premier foods plc annual report and accounts 2009  
the best in british 
food with brands
you really love all the nation’s 
favourites  
premier foods is home to some of the nation’s 
favourite food brands last year over 99 of 
british households bought a premier foods’ 
brand so you’re likely to find us in every british 
kitchen and on every british table
01 highlights
02 chairman’s statement
04 about our business
06 group at a glance
08 chief executive’s 
statement
13 marketplace
14 consumers
16 key product 
developments
our business
pages 1 to 17
18 operating review
22 divisional review
28 financial review
36 risk management and 
risk factors
42 people at premier
44 corporate social 
responsibility
business review
pages 18 to 49
50 board of directors 
and senior 
management
52 directors’ report
55 corporate 
governance
61 directors’ 
remuneration report
governance
pages 50 to 73
127 shareholder 
information
128 glossary
ibc premier foods’ 
brands
other information
pages 127 to 128
74 independent auditors’ 
report — group and 
company
76 principal statements
81 notes to the ﬁ nancial 
statements
123 company balance 
sheet
124 notes to the company 
ﬁ nancial statements
financial 
statements
pages 74 to 126
did you know that 994 of british households bought one of our brands last year and 472 million people eat a premier 
foods’ branded product in an average two week period   
   the best in british food with brands you really love premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 01
our business business review governance financial statements other information
operational highlights
— underlying cash generation of £60m
— net debt at 31 december 2009 £1365m
— financial position now secure with banking facilities arranged until 2013
— implementing strategy of growing branded sales delivering efficiencies and generating cash
— confident of making progress in 2010 despite difficult consumer and competitive
environment
highlights for 2009
 trading profit is defined as operating profit before exceptional items amortisation of intangible assets the revaluation of foreign exchange and other derivative contracts under ias 39 
and pension credits or charges in relation to the difference between the expected return on pension assets administration costs and interest costs on pension liabilities   
branded
sales
to £1678m
2008 £1576m
65
total sales
to £2661m
2008 £2604m
22
trading profit
to £323m
2008 £309m
45
profit
before tax
2008 loss of £405m
£47m premier foods plc annual report and accounts 2009  stock code pfd 02
performance
2009 was dominated by concerns over the economy with 
the impact of the financial crisis and the continuing recession 
in the uk
there was also uncertainty over how this would impact the 
food industry — would consumers switch to discounters and
would they trade down from branded products to own label 
the growth of discounters whilst certainly a feature of the 
year has not been as significant as some had anticipated 
more important has been the resilience of food brands 
despite the spending pressure on consumers
in the face of these challenges i am pleased to report a 
solid performance from the business we have seen sales of 
£2661m up 22 on 2008 trading profit for the year was 
£323m an increase of 45 year on year and broadly in line 
with expectations branded sales in particular have performed 
strongly in the year up 65 with market share gains in 
many of our key categories i believe that this is a creditable 
achievement in the current economic climate and a testimony 
both to the success of our strategy of focusing on branded 
sales and also the work and commitment of management and 
employees
refinancing
a very important event during the year was the refinancing
of the business which raised approximately £380m under a
placing and open offer announced in march the refinancing
has been successful both in removing the uncertainty over the
company’s debt position and also in providing premier with a
stable position from which to drive performance
as shareholders will be aware prior to the refinancing 
the board considered it appropriate to suspend dividend 
payments future payments will be dependent on the 
limitations imposed by our current debt arrangements 
board
there have been a number of changes to the board over the 
last year following the refinancing warburg pincus became 
a major shareholder of the company and under the terms 
of the placing and open offer have the right to nominate the 
appointment of a director to the board as a result in june we 
welcomed charles miller smith as an additional nonexecutive 
director charles has a wealth of experience in both the 
consumer goods and financial markets which has enabled 
him to make a valuable contribution to the board and support 
the achievement of the company’s strategic goals 
“we have built a stable platform from which to drive branded
growth and deliver shareholder value”
building
a strong branded food company
david j kappler chairman
chairman’s statement premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 03
our business business review governance financial statements other information
after seven years with the group paul thomas stepped down 
as finance director in august 2009 paul was instrumental in 
the company’s flotation in 2004 and contributed significantly 
to the development of the group the board would like to 
thank him for his dedication to premier and wish him well for 
the future 
in october jim smart was appointed to the board as chief 
financial officer jim who previously held the role of cfo at 
both friends provident plc and boots group plc is a well
known and respected cfo and has made an immediate and 
positive impact on the group 
christine cross who was appointed as a nonexecutive 
director in january 2008 retired from the board at the end of 
january 2010 in order to take up a new role as chief retail 
adviser to pricewaterhousecoopers the board would like to 
thank christine for her valuable contribution to the company
during the year a new finance committee was established to 
provide additional focus and review in respect of the group’s 
ongoing financial strategy david beever was appointed 
chairman of the committee which meets quarterly
employees
the last few years have been a period of major change for 
employees at premier as a result of the rationalisation of the 
business following the acquisitions of campbell’s and rhm 
staff across the business have consistently shown great 
tenacity and determination to deal with this change 
developing our people and delivering our plans and objectives 
is critical to the success of the company and to help embed 
a common approach across the business we have developed 
the “premier way” which sets out what we believe are the 
most important attributes for our leaders and this is now 
being embedded in the business 
in 2008 we launched our first employee recognition awards 
to recognise and reward the significant achievements of 
employees across the group it is pleasing to note that over 
100 entries were received and details of the winners which 
were announced in june 2009 are set out in the employee 
section of this report the second employee recognition 
awards were launched earlier this year
in february we opened the new groupwide shared service 
centre in manchester this is the next step in integrating the 
many systems and processes inherited over the years as the 
company has expanded significant progress is being made 
by the team there
csr
we have made important strides in the area of corporate 
social responsibility and for the first time have a produced 
a standalone csr report which is available on our website 
wwwpremierfoodscouk key achievements in the year have 
been a 52 reduction in energy consumption and a 377 
reduction in waste sent to landfill further information on our 
achievements can also be found in the csr section of this 
report
looking forward
there are indications that the uk economic outlook may 
now be improving slightly food inflation which has been 
a significant factor over the last couple years whilst still 
above traditional levels fell back in the final quarter of 2009 
however the outlook for consumers remains uncertain and 
the pressure on spending continues
we believe that with the integration of the business now 
largely completed we can focus on our business model of 
growing branded sales using our scale to deliver value to 
customers and gaining efficiency benefits from our supply 
chain
in addition we have a full programme of product development 
for the coming year designed to help drive sales growth i am 
confident that 2010 will be a year of significant progress for 
premier foods
finally on a personal note this will be my last report as 
chairman of premier foods as i will be stepping down as 
chairman following the appointment of a successor during 
the year after six hugely enjoyable years with the company 
i have decided that this is an appropriate time for me to 
stand down 
in spite of the upheavals in the markets for the last three 
years i am pleased to say we have adhered to our strategy 
of building a strong branded food company capable of 
competing in a difficult marketplace following a series of 
acquisitions integration is complete finances are secure 
and a strong management team is in place from this stable 
platform i am confident the group will deliver and i wish 
them well
david j kappler
chairman premier foods plc annual report and accounts 2009  stock code pfd 04
➜
premier foods
all you need to know
➜
 uk’s largest branded ambient grocery manufacturer
➜
 uk’s largest bread baker and flour miller
➜
 a leading supplier of chilled food products
➜
 a strategic focus on the uk and on growing
our brands
about our business
   in this respect we are unique in 
the uk food industry premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 05
our business business review governance financial statements other information
12
wrapped bread
ambient cake
meatfree
ambient desserts
ambient gravy
asian meal solutions
dried soup
dried noodles
pickles and relishes
baked beans
preserves
jelly
ambient wet cooking sauces
stock
category position category position category
mr kipling
quorn
ambrosia
bisto
sharwood’s
batchelors
batchelors
branston
hartley’s
hartley’s
hovis
cadbury
cauldron
branston
loyd grossman
oxo premier foods plc annual report and accounts 2009  stock code pfd 06
group at a glance
we supply a broad range of customers including the major 
multiple retailers wholesalers foodservice providers and 
other food manufacturers premier owns iconic british 
brands such as hovis batchelors mr kipling quorn bisto 
ambrosia branston sharwood’s hartley’s loyd grossman 
oxo and many more the business employs around 16000 
people and operates from over 60 sites across the uk
and ireland  
three focused divisions
the group is organised into three divisions
grocery 
comprising the shelf stable or ‘‘ambient’’ grocery products
hovis 
comprising wrapped bread morning goods and bulk and 
bagged flour and
chilled
comprising chilled and frozen meatfree products and our 
retailer branded chilled ready meal and cake businesses
non branded products comprise retailer brand and business 
to business sales
premier foods is the uk’s 
largest food producer we 
manufacture distribute and sell 
a wide range of branded and 
non branded foods 
➜ grocery
the grocery division encompasses a wide variety 
of ambient grocery sectors including cakes soups 
vegetables stocks gravies spreads ambient desserts 
home baking cooking sauces asian meal solutions 
pickles and beverages the division also incorporates 
premier’s business in the republic of ireland
591
of total group turnover
turnover  £1574m
yoy sales growth total 48
 branded 54
trading proﬁ t  £256m
employees  6838
branded mix
 branded 
£1153m
733
 non branded 
£421m
267
 1 ashford
 2 bury
 3 carlton
 4 histon
 5 knighton
 6 lifton
 manufacturing sites
 distributionlogistics centres
 1 long sutton
 2 rugby
7
5
2
1
3
8
11
9
10
6
12
1
2
key brands
batchelors mr kipling bisto ambrosia branston 
sharwood’s hartley’s loyd grossman and oxo
 7 long sutton
 8 middleton
 9 moreton
10 stoke
11 wisbech
12 worksop
 1 dublin
ireland
1
4 premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 07
our business business review governance financial statements other information
the chilled division comprises brookes avana our 
retailer branded chilled ready meal cake and desserts 
businesses and our chilled and frozen meatfree business 
130
of total group turnover
branded mix
 branded 
£131m
380
 non branded 
£214m
620
6
4
1
2
3
5
key brands
quorn and cauldron
➜
 chilled
➜
 hovis
the hovis division operates principally in the wrapped 
bread market and in addition manufactures own label 
bread and morning goods the division is also the largest 
vertically integrated baker and flour miller in the uk and 
produces a wide range of bulk flours and branded and 
own label bagged flours 
279
of total group turnover
branded mix
 branded 
£394m
531
 non branded 
£348m
469
7
5
2
1
3
8
10
9
11
4
6
12
1
2
key brands
hovis granary and mother’s pride 
 1 avonmouth
 2 belfast
 3 birmingham
 4 eastleigh
 5 erith
 6 forest gate
 7 glasgow
 bakeries
 mills
 1 andover
 2 barry
 3 gainsborough 
wheat maltings
 4 glasgow
 5 manchester
 8 greenford
 9 leicester
10 mitcham — sebon
11 nottingham
12 wigan
 1 bradford
 2 dagenham
 3 chandlers ford
 4 inverness
 5 martland mill
 6 mendlesham
 7 mossend
 8 newbridge —
fleming howden
 depotsrdc
1
 1 belasis
 2 leicester — rf brookes
 3 methwold
 4 rogerstone park — avana
 5 rogerstone park — rf brookes
 6 stokesley
 manufacturing sites
3
4
5
8
6
7
8
2
3
 6 selby
 7 southampton
 8 wellingborough
 9 newcastle
10 plymouth
10
9
7
6
5
4
turnover  £742m
yoy sales growth total    36
 branded 116
trading proﬁ t  £42m
employees  6179
turnover  £345m
yoy sales growth total 39
 branded 16
trading proﬁ t  £25m
employees  3082 premier foods plc annual report and accounts 2009  stock code pfd 08
chief executive’s statement
delivering
our business model
our vision is to be “the best in british food with brands you 
really love”
business model
now that the integration of the rhm and campbell’s 
businesses is behind us we are focused on demonstrating 
our business model and on delivering organic growth over the 
next three years our business model to deliver this growth is
“the group’s strategy remains unchanged the group has 
acquired a wide portfolio of wellknown brands many of which 
have leading positions in their markets widespread distribution 
through a large number of customers and a scale advantaged 
supply chain throughout the uk this forms the platform for 
growing our brands and generating future earnings growth”
robert schofield chief executive
➜
 
 to grow our branded sales faster than their respective 
markets by investing in and strengthening our brands 
and their relevance to today’s consumers
➜
 
 to gain competitive advantage by utilising our 
consumer insight and scale to deliver value to 
customers and to work more effectively with suppliers
➜
  
to deliver efficiency benefits such that supply chain 
costs and overheads are held flat or decline while 
volumes grow and as a result
➜
  
to focus on cash generation and debt reduction
successfully delivering this model will drive sales growth will 
improve gross margin will increase operating profit and will 
enable us to reduce debt over the next few years 
branded sales
to drive branded sales growth we will concentrate our 
investment into the areas with the greatest growth potential 
we judge this potential by a combination of size and growth 
prospects of the category and the competitive strength of
our brands 
drive we have identified five drive categories 
categories which are large and in which we believe
 we can grow ahead of the market
core we have identified four core categories
categories which have more moderate growth potential
 but in which we have strong market shares
 we aim to grow in line with these markets
defend the remaining defend categories have
categories lower growth prospects and our aim is to 
 maintain our market position premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 09
our business business review governance financial statements other information
our brand investment will be prioritised in relation to the 
competitive strength and growth prospects of the brands the 
brands which we aim to invest behind in drive categories are 
referred to as drive brands other brands which will receive 
a more moderate level of investment are referred to as core 
brands brands which will receive minimal investment are 
referred to as defend brands
some brands in the drive categories will play a supporting 
role will receive less investment than other drive brands 
and will be treated as core brands in addition we have a 
number of smaller brands which although they compete in 
the higher growth categories are included within the defend 
classification as due to their size they are less likely to receive 
significant investment
category size £m
479 2 6 652 total
convenience
meals
298
stock 97
pickles and
relish
131
gravy 126
3 year
category growth rate
6 2
14 12
value volume
6 0
3 0
premier’s
value share
448
388
368
741
premier 
brand
batchelors
oxo
branston
bisto
why this is a core category
we have a strong share position
we have a strong share position
we have a strong share position
we have a strong though contested share position 
and the category is in strong growth
category size £m
core categories
we believe that we can grow volumes of drive brands in 
total by at least 1 to 2 percentage points ahead of the overall 
category growth rates we aim to grow core and defend 
brands in line with their markets
■ drive brands
£840m
■ core brands 
 £400m
■ defend brands
 £438m
of total sales
brand categories
the categories and brands are as follows 
premier 
brand
hovis
ambrosia
hartley’s
quorn
sharwood’s
lloyd 
grossman
mr kipling
category
3 year
category growth rate size £m
why this is a drive category
a very large category and we have the no 2 brand
a fast growing large category where we are the 
no 2 manufacturer
a large category where we have the largest brand 
growth opportunity in snacking and lunch box
strong branded position with growth opportunity 
behind individual dessertssnacking and lunch box
strong branded position growth opportunity 
through increased consumption by vegetarians 
meat reducers healthy eaters and international 
expansion
bread
cooking sauces
cake
meatfree
1826
1041
1018
209
9
7
1
2
0
3
2
0
ambient desserts 301 6 1
value volume
premier’s
value share
266
181
269
511
668
282 1 6 4394 total
drive categories
631 premier foods plc annual report and accounts 2009  stock code pfd 10
chief executive’s statement continued
if the categories continued to perform in line with the last 
three years we would in total expect to be able to grow our 
drive brands by between 2 and 4 pa in volume our 
core brands in line with the market ie at 2 pa and keep 
our defend volumes flat
we will use this categorisation of brands dynamically as 
market opportunities develop and hence brands may 
play different roles at different times using this brand 
architecture we believe that in total we can grow our 
branded sales faster than the market 
competitive advantage through scale
premier foods is the uk’s largest supplier of ambient 
grocery goods our business model is to utilise this scale for 
competitive advantage we believe we can use our scale to 
reduce costs and working capital by procuring more effectively 
our focus on the uk and our presence in a broad range 
of categories gives us a deep insight into consumer trends 
in british food this insight enables us to work closely with 
customers as their chosen category development partners 
across our priority markets we are currently lead category 
partner across drive and core categories in several major 
customers working with them on recommendations regarding 
range space merchandising and promotional strategies 
the group also has scale in retailer branded and business 
to business products these businesses are an important 
element of the strategy as they utilise capacity 
contribute expertise in product innovation 
help to build relationships with 
customers enhance buying scale 
and contribute towards overheads 
over the last three years the retailer brand categories in 
which we compete have declined by 1 in volume the 
objective is to generate sales in line with total retailer brand 
performance in the relevant categories over the medium term 
nevertheless sales in any one period are likely to be more 
volatile given periodic contract gains and losses as we seek 
to manage the best balance between profit and retailer brand 
sales volumes 
improve efficiency
we have integrated the rhm and campbell’s supply chains into 
our grocery business and have delivered synergies as a result 
the next stage of the strategy is to extract organic efficiency 
savings from the restructured footprint we believe there are 
substantial opportunities to achieve benefits not only from raw 
material procurement but also from supply chain operations 
manufacturing controllable costs in grocery were £273m in 
2009 this includes direct labour overheads wastage and 
logistics our aim is to deliver efficiency savings of around 4 
pa from these controllable costs we believe that this will 
exceed not only overhead inflation in a normal year but also the 
variable costs of incremental volume we will also continue to 
improve our customer service technical and health and safety 
standards which will add further to competitive advantage 
our support functions are already relatively low cost with the 
integration programme having focused on removing duplication 
the acquired business processes and systems have however 
largely been retained the implementation and rollout of sap 
is beginning to enable more efficient and effective business 
processes and will give us greater scope to improve the agility 
of the business and reduce administrative costs over the next 
three years
01  hovis is the second largest bread brand and the sixth largest food brand 
in the uk
472
million people 
eat a premier 
branded
product
fortnightly
02 2009 saw a new tv ad campaign for loyd grossman putting his 
bolognese sauce to the test in bologna the city where the original
sauce was created premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 11
our business business review governance financial statements other information
these are the two areas in which there is the greatest potential 
for efficiencies but we will strive for efficiencies throughout all 
our businesses 
cash generation
in recent years the operating business cash flows have been 
absorbed by acquisitions and by costs of integration and 
restructuring the major projects are largely complete our 
priority now is to execute the business model outlined above 
enabling us to deliver not only sustained earnings growth but 
also increased cash generation this will enable us to reduce 
our financial obligations
divisional strategy
grocery
within the grocery division we have a large portfolio of brands 
with a strong presence in a range of ambient food categories 
 
in our drive categories we believe the biggest immediate 
opportunities lie in cooking sauces  accompaniments 
desserts and cake 
with cooking habits increasingly moving towards the 
convenience of cooking with preprepared sauces combined 
with fresh ingredients we believe there is ample room for further 
growth of the market loyd grossman provides a high quality 
product in italian indian and thai cuisine sharwood’s is the 
03 oxo launched a new xshaped cube in 2009 the brainwave of a project 
engineer from the worksop factory
voice of authoritative discovery in asian meals cooking sauces 
and accompaniments 
although the cake category has been in decline over the last 
three years we believe that within both cake and dessert 
categories there are rapidly growing subcategories comprising 
individual readytoeat formats such as sweet snacks or treats 
for one or as components of a lunch box ambrosia hartley’s 
and mr kipling are ideally placed to accelerate the growth in 
these sectors 
in core categories we include dry convenience and express 
meals in which we lead with the batchelors brand pickles 
chutneys and relishes where branston is the market leader 
and gravy and stock in which we compete with bisto and oxo 
respectively 
the remainder of the grocery business is non branded 
including retailer brand and business to business sales these 
businesses utilise capacity help to build relationships with 
customers enhance buying scale and contribute towards 
overheads 
 
hovis 
our vision is to make hovis the biggest and most loved brand 
in bakery the strategy is focused around hovis as a drive 
brand being the best quality bread available and developing 
advertising which connects emotionally with the uk consumer  premier foods plc annual report and accounts 2009  stock code pfd 12
chief executive’s statement continued
this strategy has succeeded in increasing market share to 
266 of the branded bread market in 2009 the strategy 
from here is to continue to innovate in the bakery category 
working in conjunction with farmers we have now sourced 
high quality red wheat from the uk to enable us to replace 
wheat which would have otherwise had to be imported as a 
result in 2010 our branded range will be made from 100 
british wheat these and other product launches should 
continue to improve the brand image and drive growth 
growth is also available from expanding in segments of the 
market in which hovis is underrepresented such as white 
bread 
retailer brand bread and bakery goods utilise capacity 
enhance relationships with customers add buying scale and 
contribute towards overheads 
our milling business contributes to innovation in hovis 
bakery and provides expertise in the supply of specialist 
flour a profitable business its sales revenue is by nature 
volatile as pricing directly reflects input costs 
the bread market continues to be competitive with a high 
cost distribution model we believe the industry business 
model needs to change in the medium term in the 
meantime we believe that the appropriate strategy is to 
encourage customers and consumers to value the hovis 
brand above others and to continue to grow the brand in 
this way we should be able to maximise volume through the 
existing supply chain in recent years we have invested in 
modernising our supply chain to support the improvement in 
product quality and volume of sales in future we will focus 
on improving supply chain efficiency to mitigate cost inflation 
further investment in the infrastructure will be made from 
within the group’s normal capital budget
chilled
the chilled division comprises the branded meatfree 
business and the largely retailer brand brookes avana chilled 
ready meals and cakes business 
in meatfree quorn and cauldron are two major brands within 
the meat alternative market providing a range of products using 
mycoprotein and tofu respectively quorn is a drive brand as we 
believe that it has significant potential in the medium term the 
core consumer who does not eat meat has many occasions 
on which quorn can fulfil his or her needs we intend to focus 
on this market in the first half of this year the most significant 
opportunity is to tap into those consumers who want to eat 
less meat for reasons of health concern or lifestyle choice 
quorn is a healthy alternative to meat and we are working on 
plans to communicate this later in 2010 we are still committed 
to expanding the brand in overseas markets cauldron will 
be repackaged in the spring and improvements made to the 
product which we believe will realise the growth potential for 
this brand
brookes avana has three excellent facilities manufacturing 
retailer brand and branded ready meals and cakes the 
industry is very competitive due to spare capacity however 
brookes avana has a welldeveloped set of innovation and 
new product development processes and in tandem with its 
strong customer relationships is well placed to use its breadth 
of expertise to deliver further progress in the future
robert schofield
chief executive
02 a new tv ad campaign began in september to support the launch of 
ambrosia “feel good puds”
01 bisto granules coming off the production line in worksop bisto is used in 
16 bn meals each year premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 13
our business business review governance financial statements other information
marketplace
markets
the uk grocery market proved resilient despite the 
recessionary environment in 2009 and pressure on consumer 
spending the total uk grocery market is worth £658bn and 
grew 48 in 2009 branded sales outpaced retailer brands 
with value growth of 70 compared to 33 
premier operates in the ambient grocery sector and is the 
uk’s largest manufacturer in this segment with a 68 share 
of the £250bn market
 
our principal market is the uk accounting for 939 of sales 
in 2009 
customers
we sell both branded and non branded products to a wide 
range of customers our most significant customers are the 
major uk retailers our foodservice business sells to local 
authorities schools and hospitals staff canteens restaurant 
and pub chains largely through intermediate wholesalers our 
mills produced over 1 million tonnes of flour in 2009 52 
used by the business and the remainder sold to other food 
manufacturers in addition we supply retailer branded chilled 
ready meals cakes and pizza bases to a number of leading 
food service retailers
competitors
due to the breadth of categories that the group covers 
premier has no principal competitor who operates across all 
of the same categories the competitors that the grocery 
division face range from multinational food companies 
to smaller family or private equity owned businesses 
competitors who have significant branded shares in the 
categories in which we operate include h j heinz company 
soup baked beans the baxters food group soup pickles 
unilever plc stocks cooking sauces masterfoods part of 
mars incorporated group cooking sauces united biscuits 
cakes and andros uk ltd preserves 
hovis’ principal competitors in the wrapped bread and 
morning goods markets are warburtons ltd and associated 
british foods plc kingsmill the principal competitor in the 
bulk flour market is adm milling ltd within the chilled market 
our principal competitors are northern foods plc bakkavor 
group hf and greencore group plc
sales split by customer
 
03 in december the hovis “go on lad” tv advert was voted itv “ad of 
the decade”
■  top 5 retailers — £1569m
■  other retailers — £452m
■  food service
 wholesalers — £330m
■  bulk flour — £166m
■ others — £144m
our share of the £250bn uk ambient grocery market 
■ premier foods
■ nestlé uk ltd
■ cadbury plc
■ united biscuits 
■ pepsico uk
0 1 2 3 4 5 6 7 8
68
48
36
34
33 premier foods plc annual report and accounts 2009  stock code pfd 14
chief executive’s statement continued
consumers 
with our brands spanning many categories and our focus on the uk we have the
opportunity to make consumer and shopper insight a competitive advantage
our consumer and shopper manifesto
we have developed a consumer and shopper manifesto designed to help all of our people — from new product
development through to sales — to put consumers and shoppers at the heart of everything we do the manifesto has
eight simple principles    
994
of british
households
bought our
brands
last year
1
focus on the nation’s
favourite foods
concentrate on the meals that most 
people eat most of the time
our research shows that uk households have on 
average a repertoire of just six or seven meals that are 
cooked on a regular basis the most popular meals tend 
to be traditional favourites such as roast dinners pasta 
pizza fish and curry and don’t change much over time 
we will not singlehandedly change how britain eats so 
we will focus innovation within the most popular dishes to 
help consumers and shoppers have the best experience 
they can from the food they already eat every day
consumers and shoppers are at 
the heart of everything we do
2
look and taste delicious
look great in advertising in the store 
and on the plate and really deliver on 
taste
above anything else people want their food to taste 
great and if it does they will come back for more we 
will regularly test our products with consumers so 
that we know they are the best in market our brands 
need to look good too including the packaging the 
way they are displayed in store how they look in our 
communications and ultimately when they are on the 
plate or in the bowl
3
be natural and wholesome
striving for natural food free of artificial 
ingredients as part of a healthy
balanced diet
people are more aware than ever of what is in 
their food and where it comes from — they are 
reconnecting with food as britain’s largest food 
manufacturer we understand our responsibility to 
make our products as natural and wholesome as 
possible we will look to minimise artificial ingredients 
or preservatives and we will review our levels of salt 
sugar and fats we want ingredients lists to be as 
simple as possible using ingredients that people 
understand
4
make food easy
the right size the right shape and
easy as 1 2 3
many consumers find life busier and busier so they 
value products that save them time and energy we 
will provide food products that require little or no 
preparation such as ambrosia crumble puds and 
others that will help people create good meals with 
little effort such as our cooking sauces range our 
products will be easy and intuitive to use we will 
provide the right size packs for all households and 
the right shape packs to easily fit in the fridge or the 
cupboard premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 15
our business business review governance financial statements other information
• thirdly a new family size jar was launched “making food 
easy” for families
• finally the product was supported by a new tv ad 
campaign “a brand you love” and a very wellexecuted in 
store programme of promotions displays and point of sale 
helped us “shine in store”
5
shine in store
on shelf easy to find and attention 
grabbing
a typical uk supermarket has 30000 different 
products on display many shoppers shop on 
“autopilot” so we need to make sure that our products 
stand out on the shelves whether through eye
catching colour unique shape or via point of sale 
materials to help us “shine in store” we must ensure 
our products are always on the shelves when the 
shopper is choosing we will work with our customers 
to make it easy to find our categories within the store 
and to offer shoppers helpful ideas for food at a 
relevant moment in their shopper journey
6
offer genuine value
for money
good food that goes a long way 
something that everyone can afford
there are few shoppers who are not concerned about 
looking after their finances in the current economic 
climate and they want to get great value for the
money they spend this is of course about quality but 
also the right price and the promotional context many 
of our products are ambient reducing waste and 
further improving value 
 premier foods can only recommend to the retailer a price to be paid 
by the shopper the actual price paid is always independently set by 
the retailer
7
do the right thing
treating people and the environment 
responsibly
environmental and ethical issues are increasingly 
important to consumers and shoppers but for 
many deciding what is the right thing to do can be 
confusing and complex research has shown that 
consumers and shoppers will look to governments and 
manufacturers to help them and as the uk’s largest 
food producer we recognise our responsibility we 
need to ensure that consumers and shoppers can 
make the right choices by communicating the good  
things we are doing through our brands such as 
moving to sourcing 100 sustainable palm oil through 
the greenpalm certification scheme
8
a brand you love
forming an emotional bond between 
our brands and consumers
many of the consumer and shopper manifesto 
‘principles’ are rational and practical but a final critical 
element is that consumers maintain an emotional 
bond with our brands we understand what it is about 
our brands that people love and we will continue to 
engage our consumers in modern and relevant ways
• firstly we focused attention on spaghetti bolognaise this is 
the seventh most popular meal eaten by british households 
— eaten on 165 million separate occasions so we focused 
on the “nation’s favourite foods”
• secondly the loyd grossman bolognaise sauce recipe was 
reviewed tested and improved so we “tasted even more 
delicious”
this has helped the loyd grossman brand to the most successful year in its history loyd grossman sales grew by 20 in 
2009 and our sauces were enjoyed in over 2 million more households than in the previous year  
putting the manifesto into practice
by combining these attributes we can have a real impact with consumers and shoppers as seen by the loyd grossman 
bolognaise launch in april 2009 premier foods plc annual report and accounts 2009  stock code pfd 16
key product developments
growing
our branded sales
january february march april may june
➜
➜
the launch of loyd grossman al forno bakes is a great 
example of how we can expand an existing market by 
making our products more relevant to consumers
al forno bakes fill the gap in the market for two person 
oven bake meals that appeal to food connoisseurs and 
deliver “real meal solutions to foodies”
the italian bakes market is worth £23m and is growing 
21 year on year 
matt brown head of marketing for sauces said  
“consumers are always looking for simple ways to cook 
creatively the quality of loyd grossman sauces make 
it the perfect brand to cater for this consumer and we 
are also broadening the market offering through the 
introduction of roast potato and vegetable bakes”
this helped loyd grossman to achieve its highest ever 
sales of £42m in 2009 up 20 year on year 
expanding existing markets
loyd grossman
al forno bakes
march saw the latest innovation launch from branston as 
branston mayo with a twist hit the supermarket shelves
the biggest launch from branston since the introduction 
of the successful relish range mayo with a twist sees 
branston diversifying once again into a completely
new market
flavoured mayonnaise is still in its infancy currently 
accounting for just 6 of the category however it is 
growing at a massive 96 year on year and branston 
plans to invigorate the sector by becoming a key player in 
the market
kelly pym marketing manager for branston said “foods 
that have been neglected such as baked beans and relish 
have now been rejuvenated by adding some branston 
‘oomph’ we are confident that this new activity in the 
mayonnaise sector will deliver the excitement the category 
needs and add incremental growth by providing what 
consumers want — an innovative new angle on a
muchloved product”
branston brings a
tasty twist to mayo
brand stretch premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 17
our business business review governance financial statements other information
one of the key elements of our business model is to grow sales of 
our drive and core brands faster than their respective markets
to do this we will focus on
➜
 using product innovation and quality to take market share from competitors
➜
 stretching our brands by expanding into new categories
➜ 
 expanding existing markets by increasing the frequency of purchase
➜ 
 leveraging our brand equity through brand rejuvenation
2009 saw continued success in the rejuvenation of the 
hovis brand
acquired in 2007 hovis was in market share decline 
having suffered from underinvestment and poor quality
we made a significant investment in recipe improvements 
which have improved quality and taste the range was 
also boosted by an increased product range and new 
packaging following the highly successful tv advertising 
campaign launched at the end of 2008 we have now 
returned hovis to market share growth
during 2009 hovis achieved a total branded market 
volume share of 258 an increase of 37pp over the year
as part of the continuing innovation taking place within the 
bakery category hovis announced in december 2009 the 
intention to move to sourcing flour milled from 100 british 
wheat across its entire range — the first major british bread 
brand to do so
ambrosia is another example of where we are expanding 
the market by making products more relevant to more 
eating occasions
there are an estimated 4 billion lunch box occasions a year 
worth a total of £539bn and this category is growing by 
51 year on year
new ambrosia puds were launched in august 2009 to 
reinvigorate ambient desserts with a new range of everyday 
complete desserts designed to meet consumers’ needs 
for lunch box after dinner and pickmeup occasions 
two delicious combinations crumble puds ambrosia 
devon creamy custard and apple peach or rhubarb fruit 
compote with crumble on the side and jelly puds which 
combine jelly with ambrosia devon custard on the side 
with less than 5 fat they can be enjoyed hot or cold 
and like the rest of ambrosia contain no artificial colours 
flavours or preservatives
this has helped ambrosia reach sales of £83m in 2009 up 
92 year on year 
july august september october november december
➜
➜
brand innovation
ambrosia “feel good puds”
brand rejuvenation
hovis “renaissance” premier foods plc annual report and accounts 2009  stock code pfd 18
robert schofield chief executive
operating review 
focusing
on branded sales growth
“premier foods achieved a tremendous amount in 2009 we 
strengthened our balance sheet cut debt increased trading profit 
and returned to positive earnings most importantly we improved 
the performance of all our key brands in a highly competitive 
marketplace”
set out below are our plans and ambitions for the next 
chapter in the successful growth of the business we are 
laying out a series of key metrics for the next three years and 
providing an even greater degree of transparency as befits a 
business of our scale
we are confident that our business model is capable of 
continuing to capture share in our key market segments and 
delivering sustained earnings growth and cash generation 
over the medium term we look forward to the next stage of 
the group’s development with determination and enthusiasm
summary 
     09 v 08
 2009 2008  
 branded sales £m 1678 1576 65
 total sales £m 2661 2604 22
 branded market share 
 — volume  222 205 17pp
 branded market share 
 — value  247 242 05pp
 trading profit £m 323 309 45
 profit before tax £m 47 405
 adjusted eps — 
 continuing pence 58 144 597
 pro forma adjusted eps pence 47
 eps — continuing pence 19 413
 cash flow before 
 nonrecurring items £m 60 104 423
 net debt £m 1365 1767 228
 net debtebitda times 36 49 13
sales
     09 v 08 
 2009 2008 
 branded £m 1678 1576 65
 non branded £m 983 1028 44
 total sales 2661 2604 22
 total branded sales  631 605 26pp
 branded market share 
 in grocery 
  volume  192 188 04pp
  value  224 227 03pp
 hovis branded market share 
 in bread 
  volume  258 221 37pp
  value  266 237 29pp
adjusted eps is defined as trading profit less net regular interest payable less a 
notional tax charge at 280 2008 285 divided by weighted average number 
of ordinary shares of the company net regular interest payable is defined as net 
interest after excluding noncash items namely exceptional writeoff of financing 
costs accelerated amortisation of debt issuance costs fair value adjustments on 
interest rate swaps and the unwind of the discount on provisions
pro forma eps shows what the adjusted eps would have been if the issue of 
shares and associated refinancing had been in place for the whole of 2009 premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 19
our business business review governance financial statements other information
total sales increased by 22 volume contributed 18 to 
sales growth with price and mix contributing 04
branded sales increased by 65 to £1678m and now 
account for 631 of total sales an increase of 26pp on 
2008 branded sales growth was recorded in grocery hovis 
and meatfree market share for the grocery division increased 
by 04pp to 192 by volume as a result of innovation and 
promotional activity market share fell by 03pp to 224 
by value as the higher volumes were offset by the effect of 
increased promotional activity on net prices premier’s value 
share across drive and core grocery categories however 
grew by 01pp to 308 
market share for the hovis division increased by 37pp to 
258 by volume and by 29pp to 266 by value as a result 
of increased volumes and additional distribution 
branded sales
   2009 2008 09 v 08
 £m £m  
 hovis  349 303 152
 mr kipling  132 128 31
 quorn  118 113 44
 ambrosia  83 76 92
 sharwood’s  62 59 51
 hartley’s  54 46 174
 loyd grossman 42 35 200
 subtotal — drive brands 840 760 105
 batchelors  132 122 82
 bisto  96 94 21
 branston — 
 pickles and relishes 40 31 290
 branston – beans 34 22 545
 cadbury cakes  60 59 17
 oxo 38 37 27
 subtotal — core brands 400 365 96
 defend brands 438 451 29
 total branded 1678 1576 65
drive brands grew by 105 to £840m in cooking sauces 
sharwood’s and loyd grossman both recorded growth 
ahead of their markets through coordinated programmes of 
innovation advertising and promotional activity in desserts 
ambrosia and hartley’s benefited from new product 
development in individual desserts in cake mr kipling grew 
despite a decline in the market hovis grew 152 as it took 
market share in the bread market core brands grew by 96 
to £400m defend brands declined by 29 to £438m
trading scale and position
case study
our scale delivers competitive advantage
with retailers
the uk grocery market is worth £658bn and grew by 48 
in 2009 we operate in the ambient grocery sector which 
is worth £250bn this makes it a very important sector to 
retailers
premier foods is in a unique position as the uk’s no 1 
ambient grocery supplier covering more categories than 
the majority of our competitors this means we can bring a 
broad perspective and a breadth of knowledge across the 
ambient grocery sector that our competitors can’t match 
helping both premier foods and retailers maximise their 
return we have conducted extensive research to develop 
individual category strategies and therefore understand how 
they fit into the grocery market as a whole 
we are now working with major retailers to define an overall 
ambient grocery strategy this strategy aims to improve 
the shopping experience through enhanced layout range 
and availability of products the use of signage and shopper 
marketing  
non branded sales
   2009 2008 09 v 08
 £m £m  
 grocery 421 408 32
 hovis 348 417 165
 chilled 214 203 54
 total 983 1028 44
non branded sales which comprise retailer brand business 
to business products and milling were down by 44 in the 
grocery division non branded sales increased by 32 in 
retailer brand the increase reflected volume gains of pickles  
condiments and spreads in canning volumes were down 41 
which reflects the depressed volumes in the market and the loss 
of a material retailer brand contract in q3 of 2009 the volume  premier foods plc annual report and accounts 2009  stock code pfd 20
02 oxo cubes on the production line at our worksop factory 01 premier employs chefs across the business to develop new and exciting 
products and improve existing recipes
operating review continued
loss was partially offset by a favourable mix of other contracts 
and pricing sales to catering customers had a quieter year 
with lower demand as consumers ate out less frequently 
the main area of non branded decline was in hovis where 
sales of retailer brand bakery products were down 156 
reflecting a retailer brand bread market down 11 and the
exit from certain contracts the volume lost by this decline
was more than offset by increased volume of branded
bread
in milling sales revenue was down 176 in volume terms 
however sales were down only 24 with price deflation 
accounting for the remaining 152 this has little effect on 
profitability as the cost of raw materials is similarly reduced 
in the chilled division non branded sales increased by 54 
driven by new contracts and product lines
outlook
the group has made progress during 2009 in developing its 
strategy of growing branded sales and in expanding gross 
margin through the benefits of consumer insight and scale 
we shall continue this development in 2010 and we expect 
to deliver efficiency savings over and above the synergies 
already delivered furthermore these efficiencies should be 
deliverable without material access costs 
in 2009 much of the benefit of the strategy was absorbed by 
inflation in input costs and by a tougher consumer and trading 
environment which drove higher promotional costs we are 
confident that 2010 will be a successful first step of a three year 
journey of demonstrating the strategic direction of the business 
and of generating cash we will therefore prioritise actions 
which are consistent with that three year journey 
we remain cautious about the consumer and trading 
environment for 2010 but assuming no further adverse 
change in that environment we expect the benefits of the 
strategy to result in further progress in 2010
robert schofield
chief executive
9 march 2010 premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 21
our business business review governance financial statements other information
hovis
gives it 100
in december 2009 hovis announced it will be 
backing british farmers and moving to flour milled 
from 100 british wheat across its entire range — 
the first major british bread brand to do so
launched in early 2010 the move which represents a 
multimillion pound investment comes as part of the 
brand’s continuing “renaissance” which began with its 
awardwinning “go on lad” advertising campaign and 
packaging rebrand in september 2008 
hovis has been growing a strain of canadian red wheat 
here in britain for the past five years in trials and now 
has over 600 farmers across great britain growing 
wheat for hovis loaves this is the equivalent to one in 
eight british wheat fields being grown for hovis 
nfu president peter kendall said “it is fantastic 
news that hovis will be committing to source 
100 of its wheat from britain from next year this 
shows real commitment to uk farming and its skill 
professionalism and reliability by a wellknown and 
respected uk company”
jon goldstone marketing director at hovis said 
“we used to import £18m worth of canadian wheat 
£18m which will now go to british farmers this is 
a significant amount of cash hovis’ move to 100 
british will not only be a good deal for farmers the 
new strain of wheat means a tastier better quality 
allbritish hovis loaf — without any price rise for 
consumers” premier foods plc annual report and accounts 2009  stock code pfd 22
divisional review
branded sales volumes increased by 35 with price and 
mix contributing 19 individual desserts grew strongly 
contributing to a 77 increase by volume and 9 increase 
by value in our desserts business sales also grew in our 
spreads and cake businesses but declined in our homebaking 
business sales grew 116 in cooking sauces and 215 
in pickles helped by the successful launch of branston mayo 
and new relish products
retailer brand sales were up 32 in the year with volume 
decline reducing sales revenue by 53 but this was more 
than offset by price and mix which contributed 85 the loss 
of volume was largely in the canning business in the second 
half of the year firstly a material retailer brand contract was 
lost in q3 secondly the market for retailer brand goods 
was down as promotions on branded goods and increases 
in retailer brand market pricing caused consumers to switch 
away from retailer brand products this effect was particularly 
marked in canned soup where total retailer brand sales in 
the category were down 10 these two effects are likely to 
mean that grocery non branded sales revenue will be lower in 
the first half of 2010 than in the first half of 2009
we have seen an improved performance in ireland during 
the second half of 2009 the decline in sales seen earlier 
in the year has been significantly reduced and our brands 
are gaining market share the irish grocery retail sector has 
continued to adapt to the difficult economic environment with 
a substantial increase in sourcing directly from the uk coupled 
with a move to more centralised distribution we commenced 
restructuring our business in ireland to reflect these changes 
in 2009 and anticipate that further restructuring may be 
required as the retail sector continues to adapt
trading profit increased by 2 to £256m
➜
  branston sales up 40 — mayo with a twist launched
➜
  loyd grossman sales up 20 — al forno range launched
➜
  ambrosia sales up 9 — crumble puds and fruit pots launched
➜
  mr kipling sales up 3 — new halloween summer easter and valentine variants launched
➜
  sharwood’s sales up 5 — biryani spice  sauce launched
grocery
will carter
managing director
grocery division
grocery
   2009 2008 09 v 08
 £m £m 
 branded sales  1153 1094 54
 non branded sales 421 408 32
 total sales 1574 1502 48
 trading profit 256 251 20
 volume market share  192 188 04pp
 value market share  224 227 03pp
sales for the grocery division increased by 48 we saw 
good branded sales growth of 54 with branded sales 
rising to £1153m non branded sales were up by 32 
to £421m
in 2009 grocery succeeded in growing branded sales through 
innovation and added to gross profit by better procurement efficiency 01 our sharwood’s chefs went on location in march 2009 to sri lanka
china and malaysia for a tv ad campaign launching the new range of 
sharwood’s sauces
24 million
sharwood’s
curries eaten 
each year in 
britain
premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 23
our business business review governance financial statements other information
higher sales volumes and a superior product mix with 
branded sales growth outstripping non branded growth 
added £8m to profit our strategy of improving procurement 
efficiency added a further £28m to profit 
in the year input costs increased reflecting commodity markets 
and weaker sterling a combination of pricing partly offset 
by higher promotional cost was not able to recover all the 
additional costs and the business incurred a net cost of £30m 
the increase in promotional costs was driven by two factors 
firstly there was an increase in the level of deal activity 
across all grocery markets with retailers 
competing to offer value during the 
recession grocery ranges saw 
30 of volumes sold on deal in 
2009 versus a more normal rate 
of 28 seen in 2008 and prior 
years in total this market level 
of promotions is a cost that the business has to absorb and 
does not in aggregate drive volume given that it has been a 
marketwide increase secondly we increased promotional 
spend on particular drive and core brands to drive household 
penetration and market share and to support new product 
launches this succeeded in driving market share gains in 
categories such as cooking sauces desserts and gravy and 
helped achieve good sales for new products we judge these 
investments over a number of years and we are confident 
that they will continue to generate increased sales in future 
periods
there was a £6m net cost as a result of increased 
manufacturing costs savings were realised from closing 
factories these savings were offset by inflation notably 
in utilities and by initially high running costs as the new 
processes were commissioned in the factories receiving the 
products previously made in the factories which were closed 
in the second half of the year we saw increasing efficiencies 
of the new lines and processes which we expect will lead to 
ongoing savings 
there was a £5m improvement in operating expenses 
comprising lower administration costs offset by additional 
investment in marketing the additional marketing costs 
of £6m were incurred to support driving market share and 
the new product launches we expect this cost to continue 
to increase in the future as we refresh our brand ranges 
administration costs benefited from synergies and lower 
pension service and bonus costs 
in conclusion in 2009 grocery succeeded in growing its 
branded sales added to sales through innovation and added 
to gross profit by better procurement efficiency with delivery 
of further efficiencies now enabled we are confident of 
making further progress in 2010 premier foods plc annual report and accounts 2009  stock code pfd 24
divisional review continued
branded bakery sales grew 135 to £370m sales benefited 
from growth in white loaves where hovis has traditionally had 
a lower market share growth also came from increasing 
distribution of existing products during the year we continued 
to improve quality and as a result consumer perception of the 
brand is more favourable the quality improvements and the 
innovations are significantly aided by our milling operation 
hovis branded volume increased by 159 contributing to 
a 37pp increase in volume market share this volume was 
partially offset by pricing and mix as the proportion of bread 
sold on deal was higher in 2009 than in the previous year as 
a consequence market share in value terms increased by 
29pp to 266
in retailer brand bakery the majority of the fall in sales 
reflected an 11 fall in the market for retailer brand bread 
as consumers switched to branded bread as increased 
promotional activity improved value the remainder of the 
156 fall in sales was due to the expiry of certain contracts 
in total the volume of bread grew by 49 
in milling pricing is closely related to raw material costs 
the decline in wheat cost in 2009 was thus largely mirrored 
in flour sales value volumes were down 24 owing to the 
withdrawal from certain contracts 
the combined effect of the additional volume in bread and 
of the improved mix of product in bakery and milling was a 
£14m increase in profit
the combination of pricing promotion and inflation in 
manufacturing costs was offset by lower input costs and 
efficiencies in manufacturing and this added £13m to profit 
of this additional profit £9m was invested to bring on stream 
additional capacity to cope with the higher bread volumes 
and to improve quality these additional costs are ongoing 
➜
  hovis branded volume market share increased by 37pp year on year to 258
➜
  hovis branded bread sales up 152 on 2008
➜
  hovis “go on lad” tv advert voted itv “ad of the decade”
➜
  hovis won the grocer magazine’s top product of 2009 with the strongest sales growth of
any grocery brand
hovis
tim kelly
chief operating
officer hovis
and chilled
   2009 2008 09 v 08
 £m £m 
 branded bakery 370 326 135
 retailer brand bakery  179 212 156
 total bakery sales 549 538 20
 milling 193 232 168
 total sales 742 770 36
 trading profit 42 24 750
 hovis branded volume 
 market share  258 221 37pp
 hovis branded value 
 market share  266 237 29pp
we had a very successful year in 2009 with strong branded growth 
and increased trading profit up 75 to £42m 01 hovis seed sensations raised over £130000 for the the royal british 
legion including £12500 raised by premier employees
premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 25
our business business review governance financial statements other information
and are important in modernising 
the infrastructure to support the 
strategy further updating of the 
infrastructure will be required in the 
next few years this will be funded 
from within the normal capital 
expenditure budget 
in conclusion hovis had a very successful year growing 
trading profit by 75 to £42m branded growth was very 
strong and considerable investment was made in additional 
capacity and product and manufacturing quality we remain 
confident of making further strategic progress with the brand 
in 2010 however we expect competition 
to be fierce in 2010 as our competitors 
respond to our successes in 2009
hovis
bake 13 million 
loaves every 
week
best in class common 
processes and systems
case study
hovis track and trace
premier foods has invested significantly in a new track 
and trace application within the hovis division the system 
utilises barcode scanning technology managed by the 
sap application to track products from production 
through the distribution chain using a set of complex but 
simple to operate rules
hovis produce approximately 18 million baked products each 
week in some instances a complex cross docking operation 
will result in bread being moved via a number of sites all 
this has to be done within a 24 hour window to ensure that 
product is delivered fresh to stores nationwide
with 22 distribution sites 13 of which are also bakeries and 
just under 1000 product types this is a complicated logistics 
picture involving around 2000 employees 
prior to track and trace this was a largely manual 
operation requiring individual decisions about where to 
send product with limited management visibility through 
the introduction of track and trace we have been able to 
increase accuracy and consequently improve service to our 
customers track and trace also considerably enhances 
the traceability of product which is an increasingly 
important priority enhanced business review continued
premier foods plc annual report and accounts 2009  stock code pfd 26
divisional review continued
a premium priced product in a recessionary environment but 
sales uplifts from upweighted promotional activity were lower 
than expected consequently we took the decision to prioritise 
profit and hence pulled back on promotions in quarter four as 
a result gross profit was lower in 2009 in 2010 we plan to 
refresh both the quorn and cauldron range of products 
 
there was an increase in costs as a result of problems in the 
meatfree manufacturing and packing operations in the first 
half of 2010 we intend to address the supply chain issues by 
contractingout more of the operations this will result in a 
further charge for restructuring the supply chain in the first half 
of 2010 
an increase in gross profit as a result of the higher sales was 
offset by the higher operating expenses leaving trading profit 
down 265
chilled
➜
  brookes avana sales growth from contract wins in italian meals and christmas puddings
➜
  loyd grossman chilled pizzas launched
➜
  quorn sales up 44
➜
  restructuring of meatfree business under way to improve efficiency
   2009 2008 09 v 08
 £m £m 
 brookes avana 214 203 54
 meatfree 131 129 16
 total sales 345 332 39
 trading profit 25 34 265
the chilled division comprises the retailer branded chilled ready meals and 
cake businesses and the meatfree business incorporating the quorn and 
cauldron brands the businesses are aggregated and reported as the ‘other’ 
reporting segment in the notes to the financial statements 
in the year sales for the chilled division increased 39 
helped by new contracts and new product development in 
brookes avana 
meatfree sales increased 16 cauldron sales fell 203 as 
the market for premium and organic products fell 
quorn sales increased 44 a good result for 
02 quorn burgers on the production line at our site in stokesley 01 quorn expanded its range of lunch and snacking options in 2009 with the 
launch of a new range of products including quorn mini sausage rolls and 
quorn sliced tikka fillets
quorn 
features in over
200 million
meals a year competitive 
advantage 
through 
industry 
leading 
procurement
our central procurement team controls over £15bn 
of spend with specialists covering every category area 
including machinery facilities engineering energy 
packaging ingredients marketing and all corporate 
spend to name but a few they cover over 26000 
ingredient and packaging items and approaching
£500m of indirect spend through over 7000 suppliers 
a key achievement this year has been to reduce the
active number of suppliers by over 16 and grow 
our total spend through our top 250 strategic and 
preferred suppliers to over 78 of our total the team 
have industry leading tools at their disposal including 
an esourcing and contract suite and have this year 
esourced over 23 of their spend 
comprehensive risk management processes are in
place to safeguard business continuity in respect of 
ongoing supply and there is also renewed focus on 
leveraging the innovation resources of our supply base
premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 27
our business business review governance financial statements other information premier foods plc annual report and accounts 2009  stock code pfd 28
financial review
“in order to demonstrate the delivery of the business model 
we will give more disclosure of the way the business operates 
and of the key metrics which we are using to monitor the 
progress of the strategy”
reporting
introduction
we intend to use the same format for reporting each period 
in the future so that progress can be judged
the key changes are
• within our segments we will show separately branded and 
non branded sales we will describe the drivers of growth 
and show sales growth against the respective markets
• we will illustrate the effect of the growth in branded sales 
and of the benefits of scale by describing the development 
of gross margin percentage
• we will show the efficiency of the operations by analysing 
the progression of controllable costs
• up to 2009 the group was incurring a large amount of 
spend for restructuring and investment in the business 
these along with costs of integration were treated as 
exceptional items and excluded from trading profit 
integration is now complete and the level of restructuring is 
now likely to run at a normal level of £10m to £15m a year 
from 2010 we will include the costs of restructuring and 
investment within trading profit
• finally we will also increase our disclosure of debt and 
related financing matters 
on our progress
jim smart chief financial officer
01 one of the canning lines at our factory in long sutton premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 29
our business business review governance financial statements other information
02 we sell over 110 million mr kipling french fancies every year 
trading profit
   2009 2008 09 v 08
 £m £m  
 sales 2661 2604 22
 cost of sales 1852 1806 25
 gross profit 809 798 14
 gross margin  304 306 02pp
 operating expenses 486 489 06
 trading profit 323 309 45
trading profit increased 45 to £323m
trading gross profit
   2009 2008 09 v 08
 £m £m  
 trading gross profit 809 798 14
 trading gross margin  304 306 02pp
 trading gross margin 
 movement bp 
 branded growth product mix
 manufacturing efficiency and 
 procurement  140
 commodity costs pricing 
 and promotions 160
 total change bp 20
trading gross profit is defined as gross profit before exceptional items
trading gross profit increased by 14 to £809m
input costs in some of our largest spend areas were 
tight control and allocation 
of scarce resources 
case study
in february 2009 we opened premier business services pbs 
our new groupwide shared service centre in manchester this 
is the next step in the integration of the many systems and 
processes we have inherited following recent acquisitions   
we have now centralised 70 of the group’s total payroll 
and have improved efficiencies by 35 whilst delivering 
increased accuracy the pbs payroll team were also 
winners of “the payroll team of the year” award at the 
recognised industry annual awards run by pay magazine
within credit management the grocery division has  been 
fully integrated into sap and the team have improved 
collection efficiency by 9
the centralisation of financial operations reporting and 
analysis and accounts payable has been achieved against 
a challenging time frame the centralisation of a number 
of outstanding legacy systems has been achieved and 
this is helping to drive efficiencies whilst also shaping the 
integration of the sap common platform
an agenda of groupwide process improvements and cost 
reductions has been created for implementation in 201011 01 we buy 3000 tonnes of uk bramley apples each year for our mr kipling 
apple pies
02 sales of hartley’s increased 17 in the year helped by low calorie jelly pots 
and new frujies — real fruit pieces in jelly
premier foods plc annual report and accounts 2009  stock code pfd 30
financial review continued
significantly higher in 2009 reflecting the weakness of 
sterling and rises in various commodity markets which were 
particularly severe in 2008 commodities particularly affected 
included beans tomato paste meat glass and tinplate for 
cans some commodity costs began to level out in 2009 
but the group is still facing upward pressures in some 
commodity categories and from weaker sterling 
the group generally expects the effects of input cost 
changes and resulting pricing changes to even out over 
the long term however there can be a delay or stagger 
between input costs changing and pricing in the market 
changing to reflect them this can lead to volatility in results 
within any financial year in 2009 pricing was increased to 
reflect the input costs but the effect of the negative stagger 
together with the general increase in promotional activity in 
the grocery market reduced group gross margin 
in hovis the largest commodity cost is wheat wheat 
prices rose in 2007 and 2008 and then fell in 2009 a 
similar stagger effect happens in hovis as there is a delay 
in customer prices and promotions absorbing the change 
in commodity costs as a consequence 2008 suffered a 
negative effect and 2009 benefited although the benefit 
has been fully reflected in pricing the stagger effect helped 
group gross margin for the year 
in total the combination of input cost changes promotional 
activity and pricing reduced group trading gross margin 
by 160bp
in 2009 the group’s strategy of improving mix by growing 
branded sales of better procurement and of manufacturing 
efficiency combined to add 140bp to group trading gross 
margin 
the net effect of all these changes was a reduction of 20bp in 
group trading gross margin
trading operating expenses
   2009 2008 09 v 08
 £m £m  
 consumer and instore 
 marketing 91 82 110
 distribution 229 227 09
 support functions and 
 corporate costs 166 180 78
 trading operating expenses 486 489 06
trading operating expenses are defined as operating expenses before exceptional 
items amortisation of intangible assets the revaluation of foreign exchange and 
other derivative contracts under ias 39 and pension credits or charges in relation 
to the difference between the expected return on pension assets administration 
costs and interest costs on pension liabilities
the strategy is to grow our branded sales without growing 
operating expenses in the year trading operating expenses 
fell by 06 to £486m
consumer and instore marketing increased by 110 to 
£91m to support the growth in branded sales we expect 
marketing costs to continue to increase as we refresh the 
branded range  premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 31
our business business review governance financial statements other information
distribution costs were up 09 to £229m synergies and 
efficiencies were offset by inflation and the investment in new 
facilities to cater for greater volumes in hovis
 
support functions and corporate costs decreased by 78 to 
£166m pension current service costs reduced from £17m in 
2008 to £12m in 2009 as a result of changes in bond yields 
and inflation assumptions we expect the charge to be around 
£22m in 2010 other costs decreased by £7m helped by 
lower bonus costs
during the year we continued to roll out our new sap system 
over the next few years we intend to complete the transition 
to sap and to simplify processes our aim is to reduce the 
administrative costs over this period
exceptional items
    2009 2008
  £m £m
 restructuring  investment  14 27
 integration  29 73
 impairment of goodwill   — 194
 refinancing fees  17 3
 exceptional items  60 297
in 2009 £60m was categorised as exceptional items 
£14m was spent on restructuring and investment £11m of 
this relates to hovis for improving quality and modernising 
facilities the remainder was incurred in meatfree on 
supply chain restructuring initiatives to address production 
inefficiencies at our chilled facility in methwold
integration costs of £29m were incurred and this now 
completes the projects to integrate the businesses of rhm 
and campbell’s
a further £17m of adviser costs were incurred in connection 
with the refinancing in march 2009
up to 2009 the group was incurring material expense in 
restructuring and investing in the business these items were 
shown as exceptional items and excluded from trading profit 
the bulk of the catchup expense is now complete and the 
amount of restructuring and investment is from 2010 likely to 
be at a normal ongoing level which we would expect to be 
around £10m to £15m per annum this will be included in 
trading profit from 2010 onwards 
for 2010 comparative purposes trading profit for 2009 using 
the new definition was £309m being trading profit of £323m 
less £14m of restructuring and investment costs previously 
categorised as exceptional items 
other financial information
this section gives details of the group’s cash flow and its 
main financial obligations in summary the group’s financial 
position is stable and there is adequate cash flow to service 
the cost of its financial obligations and to reduce net debt 
cash flow
when the group was acquiring businesses cash generated 
by the business was absorbed by the costs of their acquisition 
and investing in their integration and modernisation as 
these costs draw to a close the focus is to improve cash 
generation the cash flow in 2009 still reflects the previous 
phase of integrations 
   2009 2008 09 v 08
 £m £m  
 trading profit 323 309 45
 depreciation  52 51 20
 interest 152 105 448
 tax 1 —
 pension  52 41 268
 regular capital expenditure 83 83
 working capital 29 27 74
 cash flow before 
 nonrecurring items 60 104 423
in the year cash flow before nonrecurring items was £60m 
within this working capital grew £29m it is our intention to 
reduce working capital in 2010 
the combination of lower working capital outflows and lower 
costs of servicing financial obligations will leave sufficient cash 
flow to ensure that headroom is maintained as the banking 
facility reduces by £100m in 2010
   2009 2008 09 v 08
 £m £m  
 cash flow before 
 nonrecurring items 60 104 423
 exceptional items excluding 
 financing fees 52 122 574
 integration capital expenditure 2 78 974
 operating cash flow 6 96
 disposal proceeds 54 26 1077
 dividends — 55
 net equity proceeds 380 —
 financing feesdiscontinued 
 operations and other 
 noncash items 38 23 652
 movement in net debt 402 148
the combination of exceptional items disposals and 
refinancing resulted in a net inflow of £342m leading to a  premier foods plc annual report and accounts 2009  stock code pfd 32
02 ambrosia creamy rice pudding produced at our facility in lifton devon 01 batchelors super noodles produced at our factory in worksop
financial review continued
reduction in net debt of £402m in 2010 there will be a 
further cash outflow of around £9m relating to creditors and 
provisions for exceptional items which were provided 
in 2009
financing
   2009 2008 09 v 08
 £m £m 
 gross debt 1383 1777 222
 deferred refinancing fees 18 10 800
 net debt — year end 1365 1767 228
 gross debt — average 1617 1877 139
 ebitda 375 360 42
 net debtebitda 36✕ 49✕ 13✕
in march 2009 the group raised a gross £404m of additional 
equity and renegotiated its banking facility this facility is in 
place until 2013 and is secured by fixed and floating charges 
over all group assets total fees for the refinancing were 
£70m and comprised three elements firstly the equity raising 
incurred adviser and underwriting fees of £24m which were 
deducted from share premium secondly there were fees of 
£26m payable to banks for the renegotiation of the banking 
facilities of which £3m was written off in the year and the 
remaining £23m is being amortised over the life of the facility 
thirdly there was a further £20m of adviser fees related to the 
refinancing which have been charged to profit and treated as 
an exceptional item of these adviser fees £3m were incurred 
in 2008 and £17m in 2009
the refinancing together with a cash inflow from operations 
has reduced the group’s net borrowings to £1365m at the 
end of 2009 
the key indicator of success in managing the group’s 
finances is the average gross borrowings as this is the driver 
of the interest charge working capital and borrowings are 
seasonal so are better judged by averages average gross 
borrowings for 2009 adjusting for the period before the 
equity was raised were £1561m it is our intention not only 
to generate sufficient free cash each year to repay at least 
£100m but also to reduce the average net debt
financial instruments
   2009 2008 09 v 08
 £m £m 
 nominal value of derivative 
 interest rate related financial 
 instruments 1350 1650 182
 mark to market on interest rate 
 derivative financial instruments  199 237 160
the group has a number of derivative contracts which have 
the effect of swapping floating interest payments on the bank 
debt which costs libor plus 3 into fixed rate obligations 
the nominal value of these contracts at the end of 2009 was 
£1350m versus gross borrowings of £1383m the profile of 
the derivative portfolio is however different from the profile 
of the bank debt and is not an exact hedge and hedge 
accounting is not applied 
the mark to market is volatile depending on interest rate 
expectations in the year the negative mark to market value 
of the financial instruments fell by £38m as payments made 
of £62m were partially offset by the effect of a decrease in the 
short end of the interest rate yield curve 
71
million
batchelors
cup a soups
consumed
annually premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 33
our business business review governance financial statements other information
interest
   2009 2008 09 v 08
 £m £m 
 net debt interest 78 137
 securitisation interest  2 6
 swap contract interest  62 25
 amortisation and deferred fees 13 8
 net regular interest cost 155 126 230
 ebitda 375 360 42
 ebitdainterest 24✕ 29✕ 05✕
net regular interest cost increased to £155m on a pro 
forma basis assuming the refinancing had been in place at 
1 january 2009 the interest cost would have been £153m 
the debt level and interest cost is manageable with interest 
costs covered 24 times by ebitda 
earnings per share
   2009 2008 09 v 08
 pence pence 
 basic — continuing 
 operations 19 413
 adjusted — continuing 
 operations 58 144 597
 adjusted — pro forma 47
03 sales of bisto increased 21 to £96m in 2009
basic earnings per share on a continuing basis were 19 
pence versus a loss of 413 pence in 2008 adjusted earnings 
per share were 58 pence compared with 144 pence in 2008 
the earnings per share on a pro forma basis for 2009 were 
47 pence this uses the 2010 definition of trading profit 
and assumes that the refinancing and issue of shares were 
completed on 31 december 2008 the pro forma figure is 
provided to form the base for comparison in 2010
pensions
as part of its refinancing programme announced in march 
2009 the group has agreed with the pension fund trustees a 
schedule of payments to reduce the deficit the schedule of 
payments is agreed until 2014 over this period the group will 
make a total contribution of around £200m towards reducing 
the deficit total cash paid to the pension funds including 
deficit funding was £65m in 2009 and £61m in 2008 at the 
end of 2009 the deficit was calculated to be £429m on an 
ias 19 basis which is equivalent to £310m net of deferred tax 
the group’s investment and liability management strategy 
is to reduce risk and hence volatility and the group is in 
discussion with the trustees about the appropriate balance of 
risk and return and hence the appropriate future investment 
strategy for the funds  01 in march 2010 we launched a major tv ad campaign featuring mrs kipling 
and a new range of individually wrapped cakes — oatibakes
02 we employ more than 16000 people and operate from over 60 sites across 
the uk and ireland
premier foods plc annual report and accounts 2009  stock code pfd 34
financial review continued
the size of the reported deficit will continue to be volatile 
based on movements in bond yields and retail price inflation 
each 01 decrease or increase in bond yields would 
increase or decrease the deficit by £52m each 01 increase 
or decrease in the assumed inflation rate would increase 
or decrease the deficit by £25m if the group’s assumption 
on the mortality of its members was amended to assume 
a change of one year total liabilities would change by 
approximately 36
the above combination of movements in bond yield discount 
rate and inflation rates also caused the current service cost 
charged to profit to fall from £17m in 2008 to £12m in 2009 
the rates as at 31 december 2009 mean that it will increase 
to around £22m in 2010 
jim smart
chief financial officer
9 march 2010
pensions
    31 dec  31 dec
  2009 2008
  £m £m
 liabilities  2959 2540
 discount rate   58 63
 inflation rate  35 28
 assets
 equities  599 536
 bonds  395 301
 property  166 192
 absolute return and swaps  509 680
 cash  other  861 819
 total assets  2530 2528
 gross deficit ias 19  429 12
 deferred tax  119 1
 net deficit ias 19  310 11
the group’s pension schemes have aggregate liabilities of 
£2959m and assets of £2530m leaving a gross deficit of 
£429m on an ias 19 basis the deficit has increased from 
£12m in 2008 as a result of a fall in the discount rate used 
which is based on the aa bond yield from 63 to 58 
and an increase in the inflation rate assumption from 28 to 
35 as a consequence the real interest rate assumed fell 
from 35 to 23 premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 35
our business business review governance financial statements other information
lowest cost 
supply chain
ashford dry food manufacturing facility
2009 saw the first year of full production at ashford 
following a major increase in manufacturing scale at 
the site as part of the group’s grocery supply chain 
restructuring following the acquisitions of campbell’s 
and rhm 
the restructuring at ashford has created a major dry food 
manufacturing facility the project involved the complete 
refurbishment of a 12500 m
2
 building over three floors 
and the transfer of paxo stuffing from wythenshaw 
bisto powder from middlewich soups and curry from 
thurles in ireland and mcdougalls flour based mixes and 
foodservice products from bristol and reading sites
in terms of scale the project involved the recruitment 
of 284 permanent and agency staff the transfer of 
14 production lines and five process mixers and the 
purchase of one new production line and process mixer 
this led to an increase in dry food production at ashford 
of over 240 — from 14000 tonnes per year from 125 
products to 48000 tonnes from 450 products premier foods plc annual report and accounts 2009  stock code pfd 36
risk management and risk factors
effective management of risk is critical to achieving the group’s 
strategic objectives protecting our people and reputation and 
creating sustainable shareholder value
risk management
risk management at premier foods
we recognise at premier foods that effective risk 
management is an integral part of the overall achievement 
of the company’s strategic objectives we have established 
a governance structure that is intended to support the early 
identification and mitigation of key business risks and this 
has been strengthened over the course of 2009 as set out 
below
our risk management process comprises three main 
elements
• a formal risk structure underpinned by effective policies
• bottom up risk reviews
• top down risk reviews
an overview of the risk management process is provided
as follows
➜
➜
plc board
business operations
group functions and divisional executives
policy
steering
group
risk
review
group
group
executive
audit and 
finance 
committees
embed and monitor
• divisional and functional risk registers
• internal control self assessment
• policies and procedures
• organisational design
• project governance
• assurance
mitigate
and manage
• risk action plans
• performance review
• governance framework
identify and
assess
• biannual risk review
• board oversight
• risk ownership
• rrg process premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 37
our business business review governance financial statements other information
the board has ultimate responsibility for ensuring that 
business risks are effectively managed the board has 
considered and approved the risk management policy and risk 
appetite of the company and has delegated the regular review 
of the risk management process to the audit committee to 
ensure compliance with the requirements of the 2005 turnbull 
guidance on internal control and risk management the audit 
committee also receives regular reports from the internal 
and external auditors and monitors progress against agreed 
action plans arising from control reviews it also reviews the 
results of the internal control self assessment process which 
is conducted annually across the business details of this 
process are included in the section on corporate governance
during 2009 a new finance committee was established 
under the chairmanship of david beever nonexecutive 
director the committee includes as members the company 
chairman and two further nonexecutive directors ian 
mchoul and charles miller smith and in addition the chief 
executive chief financial officer and group treasurer and 
has as part of its terms of reference the consideration of 
financial and financing risks further details of the board 
and its committees are included in the section on corporate 
governance 
a policy steering group has been established under the 
chairmanship of suzanne wise general counsel  company 
secretary the group which meets quarterly and includes 
as members the group procurement director director of 
technical and head of risk and corporate responsibility 
considers the effective implementation of corporate policies 
taking account of changes in regulation and other business 
risks daytoday risk management is the responsibility of 
business management as part of their everyday business 
processes and is encompassed within the company’s policies 
and procedures to ensure that it is fully embedded there is 
a structured business review process that operates across 
all divisions and this along with the corporate governance 
framework as defined by the board and committee structure 
underpins the ongoing management of risk 
each division and group function is also required to maintain 
a risk register which includes the key risks that have been 
identified their potential impact and probability of occurrence 
the risk owner action and action owner along with timescales 
for effective mitigation every six months the risk register is 
submitted to the risk review group for review
the risk review group is chaired by suzanne wise and 
meets quarterly the group which includes the chief financial 
officer group operations director group procurement 
director chief operating officer hovis and chilled managing 
director grocery division group treasurer group head of 
operational excellence and head of risk and corporate 
responsibility performs the following activities
• reviewing the effectiveness of the risk management 
process and making recommendations to the audit 
committee as appropriate
• discussing emerging risks and their potential impact on the 
company for onward review with the group executive
• receiving presentations from management and providing 
challenge in relation to risk management actions and their 
effective implementation
every six months the group executive reviews the corporate 
risk register and assesses progress on the implementation 
of mitigation strategies along with consideration of new and 
emerging risks
the results of each group executive risk review are presented 
to the board for consideration additionally during 2009 
a separate risk session was held with the nonexecutive 
directors without the presence of management the purpose 
of this session was to provide additional challenge to the 
internal risk process by considering risk in its widest context 
in particular taking account of the following
• the world in which we operate
• our marketplace
• premier specific risks
the results of the discussion were presented by the 
chairman to the group executive and formed part of the 
overall process for reviewing the corporate risk register at the 
end of the financial year following the success of this process 
it is intended that it will be adopted on an annual basis going 
forward premier foods plc annual report and accounts 2009  stock code pfd 38
risk management and risk factors continued
through its normal business operations premier is exposed to a number of risks factors and market trends which 
could impact on the results of the group these may be common to the food industry generally or relate specifically 
to the company the key factors identified by the board are highlighted below together with the relevant management 
responses which are designed where possible to help mitigate the potential impact on the business
risk factors
risk area and potential impact
industry risks and trends 
raw materials
the group purchases a significant amount of raw materials 
each year in recent years there has been a significant 
increase in the cost of raw materials and other input costs 
such as utilities any inability or delay in passing on increases 
in raw material costs to our customers or to source raw 
materials of an acceptable type or quality could adversely 
affect the results of the group
competition
there is strong competition between manufacturers in the 
grocery business the market is served by a number of 
wellestablished companies that operate on both a national 
and international basis within single or multiple product 
categories we face competition at a category level from these 
companies on both branded and unbranded products our 
ability to compete effectively requires us to be successful in 
the sales and marketing of our existing products new product 
development and innovation in addition to operating efficient 
and effective manufacturing and procurement processes
economy
our business could be adversely affected by general 
business conditions and a worsening of the economy both 
generally and in the uk and ireland factors such as taxation 
interest rates inflation the availability and cost of credit and 
the liquidity of the global financial markets could significantly 
affect the activity level of customers a continued economic 
downturn may lead to a decline in the volume of sales of 
premium brands and may increase promotional pressure 
in addition it may also lead to an increase in industrial action 
within the food industry and more generally
customers
our ability to compete in the retail food industry and the 
results of our operations could be adversely affected if the 
concentration and buying power of grocery retailers increases 
the strength of the major multiple retailers’ bargaining 
position gives them significant leverage over their suppliers in 
dictating pricing product specification and the level of supplier 
participation in promotional campaigns and offers
management response
premier has a centralised procurement function with a global 
sourcing strategy we are a significant purchaser of raw 
materials in the uk which assists us in negotiating better 
terms and lower per unit costs we are able to source goods 
from around the world and develop strong relationships 
with our key suppliers to date we have a strong record of 
successfully recovering input cost increases
premier is the largest food producer in the uk our business 
model is to use this scale to drive competitive advantage 
our focus on the uk and the range of categories we operate 
in also give us a deep insight into consumer trends in food 
our scale allows us to procure more effectively and the 
consolidation of our asset base helps to drive efficiency
whilst general economic conditions are outside of the 
company’s control we believe that our portfolio of staple 
food products and popular brands should continue to prove 
resilient in the current difficult economic environment premier 
has a good track record of industrial relations and continues 
to work with employees and their representatives to mitigate 
the risk of any industrial action
our size and scale coupled with our focus on the uk enable 
us to work with customers to provide consumers with more 
choice and convenience and to coordinate activity to drive 
volume premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 39
our business business review governance financial statements other information
risk area and potential impact
industry risks and trends 
consumer preferences
there are a number of trends in consumer preferences which 
impact on premier and the industry as a whole these include 
amongst others dietary concerns and fashions and changes 
in preference for fresh and chilled foods ready prepared foods 
and organic foods furthermore concerns as to the nutritional 
value of certain foods increasingly results in food manufacturers 
being encouraged to produce products with reduced levels 
of salt sugar and fat and to eliminate transfatty acids from 
the ingredients used these trends may reduce demand for 
certain of our products and providing or developing modified or 
alternative products may increase our costs
regulation
as a manufacturer of products intended for human 
consumption we are subject to extensive uk and eu 
legislation and regulation in respect to product composition 
manufacturing storage handling packaging labelling 
advertising and the safety of our products the health safety 
and working conditions of employees pensions and our 
competitive and marketplace conduct failure to comply with 
regulations or the introduction of new regulatory requirements 
may affect our business operations and have an adverse 
effect on our results
operational risks and trends
suppliers
we are dependent on the provision of products from key 
suppliers a loss of these suppliers could cause shortterm 
disruption to the operational ability of the group
seasonality
consumer demand for convenience foods tends to be higher 
in colder months of the year sales of certain of our products 
may therefore be affected by unseasonable weather 
conditions also certain of our products see increased sales 
during the prechristmas period and this has an impact on 
working capital as production is higher and stock levels build 
in the runup to this period 
management response
we recognise that consumers are at the heart of what we do 
we have a consumer insight team whose role is to monitor 
and understand the current trends within the categories 
that we operate they also help identify opportunities for 
our brands to expand into new categories or by making our 
products more relevant to more eating occasions
in addition we have a crossfunctional steering committee 
responsible for monitoring and responding to nutrition and 
ingredient issues and reviewing our products against relevant 
external benchmarks
premier is committed to complying with all its statutory 
and regulatory obligations and to managing its business in 
a socially responsible manner food quality and safety is 
embedded in the quality management system we operate 
at each site and is the subject of independent monitoring 
performance in the areas of food safety and health  safety 
are closely monitored and reported to and reviewed by the 
group executive and board on a regular basis
our procurement team reviews and monitors suppliers by 
category as part of its risk assessment process risk can 
be measured across a number of factors including the total 
size and availability of the supply whether we are dependent 
upon a sole supplier whether the supplier is in financial 
difficulties where necessary contingency plans are put in 
place and the situation monitored
management plans for changes in seasonal demand for its 
products and where possible builds contingency around 
changes in seasonality  premier foods plc annual report and accounts 2009  stock code pfd 40
risk management and risk factors continued
risk area and potential impact
operational risks and trends
licences and intellectual property
whilst the majority of the intellectual property used in our 
business is owned we have entered into medium to long
term licensing arrangements for the use of certain brands 
these agreements and licences under which we produce 
certain of our branded products will expire and may not be 
renewable on terms acceptable to us or at all the failure to 
renew one or more of our licences could have an adverse 
effect on the results of our operations 
brand management
we are dependent on the successful management of our 
key brands most of our key brands have been marketed 
for several decades our marketing teams must continue to 
support our brands through programmes of investment in new 
product development product repackaging brand relaunches 
and marketing efforts in order to continue to generate revenues 
and maintain or increase market share we must also anticipate 
changes in consumer preferences and develop new products 
in response to these changes if we are not successful in our 
brand management efforts the results of our operations and 
our profitability could be materially adversely affected
damage to sites and it systems
certain of our manufacturing sites are at a statistical risk of 
suffering damage from floods or fire given the flammable 
nature of flour and the frying and baking activities carried 
out at several such sites we are also exposed to losses 
from inadequate or failed internal information technology 
processes and systems 
product quality and safety
our products are subject to a number of supply and 
manufacturing processes a failure to control the quality of 
these processes or the occurrence of some external event 
eg third party contamination may result in remedial action 
such as product recalls which could result in damage to our 
brands’ reputation
management response
premier develops longterm and lasting relationships with the 
owners of licensed brands we also recognise that our own 
intellectual property is one of our most important assets and 
in order to maintain and increase the value of these assets 
we actively manage our brand portfolio we ensure that our 
trade marks are registered in the jurisdictions where our 
products are marketed
premier has a strong track record of brand rejuvenation and 
innovation we believe that branded sales growth can be 
achieved through product innovation and quality though 
stretching our brands into new categories and by increasing 
the frequency of purchase by making our products more 
relevant to more eating occasions
fire and flood risks are monitored closely under health  
safety and reported to and reviewed by the group executive 
and board on a regular basis business continuity and 
disaster recovery plans are in place across the group we 
also have in place a group insurance policy which covers
all sites
the company takes product quality very seriously and has 
rigorous quality assurance processes in place to minimise 
any potential risk premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 41
our business business review governance financial statements other information
risk area and potential impact
financial risks and trends
leverage and liquidity
our substantial leverage could adversely affect our financial
wellbeing there is a risk that a greater level of cash flow than
anticipated may be required to service our debt for example
due to a rise in interest rates or that our debt level may limit
our ability to react to changing market conditions there is
a risk that in certain circumstances we may be unable to
replace existing facilities when they come up for renewal
interest rates swaps
as set out above we enter into interest rate swaps there is a
risk that we will not be able to replace the interest rate swaps
and other financial derivatives on favourable terms when they
expire or at all the terms and conditions of some of our swaps
result in a rise in the group’ s interest cost as interest rates fall
in addition we have a number of long dated interest rate swaps
outstanding which can be terminated at the option of our
counterparties in the event that such a swap is terminated we
could be liable to make a payment to the counterparty based
on the mark to market value of the swap at such time any such
payment may be a material cost and have a material adverse
effect on our liquidity and the results of our operations
currency exchange fluctuations 
we source raw materials from countries around the world
and export our products to various countries therefore our
financial position and the results of our operations are subject
to currency transaction risk primarily against the us dollar
euro and swedish krona we generate some of our profits
in nonsterling currencies and have assets in nonsterling
jurisdictions principally the euro
pension schemes
we have defined benefit pension plans that are currently
in deficit on an actuarial basis valuations of all defined 
benefit plans are dependent upon market conditions and the 
actuarial methods and assumptions including assumptions 
as to mortality and we may be required to pay increased 
pension contributions which may have an adverse effect on 
our financial condition
management response
the board has now completed its review of the group’s
capital structure and announced in march 2009 an 
equity issue which we believe combined with amended 
banking facilities and an agreed schedule of pension 
deficit contributions has enabled us to put in place a more
appropriate capital structure for the group and in turn 
provide a solid platform for future development
the board and finance committee closely monitors the
group’s level of debt and liquidity to ensure that it meets its
covenant requirements and also has sufficient working capital
we seek to mitigate the effect of movements in interest rates
by entering into interest rate swaps that reduce our level of 
exposure to floating rates in relation to the debt portfolio of 
the group
the group’s policy is to have interest rate hedging in place 
for the majority of its borrowing interest rate exposure is 
actively monitored by the board and the finance committee
exchange rate exposure is reviewed by the board and the
finance committee the translation exposure resulting from
eurodenominated profits and overseas net assets is hedged
we review the commercial position of the business and
selectively enter into forward currency contracts to hedge
against our exposure to foreign currency exchange rate
fluctuations in the purchase of raw materials and in our export
business this hedging helps to reduce our exposure to short
term volatility in exchange rates
the board and the finance committee regularly reviews 
the value of assets and liabilities under the group’s pension 
schemes as well as the potential impact of changes in 
actuarial assumptions premier foods plc annual report and accounts 2009  stock code pfd 42
people at premier
“the success that we have experienced in recent years is
in no small way attributable to the people who work within
our business and their ability to deal with significant change 
whilst at the same time delivering against challenging 
commercial objectives”
people
at premier foods
premier foods is one of the largest employers in the uk food 
industry and as such we understand the need to treat our 
employees fairly with respect and give them opportunities to 
grow and develop 
since the acquisitions of campbell’s and rhm we have 
initiated a number of significant programmes to drive the 
development of our people practices  
leading premier foods to a great future
helping our people to deliver our plans and objectives is a 
major responsibility for all our leaders across the business 
therefore to support our leaders we have developed the 
“premier way” which highlights what we believe leadership is 
about at premier foods
we believe leadership is about
• being passionate
• delivering on our commitments and accountabilities
• empowering and developing our people
• doing the right thing
• focusing on our customers and consumers
• striving to be the best
in 2010 we will embed the “premier way” framework 
throughout the business this will have many benefits and will 
ultimately support the delivery of our vision and strategy
our rewards and benefits
premier foods prides itself on being a fair and equitable 
employer all of our people are entitled to join the company 
pension scheme benefit from company sick pay 
arrangements and good annual leave entitlement however 
in addition there are benefits such as childcare vouchers 
an employee assistance programme and an employee 
sharesave scheme which allows employees to save over 
a three year period to purchase shares in the company at 
a discounted rate around 30 of our employees take the 
opportunity to participate in our sharesave scheme  
development and training 
we are committed to providing high quality training and 
development initiatives to ensure we are equipped to deliver 
excellence in all we do we provide training and development 
solutions through which all employees can maximise the 
contribution they can make to the development of the business 
and the achievement of personal goals 
career progression
premier actively encourages development from within our new 
talent identification and succession planning process is now 
becoming embedded across the business and our intention 
is to ensure we develop our internal pool of talent so we can 
resource roles internally in the majority of cases
however to anticipate future requirements we will look to bring 
the right people into the business to satisfy our anticipated 
growth as an example in 2009 we launched our first finance 
graduate programme aimed at giving us a pipeline of talented 
finance professionals for the future premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 43
our business business review governance financial statements other information
employee assistance programme
in october 2009 we launched a brand new service for all our 
employees the employee assistance programme eap is 
a free confidential telephone and online counselling service 
for all employees which is available 24 hours a day 7 days a 
week across the entire year eap provides life coaching and 
personal development advice counsel on issues such as debt 
management tax matters and health issues 
premier foods sees this as a valuable free service we want to 
support our employees and recognise that expert advice at a 
difficult time can make all the difference 
occupational health  wellbeing
occupational health  wellbeing provides professional 
specialist health advice to employees on the following issues
• the effects of work on health and of health on work
• ways to improve physical and psychological
wellbeing within the workplace 
• strategies to prevent illness and injury arising from
work activity
premier foods encourages employees to discuss any problems 
they are having at work with their line manager our inhouse 
occupational health  wellbeing advisers will put forward 
proposals to management if they feel that any adjustments to 
work need to be considered 
employee recognition awards
in 2008 we launched our first ever “employee recognition 
awards” which is aimed at recognising and rewarding 
employees who have “gone the extra mile” 
the awards proved that we have no shortage of people and 
teams with skill dedication and creativity we received over 
100 entries from across the business and the winners were 
announced by robert schofield at an awards ceremony in 
june 2009
the grand prix award went to the hovis team for their 
successful relaunch of the hovis brand with a campaign that 
included the “go on lad” tv advert as well as new recipes 
new pack design new press tv and online advertising a 
new consumer and trade pr campaign new truck graphics 
and communication with customers and employees — all 
pulled off in just four months
the individual award went to steve finn plant manager at 
belasis whose process innovation led to a 25 increase 
in productivity from the belasis fermenters which provide 
mycoprotein paste the main ingredient in all quorn products
the employee recognition awards were run again in 2009 
and winners will be announced later this year
01 mr kipling cake factory carlton 02 hovis bread bakery erith premier foods plc annual report and accounts 2009  stock code pfd 44
corporate social responsibility
energy
reduction of energy consumption kwhtonne
2009 target of 5 exceeded
52
carbon
reduction of carbon co
2
e emissions kgtonne
2009 target of 5 exceeded
77
waste
reduction of waste to landfill kgtonne
2009 target of 20 exceeded
377
packaging
reduction in packaging weight kgtonne
2009 target of 2 achieved
20
transport
reduction of delivery mileage milestonne
2009 target of 5 part achieved
35
water
reduction of water usage m
3
tonne
2009 target of 3 exceeded
61
note all targets were against a 2008 baseline and were relative to tonnes of product manufactured in 2009 premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 45
our business business review governance financial statements other information
our
responsibilities
doing the right thing   
we place a high value on the labour ingredients and natural 
resources used in the manufacture of our products we believe 
that practising good environmental and social stewardship and 
running an efficient and successful business are complementary
empowered people in a
capable organisation
case study
food manufacturing excellence awards
in november 2009 premier received two major awards 
at the food manufacturing excellence awards which 
recognises the best food and drink manufacturers and 
their employees
premier was named as the winner of the judges special 
award for the successful completion of the group’s 
operational restructuring following the acquisitions of 
campbell’s and rhm the project which demonstrated 
excellent cross functional communication and co
operation saw the group’s operating footprint reduced 
from 21 sites to 12 this resulted in the investment in 5 
core manufacturing sites and the closure of 9 factories 
all achieved in 12 months  
in addition martyna zelazek a senior operator at our 
methwold factory won the apprenticeships award 
since completing her apprenticeship last year martyna 
has been promoted to team leader and now runs a 
production line of 28 people producing quorn and 
cauldron products 
in 2009 we set out six key environmental targets set out in 
the table opposite which are aligned to our aim of reducing 
waste and increasing efficiency during the year we made 
excellent progress across the range of targets with five of the 
six targets either achieved or exceeded
we are proud of our support for uk farmers particularly within 
the arable meat and dairy sectors this commitment has 
been further strengthened by our announcement that we will 
source 100 british wheat across the entire hovis range 
in 2010
other achievements of note is our move to sourcing 100 
certified sustainable palm oil through the greenpalm 
certification scheme and the £205000 raised by staff in 2009 
for our corporate charity “cancer research uk”
we have set out the four core areas that we focus on as part 
of our corporate social responsibility csr initiatives 
• marketplace
• environment
• workplace
• community
an overview of these four areas is set out in this report 
together with our key aims and objectives for 2010 
in addition for the first time we have produced a dedicated 
csr report copies of this report and further details of the 
progress we are making in this important area can be found 
on our website wwwpremierfoodscouk premier foods plc annual report and accounts 2009  stock code pfd 46
corporate social responsibility continued
our overall marketplace objective is to balance our
responsiveness to consumer demands with a
responsible and ethical approach to sourcing 
underpinning our approach are the many cases of 
strong partnerships we have formed with our uk food 
producers combined with our focus on the health and 
nutrition agenda
our aims
we believe that food must be affordable to the consumer 
whilst enabling our food producers to generate sufficient 
profits to enable investment and productivity improvements 
to drive sustainable and secure food sourcing product 
labelling is also important because it allows consumers to 
make informed choices our responsible marketing initiatives 
are compliant with both mandatory and voluntary codes of 
practice as set out by ofcom and bcap including rules for 
responsible advertising to children
link to performance
our investment in our sourcing arrangements enables us to 
manage our cost base this ensures quality products that 
our consumers continue to love and that continue to support 
our proud iconic brand heritage informed labelling protocols 
and responsible marketing enables our consumers to make 
good choices that attract them to our wellknown and well
loved brands
leadership
our commitment to sourcing 100 wheat from uk wheat 
fields for use in our hovis range directly contributes an 
additional £18m back into the uk economy
we are actively involved in many industry groups and 
working bodies including the food and drink federation 
the institute of grocery distribution as well as research 
organizations such as the leatherhead food research and 
campden bri
premier foods believes that labelling should clearly 
communicate the nutritional content of products to allow for 
informed decisions by consumers to encourage balanced diets 
wherever feasible premier foods’ brands voluntarily provide 
nutrition labelling on energy protein carbohydrate sugars fat 
saturated fat fibre and sodium in a simple tabular format
additionally all premier foods’ brands excluding foodservice 
are working towards displaying on the front of pack the 
percentage of the guideline daily amounts gdas a serving 
provides for energy sugar fat saturated fat and salt equivalent
our key aims our key deliverables in 2010 ➜
learn more online at
wwwpremierfoodscouk
health and nutrition
uk agriculture
to meet or exceed the voluntary food standards agency’s fsa 
“2010 salt reduction target”
to source 100 british wheat across the entire hovis range in 2010
to seek to increase gda’s on front of pack to 75 of our branded 
products
to review 100 of our branded products against our internal health 
and nutrition guidelines  
marketplace premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 47
our business business review governance financial statements other information
our key aims our key deliverables in 2010 ➜
environment
our environmental objectives orchestrated through our 
five star environmental award programme fseap focus 
on a number of areas underpinned by the climate change 
agenda and include energy use waste management 
water use and conservation transport management 
packaging reduction and involvement in a consumer 
education campaign to reduce food waste
our aims
the fseap aims to raise the profile of environmental 
management within the group and improve environmental 
performance throughout the group as part of our desire to 
promote good business practice
link to performance
tangible benefits of the programme include cost and risk 
reduction the identification and dissemination of best practice 
active engagement of local managers and employees and 
the fostering of positive relationships with local communities 
overall our award programme assists in enhancing our  
corporate and brand reputation and forms an integral element 
of successfully managing our brand portfolio 
premier foods were delighted to be presented with an award 
at the 2009 food and drinks federation fdf community 
partnership awards ceremony in the “environment business 
initiatives” category in recognition of our approach to 
environmental management across the group
leadership
our soil doctors work extensively with our farmers to advise on 
how to get the best from their land a resource that farmers find 
invaluable and more costeffective than doing it on their own
the water recycling plant installed at our long sutton factory 
saved over 175 million litres of water equivalent to 19 of 
water supplied during 2009
as one of the original signatories to the fdf’s transport 
efficient commitment we have been active in achieving “fewer 
and friendlier” food transport miles helping to contribute to an 
absolute target for the food chain to reduce its environmental 
and social impacts by 20 by 2012 relative to 2002
did you know 
an estimated 83 million tonnes of household food waste is 
produced each year within the uk most of which could have 
been eaten to find out more about what we are doing to 
help consumers make a difference visit our “love food hate 
waste” campaign featured on our website
the five star environmental 
award programme
compatible with iso 14001 our fseap was developed 
internally to address the specific needs of our business 
it provides the framework through which environmental 
performance improvement is encouraged delivered 
and managed within premier foods
energy consumption and efficiency
carbon co
2
e emissions 
transport and logistics
water consumption and efficiency
waste management and recycling
to reduce energy consumption by 3 from a 2009 baseline year
to reduce carbon co
2
e emissions by 3 from a 2009 baseline year
to reduce delivery miles travelled by 5 from a 2009 baseline year  
to reduce water usage in production by 25 from a 2009 
baseline year
to reduce waste sent to landfill by 20 from a 2009 baseline year premier foods plc annual report and accounts 2009  stock code pfd 48
workplace
premier foods is one of the largest employers in the uk 
food industry as a major employer we understand the 
need to treat all our employees fairly and with respect 
ensuring they all have the opportunity to grow and 
develop
our aims
premier foods is all about iconic british brands but we are 
also about great people who are given great opportunities to 
shine 
link to performance
premier foods is on an exciting journey and we want to be 
the best employer in uk food manufacturing we have great 
plans for the business and we recognise that our people are 
the key to our ability to successfully deliver on those plans 
to support our leaders we have developed the “premier 
way” which highlights what we believe leadership is about at 
premier foods the “premier way” will have many benefits 
and will ultimately support the delivery of our vision and 
strategy
leadership
over the past twelve months 
we have rolled out a fullscale 
occupational health programme 
that is available to all our 
employees to help meet their 
ongoing and future health 
needs
in 2010 our dedicated 
occupational health 
practitioners will 
carry out the two key 
groupwide health 
promotion activities 
“slipslopslap” will 
encourage employees 
to “slip on a shirt slop on sunscreen and slap on a hat” 
when they go out into the sun in order to protect themselves 
against an increased risk of skin cancer 
a second promotion will raise awareness to alcohol which will 
offer advice on the health benefits and risks associated with 
drinking alcohol 
health  safety
our workplace health and safety corporate plan sets out a 
range of strategic initiatives and leading and lagging indicators 
which drive the ongoing improvement in our health and 
safety performance in 2009 we achieved a 35 year on year 
improvement in a riddor rate of 026 reportable accidents 
per 100000 hours worked
other plans in 2010 include
• to carry out occupational health training workshops for our 
hr department
• to undertake occupational health training for our factory 
supervisors and line managers
• to deliver management guidance on the use of the new uk 
government “fit note” scheme
our key aims our key deliverables in 2010 ➜
corporate social responsibility continued
health and safety
our people
occupational health
to achieve a group riddor rate of 023 of reportable accidents 
per 100000 hours worked in 2010
to embed the “premier way” leadership framework throughout
the business
to embed the “talent identification and succession planning process”
to complete a groupwide occupational health surveillance 
programme
to undertake groupwide workplace health screening programme  premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 49
our business business review governance financial statements other information
our aims
our community and charitable efforts share common traits 
including celebrating all that is good about being “british” 
capable of “national reach” and focused on “service provision” 
— these are key factors that we look for when identifying which 
community and charitable initiatives to support
link to performance
charitable and community involvement provides premier 
foods with the opportunity to give something back and say 
thank you for the contribution that local communities make 
to the group’s success whether as our consumers our 
producers our workforce or our neighbours
leadership
at the october meeting of the csr steering group chaired by 
robert schofield our chief executive it was decided to extend 
our partnership with cruk up until the end of 2010 and to 
increase our fundraising target accordingly to £300000
whilst our employees have really got behind fundraising for 
our corporate charity the question we asked was “how do we 
our key aims our key deliverables in 2010 ➜
community
encourage and motivate employees to continue their fundraising 
activities in order to meet this new and challenging target”
it was agreed that the senior management team would rise 
to a “directors challenge” and lead from the front in order to 
keep up the momentum and show their personal support and 
commitment for our corporate charity
did you know 
we not only provide essential store cupboard heroes for 
our consumers we also help develop and support local 
community heroes during the year a community involvement 
project was undertaken by a team of 60 employees from 
premier foods head office based in st albans the jubilee 
community centre project provides a venue for local residents 
to hold events take part in activities and receive advice and 
guidance from local community groups
fundraising highlights from 2009
all premier foods sites up and down the uk have been 
getting involved and  raising vital funds for our corporate 
charity “cancer research uk” managing to raise an amazing 
£194000 in 2009 
fund raising events included brookes avana in wales 
raised £2500 through “wear it pink” activities branston in 
lincolnshire raised £370 with a factory “fun day” ambrosia 
in devon held a golf tournament which raised £645 and 
corporate staff in st albans raised over £1000 with a “get 
pampered” event
finally the ladies at premier foods donned their trainers 
and took part in numerous “race for life” events raising an 
astonishing £15000 for cancer research uk our people are 
truly amazing
charitable
giving
in 2009 our employees ran 
walked cycled and even 
“paddled their way” to raise 
£194000 in support of our 
corporate charity “cancer 
research uk” cruk
charitable giving
community involvement
food donations
community involvement
to raise £300k for our corporate partner “cancer research uk” by the 
time our partnership comes to an end in december 2010
to support the royal british legion’s 2010 “poppy appeal” at all
our sites
to ensure that a minimum of 20 of our manufacturing distribution 
and head office sites complete a local community project in 2010   
to support the redistribution of “aged stock” to those in social need 
within the uk and abroad in 2010  premier foods plc annual report and accounts 2009  stock code pfd 50
5 6 7
senior management
2 3
4 5 6
7 8 9
1 2 3 4
board of directors
1 premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 51
our business business review governance financial statements other information
1 brian carlton
1
 aged 53
group hr director
brian carlton joined the business 
in 1994 as head of personnel for 
the canned foods division his 
responsibilities have since been 
extended to embrace all hr activities 
across the group he was appointed 
to the group executive in october 
2006 prior to joining premier mr 
carlton held hr and operational 
roles in chrysler uk k shoes metal 
box and smurﬁ t packaging
2 will carter
1
 aged 53
managing director grocery division
will carter joined premier foods and 
the group executive in may 2008 
and has responsibility for the ambient 
grocery business including cake 
cooking sauces desserts pickles 
and beverages he was previously 
chief executive of whitworths and 
prior to that managing director 
of kpmcvities mr carter held a 
number of marketing and general 
management roles at united biscuits
3 mark hughes
1
 aged 49
group procurement director
mark hughes joined premier foods 
and the group executive in 2007 
following the acquisition of rhm 
mr hughes joined rhm in 2003 as 
divisional services director bread 
bakeries and became a member of 
the bread bakeries division executive 
in 2004 mr hughes was previously 
director at archer daniels midland 
milling uk and has held a number 
of senior positions with associated 
british foods plc
4 bob spooner
1
 aged 55
group operations director
bob spooner joined premier foods 
in april 2007 with responsibility for all 
manufacturing and logistics activities 
for the group prior to joining 
premier mr spooner was previously 
group supply director for northern 
foods and managing director of 
northern foods’ pastry products 
business and prior to that held senior 
operational and supply chain roles 
with ici paints and sara lee
5 mark vickery aged 55
group is  change director
mark vickery joined the group 
in early 2005 as director of is  
change management following the 
acquisition of rhm he assumed the 
role of group is  change director 
mr vickery started his career at 
unilever where he spent 17 years 
working in a number of businesses 
and geographies he then moved to 
united biscuits as is director prior to 
joining premier foods
6 suzanne wise
1
 aged 48
general counsel 
company secretary
suzanne wise joined the group 
in january 2008 ms wise has 
extensive inhouse legal experience 
gained within the listed company 
environment and joined the company 
from gallaher group plc where she 
held the position of group head of 
legal prior to gallaher she was 
a solicitor in a private practice ms 
wise is a qualiﬁ ed solicitor and was 
admitted to practice in 1987 
7 ian york
1
 aged 50
group sales director
ian york joined the group in 1994 
as general sales manager for the 
canned foods division he now 
has responsibility for all uk sales 
activities throughout the business 
having been appointed group sales 
director in 2001 previously mr york 
held a variety of positions in the uk 
grocery market with quaker oats 
ltd associated british foods and 
blue crest
executive directors
1 robert schoﬁ eld
1
 aged 58
chief executive  
robert schoﬁ eld joined the group in 2001 taking 
responsibility for its branded business he was 
appointed chief executive in january 2002 
mr schoﬁ eld has extensive manufacturing and 
operational experience gained at united biscuits plc 
where he ultimately served as managing director of 
united biscuits uk directing both the mcvities and 
kp foods businesses
2 jim smart
1
 aged 50
chief financial ofﬁ cer
jim smart joined the group in october 2009 as 
chief financial officer prior to his appointment he 
served as chief financial officer of friends provident 
plc and was a nonexecutive director of fc asset 
management plc formerly he was chief financial 
officer of boots group plc having joined the 
company in 2003 as group financial controller mr 
smart is a certified accountant
3 tim kelly
1
 aged 52
chief operating ofﬁ cer
hovis and chilled
tim kelly was appointed as a director in june 
2008 mr kelly joined premier foods in march 2007 
following the company’s acquisition of rhm where 
he was chief operating ofﬁ cer cakes  customer 
partnerships in december 2007 he assumed 
additional responsibility for the group’s baking 
and milling businesses prior to that mr kelly was 
with constellation brands where he was the chief 
operating ofﬁ cer international he previously held 
senior marketing roles at diageo and cocacola 
schweppes beverages
nonexecutive directors
4 david kappler aged 62
chairman
david kappler joined the group on ﬂ otation in 
2004 as chairman mr kappler is currently the 
deputy chairman senior independent director and 
chairman of the audit and nomination committees 
at shire plc and senior independent director and 
chairman of the audit committee at intercontinental 
hotels group plc prior to this he was finance 
director of cadbury schweppes plc nonexecutive 
director and latterly chairman of hmv plc and a 
nonexecutive director of camelot plc 
5 david felwick cbe aged 65
senior independent director
david felwick joined the group on ﬂ otation in 2004 
mr felwick is currently chairman of product of the 
year ltd prior to this he was deputy chairman of 
the john lewis partnership and managing director 
of waitrose his previous appointments include 
chairman of the british retail consortium and 
leckford estate limited and nonexecutive director 
of dairy farmers of britain
6 ian mchoul aged 50
nonexecutive director
ian mchoul joined the group on ﬂ otation in 2004 
he is also chief financial ofﬁ cer of amec plc until 
april 2008 mr mchoul was the group finance 
director of scottish  newcastle plc he was 
previously the finance and strategy director of the 
inntrepreneur pub company limited and prior to 
that spent ten years with courage limited and its 
parent company foster’s brewing group in a variety 
of roles mr mchoul is a chartered accountant
7 louise makin aged 49
nonexecutive director
louise makin joined the group in 2006 she is 
currently chief executive ofﬁ cer of btg plc a 
growing life sciences company focused on the 
development and commercialisation of speciality 
pharmaceuticals prior to that she was president 
biopharmaceuticals europe of baxter healthcare 
responsible for europe africa and the middle east 
in 2000 louise makin joined baxter healthcare as 
vicepresident strategy  business development 
europe before joining baxter she was director of 
global ceramics at english china clay and prior 
to that she held a variety of roles at ici between 
1985 and 1998 dr makin holds an ma in natural 
sciences and a phd in metallurgy from the 
university of cambridge and an mba
8 david beever aged 68
nonexecutive director
david beever joined the group in january 2008 he 
was previously chairman of london and continental 
railways plc and international chairman of kpmg 
corporate finance he spent most of his career 
at sg warburg  co ltd where he was vice
chairman he has been a nonexecutive director of 
a number of listed companies including the paragon 
group of companies plc volex group plc and
jjb sports plc
9 charles miller smith aged 70
nonexecutive director
charles miller smith joined the group in june 
2009 he is a senior adviser to warburg pincus 
international llc deutsche bank rreef 
infrastructure and a senior adviser to defence 
strategy  solutions in 2008 he became a 
member of the international advisery council for 
principal financial in the usa he was recently 
an international adviser at goldman sachs and a 
director of hsbc holdings plc mr miller smith 
was at unilever for 30 years culminating in his 
appointment as director of finance and a director 
of unilever foods he also served as chief executive 
and then chairman of ici he is currently chairman 
of firstsource solutions uk limited
1
 member of premier foods group executive premier foods plc annual report and accounts 2009  stock code pfd 52
directors’ report
directors’ report
the directors have pleasure in presenting the annual report 
and audited financial statements of premier foods plc and 
its subsidiaries for the year ended 31 december 2009
business review 
a review of the group’s business its activities and 
performance during the year its financial position at 
the end of the year and an indication of the likely future 
developments of the business are provided in the following 
sections of the annual report and are incorporated in this 
directors’ report by reference
• our business on pages 1 to 17
• business review on pages 18 to 49
• environmental employee social and community issues 
are discussed on pages 42 to 49
• a review of risk management and risk factors on pages 36 
to 41
• group key performance indicators kpis on pages 
8 to 12 18 to 34 and 44 to 49
the corporate governance report forms part of this directors’ 
report and is incorporated into it by reference
principal activities 
premier foods plc is a public limited company incorporated 
in england and wales registered number 5160050 with 
its registered office at premier house centrium business 
park griffiths way st albans hertfordshire al1 2re the 
principal activities of the group are food manufacturing 
processing and distribution further information can be 
found within the overview of our business
financial statements 
the audited financial statements are presented on pages 
74 to 126 
profit and dividends 
the profit on ordinary activities before tax for the year ended 
31 december 2009 was £467m 2008 loss of £4048m 
the directors do not recommend the payment of dividend 
for the year ended 31 december 2009 2008 £nil 
research and development 
applied research and development work continues to be 
directed towards the introduction of new and improved 
products the application of new technology to reduce unit 
and operating cost and to improve service to customers 
research and development costs of £37m 2008 £51m 
were incurred in continuing operations during the year 
land and buildings 
the directors are of the opinion that there is no significant 
difference between the book and market value of the land and 
buildings of the group
donations 
no donations were made to political parties 2008 £nil 
during the year the group made charitable donations 
amounting to £167000 2008 £287000 further information 
on charitable giving can be found within the corporate social 
responsibility section of this annual report
directors 
the present directors of the company are listed on page 55 of 
the corporate governance report 
details of the interests in the share capital of the company 
of the directors in office as at 31 december 2009 are set out 
within the directors’ remuneration report 
statement of directors’ responsibilities
the directors are responsible for preparing the annual report 
the directors’ remuneration report and the group and the 
parent company financial statements in accordance with 
applicable law and regulations
company law requires the directors to prepare financial 
statements for each financial year under that law the directors 
have elected to prepare the group financial statements in 
accordance with international financial reporting standards 
ifrss as adopted by the european union and the parent 
company financial statements in accordance with applicable 
law and united kingdom accounting standards united 
kingdom generally accepted accounting practice the 
group and parent company financial statements are required 
by law to give a true and fair view of the state of affairs of the 
company and the group and of the profit or loss of the group 
for that period
in preparing those financial statements the directors are 
required to
• select suitable accounting policies and then apply them 
consistently
• make judgements and estimates that are reasonable and 
prudent
• state that the group financial statements comply with ifrss 
as adopted by the european union and with regard to the 
parent company financial statements that applicable uk 
accounting standards have been followed and
• prepare the group and parent company financial 
statements on the going concern basis unless it is 
inappropriate to presume that the group will continue in 
business  premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 53
our business business review governance financial statements other information
the directors confirm that they have complied with the above 
requirements in preparing the financial statements
the directors are responsible for keeping adequate 
accounting records that are sufficient to show and explain 
the company’s transactions and disclose with reasonable 
accuracy at any time the financial position of the company 
and the group and to enable them to ensure that the financial 
statements and the directors’ remuneration report comply 
with the companies act 2006 and as regards the group 
financial statements article 4 of the ias regulation they are 
also responsible for safeguarding the assets of the company 
and the group and hence for taking reasonable steps for the 
prevention and detection of fraud and other irregularities
the directors are responsible for the maintenance and integrity 
of the company’s website legislation in the united kingdom 
governing the preparation and dissemination of financial 
statements may differ from legislation in other jurisdictions 
each of the directors whose names and functions are listed in 
the corporate governance report confirms that to the best of 
their knowledge
• the group financial statements which have been prepared 
in accordance with ifrss as adopted by the eu give a true 
and fair view of the assets liabilities financial position and 
profit of the group and
• the directors’ report and the sections of the annual report 
which are incorporated by reference includes a fair review 
of the development and performance of the business and 
the position of the group together with a description of the 
principal risks and uncertainties that it faces
in addition the companies act 2006 requires directors 
to provide the group’s auditors with every opportunity to 
take whatever steps and undertake whatever inspections 
the auditors consider to be appropriate for the purpose of 
enabling them to give their audit report the directors having 
made appropriate enquiries confirm that
• so far as each director is aware there is no relevant audit 
information of which the group’s auditors are unaware and
• each director has taken all the steps that they ought to 
have taken as a director to make themselves aware of any 
relevant audit information and to establish that the group’s 
auditors are aware of that information
substantial shareholdings 
as at 9 march 2010 the company has been notified in 
accordance with disclosure and transparency rules issued 
by the financial services authority of the following interests of 
3 or more in the ordinary shares of the company 
notification  number of  of issued
received from ordinary shares  share capital
 wp x investments ltd 376761419 1571
 franklin templeton investment 
 management  307173509 1281
 paulson europe llp 283625120 1183
 alliance bernstein 
 investments lp 115232250 481
 legal  general investment 
 management 97613259 407
share capital and control
at the general meeting held on 23 march 2009 the 
authorised share capital of the company was increased to 
£35000000 divided into 3500000000 ordinary shares of 
1 pence each nominal value ordinary shares during the 
year the number of ordinary shares in issue was increased to 
2398021581 shares as a result of the placing and open offer 
and firm placing the ordinary shares are listed on the london 
stock exchange all of the ordinary shares rank equally with 
respect to voting rights and the rights to receive dividends
the holders of ordinary shares are entitled to receive the 
company’ s reports and accounts to attend and speak at general 
meetings of the company to appoint proxies and to exercise 
voting rights there are no restrictions on transfer or limitations on 
the holding of any class of shares and no requirements for prior 
approval of any transfers none of the shares carry any special 
rights with regard to control of the company there are no known 
arrangements under which financial rights are held by a person 
other than the holder of the shares and no known agreements 
on restrictions on share transfers or on voting rights other than as 
disclosed in contractual relationships below shares acquired 
through company share schemes and plans rank pari passu with 
the shares in issue and have no special rights
at the annual general meeting in 2009 shareholders authorised 
the directors to make market purchases of ordinary shares 
any ordinary shares so purchased may be cancelled or held in 
treasury this authority will expire at the conclusion of the 2010 
annual general meeting at which a further authority will be 
sought no share purchases were made during the year
changes to the articles of association must be approved by 
the shareholders in accordance with the legislation in force 
from time to time
the company does not have agreements with any director 
or employee that would provide compensation for loss of 
office or employment resulting from a takeover except that 
provisions of the company’s share schemes and plans may 
cause options and awards granted to employees under such 
schemes and plans to vest on a takeover premier foods plc annual report and accounts 2009  stock code pfd 54
directors’ report continued
contractual relationships
the group has contractual arrangements with many parties 
including directors employees suppliers customers 
trade mark owners and banking groups the following are 
considered significant in terms of their effect on the business 
of the group as a whole
the group has a term and revolving facilities agreement 
originally for £21bn entered into in 2006 which has 
subsequently been amended on 5 march 2009 and a 
receivables purchasing agreement and guarantee dated
30 december 2007 which was amended on 5 march 2009 
and further amended on 22 december 2009
the group entered into a relationship agreement with 
warburg pincus in march 2009 setting out the terms and 
conditions under which warburg pincus have the right to 
appoint a director to the board of premier foods and also 
governing the retention of its shareholding in premier foods 
and the purchase of further shares in the company under 
the relationship agreement mr charles miller smith was 
appointed to the board on 16 june 2009
the group entered into a pensions framework agreement 
with the trustees of premier’s uk defined benefit plans on 
5 march 2009
the group has a licence for certain of cadbury limited’s 
trade marks in connection with ambient packaged cakes the 
original licence which was due to expire in january 2010 has 
been extended for an additional 18 months the group has 
as an exclusive worldwide licence to use the loyd grossman 
name on sauces oils and dressings accompaniments 
toppings and marinades for a term lasting until 2026
these agreements include change of control provisions 
which in the event of a change of control could result in the 
agreements being renegotiated or terminated
employment policies 
a summary of the group’s employment policies and the 
actions to involve employees is set out in the corporate 
governance report and employee section of this annual 
report 
creditor payment policy 
premier foods plc is a holding company and had no amounts 
owing to trade creditors at 31 december 2009 2008 £nil 
the group’s creditor days outstanding at 31 december 2009 
were 64 days 2008 61 days of purchases based on the 
ratio of group trade creditors at the end of the year to the 
amounts invoiced during the year by trade creditors
the group has standard payment terms of 60 days end of 
month which are available as part of the standard terms and 
conditions on the company’ s website wwwpremierfoodscouk 
payment terms for purchases under major contracts are 
agreed as part of the contract negotiations
financial instruments
the financial risk management objectives and policies of the 
group and its exposure to price credit liquidity and cash 
flow risk are set out in note 23 to the financial statements 
postbalance sheet events 
details of postbalance sheet events are set out in note 33 of 
the financial statements 
office of fair trading 
in april 2008 the uk office of fair trading oft notified the 
company and a number of other ukbased retailers of an 
inquiry into potential coordination of retail prices in sectors of 
the grocery market premier are cooperating with the inquiry 
which continues to gather information it is not currently 
possible to predict how the investigation will proceed and when 
it will be concluded or determine any outcome in advance
independent auditors 
pricewaterhousecoopers llp has indicated its willingness to 
continue as auditors accordingly a resolution to reappoint them 
will be proposed at the forthcoming agm in accordance with 
section 489 of the companies act 2006 the reappointment of 
pricewaterhousecoopers llp has been approved by the audit 
committee who will also be responsible for determining their 
audit fee on behalf of the directors 
going concern 
the directors are satisfied that the company and the group 
have adequate resources to continue in operational existence 
for the foreseeable future for this reason they continue to 
adopt the going concern basis in preparing the accounts 
annual general meeting business 
the annual general meeting of the company will be held at 
insurance hall 20 aldermanbury london ec2v 7hy on 20 
may 2010 at 1100 am the notice convening the annual 
general meeting will be issued separately together with 
details of the business to be considered and full explanations 
of each resolution that is being proposed
by order of the board 
suzanne wise 
general counsel  company secretary 
premier foods plc
premier house centrium business park griffiths way 
st albans hertfordshire al1 2re 
registered in england and wales no 5160050 
9 march 2010 premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 55
our business business review governance financial statements other information
corporate governance
corporate governance
the board believes in conducting the group’s affairs in a 
fair and transparent manner and in maintaining the highest 
ethical standards in its business dealings
compliance statement 
this report sets out to describe how the group has applied 
the principles of good corporate governance as defined 
in section 1 of the revised combined code on corporate 
governance issued by the financial reporting council in 
june 2008 “the combined code” the code is publicly 
available at wwwfrcorguk
in respect of the period from 1 january 2009 to 31 december 
2009 the board considers that the group has complied with 
the provisions set out in the combined code the corporate 
governance report forms part of the directors’ report and is 
incorporated into it by reference
the board 
board structure
as at the year end the board consisted of a nonexecutive 
chairman three executive directors and six nonexecutive 
directors in accordance with the combined code separate 
individuals david kappler and robert schofield have been 
appointed to the positions of chairman and chief executive 
respectively david felwick has been appointed the senior 
independent director charles miller smith was appointed 
as an additional nonexecutive director on 16 june 2009 
jim smart was appointed as an executive director on 
19 october 2009 and christine cross retired as a non
executive director on 31 january 2010 
the board considers that the nonexecutive directors with 
the exception of charles miller smith are independent 
in character and judgement and within the definition of 
this term in the combined code under the terms of the 
relationship agreement between the company and warburg 
pincus mr miller smith a senior adviser to warburg 
pincus international llc was appointed to the board as a 
subscriber director under the agreement warburg pincus 
with the agreement of the company may appoint to the 
board a director so long as they warburg pincus retain a 
minimum interest of 239802158 shares in the company 
the combined code states that the test of independence 
is not appropriate in relation to the chairman after his 
appointment
the chairman and the nonexecutive directors contribute 
external expertise and experience in areas of importance 
to the group such as marketing customer and consumer 
focus corporate finance general finance and corporate 
governance they also contribute independent challenge 
and rigour to the board’s deliberations 
directors and their interests
the following directors held office during the year ended 
31 december 2009
  designation appointment
 david kappler chairman 19 july 2004 
 robert schofield chief executive  22 june 2004 
 tim kelly chief operating officer —  30 june 2008
  hovis and chilled 
 paul thomas
1
 finance director 22 june 2004
 jim smart chief financial officer 19 october 2009
 david felwick cbe senior independent 19 july 2004
  director  
 louise makin nonexecutive director 1 october 2006
 ian mchoul nonexecutive director 19 july 2004
 david beever nonexecutive director 21 january 2008
 christine cross
2
 nonexecutive director 21 january 2008
 charles 
 miller smith nonexecutive director 16 june 2009
1
 retired as a director on 31 august 2009
2
 retired as a director on 31 january 2010
details of the directors’ service contracts letters of 
appointment emoluments the interests of the directors and 
their immediate families in the share capital of the company 
and options to subscribe for shares in the company are 
shown in the directors’ remuneration report 
operation of the board 
the board is responsible for the overall management of the 
group and has an agreed schedule of matters reserved to it 
which includes setting longterm strategic and commercial 
objectives approval of annual operating and capital budgets 
dividend policy overseeing the group’s internal control 
systems and ensuring that appropriate resources are in place 
to enable the group to meet its objectives 
the board normally meets at least ten times in each calendar 
year and also meets on other occasions as necessary 
meetings are usually held at the company’s head office in 
st albans but the meetings also provide an opportunity for 
the board as a whole to visit the group’s operating facilities 
details of the number of board and committee meetings and 
the attendance at those meetings is set out below
the chairman is primarily responsible for the operation of the 
board and sets the agendas in consultation with the chief 
executive and company secretary board papers including 
copies of the minutes of committee meetings held since 
the previous board meeting and comprehensive briefing 
documents for all substantive agenda items for discussion are 
circulated in advance of each meeting board meetings are 
structured to allow open discussion by all directors of agenda  premier foods plc annual report and accounts 2009  stock code pfd 56
corporate governance continued
items and members of the group executive are invited to 
attend and make presentations to the board regularly
the chairman periodically holds meetings with the non
executive directors without the executive directors present
the chief executive has overall responsibility for the 
executive management of the group and for implementing 
board strategy and policy within the approved budgets and 
timescales the chief executive is supported by the chief 
financial officer and the group executive which consists 
of the senior executives who head up the group’s principal 
operations and functions 
the chairman david kappler is currently a nonexecutive 
director of shire plc and intercontinental hotels group 
plc the board of premier foods plc is satisfied that these 
appointments do not conflict with the chairman’s ability to 
carry out his duties and responsibilities effectively for the 
group biographies of the directors and members of the senior 
management team are provided in the section on board of 
directors and senior management which precedes this report 
procedures are in place which allow directors to take 
independent professional advice in the course of their duties 
and all directors have access to the advice and services of
the company secretary and where a director has a concern 
over any unresolved business he is entitled to require the 
company secretary to minute that concern should he 
later resign over this issue the chairman will bring it to the 
attention of the board 
the company purchases directors’ and officers’ liability
and indemnity insurance to cover its directors and
officers against the costs of defending themselves in
civil proceedings taken against them in that capacity and
in respect of damages resulting from the unsuccessful 
defence of any proceedings
meetings
the following table sets out the number of formal meetings 
of the board and its committees and individual attendances 
thereat during the financial year to 31 december 2009 
in addition to the meetings detailed below a number of 
additional meetings of the board committees of the board 
and the remuneration and nomination committees were 
held for the consideration of specific business denotes 
attendance by invitation the board met more frequently in 
2009 than in previous years as a result of the additional work 
required in connection with refinancing 
   group board audit nomination remuneration  finance
 david kappler   1212 55
2
 44 44
2
 22
 robert schofield   1112 45
2
 24
2
 44
2
 22
 paul thomas
1
   88 33
2
 — — —
 jim smart
1
  22 22
2
 — — 11
 tim kelly  1212 55
2
 — — —
 david felwick cbe   1112 55 44 44 —
 louise makin  1212 55
2
 44 44 —
 ian mchoul   1112 45 44 14
2
 22
 david beever  1112 45 24 14
2
 22
 christine cross  1112 55
2
 34 34 —
 charles miller smith
1
  56 — 12 — 12
1
  jim smart was appointed as an executive director on 19 october 2009 charles miller smith was appointed as a non
executive director on 16 june 2009 and paul thomas retired from the board on 31 august 2009 
2
 denotes attendance by invitation
board allocation of time year ended 31 december 2009
 
■ strategy — 20
■ operations — 29
■ finance  risk  — 26
■ governance — 20 
■ succession — 4
■ capex — 1 
the chart to the left summarises the approximate time
the board has spent discussing agenda items during the
year separated into broad categories premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 57
our business business review governance financial statements other information
the audit committee is responsible for making recommendations 
to the board on the appointment of the external auditors and their 
remuneration for reviewing the accounting principles policies 
and practices adopted in the preparation of the half year results 
and annual accounts and reviewing the scope and findings of the 
audit the committee assists the board in achieving its obligations 
under the combined code in areas of risk management and 
internal control focusing particularly on compliance with legal 
requirements accounting standards and the listing rules and 
ensuring that an effective system of internal financial and non
financial controls is maintained the ultimate responsibility for 
reviewing and approving the annual report and accounts remains 
with the board 
the committee keeps under review the external auditors’ 
independence including any nonaudit services that are to 
be provided by the external auditors the auditors are also 
requested to confirm their independence at least annually a 
formal policy has been developed and implemented which 
ensures that the nature of the advice to be provided could not 
impair the objectivity of the external auditors’ opinion on the 
group’s financial statements 
the policy incorporates a fee limit above which a formal 
tender process must normally be undertaken and approval of 
the committee obtained prior to any proposed appointment 
additionally the use of delegated authorities to appoint the 
external auditors is routinely reported to the committee 
pricewaterhousecoopers llp pwc have been the company’s 
auditors since it was listed on the london stock exchange in 
july 2004 the audit committee considers that the relationship 
with auditors is working well and remains satisfied with their 
effectiveness accordingly it has not considered it necessary to 
date to require pwc to tender for the audit work the external 
auditors are required to rotate the audit partners responsible 
directors’ interests in contracts 
no director had a material interest at any time during the year 
in any contract of significance other than a service contract 
with the company or any of its subsidiary undertakings 
remuneration 
the company’s policy on directors’ and senior managers’ 
remuneration benefits share scheme entitlements and 
pension arrangements is set out in the directors’ remuneration 
report 
the directors’ remuneration report sets out the status of 
the company’s compliance with the requirements of the 
combined code with regard to remuneration matters and 
includes a statement on the company’s policy on directors’ 
and senior managers’ remuneration benefits share scheme 
entitlements and pension arrangements a resolution to 
approve the directors’ remuneration report will be proposed at 
the forthcoming annual general meeting
appointment reappointment and retirement by rotation
the rules about the appointment reappointment and 
retirement by rotation of directors are contained in the articles 
of association “the articles” of the company as per the 
articles directors may be appointed by the company by 
an ordinary resolution or by the board a director appointed 
by the board holds office only until the next annual general 
meeting agm at each agm onethird of the directors 
rounded down will retire by rotation and be eligible for re
election the directors to retire will be those who wish to retire 
and those who have been longest in office since their last 
appointment or reappointment with the proviso that all must 
retire within a three year period 
jim smart was appointed as an executive director on 
19 october 2009 and charles miller smith was appointed as 
a nonexecutive director on 16 june 2009 and accordingly 
they will offer themselves for election at the forthcoming agm 
ian mchoul and david felwick retire by rotation and being 
eligible offer themselves for reelection at the agm to be held 
on 20 may 2010 
directors’ biographical details are provided in the section on 
the board of directors and senior management that precedes 
this report and also in the notice of agm 
board committees 
the board has an effective committee structure to assist in 
the discharge of its responsibilities the terms of reference 
of these committees comply with the provisions of the 
combined code and are available for inspection on the 
company’s website wwwpremierfoodscouk
audit committee
ian mchoul chairs the audit committee its other 
members are david felwick and david beever only 
independent nonexecutive directors who have 
no links with the external auditors may serve on 
the committee two members of the committee 
ian mchoul as the chief financial officer of amec 
plc and david beever as a member of the kpmg 
advisery board have been identified by the board 
as having recent and relevant financial experience 
the audit committee is scheduled to meet at least 
four times a year and meets with the internal and 
external auditors at least twice a year without the 
executive directors present  premier foods plc annual report and accounts 2009  stock code pfd 58
corporate governance continued
for the group and subsidiary audits every five years and the 
current lead audit partner has been in place for three years 
there are no contractual obligations restricting the company’s 
choice of external auditors
during the year pwc were employed to complete a number 
of projects as part of the group’s review of financing 
arrangements which began in 2008 and were reported in 
the last annual report
fees incurred in relation to this work amounted to £23m in 
2009 before commissioning pwc to undertake the work 
in 2008 discussions were held between pwc the finance 
director and the chairman of the audit committee to assess 
any potential threat to the external auditors’ independence 
and it was agreed that appropriate safeguards had been put 
in place by pwc the company assessed that pwc were 
best placed to perform this additional nonaudit work in view 
of their knowledge of the business the time constraints in 
completing the work and likely costs
during the year the committee approved and oversaw the 
implementation of a new whistleblowing policy utilising an 
independent third party allowing staff to disclose issues of 
malpractice or wrongdoing by any of the group’ s businesses or 
employees in confidence without the fear of reprisals concerns 
reported to the service are recorded and reported to the audit 
committee twice a year procedures exist for investigating such 
matters and for appropriate followup action to be taken 
during the year the committee
• received regular reports from the internal audit function 
ensured it was adequately resourced monitored its activities 
and effectiveness and agreed the annual audit plan
• conducted a review of the effectiveness of the internal 
audit function
• authorised the implementation of a new group whistle
blowing policy
• considered the external auditors’ report for the year 
ended 31 december 2008
• conducted an internal review of the group’s external 
auditors which included a review of the auditors’ 
independence and objectivity and the effectiveness of the 
audit process
• approved the company’s risk management policy and key 
business risks
• conducted a review of the group’s treasury policy
• approved the simplification of the group’s legal entity 
structure
• reviewed matters relating to the group’s key performance 
indicators and proposals to embed good governance 
throughout the organisation 
the remuneration committee has responsibility for making 
recommendations to the board on the company’s policy on 
remuneration of executive directors and senior managers 
and for determining within agreed terms of reference 
specific remuneration packages for each of the chairman 
the executive directors of the company and such members 
of senior management as it is delegated to consider 
including pension rights any compensation payments and 
the implementation of executive incentive schemes in 
accordance with the committee’s terms of reference no 
director may participate in discussions relating to their own 
terms and conditions of service or remuneration
information on the activities of the remuneration committee is 
set out in the directors’ remuneration report 
the nomination committee has a process for board 
appointments that it considers to be formal rigorous and 
transparent this process includes a review of the skills 
experience and knowledge of the existing directors to assess 
remuneration committee
in october 2009 louise makin took over as 
chairman of the remuneration committee from 
david felwick other members of the committee 
were david felwick and christine cross christine 
retired as a director in january 2010 only 
independent nonexecutive directors may serve on 
the committee the chairman and chief executive 
attend remuneration committee meetings at 
the invitation of the committee chairman the 
remuneration committee will normally meet at least 
twice a year
nomination committee
david kappler chairs the nomination committee 
and its other members are ian mchoul david 
felwick louise makin david beever christine cross 
and charles miller smith christine cross retired 
as a director in january 2010 david kappler will 
not chair the committee when it is dealing with a 
successor to the chairmanship of the company the 
committee which will normally meet not less than 
twice a year has responsibility for considering the 
size structure and composition of the board of the 
company retirements and appointments of additional 
and replacement directors and making appropriate 
recommendations so as to maintain an appropriate 
balance of skills and experience on the board premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 59
our business business review governance financial statements other information
in 2009 as previous years the internal evaluation process was 
combined with individual performance evaluation as described 
below
• the chairman appraises the chief executive annually 
• the senior nonexecutive director meets with all the non
executive directors to discuss the performance of the 
chairman taking into account the views of the executive 
directors 
• the chairmen of the audit and remuneration committees 
are appraised annually as part of the committee 
effectiveness review process and any nonexecutive 
directors due for reelection at the following annual general 
meeting are appraised initially by the chairman and 
thereafter their suitability for reelection is confirmed by 
the nomination committee prior to those nonexecutive 
directors offering themselves for reelection 
• the senior management are formally appraised annually 
by the chief executive who also appraises the executive 
directors 
in accordance with good practice the board carried out a 
detailed independent review of the board and committees’ 
performance during the year accordingly boardroom review 
an independent consultant conducted one to one meetings 
with all board members during the year and attended board 
and committee meetings in february the findings of the 
review were presented to the board and where possible are 
being incorporated into the operation and practices of the 
board and its committees
shareholders 
relations with shareholders 
the board recognises that its primary role is to represent 
and promote the interests of its shareholders and that it 
is accountable to shareholders for the performance and 
activities of the company 
the company announces its results on a halfyearly basis 
presentations are made to analysts and major shareholders 
following the release of the half year and yearend results 
the company announces trading updates andor interim 
management statements at relevant times throughout the 
year followed by conference calls with analysts and major 
shareholders and the group’s website wwwpremierfoods
couk contains the full text of such reports together with 
stock exchange announcements after their release to the 
market the company’s investor relations function provide 
detailed reports on shareholder make up analyst’s forecasts 
and feedback at each board meeting
the chief executive and chief financial officer are also 
available to meet with shareholders during the year the 
chairman and if appropriate the senior independent 
which of the potential short listed candidates would most 
benefit the balance of the board having regard also to the 
need for succession planning
as announced in february 2010 david kappler is to step 
down as chairman during the course of 2010 and a formal 
succession process has been initiated
during the year the committee
• approved directors for reappointment at the agm
• approved the appointment of a new nonexecutive director
• approved the selection and appointment of a new chief 
financial officer
• reviewed the composition and expertise of the board
the terms of appointment for the nonexecutive directors 
are available for inspection on the company’s website www
premierfoodscouk
during the year the committee
• approved the committee’s terms of reference
• approved a finance strategy and governance framework 
for the committee
• reviewed the group’s swap arrangements
• undertook an initial review of the group’s financial and 
pensions strategy
performance and effectiveness reviews
the board follows a performance evaluation procedure which 
measures its own performance and that of its committees 
finance committee
during the year a new finance committee was 
established to provide additional focus and review 
in respect of the group’s ongoing financial strategy 
the finance committee is chaired by david 
beever and its other nonexecutive members are 
ian mchoul and charles miller smith in addition 
the chairman chief executive chief financial 
officer and the group treasurer are also members 
of the committee the committee which will 
normally meet not less than three times a year has 
responsibility to review and make recommendations 
to the company in relation to matters relating to the 
group’s capital structure financing and pensions 
strategy the committee also has responsibility 
to oversee the governance and activities of the 
company’s treasury committee and treasury risk 
management committee premier foods plc annual report and accounts 2009  stock code pfd 60
corporate governance continued
director are available to discuss issues and concerns of 
shareholders shareholders are also provided with the 
opportunity to ask questions of the board including the 
chairmen of the various committees and to present their 
views at the annual general meeting 
notice of the annual general meeting together with the 
annual report and accounts is sent to shareholders at least 
20 working days before the meeting and details of the proxy 
votes for and against each resolution or in respect of which 
a vote is withheld are announced after the result of the poll 
vote and made available on the company’s website
employees 
as a major employer premier foods is aware of its 
responsibility to its employees and our policy on employee 
welfare and human rights sets a minimum standard to which 
all of the group companies adhere in order to meet their 
moral legal ethical and humanitarian responsibilities
we recognise that our employees are our single most 
valuable asset and strive to support them in all aspects of 
their training and development through a variety of internal 
and external training and development schemes the aim 
is to ensure that there is a highly trained and motivated 
workforce capable of meeting the highest standards 
required by customers and investors a significant number 
of employees participate in formal performance and 
development reviews and we are continuing to develop this 
process across the entire business
the group is committed to a fair but robust approach to 
equal opportunities in all areas of our business we recruit 
train promote and retain skilled and motivated people 
irrespective of sex age marital status disability sexual 
orientation race religion ethnic or national origin in line with 
this commitment we also promote a culture of openness and 
responsibility within our business
it is the policy of the group to give full and fair consideration to 
applications for employment received from disabled persons 
having regard to their particular aptitudes and abilities and 
wherever possible to continue the employment of and to 
arrange appropriate training for employees who have become 
disabled persons during the period of their employment 
the group provides the same opportunities for training 
career development and promotion for disabled as for other 
employees 
the group recognises the value of good communication 
in engaging our employees towards the achievement of 
common goals and we have a number of established 
employee consultation and communication mechanisms in 
place to achieve this goal including regular communication 
meetings specific consultation and involvement regarding 
major changes to the business the company’s intranet site 
and quarterly company magazine
internal control 
the directors are responsible for the group’s systems of 
internal control and for reviewing their effectiveness annually 
the board has conducted a review of the effectiveness of 
the group’s internal controls covering all material controls 
including financial operational and compliance controls and 
risk management systems in place throughout the year under 
review to the extent that control weaknesses are identified as 
part of this review necessary actions have been or are in the 
process of being taken to remedy them
the board has delegated direct responsibility for reviewing the 
group’s system of internal control and for regularly monitoring 
its effectiveness to the audit committee the principal aim of the 
system of internal control is to provide an ongoing process that 
identifies evaluates and manages the risks that are significant in 
relation to the fulfilment of the group’s business objectives the 
internal control systems have been designed to manage rather 
than to eliminate risk and can provide only reasonable and not 
absolute assurance against material misstatement or loss 
the principal role of the internal audit function is to review the 
effectiveness of the controls operating within the business by 
undertaking an agreed schedule of independent audits each 
year the nature and scope of this annual audit programme 
is reviewed and approved by the audit committee at the 
beginning of each calendar year and may be revised from time 
to time in circumstances such as the acquisition or disposal of 
a business or any other significant business development 
the findings of these riskbased audits are reported initially to 
executive management and any necessary corrective actions 
are agreed summaries of these reports are presented to 
and discussed with the audit committee along with details 
of progress against action plans which are also formally 
reported in addition to the internal audit programme senior 
business managers are required to complete comprehensive 
internal control self assessment questionnaires confirming 
the operation of internal controls within the business units 
for which they are responsible throughout the year the 
result of this exercise which also details any material control 
breakdowns to the extent that they have occurred is 
reviewed initially by the divisional boards and then the group 
executive prior to formal review by the audit committee the 
self assessments are also tested for accuracy as part of the 
internal audit process
further information in relation to the risk management 
process adopted by the company is detailed within the risk 
management section of this annual report premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 61
our business business review governance financial statements other information
directors’ remuneration report
directors’ remuneration report
this report prepared by the remuneration committee “the 
committee” on behalf of the board has been prepared 
pursuant to schedule 8 of the large and medium sized 
companies and groups accounts and reports regulations 
2008 and the listing rules issued by the financial services 
authority
remuneration committee 
membership
the committee comprised the following independent non
executive directors during the financial year to 31 december 
2009
louise makin committee chairman
david felwick cbe
christine cross — retired 31 january 2010
on 13 november 2009 mr felwick stepped down as 
chairman of the remuneration committee and was 
succeeded by dr makin 
meetings 
during 2009 the committee met formally on four occasions 
with an additional four written resolutions passed in respect 
of routine business details of individual meeting attendance 
are given in the corporate governance report the company
secretary  general counsel acts as secretary to the 
committee the chairman the chief executive and the 
director of human resources are invited to attend the 
committee’s meetings when appropriate they are not 
involved in discussions concerning their own remuneration
role
the board has delegated to the remuneration committee 
responsibility for reviewing and recommending the pay and
benefits and contractual arrangements of the chairman 
executive directors and the company secretary  general 
counsel recommending the pay of senior managers and for 
overseeing the group’s share plans and bonus schemes
the committee recommends and monitors the structure and 
levels of remuneration for senior managers throughout the 
group and for executive directors ensures that contractual
terms on termination and any payments made are fair to 
the individual and the company ensuring that failure is not 
rewarded and that the departing manager’s duty to mitigate
loss is fully recognised
it is committed to principles of accountability and 
transparency to ensure that remuneration arrangements 
demonstrate a clear link between reward and performance 
in its work the committee considers fully the principles and 
provisions of the combined code on corporate governance
and its terms of reference are available from the company 
secretary on request and also appear on the group’s website 
at wwwpremierfoodscouk
responsibilities
• to review and recommend the remuneration policy of
executive directors and senior managers
• within this policy agreeing individual remuneration
packages for the chairman executive directors and senior 
managers
• reviewing and recommending the terms and conditions to
be included in service agreements for executive directors
• reviewing and recommending any employee sharebased
incentive schemes and where appropriate overseeing any 
subsequent changes
• reviewing and recommending appropriate performance
conditions and targets for the variable element of 
remuneration packages and determining the extent to which
performance targets have been achieved
advisers 
deloitte llp “deloitte” were appointed by the committee 
as their retained advisers in 2005 and continue to provide 
advice to the committee on matters relating to remuneration 
including best practice during the year deloitte also provided 
organisational and it services to the group additional advice 
in relation to remuneration was provided to the company’s
senior management by hewitt new bridge street consultants
the committee consults with the chairman and the chief 
executive as appropriate and is also supported by the 
director of human resources
activities
during the year the committee
• reviewed the remuneration policy for executive directors
and senior managers
• carried out 2009 salary reviews for executive directors and
senior managers
• reviewed and recommended the annual bonuses for
executive directors and senior executives in respect of 2008 
and set the targets for the annual bonus in respect of 2009
• reviewed the performance conditions and measures of the
premier foods coinvestment plan “cip” to ensure that
they appropriately incentivised executives and focused on 
the delivery of shareholder value 
• granted awards under the cip and premier foods long
term incentive plan “ltip”
• reviewed and approved a new grading structure for
management
• determined the extent to which awards under the
executive share option plan 2006 ltip and premier group 
performance share plan had vested premier foods plc annual report and accounts 2009  stock code pfd 62
directors’ remuneration report continued
• granted awards under the premier foods employee
sharesave scheme which included all eligible employees 
in the united kingdom and ireland
• reviewed and approved the basis of rebasing for the
company’s share schemes following the placing and 
open offer and firm placing completed by the company in 
march 2009
remuneration policy 
broad policy
the committee has an ongoing process for monitoring 
its policies including the company’s arrangements for 
performance related pay against evolving market practice 
and relevant guidance this is particularly relevant bearing 
in mind the restructuring undertaken during the year and 
the share price performance more generally over recent 
years it also remains particularly pertinent in the current 
economic climate which continues to evolve however the 
broad policy of the board and the committee is to continue
to set remuneration levels so as to attract and retain high
calibre executives and to encourage and to reward superior 
business performance 
remuneration for executive directors is intended to reward
against criteria that are relevant and realistic but also 
challenging so that superior performance is encouraged 
therefore remuneration policy will continue to be reviewed 
annually and focuses on performancerelated incentives 
as well as annual salary to encourage the alignment of 
operating objectives and delivery of shareholder value 
our policy is to rigorously test review and set salaries at 
levels not normally exceeding median for companies of a 
comparable size complexity and market share in relation 
to bonuses and longterm incentive plans the policy will 
continue to be to provide an opportunity for executives 
to earn total remuneration packages in the upper quartile 
range but only if stretching and demanding performance 
conditions are met 
the remuneration policy in place for senior executives is 
designed to place emphasis on key performance objectives 
and strengthening executive shareholding 
while committed to the use of equitybased performance
related remuneration as a means of aligning directors’
interests with those of shareholders and to ensure senior 
executives have sufficient focus on the longterm performance 
of the company the committee is aware of shareholders’ 
concerns on dilution through the issue of new shares to 
satisfy such awards therefore when reviewing remuneration 
arrangements the committee takes into account the effects 
such arrangements may have on dilution 
in determining the remuneration arrangements for executive 
directors the committee is sensitive to the pay and 
employment conditions elsewhere in the group especially 
when determining base salary increases if any and reviews 
the proposed pay awards for the company at large with the 
chief executive
share ownership
a minimum shareholding requirement was introduced in 2006 
whereby executive directors are required to hold shares with 
a market value at the time of purchase at least equal to their 
annual basic salary within three years of the introduction 
of the guidelines or date of appointment if later details of 
directors’ shareholdings are set out below in the section on 
directors’ interest in ordinary shares 
remuneration for executive directors
the committee considers that the remuneration package 
of an executive director should be aligned closely with the 
interests of shareholders and therefore that a significant 
proportion of the remuneration package should be
performancerelated
in arriving at the balance between fixed and variable 
remuneration it is agreed that the fixed portion will relate only
to annual salary whilst the variable portion includes both 
annual bonuses and longterm incentive arrangements
for 2009 the balance between fixed and variable 
remuneration for the executive directors was as follows
at target at maximum
chief executive 54 fixed  46 variable 27 fixed  73 variable
chief financial officer 56 fixed  44 variable 28 fixed  72 variable
chief operating officer — hovis and chilled 55 fixed  45 variable 28 fixed  72 variable premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 63
our business business review governance financial statements other information
base salaries
basic salary for executive directors takes into account the 
responsibilities and performance of the individual this is
normally reviewed annually unless responsibilities change 
salary levels are set with reference to the relevant marketplace
for companies of a comparable size and complexity and for 
2009 salaries of executive directors remained unchanged 
from 2008 the effective salaries for 2009 were £606900
for the chief executive 2008 £606900 and £352275 
2008 £352275 for the chief operating officer — hovis 
and chilled for his role as finance director to his retirement 
on 31 august 2009 mr paul thomas received an annual 
salary of £408000 2008 £408000 the annual basic salary 
agreed with mr smart on his appointment as chief financial 
officer on 19 october 2009 was £430000 salary levels for
2010 for the chief executive chief financial officer and chief 
operating officer — hovis and chilled will not be increased 
and will remain at their 2009 levels 
annual bonus 
at the discretion of the committee executive directors are
eligible to receive an annual bonus subject to the achievement 
of performance targets which are set each year by the 
committee bonus potentials are set on an individual basis 
executive directors may defer 50 of any such bonus 
earned into shares in the company until they have built up a 
significant personal shareholding in the company see share
ownership guidelines above the deferred bonus shares will 
normally vest three years after their award generally the 
deferred bonus shares will not be forfeitable however in 
the event that the executive’s employment is terminated by 
reason of his gross misconduct or by reason of a material
breach of his employment contract his deferred bonus shares
may at the discretion of the remuneration committee be 
forfeited 
the committee reviewed the performance targets during the 
year and it was agreed that the management of cash would 
continue to be business critical and as such the bonus 
structure implemented for 2008 would be continued in
2009 as a result performance targets for 2009 were set 
such that 60 of the bonus was based on the delivery of 
trading profit 20 was linked to the yearend debt figure
and the remaining 20 linked to the achievement of personal 
performance targets the annual bonus potentials for 2009 
were set at 75 of salary for each of the executive directors 
with a target level of 50 of salary
for 2010 the annual bonus will be based on the same criteria 
as for 2009 and the annual bonus potentials are set at 75 of 
salary for each of the executive directors with a target level of 
50 of salary bonus payments are not pensionable
pensions
mr schofield elected for enhanced protection under the finance
act 2004 with effect from 6 april 2006 and no longer accrues
benefits under the scheme instead mr schofield receives
a payment in lieu of pension accrual which is included in his
salary his benefit accrued up to 6 april 2006 continues to be
linked to his final salary subject to the scheme earnings cap
mr smart receives an allowance in lieu of pension scheme 
accrual which may increase subject to the increase in the 
current notional earnings cap 
mr kelly is a member of the rhm pension scheme “rhmps” 
which is a funded registered scheme that provides benefits 
on a defined benefit final salary basis and is contracted out 
of the state second pension under the rhmps he accrues 
benefit at the rate of 130th of pensionable salary for each 
year of pensionable service pensionable salary is subject to 
a scheme “earnings cap” broadly equivalent to that previously 
imposed by the finance act 1989 prior to 6 april 2009 
rhmps was operating a pensionable salary freeze from 
6 april 2009 pensionable salary will increase in line with 
inflation capped at 5 per annum the first increase to 
pensionable salary occurred on 6 april 2009 mr kelly receives 
a salary supplement in lieu of receiving no pension in respect 
of his earnings above the scheme earnings cap 
other benefits 
each executive director is entitled to a car or car allowance 
telecommunication services and an allowance for personal 
tax and financial planning each executive director is also 
provided with private health cover and permanent health
insurance 
other directorships 
the group is supportive of executive directors who wish to 
take on a nonexecutive directorship with a publicly quoted 
company in order to broaden their experience they are
entitled to retain any fees they may receive none of the 
executive directors currently serve as a director of another 
public company
share plans
the premier foods coinvestment plan “cip” is currently 
the primary longterm incentive arrangement for executive 
directors and other key individuals and looks to ensure
that those who are most able to have a real impact on 
performance are sufficiently and appropriately incentivised 
the premier foods longterm incentive plan “ltip” has 
been retained for the purposes of incentivising other members 
of senior management individuals will not be invited to 
participate in both plans in the same year other than in 
exceptional circumstances eg in relation to recruitment premier foods plc annual report and accounts 2009  stock code pfd 64
directors’ remuneration report continued
awards made under the cip and ltip are all subject in part
to total shareholder return “tsr” based performance 
conditions all tsr measurements for the purposes of 
calculating vesting under the relevant plans are calculated on 
an independent basis by deloitte 
during the year the committee reviewed the cip prior to 
granting awards under the 2009 grant cycle the decisions 
made are detailed below
coinvestment plan the “cip”
the cip requires participants to commit and retain a 
significant amount of capital in the form of premier foods 
shares the purpose of the commitment is to encourage 
participants to adopt the attitudes of shareholders
cip participation is restricted to individuals who will have 
a real and measurable impact on the delivery of group 
performance targets and longterm growth in shareholder 
value based on the current senior team of premier this is 
considered to be 12 to 15 individuals including the executive 
directors however this number may grow to reflect 
executive responsibilities but shall not be more than 20 in 
any one plan cycle participants in the cip will not be eligible 
for participation in any other form of discretionary share
plan operated in the same year other than in exceptional 
circumstances
the cip is structured as a share matching plan an 
investment of shares pledged or purchased by the 
participant can be matched by the company — providing 
shares on the basis of the achievement of the performance 
targets over a three year period to the extent that the 
performance conditions are achieved then the level of 
company matching of the purchasedpledged shares is 
enhanced at the maximum level of performance a match 
of 31 ie 300 company shares is provided for the 
achievement of exceptionally stretching performance criteria
at the time awards vest under the cip  participants will be 
required to retain no less than half of the vested matching
shares until such time that they are no longer an employee of 
the company
the committee will decide the maximum level of individual 
share purchases or pledges that may be made within the 
terms of the cip  taking account of company and individual 
performance at the discretion of the committee the 
maximum level of invested shares pledged or purchased by 
executive directors is 200 of salary
for awards granted in 2007 and 2008 the chief executive 
was invited to pledge investment shares of up to 200 of 
salary into the plan and other executive directors were invited 
to pledge 150 of salary
following the review of the company’s capital structure and 
as anticipated in the 2008 directors’ remuneration report the 
remuneration committee reviewed the structure of awards 
for the 2009 cip cycle this review was completed after last 
year’s remuneration report had been published and as such 
the committee wrote to major shareholders to inform them of 
the outcome
the committee determined that for the 2009 grant cycle 
individuals would not be invited to participate under the 
cip by reference to a salary multiple as in previous years in 
recognition of the movement in the company’s share price
instead participants were invited to pledge a fixed number of 
shares into the plan
in respect of the 2009 cycle grant for the cip  mr schofield 
was invited to pledge a comparable number of investment 
shares into the plan as in 2008 at the share price at the time 
of the invitation this equated to approximately 67 of his 
annual base salary mr kelly and mr thomas were invited to 
pledge approximately 61 of their annual base salaries mr 
smart was invited to join the plan following his appointment 
in october 2009 and invited to pledge into the plan a 
comparable number of investment shares into the 2009 grant 
cycle as that of mr kelly and mr thomas mr smart pledged 
investment shares into the plan equating to approximately 
60 of his annual base salary
at tiers of participation below executive director level 
participants were invited to pledge approximately 48 of their 
annual base salaries as opposed to the previous maximum 
level of investment of 100 of annual base salary
the committee felt this approach struck an appropriate 
balance between incentivising the senior executive team and 
recognising evolving best practice
for awards granted in 2009 it was also decided that vesting 
of matching awards would continue to be conditional 
on achievement against a combination of eps and tsr 
performance targets structured as a matrix as for awards in 
previous years full vesting of matching awards will still require
delivery of exceptional performance under both performance 
metrics premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 65
our business business review governance financial statements other information
actual 
eps 
growth
pa
the performance matrix applicable to the 2009 awards under the cip and ltip is as follows
multiple of nominal award payable
14 0 0 50 100 150 200 250 300 300
12 to  140 0 0 0 50 100 150 200 250 300
10 to  12 0 0 0 0 100 150 200 250 250
8 to 10 0 0 0 0 50 100 150 200 250
5 to  8 0 0 0 0 50 100 100 150 200
2 to  50 0 0 0 0 0 50 100 100 150
10th 20th 30th 40th 50th 60th 70th 80th 90th
percentile percentile percentile percentile percentile percentile percentile percentile percentile
tsr against ftse 250 index constituents
relative tsr will continue to be measured against the ftse 
250 although in addition to investment trusts companies in 
the financial services insurance real estate and oil  gas 
sectors were also excluded as the committee believed that 
these were not representative comparators to the company
the company’s relative tsr will need to be positioned at 
either the 80th or 90th percentile for the maximum matching 
award to vest and this will only occur if very strong eps 
growth is achieved
the eps thresholds for the 2009 cip performance matrix 
which represent the annualised growth rates calculated by 
comparing the eps achieved in fy 2011 with that achieved in 
the “base year” of 2008 are set out in the table above 
although the eps growth targets for the 2009 awards are
lower than previous awards it should be noted that the 2007 
and 2008 targets were set in the context of the synergy gains 
flowing from the acquisitions of rhm and campbell’s the 
committee felt that the majority of these synergy gains have 
now been extracted
the committee believes that the combination of stretching 
eps and tsr targets for the 2009 awards appropriately 
incentivise executives and focus on delivery of shareholder 
value it should be noted that a combination of exceptional 
annual eps growth and tsr market outperformance is 
required for the maximum match under the award to be
achieved and the committee believes that the performance 
scale represents an exceptional level of stretch which will 
require a confluence of both internal and external factors
for the 2010 cycle grant the executive directors will be 
invited to participate under the cip by reference to the same 
invitation levels as 2009 mr schofield will be invited to pledge 
approximately 60 of his base salary while mr smart and mr 
kelly will be invited to pledge approximately 55 of their base 
salaries
the committee intend to conduct a review of the cip during 
the year to decide if it remains the most appropriate incentive 
scheme for executive directors and senior management
there is no retesting of performance conditions under the cip 
to the extent that performance conditions are not met on the
vesting date all matching awards shall lapse
other longterm incentive schemes
i longterm incentive plan the “ltip”
awards under the ltip have been made since 2005
executive directors were last granted an award under the 
scheme in 2006 it is not currently intended that the executive 
directors will participate in future awards but awards are
granted to participants below executive director level who do 
not take part in the cip 
in recent years the performance conditions for the ltip 
grants for more junior participants have been aligned with 
the cip awards see above but the committee intends to 
keep this under review taking into account the needs of the 
company
for the awards granted in the 2006 grant cycle in which 
executive directors participated vesting was subject to tsr 
performance measured against two comparator groups 
following the end of the performance period for this award 
the committee determined that since premier foods was now 
positioned below median against both comparator groups 
the required tsr performance conditions had not been 
achieved and the award lapsed in full premier foods plc annual report and accounts 2009  stock code pfd 66
directors’ remuneration report continued
ii the premier group performance share plan the “psp”
following the acquisition of rhm former rhm employees were granted replacement “rollover” awards to correspond to the 
2005 and 2006 rhm psp awards which lapsed following the acquisition the performance condition for these replacement 
awards were identical to the performance conditions which applied to the equivalent premier foods ltip awards granted in 
2005 and 2006
the performance period for the awards corresponding to the 2006 grant cycle ended in 2009 as noted above in respect of 
the ltip awards since the required tsr performance condition was not achieved the committee determined that the awards 
would lapse in full
no further awards will be granted under the psp 
iii the premier foods plc executive share option scheme the “esos”
the company adopted the esos at the time of admission in 2004 no further options will be granted under the esos other 
than in exceptional circumstances eg in relation to recruitment
outstanding vested options held by executive directors under this plan would require the share price to reach 16138p prior 
to exercise
performance graph 
the following graph shows the tsr performance of the company over the last five years against the ftse 250 which 
was chosen because it represents a broad equity market index of which the company is a constituent and the ftse food 
producers and processors index which was chosen because it contains the company’s key comparators
tsr was calculated by reference to the growth in share price as adjusted for reinvested dividends
all employee share schemes 
the company offers annual invitations to all employees to participate in savings related share option schemes executive 
directors may also participate in the company’s savings related share option scheme on the same basis as all other 
employees there are no performance conditions attached to these schemes 
premier foods total shareholder return — 2005 to 2009
2500
2000
1500
1000
500
00
jan 05 jun 05 dec 05 jun 06 dec 06 jun 07 dec 07 jun 08 dec 08 jun 09 dec 09
■ premier foods ■ ftse 250 excluding selected sectors ■ ftse food producers and processors index premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 67
our business business review governance financial statements other information
service agreements
the committee periodically reviews the company’s policy 
on the duration of directors’ service agreements and the 
notice periods and termination provisions contained in those 
agreements the current policy of the committee is that notice 
periods contained in executive directors’ service contracts 
should be limited to 12 months other than in exceptional 
circumstances such as for the purposes of recruitment 
executive directors have service agreements that continue 
until terminated by 12 months’ notice on either side mr 
schofield’s service agreement is dated 20 july 2004 mr 
kelly’s service agreement is dated 11 february 2009 and mr 
smart’s service agreement is dated 5 october 2009
in the event of early termination other than for a reason 
justifying summary termination in accordance with the terms 
of the service agreement the company may but is not 
obliged to pay to the executive director in lieu of notice 
a sum equal to the annual value of the executive director’s
then salary benefits and pension contributions calculated 
on a pro rata daily basis which he would have received 
during the contractual notice period termination payments 
are to be made in instalments and to the extent that the
executive director receives any sums as a result of alternative 
employment or provision of services while he is receiving such 
payments from the company the payments shall be reduced 
by the amount of such sums entitlements to ontarget 
bonus payments in lieu of notice are included in the service 
agreements for mr schofield and mr smart the remuneration 
committee specifically reviewed this provision during the year
and along with the company believes that these entitlements 
continue to be appropriate in certain circumstances when 
recruiting executive directors the remuneration committee
will monitor this policy annually in the context of evolving 
market practice in this area
the service contracts of executive directors do not provide for 
any enhanced payments in the event of a change of control of 
the company
none of the nonexecutive directors have employment
contracts with the company however each has entered
into a letter of appointment with the company confirming
their appointment for periods ranging from two to three
years unless terminated by either party giving the other one
month’s written notice the appointments are subject to the
provisions of the companies act 2006 and the company’s
articles of association in particular the need for periodic re
election continuation of an individual nonexecutive director’s
appointment is also contingent on that nonexecutive director’s
satisfactory performance which is evaluated annually
there are no provisions for compensation being payable 
upon early termination of an appointment of a nonexecutive 
director
details of nonexecutive appointment periods appear below
date of current 
 dateofinitial appointment
appointment letter expiry date notice period
david kappler 19 july 2004 14 june 2008 13 june 2010 one month
david felwick cbe 19 july 2004 20 july 2007 19 july 2010 one month
louise makin 1 october 2006 1 october 2009 30 september 2012 one month
ian mchoul 19 july 2004 20 july 2007 19 july 2010 one month
david beever 21 january 2008 21 january 2008 20 january 2011 one month
christine cross
2
 21 january 2008 21 january 2008 20 january 2011 one month
 charles miller smith
1 
16 june 2009 12 june 2009 see below see below
1
 the appointment period for mr miller smith is governed by the relationship between the company and wp x investments 
limited “wpx” whereby as long as wpx own at least 239802158 shares in the company they may appoint to the board 
after agreement with the company a subscriber director mr miller smith may terminate his appointment as a director by 
giving one month’s notice in writing 
2
 retired 31 january 2010 premier foods plc annual report and accounts 2009  stock code pfd 68
directors’ remuneration report continued
paul thomas
paul thomas retired as group finance director with effect from 31 august 2009 under the terms of his service agreement 
he was entitled to a 12 months’ notice period however in accordance with that agreement the company has agreed to 
make the following payments in lieu of notice £408000 representing the value of his then salary £204000 in respect of his 
on target bonus entitlement a payment into the pension scheme equivalent to 12 months’ contributions and other contractual 
entitlements with a total value of £30300 these sums are to be paid in 12 monthly instalments
all his awards under the cip lapsed on his retirement his 2006 ltip award having previously lapsed due to the tsr 
performance condition not having been met in accordance with the rules of the deferred bonus scheme his shares in respect 
of the 2006 and 2007 dbs awards 17275 and 8220 respectively were released to him
directors’ interests in ordinary shares
the interests of directors all of which are beneficial at the beginning and end of the year in shares in premier foods plc were
fully paid ordinary 
 share of 1p each
as at as at
31 dec 2009 31 dec 2008
robert schofield 2651358
2
 1820043
paul thomas
1
 1497506
3
 702800
jim smart appointed 19 october 2009  750000 —
tim kelly 112500 50000
david kappler 840424 373522
david felwick cbe 235737 104772
louise makin 58636 28283
ian mchoul 100000 84418
david beever   168750 75000
christine cross retired 31 january 2010  90659 40293
charles miller smith appointed 16 june 2009  680272 —
1
 as at 31 august 2009 the date of mr thomas’s departure from the board
2
 includes 23623 shares under the 2006 deferred bonus scheme which vested but were not exercised during the year
3
 includes 25495 shares under the 2006 and 2007 deferred bonus scheme which vested on mr thomas’s departure from
the board
directors’ share interests include the interests of their spouses civil partners and infant children or stepchildren as required by 
section 822 of the companies act 2006 there were no changes in the beneficial interests of the directors in the company’s
shares between 31 december 2009 and 9 march 2010 premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 69
our business business review governance financial statements other information
information subject to audit
remuneration of executive directors’ year ended 31 december 2009
details of the payments made to executive directors in respect of the year ended 31 december 2009 are shown below
salary  annual
fees bonus other benefits
5
total total
2009 2009 payments 2009 2009 2008
££££££
robert schofield
1
 643530133821 — 20616 797967 658463
paul thomas
2
 28000013600068930018677 1123977 442483
tim kelly
3
 40117990887 —28208 520274 210758
jim smart
4
 98975 — — — 98975 —
1
 included in the figure for mr schofield’s salary  fees is a supplement in lieu of pension of £36630 2008 £34920
2
 retired as a director on 31 august 2009 payments under salary  fees and benefits represent payments made to
mr thomas up to his retirement as a director the annual bonus of £136000 represents a pro rata on target bonus other 
payments represent contractual entitlements under mr thomas’ service contract and with the exception of payment in lieu of  
holiday entitlement are payable in 12 monthly instalments
3
 an additional £8006 was paid to mr kelly in the year for back dated salary relating to his appointment to the board in 2008
included in the figure for mr kelly’s salary  fees is a pension supplement of £38813
4
 appointed as a director on 19 october 2009 included in the figure for mr smart’s salary and fees is a supplement in lieu
of pension of £7585 mr smart was awarded no bonus in respect of 2009 however his bonus for 2010 will be increased 
proportionately to reflect his period of employment to 31 december 2009
5
 benefits include payments made in relation to housing tax advice private health insurance and car and fuel cost
remuneration of nonexecutive directors 
the remuneration of the nonexecutive directors is determined by the chairman and executive members of the board and the 
remuneration of the chairman is determined by the remuneration committee details of the payments made to nonexecutive
directors are shown below
total total
fees fees
2009 2008
££
david kappler 234600 233450
david felwick cbe
1
 70750 71875
louise makin
1
 58750 56500
ian mchoul 70000 69375
david beever
3 
 60250 53710
christine cross 57000 53710
charles miller smith
2
 30875 —
1
 in november 2009 mr felwick stepped down as chairman of the remuneration committee and was replaced by dr makin
the fee as chairman of the committee passed to dr makin from that date
2
 charles miller smith joined the group on 16 june 2009
3
 mr beever became chairman of the newly established finance committee and received a fee as chairman of the committee
with effect from october 2009
the basic fee for a nonexecutive director which includes committee membership fees did not increase during the year 
remaining at £57000 2008 £57000 the basic fee for the chairman of the group also remained unchanged at £234600
2008 £234600 the chairman of the remuneration committee receives £10500 and the chairmen of audit and finance 
committees constituted in 1 october 2009 receive £13000 the senior independent director receives an additional fee of 
£5000 there are no changes to the fees for the chairman and other nonexecutives for 2010
the chairman and the other nonexecutive directors are not eligible to participate in the company’s bonus arrangements share
option schemes longterm incentive plans or pension arrangements  premier foods plc annual report and accounts 2009  stock code pfd 70
directors’ remuneration report continued
directors’ interest in share options 
at the beginning of the year and at 31 december 2009 the following directors had options to subscribe for shares of 1 pence 
each granted under the terms of the premier foods plc executive share option scheme and savings related share option 
scheme
 adjusted
 totakelapsed
options granted account of cancelled options adjusted
as at during placing and during as at exercise
31 dec 2008 the year open offer
1
the year 31 dec 2009 price exercise period
robert schofield 1108910
3
 — 56776 —1165686 16138p 230707–220714
9760
5
 — 499 10259 — 6849p 011211–310512
— 25208
6
 — — 25208 36p 011212–310513
paul thomas
2
 660188
3
 — 33802 693990 — 16138p 230707–220714
2938
4
 — 150 3088 — 18645p 011210–310511
4853
5
 — 248 5101 — 6849p 011211–310512
tim kelly 9760
5
 — 499 10259 — 6849p 011211–310512
— 25208
6
 — — 25208 36p 011212–310513
1
 options adjusted on 19 august 2009 for the placing and open offer and firm placing which took place on 5 march 2009
2
 mr thomas’s awards under the esos lapsed on 31 august 2009 the date of his retirement from the board
3
 options granted under the premier foods plc executive share option scheme the portion of the award relating to tsr
based measures became partially exercisable in 2007 and the award lapsed to the extent performance conditions were not 
met under the rules of the award there is provision for one retest of eps performance targets the retest of the eps targets 
following the 2008 yearend was considered by the remuneration committee and it was decided that the portion of the 
award subject to eps performance targets vested and became available for exercise 
4
 options granted under the 2007 premier foods plc savings related share option scheme
5
 options granted on 16 october 2008 under the premier foods plc savings related share option scheme these options
were cancelled during the year
6
 options granted on 9 october 2009 under the premier foods plc savings related share option scheme exercise of these
options are not subject to any performance conditions
on 31 december 2009 the market price of ordinary shares of premier foods plc was 3570 pence and the range during 2009 
was 250 pence to 4539 pence 
there were no changes in the options held by the directors between 31 december 2009 and 9 march 2010 the register of 
interests which is open to inspection contains full details of directors’ shareholdings and options premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 71
our business business review governance financial statements other information
coinvestment plan 
the following table shows the executive directors’ interests in shares awarded under the premier foods coinvestment plan 
end of
period when
market qualifying
price number of maximum conditions
on date shares matching must
award date of award pledged award be met
robert schofield 160507 31550p 390163 1230418
1
 160510
150408 12550p 1010826 3187741
1
 150411
090609 405p 1062580 3187740 090612
paul thomas 160507 31550p 196721 620379
12
 160510
150408 12550p 509660 1607264
12
 150411
090609 405p 642905 1928714
2
 090612
tim kelly 160507 31550p 59000 315360
1
 160510
150408 12550p 157350 841056
1
 150411
090609 405p 555095 1665284 090612
jim smart 131109 3463p 750000 2250000 131112
1
 options adjusted on 19 august 2009 for the placing and open offer and firm placing which took place in march 2009
2
 mr thomas’s awards under the cip lapsed on 31 august 2009 the date of his retirement from the board
longterm incentive plan 
the following table shows the executive directors’ interests in shares awarded under the ltip prior to the introduction of 
the cip 
these figures represent the maximum potential award
end of
period when
market qualifying
price lapsed conditions
on date awards held during awards held must
award date of award 31 dec 2008 the year 31 dec 2009 be met
robert schofield 130406 28975p 198155 198155 — 130409
paul thomas 130406 28975p 114973 114973 — 130409
tim kelly 180407 30400p 72685 72685 — 130409
for awards made in 2006 vesting was subject to the fulfilment of tsrbased performance conditions measured over a three 
year period against appropriate comparators and the achievement of eps growth 2 above the uk retail price index over the 
performance period
for awards in 2007 the performance conditions used for the ltip were aligned to those used for the cip and vesting was 
therefore subject to a combination of eps growth and tsrbased performance conditions as measured over a threeyear 
period the vesting schedule for the cip as detailed above would also apply
following the end of the performance period for the 2006 ltip and psp in 2009 the committee determined that the required 
tsr performance conditions had not been achieved and the awards lapsed in full 
awards under the scheme were made in the year to senior management and the ltip will continue to be the primary
performance incentive scheme for management below executive board level premier foods plc annual report and accounts 2009  stock code pfd 72
directors’ remuneration report continued
pension entitlements
the following tables set out information on the defined benefit pension entitlements of the executive directors under the pfps 
and rhmps
increase
total in accrued
accrued increase in benefit during
years benefit at accrued the year
age at service at 31 dec benefit during excluding
31 dec 31 dec 2009 the year inflation
2009 2009£££
robert schofield 58 4 years 9800 500 500
10 months
paul thomas
1
 547years2140051005100
2 months
tim kelly 52 6 years 21500 3400 3400
4 months
1
 retired as a director and left the scheme on 31 august 2009
for each director the total accrued benefit at 31 december 2009 represents the annual pension that is expected to be payable 
on eventual retirement given the length of service and salary subject to the earnings cap of each director at 31 december 
2009 the increase in accrued benefit earned during the year represents the increase in this expected pension including the 
effect of inflation when compared with the position at 31 december 2008
the increase in accrued pension excluding the effect of inflation over the year is also shown
 schedule 8 of the large and mediumsized 
 requirements under companies and groups accounts and reports regulations 2008 the listing rules
increase in transfer value
transfer value at transfer value at transfer value of of the increase
31 dec 2008 of total 31 dec 2009 of total accrued benefit in accrued benefit
accrued benefit accrued benefit during the year excluding inflation
££££
robert schofield 124200 142600 18400 6600
paul thomas
1
179000 264800 85800 63000
tim kelly 237500 341800 96100 41100
1
 retired as a director and left the scheme on 31 august 2009 premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 73
our business business review governance financial statements other information
all transfer values have been calculated in accordance with 
regulation 7 to 7e of the occupational pensions schemes
transfer values regulations 1996 and subsequent
amendments the transfer values of the accrued entitlement 
represent the value of assets that the pension scheme would
need to transfer to another pension provider on transferring 
the scheme’s liability in respect of the director’s pension 
benefits they do not represent sums payable to individual 
directors and therefore cannot be added meaningfully to 
annual remuneration
for each director the increase in transfer value of accrued 
benefits under the requirements of schedule 8 of the large 
and mediumsized companies and groups accounts and 
reports regulations 2008 is the transfer value of the total 
accrued benefit at 31 december 2009 less the corresponding 
transfer value at 31 december 2008 less contributions 
made by the director during the period the transfer value 
of the increase in accrued benefits under the listing rules 
is the transfer value at 31 december 2009 of the increase in 
accrued benefits during the period excluding inflation less 
contributions made by the directors during the period 
the transfer values disclosed above do not represent the 
sum paid or payable to the individual director instead they 
represent a potential liability of the pension scheme
dr louise makin
chairman of the remuneration committee 
premier foods plc
9 march 2010 premier foods plc annual report and accounts 2009  stock code pfd 74
independent auditors’ report to the members of premier foods plc
we have audited the group financial statements of
premier foods plc for the year ended 31 december 2009
which comprise the consolidated income statement the 
consolidated statement of comprehensive income the 
consolidated balance sheet the consolidated statement of 
cash flows the consolidated statement of changes in equity 
and the related notes the financial reporting framework 
that has been applied in their preparation is applicable law 
and international financial reporting standards ifrss as 
adopted by the european union 
respective responsibilities of directors and auditors 
as explained more fully in the statement of directors’ 
responsibilities set out on pages 52 to 53 the directors
are responsible for the preparation of the group financial
statements and for being satisfied that they give a true 
and fair view our responsibility is to audit the group 
financial statements in accordance with applicable law and 
international standards on auditing uk and ireland those 
standards require us to comply with the auditing practices 
board’s ethical standards for auditors
this report including the opinions has been prepared 
for and only for the company’s members as a body in 
accordance with chapter 3 of part 16 of the companies 
act 2006 and for no other purpose we do not in giving 
these opinions accept or assume responsibility for any other 
purpose or to any other person to whom this report is shown
or into whose hands it may come save where expressly 
agreed by our prior consent in writing
scope of the audit of the financial statements 
an audit involves obtaining evidence about the amounts 
and disclosures in the financial statements sufficient to 
give reasonable assurance that the financial statements 
are free from material misstatement whether caused by
fraud or error this includes an assessment of whether
the accounting policies are appropriate to the group’s
circumstances and have been consistently applied and 
adequately disclosed the reasonableness of significant 
accounting estimates made by the directors and the overall 
presentation of the financial statements
opinion on financial statements 
in our opinion the group financial statements 
• give a true and fair view of the state of the group’s affairs
as at 31 december 2009 and of its profit and cash flows 
for the year then ended 
• have been properly prepared in accordance with ifrss as
adopted by the european union and 
• have been prepared in accordance with the requirements
of the companies act 2006 and article 4 of the las 
regulation 
opinion on other matters prescribed by the companies 
act 2006 
in our opinion
• the information given in the directors’ report for the financial
year for which the group financial statements are prepared 
is consistent with the group financial statements and
• the information given in the risk management section set
out on pages 36 to 41 and the corporate governance 
statement set out on pages 55 to 60 in the “annual report 
and accounts 2009” with respect to internal control and risk 
management systems and about share capital structures is 
consistent with the financial statements 
matters on which we are required to report by exception 
we have nothing to report in respect of the following
under the companies act 2006 we are required to report to 
you if in our opinion 
• certain disclosures of directors’ remuneration specified by
law are not made or 
• we have not received all the information and explanations
we require for our audit or
• a corporate governance statement has not been prepared
by the parent company
under the listing rules we are required to review 
• the directors’ statement set out on page 54 in relation to
going concern and 
• the part of the corporate governance statement relating to
the company’s compliance with the nine provisions of the 
june 2008 combined code specified for our review
other matter 
we have reported separately on the parent company
financial statements of premier foods plc for the year ended 
31 december 2009 and on the information in the directors’ 
remuneration report that is described as having been audited
ranjan sriskandan 
senior statutory auditor
for and on behalf of pricewaterhousecoopers llp
chartered accountants and statutory auditors
london
9 march 2010
notes
a the maintenance and integrity of the premier foods plc website is the 
responsibility of the directors the work carried out by the auditors does not
involve consideration of these matters and accordingly the auditors accept 
no responsibility for any changes that may have occurred to the financial 
statements since they were initially presented on the website
b legislation in the united kingdom governing the preparation and 
dissemination of financial statements may differ from legislation in other 
jurisdictions
the group premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 75
our business business review governance financial statements other information
independent auditors’ report to the members of premier foods plc
we have audited the parent company financial statements
of premier foods plc for the year ended 31 december 
2009 which comprise the company balance sheet and the 
related notes the financial reporting framework that has
been applied in their preparation is applicable law and united 
kingdom accounting standards united kingdom generally 
accepted accounting practice
respective responsibilities of directors and auditors 
as explained more fully in the statement of directors’ 
responsibilities set out on pages 52 to 53 the directors
are responsible for the preparation of the parent company
financial statements and for being satisfied that they give a 
true and fair view our responsibility is to audit the parent 
company financial statements in accordance with applicable 
law and international standards on auditing uk and ireland 
those standards require us to comply with the auditing 
practices board’s ethical standards for auditors
this report including the opinions has been prepared 
for and only for the company’s members as a body in 
accordance with chapter 3 of part 16 of the companies 
act 2006 and for no other purpose we do not in giving 
these opinions accept or assume responsibility for any other 
purpose or to any other person to whom this report is shown
or into whose hands it may come save where expressly 
agreed by our prior consent in writing
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts 
and disclosures in the financial statements sufficient to 
give reasonable assurance that the financial statements 
are free from material misstatement whether caused by
fraud or error this includes an assessment of whether the
accounting policies are appropriate to the parent company’s
circumstances and have been consistently applied and 
adequately disclosed the reasonableness of significant 
accounting estimates made by the directors and the overall 
presentation of the financial statements
opinion on financial statements 
in our opinion the parent company financial statements 
• give a true and fair view of the state of the company’s
affairs as at 31 december 2009
• have been properly prepared in accordance with united
kingdom generally accepted accounting practice and 
• have been prepared in accordance with the requirements
of the companies act 2006 
opinion on other matters prescribed by the companies 
act 2006 
in our opinion 
• the part of the directors’ remuneration report to be audited
has been properly prepared in accordance with the 
companies act 2006 and 
• the information given in the directors’ report for the financial
year for which the parent company financial statements are
prepared is consistent with the parent company financial
statements
matters on which we are required to report by exception
we have nothing to report in respect of the following matters
where the companies act 2006 requires us to report to you if 
in our opinion 
• adequate accounting records have not been kept by the
parent company or returns adequate for our audit have not 
been received from branches not visited by us or 
• the parent company financial statements and the part of
the directors’ remuneration report to be audited are not in 
agreement with the accounting records and returns or 
• certain disclosures of directors’ remuneration specified by
law are not made or 
• we have not received all the information and explanations
we require for our audit
other matter 
we have reported separately on the group financial
statements of premier foods plc for the year ended 
31 december 2009 
ranjan sriskandan 
senior statutory auditor
for and on behalf of pricewaterhousecoopers llp
chartered accountants and statutory auditors
london
9 march 2010
notes
a the maintenance and integrity of the premier foods plc website is the 
responsibility of the directors the work carried out by the auditors does not
involve consideration of these matters and accordingly the auditors accept 
no responsibility for any changes that may have occurred to the financial 
statements since they were initially presented on the website
b legislation in the united kingdom governing the preparation and 
dissemination of financial statements may differ from legislation in other 
jurisdictions
the company premier foods plc annual report and accounts 2009  stock code pfd 76
consolidated income statement
year ended year ended
31 dec 31 dec
2009 2008
restated
1
note £m £m
continuing operations
turnover 4 26610 26036
cost of sales  18630 18195
gross profit 7980 7841
selling marketing and distribution costs  3560 3510
administrative costs  2532 4791
net other operating expensesincome  5 123 46
operating profitloss 7 1765 414
before exceptional items  2363 2551
impairment of goodwill  6 – 1944
other exceptional items  6 598 1021
interest payable and other financial charges  9 1798 1861
interest receivable and other financial income  9 113 416
net movement on fair valuation of interest rate financial instruments  9 387 2189
profitloss before taxation for continuing operations 467 4048
taxation chargecredit 10 68 306
profitloss after taxation for continuing operations 399 3742
loss from discontinued operations  12 147 705
profitloss for the year attributable to equity shareholders 252 4447
basic and diluted earningsloss per share pence
12
 11 12 491
basic and diluted earningsloss per share pence — continuing
12
 11 19 413
basic and diluted loss per share pence — discontinued
2
11 07 78
adjusted earnings per share pence — continuing
123
 11 58 144
1 the 31 december 2008 comparatives have been restated to reflect an increased sharebased payment charge following the amendment to ifrs 2
2 comparatives have been restated to reflect the impact of the placing and open offer and firm placing in the year
3 adjusted earnings per share is defined as trading profit less net regular interest payable less a notional tax charge at 28 2008 285 divided by the 
weighted average number of ordinary shares of the company   
the notes on pages 81 to 122 form an integral part of the consolidated financial statements premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 77
our business business review governance financial statements other information
consolidated statement of comprehensive income
year ended year ended
31 dec 31 dec
2009 2008
restated
1
note £m £m
profitloss for the year 252 4447
other comprehensive income
actuarial lossesgains on pensions  26 4688 562
deferred tax creditcharge on actuarial lossesgains on pensions  1321 188
exchange differences on translation  44 108
fair value movement on net investment hedge  57 199
translation reserves relating to disposals 13 61 –
net investment hedge relating to disposals  13 72 –
total other comprehensive income for the year 3343 283
total comprehensive income attributable to owners of the company 3091 4164
1 comparatives have been restated to reflect an increased sharebased payment charge following the amendment to ifrs 2
the notes on pages 81 to 122 form an integral part of the consolidated financial statements premier foods plc annual report and accounts 2009  stock code pfd 78
consolidated balance sheet
as at as at
31 dec 31 dec
2009 2008
note £m £m
assets
noncurrent assets
property plant and equipment 15 6352 6389
goodwill  16 13713 13713
other intangible assets  17 11084 11595
retirement benefit assets  26 – 1637
total noncurrent assets 31149 33334
current assets
assets held for sale  14 18 1244
inventories  19 2140 2388
trade and other receivables 20 3470 3370
financial assets — derivative financial instruments  23 25 212
cash and cash equivalents  28 194 406
total current assets 5847 7620
total assets 36996 40954
liabilities
current liabilities 
trade and other payables 21 4850 5398
financial liabilities 
— shortterm borrowings  22 1525 1748
— derivative financial instruments  23 1624 2503
— other financial liabilities at fair value through profit or loss  23 368 –
accrued interest payable  137 228
provisions 25 159 236
current income tax liabilities  25 41
liabilities held for sale  14 – 565
total current liabilities 8688 10719
noncurrent liabilities
financial liabilities 
— longterm borrowings  22 12320 16326
retirement benefit obligations  26 4285 1752
provisions 25 310 281
other liabilities  97 27
deferred tax liabilities  24 647 1931
total noncurrent liabilities 17659 20317
total liabilities 26347 31036
net assets 10649 9918
equity
capital and reserves
share capital  27 240 85
share premium  27 11247 7606
merger reserve  27 8907 8907
other reserves  27 101 230
profit and loss reserve 27 9645 6451
capital and reserves attributable to the company’s equity shareholders 10648 9917
minority interest  27 01 01
total shareholders’ funds 10649 9918
the notes on pages 81 to 122 form an integral part of the consolidated financial statements
signed on behalf of the board of directors who approved the financial statements on 9 march 2010
robert schofield jim smart
director and  director and
chief executive chief financial officer premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 79
our business business review governance financial statements other information
consolidated statement of cash flows
year ended year ended
31 dec 31 dec
2009 2008
note £m £m
cash generated from operating activities  28 2194 1883
interest paid  1625 1504
interest received  108 450
taxation received 06 01
cash inflow from operating activities 683 830
sale of subsidiaries   13 452 –
purchase of property plant and equipment  573 1298
purchase of intangible assets  276 312
sale of property plant and equipment  94 264
cash outflow from investing activities 303 1346
repayment of borrowings  4388 1787
proceeds from borrowings – 2916
proceeds from securitisation programme – 224
financing costs  28 261 202
proceeds from share issue 27 4039 –
share issue costs  27 243 –
dividends paid  – 547
cash outflowinflow from financing activities 853 604
net outflowinflow of cash and cash equivalents 473 88
cash and cash equivalents at beginning of year  337 238
effect of movement in foreign exchange 15 11
cash and cash equivalents at end of year 28 151 337
the notes on pages 81 to 122 form an integral part of the consolidated financial statements premier foods plc annual report and accounts 2009  stock code pfd 80
consolidated statement of changes in equity
share share merger other profit and minority
capital premium reserve reserves loss reserve interest total
£m £m £m £m £m £m £m
at 1 january 2009 85 7606 8907 230 6451 01 9918
profit for the year –––– 252 – 252
other comprehensive income – – – 129 3472 – 3343
shares issued 155 3884  –  –  –  –  4039
cost of shares issued – 243 –  –  –  –  243
sharebased payments –––– 26 – 26
at 31 december 2009 240 11247 8907 101 9645 01 10649
at 1 january 2008 85 7606 8907 31 1965 01 14603
loss for the year
1
– – – – 4447 – 4447
other comprehensive income – – – 199 482 – 283
dividends paid  –  –  –  –  547  –  547
sharebased payments
1
–––– 31 – 31
tax on sharebased payments – – – – 05 – 05
at 31 december 2008 85 7606 8907 230 6451 01 9918
1 comparatives have been restated to reflect an increased sharebased payment charge of £09m following the amendment to ifrs 2
the notes on pages 81 to 122 form an integral part of the consolidated financial statements premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 81
our business business review governance financial statements other information
notes to the financial statements
1 general information
premier foods plc the “company” is a public limited company incorporated in england and wales under the companies act 1985 as
amended and restated registered number 5160050 with its registered office at premier house centrium business park griffiths way
st albans hertfordshire al1 2re the principal activities of the company and its subsidiaries the “group” are food manufacturing 
processing and distribution further information about the group’s activities can be found in the “group at a glance” section of this 
annual report
these group consolidated financial statements were authorised for issue by the board of directors on 9 march 2010
2  accounting policies
the principal accounting policies applied in the preparation of these consolidated financial statements are set out below these policies 
have been consistently applied to all the years presented unless otherwise stated
21 basis of preparation 
the group consolidated financial statements have been prepared on the going concern basis which assumes that the group will 
continue to be able to meet its liabilities as they fall due for the foreseeable future in 2008 the report of the auditors was unqualified 
but contained an emphasis of matter in respect of the group’s ability to continue as a going concern the material uncertainty as 
described in note 21 of the group’s financial statements for the year ended 31 december 2008 has been addressed following the 
resolution passed at the extraordinary general meeting on 23 march 2009 to approve the placing and open offer and firm placing see 
note 27 for further details
the consolidated financial statements of premier foods plc have been prepared in accordance with international financial reporting 
standards “ifrs” as endorsed by the european union “eu” international financial reporting interpretation committee “ifric” 
interpretations and the companies act 2006 applicable to companies reporting under ifrs and on the historical cost basis with the 
exception of derivative financial instruments defined benefit pension schemes and sharebased payments which are incorporated 
using fair value the principal accounting policies adopted are set out below
the preparation of financial statements in conformity with ifrs requires the use of certain critical accounting estimates it also requires 
management to exercise its judgement in the process of applying the group’s accounting policies the areas involving a higher degree 
of judgement or complexity or areas where assumptions and estimates are significant to the consolidated financial statements are
disclosed in note 3
the following accounting standards and interpretations issued by the international accounting standards board iasb or ifric are
effective for the first time in the current financial year and have been adopted by the group
ias 1 revised — “presentation of financial statements”
ifrs 2 amendment — “vesting conditions and cancellations”
ifrs 7 amendment — “financial instruments disclosures”
ifrs 8 — “operating segments”
ias 23 revised — “borrowing costs”
ifrs 1ias 27 — “cost of an investment in a subsidiary jointly controlled entity or associate”
ias 1ias 32 amendment — “puttable financial instruments and obligations arising on a liquidation”
ias 39 — “financial instruments recognition and measurement”
ifric 9ias 39 amendment — “embedded derivatives”
ifric 13 — “customer loyalty programmes” 
ifric 14 — “ias 19 — the limit on a defined benefit asset minimum funding requirements and their interaction”
the application of international accounting standard “ias” 1 revised has resulted in the group presenting both a consolidated 
statement of comprehensive income and a consolidated statement of changes in equity as primary statements the consolidated 
statement of changes in equity presents all changes in equity and the consolidated statement of comprehensive income presents all 
changes in financial position other than through transactions with owners this presentation has been applied in these consolidated 
financial statements for the year ended 31 december 2009 comparative information has been represented so that it is also in 
conformity with the revised standard
ifrs 2 amendment — “vesting conditions and cancellations” has been implemented during the year and the prior year results have 
been restated the effect of this restatement has been to increase administrative costs and therefore increase the operating loss for the 
year ended 31 december 2008 by £09m and to increase the charge to the profit and loss reserve by the same amount 
the impact of the application of ifrs 8 is disclosed in note 4 
the application of the remaining standards and interpretations has not had a material effect on the net assets results and disclosures 
of the group  premier foods plc annual report and accounts 2009  stock code pfd 82
notes to the financial statements continued
2  accounting policies continued
new standards and interpretations not applied
up to and during the year ended 31 december 2009 the iasb and the ifric have issued the following standards and interpretations 
with an effective date as endorsed by the eu after the date of these financial statements
effective for accounting periods
beginning on or after
international financial reporting standards
ifrs 1 revised first time adoption of ifrs 1 july 2009
ifrs 3 revised business combinations 1 july 2009
ias 27 revised consolidated and separate financial statements 1 july 2009
ifrs 1ias 27  cost of an investment in a subsidiary jointly controlled entity or associate 1 july 2009
amendment
ias 39 amendment financial instruments recognition and measurement on eligible hedged items 1 july 2009
ias 32 amendment financial instruments presentation on classification of rights issues 1 february 2010
international financial reporting interpretations committee
ifric 15 agreement for the construction of real estate 1 january 2010
ifric 16  hedges of a net investment in a foreign operation 1 july 2009
ifric 17 distributions of noncash assets to owners 1 july 2009
ifric 18 transfers of assets from customers 31 october 2009
these standards will be adopted by the group in future accounting periods the impact of the application of the amendment to ifrs 7 
is disclosed in note 23 
the directors do not anticipate that the adoption of any of these standards and interpretations will have a material impact on the 
group’s financial statements
the following standards and amendments to published standards have not been endorsed by the eu
international financial reporting standards
ifrs 1 amendment additional exemptions
ifrs 1 amendment first time adoption
ifrs 2 amendment sharebased payments — group cashsettled sharebased payment transactions
ifrs 9 financial instruments
ias 24 amendment related party disclosures
international financial reporting interpretations committee
ifric 14 amendment prepayments of a minimum funding requirement
ifric 19 extinguishing financial liabilities with equity instruments
22 basis of consolidation
the consolidated financial statements include the financial statements of premier foods plc and entities controlled by the company 
its subsidiaries up to 31 december each year control is achieved where the company has the power to govern the financial and 
operating policies of an investee entity so as to obtain benefits from its activities
the purchase method of accounting is used for all acquisitions
on acquisition the assets and liabilities and contingent liabilities of a subsidiary are measured at their fair values as at that date any 
excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recorded as goodwill 
the results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the 
effective date of acquisition or up to the effective date of disposal as appropriate upon completion of the group’s fair value exercise in 
accordance with ifrs 3 “business combinations” “ifrs 3” in the 12 months following acquisition comparatives are restated for the 
final fair value adjustments in addition comparatives are also restated to reclassify disposed businesses into discontinued operations
accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group
all intergroup transactions balances income and expenses are eliminated on consolidation
23 turnover
turnover comprises the invoiced value for the sale of goods net of sales rebates discounts value added tax and other taxes directly
attributable to turnover and after eliminating sales within the group turnover is recognised when the outcome of a transaction can be
measured reliably and when it is probable that the economic benefits associated with the transaction will flow to the group turnover is
recognised on the following basis
i sale of goods
sales of goods are recognised as turnover on transfer of the risks and rewards of ownership which generally coincides with the time 
when the merchandise is delivered to customers and title passes
ii sales rebates and discounts
sales rebates and discount reserves are established based on management’s best estimate of the amounts necessary to meet 
claims by the group’s customers in respect of these rebates and discounts the provision is made at the time of sale and released if 
unutilised after assessment that the likelihood of such a claim being made has become remote premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 83
our business business review governance financial statements other information
2  accounting policies continued
24 segmental reporting
operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker
the chief operating decision maker is responsible for allocating resources and assessing performance of the operating segments see 
note 4 for further details 
25 sharebased payments
the fair value of employee share option plans is calculated using an optionpricing model in accordance with ifrs 2 “sharebased 
payment” “ifrs 2” the resulting cost is charged to the income statement over the vesting period of the options the amount of the 
charge is adjusted to reflect expected and actual levels of options vesting
26 foreign currency translation
transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction monetary assets and liabilities 
denominated in foreign currencies are translated into sterling the group’s presentational currency at rates of exchange ruling at the 
end of the financial year
the results of overseas subsidiaries with functional currencies other than in sterling are translated into sterling at the average rate 
of exchange ruling in the year the balance sheets of overseas subsidiaries are translated into sterling at the closing rate exchange 
differences arising from retranslation at year end exchange rates of the net investment in foreign subsidiaries are recorded in reserves as
a separate component of equity when a foreign operation is sold exchange differences previously taken to equity are recognised in the 
income statement as part of the gain or loss on sale 
goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity 
and translated at the closing rate
all other exchange gains or losses are recorded in the income statement
27 dividends
dividend distribution to the group’s shareholders is recognised as a liability in the group’s financial statements in the period in which the 
dividends are approved by the group’s shareholders and for interim dividends in the period in which they are paid
28 propertyplantandequipment“ppe”
property plant and equipment is initially recorded at cost subsequent expenditure is added to the carrying value of the asset when it 
is probable that incremental future economic benefits will transfer to the group all other subsequent expenditure is expensed in the 
period it is incurred
differences between the cost of each item of ppe and its residual value are written off over the estimated useful life of the asset 
using the straightline method reviews of the estimated remaining useful lives and residual values of individual productive assets are
performed annually taking account of commercial and technological obsolescence as well as normal wear and tear freehold land is 
not depreciated the useful economic lives of owned assets range from 20 to 50 years for buildings and 3 to 35 years for vehicles 
plant and equipment
all items of ppe are reviewed for impairment when there are indications that the carrying value may not be fully recoverable 
29 business combinations and goodwill 
on the acquisition of a business fair values are attributed to the tangible and intangible assets and liabilities acquired goodwill arises 
when the fair value of the consideration for a business exceeds the fair value of the aggregate of the net assets acquired goodwill 
arising on acquisitions is capitalised and subject to impairment review both annually and when there are indications that the carrying 
value may not be recoverable 
items of ppe acquired as part of a business acquisition are stated at fair value at the date of acquisition using a market value or 
depreciated replacement cost model
on acquisition the group undertakes a review of the accounting policies of the business acquired to ensure compliance both with 
ifrss and the accounting policies of the group
210 intangible assets
in addition to goodwill the group recognises the following intangible assets 
acquired intangibles
acquired trade marks brands customer relationships licences recipes and similar assets that are controlled through custody or legal 
rights and that could be sold separately from the rest of the business are capitalised where fair value can be reliably measured a 
reputable independent specialist performs the valuations all of these assets are considered to have finite lives and are amortised on a 
straightline basis over their estimated useful economic lives that range from 7 to 40 years
research and development
research expenditure is charged to the income statement in the year in which it is incurred
costs incurred in developing a product typically its recipe or packaging are charged to income in the year in which they are incurred 
unless the future economic benefits of the project can be regarded as reasonably certain and are in accordance with ias 38 “intangible 
assets” “ias 38” in which case they are capitalised and amortised over their estimated useful economic lives premier foods plc annual report and accounts 2009  stock code pfd 84
notes to the financial statements continued
2  accounting policies continued
software development costs
assets acquired or internally developed such as software are capitalised when the future economic benefit is reasonably assured 
and the criteria within ias 38 are met software development costs are capitalised and amortised over their estimated useful lives on a 
straightline basis over a range of 3 to 10 years 
211 impairment 
the useful economic lives of intangible assets are determined based on a review of a combination of factors including the asset 
ownership rights acquired and the nature of the overall product life cycle 
intangible assets and property plant and equipment are tested for impairment when an event that might affect asset values has 
occurred an impairment loss is recognised in the income statement to the extent that the carrying amount cannot be recovered either 
by selling the asset or by the discounted future earnings from operating the assets in accordance with ias 36 “impairment of assets”
intangible assets with finite lives are subject to impairment testing on indication of impairment goodwill is tested annually for 
impairment any impairment losses are written off immediately
212 interest
i interest expense
borrowing costs are accounted for on an accruals basis in the income statement using the effective interest method
ii interest income
interest income is recognised on a time proportion basis taking into account the principal amounts outstanding and the interest rates 
applicable taking into consideration the interest element of derivatives
213 leases
assets held under finance leases where substantially all the risks and rewards of ownership are transferred to the group are
capitalised and included in property plant and equipment at the lower of the minimum lease payments or fair value each asset is 
depreciated over the shorter of the lease term or its estimated useful life on a straightline basis obligations relating to finance leases 
net of finance charges in respect of future periods are included under borrowings the interest element of the rental obligation is 
allocated to accounting periods during the lease term to reflect a constant rate of interest on the remaining balance of the obligation for 
each accounting period 
rental costs under operating leases are charged to the income statement on a straightline basis over the lease period
214 inventories
inventory is valued at the lower of cost and net realisable value where appropriate cost includes production and other attributable 
overhead expenses as described in ias 2 “inventories” cost is calculated on a first in first out basis by reference to the invoiced value 
of supplies and attributable costs of bringing the inventory to its present location and condition
all inventories are reduced to net realisable value where the estimated selling price is lower than cost
215 taxation
the charge or credit for taxation is based on the profit or loss for the year and takes into account deferred taxation 
deferred taxation is accounted for in respect of temporary differences between the carrying amount of assets and liabilities in the 
financial statements and the corresponding tax bases used in computation of taxable profit deferred taxation is not provided on the 
initial recognition of an asset or liability in a transaction other than in a business combination if at the time of the transaction there is no 
effect on either accounting or taxable profit or loss
deferred tax is measured at the tax rates that are expected to apply in the periods in which the asset or liability is settled based on 
tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date it is recognised in the income 
statement except when it relates to items credited or charged directly to equity in which case the deferred tax is also dealt with in 
equity
deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the 
temporary difference can be utilised their carrying amount is reviewed at each balance sheet date on the same basis
deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and when the group 
intends to settle its current tax assets and liabilities on a net basis
216 employee benefits
group companies provide a number of longterm employee benefit arrangements primarily through pension schemes the schemes
are generally funded through payments to insurance companies or trusteeadministered funds determined by periodic independent
actuarial calculations the group has both defined benefit and defined contribution plans  premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 85
our business business review governance financial statements other information
2  accounting policies continued
defined benefit plans
a defined benefit plan is a pension plan that defines the amount of pension benefit that an employee will receive on retirement usually 
dependent on factors such as age years of service and compensation 
the liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit 
obligation at the balance sheet date less the fair value of plan assets together with adjustments for actuarial gains or losses and past 
service costs defined benefit obligations are calculated annually by independent actuaries using the projected unit credit method 
the present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using yields of 
highquality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity 
approximating to the terms of the related pension liability
actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to the 
statement of comprehensive income in the year in which they arise
current service costs pastservice costs administration costs expected return on assets and interest costs are recognised 
immediately in the income statement unless the changes to the pension plan are conditional on the employees remaining in service for 
a specified period of time the vesting period in this case the pastservice costs are amortised on a straightline basis over the vesting 
period
defined contribution plans
a defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity which then invests 
the contributions to buy annuities for the pension liabilities as they become due based on the value of the fund hence the group has 
no legal or constructive obligations to pay further contributions
obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement as they 
fall due
217 provisions
provisions are recognised when the group has present legal or constructive obligations as a result of past events it is probable that 
an outflow of resources will be required to settle the obligations and a reliable estimate of the amount can be made where the group 
expects a provision to be reimbursed for example under an insurance contract the reimbursement is recognised as a separate asset 
but only when the reimbursement is virtually certain where material the group discounts its provisions 
218 contingent liabilities and contingent assets
a contingent liability is a possible obligation that arises from past events and the existence of which will only be confirmed by the 
occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the group or the amount of 
obligation cannot be measured reliably a contingent liability is not recognised but is disclosed in the notes to the financial statements 
when an outflow becomes probable it is recognised as a provision 
a contingent asset is a possible asset that arises from past events and the existence of which will be confirmed only by the occurrence 
or nonoccurrence of one or more uncertain events not wholly within the control of the group contingent assets are not recognised 
but are disclosed in the notes to the financial statements when an inflow of economic benefits is probable when inflow is virtually 
certain an asset is recognised
219 financial instruments
financial assets and financial liabilities are recognised on the group’s balance sheet when the group becomes a party to the 
contractual provisions of the instrument
trade and other receivables
trade and other receivables are initially measured at fair value and subsequently measured at amortised cost less any provision for 
impairment a provision is made for impairment when there is objective evidence that the group will not be able to collect all amounts 
due according to the terms of the receivables trade and other receivables are discounted when the time value of money is considered 
material 
the rights and obligations relating to those trade receivables that have been sold to third parties are derecognised from the balance 
sheet where the risks and rewards of ownership are considered to have transferred cash received from third parties in exchange for 
the transfer of ownership is recorded within cash and cash equivalents with the cost of financing prior to settlement by the customer 
recorded as interest on an accruals basis amounts received from customers for receivables in respect of which title has transferred 
for example under the debtors securitisation programme represent amounts owed to the transferee and are recorded as shortterm 
borrowings
cash and cash equivalents
cash and cash equivalents with original maturities at inception of less than 90 days comprise cash on hand and demand deposits 
and other shortterm highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant 
risk of changes in value
for the purpose of the statement of cash flows cash and cash equivalents comprise cash at bank cash in hand shortterm deposits 
with an original maturity of three months or less held for the purpose of meeting shortterm cash commitments and bank overdrafts premier foods plc annual report and accounts 2009  stock code pfd 86
notes to the financial statements continued
2  accounting policies continued
financial liabilities and equity
financial liabilities and equity instruments issued by the group are classified according to the substance of the contractual 
arrangements entered into and the definitions of a financial liability and an equity instrument an equity instrument is any contract that 
evidences a residual interest in the assets of the group after deducting all of its liabilities the accounting policies adopted for specific 
financial liabilities and equity instruments are set out below
bank borrowings
interestbearing bank loans and overdrafts are measured initially at fair value and subsequently at amortised cost using the effective 
interest rate method any difference between the proceeds net of transaction costs and inclusive of debt issuance costs and the 
settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the group’s accounting 
policy for borrowing costs
trade and other payables
trade and other payables are initially measured at fair value and subsequently measured at amortised cost trade payables and other
liabilities are discounted when the time value of money is considered material
equity instruments
equity instruments issued by the company are recorded at the proceeds received net of directly attributable issue costs
derivative financial instruments 
derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risk and 
characteristics are not closely related to those of the host contracts and the host contracts are not carried at fair value with unrealised 
gains or losses reported in the income statement derivatives are initially recognised at fair value on the date a derivative contract is 
entered into and are subsequently remeasured at their fair value movements in fair value of foreign exchange derivatives are recognised 
within other operating income and expense and those relating to interest rate swaps are recorded within the net movement on fair 
valuation of interest rate financial instruments
other items at fair value through profit or loss 
other items at fair value through profit or loss are initially recognised at fair value on the date the contract is entered into and are
subsequently remeasured at their fair value movements in fair value are recorded within the net movement on fair valuation of interest 
rate financial instruments see notes 9 and 23 for further details
net investment hedge
any gain or loss on the hedging instrument relating to the effective portion of changes in the fair value of derivatives that are designated 
and qualify as net investment hedges is recognised in equity the gain or loss relating to the ineffective portion is recognised 
immediately in the income statement within other operating income and expenditure
220 investment in own shares
investments in own shares are shown as a deduction in shareholders’ funds
3  critical accounting policies estimates and judgements
the following are areas of particular significance to the group’s financial statements and include the application of judgement which is 
fundamental to the compilation of a set of financial statements
31  pensions
the present value of the group’s pension obligations depends on a number of actuarial assumptions the primary assumptions used 
include the expected longterm rate of return on invested funds the discount rate applicable to scheme liabilities the longterm rate of 
inflation and estimates of the mortality applicable to scheme members
at each reporting date and on a continuous basis the group reviews the macroeconomic company and scheme specific factors 
influencing each of these assumptions using professional advice in order to record the group’s ongoing commitment and obligation 
to defined benefit schemes in accordance with ifrs one such assumption is the assumption of mortality rates and how these are
expected to change in the future if the group’s assumption on the mortality of its members was amended to assume an increase of 
a further one year improvement in mortality total liabilities would increase by approximately 36 each 01 decrease or increase in 
bond yields would increase or decrease the deficit by a further £52m each 01 increase or decrease in the assumed inflation rate 
would increase or decrease the deficit by a further £25m each of the underlying assumptions is set out in more detail in note 26 
 
32 goodwill and other intangible assets
impairment reviews in respect of goodwill are performed annually unless an event indicates that an impairment review is necessary
impairment reviews in respect of intangible assets are performed when an event indicates that an impairment review is necessary
examples of such triggering events include a significant planned restructuring a major change in market conditions or technology
expectations of future operating losses or a significant reduction in cash flows the recoverable amounts of cashgenerating units 
“cgus” are determined based on the higher of realisable value and valueinuse calculations these calculations require the use of 
estimates
the group has considered the impact of the assumptions used on the calculations and has conducted sensitivity analysis on the 
impairment tests of the cgus’ carrying values see note 16 for further details
acquired trade marks brands customer relationships recipes and similar assets are considered to have finite lives that range from 7 
to 40 years the determination of the useful lives takes into account certain quantitative factors such as sales expectations and growth 
prospects and also many qualitative factors such as history and heritage and market positioning hence the determination of useful 
lives are subject to estimates and judgement for further details see note 17 premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 87
our business business review governance financial statements other information
3  critical accounting policies estimates and judgements continued
33  advertising and promotion costs
trade spend and promotional activity is dependent on market conditions and negotiations with customers trade spend is charged
to the income statement according to the substance of the agreements with customers and the terms of any contractual relationship 
promotional support is generally charged to the income statement at the time of the relevant promotion these costs are accrued on 
best estimates the actual costs may not be known until subsequent years when negotiations with customers are concluded such 
adjustments are recognised in the year when final agreement is reached
expenditure on advertising is charged to the income statement when incurred except in the case of airtime costs when a particular 
campaign is used more than once in this case they are charged in line with the airtime profile
34  exceptional items
exceptional items are not explicitly addressed under ifrs accordingly the group has defined exceptional items as those items of 
sufficient financial significance to be disclosed separately in order to assist in understanding the financial performance achieved and 
in making projections of future results each of these items relates to events or circumstances that are material and nonrecurring in 
nature such as a major restructuring disposal of a business or asset or integration of an acquisition see note 6 for further details
35  securitisation
the group has sold the rights and obligations relating to certain of its trade receivable balances under a receivables purchasing 
agreement in order to achieve an overall lower cost of funding and permanently accelerate the generation of cash from working capital 
accounting for a sale of this nature is judgemental and dependent on evidence of the substantive transfer of risk and reward from the 
group to a third party in this instance transference of the two primary risks those of late payment and credit default was achieved at 
the balance sheet date the group anticipates that the receivables purchasing agreement will remain in place over the medium term 
and that derecognition of the receivables subject to it will continue to be achieved dependent upon ongoing review of the assessment 
of risk and reward transfer
36  financial instruments
the group uses a variety of derivative financial instruments to manage the risks arising from adverse movements in interest rates 
commodity prices and foreign currency
the group has a policy of not applying hedge accounting to these derivatives other than in the case of a net investment hedge 
against euro denominated assets and taking any gain or loss on the movement of the fair values of derivatives to the income 
statement
4  segmental analysis
ifrs 8 requires operating segments to be determined based on the group’s internal reporting to the chief operating decision 
maker “codm” the codm has been determined to be the chief executive officer and chief financial officer as they are primarily 
responsible for the allocation of resources to segments and the assessment of performance of the segments previously segments
were determined and presented in accordance with ias 14 “segment reporting”
the codm uses trading profit as reviewed at monthly business review meetings as the key measure of the segments’ results as it reflects
the segments’ underlying trading performance for the period under evaluation trading profit is a consistent measure within the group and
the reporting of this measure at the monthly business review meetings which are organised according to product types has been used to
identify and determine the group’s operating segments trading profit is defined as operating profit before exceptional items amortisation
of intangible assets the revaluation of foreign exchange and other derivative contracts under ias 39 and pension credits or charges in
relation to the difference between the expected return on pension assets administration costs and interest costs on pension liabilities
following the adoption of ifrs 8 the group revised its operating and reporting segments the group’s operating segments were
originally defined as “grocery” “hovis” “retailer branded chilled” “ireland” and “meatfree” certain of these operating segments have 
been aggregated and the group reports on three continuing segments within the business “grocery” “hovis” and “other” 
the grocery and ireland operating segments were previously aggregated into the grocery reporting segment which sells ambient food 
products the group’s irish operations were transferred from the former chilled  ireland segment into the grocery reporting segment 
as this reflects the fact that the businesses have similar economic characteristics sell similar products using similar distribution 
methods and share common customer types 
in response to the significant strategic changes in the irish customer base and the decision to rationalise the irish operations see note 
6 the group no longer reports ireland internally as a separate operating segment to the codm as it is now considered to be part of 
the grocery operating segment this has not impacted the reporting segments as the grocery and ireland operating segments were
previously aggregated
the hovis reporting segment comprises the hovis operating segment which now includes the charnwood foods frozen pizza base
business from the former chilled  ireland segment the hovis segment sells bread morning goods flour products and frozen pizza bases
the other reporting segment comprises the retailer branded chilled and meatfree operating segments both from the former chilled 
 ireland segment these businesses have been included in the other reporting segment as they do not meet the relevant quantitative 
thresholds and do not have similar economic characteristics and therefore can not be aggregated into their own separate reporting 
segment under ifrs 8 the other segment includes businesses which sell chilled ready meals and cakes and meatfree products
comparative information has been restated to reflect these new segments premier foods plc annual report and accounts 2009  stock code pfd 88
notes to the financial statements continued
4  segmental analysis continued
the segment results for the year ended 31 december 2009 and for the year ended 31 december 2008 and the reconciliation of the 
segment measures to the respective statutory items included in the consolidated financial statements are as follows
year ended 31 dec 2009
total for
grocery hovis other group
£m £m £m £m
turnover from continuing operations
external 15745   7416   3449   26610
intersegment 40 270 44 354
result
 tradingprofit 2560 419 252 3231
amortisation of intangible assets 787
fair value movements on foreign exchange and other derivative contracts 63
pension financing charge 18
 operatingprofitbeforeexceptionalitems 2363 
exceptional items 598
 operatingprofit 1765 
interest payable and other financial charges 1798
interest receivable and other financial income 113 
net movement on fair valuation of interest rate financial instruments 387
 profitbeforetaxationforcontinuingoperations 467 
depreciation 272   170   81   523 
amortisation 439   183   165   787 
impairment of assets held for sale – 10   –   10 
balance sheet
segment assets 24142   6940   5640   36722 
unallocated assets 274 
consolidated total assets 36996
year ended 31 dec 2008 restated
1
total for
grocery hovis other group
£m £m £m £m
turnover from continuing operations
external 15022 7700 3314 26036
intersegment 36 438 42 516
result
 tradingprofit 2507 242 344 3093
amortisation of intangible assets 767
fair value movements on foreign exchange and other derivative contracts 69
pension financing credit 156
operating profit before exceptional items 2551
exceptional items 2965
operating loss 414
interest payable and other financial charges 1861
interest receivable and other financial income 416
net movement on fair valuation of interest rate financial instruments 2189
loss before taxation for continuing operations 4048
depreciation 271 159 77 507
amortisation 419 183 165 767
impairment of ppe 01 113 – 114
impairment of goodwill – 1944 – 1944
balance sheet
segment assets 24821 9298 6160 40279
unallocated assets 675
consolidated total assets 40954
1 comparatives have been restated to reflect the new segmental reporting requirements under ifrs 8 and the increased sharebased payment charge 
 followingtheamendmenttoifrs2 premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 89
our business business review governance financial statements other information
4  segmental analysis continued
unallocated assets comprise cash and cash equivalents taxation balances derivative financial assets and head office assets
intersegment transfers or transactions are entered into under the same terms and conditions that would be available to unrelated third
parties as a consequence of extensive integration of the business certain operating costs have been incurred centrally these costs 
are allocated to reporting segments on an appropriate basis depending on the various cost drivers and therefore the total segment
result is equal to the group’s total trading profit
segment assets comprise property plant and equipment goodwill and intangible assets inventories receivables and retirement benefit 
assets and exclude cash and cash equivalents derivative assets and certain corporate assets that are not able to be allocated to the 
group’s reporting segments
revenues of approximately £5037m and £3495m 2008 £4796m and £3228m are derived from two external customers these 
revenues are attributable across the three reporting segments above
the group primarily supplies the uk market although it also supplies certain products to other european countries and a number of 
other countries the following table provides an analysis of the group’s turnover which is allocated on the basis of geographical market 
destination and an analysis of the group’s noncurrent assets excluding retirement benefit assets by geographical location
continuing operations — turnover
year ended year ended
31 dec  31 dec
2009 2008
£m £m
united kingdom 24983 24335
other europe 1349 1446
rest of world 278 255
total for group 26610 26036
noncurrent assets
as at as at
31 dec  31 dec
2009 2008
£m £m
united kingdom 30499 31033
other europe 650 664
total for group 31149 31697
5  net other operating expensesincome
year ended year ended
31 dec  31 dec
2009 2008
£m £m
lossgain on mark to market valuation of foreign exchange contracts and other derivatives 63 69
loss on disposal of fixed assets 12 13
net other operating expenses 48 10
total net other operating expensesincome 123 46 premier foods plc annual report and accounts 2009  stock code pfd 90
notes to the financial statements continued
6 exceptional items
during the year the group has seen a reduction in exceptional expenditure following the completion of its major administrative 
integration and manufacturing rationalisation programmes expenditure relating to the remaining elements of its restructuring 
and integration programmes and costs associated with the refinancing of the group are the primary factors behind total nonrecurring 
integration and exceptional costs during the year
 year ended year ended
31 dec  31 dec
2009 2008
£m £m
exceptional items — continuing operations
integration of rhm uk operations a 252 606
integration of campbell’s uk operations b 15 63
integration of irish operations c 23 60
restructure of meatfree operations d 12 35
hovis restructuring and other costs e 109 211
other restructuring costs f 60 42
gain on property disposals g 41 21
goodwill impairment h – 1944
total operating exceptional items 430 2940
refinancing costs i 168 25
total exceptional items 598 2965
a integration of rhm uk operations
on 16 march 2007 the group acquired rhm plc during 2009 the group has completed its factory closure programme but residual 
costs were incurred from the commissioning of equipment and production transferred to remaining group manufacturing sites 
redundancy and restructuring costs have been incurred relating to the move of existing administrative functions to a groupwide share
service centre in manchester and the integration of certain warehousing facilities into other group warehouses the current adverse 
market conditions have also resulted in a charge to increase onerous property lease provisions
b integration of campbell’s uk operations
on 14 august 2006 the group acquired campbell’s grocery products limited the charge during this year primarily related to 
an increase in an onerous property lease provision again driven by the current adverse market conditions the integration of the 
manufacturing operations and warehousing facilities at king’s lynn into the existing operations of the group was largely completed in 
the previous year
c integration of irish operations
the recession in ireland has resulted in significant strategic changes by the group’s irish customer base with moves to sourcing 
products directly from the uk and a shift from primarily storebased trading to central purchasing and distribution the group has
responded quickly to these changes and on 1 december 2009 the group announced its decision to rationalise part of its irish
operations
in the previous year restructuring costs were incurred after the group completed the principal phases of integrating its irish companies 
into a single operating business
d restructure of meatfree operations
during the year the group has performed a strategic review of its meatfree manufacturing facilities in order to address production 
inefficiencies at its chilled facility at methwold costs have been incurred during the year on commercial supply chain restructuring 
initiatives to address these issues at methwold the current year charge also included an increase in an onerous property lease 
provision again driven by the current adverse market conditions
in the previous year the group incurred commissioning costs from its methwold site to enable the integration of chilled production for 
quorn and cauldron products on a single site
e hovis restructuring and other costs
the hovis business has completed a number of restructuring projects in 2009 which involved headcount reductions through 
organisational and structural changes new warehouse technology and operating methods supply chain management restructuring 
initiatives and various compliance related initiatives the current year charge also includes an impairment recognised against our site 
in hull 
the previous year exceptional charges also included an impairment of assets and redundancy costs relating to the closure of our 
rotherham mill onerous lease costs for properties and impairment recognised against certain plant and machinery relating to 
discontinued production lines 
f other restructuring costs
this category incorporates a variety of other exceptional costs including redundancy and restructuring costs relating to other cost 
reduction initiatives associated with our warehousing network factory transformation programme and other supply chain initiatives it 
also includes training linked to the implementation of our new erp software professional fees and production commissioning costs
the previous year exceptional charges relate to costs associated with general business restructuring and factory transformation the 
restructuring of our warehousing network and supply chain training and a number of compliance related initiatives premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 91
our business business review governance financial statements other information
6 exceptional items continued
g gain on property disposals
the net disposal gain of £41m in the year primarily relates to the disposal of our site at king’s lynn the gain in the previous year 
related to the disposal of sites and plant and equipment in bristol droylsden middlewich wythenshawe and stoke in the uk and
thurles in the republic of ireland 
h goodwill impairment
an impairment charge of £1944m was recognised in the year ended 31 december 2008 against the goodwill allocated to the hovis 
cgu due to the significant increase in the discount rate used to calculate the recoverable amount of the hovis cgu
i refinancing costs
advisory fees have been incurred during the year relating to the placing and open offer and firm placing see note 27 amended lending 
agreements see notes 9 and 22 renegotiation of interest rate swaps and new pensions framework
7  operating profitloss for continuing operations
7a analysis of costs by nature
year ended year ended
31 dec 31 dec
2009  2008
restated
1
£m £m
cost of inventories sold 15127 14633
employee benefits expense note 8 5247 5045
depreciation of property plant and equipment
— owned assets 521 505
— under finance leases 02 02
amortisation of intangible assets
— software and licences 97 77
— brands and trade marks 343 343
— customer relationships 347 347
impairment of inventory 42 56
impairment of assets held for sale 10 –
impairment of property plant and equipment – 114
impairment of goodwill – 1944
operating lease rental payments
— plant and machinery 171 212
— land and buildings 135 88
repairs and maintenance expenditure 572 545
research and development costs 37 51
gain on disposal of property plant and equipmentintangible assets 29 08
net foreign exchange gain 90 51
auditor remuneration 38 22
1 the 31 december 2008 comparatives have been restated to reflect an increased sharebased payment charge following the amendment to ifrs 2
operating lease obligations are further disclosed in note 29
7b  auditor remuneration 
year ended year ended
31 dec 31 dec
2009 2008
£m £m
fees payable to the company’s auditors for the audit of the parent company
and consolidated financial statements 06 06
fees payable to the company’s auditors and their associates for other services
— the audit of the company’s subsidiaries pursuant to legislation 06 07
— other services relating to taxation – 02
— other services pursuant to legislation – 01
— services relating to corporate finance transactions 23 31
total auditor remuneration 35 47
included within total fees paid to the auditors of £35m 2008 £47m were £23m 2008 £31m of costs which were directly 
attributable to the financing negotiations and equity raising detailed in notes 9 22 and 27 in 2008 £25m out of the £31m relating to 
corporate finance transactions was held on the balance sheet in 2009 £22m of this amount was taken to share premium relating to 
the issue of shares and the balance was written off giving a total operating profit charge of auditors’ remuneration in 2009 of £38m 
2008 £22m
in 2009 fees of £10750 2008 £48855 were paid to the company’s auditors in respect of the audit and services in relation to one of 
the group’s pension schemes premier foods plc annual report and accounts 2009  stock code pfd 92
notes to the financial statements continued
8  employees 
year ended year ended
31 dec 31 dec
2009 2008
restated
1
£m £m
staff costs for the group during the year for continuing operations
wages and salaries 4547 4292
social security costs 422 384
termination benefits 125 156
share options granted to directors and employees 26 31
pension costs — defined contribution plans note 26 11 11
pension current service costs — defined benefit plans note 26 116 171
total staff costs 5247 5045
1 the 31 december 2008 comparatives have been restated to reflect an increased sharebased payment charge following the amendment to ifrs 2
average monthly number of people employed including executive directors for continuing operations
number number
management 564 583
administration 1874 1857
production distribution and other 13661 13473
total average headcount 16099 15913
directors’ remuneration including retirement benefits accruing to the directors under defined benefit schemes is disclosed in the 
audited sections of the directors’ remuneration report on pages 61 to 73 which form part of these financial statements
9  interest payable and receivable
on 5 march 2009 the group announced revised financing arrangements including a share issuance changes to lending agreements to 
provide greater covenant and liquidity headroom and the extension of the maturity of the facility these revised financing arrangements 
were approved by ordinary shareholders at an extraordinary general meeting on 23 march 2009
the amendments to the group’s term and revolving credit facilities included a rephasing of the facilities to provide additional liquidity 
and covenant headroom and an extension of the maturity date to december 2013 the total facility as at 31 december 2009 was 
£1780m and will be amortised by £50m in both june and december of each year until december 2013
in respect of these amendments to the existing facilities and arrangement of the new facilities the group incurred costs of £261m 
£30m of which were immediately charged to the income statement
on 5 march 2009 the group amended the break clauses in one of its long dated swaps to make it consistent with other long 
dated swaps 
at the same time the group also restructured two other swaps into one new swap which resulted in an amendment to the payment 
terms and an amendment to the break clauses being an optional break at august 2012 and a mandatory break at june 2013 the 
terms were also amended such that it will now settle at either break point for a mark to market payment to the counterparty bank 
as a result of these amendments a new contract was recognised which comprises both an underlying host as well as embedded 
derivatives this hybrid instrument was classified within a new class of financial liabilities being “other financial liabilities at fair value 
through profit or loss”
on 28 february 2008 the group entered into a supplemental agreement with its banks amending certain terms of its senior term 
credit facility and revolving credit facility arrangement of 16 march 2007 the group also converted the acquisition line of the
secured senior working capital credit facility into a £100m working capital line and agreed an additional £125m of shortterm facilities 
with three of its banks these shortterm facilities were fully repaid on 23 december 2008 and the facilities terminated
in respect of these amendments to the existing facilities and arrangement of the new facilities the group incurred costs of £153m 
£121m of which were immediately charged to the income statement in the year to 31 december 2008
on 18 november 2008 the group announced an agreement with its lending banks to defer its 31 december 2008 covenant test to 
31 march 2009 pending a review of its capital structure fees of £49m incurred in relation to this were expensed in the year to 
31 december 2008 premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 93
our business business review governance financial statements other information
9  interest payable and receivable continued
year ended year ended
31 dec 31 dec
2009 2008
£m £m
interest payable on bank loans and overdrafts 167 350
interest payable on term facility 617 960
interest payable on revolving facility 126 296
interest payable on interest rate derivatives 607 –
interest payable on interest rate financial liabilities designated as other liabilities
at fair value through profit or loss 17 –
unwind of discount on provisions 10 09
amortisation of debt issuance costs and deferred fees 126 76
1670 1691
exceptional writeoff of financing costs 30 170
accelerated amortisation of debt issuance costs 98 –
total interest payable and other financial charges 1798 1861
interest receivable on bank deposits 106 168
interest receivable on interest rate derivatives 07 248
total interest receivable and other financial income 113 416
movement on fair valuation of interest rate derivatives 755 2189
movement on fair valuation of interest rate financial liabilities designated as other
financial liabilities at fair value through profit or loss 368 –
net movement on fair valuation of interest rate financial instruments 387 2189
net interest payable 1298 3634
the fair value of interest rate swaps and other financial liabilities at fair value through profit or loss has fallen from a £2374m liability at 
31 december 2008 to a £1987m liability at 31 december 2009 resulting in a net credit of £387m for the year due to amortisation 
refer to note 23 offset by a change in the yield curve the liability at 31 december 2009 represents the net present value of the interest 
cash flows calculated using the contracted fixed rates compared to the net present value of interest cash flows that would arise if the 
interest was calculated on a floating basis
10  tax on profit on ordinary activities
analysis of the chargecredit for the year
 continuing discontinued
operations operations total
£m £m £m
2009
current tax
— prior years 40  14   26
overseas current tax
— current year 07   07   14 
— prior years 02  09   07 
deferred tax note 24
— current year 152   158  06
— prior years 49  –   49
 incometaxchargecreditfortheyear 68 128  60
2008
current tax
— current year – 09 09
— prior years 76 14 62
overseas current tax current year 28 – 28
deferred tax note 24
— current year 243 02 241
— prior years 15 06 09
income tax creditcharge for the year 306 31 275 premier foods plc annual report and accounts 2009  stock code pfd 94
notes to the financial statements continued
10  tax on profit on ordinary activities continued
tax relating to items recorded in equity for continuing operations was
year ended year ended
31 dec 31 dec
2009 2008
£m £m
deferred tax charge on share options – 05
deferred tax creditcharge on pension movements 1177 192
current tax credit on pension movements 144 04
1321 193
the tax credit from continuing operations for the year differs from the standard rate of corporation tax in the uk of 280 for the year 
ended 31 december 2009 and 285 for the year ended 31 december 2008 the reasons for this are explained below
 year ended year ended
31 dec 31 dec
2009 2008
restated
1
£m £m
profitloss before taxation for continuing operations 467 4048
tax chargecredit at the domestic income tax rate of 28 2008 285 131 1154
tax effect of
nondeductible exceptional items 45 636
other disallowable items 03 15
adjustment to reflect the abolition of tax relief for industrial buildings – 254
adjustment for sharebased pay 09 22
adjustment due to current year deferred tax being provided at 28 – 12
previously unrecognised losses utilised 29 –
adjustments to prior years 91 91
income tax chargecredit 68 306
1 the 31 december 2008 comparatives have been restated to reflect an increased sharebased payment charge following the amendment to ifrs 2
11  earnings per share
basic earnings per share has been calculated by dividing the profit attributable to ordinary shareholders of £252m 2008 £4447m 
loss by the weighted average number of ordinary shares of the company
year ended 31 dec 2009 year ended 31 dec 2008
restated
1
dilutive effect dilutive effect
of share of share
basic options diluted basic options diluted
continuing operations
profitloss after tax £m 399   –   399 3742 – 3742
weighted average number of shares m20790 – 20790 9053 – 9053
earningsloss per share pence 19 – 19 413 – 413
discontinued operations
loss after tax £m 147  –   147 705 – 705
weighted average number of shares m20790 – 20790 9053 – 9053
loss per share pence 07  –   07 78 – 78
total
profitloss after tax £m 252   –   252 4447 – 4447
weighted average number of shares m20790 – 20790 9053 – 9053
earningsloss per share pence 12 – 12 491 – 491
1 the 31 december 2008 comparatives have been restated to reflect an increased sharebased payment charge following the amendment to ifrs 2
2 comparatives have been restated to reflect the impact of the placing and open offer and firm placing in the year premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 95
our business business review governance financial statements other information
11  earnings per share continued
adjusted earnings per share “adjusted eps”
adjusted earnings per share is defined as trading profit less net regular interest payable less a notional tax charge at 280 2008 
285 divided by the weighted average number of ordinary shares of the company
trading profit is defined as operating profit before exceptional items amortisation of intangible assets the revaluation of foreign
exchange and other derivative contracts under ias 39 and pension credits or charges in relation to the difference between the expected 
return on pension assets administration costs and interest costs on pension liabilities
net regular interest payable is defined as net interest after excluding noncash items namely exceptional writeoff of financing costs 
accelerated amortisation of debt issuance costs fair value adjustments on interest rate financial instruments and the unwind of the 
discount on provisions
trading profit and adjusted eps have been reported as the directors believe these provide an alternative measure with which the
shareholders can assess the group’s underlying trading performance
 year ended 31 december 2009
continuing discontinued total
£m £m £m
operatingprofitloss 1765 274 1491
exceptional items 598 279 877
 operatingprofitbeforeexceptionalitems 2363 05 2368
pension financing charge 18 – 18
fair value movements on foreign exchange and other derivative contracts 63 – 63
amortisation of intangible assets 787 – 787
trading profit 3231 05 3236
less net regular interest payable 1547 – 1547
adjustedprofitbeforetax 1684 05 1689
notional tax at 28 471 01 472
 adjustedprofitaftertax 1213 04 1217
average shares in issue m 20790 20790 20790
 adjustedepspence 58 – 58
net regular interest payable
net interest payable 1298 01 1299
exclude exceptional writeoff of financing costs 30 – 30
exclude accelerated amortisation of debt issuance costs 98 – 98
exclude fair value adjustments on interest rate financial instruments 387 – 387
exclude unwind of discount on provisions 10 01 11
net regular interest payable 1547  –  1547
year ended 31 december 2008 restated
1
continuing discontinued total
£m £m £m
operating loss 414 681 1095
exceptional items 2965 719 3684
operating profit before exceptional items 2551 38 2589
pension financing credit 156 – 156
fair value movements on foreign exchange and other derivative contracts 69 – 69
amortisation of intangible assets 767 53 820
trading profit 3093 91 3184
less net regular interest payablereceivable 1266 01 1265
adjusted profit before tax 1827 92 1919
notional tax at 285 521 26 547
adjusted profit after tax 1306 66 1372
average shares in issue m 9053 9053 9053
adjusted eps pence 144 07 151
net regular interest payablereceivable
net interest payablereceivable 3634 07 3627
exclude exceptional writeoff of financing costs 170 – 170
exclude fair value adjustments on interest rate financial instruments 2189 – 2189
exclude unwind of discount on provisions and receivables 09 06 03
net regular interest payablereceivable 1266 01 1265
1 the 31 december 2008 comparatives have been restated to reflect an increased sharebased payment charge following the amendment to ifrs 2
2 comparatives have been restated to reflect the impact of the placing and open offer and firm placing in the year premier foods plc annual report and accounts 2009  stock code pfd 96
notes to the financial statements continued
11  earnings per share continued
dilutive effect of share options
the dilutive effect of share options is calculated by adjusting the weighted average number of ordinary shares outstanding to assume 
conversion of all dilutive potential ordinary shares the only dilutive potential ordinary shares of the company are share options a 
calculation is done to determine the number of shares that could have been acquired at fair value determined as the average annual 
market share price of the company’s shares based on the monetary value of the subscription rights attached to the outstanding share
options 
for the years ended 31 december 2009 and 31 december 2008 there is no dilutive effect as the outstanding share options that could 
have been acquired at fair value is less than the monetary value of the subscription rights attached to these options 
the issue of 1553416776 ordinary shares during the year has been included in determining the weighted average for the current year 
see note 27
no adjustment is made to the profit or loss in calculating undiluted and diluted earningsloss per share
2009 2008
number number
1
weighted average number of ordinary shares for the purpose of basic earningsloss per share 2079022507 905269075
effect of dilutive potential ordinary shares
— share options – –
weighted average number of ordinary shares for the purpose of diluted earningsloss per share 2079022507 905269075
1 comparatives have been restated to reflect the impact of the placing and open offer and firm placing in the year
12  discontinued operations
during the year the group disposed of its speciality bakery businesses martine spécialités sas “martine” le pain croustillant 
“lpc” and sofrapain sas “sofrapain” the sale of martine and lpc completed on 2 march 2009 and the sale of sofrapain 
completed on 30 april 2009 
the results of the speciality bakery businesses are included in discontinued operations in the group’s consolidated income statement 
up to the date effective control was transferred effective control of sofrapain was transferred on 6 february 2009 and for lpc and 
martine on 28 february 2009 the speciality bakery businesses were sold for £475m before disposal costs the results of discontinued 
operations for the year are as follows
 year ended year ended
31 dec 31 dec
2009 2008
£m £m
turnover 214 1730
operating expenses 243 2411
operating loss before taxation 29 681
interest payable 01 03
interest receivable – 10
loss before taxation 30 674
taxation charge 07 31
loss after taxation on discontinued operations for the year 37 705
loss on disposal before taxation 245 –
tax credit on loss on disposal 135 –
loss on disposal after taxation 110 –
total loss arising from discontinued operations 147 705
the net loss in the previous year from discontinued operations included the results of the speciality bakery businesses and property 
proceeds which the group was entitled to under the terms of the sale of our netherlandsbased subsidiary jonker fris bv on
8 december 2005 
during the year discontinued operations contributed to a net outflow of £66m 2008 £162m inflow to the group’s net operating 
cash flows and a £05m outflow to investing activities 2008 £40m outflow and an outflow of £nil 2008 £03m outflow in respect of 
financing activities premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 97
our business business review governance financial statements other information
13  disposal of subsidariesbusinesses
during the year the group disposed of its speciality bakery businesses the impact on the results of the group is disclosed in note 12 
on the dates of disposal the net assets of the businesses the consideration and the loss on disposal were as follows
 £m
property plant and equipment 365
intangible assets and goodwill 428
inventories 92
trade and other receivables 240
trade and other payables 415
provisions and lease obligations 49
pension obligation 09
translation reserves relating to speciality bakery businesses 61
net investment hedge relating to speciality bakery businesses 72
net assets disposed 663
less net consideration 418
loss on disposal before tax 245
taxation credit on loss on disposal 135
 lossondisposalaftertax 110
net cash inflow arising on disposal
initial consideration 475
disposal costs 23
 netcashinflowfortheyear 452
in the previous year £34m of disposal costs were paid for and classified within cash flow from operating activities 
14  assets and liabilities held for sale
2009 2008
£m £m
noncurrent assets
property plant and equipment 18 456
goodwill – 153
other intangible assets – 275
other noncurrent assets – 04
current assets
inventories – 90
trade and other receivables – 266
total assets held for sale 18 1244
current liabilities
trade and other payables – 410
financial liabilities — shortterm borrowings – 04
current income tax liabilities – 10
noncurrent liabilities
financial liabilities — longterm borrowings – 13
provisions – 30
other liabilities – 06
deferred tax liabilities – 92
total liabilities held for sale – 565
net assets and liabilities held for sale 18 679
as at 31 december 2009 the nonoperational property at hull was classified as an asset held for sale this disposal has taken longer 
than anticipated due to adverse market conditions however the contract for sale has been completed in january 2010 
as at 31 december 2008 properties at king’s lynn and hull were classified as assets held for sale and assets and liabilities relating to 
the speciality bakery businesses were classified as held for sale following the receipt of firm offers for these businesses premier foods plc annual report and accounts 2009  stock code pfd 98
notes to the financial statements continued
15  property plant and equipment
long short vehicles
freehold land leasehold land leasehold land plant and
and buildings and buildings and buildings equipment total
£m £m £m £m £m
cost
at 1 january 2008 1452 107 315 5172 7046
additions 48 – 04 1288 1340
disposals 16 – 04 467 487
reclassifications – – 13 13 –
transferred to held for sale 104 34 16 328 482
foreign exchange 26 15 – 48 89
at31december2008 1406 88 312 5700 7506
additions 71 – – 444 515
disposals – – – 46 46
reclassifications 08 – 01 09 –
foreign exchange – – – 01 01
at 31 december 2009 1469 88 311 6106 7974
aggregate depreciation and impairment
at 1 january 2008 14 06 12 943 975
depreciation charge for the year 68 08 10 479 565
disposal 09 – 03 437 449
impairment 23 – 16 75 114
reclassification – – 11 11 –
transferred to held for sale 17 15 03 68 103
foreign exchange 04 07 – 04 15
at31december2008 83 06 43 985 1117
depreciation charge for the year 57 05 08 453 523
disposal – – – 17 17
foreign exchange – – – 01 01
at 31 december 2009 140 11 51 1420 1622
net book value 31 december 2008 1323 82 269 4715 6389
net book value 31 december 2009 1329 77 260 4686 6352
the net book value of the group’s vehicles plant and equipment includes an amount of £07m 2008 £09m in respect of assets held 
under finance leases
at 31 december 2009 the group had entered into contractual commitments for the acquisition of property plant and equipment 
amounting to £148m 2008 £228m
the impairment in 2008 of £114m mostly related to the closure of our mill in rotherham and an impairment against certain plant and 
machinery relating to discontinued production lines the impairment charge reflected the difference between the carrying value of 
assets and their expected recoverable amounts recoverable amounts were determined on the basis of value in use or fair value less 
costs to sell 
as at 31 december 2009 the rate used to discount the forecasted cash flows was 118 2008 111 no property plant and 
equipment were impaired in 2009 
 
the group’s borrowings are secured on the assets of the group including property plant and equipment premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 99
our business business review governance financial statements other information
16  goodwill 
2009 2008
£m £m
cost
at 1 january 13713 16495
impairment — continuing – 1944
impairment — discontinuing – 685
transferred to held for sale – 153
at 31 december 13713 13713
as a result of the integration programme undertaken by the group the previously disclosed cgus have been changed to more closely 
align them with the new segmental structure which was effective from 1 january 2009 
this has resulted in four cgus in which goodwill acquired in various business combinations has been allocated goodwill previously 
allocated to the cake and ireland cgus has been allocated to the grocery cgu during the year the chilled cgu has been renamed 
as brookes avana
the new cgus are as follows 
 2009 2008
restated
1
£m £m
grocery 9480 9480
brookes avana 1707 1707
hovis 1630 1630
meatfree 896 896
net carrying value of goodwill 13713 13713
1 the 31 december 2008 comparatives have been restated into their new cgus
impairment tests for goodwill
goodwill is tested annually for impairment or more frequently if there are indications that goodwill may be impaired the recoverable 
amount of a cgu is determined based on valueinuse calculations or fair value less costs to sell depending on the way in which the
value of the cgu is expected to be recovered
key assumptions
the key assumptions for calculating value in use are those relating to the cash flows longterm growth rate and discount rate
cash flow assumptions
the cash flows used in the valueinuse calculation are pretax cash flows based on the latest approved management forecasts 
in respect of the following five years assumptions regarding these future cash flows are based upon actual results in prior periods 
and adjusted for expected developments in the following years with reference to market conditions and reasonable management 
expectations for the businesses all income and costs are taken into account and an estimate of capital expenditure required to 
maintain these cash flows is also made 
longterm growth rate assumptions
the five year management forecasts are extrapolated in perpetuity using growth assumptions relevant for the business sector the 
growth rate applied is 225 2008 225 and is not considered to be higher than the average longterm industry growth rate
discount rate
the discount rate applied to the cash flows is calculated using a pretax rate based on the weighted average cost of capital “wacc” 
which would be anticipated for a market participant investing in the group the directors believe it is appropriate to use a single 
common discount rate for all impairment testing as each cgu shares similar risk profiles
the group has considered the impact of the current economic climate in determining the appropriate discount rate to use in impairment 
testing at 31 december 2009 the pretax rate used to discount the forecasted cash flows has been determined to be 118 
2008 111 premier foods plc annual report and accounts 2009  stock code pfd 100
notes to the financial statements continued
16  goodwill continued
impairment
no impairment charge has been recognised in the year 2008 £2629m 
the current economic climate has increased the discount rate adopted by the group due to the higher level of return expected by 
equity holders due to the continued perceived risk and volatility in equity markets the group has considered this impact on the 
assumptions used and has conducted sensitivity analysis on the impairment test of the brookes avana cgu’s carrying value this has 
not resulted in any impairment of the carrying value at 31 december 2009 as the cgu’s recoverable amount exceeds its carrying value 
by £69m however the cgu’s recoverable amount would be comparable to its carrying value if the discount rate were to increase by 
05 any favourable change in assumptions in future periods will result in additional headroom
with regards to the remaining cgus the directors believe no reasonable change in the key assumptions used in the impairment testing 
would cause the carrying value to exceed its recoverable amount
in 2008 an impairment assessment of the carrying value of the goodwill assigned to the speciality bakery businesses martine 
spécialités sas le pain croustillant and sofrapain sas was undertaken by assessing their fair value less costs to sell in light of 
the decision to dispose of these businesses this goodwill was previously included within the hovis cgu and was tested for impairment 
prior to its classification as held for sale the impairment test in respect of the remaining goodwill within the hovis cgu and the other 
cgus has been undertaken by assessing the cgu’s valueinuse 
in 2008 included within the impairment charge is £685m recognised against the goodwill allocated to the speciality bakery businesses 
and was recorded within discontinued operations the residual goodwill attributable to these businesses of £153m was transferred to 
assets held for sale refer to note 14
in 2008 a further charge of £1944m was recognised against the goodwill allocated to the hovis cgu which is included within the 
hovis segment thereby reducing the carrying value of this cgu to its recoverable amount this impairment arose as a result of the 
significant increase in discount rate in 2008 any favourable change in assumptions in future periods will result in additional headroom 
however any adverse change would result in additional impairment
17  other intangible assets
software brands customer
licences trade marks relationships total
£m £m £m £m
cost
at 1 january 2008 573 9897 2800 13270
additions 312 – – 312
transferred to held for sale – – 370 370
at31december2008 885 9897 2430 13212
additions 276 – – 276
disposals 11 – – 11
at 31 december 2009 1150 9897 2430 13477
amortisation
at 1 january 2008 81 494 317 892
charge for the year 77 343 400 820
transferred to held for sale – – 95 95
at 31 december 2008 158 837 622 1617
disposals 11 – – 11
charge for the year 97 343 347 787
 at31december2009 244 1180 969 2393
net book value 31 december 2008 727 9060 1808 11595
net book value 31 december 2009 906 8717 1461 11084
brands and trade marks are considered to have finite useful lives and are amortised on a straightline basis over their estimated 
useful lives of 20 to 40 years software is amortised on a straightline basis over its estimated useful life of 3 to 10 years customer 
relationships are amortised on a straightline basis over their estimated useful lives of 7 years
included in the software additions for the year above are £73m of internal costs 2008 £65m
as at 31 december 2009 the group’s borrowings are secured on the assets of the group including other intangible fixed assets premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 101
our business business review governance financial statements other information
17  other intangible assets continued
the material brands held on the balance sheet are as follows
   carrying value at  estimated
   31 dec 2009 useful life remaining
 brandtrade mark £m years
 bisto 1633 27
 hovis 1488 37
 oxo 1005 37
 batchelors 861 27
 sharwood’s 772 27
 quorn 678 26
 mr kipling 636 27
18  investments
principal subsidiaries
     effective interest
    country of incorporation  in ordinary
   or registration and   share capital at 31 dec
 name of subsidiary principal operations principal activity 2009  2008
 operating subsidiaries
 chivers hartley limited united kingdom spreads and pickles manufacturing 100  100
 hl foods limited united kingdom manufacture and distribution of soups  100  100
    meat food canning and processing
 premier ambient products united kingdom spreads pickles vinegar jelly and 100  100
 uk limited  desserts manufacturing
 premier international united kingdom hot and cold beverages 100  100
 foods uk limited  manufacturing
 marlow foods limited united kingdom meatfree manufacturing 100  100
 premier grocery products ireland  republic of ireland distribution of soups meat and other 100  100
 limited  food products
 premier foods group limited united kingdom manufacture and distribution of cake  100  100
    bread own label and other food 
    products
 other subsidiaries
 premier brands foods limited united kingdom intermediate holding company 100  100
 premier financing limited united kingdom intermediate holding company 100  100
 premier foods holdings limited united kingdom intermediate holding company 100  100
 premier foods investments limited united kingdom financing company 100  100
 premier foods investments united kingdom intermediate holding company 100  100
 no 1 limited
 premier foods investments united kingdom intermediate holding company 100  100
 no 2 limited
 premier foods investments united kingdom intermediate holding company 100  100
 no 3 limited
 premier foods group services limited united kingdom intermediate holding company  100  100
 rhm limited united kingdom intermediate holding company  100  100
premier foods investments no 3 limited and rhm limited are direct wholly owned subsidiary undertakings of premier foods plc all 
other subsidiary undertakings are held indirectly by premier foods plc
each of the principal subsidiary undertakings has the same yearend as premier foods plc the companies listed above are those that 
materially affect the results and the assets of the group a full list of subsidiary undertakings is available from the company secretary
on 1 january 2010 the group undertook an internal reorganisation which resulted in the transfer of the trade and assets of chivers 
hartley limited hl foods limited premier ambient products uk limited and premier international foods uk limited to a fellow 
subsidiary premier foods group limited
19  inventories
        2009 2008
        £m £m
 raw materials      793 884
 work in progress      45 58
 finished goods and goods for resale     1302 1446
 inventories      2140 2388
the borrowings of the group are secured against all the assets of the group including inventory premier foods plc annual report and accounts 2009  stock code pfd 102
notes to the financial statements continued
20  trade and other receivables
        2009 2008
        £m £m
 trade receivables       3082 2874
 trade receivables impaired      77 60
 net trade receivables      3005 2814
 prepayments      223 196
 interest receivable      11 06
 other tax and social security receivable     132 200
 other receivable      99 154
 trade and other receivables      3470 3370
the borrowings of the group are secured against all the assets of the group including trade and other receivables
21 trade and other payables
        2009 2008
        £m £m
 trade payables      3862 4316
 other tax and social security payable     78 114
 other payables      489 566
 accruals      421 402
 trade and other payables      4850 5398
22  bank and other borrowings
        2009 2008
        £m £m
 due within one year
 secured senior credit facility — term note a      1000   1506 
 debt issuance costs       10  08
         990   1498 
 bank overdrafts       345   69 
 total bank borrowings due within one year      1335   1567 
 finance lease obligations note 23      05   06 
 other unsecured loans note c        185   175 
 total borrowings due within one year      1525   1748 
 due after more than one year
 secured senior credit facility — working capital note b     –   100 
         –   100 
 secured senior credit facility — revolving note a     679   4500 
 debt issuance costs       50  34
         629   4466 
 secured senior credit facility — term note a      11799   11810 
 debt issuance costs       117  62
         11682   11748 
 finance lease obligations note 23      09   11 
 other unsecured loans       –   01 
 total other       09   12 
 total borrowings due after one year      12320   16326 
 total bank and other borrowings     13845   18074 
the borrowings are secured by a floating charge over all assets of the group
cash and bank deposits and shortterm borrowings have been offset to the extent possible in accordance with the group’s banking 
agreements and the legal rights to such offset in accordance with ias 32 “financial instruments disclosure and presentation” premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 103
our business business review governance financial statements other information
22  bank and other borrowings continued
a  senior term credit facility and revolving credit facility arrangement — 2009
on 5 march 2009 the group entered into a supplemental agreement with its banks amending certain terms of its senior term credit 
facility and revolving credit facility arrangement of 16 march 2007
this original facility was arranged by barclays capital bayerische landesbank bnp paribas rabobank international lloyds tsb bank 
plc and the royal bank of scotland plc as lead arrangers and underwriters and lloyds tsb bank plc as facility agent and security 
trustee
the senior term credit facility now comprises £1430m of term facilities of which £100m was immediately repaid in april 2009 after 
the successful equity raising and a multicurrency revolving credit facility of up to £500m or its equivalent in other currencies the 
final maturity date of the above arrangements is 31 december 2013
b  secured senior working capital credit facility
on 28 february 2008 the group converted its £100m acquisition line into a working capital line and agreed an additional £125m of 
shortterm facilities with three of its leading banks the working capital line was fully repaid in march 2009 as a result of the refinancing 
and the facility terminated the £125m of shortterm facility was fully repaid on 23 december 2008 and the facility terminated 
c  other unsecured loans
other unsecured loans falling due within one year includes amounts owed in respect of cash receipts from debtors previously sold 
under the debtors securitisation programme
23  financial instruments
the group’s activities expose it to a variety of financial risks market risk arising from adverse movements in interest rates commodity 
prices and foreign currency credit risk and liquidity risk the group uses a variety of derivative financial instruments to manage certain 
of these risks the management of these risks along with the daytoday management of treasury activities is performed by the 
group treasury function the policy framework governing the management of these risks is defined by the finance committee a sub
committee of the board the framework for management of these risks is incorporated into a policies and procedures manual
the group also enters into contracts with suppliers for its principal raw material requirements some of which are considered 
commodities and also diesel and energy these commodity and energy contracts are part of the group’s normal purchasing activities 
some of the risk relating to diesel is mitigated with the use of derivative financial instruments
a  market risk
i  foreign exchange risk
the group’s main operating entities’ functional currencies and the group’s presentational currency is sterling although some 
transactions are executed in nonsterling currencies including euros us dollars canadian dollars swiss francs and swedish kronor 
the transactional amounts realised or settled are therefore subject to the effect of movements in these currencies against the pound 
management of these exposures is centralised and managed by the group’s treasury function it is the group’s policy to manage the 
exposures arising using forward foreign currency exchange contracts and currency options hedge accounting is not sought for these 
transactions 
the group generates some of its profits in nonsterling currencies and has assets in nonsterling jurisdictions principally the euro a 
portion of the translation exposure resulting from these euro denominated profits and overseas net assets is hedged
as at 31 december 2009 the group has euro denominated borrowings of €223m 2008 €742m designated as a hedge of euro 
denominated assets
the principal foreign currency affecting the translation of subsidiary undertakings within the group financial statements is the euro the 
rates applicable are as follows
         year ended  year ended
        31 dec  31 dec
 principal rate of exchange €£      2009 2008
 year end      11185 10310
 average      11142 12541 premier foods plc annual report and accounts 2009  stock code pfd 104
notes to the financial statements continued
23  financial instruments continued
the majority of the group’s assets and liabilities are denominated in the functional currency of the relevant division or subsidiary
the table below shows the group’s currency exposures as at 31 december 2009 and 2008 that gave rise to net currency gains and 
losses recognised in the consolidated income statement as a result of monetary assets and liabilities that are not denominated in the 
functional currency of the subsidiaries involved
  functional currency of subsidiaries
       sterling euro total
       £m £m £m
 at 31 december 2009
 net foreign currency monetary assetsliabilities 
 sterling     – 04 04
 euro     79 – 79
 us dollar     07 – 07
 other currencies     02 – 02
 total     70 04 66
 at 31 december 2008
 net foreign currency monetary assetsliabilities
 sterling     – 26 26
 euro     70 – 70
 us dollar     53 – 53
 other currencies     05 – 05
 total     128 26 154
in addition the group also has forward foreign currency exchange contracts outstanding at the year end in order to manage the 
exposures above but also to hedge future transactions in foreign currencies the sterling nominal amounts outstanding are as follows
        2009 2008
        payable  payable
        receivable  receivable
        £m £m
 euro      460 322
 us dollar      469 476
 swiss franc      18 17
 swedish krona      27 23
 total      884 758
if the euro were to weaken against sterling by 10 cents with all other variables held constant posttax profit would decrease by £17m 
2008 £35m
if the euro were to strengthen against sterling by 10 cents with all other variables held constant posttax profit would increase by 
£27m 2008 £32m
this is primarily driven by the effect on the mark to market valuation of the foreign exchange derivatives of the group as the hedged 
rates are above the spot rate 
if the euro were to weaken against sterling by 10 cents the foreign exchange movement taken to equity in relation to the net 
investment hedge would be an additional £16m gain 2008 £64m gain
if the euro were to strengthen against sterling by 10 cents the foreign exchange movement taken to equity in relation to the net 
investment hedge would be an additional £20m loss 2008 £77m loss
if the us dollar were to weaken against sterling by 20 cents with all other variables held constant posttax profit would decrease by 
£34m 2008 £60m
if the us dollar were to strengthen against sterling by 20 cents with all other variables held constant posttax profit would increase by 
£49m 2008 £79m
ii  commodity price risk
the group purchases a variety of commodities for use in production and distribution which can experience significant price volatility 
which include inter alia wheat tinplate diesel and energy the price risk on these commodities is managed by the group through the 
treasury risk management committee it is the group’s policy to minimise its exposure to this volatility by adopting an appropriate 
forward purchase strategy or by the use of derivative instruments where they are available premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 105
our business business review governance financial statements other information
23  financial instruments continued
iii  interest rate risk
the group’s borrowing facilities comprise term debt and a revolving facility principally in sterling interest is charged at floating rates 
plus a margin on the amounts drawn down and at half the margin for the nonutilised portion of the facility hence the borrowings are 
sensitive to changes in interest rates
the group then seeks to mitigate the effect of adverse movements in interest rates by entering into derivative financial instruments that 
reduce the level of exposure to floating rates the target of fixedcapped debt is defined in the group treasury policy and procedures 
however the amount hedged can be amended subject to agreement by the finance committee hedge accounting is not sought for 
these transactions
the gross cash flows on the interest rate derivatives are sensitive to changes in interest rates as they are driven by three month libor 
which is reset on a quarterly basis as at 31 december 2009 the reset rate was 0605
the weighted average interest rate for these derivative financial instruments is as follows
         weighed average 
         interest rate 
 currency sterling
 at 31 december 2009       60
 at 31 december 2008       71
the following table reflects the likely contractual maturity date of the interest rate derivative contracts taking into account zero cost call 
features where market rates at the balance sheet date indicate they will be triggered by the banks as well as mutual break clauses 
under which either party can be required to settle the fair value of the contract for cash without taking into account these features a 
number of these contracts would continue for up to 28 years 
   within  1 and 2 2 and 3 3 and 4 4 and 5 over 5
   1 year years years years years years total
   £m £m £m £m £m £m £m
 at 31 december 2009
 derivative financial liabilities
 fixed rate 1250 – – 500 – – 1750
 cap and floor structure – – 3500 – – – 3500
 long dated callable swaps – – 2250 1500 – 250 4000
 other callable swaps – – – 2750 – – 2750
 other financial liabilities 
 at fair value through 
 profit or loss
 other callable swaps – – 1500 – – – 1500
   1250 – 7250 4750 – 250 13500
 at 31 december 2008
 derivative financial liabilities
 fixed rate 3400 1250 – – – – 4650
 cap and floor structure – – – 3500 – – 3500
 long dated callable swaps – 1000 500 2750 1500 250 6000
 other callable swaps – – – – 2350 – 2350
   3400 2250 500 6250 3850 250 16500
fixed rate derivatives with a nominal value of £175m 2008 £465m are conventional interest rate swaps whose maturities are between 
2010 and 2013 one swap of £50m 2008 £50m has a callable option whereby the counterparty bank can cancel the swap at nil cost 
at certain specified dates from june 2011 onwards
the cap and floor structures have a nominal value of £350m 2008 £350m with caps set at 615 to 625 and floor rates between 
431 and 455 in addition when libor rates are beneath the floor strike price a digital option is triggered which results in the 
group paying interest at 575 on all of these instruments for three months
long dated swaps of £400m 2008 £600m include £400m of swaps which have callable options whereby the counterparty bank can 
cancel the swap at nil cost at certain specified dates of these contracts £250m 2008 £400m have a stated maturity date of 2037 
£150m have a maturity date of 2023 2008 £150m and £nil of 2013 2008 £50m these swaps have an average fixed rate of 487 
ranging between 452 and 521 of the contracts in place £100m are currently callable with a further £150m becoming callable 
from 30 september 2010 and the remainder being callable from september 2011 onwards all at nil cost
on 5 march 2009 the group restructured two long dated swaps one swap with a nominal value of £50m and another with a nominal 
value of £100m into one new swap of £150m so as to amend the break clauses to an optional break at august 2012 and a mandatory 
break at june 2013 and also amend its terms such that it will now settle at either break point for a mark to market payment to the 
counterparty bank the swap was structured to amortise the fair value at 5 march 2009 over the life of the new contract in addition 
a derivative element provides for an adjustment to the payments should interest rates rise above 7 as a result a new contract was 
recognised which comprises both an underlying host as well as embedded derivatives this hybrid instrument was classified within a 
new class of liabilities being “other financial liabilities at fair value through profit or loss” premier foods plc annual report and accounts 2009  stock code pfd 106
notes to the financial statements continued
23  financial instruments continued
the earliest contractual maturity date of this is august 2012 within two and three years the current fair value as at 31 december 2009 
is £368m and based on the current yield curve the mark to market payment in august 2012 would be £326m
the other callable swaps contain features whereby a fall in libor below 35 and 325 causes the rate of interest paid by the group 
to increase above these rates the group pays a fixed rate of interest of an average 451 for each quarter when the rate is below the 
trigger these contracts are also callable at nil cost 
in addition the group has entered into a debt securitisation programme which has the effect of reducing the interest cost on the 
amount advanced when compared to the borrowing costs of the group’s term facility 
cash and deposits earn interest at floating rates based on banks’ shortterm treasury deposit rates shortterm trade and other 
receivables are interestfree 
the group’s provisions of £469m as at 31 december 2009 2008 £517m include £166m relating to onerous leases which are 
considered to be floating rate financial liabilities these cash flows are discounted where the effect is material 
at 31 december 2009 for every 50 basis points reduction in rates below the last floating reset rate of 0605 based on three month 
libor with all other variables held constant annualised net interest expense would increase by £28m
at 31 december 2009 if interest rates were 200 basis points higher than the last floating reset rate of 0605 based on three month 
libor with all other variables held constant annualised net interest expense would decrease by £111m 
at 31 december 2008 for every 50 basis points reduction in rates below the last floating reset rate of 277 based on three month 
libor with all other variables held constant annualised net interest expense would increase by £36m
at 31 december 2008 if interest rates were 200 basis points higher than the last floating reset rate of 277 based on three month 
libor with all other variables held constant annualised net interest expense would decrease by £51m this analysis assumes that 
currently applicable callable features in two contracts with nominals of £110m are not exercised
the group’s other financial assets and liabilities are not exposed to material interest rate risk
b  credit risk
the group’s principal financial assets are cash and cash deposits trade and other receivables and investments 
the group has no significant concentrations of credit risk cash and cash equivalents are deposited with highcredit quality financial 
institutions and trade receivables are due principally from major grocery retailers though it is the group’s policy to insure trade debt
at 31 december 2009 trade and other receivables of £313m 2008 £423m were past due but not impaired these relate to 
customers with whom there is no history of default
the ageing of trade and other receivables was as follows
 past due
   fully performing 1–30 days 31–60 days 61–90 days 91–120 days 120 days total
   £m £m £m £m £m £m £m
 trade and other receivables
 2009 2802 176 43 19 17 58 3115
 2008 2551 328 41 43 10 01 2974
at 31 december 2009 trade and other receivables of £77m 2008 £60m were determined to be specifically impaired and provided 
for the amount of the provision reflects receivables from customers which are considered to be experiencing difficult economic 
situations 
the group does not hold any collateral as security against its financial assets
movements in the provision for impairment of trade receivables are as follows
        2009 2008
        £m £m
 at 1 january      60 38
 receivables written off during the year as uncollectable    24 57
 provision for receivable impairment raised     41 79
 at 31 december      77 60
the group has benefited from a £90m securitisation programme to allow it to transfer trade receivable balances to one of the group’s 
primary banks this programme also allows the group to delink its own credit rating from that of the underlying assets and achieve a 
lower cost of funding premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 107
our business business review governance financial statements other information
23  financial instruments continued
c liquidity risk
the group manages liquidity risk through both the treasury and finance functions cash flow forecasts are prepared and reviewed on a 
weekly basis normally covering a period of three months
in addition cash flow forecasts are prepared as part of the group’s overall budgeting and forecasting processes and performance is 
monitored against this each month this is intended to give the board sufficient forward visibility of debt levels
the group’s net debt level can vary significantly from month to month and there is some volatility within months this reflects trading 
patterns timing of receipts from customers and payments to suppliers patterns of inventory holdings and the timing of the spend on 
major capital and restructuring projects for these reasons the debt levels at the year end date may not be indicative of debt levels at 
other points throughout the year
the following table analyses the group’s financial liabilities into relevant maturity groupings based on the expected undiscounted 
cash flows
   within  1 and 2 2 and 3 3 and 4 4 and 5 over 5
   1 year years years years years years total
   £m £m £m £m £m £m £m
 at 31 december 2009
 trade and other payables 4772 – – – – – 4772
 bank overdraft 345 – – – – – 345
 bank term loan 1000 1000 1000 9799 – – 12799
 bank revolver facility – – – 679 – – 679
 finance leases 05 03 02 02 01 04 17
 other loans 185 – – – – – 185
 at 31 december 2008
 trade and other payables 5284 – – – – – 5284
 bank overdraft 69 – – – – – 69
 bank term loan 1506 1783 – 10027 – – 13316
 bank revolver facility 
 drawn down – – – 4500 – – 4500
 working capital facility – 100 – – – – 100
 finance leases 06 04 02 02 01 05 20
 other loans 176 – – – – – 176
the bank term loan and bank revolver facility are repriced quarterly and other liabilities are not repriced before the maturity date
the group has £nil 2008 £900m of facilities available and not drawn as at 31 december 2009 expiring between 1 and 2 years and 
£3876m 2008 £504m expiring between 3 and 4 years
the borrowings are secured by a fixed and floating charge over all the assets of the group
the following table analyses the expected undiscounted cash flows of interest on the floating rate debt to maturity based on the last 
fixed rate refix of 0605 2008 277 plus applicable margin
   within  1 and 2 2 and 3 3 and 4 4 and 5 over 5
   1 year years years years years years total
   £m £m £m £m £m £m £m
 interest
 2009 510 451 385 336 – – 1682
 2008 747 684 610 127 – – 2168
the following table analyses the group’s derivative financial instruments including other financial liabilities at fair value through profit 
or loss into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date the 
amounts disclosed are the undiscounted cash flows except in the case of “other financial liabilities at fair value through profit or loss” 
where to the outflows included the expected mark to market value at the call date premier foods plc annual report and accounts 2009  stock code pfd 108
notes to the financial statements continued
23  financial instruments continued
   within  1 and 2 2 and 3 3 and 4 4 and 5 over 5
   1 year years years years years years total
   £m £m £m £m £m £m £m
 at 31 december 2009
 forward foreign exchange 
 contracts
 outflow 854 – – – – – 854
 inflow 869 – – – – – 869
 inflow on options 04 – – – – – 04
 commodities
 outflow 107 10 – – – – 117
 interest rate swaps
 outflow 800 776 3306 1059 11 262 6214
 inflow 68 65 395 111 02 35 676
 other financial liabilities 
 at fair value through 
 profit or loss
 outflow 65 65 369 – – – 499
 inflow 45 45 30 – – – 120
   840 741 3250 948 09 227 6015
 at 31 december 2008
 forward foreign exchange
 contracts
 outflow 789 167 – – – – 956
 inflow 643 137 – – – – 780
 commodities
 outflow 242 04 – – – – 246
 outflow on options 06 – – – – – 06
 inflow 149 02 – – – – 151
 interest rate swaps
 outflow 765 1945 611 3634 882 270 8107
 inflow 441 1063 301 2089 458 165 4517
   569 914 310 1545 424 105 3867
the above table incorporates the contractual cash flows of the interest rate derivatives with floating rates of interest calculated based on 
libor of 0605 2008 277 at the balance sheet date this table includes the effect of mutual break clauses whereby either party 
can require the other to settle the fair value of the contract at that date for cash the group does not anticipate a future requirement 
to do so 
furthermore for the purposes of this table callable features have been reflected where the yield curve indicates that a counterparty is 
likely to call or cancel a contract at nil cost to themselves we note that no contracts 2008 no contracts are expected to be called at 
nil prior to their contractual maturity based on the current yield curve premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 109
our business business review governance financial statements other information
23  financial instruments continued
d  fair value
the following table shows the carrying amounts which approximate to fair value except as noted below of the group’s financial assets 
and financial liabilities fair value is the amount at which a financial instrument could be exchanged in an arm’s length transaction 
between informed and willing parties other than a forced or liquidation sale and excludes accrued interest set out below is a summary 
of methods and assumptions used to value each category of financial instrument
        2009 2008
        book and  book and
        market value market value
        £m £m
 loans and receivables
 cash and cash equivalents      194 406
 trade and other receivables      3115 2974
 financial assets at fair value through profit or loss
 derivative financial instruments
 — forward foreign currency exchange contractscurrency options    20 212
 — commodity and energy derivatives     05 –
 financial liabilities at fair value through profit or loss
 derivative financial instruments
 — forward foreign currency exchange contractscurrency options    05 10
 — commodity and energy derivatives     – 119
 — interest rate swaps      1619 2374
 other financial liabilities at fair value through profit or loss
 — interest rate swaps      368 –
 financial liabilities at amortised cost
 trade and other payables      4772 5284
 bank term loan      12799 13416
 bank revolver facility drawn down     679 4500
 bank overdraft      345 69
 finance leases      14 17
 other      185 176
 interest payable      137 228
effective 1 january 2009 the group adopted the amendment to ifrs 7 for financial instruments that are measured in the balance sheet 
at fair value this requires disclosure of fair value measurements by level of the following fair value measurement hierarchy
• quoted prices unadjusted in active markets for identical assets or liabilities level 1
• inputs other than quoted prices included within level 1 that are observable for the asset or liability either directly that is as prices 
or indirectly that is derived from prices level 2
• inputs for the asset or liability that are not based on observable market data that is unobservable inputs level 3
the following table presents the group’s assets and liabilities that are measured at fair value at 31 december 2009
         level 2
 financial assets at fair value through profit or loss
 derivative financial instruments
 — forward foreign currency exchange contractscurrency options     20
 — commodity and energy derivatives      05
 financial liabilities at fair value through profit or loss
 derivative financial instruments
 — forward foreign currency exchange contractscurrency options     05
 — interest rate swaps       1619
 other financial liabilities at fair value through profit or loss
 — interest rate swaps       368 premier foods plc annual report and accounts 2009  stock code pfd 110
notes to the financial statements continued
23  financial instruments continued
fair value estimation
derivatives
forward exchange contracts are marked to market using prevailing market prices hedge accounting has not been applied to forward 
contracts and as a result the movement in the fair value of £186m has been debited to the income statement in the year 2008 
£188m credit 
commodity derivatives are marked to market using prevailing prices and are also not designated for hedge accounting as a result the 
fair value movement of £117m 2008 £119m debit has been credited to the income statement 
interest rate swaps are marked to market using prevailing market prices interest rate swaps are also not designated for hedge 
accounting as a result the movement in the fair value of £755m has been credited to the income statement in the year 2008 
£2189m charge 
interest rate swaps classed as “other financial liabilities at fair value through profit or loss” are also marked to market using prevailing 
market prices these are also not designated for hedge accounting as a result the movement in the fair value of £368m has been 
charged to the income statement in the year 2008 £nil 
short and longterm borrowings loan notes and interest payable
fair value is calculated based on discounted expected future principal and interest rate cash flows the fair value of the floating rate 
debt approximates the carrying value above 
finance lease liabilities
the fair value of finance lease liabilities approximates book value
trade and other receivablespayables
the carrying value of receivablespayables with a remaining life of less than one year is deemed to reflect the fair value given their short 
maturity the fair values of noncurrent receivablespayables are also considered to be the same as the carrying value due to the size 
and nature of the balances involved 
e  obligations under finance leases
 minimum lease  present value of
 payments minimum lease payments
      2009 2008 2009 2008
      £m £m £m £m
 not later than one year    05 06 05 06
 later than one year but not later than five years   08 09 06 07
 later than five years    04 05 03 04
      17 20 14 17
 less future finance charges    03 03 na na
      
 present value of lease obligations   14 17 14 17
      
 less amounts due for settlement within 12 months    05 06
       
 amounts due for settlement after 12 months     09 11
       
it is the group’s policy to lease certain items of plant and equipment under finance leases the average lease term is three years the 
longest being eight years 
for the year ended 31 december 2009 the average effective borrowing rate was 82 2008 76
interest rates are fixed at the contract date and thus expose the group to fair value interest rate risk all leases are on a fixed repayment 
basis and no arrangements have been entered into for contingent rental payments 
the fair value of the group’s lease obligations approximates their carrying value the group’s obligations under finance leases are 
secured by the lessor’s title to the leased assets premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 111
our business business review governance financial statements other information
23  financial instruments continued
f  capital risk management
the group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide 
returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital
in order to maintain or adjust the capital structure the group may vary the amount of dividends paid to shareholders return capital to 
shareholders issue new shares or sell assets to reduce debt
consistent with others in the industry the group monitors capital on the basis of the gearing ratio this ratio is calculated as net debt 
divided by total capital net debt is calculated as total borrowings less cash and cash equivalents total capital is calculated as equity 
plus net debt
the gearing ratios at 31 december 2009 and 31 december 2008 were as follows
        2009 2008
        £m £m
 total borrowings      13845 18074
 less cash and cash equivalents      194 406
 net borrowings      13651 17668
 total equity      10649 9918
 total capital      24300 27586
 gearing ratio      56 64
under the group’s financing arrangement the group is required to meet two convenant tests which are calculated and tested on a 12 
month rolling basis at the half year and full year each year the group has complied with these tests during the year and at year end 
24  deferred tax
deferred tax is calculated in full on temporary differences using the tax rate appropriate to the jurisdiction in which the assetliability 
arises and the tax rates that are expected to apply in the periods in which the asset or liability is settled in all cases this is 280 except 
for an asset of £10m 2008 £19m relating to irish retirement benefit obligations where the local rate of 125 has been used
        2009 2008
        £m £m
 at 1 january      1931 2076
 chargedcredited to the income statement     103 250
 crediteddebited to equity      1321 197
 transferred to held for sale      – 92
 disposal of subsidiariesbusinesses     66 –
 at 31 december      647 1931
due to the unpredictability of future profit streams the group has not recognised deferred tax assets of £481m 2008 £481m relating 
to capital losses £nil 2008 £71m relating to uk corporation tax losses £04m 2008 £13m irish corporate tax losses and £348m 
2008 £348m relating to act under current legislation these losses can generally be carried forward indefinitely 
       accelerated 
       tax 
       depreciation intangibles total
 deferred tax liabilities     £m £m £m
 at 1 january 2008     448 2730 3178
 current year chargecredit     368 114 254
 prior years credit     68 – 68
 transferred to held for sale     20 72 92
 at 31 december 2008     728 2544 3272
 current year chargecredit     06 148 154
 prior years credit     345 62 407
 disposal of subsidiariesbusinesses    66 – 66
 at 31 december 2009     311 2334 2645 premier foods plc annual report and accounts 2009  stock code pfd 112
notes to the financial statements continued
24  deferred tax continued
    retirement 
    benefit  sharebased financial
    obligation payments instruments losses other total
 deferred tax assets  £m £m £m £m £m £m
 at 1 january  353 23 42 521 163 1102
 current year  149 17 591 172 102 495
 prior year chargecredit  – – – 68 09 59
 crediteddebited to equity  192 05 – – – 197
 at 31 december 2008  12 01 633 625 70 1341
 current year  – 03 89 152 68 306
 prior year chargecredit  03 01 04 341 19 358
 debited to equity  1177 – – 144 – 1321
 at 31 december 2009  1186 05 548 276 17 1998
 
 net deferred tax liability       £m
 at 31 december 2009       647
 at 31 december 2008       1931
where there is a legal right of offset and an intention to settle as such deferred tax assets and liabilities may be presented on a 
net basis this is the case for most of the group’s deferred tax balances and therefore they have been offset in the tables above 
substantial elements of the group’s deferred tax assets and liabilities primarily relating to the defined benefit pension obligation are 
greater than one year in nature
deferred tax assets in respect of losses are only recognised to the extent that it is anticipated they will be utilised in the foreseeable 
future
25  provisions for liabilities and charges
       restructuring other total
       £m £m £m
 at 1 january 2008     586 164 750
 utilised during the year     548 31 579
 additional charge in the year     338 64 402
 transferred to held for sale     – 30 30
 unwind of provision     06 03 09
 released during the year     – 35 35
 at 31 december 2008     382 135 517
 utilised during the year     293 45 338
 additional charge in the year     216 117 333
 unwind of provision     07 04 11
 released during the year     28 26 54
 at 31 december 2009     284 185 469
         2009
 analysis of total provisions       £m
 current      89 70 159
 noncurrent     195 115 310
       284 185 469
         2008
 analysis of total provisions       £m
 current     184 52 236
 noncurrent     198 83 281
       382 135 517 premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 113
our business business review governance financial statements other information
25  provisions for liabilities and charges continued
at 31 december 2009 restructuring and redundancy provisions have been raised in respect of the integration and restructuring of the 
group’s irish operations and onerous lease provisions in respect to properties to reflect the current adverse market conditions other 
than onerous leases provisions which range from 3 to 23 years it is anticipated that the majority of these provisions will be utilised 
during 2010
at 31 december 2008 restructuring redundancy and onerous lease provisions were raised in respect of the integration and 
restructuring of rhm’s manufacturing facilities into the group’s existing premier operations the move of existing administrative functions 
to a groupwide shared service centre and closure of our mill in rotherham 
other provisions at 31 december 2009 and 2008 primarily relate to insurance claims and dilapidations against leasehold properties 
the costs relating to dilapidation provisions will be incurred over a number of years in accordance with the length of the leases these 
provisions have been discounted at rates between 44 and 52 the unwinding of the discount is charged to the income statement 
under interest payable
26  retirement benefit schemes
defined benefit schemes
the group operates a number of defined benefit schemes under which employees are entitled to retirement benefits which are based 
on final salary on retirement these are as follows
a premier schemes
the premier foods pension scheme “pfps” was the principal funded defined benefit scheme within the old premier group which 
also operated a smaller funded defined benefit scheme the premier ambient products pension scheme “papps” for employees 
acquired with the ambrosia business in 2001 as a result of the acquisition of campbell’s in 2006 the group inherited the premier 
grocery products pension scheme “pgpps” covering the employees of campbell’s uk business and the premier grocery products 
ireland pension scheme “pgpips” covering the employees of campbell’s ireland the group also acquired two further schemes with 
the acquisition of chivers ireland in january 2007 the chivers 1987 pension scheme and the chivers 1987 supplementary pension 
scheme these schemes are presented together below as the premier schemes
b  rhm schemes
as a result of the acquisition of rhm plc the group also acquired the rhm pension scheme the premier foods ireland pension 
scheme 1994 the premier foods ireland van sales scheme and the french termination indemnity arrangements these schemes 
are presented together below as the rhm schemes with the exception of the french termination indemnity arrangements which 
were disposed of with the speciality bakery businesses during the year at 31 december 2008 the french termination indemnity 
arrangements were included in the speciality bakery businesses disposal group following their classification as discontinued operations 
the exchange rates used to translate the overseas euro based schemes are £100  11142 euros for the average rate during the year 
and £100  11185 euros for the closing position at 31 december 2009
under all the schemes detailed above the employees are entitled to retirement benefits which vary as a percentage of final salary on 
retirement the assets of all schemes are held by the trustees of the respective schemes and are independent of the group’s finances 
the schemes invest through investment managers appointed by the trustees in uk and european equities and in investment products 
made up of a broader range of assets the plan assets do not include any of the group’s own financial instruments nor any property 
occupied by or other assets used by the group
at the balance sheet date the combined principal actuarial assumptions used for all the schemes were as follows
        premier  rhm
        schemes schemes
        2009 2009
 discount rate      58 58
 inflation      35 35
 expected salary increases      45 35
 future pension increases      22  22
        2008 2008
 discount rate      63 63
 inflation      28 28
 expected salary increases      38 28
 future pension increases      20 20 premier foods plc annual report and accounts 2009  stock code pfd 114
notes to the financial statements continued
26  retirement benefit schemes continued
for the smaller overseas schemes the discount rate used was 54 expected salary increases of 30 and future pension increases 
of 175 
the mortality assumptions are based on standard mortality tables which allow for future mortality improvements the assumptions are 
as follows
       premier  rhm
 life expectancy     schemes schemes total
 male pensioner currently aged 65    859 850 852
 female pensioner currently aged 65    884 873 876
 male nonpensioner currently aged 45    872 862 864
 female nonpensioner currently aged 45    896 884 887
the fair values of plan assets split by type of asset are as follows
       premier  rhm
 pension scheme assets     schemes schemes total
 assets at 31 december 2009
 equities     1165 4831 5996
 government bonds     124 74 198
 corporate bonds     717 3033 3750
 property     20 1640 1660
 absolutetarget return products     2091 3131 5222
 interest rate and inflation swaps     253 388 135
 cashother     401 8208 8609
 fair value of scheme assets     4771 20529 25300
 assets at 31 december 2008
 equities     1485 3875 5360
 government bonds     126 14 140
 corporate bonds     94 2779 2873
 property     13 1911 1924
 absolutetarget return products     1804 2229 4033
 interest rate and inflation swaps     265 2500 2765
 cashother     367 7821 8188
 fair value of scheme assets     4154 21129 25283
the schemes invest in interest rate and inflation swaps to protect from fluctuations in interest and inflation
the expected rates of return on assets were
       premier  rhm
       schemes schemes total
 2009 for 2010 return
 expected rate      80 70 72
 market value £m     4771 20529 25300
 2008 for 2009 return
 expected rate      74 63 65
 market value £m     4154 21129 25283
 2007 for 2008 return
 expected rate      80 69 72
 market value £m     5062 20792 25854
 2006 for 2007 return
 expected rate      75 – 75
 market value £m     4657 – 4657
the expected return on pension scheme assets is based on the longterm investment strategy set out in the schemes’ statement of 
investment principles at the start of the year 
the actual rate of return on plan assets was a gain of 175 2008 182 loss for premier schemes and a loss of 02 for rhm 
schemes 2008 43 gain 
the pension schemes hold a charge over the assets of the group premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 115
our business business review governance financial statements other information
26  retirement benefit schemes continued
the amounts recognised in the balance sheet arising from the group’s obligations in respect of its defined benefit schemes is as 
follows
       premier  rhm
       schemes schemes total
       £m £m £m
 2009
 present value of funded obligations    6855 22730 29585
 fair value of plan assets     4771 20529 25300
 deficit in scheme     2084 2201 4285
 2008
 present value of funded obligations    5877 19521 25398
 fair value of plan assets     4154 21129 25283
 deficitsurplus in scheme     1723 1608 115
 2007
 present value of funded obligations    5817 21269 27086
 fair value of plan assets     5062 20792 25854
 deficit in scheme     755 477 1232
 2006
 present value of funded obligations    5504 – 5504
 fair value of plan assets     4657 – 4657
 deficit in scheme     847 – 847
 2005
 present value of funded obligations    4189 – 4189
 fair value of plan assets     3345 – 3345
 deficit in scheme     844 – 844
as at 31 december 2008 all of the schemes recognised a deficit with the exception of the rhm scheme which was in surplus under 
ias 19 this surplus of £1637m has been shown separately on the face of the balance sheet within noncurrent assets
the aggregate deficit has increased by £4170m during the year primarily due to an increase in the defined benefit obligation this was 
a result of a fall in discount rate assumption used which is based on the aa bond yield from 63 to 58 and an increase in the 
inflation rate assumption from 28 to 35 
 
changes in the present value of the defined benefit obligation were as follows
       premier  rhm
       schemes schemes total
       £m £m £m
 2009
 opening defined benefit obligation    5877 19521 25398
 current service cost     80 36 116
 past service cost     – 12 12
 interest cost     361 1199 1560
 actuarial loss     812 2951 3763
 other incomeexchange differences    36 14 50
 curtailments     01 09 10
 contributions by plan participants    47 115 162
 benefits paid     285 1081 1366
 closing defined benefit obligation    6855 22730 29585
 2008
 opening defined benefit obligation    5817 21269 27086
 current service cost     90 81 171
 past service cost      –  28 28
 interest cost     339 1229 1568
 actuarial gain     233 2148 2381
 other costsexchange differences    102 41 143
 curtailments      –  02 02
 contributions by plan participants    43 131 174
 benefits paid     281 1112 1393
 closing defined benefit obligation    5877 19521 25398 premier foods plc annual report and accounts 2009  stock code pfd 116
notes to the financial statements continued
26  retirement benefit schemes continued
changes in the fair value of plan assets were as follows
       premier  rhm
       schemes schemes total
        £m £m £m
 2009
 opening fair value of plan assets     4154 21129 25283
 expected return     302 1316 1618
 administrative and life insurance costs    22 54 76
 actuarial gainloss     425 1350 925
 contributions by employer     177 468 645
 contributions by plan participants    47 115 162
 other costsexchange differences    27 14 41
 benefits paid     285 1081 1366
 closing fair value of plan assets    4771 20529 25300
 2008
 opening fair value of plan assets     5062 20792 25854
 expected return     397 1404 1801
 administrative and life insurance costs    22 55 77
 actuarial loss     1316 503 1819
 contributions by employer     180 431 611
 contributions by plan participants    43 131 174
 other incomeexchange differences    91 41 132
 benefits paid     281 1112 1393
 closing fair value of plan assets    4154 21129 25283
the history of the plans for the current and prior years is as follows
       premier  rhm
       schemes schemes total
       £m £m £m
 2009
 actuarial loss on plan liabilities     812 2951 3763
 actuarial gainloss on plan assets    425 1350 925
 net actuarial loss for the year     387 4301 4688
 cumulative actuarial loss     2250 1181 3431
 2008
 actuarial gain on plan liabilities     233 2148 2381
 actuarial loss on plan assets     1316 503 1819
 net actuarial lossgain for the year    1083 1645 562
 cumulative actuarial lossgain    1863 3120 1257
 2007
 actuarial gain on plan liabilities     26 1358 1384
 actuarial lossgain on plan assets    148 117 31
 net actuarial lossgain for the period    122 1475 1353
 cumulative actuarial lossgain    780 1475 695
 2006
 actuarial gain on plan liabilities     44 – 44
 actuarial gain on plan assets     117 – 117
 net actuarial gain for the year     161 – 161
 cumulative actuarial loss     658 – 658
 2005
 actuarial loss on plan liabilities     437 – 437
 actuarial gain on plan assets     178 – 178
 net actuarial loss for the year     259 – 259
 cumulative actuarial loss     819 – 819
the actual return on plan assets was a £693m gain 2008 £18m loss which is £925m less 2008 £1819m less than the expected 
return on plan assets of £1618m 2008 £1801m at the start of the relevant periods 
the actuarial loss on liabilities of £3763m 2008 £2381m gain comprises a gain on member experience of £89m 2008 £86m loss 
and an actuarial loss due to changes in assumptions of £3852m 2008 £2467m gain premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 117
our business business review governance financial statements other information
26  retirement benefit schemes continued
the net actuarial losses taken to the statement of comprehensive income were £4688m 2008 £562m gain these were £3367m 
2008 £374m gain net of taxation with tax at 28 for uk schemes and 125 for irish schemes
the group expects to contribute approximately £649m 2009 £575m to its defined benefit plans in 2010 £249m 2009 £250m of 
regular contributions and £400m 2009 £325m of additional contributions to fund the scheme deficits
the amounts recognised in the income statement are as follows
       premier  rhm
       schemes schemes total
       £m £m £m
 2009
 current service cost     80 36 116
 past service cost     – 12 12
 administrative and life insurance costs    22 54 76
 interest cost     361 1199 1560
 expected return on plan assets     302 1316 1618
 gains on curtailment     01 09 10
 total expenseincome     160 24 136
 2008
 current service cost     90 81 171
 past service cost      –  28 28
 administrative and life insurance costs    22 55 77
 interest cost     339 1229 1568
 expected return on plan assets     397 1404 1801
 losses on curtailment      –  02 02
 total expenseincome     54 09 45
defined contribution schemes
a number of companies in the group operate defined contribution schemes predominantly stakeholder arrangements in addition 
a number of schemes providing life assurance benefits only are operated the total expense recognised in the income statement of 
£11m 2008 £11m represents contributions payable to the plans by the group at rates specified in the rules of the plans 
other postretirement benefits
the group does not provide any other postretirement benefits
27  reserves and share capital
share premium reserve
the share premium reserve comprises the premium paid over the nominal value of shares for shares issued
merger reserve
the merger reserve comprises the nonstatutory premium arising on shares issued as consideration for acquisition of subsidiaries where 
merger relief under section 612 of the companies act 2006 applies
other reserves
other reserves comprise the hedging reserve which represents the effective portion of the gains or losses on derivative financial 
instruments that have been designated as hedges
profit and loss reserve
the profit and loss reserve represents the cumulative surplus or deficit and the own shares reserve which represents the cost of shares 
in premier foods plc purchased in the market and held by the company on behalf of the employee benefit trust in order to satisfy 
options and awards under the company’s incentive schemes
minority interest reserve
the minority interest reserve represents the reserves attributable to minority interests
        2009 2008
 share capital      £m £m
 authorised
 3500000000 2008 1500000000 ordinary shares of 1 pence each   350 150
 issued and fully paid
 2398021581 2008 844604805 ordinary shares of 1 pence each   240 85
2009
on 24 march 2009 the group raised approximately £3796m net of expenses through the issue of 1553416776 new 1 pence 
ordinary shares the issue was structured as a placing and open offer of 1055756006 new ordinary shares at a price of 26 pence per 
share and a firm placing of 497660770 new ordinary shares at a price of 26 pence per share 
2008
in 2008 4731 1 pence ordinary shares were issued to certain employees at a price of between 171 and 186 pence per ordinary share 
upon the exercise of share options and were fully paid up premier foods plc annual report and accounts 2009  stock code pfd 118
notes to the financial statements continued
27  reserves and share capital continued
share option schemes
the company has share option schemes for certain senior executives and key individuals the employees involved in the schemes hold 
options to subscribe for up to 748m ordinary shares of 1 pence each between 2010 and 2014 granted at prices ranging between 
1 pence per ordinary share and 186 pence per ordinary share the number of shares subject to options the periods in which they 
were granted and the periods in which they may be exercised are given below for 2009 a summary of the company’s schemes is as 
follows
1 the company adopted an executive share option scheme “esos” at the time of admission for executive directors a portion 
of the options granted under the esos have now vested and are exercisable between 3 and 10 years after grant as certain 
performance criteria have been met these options are equitysettled and the number of shares subject to options the periods in 
which they were granted and the periods in which they may be exercised are given below
 
2 a savings related share option scheme for employees the employees involved in the scheme have the right to subscribe for 
up to 588m ordinary shares the number of shares subject to options the periods in which they were granted and the periods in 
which they may be exercised are given below these options are equitysettled have a maximum term of 35 years and generally 
vest only if employees remain in employment to the vesting date
 
3 a longterm incentive plan “ltip” for senior managers the individuals involved in the scheme have the right to subscribe for up 
to 61m ordinary shares at 1 pence per ordinary share the number of shares subject to awards the periods in which they were 
granted and the periods in which they may be awarded are given below these awards are equitysettled and have a maximum 
term of 3 years 
 the vesting conditions attached to the company’s ltip arrangements are explained in detail in the directors’ remuneration report 
on pages 61 to 73 
4  a coinvestment plan “cip” for directors and senior managers the scheme is structured as a share matching plan and the 
individuals involved in the scheme are required to commit and retain a significant amount of capital in the form of premier foods 
shares the number of shares subject to awards the periods in which they were granted and the periods in which they may be 
awarded are given below these awards are equitysettled and have a maximum term of 3 years 
5 a small number of shadow awards have been made to senior management of the group these awards are cashsettled have 
a maximum term of 3 years and vest with the employees in accordance with the terms of the ltip noted below they have an 
exercise price of 1 pence and remaining contractual life of 06 years
during the year the group modified its outstanding share option and award schemes following the placing and open offer and firm 
placing in march 2009 
the group decreased the exercise price by 487 for certain schemes and increased the number of share optionsawards for all 
schemes by 512 the incremental fair value granted resulting from these modifications was £02m increase in charge over the 
remaining vesting periods of the schemes the incremental fair value granted was measured using pricing models consistent with the 
group’s other schemes 
details of the share options of the premier foods esos are as follows
 2009 2008
       weighted  weighted
       average   average
       exercise price   exercise price
     year     restated
1
     of expiry options p options  p
 outstanding at beginning of year    2559360 162 2598043 162
 granted from placing and open offer and firm placing   128597 162 – –
 forfeited during the year    1087175 162 38683 162
 outstanding at the end of the year  2014 1600782 162 2559360 162
 exercisable at the end of the year   1600782 162 1096869 162
1  the 2008 weighted average exercise prices have been restated to reflect the 487 reduction in exercise price for certain schemes following the placing 
 and open offer and firm placing in the year premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 119
our business business review governance financial statements other information
27  reserves and share capital continued
the options outstanding at 31 december 2009 had a weighted average exercise price of 162 pence 2008 162 pence and a weighted 
average remaining contractual life of 46 years 2008 56 years
the options under the premier foods plc esos are equitysettled and have a maximum term of 10 years 
details of the share options of the premier foods savings related share option schemes are as follows
 2009 2008
       weighted  weighted
       average   average
       exercise price   exercise price
          restated
1
      options p options  p
 outstanding at beginning of year    20783748 89 11373922 175
 granted from placing and open offer and firm placing  854871 89 – –
 exercised during the year    – – 4731 164
 granted during the year    50685147 36 16876711 68
 forfeited during the year    13551818 81 7462154 175
 outstanding at the end of the year   58771948 45 20783748 89
 exercisable at the end of the year   9700 177 17495 173
1 the 2008 weighted average exercise prices have been restated to reflect the 487 reduction in exercise price for certain schemes following the placing 
 and open offer and firm placing in the year
during the year 507m 2008 169m options were granted under the savings related share option schemes with a weighted 
average exercise price at the date of exercise of 36 pence per ordinary share 
the options outstanding at 31 december 2009 had a weighted average exercise price of 45 pence 2008 89 pence and a weighted 
average remaining contractual life of 27 years 2008 26 years
details of the share options of the premier foods ltip are as follows
 2009 2008
       weighted  weighted
       average  average
       exercise price   exercise price
      options p options  p
 outstanding at beginning of year    5035277 1 4417661 1
 granted from placing and open offer and firm placing  128400 1 – –
 granted during the year    3991150 1 2394634 1
 forfeited during the year    3024596 1 1777018 1
 outstanding at the end of the year   6130231 1 5035277 1
 exercisable at the end of the year   – – – –
during the year 40m 2008 24m of awards were granted under the ltip  with a weighted average share price at the date of exercise 
of 1 pence the awards outstanding at 31 december 2009 had a weighted average remaining contractual life of 19 years 2008 17 
years details of executive director participation in the above schemes can be found in the directors’ remuneration report on pages 
61 to 73 
the weighted average fair value of awards granted during the year was 49 pence per award 2008 70 pence this was determined 
using a closedform approach as a proxy for a stochastic monte carlo valuation model which takes into account marketbased 
performance conditions except for the savings related share option scheme where the black–scholes model was used the 
significant inputs into the model were
        2009 2008
 weighted average share price pence     41 126
 annual riskfree interest rate       25 40
 expected dividend at grant date      – 45
 expected option life years      3 3
 expected volatility       37 33
the expected dividend used in 2008 was based on the annual average dividend yield for the group up to the date of the grant 15 april 
2008 and matched to the expected life of the awards 
the volatility measured at the standard deviation of expected share price returns is based on statistical analysis of daily share prices 
over the last three years premier foods plc annual report and accounts 2009  stock code pfd 120
notes to the financial statements continued
27  reserves and share capital continued
details of the share awards of the premier foods cip are as follows
 2009 2008
       weighted   weighted
       average   average
       exercise price   exercise price
      options p options  p
 outstanding at beginning of year     4427418   1 1272454   1 
 granted from placing and open offer and firm placing   226684   1   –   – 
 granted during the year     5236033   1  3530765   1 
 forfeited during the year    1624298  1  375801  1 
 outstanding at the end of the year    8265837   1   4427418   1 
 exercisable at the end of the year    –   –   –   – 
the awards outstanding at 31 december 2009 had a weighted average remaining contractual life of 19 years 2008 21 years the 
weighted average fair value of awards granted during the year was 48 pence per award 2008 66 pence this was determined using a 
closedform approach as a proxy for a stochastic monte carlo valuation model the significant inputs into the model were
        2009 2008
 weighted average share price pence     40 118
 annual riskfree interest rate       25 40
 expected dividend       – 45
 expected option life years      3 3
 expected volatility       37 33
the volatility measured at the standard deviation of expected share price returns is based on statistical analysis of daily share prices 
over the last three years 
in 2009 the group recognised an expense of £27m 2008 £23m related to all equitysettled sharebased payment transactions
28  notes to the cash flow statement
reconciliation of operating profitloss to cash flows from operating activities
        year ended year ended
        31 dec 31 dec
        2009 2008
         restated
1
        £m £m
 continuing operations
 operating profitloss      1765 414
 depreciation of property plant and equipment     523 507
 amortisation of intangible assets      787 767
 impairment and gainloss on disposal of property plant and equipment   19 106
 impairment of goodwill       –  1944
 revaluation lossesgains on financial instruments    63 69
 sharebased payments      27 23
 net cash inflow from operating activities before interest and tax and movements in working capital  3146 2864
 decreaseincrease in inventories     244 388
 increase in trade and other receivables     89 425
 decreaseincrease in trade and other payables and provisions    532 236
 movement in net retirement benefit obligations     509 566
 cash generated from continuing operations     2260 1721
 discontinued operations      66 162
 cash generated from operating activities     2194 1883
 exceptional items cash flow      713 1218
 cash generated from operations before exceptional items    2907 3101
1  the 31 december 2008 comparatives have been restated to reflect an increased sharebased payment charge following the amendment to ifrs 2 premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 121
our business business review governance financial statements other information
28  notes to the cash flow statement continued
additional analysis of cash flows
        year ended year ended
        31 dec 31 dec
        2009 2008
        £m £m
 interest paid      1625 1504
 interest received      108 450
 financing costs      261 202
 return on financing      1778 1256
 sale of subsidiariesbusinesses     452  –
reconciliation of cash and cash equivalents to net borrowings
        year ended year ended
        31 dec 31 dec
        2009 2008
        £m £m
 net outflowinflow of cash and cash equivalents     473 88
 decrease in finance leases       03  26
 decreaseincrease in borrowings      4640 1332
 other noncash changes      153 265
 decreaseincrease in borrowings net of cash     4017 1483
 total net borrowings at beginning of year     17668 16185
 total net borrowings at end of year     13651 17668
analysis of movement in borrowings 
      as at  other as at
      1 jan   noncash 31 dec
      2009 cash flow changes 2009
      £m £m £m £m
 bank overdrafts    69  276  –   345
 cash and bank deposits    406   197  15 194 
 net cash and cash equivalents    337   473  15  151
 borrowings — term facilities    13416  617   –  12799
 borrowings — revolving credit facilities   4500  3771   50  679
 finance leases    17  06   03  14
 other    176  09  –   185
 gross borrowings net of cash
1
    17772  3912   32  13828
 debt issuance costs    104   261   188 177 
 total net borrowings
1
    17668  4173   156 13651
1  borrowings excludes derivative financial instruments and other financial liabilities fair valued through profit or loss
29  operating lease commitments
the group has lease agreements in respect of properties plant and equipment for which future minimum payments extend over a 
number of years
 2009 2008
       plant and   plant and
      property equipment property equipment
      £m £m £m £m
 within one year    147 149 164 139
 between 2 and 5 years    501 282 560 330
 after 5 years    847 21 1153 15
 total operating lease commitments   1495 452 1877 484
the group sublets various properties under noncancellable lease arrangements
30  capital commitments
        2009 2008
        £m £m
 contracts placed for future capital expenditure not provided in the financial statements  148 228 premier foods plc annual report and accounts 2009  stock code pfd 122
notes to the financial statements continued
31  contingencies
in april 2008 the uk office of fair trading notified the group of an inquiry into potential coordination of retail prices in sectors of the 
grocery market the group is cooperating with the inquiry which is currently at the information gathering stage
during the year the group has been in discussion with one of the group pension schemes relating to the possibility that it may have to 
recognise some additional liability the legal position and the potential methods of calculation of the liability is as yet uncertain in the 
event that it materialises the impact on net assets is not expected to be significant and the cash impact would be spread over several 
years in line with the agreed pension deficit recovery period for the scheme agreed by the group and trustees
there were no other material contingent liabilities at 31 december 2009 other contingencies and guarantees in respect of the parent 
company are described in note 8 of the parent company financial statements
32  related party transactions
key management personnel of the group are considered to be the executive and nonexecutive directors the operations board and 
the company secretary 
details of their remuneration are set out below in aggregate for each of the categories specified in ias 24 “related party disclosures” 
further information about the remuneration of individual directors is provided in the audited part of the directors’ remuneration report on 
pages 61 to 73
        year ended  year ended 
        31 dec  31 dec
        2009 2008
        £m £m
 salaries and other shortterm benefits     51 43
 postemployment benefits      03 04
 termination benefits      13 07
 sharebased payments      09 01
 total      76 55
wp x investments limited “warburg pincus” is considered to be a related part of the group by virtue of its 157 equity shareholding 
in premier food plc and of its power to appoint a member to the board of directors which has been exercised there have been no 
transactions during the year
apart from the information above there were no other related party transactions
33  postbalance sheet events
on 1 january 2010 the group undertook an internal reorganisation which resulted in the transfer of the trade and assets of chivers 
hartley limited hl foods limited premier ambient products uk limited and premier international foods uk limited to a fellow 
subsidiary premier foods group limited premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 123
our business business review governance financial statements other information
premier foods plc company financial statements
the following statements reflect the financial position of the company premier foods plc as at 31 december 2009 and 2008 these financial 
statements have been prepared in accordance with generally accepted accounting standards in the united kingdom “uk gaap” the 
directors have taken advantage of the exemption available under section 408 of the companies act 2006 and not presented a profit and loss 
account for the company alone
balance sheet
        as at as at
        31 dec  31 dec
        2009  restated
1
         2008
       note £m £m
assets
noncurrent assets
 investments     3 17437 17415
 deferred tax assets      03 10
current assets
 debtors     4 6245 2326
 cash at bank      03 03
total assets      23688 19754
current liabilities
 creditors     5 470 439
total liabilities      470 439
net assets      23218 19315
capital and reserves
 share capital     6 240 85
 share premium     6 11247 7606
 merger reserve     6 10275 10275
 profit and loss reserve     6 1456 1349
total shareholders’ funds      23218 19315
1 the 31 december 2008 comparatives have been restated to reflect an increased sharebased payment charge following the amendments to ifrs 2 
the notes on pages 124 to 126 form an integral part of the financial statements
signed on behalf of the board of directors who approved the financial statements on 9 march 2010
robert schofield jim smart
director and  director and
chief executive chief financial officer premier foods plc annual report and accounts 2009  stock code pfd 124
notes to the company financial statements
1  accounting policies
basis of preparation 
the financial statements have been prepared in accordance with the companies act 2006 and applicable accounting standards 
in the united kingdom “uk gaap” under the historical cost convention with the exception of sharebased payments which are 
incorporated using fair value the profit for the year of £81m 2008 £91m is recorded in the accounts of premier foods plc the 
directors have taken advantage of the exemption available under section 408 of the companies act 2006 and not presented a profit 
and loss account for the company
the company has taken exemption under financial reporting standard 1 “cash flow statements” “frs 1” to not prepare a cash flow 
statement the company is also exempt under the terms of financial reporting standard 8 “related party transactions” “frs 8” from 
disclosing related party transactions with entities that are part of the premier foods plc group or investees of the premier foods plc 
group
fixed asset investments
investments held as fixed assets are stated at cost less any provision for impairment in their value
taxation
the charge for taxation is based on the profit for the year and takes into account deferred taxation the company provides in full for 
deferred tax arising from timing differences between the recognition of gains and losses in the financial statements and their inclusion 
in tax computations to the extent that a liability or an asset is expected to be payable or recoverable in the foreseeable future the 
company discounts its deferred tax liability as appropriate
cash and liquid resources
shortterm cash deposits which can be called on demand without any material penalty are included within cash balances in the 
balance sheet
sharebased payments
the fair value of employee share option plans is calculated using an optionpricing model in accordance with financial reporting 
standard 20 sharebased payment “frs 20” the resulting cost is charged to the profit and loss account over the vesting period 
of the options for employees employed by the parent company or treated as an investment in subsidiaries in respect of employees 
employed by the subsidiaries where the cost is recharged the value of the charge is adjusted to reflect expected and actual levels of 
options vesting
dividends
dividend distribution to the company shareholders is recognised as a liability in the company’s financial statements in the period in 
which the dividends are approved by the company’s shareholders and for interim dividends in the period in which they are paid
2  operating profit
audit fees in respect of the company are £nil 2008 £nil
at 31 december 2009 the company had 3 employees 2008 3 and their remuneration totalled £31m 2008 £13m this excludes 
the company’s 7 2008 6 nonexecutive directors whose remuneration totalled £06m 2008 £06m
3  investments
        2009 2008
         restated
1
        £m £m
 shares in subsidiary undertakings
 at 1 january      17415 17393
 additions      22 22
 at 31 december      17437 17415
1  the 31 december 2008 comparatives have been restated to reflect an increased sharebased payment charge following the amendment to ifrs 2
during 2009 a capital contribution of £22m 2008 £22m was given in the form of share incentive awards to employees of subsidiary 
companies which were reflected as an increase in investments see note 18 on page 101 in the group financial statements for a list of 
the principal subsidiary undertakings a full list of subsidiary undertakings is available from the company secretary
4 debtors
        2009 2008
        £m £m
 amounts falling due within one year
 amounts owed by subsidiaries      6245 2323
 prepayments      – 03
 total debtors falling due within one year     6245 2326
the above balances are not subject to interest rate risk as they are interestfree carrying value approximates fair value premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 125
our business business review governance financial statements other information
5 creditors
        2009 2008
        £m £m
 amounts payable within one year
 amounts due to subsidiaries      408 395
 accruals      – 07
 corporation tax      62 37
 total creditors falling due within one year     470 439
the above balances are not subject to interest rate risk as they are interestfree carrying value approximates fair value
6 share capital and other reserves
     share  share merger profit and
     capital premium reserve loss reserve total
     £m £m £m £m £m
 at 1 january 2008   85 7606 10275 1774 19740
 shares issued a   – – – – –
 profit for the year   – – – 91 91
 dividends paid   – – – 547 547
 sharebased payments
1
 b   – – – 31 31
 at 31 december 2008   85 7606 10275 1349 19315
 shares issued a   155 3884 – – 4039
 share issue costs a   – 243 – – 243
 profit for the year   – – – 81 81
 sharebased payments b   – – – 26 26
 at 31 december 2009   240 11247 10275 1456 23218
1 the 31 december 2008 comparatives have been restated to reflect an increased sharebased payment charge following the amendments to ifrs 2
for details on authorised share capital and the company share option schemes see note 27 on page 117 in the group’s financial 
statements 
a 2009
 on 24 march 2009 the group raised approximately £3796m net of expenses through the issue of 1553416776 new 1 pence 
ordinary shares the issue was structured as a placing and open offer of 1055756006 new ordinary shares at a price of 26 
pence per share and a firm placing of 497660770 new ordinary shares at a price of 26 pence per share 
 2008
 during 2008 4731 1 pence ordinary shares were issued to certain employees at a price of between 171 and 186 pence per 
ordinary share upon the exercise of share options and were fully paid up
b these costs reflect the cost of share option schemes in operation premier foods plc annual report and accounts 2009  stock code pfd 126
notes to the company financial statements continued
7 operating lease commitments
at 31 december 2009 the company had annual commitments under noncancellable operating leases in respect of land and buildings 
as follows
        2009 2008
        £m £m
 within one year      – –
 between 2 and 5 years      – –
 after 5 years      03 03
 total      03 03
the lease expense has been borne by a subsidiary company
8 contingencies and guarantees
premier foods plc has provided guarantees to third parties in respect of borrowings of certain subsidiary undertakings the maximum 
amount guaranteed at 31 december 2009 is £18bn 2008 £19bn
during the year the group has been in discussion with one of the group pension schemes relating to the possibility that it may have to 
recognise some additional liability the legal position and the potential methods of calculation of the liability are as yet uncertain in the 
event that it materialises the impact on net assets is not expected to be significant and the cash impact would be spread over several 
years in line with the agreed pension deficit recovery period for the scheme agreed by the group and trustees
in april 2008 the uk office of fair trading notified the group of an inquiry into potential coordination of retail prices in sectors of the 
grocery market the group is cooperating with the inquiry which is currently at the information gathering stage 
9 postbalance sheet events
on 1 january 2010 the group undertook an internal reorganisation which resulted in the transfer of the trade and assets of chivers 
hartley limited hl foods limited premier ambient products uk limited and premier international foods uk limited to a fellow 
subsidiary premier foods group limited premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 127
our business business review governance financial statements other information
electronic communications with shareholders
at the 2008 agm shareholders agreed to change the 
company’s articles of association to allow the company to 
use its website as its main method of communication with 
shareholders election forms were sent to shareholders in 
january 2009 and shareholders who did not request to receive 
shareholder information in paper form will receive a notification 
when shareholder documents are available on the company’s 
website
if you would prefer to receive an email notifying you of the 
publication please register at wwwshareviewcouk or contact 
the registrar at the address below the shareview website also 
enables shareholders to view details of their own shareholding 
or electronically appoint a proxy to vote on their behalf on 
any poll that may be held at the forthcoming annual general 
meeting
the company no longer publishes interim results in hard copy 
further information including results and presentations 
financial information share price information and rns 
announcements are available online at wwwpremierfoods
couk
corporate social responsibility
the premier foods corporate social responsibility report is 
available on our website at wwwpremierfoodscouk
annual general meeting 
20 may 2010 at 1100 am
insurance hall 20 aldermanbury london ec2v 7hy
company secretary and registered office 
suzanne wise 
premier foods plc 
premier house
centrium business park
griffiths way
st albans
hertfordshire
al1 2re
 
investor relation contacts
gwyn tyley
premier foods plc 
premier house
centrium business park
griffiths way
st albans
hertfordshire
al1 2re
email investorrelationspremierfoodscouk
tel 44 01727 815850
registrars and transfers office
equiniti 
aspect house
spencer road
lancing
west sussex
bn99 6da
shareholder helpline 0871 384 2030 
independent auditors
pricewaterhousecoopers llp
1 embankment place
london 
wc2n 6rh
lawyers
slaughter and may
one bunhill row
london 
ec1y 8yy
principal bankers
barclays bank plc
bayerische landesbank
bnp paribas
lloyds tsb bank plc
rabobank london
the royal bank of scotland plc
corporate brokers
citigroup global markets limited
citigroup centre
25 canada square
canary wharf
london
e14 5lb
rbs hoare govett limited
250 bishopsgate
london 
ec2m 4aa
shareholder information premier foods plc annual report and accounts 2009  stock code pfd 128
adjusted earnings per share
adjusted earnings per share is 
defined as adjusted profit before tax 
less a notional tax rate for the group 
divided by the weighted average 
number of shares in issue during the 
period
adjusted profit before tax
trading profit less net regular interest 
payable
agm
annual general meeting
amortisation
an annual charge made in a 
company’s profit and loss account 
to reduce the value of an intangible 
asset to its residual value over its 
useful economic life
bps
basis point — a unit that is equal to 
1100th of 1
brc
the british retail consortium
calledup share capital
ordinary shares issued and fully 
paid
cgu
cash generating unit — the smallest 
identifiable group of assets that 
generate cash inflows that are largely 
independent of the cash inflows from 
other assets or groups of assets
cip
premier foods plc coinvestment 
plan
combined code
the 2008 combined code on 
corporate governance published by 
the financial reporting council
ebitda
earnings before interest tax 
depreciation and amortisation
ebt
employee benefit trust
eps
earnings per share — calculated 
as total earnings divided by the 
weighted average number of shares 
in issue during the period
esos
premier foods plc executive share 
option scheme
fair value
the amount for which an asset could 
be exchanged or a liability settled 
between knowledgeable willing 
parties in an arm’s length transaction
fdf
the food and drink federation
finance lease
a lease that transfers substantially all 
the risks and rewards incidental to 
ownership of an asset
free cash flow
the amount of money that a 
business has at its disposal at any 
given time after paying out operating 
costs interest payments on bank 
loans and bonds salaries research 
and development and other fixed 
costs
fsa
depending on the context either 
the food standards agency or the 
financial services authority
gdas
guidance daily amounts
haccp
hazard analysis critical control 
point
higgs report
report in the uk by derek higgs on 
the role and effectiveness of non
executive directors
hmrc
her majesty’s revenue  customs
ias
international accounting standards
ifric
international financial reporting 
interpretations committee
ifrs
international financial reporting 
standards
intangible assets
an identifiable nonmonetary asset 
without physical substance eg 
patents goodwill trade marks and 
copyrights
interest rate hedging 
entering into a financial derivative 
to protect against unfavourable 
changes in interest rates
 
interest rate swaps
an agreement between two parties 
that allows either party to modify the 
interest cost without changing the 
characteristics of the underlying debt
kpi
key performance indicator
libor
the london interbank offered rate
ltip
premier foods plc longterm 
incentive plan
mark to market
the recording of a financial asset or 
liability to reflect its fair value rather 
than its book value
net regular interest payable
the net interest after excluding non
cash items namely exceptional write
off of financial costs accelerated 
amortisation of debt issuance costs 
fair value adjustments on interest rate 
financial instruments and the unwind 
of the discount on provisions
non branded
non branded products comprise 
retailer brand and business to 
business sales
nonrecourse securitisation 
the sale of selected accounts 
receivable on a nonrecourse basis 
where legal title and nonpayment 
risk is transferred to a third party
 
operating lease
a lease that is not a finance lease
operating profit
a company’s profit after deducting its 
operating costs from gross profit
orders to cash 
the fusion programme 
encompasses a number of key 
business streams orders to cash 
is one such stream and represents 
the processes and systems involved 
in the receipt of an order through 
distribution to receipt of payment 
from the customer
placing and open offer
placing and open offer and firm 
placing carried out by the company 
in march 2009 as part of its 
refinancing exercise 
pp
percentage points
pro forma
pro forma comparisons are 
calculated as follows current 
year actual results which include 
acquisitions andor disposals from 
the relevant date of completion 
are compared with prior year 
actual results adjusted to include 
the results of acquisitions andor 
disposals for the commensurate 
period in the prior year
project fusion 
launched in june 2005 programme 
fusion is a major undertaking 
essential to the development of the 
business it encompasses a series of 
projects under its banner including 
the introduction of “best practice 
business processes” and a fully 
integrated software package in the 
form of sap 
proposed dividend
dividend declared by directors but 
not yet approved by shareholders
psp
premier group performance share 
plan
riddor
reporting of injuries diseases and 
dangerous occurrences regulations
retailer branded
also known as “private label” or “own 
label” products
sap
sap is the market leader in the 
supply of enterprise resources 
planning erp sap is also the name 
of the software and is an acronym for 
systems applications and products 
this software is being deployed as 
part of the fusion programme
saye
saveasyouearn employee 
sharesave scheme
share capital
ordinary shares issued and fully paid
share premium account
additional paidin capital or paidin 
surplus not distributable
sku
stock keeping unit
each specific product item which 
is identifiable as separate from any 
other due to brand size flavour etc
term and revolving credit facility 
the amounts of money borrowed 
or available for borrowing where 
the repayment of the debt is 
predetermined by a contract
the company
premier foods plc
the group
the company and its subsidiaries
trading profit
operating profit before exceptional 
items amortisation of intangible 
assets the revaluation of foreign 
exchange and other derivative 
contracts under ias 39 and pension 
credits or charges in relation 
to the difference between the 
expected return on pension assets 
administration costs and interest 
costs on pension liabilities
tsr
total shareholder return — the 
growth in value of a shareholding 
over a specified period assuming that 
dividends are reinvested to purchase 
additional shares
turnbull report
guidance issued by the institute of 
chartered accountants in england 
 wales on the implementation of 
the internal control requirements of 
the combined code on corporate 
governance at the request of the 
london stock exchange
uk gaap
uk generally accepted accounting 
principles
wacc
weighted average cost of capital
yoy
year on year
glossary cautionary statement
the purpose of this annual report is to provide information to shareholders of premier foods plc “the company” the company its directors employees and 
advisers do not accept or assume responsibility to any other person to whom this document is shown or into whose hands it may come and any such responsibility 
or liability is expressly disclaimed it contains certain forwardlooking statements with respect to the ﬁ nancial condition results operations and businesses of 
the company these statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the 
future there are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forwardlooking 
statements and forecasts nothing in this annual report and accounts should be construed as a proﬁ t forecast
in this report we make references to market size share and growth retail sales data and household penetration which are sourced from independent market 
research and consumer data providers including kantar and iri
cadbury is a trade mark of cadbury ltd erin is a trade mark of erin foods limited ormo is a trade mark of a h foods ltd and rose’s is a trade mark of l rose  
company limited all of which are used under licence the group has an exclusive worldwide licence to use the loyd grossman name on certain products wwwpremierfoodscouk
premier house
centrium business park
grifﬁ ths way
st albans
hertfordshire
al1 2re
t 01727 815850
f 01727 815982


Summary:
 premier foods plc annual report and accounts 2009  stock code pfd 06
group at a glance
we supply a broad range of customers including the major 
multiple retailers wholesalers foodservice providers and 
other food manufacturers premier owns iconic british 
brands such as hovis batchelors mr kipling quorn bisto 
ambrosia branston sharwood’s hartley’s loyd grossman 
oxo and many more the business employs around 16000 
people and operates from over 60 sites across the uk
and ireland  
three focused divisions
the group is organised into three divisions
grocery 
comprising the shelf stable or ‘‘ambient’’ grocery products
hovis 
comprising wrapped bread morning goods and bulk and 
bagged flour and
chilled
comprising chilled and frozen meatfree products and our 
retailer branded chilled ready meal and cake businesses
non branded products comprise retailer brand and business 
to business sales
premier foods is the uk’s 
largest food producer we 
manufacture distribute and sell 
a wide range of branded and 
non branded foods 
➜ grocery
the grocery division encompasses a wide variety 
of ambient grocery sectors including cakes soups 
vegetables stocks gravies spreads ambient desserts 
home baking cooking sauces asian meal solutions 
pickles and beverages the division also incorporates 
premier’s business in the republic of ireland
591
of total group turnover
turnover  £1574m
yoy sales growth total 48
 branded 54
trading proﬁ t  £256m
employees  6838
branded mix
 branded 
£1153m
733
 non branded 
£421m
267
 1 ashford
 2 bury
 3 carlton
 4 histon
 5 knighton
 6 lifton
 manufacturing sites
 distributionlogistics centres
 1 long sutton
 2 rugby
7
5
2
1
3
8
11
9
10
6
12
1
2
key brands
batchelors mr kipling bisto ambrosia branston 
sharwood’s hartley’s loyd grossman and oxo
 7 long sutton
 8 middleton
 9 moreton
10 stoke
11 wisbech
12 worksop
 1 dublin
ireland
1
4 premier foods plc annual report and accounts 2009 wwwpremierfoodscouk 07
our business business review governance financial statements other information
the chilled division comprises brookes avana our 
retailer branded chilled ready meal cake and desserts 
businesses and our chilled and frozen meatfree business 
130
of total group turnover
branded mix
 branded 
£131m
380
 non branded 
£214m
620
6
4
1
2
3
5
key brands
quorn and cauldron
➜
 chilled
➜
 hovis
the hovis division operates principally in the wrapped 
bread market and in addition manufactures own label 
bread and morning goods the division is also the largest 
vertically integrated baker and flour miller in the uk and 
produces a wide range of bulk flours and branded and 
own label bagged flours 
279
of total group turnover
branded mix
 branded 
£394m
531
 non branded 
£348m
469
7
5
2
1
3
8
10
9
11
4
6
12
1
2
key brands
hovis granary and mother’s pride 
 1 avonmouth
 2 belfast
 3 birmingham
 4 eastleigh
 5 erith
 6 forest gate
 7 glasgow
 bakeries
 mills
 1 andover
 2 barry
 3 gainsborough 
wheat maltings
 4 glasgow
 5 manchester
 8 greenford
 9 leicester
10 mitcham — sebon
11 nottingham
12 wigan
 1 bradford
 2 dagenham
 3 chandlers ford
 4 inverness
 5 martland mill
 6 mendlesham
 7 mossend
 8 newbridge —
fleming howden
 depotsrdc
1
 1 belasis
 2 leicester — rf brookes
 3 methwold
 4 rogerstone park — avana
 5 rogerstone park — rf brookes
 6 stokesley
 manufacturing sites
3
4
5
8
6
7
8
2
3
 6 selby
 7 southampton
 8 wellingborough
 9 newcastle
10 plymouth
10
9
7
6
5
4
turnover  £742m
yoy sales growth total    36
 branded 116
trading proﬁ t  £42m
employees  6179
turnover  £345m
yoy sales growth total 39
 branded 16
trading proﬁ t  £25m
employees  3082