GREENE KING PLC
ANNUAL REPORT 
2001/2002 HIGHLIGHTS OF THE YEAR
Ø
Profit before tax, goodwill and exceptional items 
+ 10 per cent to £69.2 million
Ø
Excellent like-for-like turnover performance
with managed pubs + 3.6 per cent
and tenanted pubs + 5.0 per cent 
Ø
Managed house average turnover per pub 
+ 6 per cent to £10,300 per week
Ø
Average barrelage per tenanted and leased
pub +1.6 per cent
Ø
Pub Company and Pub Partners each awarded 
‘Pub Company of the Year’ in their
respective sectors by the ‘Publican’ newspaper 
Ø
Continuing growth of our beer brands in 
competitive markets:
Ø Greene King IPA + 4 per cent
Ø Abbot Ale + 12 per cent
Ø Old Speckled Hen + 22 per cent
Ø Ruddles County + 12 per cent
Ø
Record 11.5 per cent market share
achieved by our cask ale brands 
Ø
Acquisition of Old English Inns
in September 2001 for £104.8 million
Ø
Acquisition of Morrells of Oxford in June 2002 for £67 million
Ø
Proven strategy delivering another year of double digit earnings 
and dividend per share growth
We would like to thank our customers, employees and licencees who co-operated
with such good nature in the taking of the photographs shown in this report.
HIGHLIGHTS OF THE YEAR GREENE KING ANNUAL REPORT |  2001/2002
HIGHLIGHTS OF THE YEAR 1
CORPORATE STRATEGY 3 
FINANCIAL HIGHLIGHTS 4
CHAIRMAN’S STATEMENT 5 
CHIEF EXECUTIVE’S REVIEW 9
FINANCIAL REVIEW 19
GROUP FINANCIAL RECORD 20
GROUP PROFIT AND LOSS ACCOUNT 21
BALANCE SHEETS 22
CASH FLOW STATEMENT 23
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 24
ACCOUNTING POLICIES 25
NOTES TO THE ACCOUNTS 26
DIRECTORS 40
DIRECTORS’ REPORT 41
REMUNERATION REPORT 45
CORPORATE GOVERNANCE 50
STATEMENT OF DIRECTORS’ RESPONSIBILITIES 52
INDEPENDENT AUDITORS’ REPORT 53
SHAREHOLDERS’ INFORMATION 54
CORPORATE ADVISERS 54
1 2
Our objective is to create long-term shareholder value by
building a business founded on a clear and sustainable
strategic approach to our markets.
Market trends
Our customers’ expectations continue to rise and, in
response, we need to raise our game in order to appeal
successfully to their increasingly sophisticated and disparate
demands. Only the best companies, combining the strongest
operational standards with excellent people, outlets and
brands, will be able to achieve long-term success in this
environment.
Differentiation and sustainability
Differentiating our strategy and our businesses is our
principal approach to securing sustainable success in a
changing environment. This involves:
• becoming an even stronger player in the traditional
drink and hospitality markets 
• continually improving the quality of our people
• developing distinctive brands and formats with
sustainable consumer appeal
• concentrating on those sectors of our markets 
where economic returns are more reliable and
competition is less intense.
Quality pubs
We believe that the traditional pub can generate superior
long-term returns against its competitors for the leisure
pound. The pub can offer a uniquely flexible mix of tangible
and intangible attractions which appeal to a more affluent
population seeking higher levels of relaxation and enjoyment.
We achieve this by combining strong trading formats with
high quality properties and excellent employees to run them.
Beer brands
We aim to secure leadership in the market for traditional
British beers in both cask and take-home formats. The
effective exit from this category by many of our larger
competitors gives us an exceptional opportunity to achieve
long-term growth by:
• investing sustainably in the marketing 
and selling of our brands
• offering high levels of customer service
• ensuring excellent product quality from the brewery 
to the point-of-sale.
Spread
The south of the country remains our principal focus due to
its excellent demographics and the potential for further long-
term growth within it. However, our Hungry Horse pubs and
own beers already possess a growing national audience
because of their successful branding, and this offers us the
potential to profit from broadening their distribution.
Finance
Our business is highly cash generative and has great balance
sheet resilience. This enables us to improve shareholder
returns by the prudent use of our funding capacity to invest
in future profit growth.
Strategic development
We aim to achieve continual organic growth from our
existing assets, but will pursue those acquisition
opportunities which fit our strategic profile and offer us the
chance to generate additional long-term shareholder value.
CORPORATE STRATEGY
CORPORATE STRATEGY GREENE KING ANNUAL REPORT |  2001/2002 3
GREYHOUND, BESSELSLEIGH, ABINGDON, OXFORDSHIRE
Offering fresh, wholesome food in excellent pubs, Appleton’s distinction
lies in its combination of a premium experience at every day prices.
Every day we sell over 
2,000 lbs of peas,
8,000 iceberg lettuces
and 1,700 lbs of mushrooms Results
I am pleased to report another record
performance in the 53 weeks ended 4
May 2002, with all areas of the business
contributing to the progress of the
company. Turnover for the year was up
15 per cent at £494.5 million and profit
before tax, goodwill and exceptional
items was ahead by 10 per cent to £69.2 million.
We are recommending a final net dividend of 19.45 pence per
share, producing a total dividend for the year of 27.3 pence
per share - up 10 per cent - on the back of a 10 per cent rise
in adjusted earnings per share to 64.2 pence. The dividend
will be paid on 6 September 2002 to those shareholders on
the register at the close of business on 2 August 2002.
These record results are evidence that our strategy of
improving the quality of our people and assets, focusing on the
quality pub and traditional beer markets, and making strategic
moves which strengthen the long-term prospects of the core
business, is creating sustainable value for our shareholders.
Finance
A combination of strong operational cash flows and proceeds
from further non-strategic asset disposals allowed us to fund
£165.7 million of acquisition and capital expenditure from cash,
resulting in only a moderate increase in our debt to equity ratio
from 67 per cent at the start of the year to 86 per cent at its end.
We also took the opportunity to buy back and cancel 
£4.1 million of our own equity during the year in order to
improve shareholder returns. Interest cover improved to a
healthy 3.9 times, despite the increase in debt, and the
recommended dividend is covered 2.4 times. We have an
efficient balance sheet which retains significant potential to
finance the company’s future growth aspirations.
Investment
Our strategy of investing prudently in the core business
continued to produce good results. This organic investment
programme is designed to improve the quality of our pub
estate at a sustainable rate and to achieve levels of return in
excess of our cost of finance. It also has the merit of ensuring
that a significant number of investment opportunities remain
within the business to provide future profit growth.
Capital expenditure rose 88 per cent to £60.9 million
compared with the previous year, although £17.1 million of
this investment related to individual site acquisitions, of
which £12.1 million was for the purchase of 8 Hungry Horse
sites in Scotland in April 2002.
Asset disposals
We continued our programme of rationalising those assets
which do not fit our long-term strategic criteria, albeit at a
lower rate than in the previous year. Total disposal proceeds
were £8.1 million, achieving a profit on book value of 
£1.5 million, with 29 non-core pubs being sold.
Acquisition of Old English Inns
On 7 September 2001 we announced a recommended offer
of £104.8 million for Old English Inns, which passed into our
management control on 13 September. Old English Inns
owned and managed 136 premium inns spread across the
south of the country, offering high quality food, drink and
accommodation.
We have been rationalising and integrating the business, and
are retaining 77 of the properties under management,
transferring 32 to lease agreements and marketing the non-
core remainder for sale. We are confident that the integrated
business will benefit significantly from much needed
investment and greater management focus, and that Old
English represents an excellent long-term opportunity to
create sustainable value for shareholders.
Post balance sheet acquisition of Morrells
We completed the acquisition of Morrells of Oxford Limited
on 17 June 2002 for a consideration of £67 million, including
the assumption of £30.4 million of debt. Morrells owns 
57 managed and 50 tenanted pubs, which are primarily
traditional freeholds located within 30 miles of Oxford.
The purchase is consistent with our strategy of developing
the scale and quality of our pub estate across the south, and
will be integrated speedily within our business.
CHAIRMAN’S STATEMENT FINANCIAL HIGHLIGHTS FOR THE FIFTY-THREE WEEKS ENDED 4 MAY 2002
4 CHAIRMAN’S STATEMENT GREENE KING ANNUAL REPORT |  2001/2002 5
100
200
300
400
500
1998 1999 2000 2001 2002
40
60
80
100
1998 1999 2000 2001 2002
30
40
50
60
70
1998 1999 2000 2001 2002
40
60
80
100
120
1998 1999 2000 2001 2002
40
50
60
70
1998 1999 2000 2001 2002
15
20
25
30
1998 1999 2000 2001 2002
Turnover + 15% to £494.5m
T rading profit before goodwill and exceptionals + 7% to £92.9m
Profit before tax, goodwill and exceptionals + 10% to £69.2m
EBITDA + 8% to £114.9m
Adjusted earnings per share + 10% to 64.2p 
Dividends per share + 10% to 27.3p
Turnover (£m)
Trading profit before goodwill
and exceptionals (£m)
Profit before taxation,
goodwill and exceptionals (£m) EBITDA (£m)
Dividends per share (p)
Comparable earnings
per share (p)
IPA sales were up 4 per cent in
2001/02, reaching 130 thousand
pints per day Pub Company
Our managed house division had an excellent year both in its
trading performance and its strategic progress. By adopting a
policy which encourages individual house manager initiatives
with strong operational disciplines, and which focuses on
developing the skills of our people within high quality
properties, we intend to operate the best managed pub estate
in the market.
This business now has a robust market position, comprising
mostly freehold properties in excellent trading locations, a
vibrant and expanding pub brand in Hungry Horse, two
premium food-orientated brands with exciting prospects in
Old English Inns and Appletons, and a strong foundation of
successful and progressive unbranded pubs focused on their
own local markets. This balance of complementary businesses
gives Pub Company a unique combination of potential profit
growth and operational resilience for the future.
Pub Partners
Our tenanted and leased pub division also combined strong
financial results with further operational success, which was the
result of Pub Partners’ determination to recruit the best licensees
and to adopt the highest operating standards in the market.
We achieved increases in the average sales of all drinks
categories per pub, bucking the national market trend, and a
further rise in the business’ return on capital. During the year,
we transferred 18 outlets from management to tenancy and
further trimmed the tail by the sale of 15 sites, as we continued
our policy of raising the average pub quality of the estate.
Brewing & Brands
Our brewing and wholesaling division pursued its strategy of
increasing the sales and distribution of our four key beer
brands – Greene King IPA, Abbot Ale, Old Speckled Hen and
Ruddles County – to secure clear leadership in the traditional
beer category, and has been providing customers with
excellent, cost effective service.
New marketing initiatives and sustained media investment
saw all four brands increase sales strongly, growing volume
and market share, while further service level and cost
improvement initiatives enabled the business to out-perform
the market in all distribution channels and to increase both
profits and capital returns to record levels.
‘Publican’ awards
The professionalism and dynamism of our business received
national recognition when both Pub Company and Pub
Partners were named the managed and tenanted pub
companies of the year in the ‘Publican’ newspaper awards in
March 2002. This success was further distinguished by Pub
Partners becoming the first business to win it’s award in
consecutive years. The winning of these awards not only
boosts employee morale, but also delivers a tangible business
benefit by improving our ability to attract the best employees
and licensees into our business.
Prospects
Our start to the new financial year has been positive, with
sales in our pub divisions running ahead of last year and our
beer brands continuing their sales and market share growth.
We intend to drive as much profit growth as we can from our
core business and will be continuing to integrate, and
improve, the Old English and the Morrells outlets we have
acquired. The company is well positioned to generate
consistent shareholder value in the future.
People
The quality and motivation of our people is our ultimate
competitive advantage and the company undertakes a wide
range of initiatives to improve skills and calibre. The success
of this strategy is measured by the results of our annual
employee attitude survey, which most recently indicated that
no less than 91 per cent of our employees enjoy their job.
The continuing rapid pace of progress in all areas of the
company has posed them a significant challenge, and the
strength of these results testifies to their commitment and
ability to embrace change in order that the company can
compete so successfully. I wish to thank every one of them
for all their hard work.
David McCall
Chairman
4 July 2002 
CHAIRMAN’S STATEMENT
OLD MILL HOTEL, TOWN PATH, HARNHAM, SALISBURY, WILTSHIRE
Old English Inns’ exceptional sites provide excellent opportunities for
future profit growth.
6 CHAIRMAN’S STATEMENT GREENE KING ANNUAL REPORT |  2001/2002 7 The year saw further success
derived from our strategy of
consistently investing to improve
the quality of all facets of our
operations, while focusing on
achieving increases in the returns
we derive from the capital
invested, and using the strength
of our balance sheet to make complementary acquisitions.
The company is structured to support this growth strategy,
balancing the need for empowered management within the
operating divisions, to give them the freedom and resources
to compete successfully against their competitors, with that
of ensuring that we achieve our corporate synergies and
increase shareholder value.
Our structure of three different, but complementary, businesses
produces demonstrable benefits in terms of strategic flexibility,
cost synergies and corporate branding, which help each to be a
stronger player within their particular markets.
Pub Company
Our managed pubs division operates larger outlets which offer
greater profit potential under direct management. Comprising
a balanced mix of individual businesses, Pub Company is
organised into five operating segments focused on particular
markets, following the integration of Old English Inns as a new
sub-division and the merger of the ‘town local’ and ‘circuit bar’
businesses into the new ‘high street’ segment during the year.
Excluding outlets acquired with Old English Inns, the
number of pubs operated by Pub Company rose to 503 at the
year end as the site acquisition programme out-paced the
continuing rationalisation of those outlets which we did not
consider to be more profitable under management. Adjusted
for the relative timings of purchases and disposals, the
average number of pubs in the core estate fell by 9 to 495.
Turnover for the 53 weeks to 4 May 2002 rose 6 per cent to
£270.6 million and trading profit was 5 per cent ahead at £48.0
million. On an individual pub basis adjusted for a 53 week year ,
turnover and trading profit rose 6 and 5 per cent respectively
due to the improvement in the quality of the average pub.
The trading margin declined slightly to 17.7 per cent, partly
because of the additional costs caused by the significant
increase in minimum wage costs and partly through a further
increase in the proportion of food sales to 29 per cent, arising
primarily from the continued success of the Hungry Horse
brand. Underlying gross margin performance was excellent,
driven by improvements in purchasing terms and
management of the sales mix within the estate.
Like-for-like turnover performance was very strong,
registering a 3.6 per cent increase on the prior year in the 267
pubs receiving less than £20k of capital expenditure in the
year. This was one of the best results in the sector and
reflects the continuing improvement in management and
retailing skills within the business.
CHIEF EXECUTIVE’S REVIEW
Old Speckled Hen
is now the
number one
premium bottled
ale brand and is
up 41 per cent
since 2000
8 CHIEF EXECUTIVE’S REVIEW GREENE KING ANNUAL REPORT |  2001/2002 9
Number Number
of outlets at of outlets at 
29 April 2001 4 May 2002
117 131
152 151
156 145
-95
71 79
Total 496 601
Traditional pubs in rural or edge of
town locations with a range of
quality food offers drawing
customers from a wide area
Inns
Traditional inns and hotels offering a
mix of high quality food, liquor and
accommodation in attractive, scenic sites
appealing to more affluent customers
Old
English
Inns
City, town and suburban centre
pubs with a complex mix of
consumers including shoppers and
business people at lunch or early
evening, and a younger profile later
in the evening
High
Street
Community pubs primarily serving
local customers, with an emphasis on
local trade building activities
Real Pubs
Larger branded pubs with a great
value food business, appealing to both
the local community and customers
travelling from a wider area
Hungry
Horse
WARWICK ARMS, KINGS ROAD, READING, BERKSHIRE
We believe the Warwick to be quite simply the best real pub in the
city centre – and our customers seem to agree… We undertook an increased capital development programme,
resulting partly from:
• an increase in the number of individual site purchases
to 15, with 14 being for conversion to Hungry Horse
• five site conversions to the Appleton’s brand, which
offers quality, fresh food at attractive price points in an
excellent traditional pub environment, and
• some further major developments within the Inns
segment.
In all, 123 major development schemes were undertaken
during the year and the average investment per scheme rose
from £79k to £106k. In total, £37.7 million was invested
(excluding Old English Inns), £17.1 million of which related
to site purchases. Initial returns on this increased level of
investment are well ahead of our cost of capital and should
generate additional profit growth in the next twelve months.
Beside its strong financial performance in achieving long-
term economic profit growth, Pub Company also registered
a year of strategic and operational progress as it continued to
reshape its business to meet the needs of the modern
consumer. The key areas of strategic focus in the year were:
1. Improving pub manager recruitment and development 
The quality of local management is the differentiating factor
between good and excellent pub estates. In recognition of
this critical ingredient of future success, we have upgraded
our recruitment and development function to ensure the
availability of high quality, fully trained licensees to run our
broad spread of outlets. The trainee and deputy management
programme was enhanced, the new manager induction
process was extended in scope and length, and manager
benefits improved to increase our attractiveness to potential
recruits. The early benefits of this initiative are encouraging
and have already resulted in a dramatic reduction in the use
of temporary relief managers.
2. Expanding and strengthening the Hungry Horse brand
The marketing and imagery of the Hungry Horse brand were
refreshed, re-emphasising the quirkiness of the brand’s
personality, whilst the quality and value of the food offer
have been strengthened. We also acquired a further 14 sites
for Hungry Horse. The effect of this energetic approach to
an already successful business has exceeded all expectations,
with like-for-like sales up 6.0 per cent and strong
performances being achieved by those new sites which had
been developed by the year end.
3. The development of a second pub brand
We identified a gap in the market for a food-led pub offer at
a higher specification than Hungry Horse, but providing much
higher levels of value than potential competitors. Successful
trials of the  Appleton’s concept were refined and extended to
six sites by the year end. Although much still needs to be
done before the brand can be grown significantly, we are
increasingly confident that Appleton’s has the potential to
emerge as a second sustainable, clearly differentiated pub
brand within our estate.
Much work was also undertaken to integrate the Old English
Inns acquisition, with 77 outlets identified for retention
within Pub Company. The principal challenges of winning
the hearts and minds of the Old English employees and
carrying out the integration of its infrastructure have largely
been completed. We are now addressing the need to invest in
improving the quality standards of the retained properties to
ensure that they deliver the promised premium experience.
All these initiatives are designed to ensure that Pub
Company continues to grow on an economically profitable
basis and is the best operator of managed pubs in the market,
an achievement recognised at the ‘Publican’ newspaper
awards in March 2002 when it was voted the ‘Managed Pub
Company (over 100 outlets) of the Year’.
CHIEF EXECUTIVE’S REVIEW
CHIEF EXECUTIVE’SREVIEW 11
Pub Average number Turnover Trading profit Trading profit
Company of outlets (£m) (£m) margin (%)
2001 504 254.6 45.6 17.9
2002 495 270.6 48.0 17.7
10 GREENE KING ANNUAL REPORT |  2001/2002
GRANDSTAND, GRANDSTAND ROAD, HEREFORD
Right by the race course, Hungry Horse is a dead cert to romp home
against the competition.
Hungry Horse sells rump steaks
equivalent to the weight of the
international space station every
week Pub Partners
The year saw a significant level of property activity within
our tenanted and leased pub estate as it disposed of 15 non-
core outlets, passed 2 sites to management and accepted back
5 properties from management, as part of the ongoing
evolution of our estate. Pub Partners also took over 32 inns
acquired as part of Old English and completed 13 transfers to
lease, finishing with 1,071 pubs at the end of the year and a
further 19 Old English sites in the process of transfer.
The transfer of these Old English Inns to assignable lease
agreements is a major task, given the relatively large size and
complexity of the properties involved, and takes more time
than if transferred to our simpler nine year tenancy agreement.
Leases are needed to let these properties because of the greater
scale of the financial commitment required by the licensee, the
higher level of investment committed by us, and the greater
rental levels we seek to achieve our return. Finally, given the
specialist skills required, securing the right calibre of licensee to
operate such properties successfully is a significant undertaking
and one which we are not prepared to rush just to achieve
rapid lettings.
T rading at the 13 sites let by the year end has been encouraging
and a further 10 had been let by the end of June. We are
confident that these properties are an excellent addition 
to the top end of the estate and will produce attractive 
long-term returns.
Trading profit for the year increased by 6 per cent to 
£37.5 million on the back of a 6 per cent rise in turnover to
£95.7 million. Allowing for the time-weighted decline in the
number of outlets within the estate due to the sale of non-
strategic properties, and adjusting for a 53-week year, turnover
and trading profit per pub were both ahead by 8 per cent.
Operational performance was strong across a broader range
of trading measures, as follows:
• in the like-for-like estate of 908 pubs, turnover 
rose by 5 per cent
• average beer barrels per pub were up 1.6 per cent,
despite a market decline
• we achieved a £3.5 million improvement 
in working capital efficiency
• our return on capital rose to 14.4 per cent.
This strong performance at outlet level reflects the benefits
accruing from our strategy of improving the average quality
by means of:
• acquiring new outlets in the top quartile of the estate
• improving the calibre of licensees through better
recruitment and support
• investing prudently in pub developments
• disposing of those outlets which no longer meet our
criteria for sustainable quality.
CHIEF EXECUTIVE’S REVIEW
BAR 4, FRIAR STREET, READING, BERKSHIRE
Trading around the clock, from an early morning coffee with pastry
to late evening living it up, the right site and the right staff deliver a
good time…
Our success in selling our beers 
was complemented by a 9 per cent
increase in wine and spirit volumes
12 CHIEF EXECUTIVE’SREVIEW GREENE KING ANNUAL REPORT |  2001/2002 13
Pub Average number Trading profit Trading profit Profit per pub
Partners of outlets (£m) change (%) change (%)
2001 1,091 35.3 +23 +12
2002 1,053 37.5 +6 +8 CHIEF EXECUTIVE’S REVIEW
14 CHIEF EXECUTIVE’SREVIEW GREENE KING ANNUAL REPORT |  2001/2002 15
We regard these inter-related strategies to be the critical
success factors for a tenanted and leased pub business. High
quality properties in good trading locations are essential to
attract the best licensees, while the latter are essential for
ensuring that the business prospers and grows. Finally, a
strong support package and keenness to invest in the fabric of
the estate is important to support the business plans of our
tenants and lessees, and improve their ability to succeed
against their competitors.
The competition for good licensees is intense, given the
significant number of managed pubs currently being
transferred to tenancy across the industry. Fortunately, our
strategy and estate quality is allowing us to attract a
disproportionate share of the best licensees and so maximise
our ability to exploit our trading potential. The success of
this approach is also recognised nationally, with Pub Partners
winning recognition as the ‘Publican’ newspaper’s ‘Tenanted
Pub Company (over 100 outlets) of the Year’ for an
unprecedented second consecutive year.
Brewing and Brands
The financial performance of our beer brands and wholesaling
business was highly positive despite a further intensification in
competitor activity. Turnover rose by 5 per cent to £91.9
million and trading profit by 3 per cent to £11.9 million.
The continued growth in sales of our own brands to major 
on-trade and take-home national accounts customers was
responsible for the slight reduction in trading profit margin
from 13.2 to 12.9 per cent, despite further improvements in
operational efficiency levels. However, the business achieved a
22 per cent return on its invested capital, over twice our cost
of finance, which was a tremendous result.
The continued prosperity of the division is predicated on the
success of our four principal beer brands: Greene King IPA,
Abbot Ale, Old Speckled Hen and Ruddles County. These
brands are leading players within their respective segments of
the traditional beer market and we intend to develop each of
them into strong leadership positions at the expense of their
competitors. This will be done by strengthening their
consumer franchise through consistent marketing support
rather than by over-aggressive discounting, although we
recognise the need to be price competitive.
The year saw high levels of marketing activity in line with
this strategy. Following consumer research, Ruddles County
in cask was repositioned at the start of the year in the mid-
gravity sector, with improved brand presentation and new
advertising, and achieved a big rise in volume.
Old Speckled Hen, which was returned to growth in
2000/01 after having been in decline when we acquired
Morland, benefited from consistent support and registered a
volume increase of 22 per cent, making an excellent 41 per
cent rise over the past two years. Old Speckled Hen is now
clearly established as the nation’s number one premium
bottled ale and is enjoying strong growth in cask as it further
differentiates itself from its competitors.
Trading profit Trading profit Trading profit
Brewing & Brands (£m) change (%) margin (%)
2001 11.5 +8 13.2
2002 11.9 +3 12.9
Snack sales are thriving –
we sold over 25 million
packets of crisps during
the year
DURHAM OX, SHREWLEY , W ARWICKSHIRE
Highly skilled licensees and a great site ensure that this recent
transfer to tenancy is an exceptionally successful business. CHIEF EXECUTIVE’S REVIEW
CHIEF EXECUTIVE’SREVIEW 17
Greene King IPA is our flagship beer brand and its continued
health is of critical importance to us. Although the brand
achieved 4 per cent growth during the year, we undertook a
review of what we need to do in future to strengthen further
its consumer franchise. We consequently introduced in the
latter part of the year a radically different advertising
campaign designed to appeal to a broader customer base
without alienating existing consumers. Early results are
encouraging, with Greene King IPA’s pace of growth
increasing in the final months of the year.
Abbot Ale enjoyed its sixth consecutive year of growth with
a 12 per cent gain. A review of future brand strategy conducted
during the year to maintain this growth led to the introduction
of a new brand presentation in terms of both packaging and
advertising, with the intention of further enhancing the
brand’s appeal. Again, the early customer response is very
encouraging with the gaining of additional distribution and a
strengthening of its rate of growth.
The continued progress of our brands enabled us to register
further advances in market share at the expense of our
competitors and to achieve a 5 per cent increase in total own
brewed sales against a market ahead by 1 per cent. This success
is firmly rooted in the consumer appeal of our brands and the
ability of our sales teams to grow distribution, and is
demonstrated by the fact that less than one pint in four of our
own beer is sold through our pub estate, with the balance sold
to external customers. These factors, combined with our proven
strategy, will ensure that Brewing & Brands remains a successful
competitor and important creator of value for our shareholders.
Old English Inns
In this year of acquisition, we are reporting Old English Inns
separately, with the exception of those 13 outlets which
transferred to lease before the year end, so as not to distort
the results of the core business during the initial period of
rationalisation. Old English contributed a trading profit of
£1.7 million on turnover of £36.3 million in its 33 weeks
within the group from the 118 outlets remaining at the end
of the year.
During this period, Old English was subject to an intense
rationalisation programme involving the following activities:
• closure and sale of its head office
• integration of its IT systems 
and supply chain infrastructure
• sale of 5 non-strategic outlets
• letting of up to 32 outlets as tenancies or leases
• start of an investment plan to improve 
the quality of the retained properties.
This process anticipated a considerable disruption to the
trading of the business and margins only started to rise in the
last weeks of the year as the integration synergies began to
come on stream. We anticipate the retained Old English
outlets achieving margins closer to those in the core business
in 2002/03 now that the integration work is largely complete
and the rationalisation process well advanced.
The next challenge is to raise the trading performance by
pursuing our investment plan for Old English Inns in order to
ensure that the quality of its fabric and service standards meet
the high expectations of its affluent customer base. We are
confident that we will be able to generate attractive returns
from Old English’s fundamentally excellent trading sites as we
undertake the development programme over the next two
years and that, once this is completed, the business will prove
a valuable and sustainable addition to our portfolio.
Greene King Greene King
Market share by television region 2001 (%) 2002 (%)
Cask ale – Great Britain 10.5 11.5
Cask ale – London/Anglia/Meridian/Central 17.6 18.6
Cask ale – London/Anglia/Meridian 26.3 27.2
WOOLPACK INN, KETTERING ROAD, KETTERING, NORTHAMPTONSHIRE
A classic high quality tenancy attracting customers all year, come rain,
come shine…
16 GREENE KING ANNUAL REPORT |  2001/2002
The well-run pub now has a broader
consumer appeal than ever before
and is
uniquely
well-suited
to the
expectations
of today’s
demanding
customers FINANCIAL REVIEW
18 FINANCIAL REVIEW GREENE KING ANNUAL REPORT |  2001/2002 19
Focusing on our economic
fundamentals enables us to deliver
a virtuous circle of increasing
shareholder value and investing to
satisfy our
customers’
rising
expectations
Double digit growth
We have again delivered strong growth in
shareholder income. Indeed, comparable
earnings per share have increased at a
compound rate of 10 per cent over the
last five years and dividends by 11 per
cent. This is in line with our strategy of
growing earnings at a sustained, superior
rate whereby we offer investors an attractive dividend, which is
well covered and increasing. We are pleased with our
achievements, which are reflected in the table overleaf.
Strong cash flow
Cash is the life-blood of our business and this year our free
cash flow, struck after deducting interest, tax and dividends,
amounted to £58.5 million. At this level, we have every
opportunity to invest in our current business, buy other
compatible businesses, pay dividends and selectively buy back
shares. The strength of our cash flow and balance sheet was
sufficient to enable us to fund the purchase of Old English
Inns during the year and, since the balance sheet date,
Morrells of Oxford, using internal resources rather than
looking to our shareholders for additional funds.
Property value
Most of the cash we generate is channelled into our pub
estate, which is mainly freehold and accounts for the lion’s
share of our fixed asset base. Our fixed assets, whose balance
sheet value amount to £810.8 million, provide fundamental
long-term security for our debt providers, to whom we owe
less than half of this amount.
Focus on economic fundamentals
Our business’ focus is to deliver superior like for like profits, to
achieve returns ahead of the cost of capital and to drive down
real unit costs. Growth in economic profit is our principal aim,
whereby profit is only struck once capital employed has itself
been costed. We are convinced that our focus on economic
fundamentals creates significant shareholder value.
Treasury
Our net debt was £387.9 million, higher mainly due to the
acquisition of Old English Inns for £104.8 million. Our interest
cover, nevertheless, improved to 3.9 times demonstrating that
our borrowings are simple to service. Furthermore, we
increased the proportion of our borrowings that are fixed or
hedged to 82 per cent in order to protect ourselves against rises
in interest rates. A 1 per cent increase in short-term interest
rates now adds just £0.7 million to interest costs compared to
£3.9 million were none of the borrowings fixed or hedged.
Further details are provided in note 22 to the accounts.
New accounting standards
We have implemented the FRS 19 accounting standard on
deferred tax for the first time and as a result our effective rate
of tax has increased from 24 to 31 per cent, 1 per cent higher
than the underlying rate of tax. Further details are provided
in note 9 to the accounts.
We have also implemented the initial transition arrangements
for the FRS 17 accounting standard on retirement benefits. If
FRS 17 had been fully implemented, net assets would have
reduced by £18 million, reflecting unfunded pension
liabilities, which will be made good in future years. Further
details are provided in note 7 to the accounts.
Goodwill and exceptional items
Our profit and loss account continues to separate out
amortisation of goodwill and exceptional items to highlight
the underlying performance of the business. Amortisation of
goodwill amounted to £5.2 million, integration costs relating
to Old English Inns amounted to £2.8 million and the surplus
on property disposals amounted to £1.5 million.
Summary
The strength of our cash flow, the value of our property and
our focus on economic fundamentals has led to a strong and
sustained performance over the last five years. Our financial
momentum has been helped by recent acquisitions. We face
the future with confidence..
Consistent press and television advertising, and strong branding,
delivered record market share and 5 per cent growth for our own
beers during the year. GROUP FINANCIAL RECORD
20 GROUP FINANCIAL RECORD
Profit and loss account 2002 2001 2000 1999 1998
(53 weeks) as restated
£m £m £m £m £m
Turnover 494.5 431.7 414.1 292.6 282.9 
Trading profit before goodwill and exceptionals 92.9 87.1 80.1 60.5 57.7 
Profit before taxation 62.7 59.7 39.1 46.7 45.3 
Profit before taxation, goodwill and exceptionals 69.2 62.8 54.5 46.5 43.5 
Basic earnings per share 58.2p 54.6p 46.7p 59.5p 57.7p 
Adjusted earnings per share 64.2p 58.2p 59.2p 59.2p 54.7p 
Comparable earnings per share (restated) 64.2p 58.2p 53.0p 48.9p 45.1p 
Dividends per share 27.3p 24.8p 22.5p 20.3p 18.35p 
Adjusted trading profit / turnover 18.8% 20.2% 19.3% 20.7% 20.4%
Adjusted taxation / profit 31% 31% 23% 23% 24%
Adjusted interest cover (times) 3.9 3.6 3.1 4.3 4.1
Adjusted dividend cover (times) 2.4 2.3 2.6 2.9 3.0
Balance sheet £m £m £m £m £m 
Intangible fixed assets 102.9 80.6 85.0 2.4 - 
Tangible fixed assets 810.8 688.4 701.8 492.8 447.3 
Investments 21.3 23.6 27.8 27.0 31.7 
Working capital (68.9) (52.6) (34.1) (31.8) (30.5)
Deferred tax (25.0) (18.8) - - - 
Net debt (387.9) (289.0) (357.3) (173.2) (162.8)
Net assets 453.2 432.2 423.2 317.2 285.7 
Gearing 86% 67% 84% 55% 57%
Net assets per share 612p 582p 571p 521p 472p 
Cash flow and investment £m £m £m £m £m 
EBITDA 114.9 105.9 98.9 71.0 67.0 
Cash inflow from operations 115.2 107.6 92.4 71.6 60.7 
Interest, tax and dividends (56.7) (43.3) (50.7) (35.8) (31.2)
Fixed asset purchases (48.8) (32.4) (38.0) (45.3) (42.2)
Fixed asset sales 8.1 31.5 59.3 5.9 24.5 
Trade loans and investments 2.3 4.2 5.1 4.9 3.2 
Acquisitions (116.9) - (253.2) (11.7) - 
Shares (re-purchased) / issued (2.1) 0.7 1.0 - 0.9 
(Increase) / decrease in debt (98.9) 68.3 (184.1) (10.4) 15.9 
Adjusted earnings per share, trading profit, taxation, interest cover and dividend cover exclude the effect of exceptional items and the
amortisation of goodwill.
The 2001 figures have been restated to comply with FRS 19 (Deferred Tax) - see note 1.
Comparable earnings per share illustrate earnings in 2000 and earlier years that would have been reported had the FRS 15 and FRS 19
accounting standards then been in effect. GROUP PROFIT AND LOSS ACCOUNT FOR THE FIFTY-THREE WEEKS ENDED 4 MAY 2002
GROUP PROFIT AND LOSS ACCOUNT 21
2002   (53 weeks) 2001
Before Goodwill (52 weeks)
goodwill and and as restated
Change exceptionals exceptionals Total Total
Note %£m£m£m £m
Turnover
Continuing operations 458.2 - 458.2 431.7
Acquisitions 36.3 - 36.3 -
Total +15 494.5 - 494.5 431.7
Trading profit 2 - 4
Continuing operations 91.2 (4.5) 86.7 82.0
Acquisitions 1.7 (3.5) (1.8) -
Total 92.9 (8.0) 84.9 82.0
Disposal of fixed assets -1.5 1.5 2.0
Profit before interest 92.9 (6.5) 86.4 84.0
Interest 8 (23.7) - (23.7) (24.3)
Profit  before taxation 69.2 (6.5) 62.7 59.7
Taxation 9 (21.4) 2.0 (19.4) (19.2)
Profit after taxation 10 47.8 (4.5) 43.3 40.5
Dividends 11 (20.2) - (20.2) (18.4)
Retained profit 27.6 (4.5) 23.1 22.1
Trading profit before goodwill and exceptionals 2 +7 92.9 87.1
Profit before taxation, goodwill and exceptionals +10 69.2 62.8
Earnings per share
- adjusted 12 +10 64.2p 58.2p
- basic 12 58.2p 54.6p
- diluted 12 57.4p 54.4p
Dividends per share +10 27.3p 24.8p
Adjusted trading profit / turnover 18.8% 20.2%
Adjusted taxation / profit 31% 31%
Adjusted interest cover (times) 3.9 3.6
Adjusted dividend cover (times) 2.4 2.3
Adjusted earnings per share, trading profit, taxation, interest cover and dividend cover exclude the effect of exceptional items and the
amortisation of goodwill. BALANCE SHEETS AS AT 4 MAY 2002
22 BALANCE SHEETS
Group Parent 
2002 2001 2002 2001
as restated
Note £m £m £m £m
Fixed assets
Intangible assets 13 102.9 80.6 - - 
Tangible assets 14 810.8 688.4 - - 
Investments 15 21.3 23.6 1,141.2 971.3
935.0 792.6 1,141.2 971.3
Current assets
Stocks 16 11.3 11.2 - -
Debtors 17 23.8 27.7 0.2 7.0
Cash at bank 2.2 4.0 - 2.0
Creditors: due within one year
Short term debt 18 (5.6) - (5.6) -
Other creditors 18 (104.0) (91.5) (312.6) (231.1)
Net current liabilities (72.3) (48.6) (318.0) (222.1)
Total assets less current liabilities 862.7 744.0 823.2 749.2
Creditors: due after more than one year
Medium and long term debt 19 (384.5) (293.0) (384.5) (293.0)
Provisions for liabilities and charges
Deferred tax 20 (25.0) (18.8) - -
Net assets 453.2 432.2 438.7 456.2
Capital and reserves
Called-up share capital 23 18.5 18.6 18.5 18.6
Share premium account 24 182.3 180.3 182.3 180.3
Revaluation reserve 24 100.4 101.8 - -
Other reserve 24 0.1 - 97.1 97.0
Profit and loss account 24 151.9 131.5 140.8 160.3
Equity shareholders' funds 24 453.2 432.2 438.7 456.2
Net debt 387.9 289.0
Gearing 86% 67%
Net assets per share 612p 582p
Signed on behalf of the board on 4 July 2002
D S McCall
T J W Bridge
Directors CASH FLOW STATEMENT FOR THE FIFTY-THREE WEEKS ENDED 4 MAY 2002
CASH FLOW STATEMENT 23
Change 2002 2001
(53 weeks)
Note % £m £m
EBITDA 25 +8 114.9 105.9
Working capital movements 26 2.8 3.8
Exceptional items (2.5) (2.1)
Cash inflow from operations 115.2 107.6
Cash inflow from operations 115.2 107.6
Returns on investments and servicing of finance
Interest paid (24.7) (24.8)
Interest received 0.2 0.2
(24.5) (24.6)
Taxation (13.3) (1.5)
Capital expenditure and financial investment
Purchase of tangible fixed assets (48.8) (32.4)
Sales of tangible fixed assets 8.1 31.5
Movement in trade loans 2.3 4.2
(38.4) 3.3
Acquisitions
Old English Inns (60.7) -
Dalgety Taverns (4.2) -
(64.9) -
Equity dividends paid (18.9) (17.2)
Cash (outflow)/inflow before financing (44.8) 67.6
Financing
Issue of shares 2.0 0.7
Purchase of own shares (4.1) -
Advance of bank loans 39.5 -
Repayment of bank loans - (65.5)
37.4 (64.8)
(Decrease)/increase in cash (7.4) 2.8
Reconciliation to movement in net debt
(Decrease)/increase in cash (7.4) 2.8
Cash (inflow)/outflow from (increase)/decrease in debt (39.5) 65.5
(Increase)/decrease in net debt resulting from cashflows (46.9) 68.3
Debt acquired - Old English Inns (44.1) -
Debt acquired - Dalgety Taverns (7.9) -
(Increase)/decrease in debt (98.9) 68.3
Opening net debt (289.0) (357.3)
Closing net debt 27 (387.9) (289.0) STATEMENT OF TOTAL RECOGNISED
GAINS AND LOSSES FOR THE FIFTY-THREE WEEKS ENDED 4 MAY 2002
24
2002 2001
(53 Weeks) as restated
£m £m
Profit after taxation 43.3 40.5
Total recognised gains and losses relating to the period 43.3 40.5
Prior year adjustment (FRS 19 - note 1) (18.8)
Total gains and losses recognised since last annual report 24.5
2002 2001
(53 weeks) as restated
£m £m
Total recognised gains and losses 43.3 40.5
Ordinary dividends (20.2) (18.4)
Share capital issued 2.0 0.7
Purchase of own share capital (4.1) -
21.0 22.8
Prior year adjustment (FRS 19 - notes 1,20) - (13.8)
Opening shareholders' funds 432.2 423.2
Closing shareholders' funds 453.2 432.2
2002 2001
(53 weeks) as restated
£m £m
Profit on ordinary activities before taxation 62.7 59.7
Depreciation 0.4 0.4
Realisation of property revaluation gains 1.0 2.8
Historical cost profit on ordinary activities before taxation 64.1 62.9
Historical cost profit for the period retained after taxation and dividends 24.5 29.9
RECONCILIATION OF MOVEMENTS
IN SHAREHOLDERS’ FUNDS FOR THE FIFTY-THREE WEEKS ENDED 4 MAY 2002
NOTE OF HISTORICAL COST
PROFITS AND LOSSES FOR THE FIFTY-THREE WEEKS ENDED 4 MAY 2002 ACCOUNTING POLICIES FOR THE FIFTY-THREE WEEKS ENDED 4 MAY 2002
ACCOUNTING POLICIES 25
Basis of  accounting and consolidation
The accounts are prepared in accordance with the Companies Act 1985 and applicable accounting and financial reporting standards.
They are prepared under the historical cost convention modified by the revaluation of property. The group accounts incorporate the
accounts of the company, its subsidiaries under the acquisition method and its associates under the equity method.
Turnover
Turnover represents the value of goods and services supplied to third parties net of discounts and excluding value added tax.
Revaluation of  properties
Fixed asset properties were revalued in earlier years and the surplus reflected in the balance sheet. With effect from 2 May 1999, and
following the implementation of the FRS 15 accounting standard, revaluations are no longer undertaken. Earlier valuations are retained
but not updated.
Depreciation
Freehold land is not depreciated, freehold buildings are depreciated to their estimated residual values over periods up to fifty years,
long leasehold properties are depreciated to their estimated residual values over periods up to fifty years, short leasehold properties are
depreciated to their estimated residual values over the remaining term of the lease and furniture, fixtures and equipment assets are
depreciated over their estimated lives which range from three to twenty years.
Where the carrying value of properties may not be recoverable an impairment in the value of fixed assets is charged to the profit and
loss account.
Stocks
Stocks are valued at the lower of cost and net realisable value and where applicable include an element of production overheads.
Loan capital
Loan capital and equivalent financial instruments include the premium realised on issue, or recognised on acquisition, which is
amortised over the term of the loan to keep the effective interest rate constant.
Deferred taxation
Deferred tax is recognised in respect of all timing differences that have originated but not been reversed by the balance sheet date
and is calculated using the tax rates at the balance sheet date. Deferred tax is not recognised when an asset is sold if it is more likely
than not that the taxable gain will be rolled over. Provisions for deferred tax are not discounted.
Financial instruments
Amounts payable or receivable in respect of interest rate swaps are recognised as adjustments to the interest expense over the period of
the swap contracts.
Pensions
The cost of providing defined benefit pensions is charged against profits on a systematic basis taking account of actuarial surpluses and
deficits arising which are allocated over the remaining average service life of current qualifying employees. The cost of providing
defined contribution pensions amounts to the value of contributions made.
Goodwill
Goodwill arising from the premium paid on businesses acquired after 3 May 1998 is amortised over its estimated useful life of 20
years. Previously goodwill was written off to reserves and has not been re-instated.
Operating leases
Rental payments in respect of operating leases are charged against trading profit on a straight line basis over the period of the lease. NOTES TO THE ACCOUNTS FOR THE FIFTY-THREE WEEKS ENDED 4 MAY 2002
26 NOTES TO THE ACCOUNTS
1  CHANGES TO ACCOUNTING POLICIES
The FRS 17 (Retirement Benefits) initial transitional arrangements have been complied with. There have been no changes to the
reported figures. Additional disclosure is set out in note 7 to the accounts.
FRS 18 (Accounting Policies) has been adopted in the current year. It has had no effect on the reported results.
FRS 19 (Deferred Tax) has been adopted in the period. The 2001 figures have been restated to comply with the new standard. The
effect is to increase the profit and loss account tax charge by £5.0 million (2001- £5.0 million) and balance sheet provisions by £25.0
million (2001- £18.8 million). The change in reported profit has no effect on the underlying performance of the business or its
cashflow.
2  BUSINESS SEGMENT ANALYSIS
2002 (53 weeks)
Assets Trading Trading 
employed Turnover EBITDA profit profit 
£m £m £m £m change %
Pub Company 391.0 270.6 61.0 48.0 +5
Pub Partners 259.9 95.7 40.2 37.5 +6
Brewing and Brands 54.2 91.9 15.5 11.9 +3
Old English Inns (note 21) 80.2 36.3 3.6 1.7 
Corporate 55.8 - (5.4) (6.2) +17
841.1 494.5 114.9 92.9 +7
Amortisation of goodwill and exceptionals (note 4) - - - (8.0)
Net debt (387.9) - - - 
453.2 494.5 114.9 84.9 
2001 (52 weeks)
Assets
employed Trading
as restated Turnover EBITDA profit
£m £m £m £m
Pub Company 369.6 254.6 57.6 45.6 
Pub Partners 250.3 89.9 37.7 35.3 
Brewing and Brands 65.1 87.2 15.2 11.5 
Corporate 36.2 - (4.6) (5.3)
721.2 431.7 105.9 87.1 
Amortisation of goodwill and exceptionals (note 4) - - - (5.1)
Net debt (289.0) - - - 
432.2 431.7 105.9 82.0 
Pub Company covers the results of managed houses, Pub Partners covers the results of tenanted houses and Brewing and Brands covers
the results of brewing, brands and free trade wholesaling. NOTES TO THE ACCOUNTS FOR THE FIFTY-THREE WEEKS ENDED 4 MAY 2002
NOTES TO THE ACCOUNTS 27
Goodwill and exceptionals are detailed in note 4 and are analysed as follows:
Trading profit after 
Goodwill and exceptionals goodwill and exceptionals
2002 2001 2002 2001
(53 weeks) (53 weeks)
£m £m £m £m
Pub Company - 0.2 48.0 45.4
Pub Partners - 0.1 37.5 35.2
Brewing and Brands - 0.3 11.9 11.2
Old English Inns 2.8 - (1.1) -
Corporate 5.2 4.5 (11.4) (9.8)
8.0 5.1 84.9 82.0
3  TRADING EXPENSES 2002 (53 weeks) 2001
Continuing
operations Acquisitions Total Total
£m £m £m £m
Raw materials, consumables and excise duty 163.2 10.1 173.3 157.8
Changes in stocks of finished goods and work in progress 0.6 0.1 0.7 (0.5)
Employment costs (note 5) 92.9 11.3 104.2 86.3
Depreciation 20.1 1.9 22.0 18.8
Amortisation of goodwill 4.5 0.7 5.2 4.4
Other operating charges 90.2 14.0 104.2 82.9
371.5 38.1 409.6 349.7
Trading profit is stated after charging: 2002 2001
(53 weeks)
£m £m
Depreciation 22.0 18.8
Amortisation of goodwill 5.2 4.4
Operating lease rentals
Plant and machinery 2.5 2.2
Property 4.1 3.9
Auditors' - audit services 0.1 0.1
Auditors' - other services 0.1 0.1
4  GOODWILL AND EXCEPTIONALS 2002 2001
(53 weeks)
£m £m
Amortisation of goodwill 5.2 4.4
Exceptionals
Integration of Marston's southern business and Morland - 0.7
Integration of Old English Inns 2.8 -
8.0 5.1 NOTES TO THE ACCOUNTS FOR THE FIFTY-THREE WEEKS ENDED 4 MAY 2002
28 NOTES TO THE ACCOUNTS
5  EMPLOYMENT COSTS 2002 2001
(53 weeks)
£m £m
Pay costs 91.4 75.8
Social security costs 6.6 5.7
Other pension costs (see note 7) 4.3 4.0
Employee profit sharing scheme 0.9 0.8
Exceptional costs associated with the integration of Old English Inns 1.0 -
104.2 86.3
The average number of employees during the period was as follows: 2002 2001
Pub Company 7,041 7,516
Pub Partners 81 75
Brewing and Brands 642 673
Old English Inns 956 -
Corporate 102 99
8,822 8,363
The figures above include 3,571 (2001 - 3,340) part-time employees.
6  DIRECTORS EMOLUMENTS
Details of directors emoluments is shown in the remuneration report on pages 45 to 49.
7  PENSION SCHEME
The company maintains a defined contribution scheme, which is open to all new employees, a Greene King defined benefit scheme
which closed to new entrants on 2 May 1997 and a Morland defined benefit scheme for former Morland employees which was closed
to new entrants on 12 December 2000.
Member funds for the defined contribution scheme are held and administered by the Prudential Assurance Company.
Member funds for the defined benefit schemes are held in separate funds independently of the group's finances and are administered
by pension trustees.
An actuarial valuation of the Greene King defined benefit scheme was carried out by Watson Wyatt as at 5 April 2000. The principal
assumptions were that retail price inflation would be 3 per cent per annum, pension increases would be in line with price inflation, real
salary growth would be 1.75 per cent per annum and the real investment return would be 3 per cent per annum. At that date the
market value of the scheme's assets was £83.6 million. Assets represented 89 per cent of the value of benefits that had accrued to
members to that date, and the shortfall in value is being funded by increased contributions from the company.
An actuarial valuation of the Morland defined benefit scheme was carried out as at 1 October 2000 using similar assumptions. The
market value of the assets of the scheme was £17.3 million which represented 122 per cent of the accrued member benefits.
For FRS 17 purposes, the most recent valuations have been updated to 4 May 2002, using the principal assumptions that price inflation
would be 2.50 per cent per annum, pension increases would be in line with price inflation, real salary growth would be 1.75 per cent
per annum and the discount rate would be 5.75 per cent per annum. NOTES TO THE ACCOUNTS FOR THE FIFTY-THREE WEEKS ENDED 4 MAY 2002
NOTES TO THE ACCOUNTS 29
The assets in the defined benefit schemes and their expected rates of return were: Long-term rate Value at 
of return expected 4 May 2002
at 4 May 2002 £m
Equities 7.9% 77.7
Bonds 5.5% 17.0
Property 6.8% 1.8
Cash 4.6% 3.4
Total market value of assets 7.4% 99.9
Present value of scheme liabilites (125.7)
Deficit in the schemes (25.8)
Related deferred tax asset 7.7
Net pension liability (18.1)
If FRS 17 had been adopted in the financial statements, year end net assets and profit and loss reserves would be:
Value at 
4 May 2002
£m
Net assets excluding SSAP 24 pension asset 452.9
FRS 17 pension liability (18.1)
434.8
Profit and loss reserve excluding SSAP 24 pension asset 151.6
FRS 17 pension reserve (18.1)
133.5
8  INTEREST 2002 2001
(53 weeks)
£m £m
Interest payable on bank loans and overdrafts 17.1 17.9
Interest payable on other loans 6.8 6.6
Interest receivable on loans and short term deposits (0.2) (0.2)
23.7 24.3
9  TAXATION 2002   (53 weeks) 2001
On profits before Exceptional as restated
exceptional items items Total Total
£m £m £m £m
Current taxation
Corporation tax before exceptional items 18.4 - 18.4 16.0
Recoverable on exceptional items - (0.8) (0.8) (0.4)
Corporation tax 18.4 (0.8) 17.6 15.6
Adjustment in respect of prior years (2.0) (1.2) (3.2) (1.4)
16.4 (2.0) 14.4 14.2
Deferred taxation
Origination and reversal of timing differences 5.0 - 5.0 5.0
Total 21.4 (2.0) 19.4 19.2 NOTES TO THE ACCOUNTS FOR THE FIFTY-THREE WEEKS ENDED 4 MAY 2002
30 NOTES TO THE ACCOUNTS
Factors affecting current taxation charge for year 2002 2001
The effective rate of taxation is lower than the full rate of corporation tax. The differences are explained below: (53 weeks)
£m £m
Profit on ordinary activities before tax 62.7 59.7
Profit on ordinary activities multiplied by standard rate corporation tax 30 % (2001 - 30 %) 18.8 17.9
Effects of:
Expenses not deductible for tax purposes - Goodwill 1.6 1.3
- Other 0.7 (0.1)
Capital allowances in year in excess of depreciation (3.1) (2.9)
Rollover relief on profit on disposal of property (0.4) (0.6)
Adjustments to tax charge in respect of previous years (3.2) (1.4)
14.4 14.2
Deferred taxation
FRS 19 (Deferred Tax) has been adopted during the year. The comparative amounts have been restated to comply with the new
standard. Its effect on the profit and loss account is to increase the taxation charge for the group by £5.0 million (2001 - £5.0 million).
The balance sheet effect is to increase provisions for deferred tax by £25.0 million (2001 - £18.8 million). Provisions for deferred tax
have not been calculated on a discounted basis.
Factors that may affect future tax charges
Based on current capital investment plans, it is anticipated that capital allowance claims will be in excess of depreciation in future
years. No provision has been made for deferred tax on gains recognised on revaluing property to its market value or on the sale of
properties where potentially taxable gains have been rolled over into replacement assets. Such tax would become payable only if the
property were sold without it being possible to claim rollover relief. The total amount unprovided for is £9.7 million (2001 - £9.1
million).
10  PROFIT AFTER TAXATION 2002 2001
(53 weeks)
£m £m
Attributable to parent company 4.8 19.5
As permitted by the Companies Act 1985 the profit and loss account of the parent company has not been separately presented.
11  DIVIDENDS 2002 2001
(53 weeks)
£m £m
Interim 7.85p paid per share (2001 - 7.15p) 5.8 5.3
Final 19.45p proposed per share (2001 - 17.65p) 14.4 13.1
Total 27.30p per share (2001 - 24.8p) 20.2 18.4 NOTES TO THE ACCOUNTS FOR THE FIFTY-THREE WEEKS ENDED 4 MAY 2002
NOTES TO THE ACCOUNTS 31
12  EARNINGS PER SHARE
Basic earnings per share has been calculated by dividing the profit after taxation of £43.3 million (2001 - £40.5 million as restated) by
the weighted average number of shares in issue of 74.4 million (2001 -  74.2 million).
Adjusted earnings per share excludes the effect of exceptional items and the amortisation of goodwill and is presented to show the
underlying performance of the group.
Earnings Earnings per share      
2002 2001 2002 2001
as restated as restated
£m £m p p
Basic 43.3 40.5 58.2 54.6
Goodwill and exceptionals 4.5 2.7 6.0 3.6
Adjusted 47.8 43.2 64.2 58.2
Diluted earnings per share has been calculated on a similar basis taking account of 1.0 million (2001 - 0.3 million) additional
contingent shares.
13  INTANGIBLE ASSETS
Goodwill 
£m
Assets
Cost at 28 April 2001 88.6
Acquisition of Old English Inns 25.6
Acquisition of Dalgety 1.9
Cost  at 4 May 2002 116.1
Amortisation
At 28 April 2001 8.0
Charged during the year 5.2
At 4 May 2002 13.2
Net book value
At 4 May 2002 102.9
At 28 April 2001 80.6
Goodwill is being amortised evenly over the estimated useful economic life of 20 years. NOTES TO THE ACCOUNTS FOR THE FIFTY-THREE WEEKS ENDED 4 MAY 2002
32 NOTES TO THE ACCOUNTS
14  TANGIBLE ASSETS
Group
Land Fixtures
and and      
buildings plant Total 
£m £m £m
Assets
Cost or valuation at 28 April 2001 599.6 168.4 768.0
Acquisition - Old English Inns 62.3 24.8 87.1
Acquisition - Dalgety Taverns 9.8 1.2 11.0
Additions during period 23.9 28.6 52.5
Disposals during period (5.0) (2.4) (7.4)
Balances at 4 May 2002 690.6 220.6 911.2 
Depreciation
Accumulated depreciation at 28 April 2001 11.3 68.3 79.6 
Written back on disposals (0.9) (0.3) (1.2)
Provided in these accounts 2.6 19.4 22.0 
Balances at 4 May 2002 13.0 87.4 100.4 
Net book value
At 4 May 2002 677.6 133.2 810.8
At 28 April 2001 588.3 100.1 688.4
The net book value of land and buildings comprises: Group
2002 2001
£m £m
Freehold properties 638.7 552.7
Long leasehold properties 27.6 27.1
Short leasehold properties 11.3 8.5
677.6 588.3
Valuation
Up to 1999 licensed properties were valued on the basis of existing use value, the brewery and depots were valued at depreciated
replacement cost and other properties at open market value. These valuations have been retained but they have not been updated.
Subsequent additions have been included at cost or, in the case of acquisitions, at fair value.
Cost or valuation of properties 2002 2001
£m £m
As valued 1996 126.8 131.8
As valued 1997 31.2 32.2
As valued 1998 49.1 51.1
As valued 1999 85.8 88.8
Subsequent additions at cost or fair value 384.7 295.7
677.6 599.6 NOTES TO THE ACCOUNTS FOR THE FIFTY-THREE WEEKS ENDED 4 MAY 2002
NOTES TO THE ACCOUNTS 33
Historical cost
The historical cost amounts for land and buildings are:
Group
2002 2001
£m £m
Historical cost 587.4 502.0
Accumulated depreciation (10.2) (8.7)
Net book value 577.2 493.3
Future capital expenditure
Group
2002 2001
£m £m
Contracted for 1.7 1.6
15  INVESTMENTS Group               Parent            
2002 2001 2002 2001
£m £m £m £m
Trade loans less provisions 18.3 20.6 - -
Share of net assets of associates 3.0 3.0 - -
Shares in associates - - 0.7 0.7
Shares in subsidiaries - - 610.5 545.6
Loans to subsidiaries - - 530.0 425.0
21.3 23.6 1,141.2 971.3
Trade loans Group               Parent            
2002 2001 2002 2001
£m £m £m £m
Balances at 28 April 2001 20.6 24.8 - -
Advances 2.6 3.5 - -
Repayments and provisions (4.9) (7.7) - -
Balances at 4 May 2002 18.3 20.6 - -
Associates
Country of
incorporation
and operation Issued capital Holding 
Butterfly Hotels  Limited England £325,000 ordinary shares 45%
Pubco PLC England £100,000 ordinary shares 33%
The results of Pubco PLC have not been included as the amounts are not material. NOTES TO THE ACCOUNTS FOR THE FIFTY-THREE WEEKS ENDED 4 MAY 2002
34 NOTES TO THE ACCOUNTS
Principal subsidiaries
Country of Principal 
operation activity Holding
Greene King Brewing and Retailing Limited United Kingdom Brewing and retailing 100%
Old English Inns PLC United Kingdom Pub retailing 100%
Country Style Inns Limited United Kingdom Pub retailing 100%
Greene King Services Limited United Kingdom Employment 100%
Greene King Retail Services Limited United Kingdom Employment 100%
Beards of Sussex Limited United Kingdom Pub retailing 100%
Loans to subsidiaries Parent
2002 2001
£m £m
Balance at 28 April 2001 425.0 125.0
Advances 105.0 300.0
Balance at 4 May 2002 530.0 425.0
16  STOCKS Group               Parent            
2002 2001 2002 2001
£m £m £m £m
Raw materials and work in progress 0.8 1.1 - -
Finished goods and goods for resale 9.2 8.9 - -
Consumable stores 1.3 1.2 - -
11.3 11.2 - -
17  DEBTORS Group               Parent            
2002 2001 2002 2001
£m £m £m £m
Trade debtors 19.9 22.0 - -
Other debtors 2.7 3.2 0.1 0.1
Current corporation tax - - 0.1 -
Prepayments and accrued income 1.2 2.5 - -
Amounts owed by subsidiaries - - - 6.9
23.8 27.7 0.2 7.0
Included above are the following amounts falling due after more than one year:
Other debtors 0.5 0.5 - -
Prepayments and accrued income (pension fund prepayment) 0.3 0.2 - - NOTES TO THE ACCOUNTS FOR THE FIFTY-THREE WEEKS ENDED 4 MAY 2002
NOTES TO THE ACCOUNTS 35
18  CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Short term debt Group               Parent            
2002 2001 2002 2001
£m £m £m £m
Bank overdrafts 5.6 - 5.6 -
Other creditors Group               Parent            
2002 2001 2002 2001
£m £m £m £m
Trade creditors 36.2 29.7 - -
Current corporation tax 16.4 16.6 - 1.4
Other taxation and social security costs 19.8 19.5 - -
Proposed dividend 14.4 13.1 14.4 13.1
Accruals and deferred income 17.2 12.6 1.9 1.2
Amounts owed to subsidiaries - - 296.3 215.4
104.0 91.5 312.6 231.1
19  CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
Medium and long term debt Group               Parent            
2002 2001 2002 2001
£m £m £m £m
Bank loans 296.6 204.0 296.6 204.0
Loan from associate 52.0 52.8 52.0 52.8
Debenture 31.2 31.3 31.2 31.3
Loan notes 4.7 4.9 4.7 4.9
384.5 293.0 384.5 293.0
20  PROVISIONS FOR LIABILITIES AND CHARGES
Deferred taxation Group
2002 2001
£m £m
Accelerated capital allowances 25.9 19.7
Provisions (0.9) (0.9)
25.0 18.8
Opening provision (restated) 18.8 13.8
Deferred tax charge 5.0 5.0
Old English Inns 1.0 -
Dalgety Taverns 0.2 -
Closing provision 25.0 18.8 NOTES TO THE ACCOUNTS FOR THE FIFTY-THREE WEEKS ENDED 4 MAY 2002
36 NOTES TO THE ACCOUNTS
21  ACQUISITIONS
On 7 September 2001, Greene King announced the recommended acquisition of Old English Inns. Management control was taken on,
and the results consolidated from 13 September 2001. The offer for Old English Inns was declared unconditional on 24 October
2001. The acquisiton of Dalgety Taverns took place on 9 April 2002.
Fair value of assets acquired Dalgety Taverns Old English Inns
Fair Value Book value Revaluation Accounting Fair value
adjustments policy
adjustments
£m £m £m £m £m
Tangible fixed assets 11.0 118.1 (31.0) - 87.1
Stocks 0.1 1.0 - - 1.0
Debtors - 2.6 (1.0) - 1.6
Creditors (0.7) (10.9) 1.4 - (9.5)
Deferred tax (0.2) - - (1.0) (1.0)
10.2 110.8 (30.6) (1.0) 79.2
Goodwill 1.9 25.6
12.1 104.8
Satisfied by:
Cash 4.2 60.7
Debt acquired 7.9 44.1
12.1 104.8
The fair value of properties acquired was established following a review of properties that was carried out by qualified surveyors
employed by the company. Retained properties have been revalued at their existing use value and properties for disposal have been
valued at their estimated net realisable value. The fair value of the Old English Inns fixed interest swaps was established by discounting
future cash flows by the market yield curve at the acquisition date. The values of other current assets and liabilities have been adjusted
to amounts to be realised or paid respectively.
The Old English Inns loss after taxation for the financial year prior to acquisition (52 weeks ended 1 April 2001) was £3.7 million. NOTES TO THE ACCOUNTS FOR THE FIFTY-THREE WEEKS ENDED 4 MAY 2002
NOTES TO THE ACCOUNTS 37
22  FINANCIAL INSTRUMENTS AND LOAN CAPITAL
The group's objectives and policies on the use of financial instruments can be found in the Operating Financial Review. All financial
assets and liabilities are denominated in Sterling.
Repayment Nominal Facility Nominal Nominal Carrying Carrying
date interest amount value value value value
rate 2002 2001 2002 2001
£m £m £m £m £m
Parent - secured
Loan from associate 2006 11.25% 47.5 47.5 52.0 52.8
Debenture 2027 7.75% 25.0 25.0 31.2 31.3
Parent - unsecured
Bank loans 2004 to 2006 Variable 345.0 295.0 204.0 296.6 204.0
Loan notes 2003 to 2005 Variable 4.7 4.9 4.7 4.9
Overdraft On demand Variable 15.0 5.6 - 5.6 - 
390.1 293.0
The loan from associate and debenture stock are secured by a first floating charge over the group's principal trading companies.
Maturity of financial liabilities and expiry of facilities
Expiry of facilities Maturity of financial liabilities
2002 2001 2002 2001
£m £m £m £m
Within one year or on demand 15.0 15.0 5.6 -
Between one and two years - 15.0 4.4 15.0
Between two and five years 345.0 300.0 348.9 193.9
After five years - - 31.2 84.1
390.1 293.0
Analysis of interest rate exposure and fair values
Effective Period Fair Fair Carrying Carrying
interest rate value value value value
rate fixed 2002 2001 2002 2001
£m £m £m £m
Loan from associate - fixed rate 8.4% 4 years 56.9 56.8 52.0 52.8
Debenture - fixed rate 5.8% 25 years 26.7 27.2 31.2 31.3
Bank loans - swapped into fixed interest 6.6% 6 years 239.4 78.6 236.6 75.0
323.0 162.6 319.8 159.1
Bank loans - variable 60.0 129.0 60.0 129.0
Loan notes - variable 4.7 4.9 4.7 4.9
387.7 296.5 384.5 293.0
Short term - variable 5.6 -
Cash - nil interest (2.2) (4.0)
Net debt 387.9 289.0
Fair values and effective interest rates have been calculated by discounting future cash flows by reference to the market yield curve at
the balance sheet date. NOTES TO THE ACCOUNTS FOR THE FIFTY-THREE WEEKS ENDED 4 MAY 2002
38 NOTES TO THE ACCOUNTS
The fair value liability of the interest rate swaps was £4.4 million (2001 - £3.6 million). The expected loss to be recognised in the
profit and loss account in the following year was £1.0 million (2001 - £0.9 million). The actual loss recognised in the profit and loss
account during the year was £0.9 million (2001 - £0.9 million).
The weighted average effective fixed interest rate is 6.8% (2001 - 7.5%), with weighted average maturity in 7.2 years (2001 - 8.0 years).
Interest on variable rate loans are all linked to LIBOR.
Short term debtors and creditors are excluded from the above.
Trade loans are advanced to customers on terms linked to supply terms such that returns are significantly greater than interest income.
The fixed rate trade loans amounted to £14.0 million (2001 - £16.9 million) and variable rate trade loans amounted to £4.3 million
(2001 - £3.7 million)
The fixed rate trade loans had weighted average interest rate of 1.1% (2001 - 1.6%) and a weighted average period of 2.3 years (2001 -
5.8 years). Interest rates on variable rate trade loans are linked to base rate.
23  CALLED-UP SHARE CAPITAL 2002 2001
£m £m
Ordinary shares of 25p each
Authorised - 100 million shares (2001 - 100 million) 25.0 25.0
Issued - 74.1 million shares (2001 - 74.3 million) 18.5 18.6
At 4 May 2002 there were outstanding options under the executive share option scheme for directors and employees to purchase up
to 1.9 million (2001 - 1.9 million) ordinary shares of 25p each up to 2012 at prices ranging between 463.5p and 716p per share.
Further information on the executive share options are shown in the remuneration report.
There were also outstanding options under the sharesave scheme to purchase up to 0.9 million (2001 - 1.0 million) ordinary shares on
a range of dates between 2002 and 2007 at prices ranging between 382p and 589p per share.
During the year 0.3 million shares were issued for £2.0 million cash in connection with profit sharing, sharesave and executive share
option schemes. 0.5 million shares were repurchased for £4.1 million cash and subsequently cancelled.
24  MOVEMENTS IN SHAREHOLDERS' FUNDS
Share Share Revaluation Other Profit and loss Total
Group capital premium reserve reserve account
£m £m £m £m £m £m
At 28 April 2001 18.6 180.3 101.8 - 150.3 451.0 
Prior year adjustment (FRS 19) - - - - (18.8) (18.8)
At 28 April 2001 (restated) 18.6 180.3 101.8 - 131.5 432.2 
Retained profit - - - - 23.1 23.1 
Issue of share capital - 2.0 - - - 2.0 
Purchase of own share capital (0.1) - - 0.1 (4.1) (4.1)
Transfer - - (1.4) - 1.4 - 
At 4 May 2002 18.5 182.3 100.4 0.1 151.9 453.2 
The prior year adjustment has arisen as a result of the provision for deferred tax that has been set up following the adoption of FRS 19.
The Other reserve is a Capital Redemption Reserve arising from the purchase of own share capital. NOTES TO THE ACCOUNTS FOR THE FIFTY-THREE WEEKS ENDED 4 MAY 2002
NOTES TO THE ACCOUNTS 39
The cumulative amount of goodwill written off to reserves in respect of acquisitions made prior to May 1999 amounts to £89.7 million
(2001 - £89.7 million).
Share Share Other Profit and loss Total
Parent company capital premium reserve account
£m £m £m £m £m
At 28 April 2001 18.6 180.3 97.0 160.3 456.2 
Retained profit - - - (15.4) (15.4)
Issue of share capital - 2.0 - - 2.0 
Purchase of own share capital (0.1) - 0.1 (4.1) (4.1)
At 4 May 2002 18.5 182.3 97.1 140.8 438.7 
The Other reserve consists of £0.1 million Capital redemption reserve arising from the purchase of own share capital, and £97.0
million arising from transfer of revalued assets to other group companies.
25  EBITDA 2002 2001
£m £m
Trading profit before amortisation of goodwill and exceptionals 84.9 82.0
Amortisation of goodwill and exceptionals 8.0 5.1
Depreciation 22.0 18.8
114.9 105.9
EBITDA represents earnings before interest, tax, depreciation, amortisation of goodwill and exceptionals.
26  WORKING CAPITAL MOVEMENTS 2002 2001
£m £m
Decrease in stocks 1.0 -
Decrease in debtors 5.1 7.3
Decrease in creditors (3.3) (3.5)
2.8 3.8
27  ANALYSIS OF CHANGES IN NET DEBT
At 29 April Cash At 28 April Cash Debt At 4 May 
2000 flows 2001 flows acquired 2002
£m £m £m £m £m £m
Cash in hand, at bank 1.2 2.8 4.0 (1.8) - 2.2
Overdrafts - - - (5.6) - (5.6)
Debt due after one year (358.5) 65.5 (293.0) (39.5) (52.0) (384.5)
(357.3) 68.3 (289.0) (46.9) (52.0) (387.9)
28  FINANCIAL COMMITMENTS
Property Plant and machinery 
Group 2002 2001 2002 2001
£m £m £m £m
Annual payments under operating leases which expire:
Within one year 0.2 0.1 2.1 -
Between two and five years 0.3 0.4 2.4 2.1
After five years 4.7 3.2 - -
5.2 3.7 4.5 2.1
29  POST BALANCE SHEET EVENT
The company completed the acquisition of Morrells of Oxford Limited on 17 June 2002 for a consideration of £67 million including
the assumption of £30.4 million debt. This transaction will be reflected in the accounts of the 52 weeks ended 3 May 2003. Members of the Members of the Members of the 
audit committee remuneration committee nomination committee
Alan Bowkett (chairman) David McCall (chairman) David McCall (chairman)
Graham Greene Alan Bowkett Alan Bowkett 
Howard Phillips Graham Greene Tim Bridge
Howard Phillips Graham Greene
Management board
The management board comprises the executive directors, together with the following:
Rob Bellhouse John Redman
Company secretary (38) Brewing and distribution director (50)
Malcolm Chadwick John Roberts
IT director (39) HR director (45)
Jonathan Paveley Donald Stevenson
Strategy director (38) Property director (47)
David McCall, CBE, DL
Chairman and independent non-executive director (67).
Appointed to the board as non-executive chairman in 1995.
Former chairman of Anglia Television Group Limited, and
chairman of the Norfolk & Norwich Millennium Company and of
the Council of the University of East Anglia.
Tim Bridge
Chief executive (53). Joined the company in 1970 and was
appointed to the board in 1977. Became managing director in
1990 and chief executive in 1994.
Michael Shallow, FCA
Finance director (47). Joined the company from Kingfisher and
Accenture and was appointed to the board in 1991.
David Elliott
Managing director, Pub Partners (48). Joined the company from
Scottish & Newcastle Retail and was appointed to the board in
1998.
Neil Gillis
Managing director, Pub Company (37). Joined the company from
Heinz and was appointed to the board in 2000.
Rooney Anand
Managing Director, Brewing & Brands (38). Joined the company
from Sara Lee and was appointed to the board in 2001.
Graham Greene, CBE
Senior independent non-executive director (66). Appointed to
the board in 1979. Chairman of London Merchant Securities plc
and former chairman of the Trustees of the British Museum.
Alan Bowkett
Independent non-executive director (51). Appointed to the board
in 1993. Former chief executive of Berisford plc, now a
European adviser to CVC Capital Partners, chairman of Metzeler
APS SA and of the supervisory board of Acordis BV.
Howard Phillips
Independent non-executive director (61). Appointed to the
board in 1998. Former chief executive of Perkins Foods plc, now
a non-executive director of Transport Development Group plc
and Martin Currie European Investment Trust plc.
DIRECTORS
40 DIRECTORS The directors present their annual report together with the audited financial statements of the company and the group for the fifty-
three weeks ended 4 May 2002.
Profits and dividends
The group’s profit before taxation, exceptional items and the amortisation of goodwill for the period amounted to £69.2 million (2001
- £62.8 million). A net interim dividend of 7.85p per share (2001 - 7.15p) was paid on 28 January 2002. The directors recommend a
net final dividend of 19.45p per ordinary share (2001 - 17.65p), making a total dividend for the period of 27.30p per share (2001 -
24.80p). Subject to the approval of shareholders at the annual general meeting, the final dividend will be paid on 6 September 2002
to shareholders on the register at the close of business on 2 August 2002. The total dividends for the period amount to £20.2 million
and the retained profit of £23.1 million will be transferred to reserves.
Activities
Greene King plc is the holding company for a group whose principal activities are operating managed, tenanted and leased public
houses, brewing beer, and wholesaling beers, wines and soft drinks. The chairman’s statement, the chief executive’s review and the
financial review provide further details of the group’s activities during the period and likely future developments and form part of this
report. The disclosures within the remuneration report and corporate governance statement also form part of this report.
The following significant changes in the company’s activities took place during the period:
1. The acquisition of the entire issued share capital of Old English Inns PLC, pursuant to a recommended cash offer made on 
7 September 2001, for a total consideration of £104.8 million, including debt of £44.1 million. The company purchased a majority
interest in Old English Inns PLC on 13 September 2001 and achieved full ownership on 7 December 2001.
2. The acquisition of the entire issued share capital of Dalgety Taverns Limited on 9 April 2002, for a total consideration of £12.1
million, including debt of £7.9 million.
Post balance sheet event
On 17 June 2002 the company completed the acquisition of the entire issued share capital of Morrells of Oxford Limited, for a cash
consideration of £67.0 million, including debt of £30.4 million.
Directors
Details of the current directors are given opposite. All of these directors held office throughout the period except Rooney Anand, who
was first appointed to the board on 31 August 2001. In addition, Jonathan Clarke served as a non-executive director of the company
until 19 October 2001.
Under article 85 of the company’s articles of association Tim Bridge, David Elliott and Graham Greene retire by rotation and, being
eligible, offer themselves for re-election at the forthcoming annual general meeting.
Details of the directors’ service agreements, remuneration, and interests in shares and share options are set out in the remuneration report
on pages 45 to 49. Save as disclosed, there have been no changes in their interests between 4 May 2002 and the date of this report.
DIRECTORS’ REPORT
DIRECTORS’ REPORT 41 Interests in contracts
No director had a material interest in any contract that was significant in relation to the group’s business at any time during the period.
Share capital
Details of the share capital of the company are set out in note 23 to the accounts on page 38.
Under the authorities granted to the directors by shareholders in 2001, the company allotted a total of 358,997 ordinary shares of 25p
each, with an aggregate nominal value of £89,749 for cash during the period, in connection with the company’s sharesave and
executive share option schemes.
Under the authority granted to the directors by shareholders in 2001, the company has purchased a total of 530,000 of its own
ordinary shares of 25p each, with an aggregate nominal value of £132,500, as follows:
• 280,000 shares were bought in the market on 22 March 2002 at a price of 737p per share and cancelled on 2 April 2002.
• 200,000 shares were bought in the market on 4 April 2002 at a price of 779p per share and cancelled on 12 April 2002.
• 50,000 shares were bought in the market on 10 April 2002 at a price of 787p per share and cancelled on 17 April 2002.
A number of resolutions will be proposed at the forthcoming annual general meeting in connection with the company’s share capital:
• Share allotment authority
This resolution seeks to renew the authority of the directors to allot securities in the company up to an aggregate nominal amount of
£6,457,462, being the authorised but unissued capital of the company and representing approximately 34.8 per cent of the current
issued ordinary share capital, for up to fifteen months after the AGM.
• Dis-application of statutory pre-emption rights
This resolution seeks to renew the authority of the directors to dis-apply pre-emption rights and allot equity securities for cash in
connection with a rights issue and otherwise up to an aggregate nominal amount of £927,126, being approximately 5 per cent of the
current issued ordinary share capital, for up to fifteen months after the AGM.
• Authority for purchase of own shares
This resolution seeks to renew shareholders’ authority for the company to make market purchases of its own shares, as permitted by article
8 of the Articles of Association. Any shares so purchased would be cancelled. A purchase of own shares would only be undertaken when
the directors believed this would result in an increase in expected earnings per share and be in the best interests of shareholders generally.
The authority that will be sought contains several important restrictions, being:
• the authority is limited to a specific period of time and only permits 7,417,015 shares with a nominal value of £1,854,254, being 10
per cent of the company’s current issued share capital, to be purchased on the London Stock Exchange;
• the minimum price per share which may be paid is the nominal value of 25p;
• the maximum price per share that may be paid is 105 per cent of the average mid-market price for the company’s shares as shown in
the Stock Exchange Daily Official List for the five business days immediately preceding the purchase.
Full exercise of all options outstanding at the date of this report would require the issue of 2,711,220 ordinary shares. This represents
3.7% of the current issued share capital and 4.1% of the share capital if the proposed authority to purchase own shares had been
obtained and exercised in full. The company has issued no warrants to subscribe for share capital.
DIRECTORS’ REPORT
42 DIRECTORS’ REPORT Substantial shareholdings
At the date of this report, the company had been notified of the following material interest of 3 per cent or more in its issued ordinary
share capital:
Ordinary shares of 25p each %
Scottish Widows Investment Partnership Limited 2,522,938 3.40
Employment policies
• Internal communications
The group is committed to involving employees in its activities and believes that effective communication brings important business
benefits. This is achieved through regular briefings, a weekly internal news bulletin and access to an intranet for all computer-using
employees, whilst information about the business is published in a range of in-house magazines and the annual report.
• Employee benefits
The group operates a profit-sharing scheme open to all employees with the requisite qualifying service and a sharesave option
scheme open to all employees. The schemes are intended to enhance commitment to the success of the company and details of
them can be found in the notes to the accounts. All employees are offered access to a stakeholder-compliant defined contribution
pension scheme.
• Training and development
The group is committed to developing its people. Training and development opportunities are provided at all levels, from bar skills
training to MBA programmes. By giving employees the skill and knowledge essential to perform their jobs effectively, the group
believes it will create a professional and highly motivated workforce that will take the business forward.
• Equal opportunities
The group is committed to the principle of equal opportunities for all. The rationale for recruitment and selection is the ability and
aptitude of applicants. Disabled people are offered the same opportunities as all others in respect of recruitment, training,
promotion and career development, taking account of their skills and qualifications. Employees who become disabled will be
retained and retrained wherever possible.
Environmental policy 
The group regards compliance with relevant environmental laws and the adoption of responsible standards as integral parts of its
business operations. It is also committed to introducing measures to limit any adverse effects its business may have on the
environment and will promote continuous improvement in accordance with the best available techniques.
The overall responsibility for environmental policy rests with the board, but the managing directors of the divisions are responsible for
the sound environmental management of their particular operations.
Charitable donations
Donations for charitable purposes made during the period amounted to £57,950 (2001 - £37,100). The group made no political
donations.
Going concern
The directors expect the group to continue in operational existence for the foreseeable future and have, therefore, used the going
concern basis in preparing the financial statements.
DIRECTORS’ REPORT
DIRECTORS’ REPORT 43 Payments to suppliers 
The group understands the benefits to be derived from maintaining good relationships with its suppliers and where possible enters into
agreements over payment terms. Where such terms have not been agreed it is the group policy to settle invoices close to the end of the
month following invoicing. This policy is dependent on suppliers providing accurate, timely and sufficiently detailed invoices. Payment
in respect of 33 days’ average purchases from trade creditors was outstanding at the end of the period (2001 - 33 days).
Annual general meeting and special business
The annual general meeting will be held at 12 noon on Friday 30 August 2002 at Culford School, Culford, Suffolk. The notice of the
annual general meeting and an explanation of the items of non-routine business are set out in the explanatory circular that
accompanies this annual report.
Auditors
Ernst & Young LLP has expressed its willingness to continue in office and a resolution to re-appoint the firm as the company’s auditors
will be proposed at the annual general meeting.
By order of the board
Rob Bellhouse
Company secretary
4 July 2002
DIRECTORS’ REPORT
44 DIRECTORS’ REPORT Composition of the remuneration committee
The remuneration committee is appointed by the board and comprises David McCall (committee chairman), Alan Bowkett, Graham
Greene and Howard Phillips, all of whom are independent non-executive directors. There are no cross-directorships or other factors
that may interfere with their judgement.
Terms of reference and reporting
The committee determines all elements of the executive directors’ remuneration, which is reviewed annually. It approves all contracts
with executive directors and any compensation arrangements arising from the early termination of such service contracts. It also
approves all grants of options over shares. This report has been prepared by the remuneration committee on behalf of the board.
Service contracts
The notice period generally required from the company to terminate the service agreements of the executive directors appointed after
1991 is one year. Executive directors who held office before that date retain a notice period of two years, which was reduced from
five years in September 1995 at no cost to the company. The committee views the current arrangements as consistent with the
objectives of the remuneration policy. In the event of the employment of an executive director being terminated, the committee
would have regard to both the Combined Code and the executive’s legal duty to mitigate their loss. The non-executive directors hold
letters of appointment and are each appointed for three-year terms.
Tim Bridge, an executive director proposed for re-election, has a service agreement with the company terminable on two years’ notice.
David Elliott, who is also standing for re-election, will shortly be entering into a service agreement which has a notice period of one
year. Graham Greene is seeking re-election to the board as a non-executive director and does not therefore have a service contract.
Remuneration policy
The objective of the company’s remuneration policy is to attract, motivate and retain high quality directors and senior executives who
will contribute fully to the success of the group and so add shareholder value. In order to achieve this, regular comparisons are made
with current practice in a selected group of companies. The principal criteria used in the selection of the appropriate companies are
turnover, market capitalisation and range of operations and external advice is sought in order to ensure an objective review. The
committee also consults with the chief executive on its proposals and has regard to pay and conditions elsewhere within the group.
No director plays any part in determining his own remuneration.
A significant proportion of each executive director’s potential remuneration package is performance-related, thus aligning the directors’
interests with those of shareholders and encouraging performance at the highest levels. The remuneration package of each executive
director consists of the following elements:
• Annual pay
The annual pay reflects the responsibilities, market value and sustained performance level of executive directors. Pay is reviewed
annually or when a change in responsibility occurs.
• Benefits in kind
The executive directors are eligible for a range of taxable benefits, which include the provision of a fully expensed company car and
private medical insurance.
• Bonus
Bonus payments are determined by the remuneration committee and awarded where justified by performance. The executive
directors are eligible to receive an annual incentive bonus of up to 75 per cent of their annual pay. The amount payable is based
upon the achievement of financial performance targets, which are agreed in advance by the committee.
REMUNERATION REPORT
REMUNERATION REPORT 45 REMUNERATION REPORT
46 REMUNERATION REPORT
• Pensions
Tim Bridge and Michael Shallow are entitled to receive a pension of up to two-thirds of their annual pay on their retirement, subject to
their length of service and Inland Revenue limits, under the group’s defined benefit pension scheme, which also provides a cash lump
sum accrual. The directors contribute five per cent of their annual pay to the scheme and have a retirement age of sixty. David Elliott
participates in the group’s defined contribution pension scheme, whilst Neil Gillis and Rooney Anand participate in independently
arranged defined contribution pension schemes. The company has a standard contribution policy for these three directors.
Tim Bridge and Michael Shallow participate in the group’s defined benefit pension scheme for death-in-service purposes, subject to
the Inland Revenue earnings cap where appropriate. Death benefits in excess of the Revenue maximum are provided through
insurance, the cost of which is taxable as a benefit in kind on the relevant directors and disclosed as such in the table below. Life
assurance has been purchased by the company in respect of the three other executive directors, which is disclosed as a benefit in
kind in the table below to the extent that it provides benefits in excess of the Inland Revenue maximum.
The Inland Revenue earnings cap restricts the pension that the schemes can provide for four of the directors. The scheme pensions
are, therefore, being supplemented for each of them through funded unapproved pension arrangements. In the case of Michael
Shallow some deficit funding is now being undertaken following an actuarial review. As a result, the company‘s contribution for the
period in respect of him is £78,500 to his pension arrangements and £52,333 to meet the tax liability created (2001 - £17,000 total).
The company contribution for David Elliott is £25,056 to his pension arrangements and £5,945 to meet the tax liability created
(2001 - £54,025 total, including £26,974 in respect of prior service). The contribution for Neil Gillis is £18,515 to his pension
arrangements and £4,864 to meet the tax liability created (2001 - £20,000 total, including £2,653 in respect of prior service). The
contribution for Rooney Anand is £13,512 to his pension arrangements, and £3,161 to meet the resultant tax liability.
• Executive share option scheme
Executive directors and a selection of other managers are rewarded for long-term performance by the phased granting of options at
nil cost. At the 2001 annual general meeting, shareholders approved a rule change so that the scheme now offers executives an
annual grant up to the value of once their basic salary. In certain special situations, the remuneration committee can issue shares with
a grant value of up to four times annual salary. The committee approves all grants of executive share options and does not grant
options at a discount to the prevailing mid-market price.
Options issued under this scheme can only be exercised between the third and tenth anniversary of the date of grant and then only if
attaching performance conditions have been met. Specifically, annual grant options may not be exercised, in whole or in part, unless
the growth in audited adjusted earnings per share has exceeded RPI inflation by 3% per annum, measured over periods of 3, 4 or 5
years relative to the year of grant.
• Employee share schemes
In common with all other employees, the executive directors are also entitled to participate in the sharesave and profit share schemes operated
by the company. Further details of these schemes are given later in this report, together with the directors’ entitlements under them. REMUNERATION REPORT
REMUNERATION REPORT 47
Remuneration for non-executive directors
The fees paid to the chairman and the other non-executive directors are determined by the board as a whole. They are agreed after
taking external advice and making market comparisons, and relate to the services of the directors in connection with the company’s
business. The non-executive directors do not have service contracts, are not eligible for pension scheme membership and cannot
participate in any of the group’s bonus or share option schemes. No non-executive director participates in any decision relating to his
own remuneration. Their service is regulated by letters of appointment under which three-year terms are granted.
Director’s emoluments
Annual pay Bonus Fees Benefits Total Total
2002 2002 2002 2002 2002 2001
£’000 £’000 £’000 £’000 £’000 £’000
David McCall*+ — — 110 — 110 95
Tim Bridge 300 150 — 21 471 392
Rooney Anand^ 111 41 — 33 185 —
Alan Bowkett* —— 23 — 23 23
Jonathan Clarke*# —— 8— 8 15
David Elliott 155 78 — 16 249 227
Neil Gillis 155 78 — 21 254 223
Graham Greene* —— 23 — 23 23
Howard Phillips* —— 23 — 23 23
Michael Shallow 185 93 — 73 351 275
906 440 187 164 1,697 1,296
^ appointed 31 August 2001
# resigned 19 October 2001
* non-executive
+ the fees for David McCall include amounts paid under a consultancy arrangement, which are taken into account by the
board when agreeing his overall payment.
The remuneration paid to, and the accrued pension rights of, the highest paid director are as follows:
2002 2001
£’000 £’000
Aggregate emoluments 471 392
Accrued annual pension entitlement at end of period 200 170
Accrued pension scheme lump sum at end of period 20 19
Directors’ defined benefit pensions
Increase in period Accrued entitlement Transfer value of
(excluding inflation) at 4 May 2002 the period’s accrual,
net of employees’ 
contributions
Pension Lump sum Pension Lump sum
£’000 pa £’000 £’000 pa £’000 £’000
Tim Bridge 27 1 200 20 342
Michael Shallow 2 1 23 11 14 REMUNERATION REPORT
48 REMUNERATION REPORT
Directors’ interests in shares
The beneficial interests of each of the directors and their immediate families in the ordinary share capital of the company at the start
and end of the period were as follows:
4 May 2002 28 April 2001 
(or later date of appointment)
David McCall 76,640 76,640
Tim Bridge 212,414 207,654
Rooney Anand — —
Alan Bowkett 15,896 15,896
David Elliott 6,293 5,570
Neil Gillis 3,078 —
Graham Greene 99,788 99,788
Howard Phillips 10,850 10,850
Michael Shallow 43,887 27,621
At 4 May 2002, Tim Bridge had a non-beneficial interest in 44,884 (2001 - 44,884) shares, in addition to the holding shown above.
In their capacity as trustees of the company’s profit sharing scheme, Tim Bridge and Michael Shallow are deemed to be interested in
304,385 (2001 - 297,672) shares at the period end, and their beneficial interests arising through participation in the scheme are
included in these figures and the table above. Between 4 May and 4 July 2002 the profit sharing scheme’s holding reduced by 458
shares. Save for this, there have been no changes to the date of this report.
Executive share options
The directors’ interests in options granted under the executive share option scheme are:
Granted Exercised Outstanding Weighted Outstanding at 
during during at 4 May average 28 April 2001
the period the period 2002 option price (or later date
of appointment)
Tim Bridge 42,000 —- 302,000 564p 260,000
Rooney Anand 50,000 —- 50,000 701p —-
David Elliott 22,000 25,000 147,000 528p 150,000
Neil Gillis 22,000 —- 122,000 527p 100,000
Michael Shallow 26,000 15,337 190,663 567p 180,000
The weighted average option prices relate to all options outstanding at 4 May 2002. No options lapsed during the period, and there
have been no changes to the date of this report.
Michael Shallow exercised an option over 15,337 shares on 20 July 2001, when the share price was 671
1 /
2p, achieving a notional gain
of £27,990. He has retained the shares issued to him on exercise of the option.
David Elliott exercised an option over 15,000 shares on 5 April 2002, when the share price was 785p, and over 10,000 shares on 
8 April 2002, when the share price was 784p, achieving a total gain of £61,775 before tax. The shares issued to him were sold in the
market on the date of exercise for the prices stated above. REMUNERATION REPORT
REMUNERATION REPORT 49
A grant of options under the scheme was made on 4 January 2002 at an exercise price of 701p per share, these options being
exercisable between 4 January 2005 and 3 January 2012, subject to the relevant performance conditions having been met.
The other executive share options outstanding were granted on 12 October 1994 at 489p per share, on 18 January 1996 at 576p per
share (in both cases as adjusted after the rights issue in July 1996), on 18 July 1996 at 586p per share, on 8 January 1997 at 649p per
share, on 1 July 1997 at 678p per share, on 3 December 1998 at 537
1 /
2p per share, on 23 December 1999 at 487
1 /
2p per share, on 21
July 2000 at 463
1 /
2p per share and on 22 December 2000 at 527p per share.
Full details of the individual option exercise periods and the prices payable on exercise by each director are set out in the register of
directors’ interests, which is available for inspection at the registered office of the company at any time during normal working hours.
Sharesave scheme
The Inland Revenue-approved sharesave scheme is open to all employees, including directors and part-time employees. Under this
scheme options are granted over the company’s ordinary shares, at an option price which, at board discretion, can be at a discount of
up to 20 per cent to the mid-market price at the time of granting. The company has historically granted all such options at a 20 per
cent discount and the company has taken advantage of the UITF 17 exemption for schemes of this type.
A grant of options was made under the sharesave scheme at an exercise price of 570p per share on 1 February 2001. Options granted
under this scheme can be exercised at any time during a six month period commencing on either 1 April 2005 or 1 April 2007, as
selected by the participant at the commencement of the savings contract.
The directors’ interests in options granted under the sharesave scheme are:
Granted Exercised Outstanding Option Outstanding at
during during at 4 May price 28 April 2001
the period the period 2002 (or later date
of appointment)
Tim Bridge 1,666 3,470 1,666 570p 3,470
Rooney Anand —- —- —- —- —-
David Elliott —- —- 2,201 440p 2,201
Neil Gillis 1,666 —- 1,666 570p —-
Michael Shallow —- —- 2,535 382p 2,535
Michael Shallow’s option can be exercised between 1 April and 30 September 2003. David Elliott’s option can be exercised between
1 April and 30 September 2004. The remaining directors’ options can be exercised between 1 April and 30 September 2005.
Profit-sharing scheme
Following the adoption of new scheme rules by shareholders at the 2001 annual general meeting, the Inland Revenue approved profit
share scheme is open to all employees at the date of appropriation who have been employed throughout the whole of the previous
financial year. Shares are appropriated once annually according to a pre-set formula relating to the year-on-year increase in the
company’s profits. The directors’ beneficial interests in Greene King shares resulting from participation in this scheme are reflected in
their shareholding data given above, and the value of their entitlements for the latest period are included in the benefits-in-kind data in
the remuneration table, as the shares have not yet been awarded.
Share price during the period
The closing mid-market price of the company’s shares on 3 May 2002 (being the last business day before the financial period end) was
835p (2001 - 553p). The closing mid-market price of the company’s shares during the period ranged between 555p and 835p. CORPORATE GOVERNANCE
50 CORPORATE GOVERNANCE
Overview
Greene King is committed to high standards of corporate governance, for which the board is accountable to shareholders. The company
complied with the provisions of Section 1 of the Combined Code throughout the period and to the date of this report.
Governance structure
The board comprises a non-executive chairman and three other non-executive directors and, since 31 August 2001, five executive
directors. The division of the roles of chairman and chief executive and the balanced composition of the board are felt to create an
effective forum that provides leadership and control. The non-executive directors all exercise independent judgement and have a range
of skills and experience. The board regards Graham Greene as being the senior independent non-executive director. He has diverse
business interests which ensure his independence from management, in spite of his having been a non-executive director for many years.
The board meets regularly, has a formal schedule of matters reserved to it for decision and has an agreed procedure for directors to take
independent professional advice at the company’s expense. All directors have access to the advice and services of the company secretary
and are provided with full and timely access to all relevant information, plus the opportunity to question management as required.
Board appointments are considered by the nomination committee under agreed terms of reference, with non-executive directors being
appointed for terms of three years. All directors are subject to re-election following their appointment and subsequently in every third
year. Where directors are appointed to the board and it is the first time they have held office in a quoted company, they are provided
with access to appropriate external training, which continues to be made available during their tenure in office.
Communication
Shareholder communication is regarded as a key priority, with the annual report and interim statements being the principal media
used. In addition, the AGM, which is well attended, is fully utilised as a means of communicating directly with shareholders, who have
a full opportunity to ask questions. The chairman of the board, as chairman of the remuneration and nomination committees, and the
chairman of the audit committee are available to answer questions at the AGM.
All substantive items of business at shareholders’ meetings are dealt with under separate resolutions, including a resolution to adopt the
report and accounts. The chairman announces the results of the proxy voting on each resolution after it has been dealt with on a show
of hands. The notice of meeting is issued in compliance with both the articles and the Combined Code. Regular dialogue is maintained
with key shareholders involving an exchange of views and information.
The company also maintains a web site to provide up-to-date, detailed information on the company’s operations and brands, which
includes a dedicated investor relations section. All company announcements are available on this site, as are copies of slides used for
investment analysts’ briefings.
Financial reporting
The annual report and interim statement are felt to present a balanced and understandable assessment of the company’s position and
prospects and the board ensures that all other public, regulatory and statutory reports are similarly presented.
Internal control 
The company has assessed and recently re-appraised the key risks to which it is exposed and has formalised the control environment
needed to address these and other issues. During the period and to the date of this report, the company had processes in place to
implement in full the guidance on internal controls produced by the Turnbull Committee, and in particular to identify, evaluate and
manage the significant risks faced.
Such systems can only be designed to manage, rather than eliminate, the risk of failure to achieve business objectives and provide reasonable,
but not absolute, assurance that the group’s assets are safeguarded, that the financial information used within the business and for external
reporting is reliable, and against material misstatement or loss. Similarly, the system can reduce, but not eliminate, the possibility of poor
judgement in decision-making, human error, control processes being deliberately circumvented, management over-riding the controls and the
occurrence of unforeseen circumstances. CORPORATE GOVERNANCE
CORPORATE GOVERNANCE 51
The board and the management board regularly review risk management and internal controls, including the provision of key performance
indicator data on the significant risks faced. A risk management group, comprising senior managers from all parts of the company, meets
regularly to consider the effective management of risk throughout the business. This group oversees the development of risk management
strategies, monitors progress and reports to the audit committee, to whom it is accountable, on risk issues within the business.
The board acknowledges that it is ultimately responsible for the company’s system of internal control and for reviewing its
effectiveness. A formal assessment of the risk and control environment in place during the period and to the date of this report has
been undertaken, based on a detailed report from, and subsequent discussions with, senior management. No significant problems were
disclosed in this report.
The control environment comprises the elements set out below:
• Control environment
The board of directors and the management board routinely monitor all aspects of risk management and internal control, and
regularly assess the data provided by the risk management group on the significant risks faced. Any issues arising from this process
are discussed with operational management as needed.
• Risk management process 
Major risks are identified, the financial implications of each risk assessed and the adequacy and effectiveness of the associated control
environment analysed. Appropriate steps are then taken to mitigate and monitor the effect of these risks. Data on the key exposures
is prepared and reviewed regularly by the risk management group, who report their findings to the management board and the audit
committee of the board.
• Internal audit
The controls over the group’s managed houses are enhanced by an internal audit team and the availability of comprehensive
information from the EPOS till system. On behalf of the board, the audit committee regularly monitors the procedures and scope of
internal audit within the group, including seeking the views of the external auditors.
• Business plans and budgets
Business plans and detailed annual budgets covering all financial aspects of the group’s business are evaluated and approved by the
board. The actual results are compared against these plans and budgets on a four-weekly basis and variances analysed in order that
any appropriate action can be taken.
• Capital and project control
There are clearly defined evaluation and approval processes for acquisitions and disposals, capital expenditure and project control.
These include escalating levels of authority, detailed appraisal and review procedures and post-completion reviews of all major
projects to compare the actual outcome with the original plan. Certain clearly defined transactions are reserved for approval by the
board. Limits of delegated responsibility and areas of authority have been identified for employees.
Relationship with auditors
The audit committee, which comprises solely independent non-executive directors, continuously monitors the relationship with the
auditors and agrees the scope and reviews the results of the full year audit and interim review each year. The committee assesses the cost-
effectiveness, objectivity and independence of the auditors from time to time. The company uses both the auditors and other accounting
firms for non-audit work, and considers maintenance of objectivity, value for money and experience when making such decisions.
Audit independence
The auditors report to the audit committee, on behalf of the board, on the actions they take to comply with the professional and
regulatory requirements to ensure their independence from the company, including the periodic rotation of key team members. The
board is satisfied that the auditors are independent of the company and that best practice is being observed. STATEMENT OF DIRECTORS’ RESPONSIBILITIES
52 STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The following statement, which should be read in conjunction with the auditors’ statement of their responsibilities opposite, is made
with a view to distinguishing for shareholders the respective responsibilities of the directors and the auditors in relation to the financial
statements.
The directors are required by law to prepare accounts for each financial period which give a true and fair view of the state of affairs of
the company and the group as at the end of the financial period and of the profit or loss for the period.
The directors are responsible for ensuring that the group maintains proper accounting records, which disclose with reasonable accuracy
at any time the financial position of the group and which enable them to ensure that the accounts comply with the Companies Act
1985. They are also responsible for safeguarding the assets of the group and taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The directors consider that the accounts have been prepared using suitable accounting policies, consistently applied and supported by
reasonable and prudent judgements and estimates and confirm that all applicable accounting standards have been followed. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF GREENE KING PLC
INDEPENDENT AUDITORS’ REPORT 53
We have audited the group’s accounts for the fifty three weeks ended 4 May 2002 which comprise the Group Profit and Loss Account,
the Group Balance Sheet, Parent Company Balance Sheet, Cash Flow Statement, Statement of Total Recognised Gains and Losses,
Reconciliation of Movements in Shareholders’ Funds, Note of Historical Cost Profits and Losses and the related notes 1 to 29. These
accounts have been prepared on the basis of the accounting policies set out therein.
Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the Annual Report and the accounts in accordance with applicable United Kingdom law
and accounting standards are set out in the Statement of Directors’ Responsibilities.
Our responsibility is to audit the accounts in accordance with relevant legal and regulatory requirements, United Kingdom Auditing
Standards and the Listing Rules of the Financial Services Authority.
We report to you our opinion as to whether the accounts give a true and fair view and are properly prepared in accordance with the
Companies Act 1985. We also report to you if, in our opinion, the Directors’ Report is not consistent with the accounts, if the company
has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if
information specified by law or the Listing Rules regarding directors’ remuneration and transactions with the Group is not disclosed.
We review whether the Corporate Governance Statement reflects the company’s compliance with the seven provisions of the
Combined Code specified for our review by the Listing Rules, and we report if it does not. We are not required to consider whether
the board’s statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the Group’s corporate
governance procedures or its risk and control procedures.
We read other information contained in the Annual Report and consider whether it is consistent with the audited accounts. This other
information comprises the Directors’ Report, Chairman’s Statement, Chief Executive’s Review, Financial Review, Corporate
Governance Statement, and Remuneration Report. We consider the implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the accounts. Our responsibilities do not extend to any other information.
Basis of audit opinion 
We conducted our audit in accordance with United Kingdom Auditing Standards issued by the Auditing Practices Board. An audit
includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the accounts. It also includes an
assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of
whether the accounting policies are appropriate to the Group’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to
provide us with sufficient evidence to give reasonable assurance that the accounts 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 accounts.
Opinion
In our opinion the accounts give a true and fair view of the state of affairs of the company and of the group as at 4 May 2002 and of
the profit of the group for the 53 weeks then ended and have been properly prepared in accordance with the Companies Act 1985.
Ernst & Young LLP
Registered Auditor
Cambridge
4 July 2002 SHAREHOLDERS’ INFORMATION
54 SHAREHOLDERS’ INFORMATION
Financial calendar
Preliminary results announcement 5 July 2002
Annual report circulated 31 July 2002
Shares trade ex-dividend from 31 July 2002
Record date for final dividend 2 August 2002
Annual general meeting 30 August 2002
Payment of final dividend 6 September 2002
Announcement of interim results December 2002
Payment of interim dividend February 2003
Preliminary announcement of the 2002 results June/July 2003
Capital gains tax For the purpose of computing capital gains tax, the market value of
ordinary shares on 31 March 1982, after adjustment for the capitalisation
issues in 1980 and 1982 was 145.125 pence. After take-up of the rights
issue in July 1996, the March 1982 value becomes 259.375 pence.
Registrars Northern Registrars Limited
Northern House, Woodsome Park,
Fenay Bridge, Huddersfield HD8 0LA
Telephone: 01484 600900
Fax: 01484 600911
Website: www.northernregistrars.co.uk
Company secretary and Rob Bellhouse, FCIS
registered office Westgate Brewery, Bury St Edmunds, Suffolk  IP33 1QT
Share dealing service NatWest Corporate and Employee Services
Greene King plc service
55 Mansell Street, London E1 8AN
Telephone :020 7895 5448
Financial advisers Schroder Salomon Smith Barney 
The Citigroup Centre, 33 Canada Square, Canary Wharf, London E14 5LB
Stockbrokers Deutsche Bank AG London
Winchester House, 1 Great Winchester Street, London EC2N 3EQ
Auditors Ernst & Young LLP
Compass House, 80 Newmarket Road, Cambridge CB5 8DZ
Solicitors Linklaters
One Silk Street, London EC2Y 8HQ
CORPORATE ADVISERS