and charges
Pensions Group           
2005 2004
£m £m
Opening provision - -  
Laurel Neighbourhood 6.0 -  
Closing provision 6.0 -  
Deferred taxation Group           
2005 2004
£m £m
Accelerated capital allowances 44.0 39.4 
Tax losses (1.5) (0.7)
Accruals and deferred income (2.7) (0.9)
39.8 37.8 
Opening provision 37.8 32.9 
Deferred tax charge 4.8 4.9 
Laurel Neighbourhood (2.8) -  
Closing provision 39.8 37.8 
21 Laurel Neighbourhood business
The acquisition of Laurel Neighbourhood business was completed with effect from 1 August 2004.
Fair value of assets acquired Book value Revaluation Pension Fair value
adjustments deficit 
£m £m £m £m
Intangible fixed assets 45.8 (45.8) -  - 
Tangible fixed assets 652.2 (130.7) -  521.5
Stocks 2.8 -  -  2.8 
Debtors 4.8 (1.0) -  3.8 
Cash 5.8 -  -  5.8 
Creditors: amounts falling due within one year (8.2) (1.6) (9.8)
Provisions for liabilities and charges: pensions -  -  (6.0) (6.0)
Provisions for liabilities and charges: deferred taxation -  -  2.8 2.8 
703.2 (179.1) (3.2) 520.9 
Goodwill 159.3
680.2
Satisfied by:
Cash 199.2
Loan notes 11.4
Debt acquried 463.4
674.0*
Fees 6.2
680.2
* Includes £20.0 million for working capital liabilities retained by vendor.
NOTES TO THE ACCOUNTS
FOR THE FIFTY-TWO WEEKS ENDED 1 MAY 2005
44 GREENE KING ANNUAL REPORT 04/05 GREENE KING ANNUAL REPORT 04/05 45
The fair value of properties acquired was established following a review of properties that was carried out by qualified surveyors
employed by the company. Retained properties have been revalued at their existing use value and preperties for disposal have
been valued at their estimated net realisable value.
The value of other current assets and liabilities have been adjusted to amounts to be realised or paid respectively.
The acquired business was not separately managed or accounted for, and as such audited financial information is not available
for the periods prior to acquisition.
22 Called-up share capital 2005 2004
£m £m
Ordinary shares of 25p each
Authorised - 100 million shares (2004 - 100 million) 25.0 25.0 
Issued - 72.5 million shares (2004 - 72.1 million) 18.1 18.0 
At 1 May 2005 there were outstanding options under the executive share option scheme for directors and employees to purchase
up to 1.4 million (2004 - 1.4 million) shares up to 2013 at prices ranging between 463.5p and 1291.0p per share.  In addition
under the long-term incentive plan the directors have options over 0.1 million shares (2004 - 0.1 million) at no cost.  Further
information on the executive share options and the long-term incentive plan are shown in the remuneration report. There were also
outstanding options under the sharesave scheme to purchase up to 0.8 million (2004 - 0.8 million) shares on a range of dates
between 2005 and 2010 at prices ranging between 382p and 1030p per share.
During the year 0.5 million (2004 - 1.1 million) shares were issued for £ 3.1 million (2004 - £5.7 million) cash in connection with
the sharesave and executive share option schemes.  No shares were repurchased (2004 - 0.6 million shares for £ 5.3 million) and
subsequently cancelled.
During the year 0.3 million (2004 - 0.9 million) shares were repurchased for £3.8 million (2004 - £9.0 million) cash and held in treasury
or by the Employee Benefit Trust. 0.4 million (2004 - 0.1 million) shares held by the EBT were transferred for £1.6 million (2004 -
£0.5 million) to satisfy awards under the long-term incentive plan and options exercised under the executive share option scheme.
23 Movements in shareholders' funds
Group Share Share Revaluation Other Own Profit and Total
capital premium reserve reserve shares loss account
£m £m £m £m £m £m £m
At 2 May 2004 18.0 189.2 282.8 1.0 (8.5) 171.6 654.1 
Retained profit -  -  -  -  -  27.9 27.9 
Issue of share capital 0.1 3.0 -  -  1.6 -  4.7 
Purchase of own share capital -  -  -  -  (3.8) -  (3.8)
Accrued share based payments -  -  -  -  -  0.8 0.8 
Transfer -  -  (4.6) -  -  4.6 -  
At 1 May 2005 18.1 192.2 278.2 1.0 (10.7) 204.9 683.7 
The Other reserve is a capital redemption reserve arising from the purchase of own share capital.
Own shares relates to shares held in treasury and by the employee benefit trust.  At 1 May 2005 0.5 million shares (2004 - 0.5
million) were held in treasury and 0.3 million shares (2004 - 0.4 million) by the employee benefit trust. The market values at that
date were £5.8 million and £3.7 million (2004 - £4.7 and £3.5 million) respectively.
The employee benefit trust is independently managed and has purchased shares in order to satisfy outstanding employee share
options and potential awards under the long-term incentive plan. None of the shares held at the year end have been allocated to
specific option arrangements.
The cumulative amount of goodwill written off to reserves in respect of acquisitions made prior to May 1999 amounts to £89.7
million (2004 - £89.7 million).
NOTES TO THE ACCOUNTS
FOR THE FIFTY-TWO WEEKS ENDED 1 MAY 2005 Parent Company Share Share Revaluation Other Own Profit and Total
capital premium reserve reserve shares loss account
£m £m £m £m £m £m £m
At 2 May 2004 18.0 189.2 2.5 94.8 (8.5) 102.0 398.0 
Retained profit -  -  -  -  -  (0.8) (0.8)
Issue of share capital 0.1 3.0 -  -  1.6 -  4.7 
Purchase of own share capital -  -  -  -  (3.8) -  (3.8)
Revaluation of investment in subsidiary -  -  -  -  -  -  -  
Transfer -  -  -  (3.2) -  3.2 -  
At 1 May 2005 18.1 192.2 2.5 91.6 (10.7) 104.4 398.1 
The Other reserve consists of £1.0 million (2004 - £1.0 million) capital redemption reserve arising from the purchase of own share
capital, and £90.6 million (2004 - £93.8 million) arising from transfer of revalued assets to other group companies.
24 EBITDA 2005 2004
£m £m
Trading profit 135.3 101.9 
Amortisation of goodwill and exceptionals 20.4 9.9 
Trading profit before goodwill and exceptionals 155.7 111.8 
Depreciation 34.0 25.1 
189.7 136.9 
EBITDA represents earnings before interest, tax, depreciation, amortisation of goodwill and exceptionals.
25 Working capital and non cash movements 2005 2004
£m £m
Increase in provision against investments 0.3 0.3 
Decrease / (increase) in stocks 0.2 (0.6)
Decrease / (increase) in debtors 3.8 (0.8)
Increase / (decrease) in creditors 25.0 (0.5)
Accrued share based payments 0.8 0.3 
30.1 (1.3)
26 Analysis of changes in net debt
At 4 May Cash At 4 May Acquisition Cash Non-cash At 2 May
2003 flows 2004 flows movements 2005
£m £m £m £m £m £m £m
Cash in hand, at bank 8.0 (0.5) 7.5 -  13.4 -  20.9
Short term deposits* -  -  -  -  13.5 -  13.5
Overdrafts (6.9) 2.4 (4.5) -  (6.3) -  (10.8)
Debt due within one year -  (2.1) (2.1) -  (13.1) -  (15.2)
Debt due after one year (442.2) (5.3) (447.5) (474.8) (106.0) (0.3) (1,028.6)
(441.1) (5.5) (446.6) (474.8) (98.5) (0.3) (1,020.2)
* included in cash on the balance sheet
27 Financial commitments
Property Plant and machinery 
Group 2005 2004 2005 2004
£m £m £m £m
Annual payments under operating leases which expire:
Within one year 0.2 0.1 2.0 1.6 
Between two and five years 0.3 0.3 3.5 1.8 
After five years 7.5 4.6 - -  
8.0 5.0 5.5 3.4 
NOTES TO THE ACCOUNTS
FOR THE FIFTY-TWO WEEKS ENDED 1 MAY 2005
46 GREENE KING ANNUAL REPORT 04/05 GREENE KING ANNUAL REPORT 04/05 47
The directors present their annual report together with the
audited financial statements of the company and the group for
the fifty-two weeks ended 1 May 2005.
Profits and dividends
The group’s profit before taxation, exceptional items and the
amortisation of goodwill for the period amounted to £94.0 million
(2004 - £82.6 million) and the profit before taxation was £72.8
million (2004 - £73.7 million). A net interim dividend of 10.45p
per share (2004 - 9.5p) was paid on 24 January 2005. The
directors recommend a net final dividend of 25.85p per ordinary
share (2004 - 23.5p), making a total dividend for the period of
36.3p per share (2004 - 33.0p). Subject to the approval of
shareholders at the AGM, the final dividend will be paid on 12
September 2005 to shareholders on the register at the close of
business on 5 August 2005. The total dividends for the period
amount to £26.2 million, the profit after taxation, goodwill and
exceptionals amounted to £54.1 million and the retained profit of
£27.9 million will be transferred to reserves.
Activities 
Greene King plc is the holding company for a group whose
principal activities are operating managed, tenanted and leased
public houses, brewing beer, and wholesaling beers, wines,
spirits and soft drinks. The chairman’s statement, the chief
executive’s review and the financial review provide further details
of the group’s activities during the period and likely developments
in the future and form part of this report. The disclosures within
the corporate governance statement also form part of this report.
Directors
Details of the current directors are given on page 19. Eight of
these directors held office throughout the period, whilst Jane
Scriven was appointed to the board on 18 March 2005, and
John Brady was appointed after the year end, on 24 June 2005.
In accordance with article 90 of the company’s articles of
association, both Jane Scriven and John Brady will retire at the
forthcoming AGM and, being eligible, offer themselves for
election. Graham Greene served as a non-executive director of
the company until 2 September 2004, and David McCall served
as non-executive chairman of the company until 1 May 2005.
Under article 85 of the company’s articles of association Tim
Bridge and David Elliott retire by rotation and, being eligible, offer
themselves for re-election at the forthcoming AGM. 
In accordance with the provisions of the combined code Alan
Bowkett retires at the AGM as he has served on the board for
more than nine years and offers himself for re-election this year.
Details of the directors’ service agreements, remuneration, and
interests in shares and share options are set out in the
remuneration report on pages 50 to 57. Except as disclosed,
there have been no changes in their interests between 1 May
2005 and the date of this report.
Interests in contracts
No director had a material interest in any contract that was
significant in relation to the group’s business at any time during
the period. 
Share capital
Details of the share capital of the company are set out in note 
22 to the accounts on page 45.
A total of 445,685 ordinary shares of 25p each with an
aggregate nominal value of £111,421 were allotted, for cash,
during the period in connection with the company’s sharesave
and executive share option schemes.
No shares in the company were bought by the company during
the year. The trustees of the company’s employee benefit trust,
Kleinwort Benson (Guernsey) Trustees Limited, acquired
312,023 shares and transferred 356,080 ordinary shares in the
company to employees to satisfy the exercise of share options.
A number of resolutions will be proposed at the forthcoming
AGM in connection with the company’s share capital:
• Share split
This resolution proposes sub-dividing every one existing
ordinary share into two new ordinary shares, which will have
the effect of reducing the share price for each share. The
proportion of the issued share capital of the company held
by each shareholder following the share split will however
be unchanged and the value of each holding should also be
unaffected. Apart from having a different nominal value,
each new ordinary share will carry the same rights as an
existing ordinary share.
• Share allotment authority
This resolution seeks to renew the authority of the directors
to allot securities in the company up to an aggregate
nominal amount of £5,960,946, being the authorised but
unissued capital of the company and representing
approximately 33.3 per cent of the current issued ordinary
share capital, for up to fifteen months after the AGM or until
the date of the AGM in 2006, whichever is earlier. The
directors consider that this authority is desirable to allow the
company to retain flexibility, although they have no present
intention of exercising this authority.
DIRECTORS’ REPORT • Dis-application of statutory pre-emption rights
This resolution seeks to renew the authority of the directors
to dis-apply pre-emption rights and allot equity securities for
cash in connection with a rights issue and otherwise and to
sell ordinary shares held in treasury (see below) up to an
aggregate nominal amount of £894,142, being
approximately 5 per cent of the current issued ordinary share
capital, for up to fifteen months after the AGM or until the
date of the AGM in 2006, whichever is earlier.
• Authority for the purchase of own shares
This resolution seeks to renew shareholders’ authority for
the company to make market purchases of its own shares,
as permitted by article 8 of the articles of association for up
to fifteen months after this AGM, or until the date of the
AGM in 2006, whichever is earlier. The directors would only
purchase and cancel shares after taking into account the
effects on earnings per share and the benefits for
shareholders generally.
Pursuant to the Companies Act 1985 (as amended), the
company can hold any shares which are repurchased as
treasury shares and either re-sell them for cash, cancel them,
either immediately or at a point in the future, or use them for
the purposes of its employee share schemes. The directors
believe that it is desirable for the company to have this
choice. Holding the repurchased shares as treasury shares
will give the company the ability to re-sell or transfer them
quickly and cost-effectively and will provide the company with
additional flexibility in the management of its capital base. No
dividends will be paid on, and no voting rights will be
exercised in respect of, treasury shares.
Shares held as treasury shares will not automatically be
cancelled and will not be taken into account in future
calculations of earnings per share (unless they are
subsequently re-sold or transferred out of treasury).
The authority that will be sought contains several important
restrictions, being:
• The authority is limited to a specified period of time and only
permits the company to purchase on the London Stock
Exchange (i) if the resolution regarding the share split
becomes wholly unconditional and effective, 14,306,272
shares of 12
1
/2p each with a total nominal value of
£1,788,284, or, (ii) if the resolution regarding the share split
does not become wholly unconditional and effective,
7,153,136 shares of 25p each with a total nominal value of
£1,788,284, being, in each case, approximately 10 per cent
of the company’s current issued share capital;
• the minimum price per share which may be paid is the
nominal value;
• the maximum price per share that may be paid is 105 per cent
of the average mid-market price for the company’s shares as
shown in the London Stock Exchange Daily Official List for the
five business days immediately preceding the purchase.
In accordance with the Listing Rules, the company will not
repurchase shares in the period of two months immediately
preceding the preliminary announcement of its annual or
interim results or, if shorter, between the end of the financial
period concerned and the time of a relevant announcement
or, except in accordance with the Listing Rules, at any other
time when, in terms of the Model Code, the directors would
be prohibited from dealing in shares.
The full exercise of all options outstanding at the date of this
report would require the issue of 2,283,167 ordinary shares.
This represents 3.19% of the current issued share capital
(excluding any shares held in treasury) and 3.55% of what
the share capital would be if the proposed authority to
purchase the company’s own shares had been obtained
and exercised in full. The company has issued no warrants
to subscribe for share capital.
Substantial shareholdings
As at 4 July 2005, the last practical date prior to the date of this
report, the company has been notified, in accordance with the
provisions of sections 198 to 202 of the Companies Act 1985,
of the following interests in 3 per cent or more of the issued
share capital of the company.
Capital Group Companies Inc 3.2%
Charitable donations
Donations for charitable purposes made during the period
amounted to £38,200 (2004 - £52,300). The group makes no
political donations.
Going concern
The directors expect the group to continue in operational
existence for the foreseeable future and have, therefore, used
the going concern basis in preparing the financial statements.
Payments to suppliers 
The group understands the benefits to be derived from
maintaining good relationships with its suppliers and where
possible enters into agreements over payment terms. Where
such terms have not been agreed it is the group policy to settle
invoices close to the end of the month following invoicing. This
DIRECTORS’ REPORT
48 GREENE KING ANNUAL REPORT 04/05 GREENE KING ANNUAL REPORT 04/05 49
policy is dependent on suppliers providing accurate, timely and
sufficiently detailed invoices. Payment in respect of 42 days’
average purchases from trade creditors was outstanding at the
end of the period (2004 - 38 days).
Annual general meeting and special business
The AGM will be held at 12 noon on Friday 2 September 2005
at Culford School, Culford, Suffolk. The notice of the AGM and
an explanation of the items of non-routine business are set out
in the explanatory circular that accompanies this annual report.
Auditors
Ernst & Young LLP has expressed its willingness to continue in
office and a resolution to re-appoint the firm as the company’s
auditors will be proposed at the AGM.
By order of the board
Lindsay Keswick
Company Secretary
5 July 2005
DIRECTORS’ REPORT Composition of the remuneration committee
The remuneration committee is appointed by the board and
currently comprises Howard Phillips, chairman, Alan Bowkett
and Norman Murray, all of whom are regarded by the board as
independent non-executive directors.   
Terms of reference and reporting
The committee determines, and annually reviews, all elements of
executive directors’ remuneration. It approves all contracts of
executive directors, and any compensation arrangements arising
from their termination. It also approves all grants of share options
to directors and executives and reviews best practice in
executive remuneration. The committee is made aware of the
salary levels of certain senior employees and has approved the
payment of special bonuses to such employees.
Advisers to the remuneration committee
The committee has taken external advice on general
remuneration levels and comparator information from Towers
Perrin and New Bridge Street Consultants. Neither firm provides
other services to the company. Advice is also obtained, where
appropriate, from the company’s legal advisers, Linklaters. The
committee also received internal advice from Tim Bridge, whilst
he was chief executive, in determining appropriate remuneration
and incentive packages for the other executive directors.
Remuneration policy
The company operates in a highly competitive market and must
attract, motivate and retain high quality directors. The committee
considers current market practice and makes comparisons with
turnover, market capitalisation and operational details against a
selection of other companies. The committee has regard to pay
and conditions elsewhere within the group. No director makes a
decision relating to his own remuneration. Individual directors
leave the meeting when their own remuneration is being
discussed. A significant proportion of each executive director’s
potential remuneration is performance-related, thus aligning the
directors’ interests with those of shareholders and encouraging
performance at the highest levels. 
Components of directors’ remuneration
The remuneration package of each executive director consists of
the following elements:
Annual pay
Annual pay reflects the responsibilities, market value and
sustained performance level of executive directors. Pay is
reviewed annually or when a change in responsibility occurs. 
Benefits in kind
A range of taxable benefits are available to executive directors,
which are listed on page 53.
Bonus
Bonus payments are determined by the remuneration committee
and awarded where justified by performance. The executive
directors were eligible to receive an annual incentive bonus of up
to 75 per cent of their annual pay. The amount payable was
based upon the achievement of financial performance targets for
the period, which were agreed in advance by the committee and
related to trading profit and profit before tax, exceptional items
and goodwill. In the case of the managing directors of the trading
divisions, 75% of their bonus was dependent on the trading profit
of their own division. The performance targets are commercially
sensitive and are therefore excluded from this report.
Pensions
Tim Bridge and Michael Shallow are entitled to receive a pension
equivalent to 1/45th of their final pensionable earnings on
retirement for each year of service, with a pro rata payment for
part years, subject to Inland Revenue limits, under the group’s
defined benefit pension scheme and supplementary pension
scheme, which also provides a cash lump sum accrual.  Tim
Bridge has become a deferred member of both schemes and no
further contributions from him or the company will be made.  
David Elliott participates in the group’s defined contribution
pension scheme and Rooney Anand and Mark Angela participate
in independently arranged defined contribution pension schemes
and for these the level of company contribution depends on the
age of the director. No element of remuneration other than annual
pay is treated as pensionable and the retirement age for the
schemes is sixty.
Michael Shallow participates, and during the year Tim Bridge
participated, in the group’s defined benefit pension scheme for
death-in-service purposes. Rooney Anand, Mark Angela and David
Elliott participate in a group death-in-service insurance scheme.
Death benefits in excess of the Inland Revenue maximum, where
applicable, are provided through additional insurance. The cost of
this insurance is taxable as a benefit in kind on the directors
concerned and disclosed as such in the emoluments table below.
Executive share option scheme
Executive directors are rewarded for delivering long-term
performance by the phased granting of share options. The
scheme offers them an annual grant with a value up to the level
of their annual pay. In certain special situations, the remuneration
committee can issue shares with an exercise cost up to four
times annual pay. The committee approves all grants of share
options to directors and does not grant options at a discount to
the prevailing mid-market price.  
DIRECTORS’ REMUNERATION REPORT
50 GREENE KING ANNUAL REPORT 04/05 GREENE KING ANNUAL REPORT 04/05 51
Options issued under this scheme can only be exercised
between the third and tenth anniversary of the date of grant and
then only if the stretching performance conditions have been
met. These conditions relate to the growth in audited adjusted
earnings per share and for awards granted in 2004/05 growth
must exceed RPI inflation by 3% per annum, measured over any
of the periods of 3, 4 or 5 financial years of the company, starting
with the year in which the award is granted.
Earnings per share growth has been chosen as the most
appropriate performance measure as it directly aligns the
individual incentive arrangement with the long-term interests of
shareholders. The specific performance measures were selected
to ensure that options can only be exercised if shareholders had
first benefited from material earnings growth in real terms over a
number of years. 
The AGM circular contains details of a proposal to introduce a
new executive share option scheme as the current scheme will
expire at the AGM.
Long-term incentive plan
The company also operates a long-term incentive plan (LTIP) for
the benefit of the executive directors, to reward them for
delivering superior long-term performance. No executive director
will in any year receive an award which is greater than their
annual pay.
The awards granted under the LTIP will only vest if the
company’s growth in earnings per share is equal to or greater
than the increase in RPI plus 4% per annum compound over the
three consecutive financial years starting immediately before the
award. At this level, 25% of the award (rounded down to the
nearest 1,000 shares) will vest.
100% of the award will vest if the company’s growth in earnings
per share is greater than the increase in RPI plus 10% per
annum over the same three year period. There is a pro-rata scale
(rounded down to the nearest 1,000 shares) between the
minimum level of RPI plus 4% and the maximum level of RPI plus
10%. If the targets are not met, the award will lapse.
As with the executive share option scheme, earnings per share
growth has been chosen as the most appropriate performance
measure as it directly aligns with the long-term interests of
shareholders. The performance target will be reviewed for
subsequent awards by the remuneration committee to ensure
that it is sufficiently challenging.
Employee share schemes
In common with all other employees, the executive directors are
also entitled to participate in the sharesave and profit-sharing
schemes which are offered once each year by the company.
Further details of these schemes are given later in this report,
together with the directors’ entitlements under them.
Remuneration from other companies
Rooney Anand also serves as a non-executive director of Pursuit
Dynamics plc, a company unconnected with the group, and currently
receives £25k per annum from that company by way of director’s
fees. He is entitled to retain such fees for his personal benefit.
Remuneration for non-executive directors
The fees paid to the chairman and the other non-executive
directors are determined by the board as a whole. They are
agreed after taking external advice and making market
comparisons, and relate to the services of the directors in
connection with the company’s business. The non-executive
directors do not have service agreements and cannot participate
in the pension scheme, the bonus scheme or the share option
schemes. David McCall had a consultancy agreement with the
company, details of which are set out below.  
Service agreements
Newly appointed executive directors are offered a service
agreement with a notice period of one year. In the event of the
employment of an executive director being terminated, the
committee would pay due regard to best practice and take
account of the individual’s duty to mitigate their loss. 
During the year Tim Bridge was employed pursuant to a service
agreement, which has been terminated with effect from 1 May
2005. No additional payment was made to Tim Bridge when he
stepped down as chief executive. He was appointed chairman
from 2 May 2005 for an initial period of 3 years with an option to
extend for a further period of 3 years, provided both parties agree.
Michael Shallow, whose contract with the company commenced
on 7 May 1991, has a rolling service agreement that entitles him
to a one year notice period from the company. The agreement
provides for the company to augment the director’s pension
entitlements if his term of service is terminated early, up to a
maximum amount of one year’s contributions. Michael Shallow
announced his intention to leave the company before the end of
the financial year. The board were keen to retain his services until
at least December 2005 and he was offered a special incentive
bonus with a defined set of objectives to accept this longer
timespan. He subsequently agreed not to tender his resignation
until December.
DIRECTORS’ REMUNERATION REPORT David Elliott, Rooney Anand and Mark Angela, whose contracts
with the company commenced on 3 November 1998, 6 August
2001 and 19 January 2004 respectively, are subject to one year
notice periods. Those contracts do not contain any additional
terms relating to compensation for termination of employment. The
terms of Rooney Anand’s appointment as chief executive have
been agreed and are set out in a letter dated 24 December 2004.
Non-executive directors are appointed pursuant to letters of
appointment for 3 year periods. The following table sets out the start
and expiry dates of their respective appointments. The appointments
of Norman Murray, Howard Phillips, Jane Scriven and John Brady
can, notwithstanding the expiry date detailed, be terminated by the
company at any time on three months’ written notice.
Performance of Greene King 
A graph showing the total shareholder return of Greene King
relative to the FTSE All-Share Index over the last five years is shown
below. We have chosen this comparator group as it is the most
appropriate market index of which the company is a member. 
DIRECTORS’ REMUNERATION REPORT
52 GREENE KING ANNUAL REPORT 04/05
£350
£300
£250
£200
£150
£100
2000
2001
2002
2003
2004
2005
£50
Directors’ interests in shares
The beneficial interests of each of the directors and their immediate families in the ordinary share capital of the company at the start
and end of the period were as follows: 
1 May 2005 2 May 2004
Tim Bridge 362,166 360,209
Rooney Anand 639 348
Mark Angela - -
Alan Bowkett 15,896 15,896
John Brady - -
David Elliott 31,540 19,749
Norman Murray 3,380 3,000
Howard Phillips 10,850 10,850
Jane Scriven - -
Michael Shallow 79,618 79,327
5 year Shareholder Return
Director Appointment date Expiry date Extendable for
further 3 years?
Alan Bowkett 07-Dec-93 01-Sep-06 -
Howard Phillips 19-Jun-98 18-Jun-07 -
Norman Murray 01-Jan-04 31-Dec-06 Yes
Jane Scriven 18-Mar-05 17-Mar-08 Yes
John Brady 24-Jun-05 23-Jun-08 Yes GREENE KING ANNUAL REPORT 04/05 53
The company has established an employee benefit trust, the trustee of which is Kleinwort Benson (Guernsey) Trustees Limited. As
at 1 May 2005 the trustee held 2,460 (2004: 358,540) shares and Rooney Anand, Mark Angela, David Elliott and Michael Shallow,
as employees of the company, are potential beneficiaries of the employee benefit trust and therefore are deemed to have an interest
in the 2,460 shares in the company.
At 1 May 2005, Tim Bridge had a non-beneficial interest in 44,884 (2004 - 44,884) shares and Michael Shallow had a non-beneficial
interest in 1,500 (2003 - 1,500) shares, in addition to the holdings shown above. 
Since the year end the employee benefit trust has acquired 212,023 shares and transferred 25,000 shares to satisfy options exercised
under the executive share option scheme, but there have been no other changes to the date of this report.
Audited information
Directors’ emoluments
Non-cash Other cash
Notes Annual pay Annual fees Annual bonus** benefits benefits Total Total
2005 2005 2005 2005 2005 2005 2004
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Tim Bridge 415 - 361 26 - 802 684
Rooney Anand 250 - 279 21 13 563 385
Mark Angela 1 225 - 241 24 - 490 56
Alan Bowkett * -30 - - - 30 30
David Elliott 225 - 219 6 21 471 381
Norman Murray * -30 - - - 30 10
Howard Phillips * -30 - - - 30 30
Jane Scriven* 2 -4 - - - 4 -
Michael Shallow 255 - 341 7 78 681 481
David McCall * 3 - 125 - - - 125 125
Graham Greene * 4 -10 - - - 10 30
1,370 229 1,441 84 112 3,236 2,212
* non-executive
**  includes a special bonus in respect of work relating to the integration of the Laurel business and the securitisation
1 Appointed 19 January 2004
2 Appointed 18 March 2005
3  David McCall had a consultancy agreement with the company that commenced on 1 May 2000 on a rolling annual basis and continued until his retirement on 1 May 2005. 
His fees included £96,000 per annum paid under this agreement.
4 Retired 3 September 2004
No payments were made to any third parties in respect of any directors’ services. Non-cash benefits principally include the provision
of company cars, fuel for company cars, life assurance, private medical insurance and the value of shares appropriated under the
profit sharing scheme. Other cash benefits include cash allowances paid in lieu of company cars and contributions towards the tax
liabilities incurred from payments to funded unapproved pension arrangements. 
DIRECTORS’ REMUNERATION REPORT Directors’ pensions
Accrued entitlements
At At At At Additional Additional Increase in Increase in
1 May 1 May 2 May 2 May benefit earned benefit earned accrued accrued
2005 2005 2004 2004 during the during the benefit benefit
period ended period ended net of net of
£’000 pa £’000 £’000 pa £’000 1 May 2005 1 May 2005 inflation inflation
Pension Lump Pension Lump £’000 pa £’000 £’000 pa £‘000
sum sum Pension Lump sum Pension Lump sum
Tim Bridge 325 23 294 22 31 1 22 1
Michael Shallow 32 15 29 14 3 1 3 1
Transfer values*
At At Transfer value Change
1 May 2005 2 May 2004 of year’s accrual before in transfer value
inflation and net of net of director’s
director’s contributions contributions
£’000 £’000 £’000 £’000
Tim Bridge 4,981 4,176 314 786
Michael Shallow 385 323 17 49
*Transfer values are the liability of the pension fund, not an amount that is to be paid or due to the individual.
The Inland Revenue earnings cap restricts the pension that the scheme can provide for Michael Shallow. The scheme pension is,
therefore, supplemented through a funded unapproved pension arrangement, operating on a targeted defined contribution basis.
Following an actuarial review, some deficit funding is now being undertaken. As a result, the company‘s contribution to the fund for
the period in respect of Michael Shallow is £88,300 (2004 - £85,500). 
Similar restrictions apply to the pensions for Rooney Anand and David Elliott who participate in funded unapproved arrangements
operating on a defined contribution basis. The company makes a contribution towards the tax liabilities incurred from payments to
funded unapproved arrangements and these contributions are disclosed as ‘other cash benefits’ in the emoluments data shown above. 
In respect of Mark Angela, a decision regarding his pension arrangements for future earnings in excess of the Inland Revenue earnings
cap has been deferred pending the introduction of new pensions legislation and an amount of £30,438, representing the amount which
would have been contributed by the company towards a funded unapproved arrangement and a contribution towards the tax liabilities
in respect thereof, together with interest at a rate of 4% per annum, is contained within the balance sheet as a current liability. 
Payments from the company made in the financial year in respect of defined contribution pension arrangements are shown in the
table below. 
2005 2004
£ £
Rooney Anand 26,086 22,288
Mark Angela 9,205 6,393
David Elliott 33,409 30,423
DIRECTORS’ REMUNERATION REPORT
54 GREENE KING ANNUAL REPORT 04/05 GREENE KING ANNUAL REPORT 04/05 55
Two former directors receive additional pension income from the company. John Bridge, who retired as a director on 31 December
1989, receives a pension of £14,457 pa in excess of his scheme entitlements and Bernard Tickner, who retired as a director on 27
August 1992, receives a pension of £11,491 pa in excess of his scheme entitlements. As required by law, both of these figures are
stated net of their company-funded pension in payment at 31 March 1997.
Share price during the period
The closing mid-market price of the company’s shares on 29 April 2005 (being the last business day before the financial period end) was
1188p (2004 – 973 p). The closing mid-market price of the company’s shares during the period ranged between 897
1
/2p and 1336p.
Executive share options
A summary of the directors’ interests in options granted under the executive share option scheme is shown below. Full details of each
director’s share options are contained in the company’s register of director’s interests.
Date of Option Outstanding Granted Exercised Lapsed Outstanding Exercise period
grant price as at 2 May during the during the during the as at 1 May 
(pence) 2004 period period period 2005
Tim Bridge 4-Jan-02 701 42,000 - - - 42,000 4 Jan 2005 - 3 Jan 2012
18-Jul-02 740 40,000 - - - 40,000 18 Jul 2005 - 17 July 2012
1-Aug-03 828
1
/2 45,000 - - - 45,000 1 Aug 2006 - 31 July 2013
6-Aug-04 1018 - 40,000 - - 40,000 6 Aug 2007 - 5 Aug 2014
Rooney Anand 4-Jan-02 701 50,000 - 50,000 - - 4 Jan 2005 - 3 Jan 2012
18-Jul-02 740 21,000 - - - 21,000 18 Jul 2005 - 17 July 2012
1-Aug-03 828
1
/2 24,000 - - - 24,000 1 Aug 2006 - 31 July 2013
6-Aug-04 1018 - 22,000 - - 22,000 6 Aug 2007 - 5 Aug 2014
Mark Angela 6-Aug-04 1018 - 22,000 - - 22,000 6 Aug 2007 - 5 Aug 2014
David Elliott 21-Jul-00 463
1
/2 30,000 - 30,000 - - 21 Jul 2003 - 20 Jul 2010
4-Jan-02 701 22,000 - 22,000 - - 4 Jan 2005 - 3 Jan 2012
18-Jul-02 740 21,000 - - - 21,000 18 Jul 2005 - 17 July 2012
1-Aug-03 828
1
/2 24,000 - - - 24,000 1 Aug 2006 - 31 July 2013
6-Aug-04 1018 - 22,000 - - 22,000 6 Aug 2007 - 5 Aug 2014
Michael Shallow 23-Dec-99 487
1
/2 65,000 - 65,000 - - 23 Dec 2002 - 22 Dec 2009
22-Dec-00 527 20,000 - - - 20,000 20 Dec 2003 - 19 Dec 2010
4-Jan-02 701 25,000 - - - 25,000 4 Jan 2005 - 3 Jan 2012
18-Jul-02 740 25,000 - - - 25,000 18 Jul 2005 - 17 July 2012
1-Aug-03 828
1
/2 28,000 - - - 28,000 1 Aug 2006 - 31 July 2013
6-Aug-04 1018 - 25,000 - - 25,000 6 Aug 2007 - 5 Aug 2014
There have been no changes to the date of this report. No changes were made during the period to the terms and conditions of any
options then outstanding.
Options issued under this scheme can only be exercised if a performance condition has been met. This condition relates to the
growth in audited adjusted earnings per share and is as follows:
• for options granted prior to 4 January 2002, the growth must exceed RPI inflation by 2% per annum, measured over any period
of three years between the date of grant and the date of exercise of the option
• for options granted on or after 4 January 2002 on an annual grant basis, the growth must exceed RPI inflation by 3% per annum,
measured over any of the periods of 3, 4 or 5 financial years of the company, starting with the year in which the award is granted. 
DIRECTORS’ REMUNERATION REPORT Details of the options exercised during the year, the notional gain before tax achieved by each director and the number of shares
retained on exercise are shown below. Total gains made by directors exercising executive options in the period ended 1 May 2005
amounted to £1,130,895 (2004 – £1,617,154).
Date of No. of Option Market value Notional No. of 
exercise options exercise at date of gain before shares 
exercised price (p) exercise (p) tax retained
Rooney Anand 20-Jan-05 50,000 701 1302 £300,500 -
David Elliott 12-Aug-04 30,000 463
1
/2 1015 £165,450 8,500
David Elliott 24-Jan-05 22,000 701 1297 £131,120 3,000
Michael Shallow 10-Dec-04 25,000 487
1
/2 1270 £195,625 -
Michael Shallow 04-Jan-05 40,000 487
1
/2 1333 £338,200 -
Long-term incentive plan
A summary of the directors’ interests in options granted under the long-term incentive plan (LTIP) is shown below. Full details of each
director’s LTIP options are contained in the company’s register of directors’ interests.
Date of Type of award Outstanding Granted Vested Lapsed Outstanding Performance period
grant as at 2 May during during during as at 1 May
2004 the period the period the period 2005
Tim Bridge 9-Oct-03 Nil-cost option 43,000 - - - 43,000 May 2003 - May 2006
10-Dec-04 Restricted forfeitable shares - 33,000 - - 33,000 May 2004 - May 2007
Rooney Anand 9-Oct-03 Nil-cost option 23,000 - - - 23,000 May 2003 - May 2006
10-Dec-04 Restricted forfeitable shares - 17,000 - - 17,000 May 2004 - May 2007
Mark Angela 10-Dec-04 Nil-cost option - 17,000 - - 17,000 May 2003 - May 2006
David Elliott 9-Oct-03 Nil-cost option 23,000 - - - 23,000 May 2003 - May 2006
10-Dec-04 Restricted forfeitable shares - 17,000 - - 17,000 May 2004 - May 2007
Michael Shallow 9-Oct-03 Nil-cost option 27,000 - - - 27,000 May 2003 - May 2006
10-Dec-04 Restricted forfeitable shares - 20,000 - - 20,000 May 2004 - May 2007
The market price of the shares on 9 October 2003 was 863
1
/2p and on 10 December 2004 was 1270p.
All awards granted under the LTIP will only vest if the company’s growth in earnings per share is equal to or greater than the increase
in RPI plus 4% per annum compound over the three consecutive financial years starting immediately before the award. At this level,
25% of the award (rounded down to the nearest 1,000 shares) will vest.
100% of the award will vest if the company’s growth in earnings per share is greater than the increase in RPI plus 10% per annum
over the same three year period. There is a pro-rata scale (rounded down to the nearest 1,000 shares) between the minimum level
of RPI plus 4% and the maximum level of RPI plus 10%. If the targets are not met, the award will lapse.
No awards vested or lapsed during the period, and there have been no changes to the date of this report. No changes were made
during the period to the terms and conditions of any awards then outstanding. 
DIRECTORS’ REMUNERATION REPORT
56 GREENE KING ANNUAL REPORT 04/05 GREENE KING ANNUAL REPORT 04/05 57
Sharesave scheme
The Inland Revenue approved sharesave scheme is open to all employees, including directors and part-time employees. Under this
scheme options are granted over the company’s ordinary shares, at an option price which, at board discretion, can be at a discount
of up to 20 per cent of the mid-market price at the time of granting. The company has historically granted all such options at a 20
per cent discount. 
The directors’ interests in options granted under the sharesave scheme are:
Outstanding Granted Exercised Outstanding Option
as at during the during the as at exercise
2 May 2004 period period 1 May 2005 price (p)
Tim Bridge 1,666 - 1,666 - 570
Rooney Anand - - - - -
Mark Angela 1,314 - - 1,314 702
David Elliott 2,257 - - 2,257 702
Michael Shallow 1,678 - - 1,678 563
Tim Bridge exercised an option at a price of 570p per share on 4 April 2005, when the closing mid-market price of the company’s
shares was 1302p, so achieving a notional gain of £12,195. He has retained the shares issued to him on exercise of the options.
Michael Shallow’s option can be exercised between 1 April and 30 September 2006. Mark Angela’s option can be exercised between
1 April and 30 September 2007. David Elliott’s option can be exercised between 1 April and 30 September 2009.
All options outstanding at 1 May 2005 were granted at an option price below the year-end mid-market price. The AGM circular
contains a proposal to establish a new sharesave scheme, as the current scheme expires this year.
Profit-sharing scheme
The Inland Revenue approved profit-sharing scheme is open to all those employees who at the date of appropriation were employed
throughout the whole of the previous financial year. Shares are appropriated once annually according to a pre-set formula relating to
the year-on-year increase in the company’s profits. The directors’ beneficial interests in Greene King shares resulting from participation
in this scheme are reflected in their shareholding data given above, and the value of their entitlements for the latest period is included
in non-cash benefits in the remuneration table, as the shares have not yet been awarded.
Shareholders will be asked to vote on this remuneration report, as an ordinary resolution, at the company’s AGM.
Approved by the board of directors on 5 July 2005.
Howard Phillips
Chairman of the remuneration committee
5 July 2005
DIRECTORS’ REMUNERATION REPORT Governance structure
The board
The board considers that it is vital to ensure that there is an
appropriate range of skills and experience among its members,
and that the objectivity and integrity of members should be
exemplary. The board currently comprises a non-executive
chairman, five other non-executive directors and four executive
directors. The directors’ biographies are on page 19. 
There have been a number of changes to the board during the year.
Graham Greene retired as a non-executive director on 3 September
2004, after twenty-five years of service. David McCall retired as non-
executive chairman on 1 May 2005, and was succeeded as
chairman by Tim Bridge, former chief executive. Rooney Anand,
previously managing director of the brewing division, took over as
chief executive. Jane Scriven was appointed as a non-executive
director with effect from 18 March 2005 and following the year end
John Brady was appointed as a non-executive director with effect
from 24 June 2005. A new executive director, Justin Adams, will be
joining the board in September as managing director of the brewing
division. The new non-executive directors are available to meet
major shareholders if required.
All of the directors are subject to election by shareholders at the first
annual general meeting after their appointment to the board and to
re-election by shareholders every three years thereafter. In addition,
any non-executive director who has served more than nine years is
subject to annual re-election.
The division of responsibilities between the chairman and the chief
executive has been clearly established, set out in writing and agreed
by the board. The job descriptions are available on request. The
chairman has primary responsibility for running the board and
devotes such time to his role as is necessary to properly discharge
his duties. The chief executive has responsibility for executing the
company’s strategy and achieving operational and financial goals.
The board has a formal schedule of matters which are reserved for
its decision, including approval of the long term objectives and
strategy, approval of budgets and financial statements including the
report and accounts, acquisitions and disposals, changes to the
structure of the group and overall corporate governance issues. It
reviews trading performance and considers major capital
expenditure and acquisition opportunities. Management is
delegated the task of the detailed planning and implementation of
the company’s strategy. 
Information and training
Full and timely information is provided to the board to enable it to
properly discharge its functions. All directors have access to the
advice and services of the company secretary and are provided
with the opportunity to question management as required.
Explanations of the securitisation of part of the company’s assets,
and of legislative changes affecting the industry, have been
provided to the board during the year. 
The training needs of the board are regularly reviewed. There is
an agreed procedure, set out in writing, for directors to take
independent professional advice at the company’s expense. The
company has in place directors’ and officers’ liability insurance.
Newly-appointed directors receive a full and appropriate
induction on joining the board to acquaint them with the
company, the board and the relevant policies and procedures.
This takes the form of meetings with other board members and
the provision of an induction pack containing relevant information.
Performance evaluation 
The board has in place a process for the annual performance
evaluation of the board, its committees and individual directors.
A questionnaire was distributed to all board members and the
company secretary, covering a wide range of matters including
board structure and composition, board processes,
communications with shareholders and corporate governance
matters. When the questionnaire had been completed, the
chairman had a one-to-one meeting with each of the directors
and the company secretary to discuss their responses and to
review the performance of the non-executive directors. The
results of the evaluation process were reported to the board and
a number of matters which arose therefrom will be addressed
during the course of this year. The board is satisfied that it and
its committees are operating effectively.
The performance of David McCall, chairman during the year, was
not separately reviewed in the light of his planned retirement at the
end of the financial year. The performance of the executive directors
is reviewed annually by the remuneration committee in conjunction
with their annual pay review and the payment of bonuses.
Independence of non-executive directors
The non-executive directors have a particular responsibility to
ensure that the strategies proposed by the executive directors are
carefully examined and fully discussed. Their independence and
objectivity are of paramount importance. The board believes that
they all have a range of skills and experience which will help the
company and that their understanding of the company, its strategy
and operations increases over the years. 
The board is satisfied that all of the non-executive directors were
independent throughout the year, being free from any relationship
with the executive management which could result in any conflict or
affect their independent judgment, that they all remained
CORPORATE GOVERNANCE
58 GREENE KING ANNUAL REPORT 04/05 GREENE KING ANNUAL REPORT 04/05 59
Audit Remuneration Nomination
Meetings held during 2004-05 Board committee committee committee
95 6 5
Meetings Meetings Meetings Meetings
attended attended attended attended
Executive directors
Tim Bridge 9 - - 5
Rooney Anand 9 - - -
Mark Angela 9 - - -
David Elliott 9 - - -
Michael Shallow 9 - - -
Non-executive directors
David McCall 7 - 6 5
Alan Bowkett 8 5 5 5
Graham Greene 
(3)
3 1 2 - 
Howard Phillips 6 4 5 -
Norman Murray 9 4 6 -
Jane Scriven 
(4)
21 - -
(1) - = not a member of the committee
(2) During the year, certain directors who were not committee members attended meetings of the audit committee, remuneration committee and nomination committee by
invitation. These details have not been included in the table.
(3) Graham Greene retired as a director on 3 September 2004. The number of board meetings and audit, nomination and remuneration committee meetings attended is
stated with effect up to and including that date.
(4) Jane Scriven was appointed as a director on 18 March 2005. The number of board and audit committee meetings attended is stated with effect from that date.
independent in character and judgment. In particular, the board was
satisfied that the length of term served by Alan Bowkett did not
affect his independence. As there have been a number of board
changes this year, the board asked Alan Bowkett to stay on to
provide continuity and stability until the AGM in 2006, when he will
retire. He will need to be re-elected this year as he has already
served for more than nine years. The board is satisfied that his
performance continues to be effective and that he continues to
demonstrate commitment to the role.
None of the independent non-executive directors participates in the
share option schemes or long-term incentive plan operated by the
company and none was dependent on the fees received from the
company as their primary source of income. 
The senior independent non-executive director is Howard Phillips,
who took over that role from Graham Greene on the latter’s
retirement. Howard was appointed to the board in June 1998, has
never been employed by the company and has diverse business
interests. The board considers that he remains independent from
management in both character and judgment. During the year his
term of appointment was renewed until 18 June 2007, and he
assumed the role of senior independent non-executive, following a
review by the chairman. The board is satisfied that his performance
continues to be effective and that he continues to demonstrate
commitment to the role. 
With effect from 2 May 2005 Tim Bridge stepped down as chief
executive and took over as chairman of the board. When
considering his appointment the board noted the requirement that
the chairman should meet the independence criteria of the
combined code. As a result of Tim Bridge’s long tenure on the
board, he does not meet all of the independence criteria set out
therein. However, the board is confident that the strength of
character and independent judgment that he has exhibited as chief
executive will continue in his role as chairman. Further details on the
background to Tim Bridge’ s appointment as chairman are set out in
the report of the nomination committee below.
Meetings and attendance
Board meetings are scheduled to be held nine times a year. There is
also a strategy day and a pub away-day for the full board each year.
Between meetings, as required, the board can be in frequent contact
to progress the company’s business and if necessary, board
meetings can be held at short notice. Where possible, however, ad
hoc committees of the board are appointed to deal with matters
which it is known will need to be dealt with between scheduled board
meetings. If directors are unable to attend meetings they are given
the opportunity to be consulted and comment in advance of the
meeting. The chairman holds regular informal meetings with the non-
executive directors without the executive directors being present.
The table below sets out the attendance record of each director at
scheduled board and board committee meetings during the year.
CORPORATE GOVERNANCE Board committees
The board has established an audit committee, a remuneration
committee and a nomination committee, each of which has
formal terms of reference governing its method of operation.
Each of the terms of reference, which are available on request
and will be available for inspection at the annual general meeting,
reflect the provisions of the new combined code and have been
approved by the board.
Set out below are reports from each of the nomination
committee, audit committee and remuneration committee.
Nomination committee report
During the year the nomination committee was chaired by David
McCall and comprised, in addition, Tim Bridge, Alan Bowkett
and, whilst he was on the board, Graham Greene. Since the year
end and the retirement of David McCall, the chairmanship of the
committee has been taken over by Tim Bridge and Howard
Phillips and Norman Murray have been appointed as members.
The committee’s role is to propose candidates for appointment to
the board, to review regularly the structure, size and composition
of the board and make recommendations to the board with
regard to any adjustments that are deemed necessary. It met five
times during the year, twice in conjunction with meetings of the
non-executive directors as a whole. 
The principal role of the nomination committee and of the non-
executive directors during the year was to ensure that plans for the
recruitment of a new chairman were in place, in view of David
McCall’s planned retirement at the age of 70. As the chief
executive, Tim Bridge, had made it clear that he did not intend to
continue in an executive capacity for more than a limited period,
and having regard to the highly successful track record which the
group had established, the nomination committee and the non-
executive directors felt that it was overwhelmingly in the interests
of shareholders to maintain continuity in the management of the
group and that the loss of both the chairman and chief executive
within a short time frame would give rise to an unacceptable risk.
Note was also taken of the extensive delegation of authority which
had already been achieved by Tim Bridge as chief executive.
The non-executive directors therefore approached Tim Bridge to
ask him whether he would consider putting himself forward to
succeed the chairman in a non-executive capacity. In doing this,
the non-executives were fully cognisant of the provision of the
combined code that such a move should only be considered in
exceptional circumstances; they therefore consulted with the
company’s five largest shareholders before putting a formal
proposal to the board. These shareholders were supportive of the
proposal in the particular circumstances of the group at the time. 
Simultaneously with the recommendation to the board regarding
the appointment of Tim Bridge as chairman, the nomination
committee and the non-executive directors also recommended
to the board that Rooney Anand, who was then managing
director of the company’s brewing division, be appointed as chief
executive. 
The nomination committee also dealt with the appointment to the
board of Jane Scriven as a non-executive director during the year.
External search consultants were employed to assist in the
recruitment process and a short list of candidates was produced.
The chairman and chief executive met a number of potential
candidates and then all of the directors were given the
opportunity to meet Jane Scriven. Having considered her other
commitments and on receiving confirmation that she would
accept the appointment, the committee recommended her
appointment to the board and it took effect from 18 March 2005. 
All directors are subject to re-election by shareholders following
their appointment and subsequently in every third year. The
nomination committee undertakes a review of all directors who
are due for re-election to determine whether or not to
recommend their re-appointment. 
Audit committee report
The audit committee is chaired by Norman Murray and the other
members of the committee during the year were Alan Bowkett,
Howard Phillips, Jane Scriven, following her appointment in
March 2005, and, whilst he was a director, Graham Greene. All
members are considered by the board to be independent. The
board is satisfied that Norman Murray has recent and relevant
financial experience, being a chartered accountant who has
already chaired audit committees of other UK listed companies
and is also currently Vice-President of the Institute of Chartered
Accountants of Scotland. 
The role of the audit committee is to review the results of the full
year audit and approve the interim results in each case prior to
their submission to the board. It is also responsible for reviewing
the company’s internal financial control and risk management
systems, advising the board on the appointment of external
auditors, overseeing the relationship with the external auditors,
reviewing the company’s whistleblowing procedures and
considering the need for a full internal audit function. 
The committee had five meetings during the year and on each
occasion the finance director attended. The external auditors
attended four of the meetings. 
The audit committee continuously monitors the relationship with
CORPORATE GOVERNANCE
60 GREENE KING ANNUAL REPORT 04/05 GREENE KING ANNUAL REPORT 04/05 61
the auditors and assesses their performance, cost-effectiveness,
objectivity and independence. It agrees the scope of the audit
work and discusses the results of the full year audit and interim
review each year. A new audit partner took over responsibility for
the company’s audit work at the beginning of the financial year.
The board is satisfied that the auditors are independent of the
company and that best practice is being observed.
The company uses specialist teams within Ernst & Young LLP for
non-audit work such as taxation advice and assistance on risk
management issues. The committee has sought and obtained
detailed explanations from the auditors as to the safeguards and
standards, including compliance with professional and regulatory
requirements, applied by Ernst & Young LLP to ensure auditor
independence in the light of the significant level of work undertaken
by the firm for the company during the year, including detailed tax
advice relating to the acquisition of the Laurel neighbourhood
estate and the securitisation. The audit committee is satisfied that
the use of Ernst & Young LLP for non-audit work has been subject
to detailed scrutiny and the work only awarded when there have
been sound business reasons for preferring Ernst & Young LLP
over and above other advisers. Further the committee has
scrutinised the internal procedures of Ernst & Young LLP and
satisfied itself that the independence and objectivity of the auditors
are not affected by the non-audit work undertaken. 
The audit committee has also established a policy in relation to
the use of Ernst & Young LLP for non-audit work. The company
will award non-audit work to the firm which provides the best
commercial solution for the work in question. Pieces of work
estimated to be in excess of an agreed level are put out to tender
unless agreed otherwise by the chairman of the audit committee.
Limits of authority have been placed on the ability of the finance
director and the chairman of the audit committee to approve
specific engagements, with fees in excess of those limits being
subject to approval of the committee.
The company has a limited internal audit function which focuses
on the group’s managed house division, where the greatest
financial risks are perceived to exist. Elsewhere within the group
a combination of the external audit procedures and the types of
financial risks involved are felt to be such that a wider internal
audit function would be superfluous. However, as a result of
deliberations by the audit committee, the company’s central
finance team has been strengthened and responsibilities clarified
to respond to the more complex treasury and financial
accounting needs which have emerged following the acquisition
of the Laurel neighbourhood estate and the securitisation. 
Remuneration committee report
During the year the remuneration committee was chaired by
David McCall and the other members were Alan Bowkett,
Graham Greene, whilst he was a director, Norman Murray and
Howard Phillips. Howard Phillips became chairman at the end of
the year on the retirement of David McCall. All the members were
considered by the board to be independent. 
The role of the committee includes determining the remuneration
policy for the executive directors and the chairman and fixing the
total individual remuneration package of each of the executive
directors, considering the granting of share options and awards
under the long-term incentive plan and determining bonuses
payable to the executive directors.
The remuneration committee met six times during the year. The
chief executive, at the request of the committee, attends its
meetings. He is consulted by the committee on its proposals, but
does not participate in any meetings or discussions relating to his
own remuneration. 
Details of the company’s policies on remuneration, service
contracts and compensation payments are set out in the
remuneration report on pages 50 to 57.
Communication with shareholders
Shareholder communication is regarded as a key priority for the
board, with the annual report and interim statements being the
principal media used. In addition, the AGM is fully utilised as a
means of communicating directly with shareholders, who have a
full opportunity to ask questions. The board aims to ensure that all
members of the board, including in particular the chairmen of the
board committees, are available to answer questions at the AGM. 
All substantive items of business at shareholders’ meetings are dealt
with under separate resolutions, including a resolution to adopt the
report and accounts. The chairman announces the results of the
proxy voting on each resolution after it has been dealt with on a
show of hands. The notice of meeting is issued in compliance with
both the articles and the combined code and is sent to shareholders
a minimum of 20 working days before the meeting. 
There is a regular dialogue with institutional shareholders,
including meetings after the announcement of the year end and
interim results. The board receives regular reports from the chief
executive on the meetings he and the finance director have with
principal shareholders. The chairman and senior independent
non-executive director were involved in meetings with the major
shareholders to discuss the board changes which were
announced during the year. The senior independent non-
executive director, Howard Phillips, is available to shareholders if
they have concerns about governance issues which the normal
channels of contact have failed to resolve.
CORPORATE GOVERNANCE The company maintains a web site (www.greeneking.co.uk) to
provide up-to-date, detailed information on the company’s
operations and brands, which includes a dedicated investor
relations section. All company announcements are available on
this site, as are copies of slides used for presentations to
investment analysts.
Directors’ responsibility statement
The following statement, which should be read in conjunction
with the auditors’ statement of their responsibilities on page 64,
is made with a view to distinguishing for shareholders the
respective responsibilities of the directors and the auditors in
relation to the financial statements.
The directors are required by law to prepare accounts for each
financial period which give a true and fair view of the state of
affairs of the company and the group as at the end of the financial
period and of the profit or loss for the period.
The directors are responsible for ensuring that the group maintains
proper accounting records, which disclose with reasonable
accuracy at any time the financial position of the group and which
enable them to ensure that the accounts comply with the
Companies Act 1985. They are also responsible for safeguarding
the assets of the group and taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The directors are required to ensure the accounts have been
prepared using suitable accounting policies, consistently applied
and supported by reasonable and prudent judgments and
estimates and confirm that all applicable accounting standards
have been followed.
Internal control 
The board acknowledges its responsibility for the group’s
systems of internal control and for reviewing their effectiveness.
Such systems can only be designed to manage, and not to
eliminate, the risk of failure to achieve business objectives. They
can provide reasonable, but not absolute, assurance that the
group’s assets are safeguarded and that the financial information
used within the business and for external reporting is reliable. 
The company has assessed the key risks to which it is exposed and
has formalised the control environment needed to address these and
other issues. There are processes in place which are in accordance
with the guidance of the Turnbull Committee on internal control. The
board regularly reviews risk management and internal controls,
including key performance indicator data on the significant risks
faced. The executive directors routinely consider the effective
management of risk throughout the business at their regular
meetings. This group oversees the development of risk management
strategies, the implementation of suitable management actions and
monitors progress made. The audit committee receives regular
reports on risk issues within the business. 
The board is ultimately responsible for the company’s system of
internal control and for reviewing its effectiveness. A formal
assessment of the risk and control environment in place during
the period and to the date of this report has been undertaken,
based on detailed reports from, and subsequent discussions
with, senior management. No significant problems were
disclosed in these reports.
The control environment comprises the elements set out below:
• Internal control and risk management process 
The directors routinely monitor all aspects of risk management
and internal control, and regularly assess the data on the
significant risks faced. Major risks are identified, the financial
implications of each risk assessed and the adequacy and
effectiveness of the associated control environment analysed.
Any issues arising from this process are discussed with
operational management as needed. Appropriate steps are
then taken to mitigate and monitor the effect of these risks.
Data on the key exposures is reviewed regularly by the
executive directors and the audit committee of the board.
• Internal audit
The controls over the group’s managed houses are enhanced
by an internal audit team and the availability of comprehensive
information from the EPOS till system. On behalf of the board,
the audit committee assesses the procedures and scope of
internal audit within the group, including seeking the views of
the external auditors.
• Annual budgets
Detailed annual budgets covering all financial aspects of the
group’s business are evaluated and approved by the board.
The actual results are compared against these budgets on a
four-weekly basis and variances analysed in order that any
appropriate action can be taken. 
• Capital and project control
There are clearly defined evaluation and approval processes
for acquisitions and disposals, capital expenditure and project
control. These include escalating levels of authority, detailed
appraisal and review procedures and post-completion reviews
of all major projects to compare the actual outcome with the
original plan. Certain transactions are reserved for approval by
the board. Limits of delegated responsibility and areas of
authority have been identified for employees.
CORPORATE GOVERNANCE
62 GREENE KING ANNUAL REPORT 04/05 GREENE KING ANNUAL REPORT 04/05  63
• External audit
The audit committee reports to the board on matters
discussed with the auditors during the course of the statutory
audit and interim review.
Exception summary
The company is committed to ensuring that high standards of
corporate governance are maintained. The board considers that
the company has complied with the new combined code issued
in July 2003, except in the following areas. 
A.1.3/A.6.1. 
A.1.3 requires the non-executive directors to meet without the
chairman at least once a year to appraise the chairman’s
performance and on such other occasions as are deemed
appropriate. A.6.1 requires the non-executive directors to
evaluate the performance of the chairman, taking into account
the views of the executive directors. This did not occur in view of
the impending retirement of David McCall as chairman at the end
of the financial year. An appraisal will be made of the current
chairman during 2005/6. 
A.2.2.
A.2.2 provides that a chairman on appointment should meet the
independence criteria set out in A.3.1 and that a chief executive
should not go on to become chairman. During the year the board
resolved to appoint Tim Bridge, then chief executive, as
chairman, which appointment took effect from 2 May 2005. The
reasons for and background to the appointment are set out in
more detail in the report of the nomination committee.
A.3.2 
A.3.2 provides that at least half the board, excluding the
chairman, should comprise independent non-executive directors.
At the beginning of the year the board comprised five executive
directors and four non-executive directors, excluding the
chairman, and following the retirement of Graham Greene in
September 2004 until the appointment of Jane Scriven in March
2005 there were just three non-executive directors plus the
chairman. The board believes that the process of recruiting non-
executive directors should not be hurried and it was keen to
select the right people irrespective of time. Since the year end
John Brady has been appointed as a further non-executive
director and the board therefore now complies with this provision. 
CORPORATE GOVERNANCE We have audited the group’s financial statements for the fifty two
weeks to 1 May 2005 which comprise the group profit and loss
account, the group balance sheet, the parent company balance
sheet, the group cash flow statement, the group statement of
total recognised gains and losses, the reconciliation of
movements in group shareholders’ funds and the related notes 1
to 27. These financial statements have been prepared on the
basis of the accounting policies set out therein. We have also
audited the information in the directors’ remuneration report that
is described as having been audited.
This report is made solely to the company’s members, as a
body, in accordance with Section 235 of the Companies Act
1985. Our audit work has been undertaken so that we might
state to the company’s members those matters we are required
to state to them in an auditors’ report and for no other purpose.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company and the
company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
The directors are responsible for preparing the annual report,
including the financial statements which are required to be
prepared in accordance with applicable United Kingdom law and
accounting standards as set out in the statement of directors’
responsibilities in relation to the financial statements.
Our responsibility is to audit the financial statements and the part of
the directors’ remuneration report to be audited in accordance with
relevant legal and regulatory requirements, United Kingdom Auditing
Standards and the Listing rules of the Financial Services Authority.
We report to you our opinion as to whether the financial
statements give a true and fair view and whether the financial
statements and the part of the directors’ remuneration report to
be audited are properly prepared in accordance with the
Companies Act 1985. We also report to you if, in our opinion, the
directors’ report is not consistent with the financial statements, if
the company has not kept proper accounting records, if we have
not received all the information and explanations we require for
our audit, or if information specified by law or the Listing rules
regarding directors’ remuneration and transactions with the
group is not disclosed.
We review whether the corporate governance statement reflects
the company’s compliance with the seven provisions of the
combined code specified for our review by the Listing rules, and we
report if it does not. We are not required to consider whether the
board’s statements on internal control cover all risks and controls,
or form an opinion on the effectiveness of the group’s corporate
governance procedures or its risk and control procedures.
We read other information contained in the annual report and
consider whether it is consistent with the audited financial
statements. This other information comprises the directors’ report,
unaudited part of the directors’ remuneration report, the chairman’ s
statement, the chief executive’s review, the financial review, the
group financial record, the financial highlights and the corporate
governance statement. We consider the implications for our report
if we become aware of any apparent misstatement of material
inconsistencies with the financial statements. Our responsibilities
do not extend to any other information.
Basis of audit opinion 
We conducted our audit in accordance with United Kingdom
Auditing Standards issued by the Auditing Practices Board. An audit
includes examination, on a test basis, of evidence relevant to the
amounts and disclosures in the financial statements and the part of
the directors’ remuneration report to be audited. It also includes an
assessment of the significant estimates and judgments made by the
directors in the preparation of the financial statements, and of
whether the accounting policies are appropriate to the group’s
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 of the group as at 1 May 2005
and of the profit of the group for the fifty two weeks then
ended: and 
- 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.
Ernst & Young LLP
Registered Auditor
Cambridge
5 July 2005
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF GREENE KING PLC
64 GREENE KING ANNUAL REPORT 04/05 GREENE KING ANNUAL REPORT 04/05  65
Financial calendar
Shares trade ex-dividend from 3 August 2005
Record date for final dividend 5 August 2005
Annual general meeting 2 September 2005
Payment of final dividend 12 September 2005
Announcement of interim results 8 December 2005
Payment of interim dividend February 2006
Preliminary announcement of the 2006 results June/July 2006
Capital gains tax For the purpose of computing capital gains tax, the market value of ordinary shares on 31 March
1982, after adjustment for the capitalisation issues in 1980 and 1982 was 145.125 pence. After
take-up of the rights issue in July 1996, the March 1982 value becomes 259.375 pence.
Registrars Capita Registrars
Northern House, Woodsome Park,
Fenay Bridge, Huddersfield HD8 0LA
Telephone : 01484 600900
Fax : 01484 600911
Website : www.capitaregistrars.com 
Company secretary and Lindsay Keswick
registered office Westgate Brewery, 
Bury St Edmunds,
Suffolk IP33 1QT
Telephone : 01284 763222
Fax : 01284 706502
Website : www.greeneking.co.uk 
Share dealing services Stocktrade 
Telephone : 0845 601 0995 
Redmayne Bentley
Moseley’s Farm Offices,
Fornham All Saints,
Bury St Edmunds,
Suffolk IP28 6JY
Telephone : 01284 723761
Capita IRG Trustees Limited
Telephone : 0870 458 4577
Website : www.capitadeal.com
Corporate Advisers
Financial advisers Citigroup
The Citigroup Centre, 33 Canada Square, Canary Wharf, London E14 5LB
Stockbrokers Deutsche Bank AG London
Winchester House, 1 Great Winchester Street, London EC2N 3EQ
Auditors Ernst & Young LLP
Compass House, 80 Newmarket Road, Cambridge CB5 8DZ
Solicitors Linklaters, One Silk Street, London EC2Y 8HQ
SHAREHOLDERS’ INFORMATION Registered in England No. 24511.
Registered Office
Westgate Brewery
Bury St Edmunds
Suffolk IP33 1QT
Telephone: 01284 763222
www.greeneking.co.uk