Thorntons PLC 
Thornton Park
Somercotes
Alfreton
Derbyshire DE55 4XJ
Telephone 0845 075 7565
www.thorntons.co.uk
Thorntons Direct 
Telephone 0845 121 1911
www.thorntons.co.uk
For information on 
Investor Relations visit
www.thorntons.co.uk
Thorntons PLC Annual Report and Accounts 2008
Thorntons PLC Annual Report and Accounts 2008
_1_THT_ar08_cover.indd   1 19/09/2008   09:08:05 About Thorntons
Established by Joseph William Thornton 
in 1911, Thorntons today is a £200m+ 
turnover company with 379 shops 
and cafés and 250 franchises, 
together with internet, mail order 
and commercial services.
Thorntons’ commitment to environmental issues is reflected in 
this annual report which has been printed on Revive 50:50 Silk 
and Revive 50:50 Offset, both recycled paper stocks containing 
50% recovered waste and 50% virgin fibre. The pulp used in this 
product is bleached using a Totally Chlorine Free (TCF) process. 
This document was printed by Vitesse using soya-based inks and 
water-soluble lacquers and all production processes used make 
the minimum demand on the environment and produce the 
minimum amount of waste. 
Both the printer and the paper mill are registered to ISO 14001 
and FSC approved.
Cert no. FS/COC/002830 
 01 Highlights
 02 About Thorntons
 04 Chairman’s statement
 06 Chief Executive’s report
 10 Finance Director’s report
 12 Corporate social responsibility
 15 Board of Directors 
 16 Corporate information
 17 Report of the Directors
 20 Corporate governance
 24 Report on the Directors’ remuneration
 32 Independent auditors’ report 
 34 Consolidated income statement
 34  Statements of recognised income and expense
 35 Balance sheets
 36 Cash flow statements
 37 Statement of accounting policies
 43 Notes to the financial statements
 74 Five year summary
 75 Shareholder analysis
 76 Financial calendar
_1_THT_ar08_cover.indd   2 19/09/2008   09:08:10 Highlights
Profit before tax rose by 19.6% to £8.5m (2007: £7.1m) 
Revenue increased by 11.9% to £208.1m (2007: £186.0m)
Earnings per share increased 13.8% to 9.1p (2007: 8.0p) 
Recommended final dividend of 4.85p (2007: 4.85p)
Consistent sales growth across all channels
2008 Profit before tax up by 19.6%
£8.5m
2008 Revenue increased by 11.9%
£208.1m
2008 Earnings per share increased 13.8%
9.1p
2008 Recommended final dividend
4.85p
Thorntons PLC Annual Report and Accounts 2008 01
_1_THT_ar08_front.indd   1 19/09/2008   09:05:24 About Thorntons
Thorntons will return to sustainable long-term profitable growth by: 
 investing in the brand; 
 developing innovative new products; 
 modernising the in-store environment; 
 expanding our Commercial and Direct business; and 
 attracting and retaining the best people. 
OuR ROutEs tO mARkEt
Retail
Thorntons trades from around 380 own 
stores across the whole of the UK and Ireland.
Our stores and cafés are the touchpoint 
for the Thorntons brand. They are located 
in all major shopping conurbations and 
provide a broad range of innovative, 
quality products – whether for a special 
gift, sharing or a personal treat.
Personalised service and expertise are offered 
to ensure a delightful chocolate experience.
Franchise 
The Franchise channel is a key growth 
area with an estate in excess of 250 stores. 
With a customer offer equal to that of 
a Thorntons retail store along with a 
secondary offer, usually of cards and 
gifts, a franchise store provides a great 
destination for gifting on the high street.
A full member of the British Franchise 
Association, Thorntons is seeing increased 
interest in its franchise offer and expects 
continued growth in store numbers in the 
year ahead.
02 Thorntons PLC Annual Report and Accounts 2008
_1_THT_ar08_front.indd   2 19/09/2008   09:05:25 Commercial
The high street is becoming a leisure 
destination for customers seeking more 
experiential shopping and more considered 
purchases. For Thorntons this means a 
need to ensure its products are more 
widely available. 
Thorntons has developed this opportunity, 
and the commercial sales team has become 
a successful and integral part of the overall 
brand development of Thorntons. This goes 
hand in hand with developing our own stores 
to be flagship destinations for the Company.
Our strategy of providing our customers with 
the opportunity to enjoy all the great values 
of the Thorntons brand, whilst meeting their 
new shopping habits in a busier, time 
constrained world, is proving successful. 
Thorntons Classics holds the No.1 brand 
position in the Boxed Chocolate category 
(AC Nielsen July 2008).
Thorntons will continue this growth by 
developing new product ranges and ensuring 
they are available to a wider range of 
Thorntons customers.
Thorntons Direct
Sending a heartfelt message through 
chocolates and gifts has been the business 
of Thorntons Direct since 1998.
Between then and now we have sent 
thousands of special gifts of chocolates, 
toffee, fudge, champagne, hand tied 
bouquets and hampers.
These gifts, which include a personal 
message, are sent to and from friends 
and family, brides, grooms, wedding 
guests and many more.
Thorntons Direct also helps corporate 
clients create and deliver a variety of 
branded solutions, including bespoke 
gifts for their staff and customers.
We receive in excess of two million 
website visitors per year and mail 
over half a million catalogues to 
lovers of Thorntons products.
Thorntons PLC Annual Report and Accounts 2008 03
_1_THT_ar08_front.indd   3 19/09/2008   09:05:36 Chairman’s statement
I am pleased to report that Thorntons 
continues to make good progress and that, 
despite tougher market conditions, sales 
rose by 11.9%, profit before taxation was 
up by 19.6 % and earnings per share by 
13.8%. Sales have increased across all 
channels: our own stores, franchise stores, 
commercial customers and Thorntons 
Direct. We have now delivered steady 
growth for seven consecutive quarters.
Underpinning this growth is the strategy 
we have been implementing to return 
Thorntons to sustainable, long-term 
profitable growth by:
  Investing in the brand to give it greater 
relevance and a more premium feel
 Developing innovative new products
 Modernising the in-store environment
  Further expanding our Commercial 
and Direct business
 Attracting and retaining the best people
We remain committed to expanding our 
own store portfolio as well as the number 
of franchise stores, despite a more challenging 
economic environment which affects the 
property market. Our success in all four 
channels is encouraging and will continue 
to provide us with a solid platform from 
which to present our continually evolving 
range of quality products to new and 
loyal customers.
The Group’s balance sheet remains strong. 
Operating cash flow before working capital 
movements improved by £2.1m to £21.9m 
which, together with our committed 
banking facilities, enables us to fund the 
continuing expansion of the business.
The progress we have made during the past 
year would not have been possible without 
the hard work and commitment of all our 
staff and I would like to take this opportunity 
to thank them for all their efforts.
Since the year end, on 1 August 2008, 
Dominic Prendergast stepped down from 
the Board. I would like to thank him for his 
contribution to the business over the past 
seven years and wish him well for the future. 
Thorntons’ prospects are good and I remain optimistic about 
its future. We are well placed to meet the challenges we face 
and to achieve our financial goal of long-term sustainable growth 
in earnings per share, supported by a strong balance sheet. 
04 Thorntons PLC Annual Report and Accounts 2008
_1_THT_ar08_front.indd   4 19/09/2008   09:05:36 We have a highly experienced team, 
whose focus it is to continue to implement 
our growth strategy. Thorntons’ prospects 
are good and I remain optimistic about 
its future. We are well placed to meet the 
challenges we face and to achieve our 
financial goal of long-term sustainable 
growth in earnings per share, supported 
by a strong balance sheet. 
The Board has recommended a final 
dividend of 4.85p per share which, subject 
to shareholder approval, will be paid on 
28 November 2008. 
John von Spreckelsen
Chairman
9 September 2008
Dessert gallery
Chocolate fountain
Thorntons PLC Annual Report and Accounts 2008 05
_1_THT_ar08_front.indd   5 19/09/2008   09:06:18 Chief Executive’s report
LOng-tERm gOALs
Re-establish thorntons as 
the undisputed leading 
premium chocolate 
brand in the uk
to increase our share of 
the uk chocolate market 
by more than 50%
to increase all year 
round business to 
reduce dependency 
on Christmas and Easter
to improve our operating 
profit percentage
selective development 
of export sales
The past year has seen continued growth for 
Thorntons. Sales rose by 11.9% to £208.1m 
surpassing the £200m mark for the first 
time, with growth in all channels. Profit 
before tax increased by 19.6% to £8.5m.
This performance improvement has been 
achieved by focusing on the five point strategy 
outlined in the Chairman’s statement.
Investment in the brand
Thorntons has a very loyal customer 
base with a very strong brand franchise. 
Our challenge is to give the brand a broader 
appeal and we have made good progress 
during the year. Our TV commercial, aired 
before Christmas, helped improve overall 
perception of the brand and went on to 
win a silver and a bronze award at the 
2008 British Television Advertising Awards. 
Our product innovation and store 
improvements, detailed below, as well 
as numerous other activities have all 
played a part in rejuvenating the brand 
and consumers have noticed and 
appreciated the changes. In July 2008 
Superbrands published its official ranking 
of the UK’s top 500 brands for 2008/09 
and I am delighted to report that Thorntons 
jumped from 81st to 18th place and now 
ranks as the UK’s number one brand in the 
Food – Chocolate and Confectionery category.
Developing innovative new products
There has been a steady stream of successful 
innovation during the year starting with the 
relaunch of our flagship Continental range 
last Autumn. We increased the choice of 
chocolates with new recipes, as well as 
reintroducing some old favourites and 
succeeded in arresting the long-term decline 
of the Continental range and growing the 
brand by 5%. Thorntons Moments, a product 
designed to be shared by the family or 
as an informal gift, was launched in the 
Spring and has performed ahead of 
our expectations. 
The new designs for our seasonal ranges 
at Christmas, Valentine’s Day, Mother’s Day 
and Easter all delivered improved sales. With 
a view to reducing our reliance on Christmas 
and Easter we have improved our ice cream 
offering, introducing two new flavours 
for sale in our own stores. We have also 
launched a new ice cream stick which 
comes in two delicious flavours: Toffee 
Temptation and Chocolate Trio. They are 
available in our own stores, supermarkets 
and convenience stores. 
Looking ahead, we have a new range 
of luxury chocolate blocks and a super 
premium box of chocolates coming out 
this Autumn together with a product 
pipeline packed with exciting ideas for 
the next three years.
06 Thorntons PLC Annual Report and Accounts 2008
_1_THT_ar08_front.indd   6 19/09/2008   09:06:22 Modernising the in-store 
environment
Whilst we have continued to improve 
the look of our current estate, the most 
notable achievements during the year were 
the design of the new store concept and the 
improvement to our infrastructure with the 
specification of a new Electronic Point 
of Sale (“EPOS”) system.
The new concept has been designed to give 
the stores a more contemporary feel and 
create a more exciting shopping experience, 
making our wonderful products the “heroes 
of the store”. Since the year end, the first 
three new stores opened in Kingston upon 
Thames, Reading and Bluewater in August 
with further openings expected in September 
in Nottingham and Edinburgh. We will 
closely monitor the performance of these 
stores until after Christmas before we 
decide what further actions to take.
We have begun to replace our EPOS 
equipment which is expected to be 
completed before Christmas. Our current 
equipment is more than ten years old and 
no longer compatible with today’s chip and 
pin or cashless payment systems. The capital 
cost of this project is over £4m, spread over 
two years. The new system will help to 
reduce customer waiting time significantly 
in the peak Christmas season as well as 
providing us with more user friendly and 
valuable sales information.
 Further expanding our Commercial 
and Direct businesses
A key part of our long-term strategy is 
to make our products available to more 
customers throughout the country. Other 
retailers and our website will play an 
important role in achieving this. Our own 
stores and Franchisees offer customers 
a wide range of products and individual 
service with the added benefits of 
personalised gift wrapping or icing of 
messages, whereas the supermarkets and 
convenience stores provide the benefits 
of wider availability of a narrower range. 
The Thorntons Direct business offers the 
ultimate choice in product personalisation 
and the benefit of 24/7 shopping and 
delivery to even the remotest location. 
All have a vital role to play and I am very 
pleased that we have delivered growth 
across all four channels.
Attracting and retaining 
the best people
Our people are key to the success of our 
growth strategy. In Retail we have improved 
the competitiveness of our pay and benefits 
package and provided more training to both 
Store Managers and Sales Assistants. As a 
result we have colleagues who are better 
able to provide customers with an enjoyable 
shopping experience and excellent customer 
service as well as seeing reduced staff turnover.
Thorntons has a very loyal customer base with a very strong 
brand franchise. Our challenge is to give the brand a broader 
appeal and we have made good progress during the year.
Thorntons’ new retail concept launch 
Chocolate tempering in Thorntons’ kitchen
Thorntons PLC Annual Report and Accounts 2008 07
_1_THT_ar08_front.indd   7 19/09/2008   09:06:33 Attracting and retaining 
the best people continued
On the supply side we followed last 
year’s successful implementation of the 
“Regrading Programme” with substantial 
changes to the shift patterns and can now 
operate 24/7 on many of our production 
lines. I am pleased to say that these changes 
involved extensive consultations with our 
staff and were implemented with their 
full support.
Finally, we have begun to implement 
programmes to develop our Managers 
internally, creating career opportunities 
and internal succession opportunities. 
The recently announced promotions of 
Lysanne McCallion to Director of Retail 
and of Hannah Legg, who joins the 
Executive Team as Head of Thorntons Direct, 
are good examples of these changes. I am 
also pleased to welcome Sarah Riley who 
joined us in August as Director of Human 
Resources replacing Carmel Brown. Carmel 
left us in July 2008 to pursue a change of 
career and I would like to thank her for 
her contribution to Thorntons and wish 
her good luck in her new endeavour.
Operational performance
Own stOREs
Our own retail stores performed well this 
year with overall and like-for-like growth in 
every quarter resulting in sales of £135.1m 
and a 4.6% growth for the year. The retail 
estate increased by a net 11 stores to 379 
as a result of 14 openings and 3 closures 
as we continue to address a small number 
of poorly performing stores. We remain 
committed to our goal of reaching 400 stores. 
While we have made progress, the current 
uncertainties in the property market may 
have an impact on the timing. We will 
closely monitor the situation and take 
advantage of opportunities for good 
sites as they arise.
FRAnChisE stOREs
The Franchise business grew by 14.5% 
to £14.9m in the year with a net increase 
of 32 stores. We now have 250 stores 
and are making good progress towards 
the medium-term target of 300. I would 
like to express my thanks to Franchisees for 
their ongoing commitment and dedication 
to the Thorntons brand. We appreciate 
their candid feedback and suggestions for 
improvement and the fact that 40% of the 
independent store openings in the course 
of the financial year came from existing 
Franchisees opening additional stores 
with us is a testament to their loyalty.
COmmERCiAL sALEs
The Commercial business rose 33.8% to 
£49.5m and is becoming an increasingly 
important part of the business, generating 
nearly a quarter of our sales. All the major 
multiples are customers and Thorntons 
is now the undisputed brand leader in 
what AC Nielsen defines as the “Inlaid Box 
Chocolate Category” with a market share of 
22% (AC Nielsen). The launch of Thorntons 
Moments into the twist wrap category has 
also proved to be a success and made a 
significant contribution to the sales growth 
in the Commercial channel.
thORntOns DiRECt
Finally, our Direct business which includes 
the consumer, online and corporate end 
user businesses continued last year’s trend 
with sales of £8.6m, which represents 
growth of 26.6% for the full year. Product 
innovation, increasing the size of our customer 
database, improving conversion rates and 
delivery accuracy have all contributed to 
the success of this channel.
suPPLy ChAin
The performance of our supply chain 
continues to improve. Customer service 
levels increased to 95%, up from 94% 
last year and 88% the previous year.
The most significant impact on the 
supply side of the business this year has 
undoubtedly been the substantial increases 
in raw material prices and energy costs. 
As has been widely reported, dairy product 
prices rose by more than 70% at one point 
during the year before dropping back 
down again. Chocolate prices have risen 
40% year on year and the market continues 
to be volatile and difficult to predict. Energy 
price increases have also been challenging. 
We have, however, succeeded in absorbing 
the high input costs by improving 
productivity and increasing prices, thus 
restoring profitability. We expect input 
costs to remain high during the current 
financial year but we are well placed to 
mitigate the likely impact through increased 
pricing across all our product ranges. 
I strongly believe we will continue to improve our performance 
overall as long as we remain close to our traditional values of 
high quality products and innovation and place our customers 
at the forefront of our thinking.
08 Thorntons PLC Annual Report and Accounts 2008
Chief Executive’s report continued
_1_THT_ar08_front.indd   8 19/09/2008   09:06:33 Commercial
£49.5m
Own Stores
£135.1m
Thorntons Direct
£8.6m
Franchise Stores
£14.9m
Outlook
Despite the uncertain general economic 
environment and the challenges faced 
by all retailers, I am confident about 
Thorntons’ progress and prospects.
During the course of the last year we 
have developed a long-term plan with 
the following goals:
  To be recognised as the UK’s leading 
premium chocolate brand. Given the 
recent “Superbrands” report, arguably 
we already are but we will not be 
complacent as more remains to be 
done to consolidate this position.
  To increase our share of the UK 
chocolate market by more than 50%. 
Our sales today represent approximately 
6% of the total market and we believe 
there are many opportunities for growth 
as we realise our new product pipeline 
and expand into new categories.
  To increase our all year round business 
and reduce our financial dependency 
on Christmas and Easter. Our new 
ice cream products are good examples 
of this strategy.
  To improve our operating profit 
margin. During the last few years 
our profit as a percentage of sales 
has hovered around the 4% mark and 
we believe that this can be improved 
through innovation, product design, 
pricing and productivity improvements.
  To grow internationally through the 
selective development of export sales. 
This is a longer-term goal as our priority 
is to grow and improve performance in 
the UK first. Nevertheless, lead times can 
be long and we feel it is right to include 
this goal in the development of our 
long-term plans.
Thorntons is continuing with its progress 
during the first weeks of the new financial 
year. I strongly believe we will continue to 
improve our performance overall as long 
as we remain close to our traditional values 
of high quality products and innovation 
and place our customers at the forefront 
of our thinking.
Mike Davies
Chief Executive
9 September 2008
Revenue
Thorntons PLC Annual Report and Accounts 2008 09
_1_THT_ar08_front.indd   9 19/09/2008   09:06:35 Profits and tax
Operating profit improved by 16.7% to 
£10.3m (2007: £8.9m) compared with 
a growth in sales of 11.9%. Cost of sales 
(49.5%) and operating expenses (46.1%) 
together remained at the same percentage 
of sales as last year which allowed the 
benefit of the sales increase to flow through 
to the bottom line. Finance costs increased 
only marginally as improved working capital 
management during the year mitigated the 
adverse effect of interest rate rises since 
August last year. As a result, profit before 
taxation (“PBT”) improved by 19.6% to £8.5m.
The tax charge for the year of £2.4m 
represents 28.4% of PBT compared with 
last year’s unusually low tax charge of 
25.2%, which included a one-off £0.5m 
credit (7.1% of PBT) due to the effect 
of the reduction in the standard rate 
of corporation tax from 30% to 28% on 
the deferred tax provision. The total tax 
charge this year includes a £0.3m credit 
(3.3% of PBT) arising from finally agreeing, 
in principle, the tax due for prior financial 
years. If allowance is made for the prior 
year tax credit the underlying current year 
tax charge is 31.6% which, as in previous 
years, is higher than the effective statutory 
rate of 29.5%. This is due to an historic 
element of capital investment for which 
no tax allowances are available.
The Finance Act 2008 was passed shortly 
after the year end and included legislation 
phasing out the benefit of industrial buildings 
allowances, which are deductible for tax 
purposes, over a period of four years. 
This change has a minimal effect on the 
2007/08 tax charge but will generate a 
one-off deferred tax charge in 2008/09 of 
approximately £2.9m (which is a non-cash 
item). Once the tax allowances are fully 
phased out, the Group’s annual tax cash 
cost will increase by some £250,000 which 
will be mitigated by the reduction in the 
corporation tax rate from 30% to 28% 
effective from 1 April 2008.
Shareholder returns and dividends
Basic earnings per share have increased 
from 8.0p to 9.1p, an increase of over 
13%. If we exclude the one-off tax 
credit due to tax rate changes worth 
0.8p included in last year’s comparative 
earnings per share, the underlying 
increase in earnings per share is 26%. 
Dividends paid in the year amounted 
to 6.8p per share. An interim dividend 
of 1.95p was paid during the financial 
year and the Board is recommending 
a final dividend of 4.85p at the Annual 
General Meeting on 23 October 2008 to 
be paid to shareholders in November 2008. 
The total dividend in respect of the year’s 
earnings amounts, therefore, to 6.8p.
Cash and debt
Cash generated from operations before 
taxation declined from £16.1m last year 
to £14.0m this year. Whilst operating cash 
flow improved from £19.8m to £21.9m, 
the improvement was offset by £7.9m of 
adverse working capital movement including 
the effect of pension scheme liability 
changes. The adverse working capital 
movement included (i) a build-up of stocks 
in anticipation of higher sales in the next 
financial year which were only partially 
funded by higher trade creditors, 
(ii) increased debtors due to the increase 
in commercial and franchise credit sales 
in the last quarter of the year and (iii) the 
effect of the continuing payments made 
to reduce the Group’s pension deficit.
Cash invested in fixed assets amounted to 
£7.5m (2006/07: £8.3m), of which £1.8m 
(2006/07: £3.2m) was funded through 
finance leasing. The net balance sheet 
addition to fixed assets of £7.9m was 
slightly more than the cash figure and 
included £4.5m of expenditure on either 
improving or adding to the retail estate 
with the balance being invested in new 
product tooling, manufacturing and 
IT improvements.
The Group benefited from having renegotiated 
its committed banking facilities for a three 
year period on favourable terms shortly 
before the effects of the “credit crunch” 
adversely affected the banking market.
10 Thorntons PLC Annual Report and Accounts 2008
Finance Director’s report
_1_THT_ar08_front.indd   10 19/09/2008   09:06:35 Business performance
The Board continues to apply the following 
key performance indicators in order to 
measure progress towards achieving 
shareholder value:
  Net sales growth – the year-on-year 
increase in sales revenue excluding any 
impact from acquisitions or disposals
  Like-for-like sales growth – the change 
in the sales of our own shops which 
are open for trading for corresponding 
periods comparing the current year 
with the previous year
  Gross return on sales – gross margin 
as a percentage of net sales revenue
  Profit before tax – current year profit before 
tax compared with the previous year
  Operating cash flow – cash generated 
from operations before working capital 
movements, taxation, asset investment 
and financing activities
Performance against these was as follows:
   2008 2007 2006
Net sales growth 11.9% 5.3% (5.9)%
Like-for-like  
sales growth 2.9% 0.8% (3.7)%
Gross return  
on sales 50.5% 53.7% 52.0%
Profit before tax £8.5m £7.1m £5.2m
Operating  
cash flow £21.9m £19.8m £18.0m
A review of each of the above is included 
under the appropriate heading elsewhere 
in this report.
Sales
The Group’s sales are made through a 
number of channels whose performances 
are summarised below: 
   2008 2007 % 
Revenue £m £m  increase
Own stores 135.1 129.2 4.6%
Franchise 14.9 13.0 14.5%
Commercial 49.5 37.0 33.8%
Thorntons Direct 8.6 6.8 26.6%
Total 208.1 186.0 11.9%
The sales figures for 2007/08 are for a 
52 week year compared with a 53 week 
year in 2006/07. If the 53rd week’s sales 
of £2.3m are excluded from the 2006/07 
reported figures the reported sales growth 
improves to 13.3%.
A detailed review of the sales 
performance by channel is included 
in the Chief Executive’s report.
Margins
The gross margin improved by £5.1m driven 
by the growth in sales offset by a decline in 
percentage margins from 53.7% last year to 
50.5% this year. The decline in margin was 
due to a number of factors including the 
change in the proportion of sales through 
the various channels (which is largely 
mitigated by the lower costs of serving the 
faster growing channels), improving the 
product offering and the effect of absorbing 
the significant raw material cost increases 
experienced this year until new sales pricing 
implemented in the second half of the year 
offset the effect of cost increases.
Costs
Operating expenses have grown by £4.0m 
representing a growth of 4.4% which is 
significantly less than the sales growth 
of 11.9%. As a consequence, operating 
expenses have decreased from 49.4% of 
sales last year to 46.1% of sales and have 
offset the decline in gross profit percentage. 
A large part of the overall increase 
in operating expenses represents the 
operating costs of expanding the number 
of shops in the retail estate and investing 
in new franchisees. The remainder of the 
increase in operating expense includes the 
effects of inflation on payroll costs together 
with higher distribution costs related to the 
higher volume of sales.
Profits on asset (mainly property) disposals 
declined from £353,000 last year to £143,000 
in the current year.
Other operating income
There has been a 41.0% improvement 
in other operating income from £0.8m 
to £1.1m which is mainly due to increased 
sales by existing licensees of Thorntons 
branded products and to the addition of 
a new range of ice cream products sold 
by a new licensee.
Pensions
The IAS 19 pension scheme deficit has 
increased from £15.4m last year to £16.0m 
at the end of the current financial year. 
The discount rate for the scheme’s liabilities 
has increased significantly since last year 
from 5.5% to 6.3% in line with market 
trends and has reduced the cost of future 
liabilities by £3.5m. However, the general 
decline in the value of equity markets has 
led to a reduction in the scheme’s asset 
valuation of £3.0m which offsets most of 
the actuarial gain on liabilities leaving the 
deficit impacted by the ongoing service cost.
The Company continues to inject funds into 
the scheme in order to reduce the scheme 
deficit over time. Deficit reduction payments 
totalled £1.7m during the year.
Information systems
Significant progress was made during the 
year on defining and specifying new shop 
till systems which are required to replace 
our current systems as they are over ten years 
old and obsolescent. The first pilot shop 
implementation took place in August 2008 
and we plan to complete the rest of the 
estate before the Christmas season in order 
to benefit from the faster response times of 
the new system which will help to reduce 
queuing in our shops at peak times.
Other projects undertaken during the 
year included upgrading Thornton Direct’s 
systems in order to comply with current 
credit card security standards, completing 
the Company’s chip and pin project and 
upgrading the communications network 
capability at Thornton Park.
John Wall
Finance Director
9 September 2008
Thorntons PLC Annual Report and Accounts 2008 11
_1_THT_ar08_front.indd   11 19/09/2008   09:06:36 12 Thorntons PLC Annual Report and Accounts 2008
Corporate social responsibility 
Thorntons PLC recognises it has social, 
ethical and environmental responsibilities 
arising from its operations. Integrity is one 
of our brand values and we are committed 
to the welfare of our colleagues, customers, 
suppliers and the communities in which 
we operate.
Making our products
sOuRCing OuR mA tERiALs
Our products use over 300 different 
raw materials, which are sourced by 
our suppliers from all around the world. 
The majority of our product range are 
made with natural colouring and flavours 
and our entire children’s range contains 
no artificial colours, flavours or added 
preservatives. A few years ago we introduced 
an organic product range and we are about 
to launch our first ‘Fairtrade’ products this 
autumn. To qualify as ‘Fairtrade’, products 
must meet the international ‘Fairtrade’ 
standards, which relate to three areas of 
sustainable development: social, economic 
and environmental development.
We currently ensure ethical, social and 
environmental standards are maintained 
by auditing and visiting 95% of our suppliers 
on a regular basis. Our main concern is 
food safety but our audits also review 
ethics, health and safety, employee pay, 
employment conditions, use of child labour 
and environmental policies and practices. 
Over the last twelve months our 
purchasing policy has been reviewed 
and revised to ensure all suppliers are 
treated fairly. We apply the highest 
moral and business standards and treat 
information we receive from suppliers 
in confidence. We aim to build long-term 
relationships with our suppliers on the 
basis of openness and honesty. 
Thorntons is a member of the World 
Cocoa Foundation (“WCF”). One of the 
WCF’s objectives is to encourage responsible 
sustainable cocoa farming amongst these 
small family-run businesses. Through a 
better understanding of their aims, objectives 
and projects, we are examining ways we can 
make a greater contribution to improving 
the conditions of cocoa farmers.
OuR EmPLOyEEs
In addition to providing core benefits of 
remuneration (including annual incentive 
schemes), holidays, sick pay, life assurance 
and pension provision, Thorntons offers 
a recently reviewed flexible benefits 
programme, training and development 
programmes, discounts and participation 
in Company share scheme offers. Thorntons 
recognises that work plays an important 
role in people’s lives but equally important 
is the time spent with families and friends 
and it has developed family friendly policies 
including maternity/paternity/adoption 
leave; parental leave; time off for dependents 
and compassionate leave. Employees and 
their immediate families also have access 
to a confidential counselling and legal 
assistance helpline which operates 24 hours 
a day, 365 days a year and the Company 
has a published procedure (“whistle blowing 
policy”) for employees to report any 
concerns confidentially. 
Last year we undertook a major restructuring 
and simplification of grading and pay rates 
for our employees. This year, we commissioned 
an external company to survey all of our 
employees covering a wide range of issues 
including company benefits, working 
conditions and working relationships. 
The results of the survey will be fed back 
to all employees and used to further identify 
and implement improvements.
The Company has recently taken steps 
to improve its succession planning 
by undertaking an audit of the skills, 
qualifications and aspirations of our 
management staff. This information is 
vital to ensure we develop the capability 
to grow the business in line with our 
long-term goals. Management performance 
is reviewed annually and, under the 
new grading structures, the Company 
is planning to introduce management 
development reviews. 
Training is available to all staff and we aim 
to develop both individuals and teams in 
line with our business needs such that we 
grow our organisational capability. 
COmmunity issuEs
The seasonal nature of our business 
means that we employ a large number of 
temporary staff from the local community in 
our production and indeed we have a policy 
to recruit staff locally in order to provide 
a benefit to the local community. As the 
business expands we have been able to 
offer temporary staff permanent positions. 
Integrity is one of our brand values and we are committed 
to the welfare of our colleagues, customers, suppliers and 
the communities in which we operate.
_1_THT_ar08_front.indd   12 19/09/2008   09:06:36 Thorntons’ training in progress 
Thorntons PLC Annual Report and Accounts 2008 13
Many of our ingredients are sourced from 
local, UK based, suppliers and this factor is 
considered in our purchasing decisions for 
both ingredients and packaging of goods. 
Thorntons retains links with its former staff 
through annual outings and dinners and builds 
new relationships through local school 
activities and work placement schemes.
hEALth AnD sAFEty in PRODuCtiOn
In order to ensure continual improvement 
in health and safety, Thorntons has a safety 
improvement programme and central to 
this programme is regular health and safety 
risk assessments and over the year we have 
trebled the number of risk assessments and 
complemented these with training courses 
for managers. We have also improved the 
documentation of hazards during this 
period. An analysis of our health and safety 
statistics identified manual handling and 
slips, trips and falls as the major causes of 
lost-time accidents. Clear manual handling 
control measures have been introduced 
which has resulted in a steady decline in 
lost time accidents in production of 47% 
over the last two years. 
We monitor and review the incidents and 
accidents in the workplace so that we can 
take appropriate action to improve working 
conditions. In order to improve the safety of 
visitors, employees and contractors around 
the site we have introduced pedestrian and 
vehicle segregation in areas of high traffic 
flow. We have also improved our procedures 
for accepting visitors and contractors on to 
the production site.
A health and safety site committee meets 
regularly to discuss unresolved health 
and safety matters and reviews statistics 
on accidents and lost time accidents.
In September this year we are planning 
an independent external health and safety 
audit and this will be followed by assistance 
from external consultants to further improve 
our accident reporting procedures.
OCCuPAtiOnAL hEAL th
Whilst always aiming to minimise 
accidents occurring in the workplace, 
we are also working with our insurers 
and have improved our occupational 
health service to employees by providing 
post accident access to private medical 
services, which will assist with the 
rehabilitation process. We also use an 
external occupational health company 
to provide us with health management 
services and a doctor attends Thornton Park 
weekly. Free eye tests and spectacles, where 
required, are provided for all VDU operatives. 
We have also introduced a wellbeing 
policy to help deal with stress at work. 
In the coming year we plan to undertake a 
new noise assessment across Thornton Park 
and provide audiometric screening for all 
relevant employees. 
Offering customers choice
CustOmERs
We believe in offering customers choices 
about what they purchase and offer both 
organic and diabetic ranges. We have 
recently introduced a range of Fairtrade 
products and have plans to develop 
dairy-free easter eggs for Easter 2009. 
As our products are luxury gift items, they 
are not viewed as part of a balanced diet, 
but we can provide advice on consumption 
and do inform consumers about nutrients 
through the pack labelling, where size 
permits. Thorntons also provides information 
on specific ingredients on request, 
e.g. whether products are gluten-free, 
or contain alcohol.
We undertake regular consumer surveys, 
which include questions about ethics and 
respond to the results of these surveys 
when developing our products. In addition, 
we obtain feedback from staff serving 
customers in our stores of their perception 
of issues that affect customer satisfaction 
and build them into our plans.
Customer complaints are handled centrally 
and we are proud of the process we have 
established. All complaint investigations 
are started within 24hrs of receipt and 
we attempt to resolve each one to the 
satisfaction of our customers. Our policy 
is to communicate with our customers in 
“plain English”. All complaints are recorded 
so that we can undertake a detailed 
analysis, monitor trends and identify 
key issues.
PACkAging
Packaging and waste are key issues for 
the Company and we have already made 
progress in our purchasing policies for 
packaging materials. We have developed 
environmental policies for the procurement 
of packaging and are moving towards 
sourcing Forest Stewardship Council 
(“FSC”) approved materials for our cartons 
Farmer Field School in Côte D’lvoire
_1_THT_ar08_front.indd   13 19/09/2008   09:06:44 14 Thorntons PLC Annual Report and Accounts 2008
Corporate social responsibility continued 
Offering customers choice continued
PACkAging continued
and have been phasing out the use of 
polyvinyl chloride over the last 18 months. 
Our cartons are sourced from the UK and 
we are currently reviewing the overall 
environmental impact of using more 
recycled materials in the cartons. 
There is currently a major initiative to reduce 
packaging on Easter eggs and Easter 
products as measured by the percentage 
of cardboard packaging to product. 
tRAnsPORt
We have taken a number of initiatives 
in goods transport to reduce the impact 
of our products on the environment. 
These initiatives are principally designed to 
reduce fuel consumption through improved 
efficiency of vehicles or their movements. 
We have recently purchased more fuel 
efficient and low emission vehicles, 
which exceed current European emission 
requirements. The vehicle manufacturer 
has also provided training to drivers 
on more efficient driving methods.
As regards lorry movements we have 
introduced back hauling of cardboard from 
the retail stores in empty vehicles returning 
to our production site. We are also making 
use of “thermal containers” in our trailers. 
These containers are frozen at our production 
site and loaded onto vehicles at the last 
possible moment. As chiller units are not 
required, fuel efficiency increases and there 
is more efficient utilisation of space within 
the trailer.
Over the next six months we are beginning 
a project to reduce the frequency of 
deliveries, fuel costs and consumption 
by reviewing the mix of vehicles used and 
ensuring that wherever possible full loads 
are carried. We will also be examining 
the case for using biofuels through an 
assessment of the overall environmental 
benefit over the lifecycle of the product.
External issues
EnViROnmEnt 
During the last year, our priorities for 
improving our environmental performance 
have been in the areas of waste management 
and energy use. For waste management, 
we set up teams to identify waste reduction 
opportunities. As a result we have entered 
into an integrated waste management 
contract with our waste contractor and 
improved both the segregation and the 
proportion of waste recycled, including 
plastic wrapping, sheets and moulds, metal 
straps and cardboard. Although this has 
required new equipment, there has been 
a net reduction in our waste costs. Also, 
cardboard generated in our retail outlets 
is being sent to our production site at 
Thornton Park in the returning empty lorries.
At our production site we have taken 
a number of initiatives to reduce energy 
consumption by, for example, reducing 
compressed air leaks, installing a daylight 
trigger on lighting in the packing area 
and changing to high frequency battery 
chargers. We have also spent approximately 
£100,000 on a new energy efficient 
compressor with improved capacity and 
have been championing a change in staff 
behaviour through a sticker and poster 
campaign reminding staff to turn off lights 
and computers when not in use. This 
is followed up with occasional reminders 
and newsletter articles. Looking forward, 
we are examining the feasibility of 
cogeneration of electricity and process 
steam on site.
Next year, at our 380+ retail stores, we have 
a programme to replace the lighting and 
we are taking the opportunity to install 
energy efficient fittings and lamps. We have 
also embarked on a programme to replace 
our air conditioning equipment in 100 stores 
with energy efficient equipment. This will 
also be phasing out R22 refrigerant by 2010. 
We have also been trialling a bio-treatment 
process for reducing both the chemical 
oxygen demand and suspended solids 
content of our effluent waste which, 
if successful, will reduce both costs and 
the environmental impact. Our environment 
team is additionally assessing the feasibility 
of composting our kitchen waste.
Other community issues
A staff fundraising committee is actively 
involved in raising money for children’s 
charities. Last year the committee raised 
£22,000 for Barnardo’s by co-ordinating 
a range of initiatives including sponsorship 
from suppliers for runners in a marathon 
and arranging collection points in stores. 
Another project is raising money for 
The Guide Dogs for the Blind Association 
through sponsorship of participants in, 
for example, the Coniston challenge. It is 
the policy of the Board not to make any 
political donations. 
Thorntons’ more fuel efficient and low emission vehicles Thorntons’ staff complete London marathon
_1_THT_ar08_front.indd   14 19/09/2008   09:06:50 Chairman
JOhn VOn sPRECkELsEn  
nOn-ExECutiVE ChAiRmAn. AgED 65 R. n.
Joined Thorntons in June 2006. He was 
previously Chief Executive Officer of 
Budgens plc and Chairman of Somerfield plc. 
Currently he is Chairman of McLeish Holdings 
Limited, a Non-Executive Director of MEP 
Mayflower Holdings, an Operating Partner 
of Merchant Equity Partners LLP in the UK, 
and Deputy Chairman of But SAS in France. 
He was Chairman of Safestore Holdings plc 
until March 2008. He is Chairman of the 
Nomination Committee.
Executive Directors
mikE DAViEs 
ChiEF ExECutiVE. AgED 55
Joined Thorntons in October 2006. 
Previously held a number of senior 
positions in Mars Inc., including Managing 
Director of the UK and Ireland, European 
Vice-President, Sales and latterly as President 
of Latin America sitting on Mars Inc.’s 
Worldwide Operating Board. Prior to joining 
Mars, Mr Davies spent three years with 
Procter & Gamble.
BARRy BLOOmER 
OPERAtiOns DiRECtOR. AgED 46
Joined Thorntons in July 2005 and was 
appointed to the Board in July 2006. 
Previously European Operations Director 
of Black & Decker and prior to that 
Quality Director for Philips Components.
JOhn wALL 
FinAnCE DiRECtOR. AgED 58
A chartered accountant, joined Thorntons 
in December 2004. Prior to this he had 
a number of Finance Director roles including 
Group Finance Director, Lee Cooper Group 
and Controller of the European Division 
of Thomas & Betts Corporation.
PEtER wRight 
mARkEting DiRECtOR. AgED 41
Joined Thorntons in August 2007. 
Previously held a number of senior 
marketing positions in Tesco plc including 
UK Director for brand marketing, UK 
Director for stores and non-food marketing 
and latterly as Marketing Director for Tesco, 
Ireland. Prior to joining Tesco he held a 
number of senior marketing positions both 
in the UK and internationally with Diageo.
Non-Executive Directors
mARtin DAVEy 
nOn-ExECutiVE DiRECtOR. Ag ED 55 A. R. n.
Joined Thorntons in April 2004. He is 
Chairman of Cranswick plc, whose 
activities are focused on the food sector. 
He is Chairman of the Audit Committee 
and is the Senior Independent Director.
PAuL wiLkinsOn  
nOn-ExECutiVE DiRECtOR. Ag ED 63 A. R. n.
Joined Thorntons in August 2006. He holds 
a portfolio of executive, non-executive and 
advisory roles in the food, consumer and 
retail sectors. He is a Director of Aryza AG. 
He is Chairman of the Remuneration 
Committee and is regarded as an 
independent Director.
kEy:
A. Audit Committee 
R. Remuneration Committee  
n. Nomination Committee
The Terms of Reference of the Audit, 
Remuneration and Nomination Committees 
are available on the Company’s website 
www.thorntons.co.uk and upon request 
to the Company Secretary.
Board of Directors
Thorntons PLC Annual Report and Accounts 2008 15
_1_THT_ar08_front.indd   15 19/09/2008   09:06:50 Secretary and registered office
mARk R. hEnsOn FCis 
Thornton Park 
Somercotes 
Derbyshire DE55 4XJ
Tel: 0845 075 7565 
www.thorntons.co.uk
Registered No. 174706 
Independent auditors
PRiCEwAtERhOusECOOPERs LLP
Chartered Accountants and Registered Auditors 
Leeds
Registrars
CAPitA REgistRARs 
Northern House 
Woodsome Park  
Fenay Bridge 
Huddersfield HD8 0LA
Tel: 0870 1623131  
Fax: 01484 600911 
www.capitaregistrars.com
Principal bankers
BARCLAys BAnk PLC
FORtis BAnk sA/nV uk BRAnCh 
hsBC PLC
LLOyDs tsB BAnk PLC
Financial advisors and corporate brokers
DREsDnER kLEinwORt
Financial PR advisors
CARDEw gROuP LimitED
Corporate information
16 Thorntons PLC Annual Report and Accounts 2008
_1_THT_ar08_front.indd   16 19/09/2008   09:06:50 Annual Report and Accounts 2008 Thorntons PLC 17
The Directors of Thorntons PLC have pleasure in presenting their Annual Report and the audited financial statements of the Company 
and Group for the 52 weeks ended 28 June 2008.
Principal activities and business review
The principal activities of the Group during the period were the manufacturing, retailing and distribution of high quality confectionery and 
other sweet foods. A review of the Group’s performance during the period, with commentary on the financial results, future development 
and principal risks and uncertainties facing the Company is contained in the Chairman’s statement (pages 4 and 5), the Chief Executive’s 
report (pages 6 to 9), the Finance Director’s report (pages 10 and 11) and the Corporate Governance statement (pages 20 to 23), which 
are incorporated into this report by reference and taken together fulfil the Companies Act requirements of the Business review.
Financial risk management
Details of the Group’s financial risk management policies are set out in note 17 on pages 55 to 57.
Results and dividends
The profit for the financial year, before tax, was £8.5m. An interim dividend of 1.95p per share was paid on 25 April 2008 (2007: 1.95p). 
The Directors recommend a final dividend of 4.85p per share (2007: 4.85p) which is not reflected in the attached accounts, representing 
a total for the period of 6.80p (2007: 6.80p). Subject to shareholders’ approval, the final dividend will be paid on 28 November 2008 to 
shareholders on the register at the close of business on 31 October 2008.
Directors
The current Directors of the Company, together with their biographical details, are shown on page 15. The Directors during the year 
who served for the whole of the period and up to the date of signing the financial statements, except where stated, were:
ChAiRmAn  
J A von Spreckelsen 
non-ExECutivE DiRECtoRs
M T P Davey
P N Wilkinson 
ExECutivE DiRECtoRs
B Bloomer 
M R Davies 
D Prendergast (resigned 1 August 2008)
J R Wall
P D J Wright (appointed 13 August 2007) 
The Directors retiring by rotation at the Annual General Meeting (“AGM”) are B Bloomer and P N Wilkinson, who, being eligible, offer 
themselves for reappointment. The interests of the Directors and their immediate families in the shares of the Company and in options 
over such shares granted under the Company’s share option schemes are shown in the Report on Directors’ Remuneration on pages 24 
to 31. No Director was materially interested, either during or at the end of the period, in any contract of significance in relation to the 
business of the Company or its subsidiaries.
Share capital
Details of the Company’s voting and share capital structure and any changes during the year under review are shown in note 22 to the 
accounts on pages 64 and 65. No person has any special rights of control over the Company’s share capital and all issued shares are fully paid.
Report of the Directors 
_2_THT_ar08_back.indd   1 19/09/2008   09:04:39 18 Thorntons PLC Annual Report and Accounts 2008
Report of the Directors continued
Interests in voting rights
The Company has been notified of the following significant interests in voting rights of the Company’s issued share capital as at 
9 September 2008:
       Ordinary  
       shares %
Oppenheimer Funds       7,032,561 10.3
Joseph Rowntree Charitable Trust       4,000,000 6.0
SVG Capital plc       3,507,000 5.2
Legal and General       3,416,693 5.0
Ms P A Thornton*       3,177,611 4.8
Mrs J S Harcus*       2,806,186 4.2
Fidelity International Ltd       2,794,616 4.1
Strategic Equity Capital plc       2,117,000 3.1
* These include joint holdings as trustees and, consequently, certain shares are allocated against more than one name.
Employee share schemes
The Company operates a number of share option schemes for the benefit of employees. Information regarding the schemes and the 
number of options outstanding is given in note 22 on pages 64 and 65.
Employee involvement
It is the Group’s policy to keep employees fully informed of matters affecting them as employees, and to make them aware of the financial 
and economic factors influencing Group performance. The views of employees are taken into account in making decisions affecting their 
interests, and information of relevance to all employees is communicated through a council system of employee representation and 
newsletters. Encouragement is given to colleagues to contribute towards the Group’s financial performance by annual bonus schemes 
and participation in the Company’s share schemes.
Equal opportunities and employment of disabled persons
Employment policies are designed to provide equal opportunity, irrespective of age, gender, sexual orientation, disability, religion, race or 
marital status. Applications for employment by disabled persons are given full and fair consideration and, whenever practicable, provision 
is made for their special needs. The Group applies the same criteria to disabled employees for training, career development and promotion 
as to any other employee. If existing employees become disabled, every effort is made to ensure their continued employment.
Research and development
The Group continues an active programme of research and development in all areas of its activities, with the constant review of existing 
products and development of new products being an integral part of this programme.
Charitable and political contributions
During the period, the Group made charitable contributions of £5,000 (2007: £5,000), and gave £3,000 (2007: £2,000) to local causes. 
It is the policy of the Board not to make political donations and accordingly none were made in the period (2007: £nil).
Payment of suppliers
The Group does not follow any specific external code or standard on payment practice. Its policy is to: 
 agree the terms of payment with suppliers when agreeing the terms of each transaction;
 ensure that those suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and
 pay in accordance with its contractual and other legal obligations.
The payment policy applies to all creditors for revenue and capital supplies of goods and services without exception. The Group 
and Company’s average creditor payment period at 28 June 2008 was 37 days (2007: 36 days).
_2_THT_ar08_back.indd   2 19/09/2008   09:04:39 Annual Report and Accounts 2008 Thorntons PLC 19
Auditors
Following a recommendation of the Audit Committee to the Board, a resolution to reappoint PricewaterhouseCoopers LLP as auditors 
to the Company will be proposed at the AGM.
DisClosuRE of infoRmA tion to A uDitoRs
In the case of each of the persons who were Directors at the date this report was approved:
  so far as each of the Directors is aware, there is no relevant audit information (as defined in the Companies Act 1985) of which the 
Company’s auditors are unaware; and
  each of the Directors has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant 
audit information and to establish that the Company’s auditors are aware of that information.
Statement of Directors’ responsibilities in respect of the Annual Report, the Report on Directors’ remuneration 
and the financial statements
The Directors are responsible for preparing the Annual Report, the Report on Directors’ Remuneration and the financial statements 
in accordance with applicable United Kingdom law and those International Financial Reporting Standards (“IFRS”) as adopted by the 
European Union.
The Directors confirm to the best of their knowledge:
  the financial statements, prepared in accordance with the applicable accounting standards, give a true and fair view of the assets, 
liabilities, financial position and profit of Thorntons PLC and the undertakings included in the consolidation taken as a whole; and
  the Report of the Directors includes a fair review of the development and performance of the business and the position of Thorntons PLC 
and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties 
that they face.
Company law requires the Directors to prepare financial statements for each financial period. Under that law the Directors have prepared 
the Group and Parent Company financial statements in accordance with IFRS as adopted by the European Union. The financial statements 
are required by law to give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group 
for that period.
In preparing these financial statements, the Directors are required to:
  select suitable accounting policies and then apply them consistently;
  make judgements and estimates that are reasonable and prudent;
  state that the financial statements comply with IFRS as adopted by the European Union; and
  prepare the financial statements on the going concern basis, unless it is inappropriate to presume that the Company or Group will 
continue in business, in which case there should be supporting assumptions or qualifications as necessary.
The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial 
position of the Company and the Group and to enable them to ensure that the financial statements and the Report on Directors’ Remuneration 
comply with the Companies Act 1985 and, as regards the Group financial statements, Article 4 of the IAS Regulation. They are also 
responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and 
detection of fraud and other irregularities.
The maintenance and integrity of the Thorntons PLC website is the responsibility of the Directors who accept that UK legislation governing 
the preparation and dissemination of financial statements may differ from legislation in other jurisdictions who may have access to the internet.
Approved by the Board on 9 September 2008 and signed on its behalf by:
Mark R. Henson 
Company Secretary
_2_THT_ar08_back.indd   3 19/09/2008   09:04:39 20 Thorntons PLC Annual Report and Accounts 2008
Corporate governance
Statement on compliance
The Company recognises the importance of and is committed to high standards of corporate governance. The Board is accountable to 
the shareholders for good corporate governance. This report describes how the Board applies the principles of good governance and 
best practice as set out in the June 2006 Combined Code on Corporate Governance (the “Combined Code”).
Throughout the year under review, the Board considers that the Company has complied fully with all provisions recommended in Section 1 
of the Combined Code. 
The Board
The Company is headed by a Board of Directors collectively responsible for the success of the Company. The Board provides leadership 
within a framework of prudent and effective controls designed to enable risk to be assessed and managed. It sets the Company’s strategy 
and is responsible for reviewing management performance and for ensuring the necessary financial and human resources are in place in 
order to meet the Company’s objectives. The Board also sets the Company’s values and standards mindful of its obligations to 
shareholders and other stakeholders.
The Board currently comprises the Chairman, four Executive Directors and two Non-Executive Directors. The Board regards M T P Davey 
and P N Wilkinson as being independent. The Chairman and Chief Executive both have clearly defined roles and responsibilities which 
are set out in writing and approved by the Board. The Chairman has responsibility for the leadership and the running of the Board, 
including but not limited to ensuring that a fixed schedule of matters is exclusively retained for the Board’s review and approval, and 
that a framework exists to allow the clear dissemination of relevant and timely information to all Directors for such discussion to occur. 
He is also responsible for communications with shareholders and for ensuring effective contributions from the Non-Executive Directors. 
The Chairman has commitments outside of the Company as detailed in his biography on page 15. All Directors are subject to 
reappointment by shareholders at the first AGM following their appointment and thereafter at intervals of no more than three years.
The Board meets regularly (normally nine times per financial year) and during the period under review there was full attendance at the 
nine Board meetings that took place by Directors eligible to attend. The Board regularly reviews the operational performance and plans 
of the Company and, as necessary, determines the Company’s current and proposed strategy. The Executive Directors also meet under 
the chairmanship of the Chief Executive on a weekly basis to discuss operational matters. All Board members receive agendas and 
comprehensive papers prior to each Board meeting. All Directors have access to the services of the Company Secretary who is responsible 
to the Board for ensuring that Board procedures are followed and that applicable rules and regulations are adhered to. Directors may also 
obtain further information from any manager or employee of the Company and there is a procedure for Directors to obtain independent 
advice from external advisors, consultants or any such further professional individual or entity at the Company’s expense. The Company 
maintains appropriate liability insurance for the benefit of its Directors.
The Chairman meets at least annually with the Non-Executive Directors without Executive Directors present and the Non-Executive 
Directors, led by the Senior Independent Director, meet annually to consider the Chairman’s performance, taking into account the 
Executive Directors’ views. The Senior Independent Director is also available to shareholders if they have any concerns which contact 
through the normal channels of the Chairman, Chief Executive or Finance Director has failed to resolve or for which such contact 
is inappropriate.
The terms and conditions of appointment of the Non-Executive Directors are available during normal business hours at the Company’s 
Registered Office and will be available for inspection at the AGM.
New appointments to the Board receive an appropriate induction to gain an understanding of the Company’s business, which includes 
meetings with senior management.
Given the skills and experience of the Non-Executive Directors, their general training requirements are left to their own discretion. The Company 
makes the necessary resources available to meet any identified requirements. The Chairman conducts a formal annual appraisal process 
for the Board, its Committees and individual Directors including those Directors due to offer themselves for reappointment at the AGM. 
The Executive Directors are also included in the Company’s annual performance appraisal arrangements which include development and 
training requirements.
The Board delegates its authority for certain matters to its Audit, Remuneration and Nomination Committees. The Board approves the 
terms of reference of each of the Committees and they are available on the Company’s website, www.thorntons.co.uk, and upon request 
to the Company Secretary. During the period under review there were three meetings of the Audit Committee and two formal meetings 
of the Remuneration and Nomination Committees with full attendance of all eligible Directors except for apologies from M T P Davey in 
respect of one Remuneration Committee meeting. In addition to formal Committee meetings, ad hoc decisions of the Committees are 
taken after discussion throughout the year as necessary through the form of written resolutions.
_2_THT_ar08_back.indd   4 19/09/2008   09:04:39 Annual Report and Accounts 2008 Thorntons PLC 21
Nomination Committee
The Nomination Committee is composed of the two independent Directors and the Chairman of the Board, J A von Spreckelsen. 
The Committee is chaired by J A von Spreckelsen and is responsible for reviewing the credentials of each and every potential Director 
before such nominee is proposed to the Board. In considering potential appointments to the Board the Committee evaluates the 
balance of skills, knowledge and experience on the Board when considering the role and capabilities required for a particular 
appointment. The Committee uses professional external recruitment specialists as and when appropriate. The Committee also 
reviews the contribution of Directors offering themselves for reappointment by shareholders.
Remuneration Committee
The Remuneration Committee is composed of the two independent Directors and the Chairman of the Board, J A von Spreckelsen, 
and is chaired by P N Wilkinson. The Board has delegated authority to the Committee for setting the Chairman’s, the Executive Directors’ 
and the Company Secretary’s remuneration and performance-related awards. Further details of the Committee and Directors’ remuneration 
is set out in the Report on Directors’ Remuneration on pages 24 to 31.
Audit Committee
The Audit Committee is composed of the two independent Directors and is chaired by M T P Davey. It meets three times a year with 
the external auditors and considers any issues which are identified during the course of their audit work. The Board is satisfied that 
both Committee members have recent and relevant financial experience. Meetings are also attended, by invitation, by the Chairman, 
Chief Executive, Finance Director and Financial Controller. The Committee meets at least annually with the external auditors without 
the Executive Directors present. 
The Audit Committee is responsible for monitoring the integrity of the Company’s financial statements; reviewing the Company’s internal 
financial controls and internal control and risk management systems; monitoring and reviewing the effectiveness of the internal audit 
function; making recommendations to the Board regarding the appointment, reappointment or removal of the external auditors and 
approving their remuneration and terms of engagement; reviewing and monitoring the external auditors’ independence and objectivity 
and the effectiveness of the audit process; and developing and implementing a policy on the engagement of the external auditors to 
supply non-audit services.
In respect of safeguarding the objectivity and independence of the external auditors, the Committee has a formal policy regarding 
the provision of non-audit services by the external auditors including certain services which they cannot provide so as not to compromise 
their independence (for example, bookkeeping or other internal accounting services, internal audit, management roles or legal services). 
The policy also provides for tendering for services where appropriate and has specific pre-approved categories of work subject to the 
level of fees involved. A formal rotation policy of the audit partner also exists which limits tenure to a maximum of five years. 
The Committee also specifically reviews the levels of all fees paid to the auditors for audit and non-audit services annually. The external 
auditors report to the Audit Committee each year on the actions they have taken to comply with professional and regulatory requirements 
and best practice designed to ensure their independence. The Committee reviews whether the auditors believe there are any relationships 
that may affect their independence and additionally the auditors formally confirm their independence in writing to the Board in respect 
of the period covered by these financial statements.
The Committee also receives regular detailed reports from the internal audit function and, to ensure its activities are appropriate, reviews 
its proposed work-plan for future periods.
_2_THT_ar08_back.indd   5 19/09/2008   09:04:40 22 Thorntons PLC Annual Report and Accounts 2008
Corporate governance continued
Internal controls
The Company’s control environment is the responsibility of the Company’s Directors and managers at all levels. The Board is therefore 
responsible for establishing and maintaining the Company’s system of internal control and for reviewing its effectiveness. No control 
system can provide absolute protection against material misstatement or loss but it is designed to manage rather than eliminate the 
risk of failure to achieve business objectives and to provide the Directors with reasonable assurance that problems should be identified 
on a timely basis and dealt with appropriately.
The Board has delegated responsibility for reviewing the Company’s system of internal control and its effectiveness to the Audit Committee. 
Due to the size of the Company, the Executive Directors are able to monitor performance, evaluate and manage on a continual basis the 
risks faced by the Company. The key procedures that have been established to provide effective internal control and to comply with the 
Financial Reporting Council’s guidance on Internal Control: Revised Guidance for Directors on the Combined Code (October 2005) include:
  a formalised reporting structure which includes the setting of detailed annual budgets and key performance indicators which are 
updated on a regular basis to form forecasts which are reviewed at both management and Board meetings;
  regular Board meetings are held at which all key aspects of the business are discussed including comparison of actual performance 
with budgets;
 monthly reports are made to the Board from the Chief Executive, Finance Director and other Executive Directors;
 there is a weekly review of operational performance and operational matters by the Executive Directors;
  meetings are held by each Executive Director on a weekly and monthly basis to review the progress of specific financial and non-financial 
responsibilities within their functions;
  the control, review and monitoring of key business projects by specific steering committees, each headed by an Executive Director 
who sponsors the project;
 there are defined authorisation levels for capital expenditure;
 there are defined authorisation levels for the placing of orders and contracts;
 there are clear authorisation levels and segregation of accounting duties to control major financial risks;
  daily cash movements are reconciled and monitored by the Treasury Department and the Company’s cash flow is monitored monthly 
in comparison to budget and forecast;
 the Company’s reporting systems provide weekly updates on key statistics including sales, production and gross margin analysis;
  a committee comprising Executive Directors meets to identify and review key operational and compliance risks and then implement 
appropriate procedures to address those risks. A review of the committee’s work is included in the Board’s agenda;
  major commercial, technological and financial risks are assessed by the Board throughout each financial year. The conclusions are then 
incorporated in the Company’s business strategy and adopted by the Board; and
 there is a formal arrangement for staff to raise any concerns over financial reporting or other matters in confidence.
The Board and Audit Committee review management reports prepared by the external and internal auditors and consider the suitability 
of suggested improvements to the system of internal controls.
The Board and Audit Committee have reviewed the effectiveness of the internal control system, including financial, operational and 
compliance controls and risk management, in accordance with the Code on an ongoing basis for the period from 1 July 2007 to the date 
of this report and have determined that they were not aware of any significant failings or weaknesses in the system of internal control.
Principal risks and uncertainties
As described above in the internal control procedures, key risks are reviewed by the Executive Committee. The assessment of risks on the 
basis of likelihood and potential impact, together with the controls and actions to manage or mitigate them, are passed to the full Board 
for approval. The key risks and uncertainties facing the business are considered to be as follows:
A vERy CompEtitivE mARkEt
The UK confectionery market has many strong players and the slowdown in consumer spending has intensified competition. Product 
innovation is key to combating and overcoming the competition. The Company has a rigorous process for identifying, researching and 
developing new product ideas, which is regularly reviewed and improved. The Company’s multi-channel strategy is also a means by which 
it can satisfy consumers’ needs better than its competitors.
_2_THT_ar08_back.indd   6 19/09/2008   09:04:40 Annual Report and Accounts 2008 Thorntons PLC 23
Principal risks and uncertainties continued
thE Comp Any’s pRoDuCts ARE pRominEnt in thE nA tionAl DEbA tE on hEAlth
Thorntons has always sought to make products with wholesome recipes, for example, only using cocoa butter in its chocolate, in line 
with other premium confectionery. Developments in food science are monitored directly and via industry associations. Recent production 
changes arising from these types of concerns include the phase out of hydrogenated vegetable oil and artificial colours. Thorntons seeks 
to inform consumers about the strong provenance of its ingredients and beneficial effects of cocoa consumption.
fooD pRoDuCts must hA vE thE highEst intEgRity
Product contamination, accidental or malicious, is a risk faced by all food producers. Thorntons has extremely rigorous policies and 
security systems for guarding against accidental or malicious contamination of ingredients or finished products. In the unlikely event that 
these policies and systems fail, a robust process for product recall and consumer communication, in addition to comprehensive insurance 
cover is in place.
singlE sitE pRoDuCtion
Most of the Company’s products for sale are produced at Thornton Park in Alfreton, Derbyshire. The remainder is bought in from 
suppliers, who have a particular expertise or cost advantage over the Company’s own facility. The operating site has been built up over 
the last 20 years, with varying standards of fire protection. Recognising this vulnerability, the Company invested over £2m in firewalls and 
a sprinkler system to improve the protection of the site. Contingency and recovery plans for IT and utilities are also regularly reviewed.
input pRiCEs ARE DRivEn by CommoDity mARkEts
The Company buys key inputs forward by 4 to 18 months and works with suppliers to choose the optimal time and quantity for 
purchases. Whilst this policy may sometimes prevent the Company taking advantage of short-term dips in prices, it provides a sound 
cost base for the Company to make its trading decisions.
thE businEss is DEpEnDEnt on thE skills, EnthusiAsm AnD wEllbEing of its pEoplE
Management aspires to keep colleagues informed of internal and external developments and regularly reviews how they are feeling 
through surveys and communication sessions. A channel outside the normal line structures for communication and resolution of 
issues exists through the Joint Industrial Council for Thornton Park and the Retail Council for store-based colleagues. 
Relations with shareholders
Communications with shareholders are given high priority. Following the announcement of the Company’s interim and final results, 
the Directors, normally represented by at least the Chairman, Chief Executive and Finance Director, make detailed business presentations 
to institutional shareholders. The Senior Independent Director is also available to all shareholders. Feedback via the Company’s brokers 
after these regular analyst and shareholder meetings ensures the Board understands shareholder views and messages. Finally, the Company’s 
website, www.thorntons.co.uk/investor, allows shareholders to view Company results and announcements and other relevant information, 
and also raise questions to put back to the Company.
The Board uses the AGM to communicate with private and institutional investors and welcomes their participation. The Directors present 
at each AGM a business review to all attending shareholders who may ask any questions they wish. It is not a requirement that these be 
previously submitted to the Company in writing. Furthermore, at each AGM, the Chairman aims to ensure that the chairmen of the Board 
Committees are available. All Code provisions regarding constructive use of the AGM are complied with.
Going concern
The Directors are satisfied, on the basis of current financial projections and facilities available, that the Company and the Group have 
adequate financial resources to continue to operate for the foreseeable future. For this reason, the Directors continue to adopt the going 
concern basis in preparing the financial statements. 
Approved by the Board on 9 September 2008 and signed on its behalf by:
Mark R. Henson
Company Secretary
_2_THT_ar08_back.indd   7 19/09/2008   09:04:40 24 Thorntons PLC Annual Report and Accounts 2008
Report on the Directors’ remuneration
Information not subject to audit
REmunERA tion CommittEE
The Remuneration Committee is composed of the Company’s two independent Non-Executive Directors, P N Wilkinson (Chairman) 
and M T P Davey, and the Chairman of the Board, J A von Spreckelsen. 
The Committee is responsible for setting the Chairman’s, Executive Directors’ and Company Secretary’s remuneration and performance-related 
awards. It also monitors the remuneration of the Company’s Senior Managers. During the period, the Chief Executive attended Committee 
meetings by invitation and provided advice on issues other than those relating to his remuneration. The Company Secretary attends the 
meetings as secretary to the Committee. During the year, the Committee received independent general remuneration and share scheme 
advice from Deloitte & Touche LLP who were appointed by the Committee and also advised the Company on tax matters. The Committee 
also had access to professional market surveys on boardroom pay. No Director is involved in any decision relating to his own remuneration. 
The Terms of Reference of the Committee are available on the Company’s website, www.thorntons.co.uk, and upon request from the 
Company Secretary.
REmunERA tion poliCy The policy for the current and future periods for the remuneration and incentivisation of the Executive Directors is as follows:
  to ensure that individual rewards and incentives are aligned with the performance of the Company and the interests of shareholders;
  to ensure that performance-related elements of remuneration constitute a significant proportion of an executive’s remuneration 
package; and
  to maintain a competitive remuneration package which enables the Company to attract, retain and motivate high calibre executives.
During the previous year the Committee undertook a detailed review of the Company’s executive remuneration arrangements and 
implemented incentive arrangements to support the objective of rewarding those individuals who deliver real and genuine shareholder 
value. In developing the arrangements the Committee and its advisors carefully considered the best practice provisions in the Combined 
Code and current market practice and evaluated various options before consulting fully with the Company’s major institutional 
shareholders and key governance bodies including the ABI before concluding the remuneration arrangements.
sAlARiEs
Salaries for the Executive Directors are targeted at remaining competitive for the market size of business and, unless they fall below what 
the Committee considers to be competitive, will not normally be changed beyond a cost of living increase outside of this target. The level 
of salary of the Executive Directors is reviewed each year by the Remuneration Committee and takes into account a range of issues 
including primarily underlying Group performance and also published information of comparative salary levels and relative remuneration 
levels within the Company.
Taxable benefits comprise principally healthcare insurance policies, a fully expensed company car or car allowance, a fuel allowance and, 
where applicable, relocation expenses.
Annu Al inCEntivE plAn
The Remuneration Committee reviews and approves the annual bonus scheme targets each year. For the 2008/09 financial year, the bonus 
potential for Executive Directors is 60% of base salary for on-target profit performance and has been increased to a maximum of 100% 
of base salary for exceptional out-performance. There are clear financial targets based on the achievement of Group profit and the 
Committee is satisfied that these are challenging and in order for the maximum bonus to be earned, will demonstrate a genuine step 
change in the profit performance of the business. 
Despite the significant sales growth achieved in the year in a difficult trading environment, the challenging profit targets set at the 
beginning of the year were not met and consequently the Executive Directors will receive no bonus in respect of the 2007/08 year.
_2_THT_ar08_back.indd   8 19/09/2008   09:04:40 Annual Report and Accounts 2008 Thorntons PLC 25
Information not subject to audit continued
l ong-tERm inCEntivE plAn (“ltip ”)
As part of the review of remuneration during 2006/07 the Committee introduced new long-term incentive arrangements, approved by 
shareholders last October, which deliver genuine performance related pay, with a clear line of sight for Executives and a direct alignment 
with shareholders’ interests.
Under the LTIP annual awards of share options will be granted with an exercise price equal to the market value of the shares at the 
date of grant. Executive Directors may receive an award under the LTIP in any financial year over shares worth 150% of their basic annual 
salary (excluding bonuses, commissions and benefits in kind) provided that to the extent that an award exceeds 100% of their basic 
annual salary, the vesting of such excess will be dependent on the achievement of a significantly more stretching performance target.
The participants will not be entitled to exercise their options for a period determined by the Committee which is generally no earlier than 
three years from the date of award. The vesting of awards at the end of the performance period will be subject to the relevant participant 
remaining in employment and the achievement of specified stretching performance conditions.
There is currently one grant of awards being operated in respect of the period 2007 to 2010 under the LTIP with a performance target 
based on the Company’s Total Shareholder Return (“TSR”). TSR will normally be averaged across a period of three months before the start 
of the performance period and three months before the date on which the performance period ends. This is in keeping with normal 
market practice and is a practical adjustment to smooth out the impact of short-term market influences and to provide a more robust 
measure of the Company’s performance. Awards will vest, on a sliding scale between each step, as follows:
  Compound equivalent 
% of total award vesting Annual TSR growth required over three year vesting period
150% 20% 73%
100% 15% 52%
25% 8% 26%
In order to reassure shareholders that Executives will not benefit simply from an upward turn in the market, the Committee will require 
underlying real EPS performance to increase by at least RPI + 10% per annum, before any awards vest, even if the TSR targets are 
achieved. In addition, for any award above 100% to vest, the underlying annual growth in real EPS must be at least RPI + 12%.
Absolute TSR was chosen as the measure for awards under the LTIP because it creates a direct line of sight for Executives to increase 
shareholder value against the Company’s current business position. The Remuneration Committee monitors the performance of existing 
awards against the above targets on an annual basis and reviews the performance conditions for future awards to ensure that the 
conditions continue to be appropriate for the Company and the prevailing market. Based on the Company’s TSR performance during 
the first year of the operation of the LTIP , no options awarded in 2007 would vest. The actual percentage of the award vesting will be 
determined by the Remuneration Committee at the end of the three year performance period. 
shARE option sChEmE
Under the Thorntons PLC 2001 Executive Share Option Scheme, the Chairman and Executive Directors have all previously been granted 
share options. Subject to the achievement of performance targets, these options may be exercised between three and ten years after 
the date of grant. Following the introduction of the LTIP last year, no further awards under this scheme to Directors are anticipated.
Executive Directors with twelve months’ service, along with all eligible employees, are also entitled to participate in the Company’s 
All-Employee Sharesave Scheme.
_2_THT_ar08_back.indd   9 19/09/2008   09:04:40 26 Thorntons PLC Annual Report and Accounts 2008
Report on the Directors’ remuneration continued
Information not subject to audit continued
supplEmEnt ARy notEs REgARDing Existing shARE sChEmE options AnD A w ARDs
THE THORNTONS PLC 2001 ExECUTIVE SHARE OPTION SCHEME (“THE SCHEME’’)
Options granted under the Scheme can be exercised at any time between three and ten years after the grant date, subject to the 
fulfilment of certain performance criteria. Options granted under the Scheme in 2001 and 2002 were split into three equal tranches with 
a requirement that a share price of 135p and 140p respectively be achieved within a minimum of three and a maximum of six years from 
the date of grant before the first third could be exercised. With regard to the second and third tranches of options granted in both years 
the share price was required to reach 160p and 185p respectively. In addition, before any tranche may be exercised, growth in earnings 
per share must exceed the Retail Prices Index by at least 2% per annum cumulatively over at least a three year and a maximum six year 
period, and the share price must have reached the relevant targets on the day prior to the exercise and the Remuneration Committee 
must be satisfied that there has been an improvement in the underlying performance of the Company.
Options granted in 2006 and 2007 were split into three equal tranches with a requirement that a share price of 160p (2006) and 200p (2007) 
be achieved within a minimum of three and a maximum of six years from the date of grant before the first tranche could be exercised. 
With regard to the second and third tranches, the share price is required to reach 185p (2006) and 225p (2007), and 210p (2006) and 
250p (2007) respectively. In addition, before any tranche may be exercised, growth in earnings per share must exceed the Retail Prices 
Index by at least 3% per annum cumulatively over at least a three year and a maximum six year period, the share price must have reached 
the relevant targets on the day prior to the exercise and the Remuneration Committee must be satisfied that there has been an improvement 
in the underlying performance of the Company.
Under the scheme rules, in the event of a change of control of the Company, options may be exercised within one month or such 
longer period as the Remuneration Committee determines and provided that such options have met their attaching performance criteria. 
The Remuneration Committee also has discretion but always acting fairly, reasonably and objectively, to determine whether, and if so, 
to what extent beyond that indicated by the performance condition, options shall be exercisable, having regard to all the circumstances.
SHARESAVE SCHEME
Options granted under the HM Revenue & Customs approved Sharesave Scheme can be exercised at any time during the six month period 
commencing three or five years from the start of the savings contract. Options may be granted under the Sharesave Scheme at a discount 
of up to 20% of the market value of a share in the Company on the date immediately preceding the date on which employees are invited 
to participate in the Scheme. There are no performance criteria under the Sharesave Scheme.
The Approved Share Scheme has now expired and a resolution will be put forward to shareholders at the Annual General Meeting to be 
held on 23 October 2008 to approve a new Savings Related Share Option Scheme (the 2008 SAYE Scheme). Further details of the 2008 
SAYE Scheme are set out in the circular to shareholders accompanying this Annual Report.
SHARE PRICE
The mid-market price of the ordinary shares at 29 June 2007 (the last dealing day prior to 30 June 2007) was 175p and at 27 June 2008 
(the last dealing day prior to 28 June 2008) was 114p and the range for the period was from 112p to 200p.
The Company’s register of Directors’ interests, which is open to inspection, contains full details of Directors’ shareholdings and options to 
subscribe. During the period from 1 July 2008 to 9 September 2008, the interests of the Directors named in the table on page 30 in the 
shares of the Company were unchanged.
_2_THT_ar08_back.indd   10 19/09/2008   09:04:40 Annual Report and Accounts 2008 Thorntons PLC 27
Information not subject to audit continued
pERfoRmAnCE gRAph
The graph below shows the total shareholder return performance for the Company’s shares in comparison to the FTSE Small Cap Index 
for the five years to 28 June 2008. For the purposes of the graph, total shareholder return has been calculated as the percentage change 
during the five year period in the market price of the shares, assuming that dividends are reinvested.
This graph shows the value, by the end of the 2007/08 financial year, of £100 invested in Thorntons over the last five financial years 
compared with £100 invested in the FTSE Small Cap Index which, given the Company forms a constituent part, the Directors believe 
is the most appropriate comparative index.
pEnsions
The Executive Directors, with the exception of M R Davies who does not participate in any Company pension arrangement, have private 
pensions to which the Company contributes a fixed percentage of basic salary.
A table identifying the accrued benefits of Executive Directors who participate in the approved pension arrangements and the 
contributions made on behalf of Directors to defined contribution arrangements are identified in the Directors’ pension benefits table 
on page 30.
Pensionable salary is based on basic salary only and excludes any other form of remuneration including bonus payments or benefits 
in kind.
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_2_THT_ar08_back.indd   11 19/09/2008   09:04:42 28 Thorntons PLC Annual Report and Accounts 2008
Report on the Directors’ remuneration continued
Information not subject to audit continued
ContRACts of sERviCE AnD EARly tERminA tion
All of the Executive Directors have service contracts with the Company. Currently, these contracts may be terminated by the Company 
or Director by giving one year’s notice. The notice period of all Executive Directors’ service contracts is kept under review by the 
Remuneration Committee. It is the Remuneration Committee’s view that the notice period for the Executive Directors is appropriate and 
consistent with current market practice. It is the practice of the Committee that if the employment of an Executive Director is terminated, 
any compensation payment is calculated in accordance with normal legal principles, including the application of mitigation to the extent 
appropriate to the circumstances of the termination. There are no contractual obligations in the event of a change of control of the Company.
All Non-Executive Directors have initial fixed-term agreements with the Company of no more than three years. There is no entitlement 
to any compensation in the event of such agreement not being renewed or the agreement terminating earlier, save for a twelve month 
notice period required from either party in the case of the Chairman, J A von Spreckelsen.
Details of the Directors’ service contracts, notice periods and, where applicable, expiry dates are set out below:
Name   Commencement Expiry Notice period
B Bloomer   18 July 2006 — 1 year
M T P Davey   5 April 2004 5 April 2010 n/a
M R Davies   2 October 2006 — 1 year
J A von Spreckelsen   5 June 2006 — 1 year
J R Wall   7 December 2004 — 1 year
P N Wilkinson   15 August 2006 15 August 2009 n/a
P D J Wright   13 August 2007 — 1 year
non-ExECutivE DiRECtoRs’ fEEs
The fees paid to Non-Executive Directors for their services are approved by the Board. These fees are paid on a pro rata basis if they 
hold office for part of the year. In recognition of increased legislative and corporate governance responsibilities, a supplement of 
£5,000 per annum is paid to the Senior Independent Director and Non-Executives who chair one or more Board Committees.
_2_THT_ar08_back.indd   12 19/09/2008   09:04:42 Annual Report and Accounts 2008 Thorntons PLC 29
Information subject to audit
DiRECtoRs’ REmunERA tion
The following table shows an analysis of the various elements of remuneration receivable by those Directors who served during the period 
to 28 June 2008:
   Salary  Performance   Basic annual 
   and Taxable related   salary/fees 
  	 fees	 benefits	 payments Total Total July  
   2008 2008 2008 2008 2007 2008 
   £’000 £’000 £’000 £’000 £’000 £’000
Chairman      
J A von Spreckelsen*    92 3 — 95 100 150
Executive Directors      
B Bloomer   159 16 — 175 238 164
P Burdon (resigned 30 September 2006)   — — — — 315 n/a
M R Davies    328 17 — 345 312 339
P S Douty (resigned 15 December 2006)   — — — — 267 n/a
D Prendergast (resigned 1 August 2008)   159 18 — 177 194 n/a
J R Wall   179 16 — 195 251 186
P D J Wright (appointed 13 August 2007)   146 71 — 217 — 171
Non-Executive Directors      
M T P Davey
†
   43 — — 43 36 43
J E Jackson (retired 1 September 2006)   — — — — 6 n/a
C J Thornton (retired 1 September 2006)   — — — — 5 n/a
P N Wilkinson
§
   38 — — 38 28 38
   1,144 141 — 1,285 1,752 1,091
*  J A von Spreckelsen received basic fees of £91,667 (2007: £100,000) with a further £58,333 (2007: £100,000) paid directly by the Company into his personal 
pension in the period. With effect from 1 July 2008 the total fees are now all paid as basic fees with no pension payments being made. 
†
 Fees paid in respect of the services provided by M T P Davey are paid directly to Cranswick Plc.
§
 Fees paid in respect of the services provided by P N Wilkinson are paid to Parkside Capital Limited.
_2_THT_ar08_back.indd   13 19/09/2008   09:04:42 30 Thorntons PLC Annual Report and Accounts 2008
Report on the Directors’ remuneration continued
Information subject to audit continued
DiRECtoRs’ pEnsion bEnEfits
   Transfer Transfer      
  Total  value of value of   Transfer   
 Gross  accrued  accrued  accrued  Total Increase in value of net   
 increase in pension at pension at pension at change in accrued increase in Pension Pension 
 accrued 28 June  28 June 30 June value during pension net accrual over  contributions contributions 
 pension 2008 2008 2007 period of inflation period 2008 2007 
 £’000 pa £’000 pa £’000 £’000 £’000 £’000 pa £’000 pa £’000 £’000 
   § §  †  †  
Chairman
J A von Spreckelsen n/a — — — — — — 58 100
Executive Directors
B Bloomer n/a — — — — — — 22 22
M R Davies n/a — — — — — — — —
D Prendergast 
(resigned 1 August 2008) 3 16 149 98 41 2 13 — —
J R Wall n/a — — — — — — 25 24
P D J Wright n/a — — — — — — 20 —
Pension accruals shown are the amounts to which the member would be entitled as a leaving service benefit based on service to the end 
of the financial year.
†
 Items are calculated after deducting the Directors’ contributions.
§
  These values have been prepared in accordance with the Pension Trustees’ direction that the allowance for pre-6 April 1997 discretionary pension increases in payment 
is removed from the calculation of cash equivalent transfer values.
DiRECtoRs’ intEREsts
The interests of the Directors and their immediate families in the Company’s ordinary shares as at 30 June 2007 (or date of appointment 
if later) and 28 June 2008 were as follows:
oRDinARy shAREs
The Directors’ holdings in ordinary shares were: 
       28 June  30 June  
       2008 2007
Chairman
J A von Spreckelsen       650,000 400,000
Executive Directors
B Bloomer       5,512 5,512
M R Davies       120,000 80,000
D Prendergast (resigned 1 August 2008)       20,000 10,000
J R Wall       6,000 6,000
P D J Wright       5,000 —
Non-Executive Directors
M T P Davey       30,000 10,000
P N Wilkinson       25,000 25,000
All the above are beneficial interests.
It is a policy of the Board that all Directors must hold a minimum of 1,000 shares. Such shares must be purchased as soon as practicable 
following the Director’s appointment, subject to the restrictions imposed by the Model Code on Directors’ Dealings.
_2_THT_ar08_back.indd   14 19/09/2008   09:04:42 Annual Report and Accounts 2008 Thorntons PLC 31
Information subject to audit continued
shARE options AnD A w ARDs
The interests of the Executive Directors in share options held under the Executive Share Option Schemes and the Sharesave Scheme were 
as follows:
    Awards and      Last date 
    options held at  Awards and   Awards and  awards 
   Subscription 30 June 2007  options   options held and options 
   price or date of  granted in Options Options at 28 June  can be 
Director Scheme Date of grant (pence) appointment period exercised lapsed 2008 exercised
J A von Spreckelsen 2001 Executive 5 Jun 2006 116 1,200,000 — — — 1,200,000 5 Jun 2016
B Bloomer 2001 Executive 11 Jul 2006 128.5 500,000 — — — 500,000 11 Jul 2016
 LTIP 2007 23 Nov 2007 192 — 123,904 — — 123,904 23 Nov 2017
 Sharesave 9 Oct 2006 113 5,151 — — — 5,151 31 May 2010
 Sharesave 10 Oct 2007 148 — 4,358 — — 4,358 31 May 2013
M R Davies 2001 Executive 2 Oct 2006 153 1,200,000 — — — 1,200,000 2 Oct 2016
 LTIP 2007 23 Nov 2007 192 — 255,849 — — 255,849 23 Nov 2017
D Prendergast*  
(resigned  
1 August 2008) 2001 Executive 22 Nov 2001 90 500,000 — — (333,334) 166,666 22 Nov 2011
 LTIP 2007 23 Nov 2007 192 — 123,904 — — 123,904 23 Nov 2017 
 Sharesave 18 Oct 2002 94 5,940 — (5,940) — — 30 Jun 2008
 Sharesave 9 Oct 2006 113 8,926 — — — 8,926 31 May 2012
 Sharesave 10 Oct 2007 148 — 4,358 — — 4,358 31 May 2013
J R Wall 2001 Executive 3 Apr 2006 119 500,000 — — — 500,000 3 Apr 2016
 LTIP 2007 23 Nov 2007 192 — 140,455 — — 140,455 23 Nov 2017
 Sharesave 9 Oct 2006 113 5,151 — — — 5,151 31 May 2010
 Sharesave 10 Oct 2007 148 — 2,490 — — 2,490 31 May 2011
P D J Wright 2001 Executive 13 Sep 2007 170 — 500,000 — — 500,000 13 Sep 2017
*  The aggregate gain on exercise of options during the period for D Prendergast was £3,475. 
There is no requirement for the Directors to pay any contributions on the granting of any options under any of the Company’s share schemes.
The earliest date of exercise for the options set out in the table above are shown in note 22 on page 65.
Approved by the Board on 9 September 2008 and signed on its behalf by:
Paul Wilkinson
Chairman of the Remuneration Committee
_2_THT_ar08_back.indd   15 19/09/2008   09:04:43 32 Thorntons PLC Annual Report and Accounts 2008
Independent auditors’ report to the members of Thorntons PLC
We have audited the Group and Parent Company financial statements (the ‘‘financial statements’’) of Thorntons PLC for the 
52 week period ended 28 June 2008 which comprise the Consolidated income statement, the Balance sheets, the Cash flow 
statements, the Statements of recognised income and expense, the Statement of accounting policies and the related notes. 
These financial statements have been prepared under the accounting policies set out therein. We have also audited the information 
in the Report on Directors’ remuneration that is described as having been audited.
Respective responsibilities of Directors and auditors
The Directors’ responsibilities for preparing the Annual Report, the Report on Directors’ remuneration and the financial statements 
in accordance with applicable law and International Financial Reporting Standards (“IFRS”) as adopted by the European Union are set 
out in the Statement of Directors’ Responsibilities.
Our responsibility is to audit the financial statements and the part of the Report on Directors’ remuneration to be audited in accordance 
with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). This report, including the 
opinion, has been prepared for and only for the Company’s members as a body in accordance with Section 235 of the Companies Act 1985 
and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other 
person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements and 
the part of the Report on Directors’ remuneration to be audited have been properly prepared in accordance with the Companies Act 1985 
and, as regards the Group financial statements, Article 4 of the IAS Regulation. We also report to you whether in our opinion the information 
given in the Report of the Directors is consistent with the financial statements. The information given in the Report of the Directors includes 
that specific information presented in the other sections of the Annual Report that are cross-referred from the “Principal activities and 
business review” section of the Report of the Directors.
In addition we report to you if, in our opinion, the Company has not kept proper accounting records, if we have not received all the 
information and explanations we require for our audit, or if information specified by law regarding Directors’ remuneration and other 
transactions is not disclosed.
We review whether the Corporate Governance statement reflects the Company’s compliance with the nine provisions of the Combined 
Code (2006) specified for our review by the Listing Rules of the Financial Services Authority, and we report if it does not. We are not 
required to consider whether the Board’s statements on internal control cover all risks and controls, or form an opinion on the 
effectiveness of the Group’s corporate governance procedures or its risk and control procedures.
We read the other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. 
The other information comprises only the Financial summary, the Chairman’s report, the Chief Executive’s report, the Finance Director’s 
report, the Report of the Directors, the Corporate Governance statement, the unaudited part of the Report on Directors’ remuneration, 
the Corporate Social responsibility statement and the other items listed within the Contents section. We consider the implications for our 
report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities 
do not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. 
An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements and the 
part of the Report on Directors’ remuneration to be audited. It also includes an assessment of the significant estimates and judgements 
made by the Directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the 
Group’s and Company’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to 
provide us with sufficient evidence to give reasonable assurance that the financial statements and the part of the Report on Directors’ 
remuneration 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 Report 
on Directors’ remuneration to be audited.
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Opinion
In our opinion:
  the Group financial statements give a true and fair view, in accordance with IFRS as adopted by the European Union, of the state 
of the Group’s affairs as at 28 June 2008 and of its profit and cash flows for the 52 weeks then ended;
  the Parent Company financial statements give a true and fair view, in accordance with IFRS as adopted by the European Union as 
applied in accordance with the provisions of the Companies Act 1985, of the state of the Parent Company’s affairs as at 28 June 2008 
and cash flows for the 52 weeks then ended;
  the financial statements and the part of the Report on Directors’ remuneration to be audited have been properly prepared in 
accordance with the Companies Act 1985 and, as regards the Group financial statements, Article 4 of the IAS Regulation; and
  the information given in the Report of the Directors is consistent with the financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants and Registered Auditors 
Leeds
9 September 2008 
_2_THT_ar08_back.indd   17 19/09/2008   09:04:43 34 Thorntons PLC Annual Report and Accounts 2008
Consolidated income statement 52 weeks ended 28 June 2008
       52 weeks 53 weeks 
       ended ended 
       28 June 30 June 
       2008 2007 
      Note £’000 £’000
Revenue      1 208,122 185,989
Cost of sales       (103,017) (86,022)
Gross	profit       105,105 99,967
Operating expenses       (95,918) (91,923)
Other operating income      2 1,139 808
Operating	profit       10,326 8,852
Finance income      3 45 61
Finance costs      4 (1,901) (1,832)
Profit	before	taxation      5 8,470 7,081
Taxation      6 (2,402) (1,785)
Profit	attributable	to	equity	shareholders       6,068 5,296
   
Earnings per share      8  
Basic       9.1p 8.0p
Diluted       9.0p 7.9p
All activities in both the current and previous year relate to continuing operations. 
Statements of recognised income and expense 52 weeks ended 28 June 2008
     Group Group Company Company 
     52 weeks 53 weeks 52 weeks 53 weeks 
     ended ended ended ended 
     28 June 30 June 28 June 30 June 
     2008 2007 2008 2007 
    Note £’000 £’000 £’000 £’000
Actuarial (loss)/gain recognised in the defined benefit pension scheme  20 (2,148) 1,510 (2,148) 1,510
Movement of deferred tax on actuarial loss/(gain)    19 601 (453) 601 (453)
Effect of reduction in tax rate     — (342) — (342)
Net	(expense)/income	recognised	directly	in	equity	   (1,547) 715 (1,547) 715
Profit attributable to equity shareholders     6,068 5,296 5,984 5,149
T otal	recognised	income	attributable	to	equity	shareholders	 
for	the	financial	period     4,521 6,011 4,437 5,864
 
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Balance sheets As at 28 June 2008
     Group Group Company Company 
     2008 2007 2008 2007 
    Note £’000 £’000 £’000 £’000
Assets     
Non-current assets     
Intangible assets    10 4,786 5,950 4,786 5,950
Property, plant and equipment    11 64,084 66,378 63,893 66,180
Investment in subsidiaries    12 — — 18 18
     68,870 72,328 68,697 72,148
Current assets     
Inventories    13 24,307 18,202 24,299 18,193
Trade and other receivables    14 15,155 12,628 15,501 14,121
Cash and cash equivalents     1,088 2,858 1,005 2,624
     40,550 33,688 40,805 34,938
Liabilities     
Current liabilities     
Trade and other payables    15 (22,014) (19,859) (24,455) (23,744)
Borrowings    16 (24,057) (22,577) (24,224) (22,577)
Current tax liabilities     (984) (1,418) (942) (1,001)
Provisions for liabilities    18 (122) (181) (122) (181)
     (47,177) (44,035) (49,743) (47,503)
Net current liabilities     (6,627) (10,347) (8,938) (12,565)
Non-current liabilities     
Borrowings    16 (5,295) (6,692) (5,295) (6,692)
Deferred tax liabilities    19 (2,750) (2,512) (2,714) (2,476)
Retirement benefit obligations    20 (15,965) (15,417) (15,965) (15,417)
Other non-current liabilities    21 (2,612) (1,996) (2,612) (1,997)
Provisions for liabilities    18 (586) (478) (585) (478)
     (27,208) (27,095) (27,171) (27,060)
Net assets     35,035 34,886 32,588 32,523
Shareholders’	equity     
Ordinary shares    22 6,835 6,811 6,835 6,811
Share premium    24 13,750 13,551 13,750 13,551
Retained earnings    24 14,450 14,524 12,003 12,161
T otal	equity	attributable	to	parent’s	equity	holders    35,035 34,886 32,588 32,523
The financial statements on pages 34 to 73 were approved by the Board of Directors on 9 September 2008 and were signed on its behalf by:
Mike Davies   John Wall
Chief Executive   Finance Director
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Cash 	 flow 	 statements 	52 weeks ended 28 June 2008
 
     Group Group Company Company 
     52 weeks 53 weeks 52 weeks 53 weeks 
     ended ended ended ended 
     28 June 30 June 28 June 30 June 
     2008 2007 2008 2007 
    Note £’000 £’000 £’000 £’000
Cash	flows	from	operating	activities    25a 11,481 14,600 11,465 26,409
Cash	flows	from	investing	activities     
Proceeds from sale of property, plant and equipment     262 400 262 400
Purchase of property, plant and equipment     (5,680) (5,030) (5,680) (5,027)
Net cash used in investing activities     (5,418) (4,630) (5,418) (4,627)
Cash	flows	from	financing	activities     
Net proceeds from issue of ordinary shares     223 748 223 748
Interest paid     (1,831) (1,849) (1,815) (1,848)
Interest received     37 25 21 21
Capital element of finance lease rental payments     (3,712) (4,526) (3,712) (4,526)
Borrowings advanced     2,000 3,000 2,000 3,000
Dividends paid    9 (4,550) (4,512) (4,550) (4,512)
Net	cash	used	in	financing	activities     (7,833) (7,114) (7,833) (7,117)
Net	(decrease)/increase	in	cash	and	cash	equivalents	 
and bank overdrafts     (1,770) 2,856 (1,786) 14,665
Cash and cash equivalents at beginning of period    25b 2,858 2 2,624 (12,041)
Cash	and	cash	equivalents	at	end	of	period	   25b 1,088 2,858 838 2,624
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Statement of accounting policies
Basis of preparation
These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and 
International Financial Reporting Interpretations Committee (“IFRIC”) interpretations as adopted by the European Union (“EU”) and with 
those parts of the Companies Act 1985 applicable to companies reporting under IFRS. These consolidated financial statements have been 
prepared under the historical cost convention with the exception of derivative financial instruments and share-based payments which are 
recognised at fair value. A summary of the more important Group accounting policies adopted in the preparation of the consolidated final 
statements is set out below, together with an explanation of where changes have been made to previous policies on the adoption of new 
accounting standards in the financial year. These policies have been consistently applied to all the years presented, unless otherwise stated.
The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported 
amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the 
reporting period. Although these estimates are based on management’s best knowledge, actual results may ultimately differ.
ADoption of ifRs 7
IFRS 7 ‘Financial instruments: Disclosures’ and the complementary amendment to IAS 1 ‘Presentation of financial statements – Capital 
disclosures’ have been adopted from 1 July 2007. IFRS 7 and the amendment to IAS 1 have introduced new quantitative and qualitative 
disclosures relating to financial instruments and they do not have any impact on the classification or valuation of financial instruments.
intERpREt Ations EffECtivE in thE pERioD EnDED 28 JunE 2008 but whiCh hAD no signifiCAnt imp ACt
The following interpretations to existing standards are mandatory for the accounting period ended 28 June 2008, but they have not had 
a significant impact on the Group or Company:
 IFRIC 10 ‘Interims and impairment’; and
 IFRIC 11 ‘IFRS 2 – Group and treasury share transactions’.
st AnDARDs, AmEnDmEnts AnD intERpREt Ations thA t ARE not yEt EffECtivE AnD hA vE not bEEn EARly ADoptED
The following standard and interpretation have been published and are mandatory for accounting periods beginning on or after 29 June 2008 
or later periods, but which the Group and the Company have not early adopted:
  IFRS 8 ‘Operating segments’ – work is currently being undertaken to establish how this standard, which is effective from 1 January 2009, 
may affect the Group’s and Company’s segmental disclosures; and
  IFRIC 14 ‘The limit on a defined benefit asset, minimum funding requirements and their interaction’ – work is currently being 
undertaken to establish how this interpretation, which is effective from 1 January 2008, will impact on the value of the Group and 
Company’s retirement benefit obligation going forward. This assessment will take account of the latest actuarial valuation, however 
it is expected that the adoption of IFRIC 14 will have no material financial impact.
AmEnDmEnts AnD intERpREt Ations thA t ARE not yEt EffECtivE AnD hA vE not bEEn EARly ADoptED, whiCh ARE not ExpECtED 
to hA vE An imp ACt
The following amendments to existing standards and interpretations have been published and are mandatory for accounting periods 
beginning on or after 29 June 2008 or later periods and are not expected to have a significant impact on the Group or Company:
 Revised IAS 1 ‘Presentation of financial statements’;
 Revised IAS 23 ‘Borrowing costs’;
 Revised IAS 27 ‘Consolidated and separate financial statements’;
 IAS 32 (Amendment) ‘Financial instruments: Presentation’ and IAS 1 (Amendment) ‘Presentation of financial statements’;
 IFRS 1 (Amendment) ‘First time adoption of IFRS’ and IAS 27 (Amendment) ‘Consolidated and separate financial statements’;
 Revised IFRS 3 ‘Business combinations’;
 IFRS 2 (Amendment) ‘Share-based payments’;
 IFRIC 12 ‘Service concession arrangements’;
 IFRIC 13 ‘Customer loyalty programmes relating to IAS 18, Revenue’;
 IFRIC 15 ‘Agreements for construction of real estates’; and
 IFRIC 16 ‘ Hedges of a net investment in a foreign operation’.
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Statement of accounting policies continued
Basis of consolidation
The consolidated financial statements incorporate the results of the Company and each of its subsidiaries for the financial year ended 
28 June 2008. Subsidiaries are entities controlled by the Group where control is deemed to exist when the Group has the power, directly 
or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The results of subsidiaries 
are included in the consolidated financial statements from the date the control commences until the date that control ceases.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is 
measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, 
plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business 
combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess 
of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost 
of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement.
Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses 
are also eliminated but considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been changed 
where necessary to ensure consistency with the policies adopted by the Group.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation. Cost comprises the purchase price of property, plant 
and equipment together with any incidental costs of acquisition.
Subsequent costs are included in the asset’s carrying value or recognised as a separate asset, as appropriate, only when it is probable 
that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other 
repairs and maintenance expenditure is charged to the income statement as incurred.
All property, plant and equipment, other than land and assets in the course of construction, are depreciated to write their cost down 
to residual value over their remaining useful lives by equal annual instalments, as follows:
Long leasehold and freehold premises   50 years
Short leasehold land and buildings    Period of the lease
Other plant, vehicles and equipment   3 – 15 years
Retail fittings and equipment   Up to 10 years
The assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at each balance sheet date. The need for an 
impairment write-down is assessed by comparison of the carrying value of the asset against the higher of its net realisable value 
or value in use.
Gains and losses on disposals are determined by comparing the proceeds (net of disposal costs) with the carrying amount and are 
recognised within operating expenses in the income statement.
Intangible assets
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring into use the specific software. 
These costs are amortised over their estimated useful lives (three to five years).
Costs associated with maintaining computer software programmes are recognised as an expense as incurred. Costs that are directly 
associated with the production of identifiable and unique software products controlled by the Group and that will probably generate 
economic benefits exceeding costs beyond one year, are recognised as intangible assets.
Computer software development costs are recognised as assets and are amortised over their estimated useful lives (not exceeding five years).
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Employee share option schemes
Where share options are granted to employees as part of their remuneration, the fair value of options granted is recognised as an 
employee expense in the income statement with a corresponding increase in equity. The fair value is measured at the grant date and 
expensed through the income statement over the period during which the employees become unconditionally entitled to the options. 
The amount recognised in the income statement is adjusted each balance sheet date for the expected and actual number of options 
vesting with a corresponding entry in equity.
The fair value of the options is measured using a Black-Scholes option valuation model of options with non-market performance 
conditions and a Monte Carlo model for options with market performance conditions.
The proceeds received net of any directly attributable transaction costs are credited to share capital and share premium when the options 
are exercised. Exercised options are equity settled.
Own shares held by the Employee Share Ownership Plan (“ESOP”) Trusts are carried at cost and disclosed within note 24.
Investments in subsidiaries
Investments in subsidiaries are stated at cost, provision being made where appropriate for impairment, assessed by comparing the 
carrying value to the higher of net realisable value or value in use.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost includes materials, direct labour and an attributable proportion of 
manufacturing overheads, based on normal operating capacity, according to the stage of production reached and valued on a FIFO basis. 
Net realisable value is the estimated value which would be realised after deducting all costs of completion, marketing and selling. Provision 
is made to reduce the cost to net realisable value having regard to the age and condition of inventory, as well as its anticipated saleability.
Trade receivables
Trade receivables are recognised initially at fair value and subsequently carried net of provisions for impairment. A provision for impairment is 
established where there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of 
the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, 
and default or delinquency in payments (more than 60 days overdue) are considered indicators that the trade receivable is impaired. The amount 
of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows. The carrying 
amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the income statement 
within operating expenses. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. 
Subsequent recoveries of amounts previously written off are credited against operating expenses in the income statement. 
Cash and equivalents
Cash and cash equivalents include cash in hand, deposits on call with banks, other short-term liquid investments with maturities 
of three months or less and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.
Trade and other payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs. Subsequent measurement is based on amortised cost and any 
difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the 
period of the borrowings using the effective interest rate method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 
twelve months after the balance sheet date.
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Statement of accounting policies continued
Current taxation
The charge for current tax is based on the results for the period after making allowance for non-assessable or disallowable items. 
It is calculated using rates of tax that have been enacted at the balance sheet date.
Deferred taxation
Deferred tax on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts 
for financial reporting purposes is accounted for using the liability method.
Deferred tax liabilities are recognised in full for all taxable temporary differences and deferred tax assets are recognised to the extent that 
it is probable that taxable profits will be available against which deductible temporary differences can be utilised. However, if the deferred 
tax arises from the initial recognition of an asset or liability in a transaction other than a business combination that at the time of the 
transaction affects neither accounting nor taxable profit, it is not accounted for.
Deferred taxation is measured based on tax rates and laws enacted or substantively enacted at the balance sheet date, and are expected 
to apply when the related deferred income tax asset is realised or deferred income tax liability is settled.
Deferred tax assets and liabilities are offset when there is a legal, enforceable right to set off current tax assets against current tax liabilities 
and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and 
liabilities on a net basis.
Provisions
A provision is recognised in the balance sheet when the Group has a legal or constructive obligation whereby, as a result of a past event, 
it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the 
amount of the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax 
rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the 
proceeds, when applicable.
Revenue
Revenue comprises the amounts receivable for goods and services provided outside the Group in the normal course of business, 
net of trade discounts and value added tax.
Retail sales and allowances are recognised at the date of the transaction with consumers. In addition, provisions are made for expected 
returns as necessary. For sales promotion purposes, Thorntons PLC operates a variety of schemes that give rise to goods being sold at 
a discount to the standard retail price. These include staff discounts and the redemption of promotional vouchers. Revenue is adjusted 
to show sales net of all related discounts.
Wholesale sales, including sales to franchise outlets, are recognised either when goods are dispatched to customers or the customer 
has accepted the products, depending on the sales channel, and collectability of the related receivables is reasonably assured. Provision 
is made for expected returns and allowances as necessary.
Other operating income
Other operating income comprises amounts receivable in respect of licensing income, franchise fees and rental income, net of value added 
tax where applicable. Licence income and rental income are recognised on an accruals basis in accordance with the risks and rewards of 
the relevant agreements. Franchise fee income is released to the income statement on a straight-line basis over a period of five years from 
date of invoice.
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Post-retirement benefits
DEfinED bEnEfit pEnsion sChEmE
The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation and unfunded 
liabilities as reduced by the fair value of defined benefit scheme assets. This scheme was closed to new entrants with effect from August 2002.
The defined benefit obligation is calculated annually by independent actuaries using the projected unit method. The present value of the 
defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high quality corporate 
bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the 
terms of the related pension liability.
Actuarial gains and losses are recognised in full in the period in which they occur. They are recognised directly in equity and are presented 
in the Statement of recognised income and expense. Other income and administrative expenses associated with the defined benefit 
scheme are recognised in the income statement.
The contributions made by the employees and the Group are held in a trust fund separate from the Group’s finances.
DEfinED ContRibution pEnsion sChEmE
The Group also operates a defined contribution pension scheme which requires contributions to be made to a separately administered 
fund. Contributions to the fund are determined as a percentage of employees’ earnings and are charged to the income statement as 
incurred. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to 
pay all employees the benefits relating to employee service in the current and prior periods.
Foreign currencies
Transactions in foreign currencies are translated in Sterling at the exchange rate ruling at the date of transaction. Monetary assets and 
liabilities denominated in foreign currencies are retranslated to Sterling at the exchange rates ruling at the balance sheet date and any 
exchange differences arising are taken to the consolidated income statement.
Finance leases
Leases are classified as finance leases where the terms of the lease transfer substantially all the risks and rewards of ownership to the 
Group. All other leases are classified as operating leases.
Property, plant and equipment held under finance leases are capitalised in the balance sheet at fair value of leased assets or if lower, 
the present value of the minimum lease payments. Assets are depreciated over the shorter of their lease term and their expected useful 
lives. The interest element of leasing payments represents a constant proportion of the capital balance outstanding and is charged to 
the consolidated income statement over the period of the lease.
Operating leases
The costs of all operating leases are charged against operating profit on a straight-line basis at existing rental levels. Incentives to sign 
leases, including reverse premiums and rent-free periods, are treated as deferred income and are credited to the income statement in 
equal instalments over the term of the lease.
Rental income from operating leases is recognised on a straight-line basis over the period of the lease at current rental levels.
New store expenditure
Pre-trading expenditure on new stores is charged to the income statement as incurred.
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Statement of accounting policies continued
Derivatives and other financial instruments
Derivatives are initially recognised at fair value on the date the contract is entered into and are subsequently remeasured at fair value. 
Where appropriate, the Group enters into derivatives in order to minimise relevant currency and interest rate exposure to the Group. 
These are designated as hedges of the cost of a highly probable forecast transaction or commitment (“cash flow hedging instrument”).
To qualify for hedge accounting the Group is required, at inception, to document in advance the relationship between the item being 
hedged and the hedging instrument, and to document and reassess at each reporting date whether the hedge will be highly effective 
in offsetting changes in cash flows of the hedged item on an ongoing basis.
The effective portion of changes in the fair value of cash flow hedging derivatives is recognised in equity within the hedging reserve. 
The change in fair value relating to the ineffective portion of the hedge is recognised in the income statement immediately within finance 
costs. Amounts accumulated within equity are recycled to the income statement in the periods when the hedged item will affect profit.
When a hedging instrument expires or is sold, or no longer meets the criteria for hedge accounting, any cumulative gain or loss on the 
hedging instrument previously recognised in equity is retained in equity and is recognised when the forecast transaction is ultimately 
recognised in the income statement. If the hedged transaction is no longer expected to occur, the cumulative gain or loss that was 
recognised in equity is immediately transferred to the income statement.
Grants
Grants and other contributions towards the cost of property, plant and equipment are included in payables as deferred income and 
credited to the income statement over the life of the asset and recognised at fair value where there is a reasonable assurance the grant 
will be received and that the Group will comply with conditions of the grant. 
Exceptional items
Exceptional items are material items which derive from events or transactions which individually or, if of a similar type, in aggregate need 
to be disclosed by virtue of their size or incidence if the financial statements are to give a true and fair view.
Dividends
Final dividends are recognised as a liability in the period in which they are approved by the Company’s shareholders. Interim dividends 
are recognised when they are paid.
Net debt
Net debt is cash and cash equivalents, bank and other loans and finance leases.
Research and development
Expenditure in respect of research and development is written off against profits in the period in which it is incurred, unless the 
development costs meet the criteria for capitalisation under IAS 38 ‘Intangible assets’.
Critical accounting estimates and judgements
pRovisions
Judgement is required in the areas of stock and store dilapidation provisioning but the Directors do not consider the impact on reported 
results to be material.
REtiREmEnt bEnEfit obligA tion
The valuation of the retirement benefit obligation is dependent upon a series of assumptions, the key ones being discount rates, mortality 
rates, investment returns, salary inflation and the rate of pension increases. These are set out in note 20 to the financial statements.
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Notes 	 to 	 the 	 financial 	 statements
1 Segmental reporting
The Group’s operations consist of the vertically integrated manufacture, distribution and retail of confectionery products. Given this level 
of integration, the Directors consider that there is only one business segment and therefore the disclosures are given in the primary 
financial statements or related notes.
Revenue arises from UK operations and therefore no separate reporting for geographical segments is required.
2 Other operating income
       52 weeks 53 weeks 
       ended ended 
       28 June 30 June  
       2008 2007 
       £’000 £’000
Franchise fee income       209 180
Licensing income       648 446
Rent receivable       282 182
       1,139 808
3 Finance income
       52 weeks 53 weeks 
       ended ended 
       28 June 30 June  
       2008 2007 
       £’000 £’000
Interest on bank deposits       37 24
Other finance income       8 37
       45 61
4 Finance costs
       52 weeks 53 weeks 
       ended ended 
       28 June 30 June  
       2008 2007 
       £’000 £’000
Interest payable on bank borrowings       1,305 1,237
Net exchange differences on foreign currency payments       23 (37)
Interest payable on finance leases       540 632
Other finance costs       33 —
       1,901 1,832
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Notes 	 to 	 the 	 financial 	 statements 	continued
5 Profit before taxation
       52 weeks 53 weeks 
       ended ended 
       28 June 30 June  
       2008 2007 
       £’000 £’000
The following items have been included in arriving at profit before taxation:  
Employee benefits expense (note 27)       60,751 53,914
Cost of inventories recognised as an expense       59,126 48,260
Depreciation of property, plant and equipment:  
– owned assets       6,933 6,818
– under finance leases       2,295 2,191
Amortisation of intangible assets       2,018 1,973
Profit on disposal of property, plant and equipment       (143) (353)
Operating lease rentals payable:  
– land and buildings       20,275 19,514
– other       976 814
Repairs and maintenance expenditure on property, plant and equipment     5,207 5,494
Trade receivables impairment       125 —
Government grant income       (21) (20)
Costs associated with offer talks       — 14
Product research and development       412 352
Costs associated with offer talks incurred in 2007 relate to residual charges following an aborted offer for the business in 2006. 
sERviCEs pRoviDED by thE gRoup’s A uDitoRs
During the period the Group obtained the following services from the Group’s auditors, as detailed below:
       52 weeks 53 weeks 
       ended ended 
       28 June 30 June  
       2008 2007 
       £’000 £’000
Audit services:  
– audit of the parent and consolidated accounts       95 99
– audit of Thorntons PLC subsidiaries pursuant to legislation      3 3
– other services supplied pursuant to legislation       27 26
Tax compliance services       — 72
Actuarial services       — 12
Advice in respect of the Company’s pension schemes       18 50
       143 262
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6 Taxation
AnAlysis of ChARgE in pERioD
       52 weeks 53 weeks 
       ended ended 
       28 June 30 June  
       2008 2007 
       £’000 £’000
Current tax:  
– current period       2,517 2,346
– adjustment in respect of prior period       (444) (44)
       2,073 2,302
Deferred tax (note 19):  
– current period       159 (74)
– adjustment in respect of prior period       170 63
– effect of reduction in tax rate       — (506)
       2,402 1,785
tAx on itEms ChARgED to Equity
       52 weeks 53 weeks 
       ended ended 
       28 June 30 June  
       2008 2007 
       £’000 £’000
Current tax credit on exercise of share options       — 253
Deferred tax (charge)/credit on share-based payments       (510) 38
Effect of reduction in tax rate on share-based payments       — 12
       (510) 303
Deferred tax credit/(charge) on actuarial gain       601 (453)
Effect of reduction in tax rate on pension liability       — (308)
Effect of reduction in tax rate on other timing differences      — (34)
       91 (492)
The Finance Act 2008 includes legislation which would prevent the Group from claiming Industrial Buildings Allowances on affected assets 
after 2011. The Directors estimate that, upon enactment of the Finance Act 2008, the proposed changes would lead to an increase in the 
deferred tax charge of approximately £2.9m in the 2008/09 financial year. 
The standard rate of corporation tax reduced to 28% with effect from 1 April 2008. The standard rate of corporation tax expected for the 
year on a weighted average basis is therefore 29.5%.
_2_THT_ar08_back.indd   29 19/09/2008   09:04:45 46 Thorntons PLC Annual Report and Accounts 2008
Notes 	 to 	 the 	 financial 	 statements 	continued
6 Taxation continued
tAx REConCiliA tion
The tax for the period is lower (2007: lower) than the standard rate of corporation tax in the UK (29.5%). The differences are explained below:
       52 weeks 53 weeks 
       ended ended 
       28 June 30 June  
       2008 2007 
       £’000 £’000
Profit on ordinary activities before tax       8,470 7,081
Profit on ordinary activities multiplied by rate of corporation tax in the UK of 29.5% (2007: 30%)   2,499 2,124
Effects of:  
– adjustments to tax provision in respect of prior periods      (274) 19
– expenses not deductible for tax purposes       177 148
– effect of reduction in tax rate       — (506)
Total taxation       2,402 1,785
7 Profits for the financial period
The Parent Company has not prepared its own profit and loss account as permitted by Section 230(1) of the Companies Act 1985. 
Of the Group profit attributable to shareholders, a profit after tax of £5,986,000 (2007: £5,149,000) has been dealt with in the 
accounts of the Company.
8 Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of 
ordinary shares outstanding during the period, excluding those held in the employee share trust (“ESOP”), which are treated as cancelled.
For diluted earnings per share the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive 
potential ordinary shares. Dilutive potential ordinary shares are those share options granted to employees where the exercise price is less 
than the average market price of the Company’s ordinary shares during the period.
Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below:
 52 weeks ended  53 weeks ended  
 28 June 2008  30 June 2007 
    Basic Diluted  Basic Diluted 
   Earnings earnings earnings Earnings earnings earnings 
   £’000 per share per share £’000 per share per share
Profit before effect of reduction in tax rate   6,068 9.1p 9.0p 4,790 7.2p 7.1p
Effect of reduction in tax rate   — — — 506 0.8p 0.8p
Profit	attributable	to	equity	shareholders   6,068 9.1p 9.0p 5,296 8.0p 7.9p
     2008   2007
Weighted average number of ordinary shares     66,810,143   66,346,144
Dilutive effect from share options     456,486   741,783
Fully diluted weighted average number of ordinary shares    67,266,629   67,087,927
 
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9 Ordinary dividends
       2008 2007 
Group and Company      Note £’000 £’000
Final dividend paid for the 53 weeks ended 30 June 2007 of 4.85p 
(52 weeks ended 24 June 2006: 4.85p)       3,235 3,211
Interim dividend paid in respect of the 52 weeks ended 28 June 2008  
of 1.95p (53 weeks ended 30 June 2007: 1.95p)       1,315 1,301
Amounts	recognised	as	distributions	to	equity	holders	    24 4,550 4,512
In addition, the Directors are proposing a final dividend in respect of the year ended 28 June 2008 of 4.85p per share which will absorb 
an estimated £3.2m of shareholders’ funds. It will be paid on 28 November 2008 to shareholders who are on the register of members on 
31 October 2008.
The trusts operating the Long-Term Incentive Plan Scheme (“LTIP 2007”) have fully waived dividends on the 504,610 shares (2007: 504,610) 
held at 28 June 2008 and all but 0.01p per share on the 905,070 (2007: 921,586) shares held in respect of the 2001 Executive Share 
Option Scheme.
10 Intangible assets
        Computer  
        software 
Group and Company        £’000
Cost 
At 30 June 2007         22,716 
Additions – externally acquired        848
Additions – internally generated         6 
At 28 June 2008        23,570
Aggregate amortisation  
At 30 June 2007        16,766 
Charge for the year         2,018 
At 28 June 2008         18,784 
Net book amount at 28 June 2008         4,786 
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Notes 	 to 	 the 	 financial 	 statements 	continued
10 Intangible assets continued
        Computer  
        software 
Group and Company        £’000
Cost 
At 25 June 2006        20,972
Additions – externally acquired         1,813 
Additions – internally generated         87 
Disposals         (156) 
At 30 June 2007         22,716 
Aggregate amortisation 
At 25 June 2006         14,945 
Charge for the year         1,973 
Disposals         (152) 
At 30 June 2007         16,766 
Net book amount at 30 June 2007         5,950 
Net book amount at 25 June 2006        6,027
Intangible assets held under finance leases were valued at £2,465,000 (2007: £3,729,000).
Amortisation costs for intangible assets directly involved in production are recognised in cost of sales within the income statement. 
All other amortisation costs are recognised within operating expenses. 
11 Property, plant and equipment
 Land and buildings
    Long  Other plant, Retail  
    leasehold Short vehicles and fittings and  
    and freehold leasehold equipment equipment Total 
Group    £’000 £’000 £’000 £’000 £’000
Cost     
At 30 June 2007    38,672 6,899 76,944 50,046 172,561
Additions at cost    19 820 2,581 3,631 7,051
Disposals    — (72) (525) (675) (1,272)
At 28 June 2008    38,691 7,647 79,000 53,002 178,340
Accumulated depreciation     
At 30 June 2007    8,913 4,386 48,947 43,937 106,183
Charge for the period    831 453 5,303 2,641 9,228
Disposals    — (59) (504) (592) (1,155)
At 28 June 2008    9,744 4,780 53,746 45,986 114,256
Net book amount at 28 June 2008    28,947 2,867 25,254 7,016 64,084
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11 Property, plant and equipment continued
 Land and buildings
    Long  Other plant, Retail  
    leasehold Short vehicles and fittings and  
    and freehold leasehold equipment equipment Total 
Group    £’000 £’000 £’000 £’000 £’000
Cost     
At 25 June 2006    38,641 6,859 74,729 47,769 167,998
Additions at cost    31 301 2,451 3,255 6,038
Disposals    — (261) (236) (978) (1,475)
At 30 June 2007    38,672 6,899 76,944 50,046 172,561
Accumulated depreciation     
At 25 June 2006    8,082 4,207 43,903 42,414 98,606
Charge for the period    831 420 5,278 2,480 9,009
Disposals    — (241) (234) (957) (1,432)
At 30 June 2007    8,913 4,386 48,947 43,937 106,183
Net book amount at 30 June 2007    29,759 2,513 27,997 6,109 66,378
Net book amount at 25 June 2006    30,559 2,652 30,826 5,355 69,392
 Land and buildings
    Long  Other plant, Retail  
    leasehold Short vehicles and fittings and  
    and freehold leasehold equipment equipment Total 
Company    £’000 £’000 £’000 £’000 £’000
Cost     
At 30 June 2007    38,463 6,860 76,944 49,902 172,169
Additions at cost    19 820 2,581 3,631 7,051
Disposals    — (72) (525) (675) (1,272)
At 28 June 2008    38,482 7,608 79,000 52,858 177,948
Accumulated depreciation     
At 30 June 2007    8,883 4,362 48,947 43,797 105,989
Charge for the period    827 451 5,303 2,640 9,221
Disposals    — (59) (504) (592) (1,155)
At 28 June 2008    9,710 4,754 53,746 45,845 114,055
Net book amount at 28 June 2008    28,772 2,854 25,254 7,013 63,893
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Notes 	 to 	 the 	 financial 	 statements 	continued
11 Property, plant and equipment continued
 Land and buildings
    Long  Other plant, Retail  
    leasehold Short vehicles and fittings and  
    and freehold leasehold equipment equipment Total 
Company    £’000 £’000 £’000 £’000 £’000
Cost     
At 25 June 2006    38,432 6,819 74,729 47,629 167,609
Additions at cost    31 301 2,451 3,252 6,035
Disposals    — (260) (236) (979) (1,475)
At 30 June 2007    38,463 6,860 76,944 49,902 172,169
Accumulated depreciation     
At 25 June 2006    8,057 4,185 43,903 42,274 98,419
Charge for the period    826 418 5,278 2,480 9,002
Disposals    — (241) (234) (957) (1,432)
At 30 June 2007    8,883 4,362 48,947 43,797 105,989
Net book amount at 30 June 2007    29,580 2,498 27,997 6,105 66,180
Net book amount at 26 June 2006    30,375 2,634 30,826 5,355 69,190
Depreciation costs for tangible fixed assets directly involved in production are recognised within cost of sales within the income statement. 
All other depreciation costs are recognised within operating expenses.
Tangible assets held under finance leases have the following net book amount:
  Land and Other  Land and   
  buildings –  plant, Retail buildings –  Other plant, Retail 
 	 long 	 leasehold	 vehicles 	 and 	 	 fittings 	 and	long leasehold vehicles and  fittings and 
 	 and 	 freehold	 equipment	 equipment	 and freehold equipment equipment 
  2008 2008 2008 2007 2007 2007 
Group and company  £’000 £’000 £’000 £’000 £’000 £’000
Cost    784 9,125 15,886 784 8,812 14,584
Aggregate depreciation   133 6,052 12,680 80 4,917 11,741
Net book amount   651 3,073 3,206 704 3,895 2,843
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12 Investment in subsidiaries
       Company Company 
       2008 2007 
       £’000 £’000
Cost of shares       19 19
Less: accumulated provisions for impairments       (1) (1)
Net book value       18 18
The Company owns the whole of the issued ordinary share capital of the following principal operating subsidiaries. To avoid a statement 
of excessive length, details of investments in dormant companies included in the consolidated accounts have been omitted. A full list of 
subsidiaries can be obtained upon request from the Company’s registered office.
Subsidiary Country of incorporation Principal activity Country of operation
Strand Court Properties Limited England Property investment United Kingdom
Thorntons (Jersey) Limited Jersey Retail trading company Jersey
The Directors believe that the carrying value of the investments is supported by their underlying net assets.
13 Inventories
     Group Group Company Company 
     2008 2007 2008 2007 
     £’000 £’000 £’000 £’000
Raw materials     2,557 2,021 2,557 2,021
Work in progress     2,963 2,409 2,963 2,409
Finished goods and goods for resale     18,787 13,772 18,779 13,763
     24,307 18,202 24,299 18,193
During the year £80,000 (2007: £216,000 expense) relating to the write-down of inventory to net realisable value was released and 
reflected in cost of sales. 
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Notes 	 to 	 the 	 financial 	 statements 	continued
14 Trade and other receivables
     Group Group Company Company 
     2008 2007 2008 2007 
     £’000 £’000 £’000 £’000
Trade receivables     7,597 5,609 7,597 5,609
Less: provision for impairment     (354) (240) (354) (240)
Net trade receivables     7,243 5,369 7,243 5,369
Amounts owed by Group undertakings     — — 359 1,506
Other receivables     1,199 539 1,199 539
Prepayments and accrued income     6,713 6,720 6,700 6,707
     15,155 12,628 15,501 14,121
The Group’s exposure to credit risk and impairment losses related to trade receivables is disclosed in note 17.
Amounts owed from other Group companies are unsecured, interest free and have no fixed repayment terms.
Prepayments and accrued income include £5.2m (2007: £4.7m) of property related rent, rates, insurances and surcharge prepayments.
15 Trade and other payables – current
     Group Group Company Company 
     2008 2007 2008 2007 
     £’000 £’000 £’000 £’000
Trade payables     9,387 8,028 9,387 8,028
Other taxation and social security payable     3,149 2,409 3,147 2,408
Amounts owed to other Group companies     — — 2,451 3,901
Other payables     97 175 97 175
Accruals and deferred income     9,381 9,247 9,373 9,232
     22,014 19,859 24,455 23,744
Amounts owed to other Group companies are unsecured, interest free and have no fixed repayment terms.
Within Accruals and deferred income is a balance in respect of Government grants within the Group and Company of £21,035 
(2007: £21,035), primarily relating to a grant received in the year ending June 2004 in respect of the relocation of toffee manufacturing 
operations from the original Belper site to Thornton Park. This Government grant totalling £400,000 is being released to the income 
statement on a straight line basis over 20 years.
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16 Borrowings
     Group Group Company Company 
     2008 2007 2008 2007 
Current     £’000 £’000 £’000 £’000
Bank loans and overdrafts due within one year or on demand:    
– unsecured bank loans and overdrafts     21,000 19,000 21,167 19,000
– finance lease obligations     3,057 3,577 3,057 3,577
     24,057 22,577 24,224 22,577
     Group Group Company Company 
     2008 2007 2008 2007 
Non-current     £’000 £’000 £’000 £’000
Finance lease obligations     5,295 6,692 5,295 6,692
Bank loans and overdrafts are denominated in Pounds Sterling and bear interest based on LIBOR or UK base rates. 
The effective interest rates at the balance sheet dates were as follows:
       2008 2007 
       % %
Bank borrowings       6.04% 6.34%
Finance leases       4.48% 5.04%
The Group’s borrowings are denominated in the following currencies:
       2008 2007 
       £’000 £’000
Pounds Sterling       29,352 29,269
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Notes 	 to 	 the 	 financial 	 statements 	continued
16 Borrowings continued
mA tuRity of finAnCiAl liAbilitiEs
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the balance 
sheet date to the contractual maturity date. The amounts disclosed in the table below are the contractual undiscounted cash flows:
    Finance 2008  Finance 2007 
   Debt leases  Total  Debt leases Total 
   £’000 £’000 £’000 £’000 £’000 £’000
Less than one year   21,044 3,090 24,134 19,033 4,026 23,059
Between one and two years   — 5,129 5,129 — 2,822 2,822
Between two and five years   — 894 894 — 4,481 4,481
   21,044 9,113 30,157 19,033 11,329 30,362
Debt due in less than one year reflects the ongoing utilisation of three year revolving facilities described in the following borrowing facilities note.
boRRowing f ACilitiEs
The Group has the following undrawn committed floating rate borrowing facilities available at 28 June 2008. The Group must comply 
with the principal lending convenants in respect of interest cover and the net debt to EBITDA ratio. At 28 June 2008 none of these 
convenants had been breached.
       2008 2007 
       £’000 £’000
Expiring within one year       5,000 41,400
Expiring between two and five years       29,000 —
       34,000 41,400
The facilities expiring between two and five years are three year revolving facilities due for renewal prior to August 2010, their utilisation 
being managed via regular review during their term. All these facilities incur commitment fees at market rates.
The minimum lease payments under finance leases fall due as follows:
       2008 2007 
       £’000 £’000
Not later than one year       3,090 4,026
Later than one year but not more than five       6,023 7,303
More than five years       — —
       9,113 11,329
Future finance charges on finance leases       (761) (1,060)
Present value of finance lease liabilities       8,352 10,269
The fair value of obligations under finance lease equates to their carrying value as the interest rates being paid on these are substantially 
those prevailing in the open market. The fair values of other financial instruments are not materially different to their carrying value due 
to their relatively short maturity or small size.
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17 Derivatives and other financial instruments
The Group’s financial instruments comprise cash and cash equivalents, bank loans, liquid resources, finance leases, onerous lease and 
dilapidation provisions and other items such as trade payables and trade receivables that arise from its operations. The principal function 
of these financial instruments is to raise finance for the Group’s operations. The main risks arising from the Group’s financial instruments 
can be analysed as follows:
intEREst RA tE Risk 
Funding received from banks is at floating rates fixed in the short term for the duration of each loan. Floating rate borrowings are exposed 
to the risk of rising interest rates. Borrowings of a longer term nature such as those required to fund fixed asset acquisitions are funded 
each year through finance leases to the extent that total finance lease exposure remains broadly constant from year to year and provides 
an element of fixed interest borrowing.
liquiDity Risk 
The Group uses banking facilities and finance leases as its primary sources of funding. The Group has historically been very cash 
generative. The bank position and headroom of the Group is monitored daily and capital expenditure has to be approved in accordance 
with its policy which defines the level of authorisation required. The Group’s bank facilities were renewed in July 2007 and consist of a 
revolving credit facility of £50.0m shared among four banks and committed for three years. The Group also has a short-term committed 
overdraft facility of £5.0m.
pRiCE Risk 
The Group seeks to limit its exposure to volatility in raw material and energy costs by buying these forward, where possible, for a period 
of up to a year.
foREign CuRREnCy Risk 
The Group’s exposure to foreign currency risk on trading transactions is not significant, however hedging arrangements are made in 
respect of the largest purchase contracts when placed. It is the Group’s policy to hedge significant fixed asset or capital transactions 
where appropriate.
CREDit Risk 
Retail sales represent a large proportion of the Group’s sales and present no credit risk as they are made for cash. Where credit sales 
are concerned the Group operates effective credit control procedures in order to minimise exposure to overdue debts and also carries 
insurance against the cost of significant bad debts. Counter-parties involved in transactions are limited to high quality financial institutions.
The carrying amount of financial assets representing the maximum credit exposure at the reporting date was:
       2008 2007 
       £’000 £’000
Trade receivables       7,597 5,609
The carrying amounts of the Group’s trade and other receivables are denominated in Pounds Sterling. 
The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:
       2008 2007 
       £’000 £’000
UK        7,119 5,307
Europe       124 62
       7,243 5,369
The maximum exposure to credit risk for trade receivables at the reporting date by sales channel was:
       2008 2007 
       £’000 £’000
Commercial       5,057 3,959
Franchise       2,186 1,410
       7,243 5,369
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Notes 	 to 	 the 	 financial 	 statements 	continued
17 Derivatives and other financial instruments continued
CREDit Risk 
The aging of gross trade receivables at the reporting date was:
     2008  2007
     Gross Impaired Gross Impaired 
     £’000 £’000 £’000 £’000
Current     5,442 — 4,533 55
30 days past due     1,163 — 779 3
60 days past due     192 1 105 8
More than 60 days past due     800 353 192 174
     7,597 354 5,609 240
A significant proportion of the receivables less than 60 days past due relate to large corporate customers for which there is no objective 
evidence that the Group will not be able to recover amounts owing and therefore no impairment has been made. Receivables more than 
60 days not impaired of £447,000 (2007: £18,000) arise where equal and opposite payable and receivable balances are held in respect 
of a major supplier and customer. 
The movement in impairment in respect of trade receivables during the year was as follows:
       2008 2007 
       £’000 £’000
At 30 June 2007 (24 June 2006)       240 320
Charged to profit and loss account       123 6
Utilised in period       (9) (86)
At 28 June 2008 (30 June 2007)       354 240
The impairment charge recognised in the income statement, net of amounts recovered previously written off amounted to £125,000 (2007: £nil).
The other classes within trade and other receivables do not contain impaired assets.
CuRREnCy ExposuRE
Net monetary assets and liabilities of the Group that are not denominated in the local functional currency were as follows:
       Euro Euro 
       2008 2007 
       £’000 £’000
Net foreign currency monetary assets/(liabilities)
Cash and cash overdraft       70 140
Trade and other payables       (547) (528)
       (477) (388)
The following significant exchange rate applied during the year:
        Reporting date 
     Average rate  spot rate
     2008 2007 2008 2007
Euro     1.3391 1.4594 1.2659 1.4829
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17 Derivatives and other financial instruments continued
sEnsitivity AnAlysis
The Group has used a sensitivity analysis technique that measures the estimated change to the income statement and equity, had a 10% 
weakening in Sterling occurred against all other currencies from the rates applicable at 28 June 2008. This analysis assumes that all other 
variables, in particular interest rates, remain constant. The analysis has been prepared on the same basis for 2007.
The amounts generated from the sensitivity analysis are estimates of the impact of market risk assuming that specified changes occur.
A 10% weakening of Sterling against the following currency at 28 June 2008 would have decreased profit and loss by the amounts:
       Profit	 Profit 
       and loss and loss 
       2008 2007 
       £’000 £’000
Euro       (53) (43)
A 10% strengthening of Sterling against the above currency would have had an equal and opposite effect to the amounts shown.
intEREst RA tE Risk
The financial assets of the Group that were exposed to interest rate risk at 28 June 2008 consisted of cash and short-term deposits and 
financial liabilities consisted of short-term bank borrowings and finance leases. These are detailed, along with their effective interest rates, 
in note 16. 
sEnsitivity AnAlysis
A 0.5% adverse movement in the effective interest rates applicable to these financial liabilities at 28 June 2008 would have decreased 
profit by the amounts shown below:
       Profit	 Profit 
       and loss and loss 
       2008 2007 
       £’000 £’000
Bank borrowings       (4) (3)
Finance leases       (77) (92)
       (81) (95)
18 Provisions for liabilities
       Group Company 
       onerous onerous 
       leases and leases and 
       dilapidation dilapidation 
       £’000 £’000
At 30 June 2007       659 659
Charged to profit and loss account       148 147
Utilised in period       (32) (32)
Released in period       (67) (67)
At 28 June 2008       708 707
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Notes 	 to 	 the 	 financial 	 statements 	continued
18 Provisions for liabilities continued
Provisions are analysed between current and non-current as follows:
     Group Group Company Company 
     2008 2007 2008 2007 
     £’000 £’000 £’000 £’000
Current     122 181 122 181
Non-current     586 478 585 478
     708 659 707 659
The provision for onerous leases is in respect of leasehold properties from which the Group no longer trades, but is liable to fulfil rent 
and other property commitments up to the lease expiry date. Obligations are payable within a range of one to nine years (2007: one to 
ten years), the weighted average being three years (2007: four years). Amounts have been provided based on current rentals. Future rent 
reviews could require additional provisions to be made.
The Group provides for property dilapidations, where appropriate, based on estimated undiscounted costs of the dilapidation repairs 
spread over the period of the tenancy.
19 Deferred tax
Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 28% (2007: 28%).
The movement on the deferred tax account is shown below:
     Group Group Company Company 
     2008 2007 2008 2007 
     £’000 £’000 £’000 £’000
At beginning of period     2,512 2,284 2,476 2,265
Profit and loss charge/(credit)     329 (11) 329 (28)
Taken to equity (employee benefits)     510 (38) 510 (38)
Actuarial (gain)/loss     (601) 453 (601) 453
Effect of reduction in tax rate on accelerated capital allowances    — (521) — (521)
Effect of reduction in tax rate on share-based payments     — (12) — (12)
Effect of reduction in tax rate on pension liability     — 308 — 308
Effect of reduction in tax rate on other timing differences    — 49 — 49
At end of period     2,750 2,512 2,714 2,476
Of the total Group and Company deferred tax balance at 28 June 2008, £86,000 (2007: £350,000) is expected to be released within 
one year.
_2_THT_ar08_back.indd   42 19/09/2008   09:04:47 Annual Report and Accounts 2008 Thorntons PLC 59
19 Deferred tax continued
The movements in deferred tax assets and liabilities (prior to the offsetting of balances within the same jurisdiction as permitted by IAS 12) 
during the period are shown below.
DEfERRED t Ax liAbilitiEs
      Accelerated 
      capital 
      allowances Other Total 
Group      £’000 £’000 £’000
At 30 June 2007      7,301 50 7,351
Credited to profit and loss account      (86) (14) (100)
At 28 June 2008      7,215 36 7,251
DEfERRED t Ax AssEts
      Retirement 
      benefit 
     Provisions obligations Other Total 
Group     £’000 £’000 £’000 £’000
At 30 June 2007     67 4,317 455 4,839
(Charged)/credited to profit and loss account     (59) (448) 78 (429)
Deferred tax on share-based payments charged to equity    — — (510) (510)
Deferred tax on actuarial loss credited to equity     — 601 — 601
At 28 June 2008     8 4,470 23 4,501
DEfERRED t Ax liAbilitiEs
      Accelerated 
      capital 
      allowances Other Total 
Company      £’000 £’000 £’000
At 30 June 2007      7,301 14 7,315
Credited to profit and loss account      (86) (14) (100)
At 28 June 2008      7,215 — 7,215
DEfERRED t Ax AssEts
      Retirement 
      benefit 
     Provisions obligations Other Total 
Company     £’000 £’000 £’000 £’000
At 30 June 2007     67 4,317 455 4,839
(Charged)/credited to profit and loss account     (59) (448) 78 (429)
Deferred tax on share-based payments charged to equity    — — (510) (510)
Deferred tax on actuarial loss credited to equity     — 601 — 601
At 28 June 2008     8 4,470 23 4,501
_2_THT_ar08_back.indd   43 19/09/2008   09:04:47 60 Thorntons PLC Annual Report and Accounts 2008
Notes 	 to 	 the 	 financial 	 statements 	continued
19 Deferred tax continued
DEfERRED t Ax liAbilitiEs
      Accelerated 
      capital 
      allowances Other Total 
Group      £’000 £’000 £’000
At 24 June 2006      8,161 19 8,180
(Credited)/charged to profit and loss account      (339) 32 (307)
Effect of reduction in tax rate      (521) (1) (522)
At 30 June 2007      7,301 50 7,351
DEfERRED t Ax AssEts
      Retirement 
      benefit 
     Provisions obligations Other Total 
Group     £’000 £’000 £’000 £’000
At 24 June 2006     152 5,381 363 5,896
(Charged)/credited to profit and loss account     (81) (303) 88 (296)
Deferred tax on share-based payments credited to equity    — — 38 38
Deferred tax on actuarial gain charged to equity     — (453) — (453)
Effect of reduction in tax rate     (4) (308) (34) (346)
At 30 June 2007     67 4,317 455 4,839
DEfERRED t Ax liAbilitiEs
      Accelerated 
      capital 
      allowances Other Total 
Company      £’000 £’000 £’000
At 24 June 2006      8,161 — 8,161
(Credited)/charged to profit and loss account      (339) 15 (324)
Effect of reduction in tax rate      (521) (1) (522)
At 30 June 2007      7,301 14 7,315
DEfERRED t Ax AssEts
      Retirement 
      benefit 
     Provisions obligations Other Total 
Company     £’000 £’000 £’000 £’000
At 24 June 2006     152 5,381 363 5,896
(Charged)/credited to profit and loss account     (81) (303) 87 (297)
Deferred tax on share-based payments credited to equity    — — 38 38
Deferred tax on actuarial gain charged to equity     — (453) — (453)
Effect of reduction in tax rate     (4) (308) (33) (345)
At 30 June 2007     67 4,317 455 4,839
_2_THT_ar08_back.indd   44 19/09/2008   09:04:47 Annual Report and Accounts 2008 Thorntons PLC 61
20 Retirement benefit obligations
Pension arrangements are operated through a defined contribution scheme and a defined benefit scheme for both the Group 
and the Company.
DEfinED ContRibution sChEmE
Pension costs for defined contribution scheme are as follows:
       2008 2007 
       £’000 £’000
Defined contribution scheme       229 300
DEfinED bEnEfit sChEmE
The Thorntons’ Pension and Life Assurance Scheme assets are held in a separate trust-administered fund to meet long-term pension 
liabilities to past and present employees. The trustees of the fund are required to act in the best interest of the beneficiaries and in 
accordance with the Trust Deed and Rules. The most recently completed triennial valuation of the fund was performed by an independent 
actuary for the trustees of the scheme and was carried out as at 31 May 2005. The Group has agreed with the trustees that it will aim 
to eliminate the deficit by November 2017, and will continue to monitor funding levels on a regular basis. The triennial valuation due 
as at 31 May 2008 is currently being prepared by the Actuaries for discussion with the Trustees and the Company. 
The Group continues to provide, through an agreement with Lloyds TSB, a £5m guarantee payable to the Scheme should the Group 
become insolvent or the Scheme or any part of it be wound up.
The Thorntons’ Pension and Life Assurance Scheme was actuarially valued by an independent professionally qualified actuary as at 28 June 2008 
under IAS 19. Principal actuarial assumptions at the balance sheet date were:
      2008 2007 2006 
      % % %
Rate of increase in pensionable salaries      4.95 4.30 4.00
Rate of increase in pensions:   
– in deferment      3.80 3.15 2.90
– pre-April 1997      0.00 0.00 0.00
– post-April 1997      3.60 3.10 2.65
Discount rate      6.30 5.50 5.30
Inflation assumption      3.80 3.15 2.90
Expected return on plan assets      7.00 7.10 6.60
The assumption as to how many members will take up the maximum tax-free commutation on retirement is based on the Scheme’s own 
experience of commutation levels.
The sensitivities regarding the principal assumptions used to measure the scheme liabilities are set out below:
      Impact on 
    Change in scheme  
    assumption liabilities
Rate of increase in pensionable salaries    Increase by 0.1% Increase by £0.45m
Rate of increase in pensions post-April 1997    Increase by 0.1% Increase by £0.2m
Discount rate    Increase by 0.1% Decrease by £1.1m
Inflation assumption    Increase by 0.1% Increase by £0.9m
Expected return on plan assets    Increase by 0.1% Decrease by £0.05m
 
_2_THT_ar08_back.indd   45 19/09/2008   09:04:47 62 Thorntons PLC Annual Report and Accounts 2008
Notes 	 to 	 the 	 financial 	 statements 	continued
20 Retirement benefit obligations continued
DEfinED bEnEfit sChEmE continued
The mortality rates used are as follows:
    Life expectancy  
    at age 65 (years)
   Mortality table Male Female
Current pensioners   PA92mc (yob = 1935) +3 18.9 21.7
Future pensioners   PA92mc (yob = 1965) +3 20.5 23.2
The expected return on plan assets is a blended average of projected long-term returns for the various asset classes. Equity returns are 
based on a selection of an equity risk premium above the risk-free rate which is measured in accordance with the yields on government 
bonds. Bond returns are selected by reference to yields on government and corporate debt as appropriate to the scheme’s holdings of 
these instruments. Returns are projected over the entire life of the benefit obligation.
The major categories of plan assets as a percentage of total plan assets are as follows:
       2008 2007 
       % %
Equities       64 69
Bonds       36 30
Other       — 1
pEnsions AnD othER post-REtiREmEnt obligA tions
The amounts recognised in the balance sheet are determined as follows:
     2008 2007 2006 2005 
     £’000 £’000 £’000 £’000
Present value of funded obligations     (53,993) (54,785) (51,527) (48,485)
Fair value of plan assets     38,028 39,368 33,586 29,488
Net	deficit     (15,965) (15,417) (17,941) (18,997)
The amounts recognised in the income statement are as follows:
       2008 2007 
       £’000 £’000
Current service cost       784 873
Interest cost       2,997 2,775
Expected return on plan assets       (2,662) (2,302)
T otal	included	within	staff	employment	benefits	expense	(note	27)	    1,119 1,346
Of the total charge, £0.7m (2007: £0.8m) and £0.4m (2007: £0.5m) were included, respectively, in cost of sales and administrative expenses.
_2_THT_ar08_back.indd   46 19/09/2008   09:04:47 Annual Report and Accounts 2008 Thorntons PLC 63
20 Retirement benefit obligations continued
pEnsions AnD othER post-REtiREmEnt obligA tions continued
Changes in the present value of the defined benefit obligations are as follows:
       2008 2007 
       £’000 £’000
Present value of obligation at beginning of period       54,785 51,527
Current service cost       784 873
Interest cost       2,997 2,775
Employee contributions       980 950
Benefit payments       (2,064) (1,812)
Actuarial (gains)/losses       (3,489) 472
Present value of obligation at end of period       53,993 54,785
Changes in the fair value of plan assets are as follows:
       2008 2007 
       £’000 £’000
Fair value of plan assets at beginning of period       39,368 33,586
Employer contributions       2,719 2,360
Employee contributions       980 950
Benefits paid       (2,064) (1,812)
Actual (loss)/return on assets       (2,975) 4,284
Closing fair value of plan assets at end of period       38,028 39,368
AnAlysis of thE movEmEnt in thE bAlAnCE shEEt DEfiCit
       2008 2007 
       £’000 £’000
At beginning of period       (15,417) (17,941)
Employer pension cost       (1,119) (1,346)
Employer contributions       2,719 2,360
Net actuarial (losses)/gains recognised in the period       (2,148) 1,510
At end of period       (15,965) (15,417)
CumulA tivE ACtu ARiAl gAins AnD lossEs RECognisED in Equity
       2008 2007 
       £’000 £’000
At beginning of period       (1,224) (2,734)
Net actuarial (losses)/gains recognised in the period       (2,148) 1,510
Cumulative loss       (3,372) (1,224)
The contribution expected to be paid by the Group during the financial period ending 27 June 2009 amounts to £1.7m.
_2_THT_ar08_back.indd   47 19/09/2008   09:04:47 64 Thorntons PLC Annual Report and Accounts 2008
Notes 	 to 	 the 	 financial 	 statements 	continued
21 Other non-current liabilities
       2008 2007 
Group and Company       £’000 £’000
Accruals and deferred income       2,612 1,997
Included in the above are amounts totalling £293,037 (2007: £314,072) held in respect of Government grants.
22 Ordinary shares
       2008 2007 
Group and Company       £’000 £’000
Authorised  
85,000,000 ordinary shares of 10p each (2007: 85,000,000)      8,500 8,500
Issued and fully paid  
Ordinary shares of 10p each: 68,348,234 (2007: 68,111,468)      6,835 6,811
AllotmEnts DuRing thE yEAR
During the year no shares (2007: 566,666) were issued under the provision of the Company’s executive share option schemes, and 236,766 
(2007: 299,347) were issued under the Sharesave scheme, representing a total nominal value of £23,677 (2007: £86,601).
The average price of shares issued under the Sharesave scheme was £0.94 (2007: £0.68) and the aggregate consideration received 
under this scheme was £222,867 (2007: £203,199).
Since the end of the year no shares have been issued under the provisions of the executive share option schemes (2007: nil) and no shares 
(2007: 184) have been issued under the Sharesave scheme.
Rights AnD REstRiCtions A tt AChing to shAREs
Holders of the Company’s ordinary shares of 10p each are entitled to participate in the payments of dividends pro rata to their holdings. 
The Directors may propose and pay interim dividends and recommend a final dividend for shareholders’ approval for any accounting 
period out of the profits available for distribution under English law.
At any general meeting a resolution put to the vote of the meeting is decided on a show of hands unless, before or on the declaration 
of the result of a show of hands, a poll is properly demanded. On a show of hands every member who is present in person at a general 
meeting of the Company has one vote. Proxies may not vote on a show of hands. On a poll every member who is present in person or 
by proxy has one vote for every share of which he is the holder.
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22 Ordinary shares continued
shARE options
Options outstanding (including those held by Directors) are listed below:
ExECutivE sChEmEs
   Number of options 
   during the 52 weeks  
   ended 28 June 2008  Exercisable
  At 30 June     At 28 June Exercise 
Date of grant 2007 Granted Forfeited Exercised Lapsed 2008 price From To
22 Nov 2001 500,000 — — — (333,334) 166,666 90p 22 Nov 2004 22 Nov 2011
12 Mar 2002 214,720 — — — (198,204) 16,516 111p 12 Mar 2005 12 Mar 2012
02 Oct 2002 99,100 — (33,034) (16,516) — 49,550 111p 02 Oct 2005 02 Oct 2012
03 Oct 2003 88,000 — — — — 88,000 125p 03 Oct 2006 03 Oct 2013
03 Apr 2006 544,000 — — — — 544,000 119p 03 Apr 2009 03 Apr 2016
05 Jun 2006 1,200,000 — — — — 1,200,000 116p 05 Jun 2009 05 Jun 2016
11 Jul 2006 500,000 — — — — 500,000 129p 11 Jul 2009 11 Jul 2016
02 Oct 2006 1,200,000 — — — — 1,200,000 153p 02 Oct 2009 02 Oct 2016
13 Sep 2007 — 500,000 — — — 500,000 170p 13 Sep 2010 13 Sep 2017
23 Nov 2007 — 644,112 — — — 644,112 192p 23 Nov 2010 23 Nov 2017
  4,345,820 1,144,112 (33,034) (16,516) (531,538) 4,908,844
shAREsA vE sChEmE
   Number of options 
   during the 52 weeks  
   ended 28 June 2008  Exercisable
  At 30 June Granted    At 28 June Exercise 
Date of grant 2007 or reinstated Forfeited Exercised Lapsed 2008 price From To
25 Oct 2001 22,043 — — — (22,043) — 67p 01 Jan 2007 30 Jun 2007
18 Oct 2002 271,808 — (9,430) (232,057) — 30,321 94p 01 Jan 2008 30 Jun 2008
16 Oct 2003 301,210 — (23,113) (4,525) — 273,572 100p 01 Jan 2009 30 Jun 2009
12 Oct 2004 226,315 — (18,370) — — 207,945 150p 01 Jan 2010 30 Jun 2010
09 Oct 2006 224,874 — (33,188) (184) — 191,502 113p 01 Jan 2010 30 Jun 2010
09 Oct 2006 258,973 — (16,744) — — 242,229 113p 01 Jan 2012 30 Jun 2012
10 Oct 2007 — 270,794 (33,225) — — 237,569 148p 01 Jan 2011 30 Jun 2011
10 Oct 2007 — 292,281 (7,491) — — 284,790 148p 01 Jan 2013 30 Jun 2013
  1,305,223 563,075 (141,561) (236,766) (22,043) 1,467,928
_2_THT_ar08_back.indd   49 19/09/2008   09:04:47 66 Thorntons PLC Annual Report and Accounts 2008
Notes 	 to 	 the 	 financial 	 statements 	continued
23 Share-based payments
Under the Company’s executive share option schemes, the Remuneration Committee can grant options over shares in the Company 
to Directors and employees of the Company. Options are granted with a fixed exercise price equal to the market price of the shares under 
option at the date of grant. The contractual life of an option is ten years. Awards of options under the Scheme are generally reserved for employees 
at senior management level and above. Details of the performance conditions attaching to awards of options are described in the Report on 
Directors’ remuneration on pages 24 to 31. Fair value is measured by the use of the Black-Scholes model for options with internal 
performance criteria and the Monte Carlo model for options with external performance conditions.
The Thorntons Sharesave Scheme enables eligible employees to acquire options over ordinary shares of the Company at a discount of 
up to 20% to the market price in conjunction with a Save As You Earn contract. The options are exercisable within a period of six months 
commencing three or five years from the date of the savings contract.
The fair value per option granted during the year and the assumptions used in their calculation are as follows:
 2008 2008 2008 2008 2007 2007 2007 2007 
 Executive  Executive Sharesave Sharesave Executive Executive Sharesave Sharesave 
 1 2 1 2 1 2 1 2
Grant date 13 Sep 07 23 Nov 07 10 Oct 07 10 Oct 07 11 Jul 06 02 Oct 06 09 Oct 06 09 Oct 06
Share price at grant date 185p 193p 172p 172p 127p 152p 152p 152p
Exercise price 170p 192p 148p 148p 129p 153p 113p 113p
Number of employees 1 4 201 144 1 1 195 149
Shares under option 500,000 644,112 270,794 292,281 500,000 1,200,000 234,204 267,607
Vesting period (years) 3 3 3 5 3 3 3 5
Expected volatility 26.19% 27.37% 26.55% 26.55% 26.18% 26.57% 26.52% 26.52%
Option life (years) 10 10 3 5 10 10 3 5
Expected life (years) 3 3 3 5 3 3 3 5
Risk-free rate 5.00% 4.35% 5.09% 5.03% 4.70% 4.76% 4.80% 4.70%
Expected dividends expressed  
as a dividend yield 3.90% 3.53% 3.90% 3.90% 5.20% 5.20% 5.20% 5.20%
Possibility of ceasing employment  
before vesting n/a n/a 44.94% 47.23% n/a n/a 46.56% 47.23%
Fair value per option (three tranches) 41p–45p 30p 40p 45p 20p–23p 24p–28p 40p 40p
The expected volatility is based on historical volatility over the last three years. The expected life is the average expected period to 
exercise. The risk-free rate of return is the yield on zero-coupon UK government bonds of a term consistent with the assumed option life. 
_2_THT_ar08_back.indd   50 19/09/2008   09:04:48 Annual Report and Accounts 2008 Thorntons PLC 67
23 Share-based payments continued
A reconciliation of executive share option movements over the period to 28 June 2008 is shown below:
     2008  2007
      Weighted  Weighted 
      average  average 
      exercise   exercise 
Executive share options     Number  price Number price
Outstanding at start of period     4,345,820 125p 4,598,984 106p
Granted     1,144,112 182p 1,700,000 146p
Forfeited     (33,034) 111p (1,303,918) 99p
Exercised     (16,516) 111p (649,246) 98p
Lapsed     (531,538) 98p — —
Outstanding at end of period     4,908,844 125p 4,345,820 125p
Exercisable at end of period     199,698 93p 216,217 95p
For share options outstanding at the end of the period, the range of exercise prices and weighted average contractual life is disclosed below:
    2008  2007
     Contractual   Contractual 
     weighted   weighted 
    Weighted average  Weighted average 
    average remaining  average remaining 
    exercise life   exercise life 
Range of exercise prices   Number  price Years Number price   Years
90p-111p   232,732 96p 3.6 813,820 98p 4.6
116p-153p   3,532,000 131p 8.0 3,532,000 131p 9.0
170p-192p   1,144,112 182p 9.3 — — —
The weighted average share price during the period for options exercised over the period was nil (2007: 147p). The total charge for 
the period relating to employee share-based payment plans was £369,000 (2007: £230,000). After deferred tax, the total charge was 
£266,000 (2007: £160,000).
A reconciliation of sharesave scheme option movements over the period to 28 June 2008 is shown below:
     2008  2007
      Weighted  Weighted 
      average  average 
       exercise   exercise 
Sharesave scheme options     Number price Number price
Outstanding at start of period     1,305,223 99p 1,237,586 99p
Reinstated     — — 10,805 89p
Granted     563,075 148p 501,811 113p
Forfeited     (141,561) 124p (108,935) 108p
Exercised     (236,766) 94p (301,034) 68p
Lapsed     (22,043) 67p (35,010) 75p
Outstanding at end of period     1,467,928 128p 1,305,223 99p
Exercisable at end of period     30,321 94p 22,043 67p
_2_THT_ar08_back.indd   51 19/09/2008   09:04:48 68 Thorntons PLC Annual Report and Accounts 2008
Notes 	 to 	 the 	 financial 	 statements 	continued
23 Share-based payments continued
For share options outstanding at the end of the period, the range of exercise prices and weighted average contractual life is disclosed below:
    2008  2007
     Contractual   Contractual 
     Weighted   Weighted 
    Weighted average  Weighted average 
    average remaining  average remaining 
    exercise life   exercise life 
Sharesave scheme   Number  price Years Number price  Years
Oct 2001   — — — 22,043 67p —
Oct 2002   30,321 94p — 271,808 94p 1.0
Oct 2003   273,572 100p 1.0 301,210 100p 2.0
Oct 2004   207,945 150p 2.0 226,315 150p 3.0
Oct 2006   191,502 113p 2.0 224,874 113p 3.0
Oct 2006   242,229 113p 4.0 258,973 113p 5.0
Oct 2007   237,569 148p 3.0 — — —
Oct 2007   284,790 148p 5.0 — — —
The weighted average share price during the period for options exercised over the period was 164p (2007: 146p). The total charge for the 
period relating to employee share-based payment plans was £87,000 (2007: £61,000). After deferred tax, the total charge was £62,000 
(2007: £43,000).
24 Statement of changes in shareholders’ equity
     Share  Share Retained 
     capital premium earnings Total 
Group    Note £’000 £’000 £’000  £’000
At 25 June 2006     6,724 12,890 12,340 31,954
Total recognised income and expense     — — 6,011 6,011
New share capital issued    22 87 661 — 748
Share-based payment credit     — — 291 291
Effect of tax on share option movement    6 — — 303 303
Movement in investment in own shares     — — 91 91
Dividends    9 — — (4,512) (4,512)
At 30 June 2007     6,811 13,551 14,524 34,886
Total recognised income and expense     — — 4,521 4,521
New share capital issued    22 24 199 — 223
Share-based payment charge     — — 447 447
Effect of tax on share option movement    6 — — (510) (510)
Movement in investment in own shares     — — 18 18
Dividends    9 — — (4,550) (4,550)
At 28 June 2008     6,835 13,750 14,450 35,035
_2_THT_ar08_back.indd   52 19/09/2008   09:04:48 Annual Report and Accounts 2008 Thorntons PLC 69
24 Statement of changes in shareholders’ equity continued
     Share  Share Retained 
     capital premium earnings Total 
Company    Note £’000 £’000 £’000  £’000
At 25 June 2006     6,724 12,890 10,124 29,738
Total recognised income and expense     — — 5,864 5,864
New share capital issued    22 87 661 — 748
Share-based payment credit     — — 291 291
Effect of tax on share option movement    6 — — 303 303
Movement in investment in own shares     — — 91 91
Dividends    9 — — (4,512) (4,512)
At 30 June 2007     6,811 13,551 12,161 32,523
Total recognised income and expense     — — 4,437 4,437
New share capital issued    22 24 199 — 223
Share-based payment charge     — — 447 447
Effect of tax on share option movement    6 — — (510) (510)
Movement in investment in own shares     — — 18 18
Dividends    9 — — (4,550) (4,550)
At 28 June 2008     6,835 13,750 12,003 32,588
Deducted from Retained Earnings are investments in own shares of £2,163,000 (2007: £2,182,000) being held by trusts operating 
the following plans:
  lapsed Long-Term Incentive Plan now holds no shares (2007: 504,610) at an original cost of £nil (2007: £1,035,000), having been 
closed with shares transferring to a new 2007 LTIP trust; 
  2007 Long-Term Incentive Plan with 504,610 shares (2007: nil) at an original cost of £1,035,000 (2007: £nil); and
  2001 Executive Share Option Scheme with 905,070 shares (2007: 921,586) at an original cost of £1,128,478 (2007: £1,146,811).
_2_THT_ar08_back.indd   53 19/09/2008   09:04:48 70 Thorntons PLC Annual Report and Accounts 2008
Notes 	 to 	 the 	 financial 	 statements 	continued
25 Cash flow from operating activities
a CAsh gEnERA tED fRom opERA tions
     Group Group Company Company 
     2008 2007 2008 2007 
     £’000 £’000 £’000 £’000
Continuing operations    
Operating profit     10,326 8,852 10,215 8,676
Adjustments for:    
Depreciation and amortisation     11,246 10,982 11,238 10,975
Amortisation of Government grants received     (21) (20) (21) (20)
Profit on disposal of property, plant and equipment     (143) (353) (143) (353)
Share-based payment charge     447 291 447 291
Operating	cash	flow	before	working	capital	movements	   21,855 19,752 21,736 19,569
Changes in working capital    
Increase in inventories     (6,105) (2,885) (6,106) (2,884)
Increase in trade and other receivables     (2,520) (875) (3,479) 9,594
Increase in payables     2,309 1,059 3,366 2,484
Increase in provisions     49 26 48 123
Decrease in post-employment benefits     (1,600) (1,014) (1,600) (1,014)
Cash generated from operations before taxation     13,988 16,063 13,965 27,872
Corporate taxation     (2,507) (1,463) (2,500) (1,463)
Cash	flows	from	operating	activities     11,481 14,600 11,465 26,409
b CAsh AnD CAsh Equiv AlEnts foR thE CAsh flow st AtEmEnt
     Group Group Company Company 
     2008 2007 2008 2007 
     £’000 £’000 £’000 £’000
Cash and cash equivalents     1,088 2,858 1,005 2,624
Bank overdraft     — — (167) —
Net position     1,088 2,858 838 2,624
_2_THT_ar08_back.indd   54 19/09/2008   09:04:48 Annual Report and Accounts 2008 Thorntons PLC 71
26 Reconciliation of movement in net debt
     Group Group Company Company 
     2008 2007 2008 2007 
     £’000 £’000 £’000 £’000
(Decrease)/increase in cash and cash equivalents     (1,770) 2,856 (1,786) 14,665
Cash flows from decrease in debt     1,712 1,526 1,712 1,526
Change in net debt resulting from cash flow     (58) 4,382 (74) 16,191
Inception of new finance leases     (1,795) (3,222) (1,795) (3,222)
Movement in net debt in the period     (1,853) 1,160 (1,869) 12,969
Net debt at beginning of period     (26,411) (27,571) (26,645) (39,614)
Net debt at end of period     (28,264) (26,411) (28,514) (26,645)
27 Employees and Directors
     Group Group Company Company 
     2008 2007 2008 2007 
Employee	benefit	expense	during	the	period     £’000 £’000 £’000 £’000
Wages and salaries     54,638 47,504 54,585 47,456
Social security costs     4,679 4,261 4,676 4,258
Health cover, medical and life assurance     195 178 195 178
Staff incentives and relocation costs     163 34 163 34
Share-based payments     456 291 456 291
Pension costs (note 20)     1,348 1,646 1,348 1,646
     61,479 53,914 61,423 53,863
     Group Group Company Company 
     2008 2007 2008 2007 
Average monthly number of people (including Executive Directors) employed   Number Number Number Number
Management and administration     221 207 220 206
Selling and distribution     2,775 2,556 2,771 2,552
Manufacturing     1,570 1,240 1,570 1,240
     4,566 4,003 4,561 3,998
_2_THT_ar08_back.indd   55 19/09/2008   09:04:48 72 Thorntons PLC Annual Report and Accounts 2008
Notes 	 to 	 the 	 financial 	 statements 	continued
27 Employees and Directors continued
gRoup AnD Comp Any
       2008 2007 
Key management compensation       £’000 £’000
Salaries and short-term employee benefits       1,732 1,702
Post-employment benefits       136 214
Termination benefits       — 389
Share-based payments       369 247
       2,237 2,552
The key management figures given above include Directors and all other members of the Executive Committee.
       2008 2007 
Directors       £’000 £’000
Aggregate emoluments       1,204 1,299
Aggregate gains made on the exercise of share options       — 268
Company contributions to money purchase pension schemes      125 201
       1,329 1,768
Pension scheme contributions above represent the total contributions made by the Company on behalf of all Directors in respect of approved 
pension arrangements.
Retirement benefits are accruing to one Director (2007: one) under defined benefit schemes.
Further detail in respect of Directors’ remuneration can be found in the Report on Directors’ remuneration on pages 24 to 31.
28 Operating lease commitments – minimum lease payments
     2008  2007
     Land and  Land and  
     buildings Other buildings Other 
Group     £’000 £’000 £’000 £’000
Commitments under non-cancellable operating leases:    
Within one year     18,770 628 16,632 641
Later than one year and less than five years     62,803 1,429 57,088 500
After five years     43,428 80 40,654 —
     125,001 2,137 114,374 1,141
     2008  2007
     Land and  Land and  
     buildings Other buildings Other 
Company     £’000 £’000 £’000 £’000
Commitments under non-cancellable operating leases:    
Within one year     18,710 628 16,572 641
Later than one year and less than five years     62,563 1,429 56,849 500
After five years     43,151 80 40,317 —
     124,424 2,137 113,738 1,141
_2_THT_ar08_back.indd   56 19/09/2008   09:04:48 Annual Report and Accounts 2008 Thorntons PLC 73
29 Contingent liabilities
As at 28 June 2008 the Group had provided guarantees in respect of Customs and Excise duty deferment of £100,000 (2007: £100,000).
30 Capital and other financial commitments
     Group Group Company Company 
     2008 2007 2008 2007 
     £’000 £’000 £’000 £’000
Contracts placed for future capital expenditure not provided in the financial statements  754 58 754 58
Bulk supplies of raw ingredients     15,687 12,255 15,687 12,255
     16,441 12,313 16,441 12,313
mAJoR non-CAsh tRAnsACtions
During the period the Group entered into finance lease agreements in respect of various shop fitting costs and plant and equipment with 
capital values at the inception of the leases of £1,795,000 (2007: £3,222,000).
31 Related party transactions
gRoup
There are no related party transactions requiring disclosure in the financial statements (2007: £nil).
Comp Any
Funds are transferred within the Group, dependent on the operational needs of individual companies. The Directors do not consider it 
meaningful to set out the gross amounts of transfers between individual companies. Balances owed by and to other Group undertakings 
are shown in notes 14 and 15 to the financial statements.
_2_THT_ar08_back.indd   57 19/09/2008   09:04:49 74 Thorntons PLC Annual Report and Accounts 2008
Five year summary
The figures for 2007 and 2008 are extracted from this Annual Report and along with 2006 and 2005 are prepared under IFRS. The figures 
for 2004 were prepared and are presented under UK GAAP .
    IFRS IFRS IFRS IFRS UK GAAP 
    2008 2007* 2006 2005 2004 
    £’000 £’000 £’000 £’000 £’000
Consolidated income statement     
Revenue    208,122 185,989 176,626 187,704 178,746
Operating profit    10,326 8,852 7,307 10,445 9,584
Net finance costs    (1,856) (1,771) (2,142) (2,366) (2,578)
Profit before taxation    8,470 7,081 5,165 8,079 7,006
Taxation    (2,402) (1,785) (1,517) (2,529) (2,037)
Profit attributable to equity shareholders    6,068 5,296 3,648 5,550 4,969
Balance sheet     
Net assets    35,035 34,886 31,954 31,575 41,406
Net borrowings    (19,912) (16,142) (15,998) (18,063) (15,930)
Net debt    (28,264) (26,411) (27,571) (28,391) (25,996)
Gearing ratio    80.7% 75.7% 86.3% 89.9% 62.8%
Additions to intangible assets and property, plant and equipment   7,905 7,938 7,513 11,204 10,359
Other	financial	data     
Basic earnings per share (excluding exceptional items)    9.1p 8.0p 6.4p 10.3p 8.8p
Dividends per share    6.8p 6.8p 6.8p 6.8p 6.8p
Number of outlets – continuing operations
Own stores    379 368 367 369 378
Franchises    250 218 212 216 203
Stock market ratios     
Year end share price    114p 175p 131p 142p 159p
Shares in issue    68.3m 68.1m 67.2m 66.6m 66.6m
Market capitalisation    £77.9m £119.2m £87.8m £94.4m £105.9m
Dividend yield    6.0% 3.9% 5.2% 4.8% 4.3%
* 53 week period.
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Shareholder analysis
Shareholder ownership analysis at 28 June 2008
 Shareholders Shareholders Shares Shares 
Shareholding range Number % Number %
Up to 500 5,537 58.5 1,435,769 2.1
501–1,000 1,575 16.6 1,293,182 1.9
1,001–10,000 2,100 22.1 6,101,049 8.9
10,001–100,000 180 1.9 5,808,510 8.5
100,000 + 81 0.9 53,709,724 78.6
 9,473 100.0 68,348,234 100.0
 Shareholders Shareholders Shares Shares 
Category of shareholder Number % Number %
Corporate bodies and nominees 549 5.8 50,270,832 73.6
Private shareholders 8,924 94.2 18,077,402 26.4
 9,473 100.0 68,348,234 100.0
_2_THT_ar08_back.indd   59 19/09/2008   09:04:49 76 Thorntons PLC Annual Report and Accounts 2008
For 52 weeks ended 28 June 2008
23 October 2008 AGM
28 November 2008 Final dividend payable
For 52 weeks ending 27 June 2009
10 January 2009 Interim accounting period end (28 weeks)
February 2009 Interim results and dividend announced
April 2009  Interim dividend payable
27 June 2009  Accounting period end (52 weeks)
September 2009  Results and final dividend announced
September 2009  Annual Report circulated
Share dealing service
If you want to buy or sell shares, Capita Share Dealing Service offer an easy-to-use, competitive, execution-only service. This means that 
they will only buy and sell shares and will not offer any other service (for example, financial advice). If you want to use this service, phone 
0870 458 4577 or visit www.capitadeal.com. The service is provided by Capita IRG Trustees Limited, which is authorised and regulated 
by the Financial Services Authority (www.fsa.gov.uk/register 184113) and is a subsidiary of Capita IRG Plc. Terms and conditions apply. 
Financial calendar
_2_THT_ar08_back.indd   60 19/09/2008   09:04:49 About Thorntons
Established by Joseph William Thornton 
in 1911, Thorntons today is a £200m+ 
turnover company with 379 shops 
and cafés and 250 franchises, 
together with internet, mail order 
and commercial services.
Thorntons’ commitment to environmental issues is reflected in 
this annual report which has been printed on Revive 50:50 Silk 
and Revive 50:50 Offset, both recycled paper stocks containing 
50% recovered waste and 50% virgin fibre. The pulp used in this 
product is bleached using a Totally Chlorine Free (TCF) process. 
This document was printed by Vitesse using soya-based inks and 
water-soluble lacquers and all production processes used make 
the minimum demand on the environment and produce the 
minimum amount of waste. 
Both the printer and the paper mill are registered to ISO 14001 
and FSC approved.
Cert no. FS/COC/002830 
 01 Highlights
 02 About Thorntons
 04 Chairman’s statement
 06 Chief Executive’s report
 10 Finance Director’s report
 12 Corporate social responsibility
 15 Board of Directors 
 16 Corporate information
 17 Report of the Directors
 20 Corporate governance
 24 Report on the Directors’ remuneration
 32 Independent auditors’ report 
 34 Consolidated income statement
 34  Statements of recognised income and expense
 35 Balance sheets
 36 Cash flow statements
 37 Statement of accounting policies
 43 Notes to the financial statements
 74 Five year summary
 75 Shareholder analysis
 76 Financial calendar
_1_THT_ar08_cover.indd   2 19/09/2008   09:08:10 Thorntons PLC 
Thornton Park
Somercotes
Alfreton
Derbyshire DE55 4XJ
Telephone 0845 075 7565
www.thorntons.co.uk
Thorntons Direct 
Telephone 0845 121 1911
www.thorntons.co.uk
For information on 
Investor Relations visit
www.thorntons.co.uk
Thorntons PLC Annual Report and Accounts 2008
Thorntons PLC Annual Report and Accounts 2008
_1_THT_ar08_cover.indd   1 19/09/2008   09:08:05