premier foods plc 
annual report and accounts for the 
year ended 31 december 2010  
stock code pfd
the best in british food 
with brands you really love
premier foods cover webindd   2 09032011   113046 premier foods plc  annual report and accounts 2010  
financial highlights for 2010
all financial metrics refer to the continuing group plus the meatfree business 
unless otherwise indicated for the purposes of the financial statements the 
meatfree business is disclosed within discontinued operations
1 trading profit is defined as operating profit before exceptional items 
amortisation and impairment 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 expected 
return on pension assets administration costs and interest costs on 
pension liabilities
2 source iri infoscan total grocery outlets 52 weeks ended  
25 december 2010
3 pro forma adjusted profit is defined as trading profit less net regular 
interest payable less a notional tax charge at 280 2009 280 
adjusted in 2009 as if the equity raising and refinancing in march 2009 
had been in place for the whole year
 net regular interest payable is defined as net interest after excluding non
cash 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
4 pro forma adjusted earnings per share is defined as pro forma adjusted 
profit divided by the weighted average number of ordinary shares of 
the company adjusted in 2009 as if the equity raising and refinancing in 
march 2009 had been in place for the whole year
5 net debt is defined as net borrowings less obligations due under finance 
leases
6 comparatives have been restated to reflect the classification of the 
meatfree business as a discontinued operation and to reflect the change 
in classification of certain exceptional items as business restructuring and 
investment costs which have now been included within trading profit
total sales
£2604m
£2661m
£2567m
08 09 10
pro forma adjusted 
earnings per share eps   
4
124p
47p
50p
08 09 10
t rading profit   
1
£282m
£309m
£311m
08 09 10
pro forma adjusted 
profit before tax   
3
net debt   
5
£1765m
£1364m
£1261m
08 09 10
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
£156m
£156m
£166m
08 09 10
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our business
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highlights for 2010
01 highlights
02 chairman’s statement
04  our business model
06  investment proposition
08 our brand portfolio
10  group at a glance
12  chief executive’s statement
14  our markets
16 consumer insight
our business  
01 17
18  key performance indicators
20  operating review
25  divisional review
30  financial review
36  corporate social responsibility 
44  risk management and risk factors
business review
18 47
48 board of directors and senior management
51  directors’ report
54 corporate governance report
62  directors’ remuneration report 
governance
48 72
73  contents
74  independent auditors’ report to the members of  
premier foods plc
76  consolidated income statement
77  consolidated statement of comprehensive income
78  consolidated balance sheet
79  consolidated statement of cash flows
80  consolidated statement of changes in equity
81  notes to the financial statements
122 premier foods plc company  
financial statements
123  notes to the company  
financial statements
financial statements 
73 125
126  shareholder information
127  glossary
other information
126 127
�	 trading profit 
1
 of £311m up 06 on last year
• grocery and hovis both recorded improved 
trading profit
• £12m pension credit reduces yearonyear 
pension service cost by £3m 
• £15m fall in trading profit at brookes avana 
�	 	sales down 35 due to lower nonbranded sales 
• branded sales volume up 31 ahead of the 
market 
2 
�	 pro forma adjusted profit before tax 
3
 and eps 
4
 
advanced by 64 benefiting from lower interest 
charges
�	 net debt 
5
 down £103m to £1261m 2009 £1364m 
after proceeds of canning and meatfree disposals 
pro forma net debt will be below £900m
�	 £125m goodwill impairment at brookes avana 
resulting in loss before taxation of £98m 2009 
£42m profit restated 
6
 on a continuing basis basic 
eps was a loss of 36p 2009 earnings of 17p on a 
continuing basis
�	 recurring cash generation of £124m ahead of 
£100m target
to read more
wwwpremierfoodscouk
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chairman’s statement
driving forward
with brand growth
ronnie bell 
chairman
dear shareholders
this is my first report to shareholders since taking over as chairman 
in october 2010 and i would like to start with a few first impressions 
 
my early observation is that premier foods has a number of strong 
platforms for growth
• it has a tremendous stable of leading brands with consumer 
franchises developed in many cases by decades of investment 
these brands account for over two thirds of the company’s 
revenues and provide an excellent base for long term business 
growth
• the business has significant scale and excellent operational 
capabilities with generally well invested assets and
• a strong and capable management team 
i have spent the last few months getting to know the company 
its brands facilities and people i have been impressed with the 
capability and commitment of employees at all levels of the group 
there is a strong culture of improvement and willingness to adapt 
quickly to the changing demands of the business 
progress in 2010 
during the year the group set out twin strategic priorities
• an ongoing strategy focused on branded growth and
• a robust financial plan to reduce the group’s debt
 
i am fully supportive of this approach and my immediate priority is to 
ensure rapid progress against delivery on both fronts 
it is clear that we experienced very challenging trading conditions 
in 2010 particularly in the second half of the year market growth 
has been subdued as a result of constrained consumer spending 
and increased promotional activity during this period of ongoing 
economic uncertainty 
however it is important to recognise that despite this we have been 
able to make progress on our strategy of delivering branded volume 
growth ahead of the market while total sales revenue was down 
slightly in line with the market branded sales were up 31 in terms 
of volume drive brands in particular made significant progress 
gaining market share in a number of areas
whilst both the grocery and hovis divisions made progress in 2010 
brookes avana had a very difficult year suffering a £15m fall in 
trading profit largely as a result of increased commodity costs and 
lower prices 
in particular i am pleased to report that through improved 
management of working capital we have increased recurring cash 
generation by £124m exceeding our target of £100m 
derisking the group’s balance sheet 
it is clear that in the current economic climate investors have 
continued to be concerned by companies with a high level 
of leverage 
a great deal of progress has been made by the company in 2010 
to reduce balance sheet concerns in october we successfully 
restructured the group’s swap portfolio significantly reducing the 
company’s risk exposure net debt at the year end has reduced by 
£103m to £1261m and in addition we have obtained a credit rating 
which will allow us to diversify our sources of funding
disposals
during the year we assessed our portfolio and took steps to reduce 
our dependence on some parts of our nonbranded portfolio which 
were deprioritised we have also undertaken a review of our 
business to assess whether there was the potential for the disposal 
of nonstrategic businesses which could accelerate our leverage 
reduction 
in january 2011 we announced we had reached agreement with the 
private equity business exponent private equity and intermediate 
capital group exponent to sell our meatfree business which 
manufactures and sells products under the quorn and cauldron 
brands for £205m this disposal was approved by shareholders on 
3 march and successfully completed on 7 march 2011 
in addition in february 2011 we announced we had reached 
agreement with food producer princes for the sale of our canned 
grocery operations in east anglia for £182m we expect the 
disposal which is subject to a number of clearances to complete 
later in 2011 
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“we will increase our focus on innovation  
brand building and consumer marketing to  
deliver branded sales growth”
the board believes that these disposals are in the best interests 
of both the company and shareholders as the net proceeds of 
the sale of around £370m will be used to repay debt this is an 
important step both in significantly reducing the time it takes to 
reach our target debt level and also in allowing management to 
focus more single mindedly on our key brands within the grocery 
and hovis businesses
board changes
as referred to above i joined as chairman with effect from  
1 october 2010 succeeding david kappler on behalf of the  
board i would like to thank david for his significant contribution 
to the group since its flotation in 2004 at the same time as my 
appointment charles miller smith became deputy chairman and 
he has been working closely with me on the strategic development 
of the business
 
at the forthcoming agm in april david felwick will be stepping 
down as a nonexecutive director i would like to take this 
opportunity to thank david for the help and support he has provided 
to the company both as senior independent director and until 
2009 as chairman of the remuneration committee following 
his retirement david beever will take up the appointment of senior 
independent director
i am also very pleased to announce the appointment of david wild 
chief executive of halfords plc as a new nonexecutive director with 
effect from 7 march 2011 david’s background within the grocery 
and retail industry will be valuable to the company as we continue 
to develop our strategy
focus for 2011
we have made significant strides in achieving a capital structure 
which we believe will be more attractive to investors and hope 
to make further progress in this over the course of the year with 
balance sheet issues largely addressed our focus for 2011 will be  
on branded sales growth 
in order to achieve this i believe it is also important that we increase 
our focus on innovation brand building and consumer marketing 
to this end we have now aligned our organisational structure to 
combine the management of our drive and core brands and plan to 
put the necessary investment behind accelerating growth
this new organisational structure is an important step in enabling 
the business to prioritise resources and maximise the return from its 
brand portfolio the new structure will enable us to 
• manage all brands together rather than solely by division
• establish a single group marketing function to facilitate the 
sharing of consumer insight and aid prioritisation of resources
• concentrate more resources behind drive and core brands and
• manage the defend brands and own label businesses 
separately to ensure their contribution is maximised 
premier foods has a good track record of developing innovation 
and new products which reflect changing consumer trends and 
habits we believe this new structure and increased investment 
will help us to grow the amount of branded sales from new and 
improved products within grocery as the benefits of our innovation 
pipeline start to come through
with the current tough general economic environment combining 
with strong pressure from rising commodity prices 2011 will remain 
difficult from a consumer confidence and trading perspective
however as demonstrated in 2010 the group remains committed 
to the pursuit of share growth behind our strong stable of brands 
across our major markets strong marketing programmes and 
increased product innovation will support our share growth 
initiatives at the same time the group will continue to leverage cost 
release from its efficiency savings programmes to support gross 
margin achievement our improving debt and strengthening balance 
sheet position will allow us to diversify sources of funding overall 
we are confident that we can continue to make progress in 2011
ronnie bell
chairman
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our business model
our business model
generating cash investing for profitable growth
customer insight 
and innovation
people
customer 
relations
manufacturing
and
procurement
consumer insight 
and innovation
raw materials
iconic british brands
finance
business review
find out more
18
raw materials and other inputs
•	 ingr edients
•	 packaging
•	 ener gy
our brand portfolio
find out more
08
iconic british brands
•	 drive
•	 cor e
•	 defend
financial review
find out more
30
finance
•	 shar eholder	equity
•	 long	term	bank	 debt
•	 short 	term	borr owings
consumer insight and innovation
•	 understanding 	market	tr ends
•	 understanding	consumer	needs
•	 pr oduct	 innovation
•	 new	pr oduct	development
manufacturing
•	 infrastructur e
•	 logistics
•	 economies 	of	 scale
•	 ef ficiencies
•	 knowhow
workplace
find out more
40
people
•	 marketing
•	 sales
•	 innovation
•	 t echnical
•	 finance
•	 intellectual	 pr operty
procurement
•	 machinery
•	 facilities
•	 engineering
•	 corporate 	spend
customer relations
•	 scale 	r elationships
•	 category 	 management
•	 instor e	 pr esence
shareholder return
consumer insight
find out more
16
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our business
1855004  09032011 proof 13
£
customer channels
•	 major 	 r etailers
•	 wholesalers
•	 food 	service
•	 convenience
•	 business 	to	 business
business review
find out more
18
consumers
•	 households
•	 individuals
operating review
find out more
20
revenue
•	 fr ee 	 cash 	flow
•	 debt	r eduction
•	 investment	in	innovation 	marketing 	and	
capital expenditure
business review
find out more
18
branded products
•	 gr ocery
•	 cake
•	 br ead
business review
find out more
18
nonbranded products
•	 gr ocery
•	 cake
•	 br ead
•	 chilled
branded
non 
branded
our markets
find out more
14
to read more
wwwpremierfoodscouk
superstore
sh areh ol der retu rn
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investment proposition
investment proposition
our business strategy is
• to grow 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 
through consumer insight 
and scale to deliver value to 
customers and work more 
effectively with suppliers and
• to deliver efficiency benefits such 
that supply chain costs and 
overheads are held flat or decline 
while volumes grow
our financial strategy is
• to focus on cash generation to 
reduce average debt to ebitda 
to 325 or less 
• to derisk the swap portfolio and 
pension arrangements and
• to diversify our sources of funding
we believe that the successful 
execution of these strategies will in 
turn deliver shareholder value
we are the uk’s largest branded 
ambient grocery manufacturer
we are the uks largest vertically 
integrated bread baker and flour 
miller
we operate across 15 food 
categories and hold 1 positions in  
11 of them
our focus on the uk market makes 
us different and means we have no 
directly comparable competitors 
when looking at either major 
multinationals or other uk food 
companies
premier has a large portfolio of over 
40 well known british brands
more than 99 of all uk households 
consume a premier foods product 
every year
our brands have stood the test of 
time — our oldest brand sarson’s has 
been in existence since 1794
with such a large portfolio of brands 
it is important we focus our effort in 
the right places to maximise growth 
and profitability
we have a clear strategy to focus on 
the categories and brands where we 
can grow the fastest and where we 
will invest the most
focused strategy to grow 
brands and reduce debt
l eading market positions portfolio of great british 
brands
see chief executive’s 
statement on page
12
see our brand 
portfolio on page
08
see our markets  
on page
14
drive
core
defend
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our scale and focus on the uk 
market gives us greater insight on 
the behaviours and needs of uk 
consumers and shoppers we use 
this to help us decide
• how brands are positioned in the 
market
• how we communicate through 
advertising and 
• how products should look and 
taste
we have implemented a new 
organisation structure which will
• establish a group marketing 
function facilitating the sharing of 
consumer insight and maximising 
value from marketing spend and 
• concentrate more resources 
behind innovation in our drive 
and core brands leading to a 
greater contribution from new and 
improved products 
our scale gives us many advantages 
it enables us to
• to work with customers over a 
wide range of categories 
• to consolidate our supplier base 
building stronger relationships 
with suppliers and driving lower 
per unit input costs
• to consolidate our manufacturing 
footprint creating fewer larger 
facilities
• to drive efficiencies in 
manufacturing
• to reduce administrative 
overheads and 
to use this to increase our profit 
margin
we have a wide customer base 
— supplying all the top retailers 
convenience and independent stores
we also supply the foodservice 
catering and milling channels
we have demonstrated our ability to 
pass on cost inflation as witnessed by 
the recent increases in wheat prices 
our business is stable and robust 
even under the recent challenging 
economic conditions
the business generates strong free 
cash flow and this in turn allows us to 
pay down our debt
consumer insight and  
innovation
benefits of scale robust and stable business
see consumer 
insight on page
16
see financial  
review on page
30
see
kpis on page
18
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our brand portfolio
great british brands
we have a strong and diversified portfolio of market leading iconic british brands a key part of our strategy is 
to grow our branded sales faster than their respective markets by investing in our brands and increasing their 
relevance to today’s consumers
to do this in the most efficient way we focus our investment on areas with the greatest growth potential this is 
based on both the size and growth prospects of the category and the competitive strength of our brands
drive
large categories where we  
believe we can win 
categories that are showing 
strong growth
core
medium sized categories  
with strong share positions  
moderate growth potential
defend
smaller categories with 
lower growth potential
our portfolio is divided into three broad categories
wrapped bread 
ambient cake
meatfree
1
ambient desserts
asian meal solutions
jellies
preserves
ambient wet cooking sauces
total drive brands
❯❯❯
❯❯❯
❯❯❯
❯❯❯
❯❯❯
❯❯❯
❯❯❯
❯❯❯
drive 
brands
dried soups
dried noodles
ambient gravy
pickles and relishes
baked beans
ambient cake
stock
total core brands
total defend brands
total branded
❯❯❯
❯❯❯
❯❯❯
❯❯❯
❯❯❯
❯❯❯
❯❯❯
core
brands
defend 
brands
1
 the meatfree business including the 
quorn and cauldron brands was sold to 
exponent on 7 march 2011
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our business
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category 
position 2
category 
position 1
uk retail sales  
value 2010
 £359m
 £136m
 £117m
 £85m
 £65m
 £36m
 £22m
 £45m
 £865m
uk retail sales  
value 2009
 £349m
 £132m
 £118m
 £83m
 £62m
 £33m
 £21m
 £42m
 £840m
yearonyear 
increase
  28
  33
  14
  29
  45
  105
  60
  72
  30
category market 
share 2010
 245
  178
 581
  316
  233
  825
  259
 96
  741
  539
 753
 210
  102
  358
  70
 £61m
 £70m
 £95m
 £38m
 £33m
 £391m
 £36m
 £58m
 £417m
 £1673m
 £62m
 £70m
 £96m
 £38m
 £36m
 £400m
 £38m
 £60m
 £438m
 £1678m
  32
  09
  15
  06
  80
  25
  48
  34
  46
  03
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the	gr oup	is	or ganised	into	thr ee	divisions	 
grocery hovis and chilled
group at a glance
group at a glance
premier foods is the uk’s largest ambient grocery producer we 
manufacture distribute and sell a wide range of branded and retailer 
branded foods
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
 
key brands
batchelors mr kipling bisto ambrosia branston 
sharwood’s hartley’s loyd grossman and oxo
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
key brands
hovis granary and mother’s pride 
the chilled division comprises brookes avana 
our retailer branded chilled ready meal cake 
and desserts business as at the year end the 
division also included the chilled and frozen 
meatfree business under the quorn and 
cauldron brands on 7 march 2011 the group 
completed the sale of the meatfree business 
for the purposes of the financial statements 
the results of the meatfree business are 
disclosed within discontinued operations
hovis
chilled
grocery group
group trading profit  £311m
group revenue  £2567m
branded mix
●	 branded  
  652 of total 
  £1673m
●	 nonbranded 
  348 of total  
  £894m
no of employees
●	 grocery  6449
●	 hovis 5742
●	 chilled 3030
revenue
●	 grocery  603 of total
●	 hovis 268 of total
●	 chilled 129 of total
revenue  
£1547m
08 09 10
£1502m
£1574m
£1547m
revenue  
£688m
08 09 10
£770m
£742m
£688m
revenue  
£332m
08 09 10
£332m
£345m
£332m
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our business
1855004  09032011 proof 13
 
 
 
 
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 15000 people and operates from over 60 sites across the uk and ireland
 
following the yearend we have announced the sale of our meatfree and east anglian canned grocery businesses on 7 march 2011 
we completed the sale of our meatfree business to exponent for £205m for the purposes of the financial statements the results of the 
meatfree business are disclosed within discontinued operations on 8 february 2011 we announced an agreement to sell our east anglian 
canning business to princes for £182m together this will result in the sale of five manufacturing and two distribution sites and the transfer of 
around 2000 employees
 1 belasis — meatfree
 2 leicester — rf brookes
 3 methwold — meatfree 
 4 rogerstone park — avana
 5 rogerstone park — rf brookes
 6 stokesley — meatfree
 manufacturing sites
 1 avonmouth
 2 belfast
 3 birmingham
 4 eastleigh
 5 erith
 6 forest gate
 bakeries
 mills
 1 andover
 2 barry
 3  gainsbor ough 
wheat maltings
 4 glasgow
 
 7 glasgow
 8 greenford
 9 leicester
 10 leicester — charnwood
 11 mitcham — sebon
 12 nottingham
 13 wigan
 5 manchester
 6 selby
 7 southampton
 8 wellingborough
 1 bradford
 2 dagenham
 3 chandlers ford
 4 inverness
 
 depotsrdc
 5 mendlesham
 6 mossend
 7 newbridge — fleming howden
 8 newcastle
 9 plymouth
7
5
2
1
3
8
11
9
12
4
6
13
1
2
1
3
4
5
7
6
7
8
2
3
9
8
6
5
4
 1 ashford
 2 bury
 3 carlton
 4 histon
 5 knighton
 6 lifton
 manufacturing sites
 distributionlogistics centres
 1 knowsley
 2 rugby
 3 skelmersdale
 4 wimblington
 5 wisbech
 7 long sutton
 8 middleton
 9 moreton
10 stoke
11 wisbech
12 worksop
7
5
2
1
3
8
11
9
10
6
12
1
2
1
4
 1 dublin — premier foods ireland
ireland
6
4
1
2
3
5
trading profit  
£256m
08 09 10
£294m
£255m
£256m
£1146m   741
branded
mix
£401m   259
branded revenue
nonbranded revenue
trading profit  
£39m
08 09 10
£3m
£31m
£39m
£398m   578
branded
mix
£290m   422
branded revenue
nonbranded revenue
trading profit  
£16m
08 09 10
£30m
£23m
£16m
£129m   389
branded
mix
£203m   611
branded revenue
nonbranded revenue
3
5
4
10
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last year we set out the group’s business strategy and in 
addition at the half year we provided details of our financial 
strategy i would now like to report on the significant progress 
we have made in 2010 in implementing these strategies and 
also our plans for 2011 
strategy
introduction
our vision is to be “the best in british food with brands that you 
really love”
the group’s business strategy is
• 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 and
• to deliver efficiency benefits such that supply chain costs  
and overheads are held flat or decline while volumes grow
the group’s financial strategy is
• to focus on cash generation and to reduce average debt to 
ebitda to 325 or less
• to derisk the swap portfolio and pension arrangements and
• to diversify our sources of funding
despite the continuing difficult consumer environment we have been 
able to progress with both our business and financial strategies in 2010
note all financial metrics refer to the continuing group plus 
the meatfree business unless otherwise indicated for the 
purposes of the financial statements the meatfree business is 
disclosed within discontinued operations
branded sales
branded sales are up 31 in volume versus category markets 
down 08 sales revenue was down 03 on 2009 in line with the 
market within this total drive brands are up 30
 
competitive advantage through scale
in the year procurement gains from working more strategically with 
our suppliers added £16m to the grocery trading profit 
improve efficiency
grocery manufacturing costs in the year were reduced by 8 being 
6 from efficiencies ahead of our 4 per annum strategic target 
and 2 from deflation in energy costs in group operating expenses 
savings of £17m were found chiefly from efficiencies in distribution 
cash generation
recurring cash flow was £124m versus the £100m target set 
out in our strategy the outperformance was generated by good 
management of working capital including reducing stock holding 
by five days’ cover to 36 £16m of recurring cash flow was used to 
enable the swap restructure to take place being £8m of settlement 
of a mark to market liability and £8m of fee for bank approval after 
other nonrecurring items amounting to £5m this left £103m which 
has been used to pay down bank debt 
derisking swap portfolio and pensions
the swap portfolio was restructured to remove the elements 
which did not provide an economic hedge to the bank debt 
these elements were diverting cash flow by increasing short term 
interest rates and were building up a large cash call risk in 2012 by 
restructuring the swap portfolio these risks have been removed 
the short term interest cost has been reduced and the cash call has 
been fixed at the then current mark to market and deferred to the 
end of the current financing period ie 2013
the closure of the final salary pension fund has been agreed with the 
trade unions and pension trustees and will be implemented in the 
second half of 2011 the previous final salary offer is replaced with a 
market competitive career average scheme for existing pension fund 
members and a money purchase scheme for new starters
in conjunction with the trustees of the pension fund we have also 
agreed a programme to increase the amount of hedging between the 
fund investments and liabilities this will reduce the volatility of the deficit 
diversifying sources of funds
the swap restructure removed a considerable risk from the group’ s 
balance sheet which would otherwise have prevented the group 
obtaining a credit rating we have now obtained a credit rating of ba2 
stable outlook from moody’ s and bb stable outlook from both fitch 
and standard  poors it is our intention to access the debt capital 
markets and raise a bond during the course of 2011 this will diversify 
our sources of funding and reduce our reliance on bank debt
proposed disposal of meatfree and canning 
businesses
after the year end the group agreed the sale of its meatfree 
chief executive’s statement
our strategy 
 focus
robert schofield 
chief executive officer
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business and its east anglian canned grocery businesses for a total 
of £387m equivalent to 76 times the combined ebitda of £51m 
after costs and pension contributions of around £17m and subject to 
working capital adjustments on completion the remaining proceeds 
of around £370m will be used to reduce bank facility borrowings 
the disposals will leave the group’ s branded sales percentage largely 
unchanged at 664 but both the gross margin and the trading profit 
margin will be improved the main effect will be in the grocery business 
where the branded sales percentage will increase from 741 to 
823 the nonbranded grocery sales will be halved and the brands 
sold are largely in the core and defend categories 
the disposal will contribute materially to our objective of deleveraging 
on a pro forma basis the group’ s net debt will be below £900m and 
net debtebitda would be around 287 times in addition average 
debtebitda would be reduced to around 372 times which is well on 
the way to achieving the group’ s stated target of 325 times
once the disposals are complete the group expects to have 
recurring cash generation of at least £80m per annum the group 
believes that the ebitda growth prospects are largely unchanged 
as the meatfree business had growth prospects whereas the 
canning business faced more difficult markets 
initially the effect of the disposals will be to dilute eps however the 
group believes this is a temporary effect firstly the initial interest 
saving is at the marginal cost of bank funds once a bank refinancing 
is undertaken the saving will increase to the average rate secondly 
the simplification of the business achieved by the disposals will facilitate 
improving processes which will result in cost savings 
corporate social responsibility
last year we also published our first stand alone csr report setting 
out the progress we had made against a number of objectives and 
also setting out our future plans to strengthen our approach to csr 
in 2010 we have also made significant progress in aligning our 
commitment to csr with our overall business strategy to deliver 
longterm and sustainable business growth details of our key 
achievements are set out on pages 36 to 43
plans for 2011
in 2010 we have made significant progress in resolving the balance 
sheet issues which have up until now weighed heavily on the 
business with the financial path now clear and the journey well under 
way we can focus our resources more firmly on building our brands 
to achieve this we have now  implemented a new organisation 
structure in which tim kelly was appointed chief operating officer 
with effect from january 2011 
this structure will
• manage all brands together rather than separately by division 
allowing for better prioritisation of resources
• establish a group marketing function facilitating the sharing 
of consumer insight and maximising value from marketing 
spend
• concentrate more resources behind innovation in our drive 
and core brands leading to a bigger contribution from new 
and improved products
• manage the defend brands and nonbranded businesses 
separately to ensure their contribution is maximised and 
• consolidate back office functions to simplify back office  
processes and facilitate cost reduction
we will elaborate on these plans at an investor conference in  
may 2011
outlook
promotional activity increased significantly in 2010 for 2011 we do 
not believe that it will continue to escalate at the same rate but we 
are cautious about whether it will decline very quickly 
commodity inflation has been running at mid single digit 
percentages this has required us to increase prices for our 
products at this level we believe that inflation is manageable 
in 2010 the most dramatic effect of pricing and commodity inflation  
was felt in the significant fall in profitability in our brookes avana 
business we are talking constructively with marks and spencer to  
agree new product ranges and revised pricing and supply arrangements 
which we believe will return the business to profitability in 2011
our focus in 2011 will be
• to continue to take branded market volume share
• to grow our percentage of grocery branded sales from new 
and improved products as our innovation pipeline matures 
• to continue our drive for efficiencies and
• to generate at least £80m of recurring cash flow
we would expect our focus to result in the group showing progress in 
2011 without any further deterioration in the consumer environment
robert schofield
chief executive officer
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our markets
our markets
market share of u k  
bread production by value
2
●	 large plant bakers   
 862
●	 instore bakers 
 135
●	 local high street bakers 
 03
top 5 u k ambient grocery producers
1
●	 premier foods  68 
 2009 68
●	 kraft including cadbury 50 
 2009 49
●	 nestlé uk  47 
 2009 48
●	 united biscuits  34 
 2009 34
●	 cocacola  34 
 2009 33
●	 other   767 
 2009 768
markets
grocery
the uk grocery market proved resilient despite the continuing 
recessionary environment in 2010 and pressure on consumer spending 
the total uk food and drink market excluding alcohol was worth 
£680bn in 2010 2009 £658bn and grew by 33 over the year 
2009 48 within this branded sales outpaced retailer brands with 
value growth of 45 2009 70 compared to 26 2009 33
1
premier operates in the ambient grocery sector which grew by 
36 to £259bn in 2010 2009 £250bn
1
 our principal market is 
the uk accounting for 949 of sales 2009 947 
baking and milling
the total uk bakery market is worth £368bn and is one of the largest 
segments within the food industry
2
 t otal volume at present is just under 
4 billion units which is equivalent to 11 million loaves and packs sold 
each day
the industry is divided into three main categories
 1 large plant bakers
 2 instore bakers and
 3 local high street bakers
 
the uk milling industry produces 45 million tonnes of flour each 
year with a total value of around £1bn demand for flour has been 
stable for the last ten years
the uk milling industry utilises 35 of the 15 million tonne wheat 
crop with a further 1 million tonnes imported approximately 40 of 
the supply is vertically integrated 
competition
grocery
competition is largely split between two categories
1 major multinationals who pursue a global brand strategy and 
focus on categories where their global focus can be achieved 
and
2 smaller uk companies who are generally more focused on 
retailer branded products as these businesses are less branded 
they tend to generate lower profit margins
due to the large portfolio of brands the group owns and our focus 
on the uk market we do not have any principal competitors who 
operate over all of the same categories as us
 
premier is the uk’s largest ambient grocery producer with a 68 
2009 68 share of the £259bn ambient grocery sector
1
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baking and milling
hovis is one of three main plant bread producers the other two 
being warburtons ltd and associated british foods plc kingsmill
hovis is the largest vertically integrated baker and miller in the uk 
and our mills produced approximately 1 million tonnes of flour in 
2010
cu stomers
the main retail channels within the uk grocery market are the large 
supermarketssuperstores and convenience stores
market share in branded bread
2
●	 warburtons  325 
 2009 322
●	 hovis  247 
 2009 249
●	 kingsmill   199 
 2009 186
●	 own label  122 
 2009 132
●	 other branded  107 
milling market share by volume
3
●	 premier foods   
 25
●	 adm milling 
 16
●	 associated british foods 
 11
●	 whitworths 
 10
●	others  
 38
l argest u k retailers
1
●	 tesco 306
●	 asda 169
●	 sainsbury’s  163
●	 morrisons 119
●	 coop 73
●	 waitrose  42
●	 other multiples 106
●	 independents 22
within grocery we sell both branded and nonbranded products to 
a wide range of customers our most significant customers are the 
major uk retailers 
in addition our foodservice business sells to local authorities 
schools and hospitals staff canteens restaurants and pub chains 
largely through intermediate wholesalers 
within milling approximately 50 of the flour milled is 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
premier sales split per customer
●	 top 5 retailers £1517m   
●	 other retailers £452m 
●	 	others including 
wholesalers and 
food service £450m
●	 bulk flour  £148m 
sources
1 
kantar worldpanel purchase panel 52 we 26 dec 2010 
2
  kantar worldpanel 52 we 28 nov 2010
 iri total grocery outlets 52 we 27 nov 2010 vs previous year value share 
prepacked bread only
3
  internal management estimates
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consumer insight
consumer insight
growing the business through branded sales
much of the last few years since the acquisition of the rhm 
and campbell’s businesses has been focused on managing the 
restructuring the business with this completed we are now moving 
to focus on our key strategic priority of growing the business 
through branded sales 
indepth understanding of the british consumer
if we are to achieve this it is essential that all our activities and 
initiatives are based on understanding the behaviours and needs 
of our consumers and shoppers this is the step change that is 
underway that will ensure that premier foods achieves its’ goals 
over the coming years
it is the role of the consumer insights team at premier foods 
to know exactly what those behaviours and needs are and to 
make sure the business understands them better than any of our 
competitors part of their role is to articulate specific consumer 
insights which can feed into a number of activities such how 
are brands are positioned in the market how we communicate 
through advertising or packaging design what areas we need to be 
innovating in how our products should be tasting and so on
so what is a consumer insight
there are many textbook definitions but what is common to them all 
is that a good consumer insight requires a deep understanding of a 
consumer’s needs and behaviours that will in turn offer competitive 
advantage the word deep is highlighted as it is very easy to 
‘observe’ what is on the surface but the job of an insight practitioner 
is to ask why and why again to get under the skin of what a 
consumer is saying or doing
the consumer and shopper manifesto
the consumer and shopper manifesto was first published in the 
2009 annual report and is a good example of broader level insights 
the manifesto was conceived with a view to answering the simple 
question “what are the things that are most important to consumers 
and shoppers of food today” on reading the manifesto most of 
those things would appear to obvious such as ‘looking and taste 
delicious’ ‘offer genuine value for money’ and ‘be natural and 
wholesome’ but it can be easy to forget the big important things 
when focusing on the day to day running of a business
“   good consumer 
insight requires a deep 
understanding of a 
consumer’s needs and 
behaviours that will in 
turn offer competitive 
advantage”
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consumer insight in action — loyd for one
the consumer and shopper manifesto has proved most powerful 
where one or more of the principles have combined with brand level 
consumer insights loyd for one cooking sauces which launched in 
2010 is a good example of this 
one of the manifesto principles ‘make food easy’ urges us to think 
about whether we have the right size packs for the consumers who 
use them our data shows that meals where four or more people 
are present are three times more likely to be prepared using a 
cooking sauce than a meal where only one person is present we 
also know that the number of single person occupied households is 
increasing rapidly and busy family lives means that even within larger 
households eating alone is becoming more commonplace
armed with this information the loyd grossman team set about 
launching a product specifically for one person 
•	 w e 	 found	that	the	main 	r eason 	 that 	people	eating	on	their	own	
were less likely to use cooking sauces is that invariably despite 
current jars being resealable half a jar would be used and after 
a few days the remainder of the sauce would be thrown away 
•	 w e	 also 	know	 fr om	data	that	loyd grossman consumers 
specifically are far more likely to be environmentally aware than 
other consumers and avoiding food wastage is very important 
to them 
•	 finally  	 we	know	that	typical	loyd grossman consumers are 
‘foodie’ people who like to know what is in their food and where 
is comes from
as a result loyd for one was launched addressing all of these 
needs the portion size is perfect ‘for one’ we researched this too 
using high quality premium ingredients with nothing artificial added 
as with all of our cooking sauces packed in lightweight packaging 
a pouch is approximately 95 less packaging in weight than a 
glass jar in the flavours that we know our consumers love the most 
whilst the original inspiration for loyd for one was the ‘make food 
easy’ principle in reality every one of the other seven consumer and 
shopper manifesto principles were employed 
•	 the	pr oducts	 ar e	only	made	fr om	natural	ingr edients 	and	ar e	
‘natural and wholesome’
•	 by	addr essing 	food	waste	and	with	less	packaging	they	‘do	the	
right thing’
•	 they	‘focus	on	the	nation’ s	favourite	food’	as	they	ar e	in	the	
most popular flavours
•	 they	‘look 	and 	t aste 	delicious’	only 	using	the	finest	ingr edients
•	 they 	ar e	‘genuine	v alue 	for	money’	partly 	because	of	the	
competitive price point but also because there is no waste
•	 the	pouch 	is 	a	dif fer ent 	size	and	shape	to 	the	r est	of	the	
category which is in jars and so they ‘shine in store’ and
•	 finally	its	launch	tv	advertising	helps	the	pr oduct	and	brand	to 	
‘be loved’
the result is a phenomenal rate of sale for the range and after less 
than a year in the market this part of the loyd grossman range is 
already bigger than some other competitor brands in their entirety
•	 loyd for one has already gained a 5 value share of the 
premium italian sector
1

•	 contributed 	 to 	 second 	 half 	 sales 	 gr owth 	 of 	 167 	 acr oss 	 the 	loyd 
grossman range — delivering total sales of £45m for the year
outlook for the future
this is just one example of how understanding the consumer and 
shopper can help ensure success however this is just the starting 
point all premier foods employees are now being encouraged to 
think about the consumer and shopper 
over the year every member of the group executive has spent a day 
meeting a consumer in their home and accompanying them around 
a store and have seen consumer insights in action by attending 
focus groups there are plans to roll out this kind of activity 
throughout the organisation
1
 source kantar 4 we 19 feb 2011
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key performance indicators
key performance  
indicators kpis
underlying  
operating  
cash flow
08 09 10
£78m
£49m
£124m
trading profit
08 09 10
£282m
£309m
£311m
total sales  
value £
08 09 10
£2604m
£2661m
£2567m
total branded 
sales volume 
growth
grocery  
procurement 
savings
grocery  
manufacturing 
costs
overall category market 
volume decline
31 
versus 08
£16m 80
branded sales 
growth
•	 t o	gr ow 	branded	sales 	
volume faster than their 
respective markets
•	 t o	gr ow 	total 	sales	0–2	
ahead of market
•	 t o	gr ow 	drive	brand 	
volumes 	 1–2	ahead 
of market
•	 t o	generate	pr ocur ement 	
savings in grocery
•	 t o	r educe 	manufacturing	
costs with grocery by 4 
per annum
•	 t o	incr ease 	gr oss	margin
•	 t o	make	pr ogr ess 	against	
2009 trading profit
•	 t o	incr ease 	r ecurring	cash	
flow by £100m
•	 t o	r educe 	average	debt	to 	
ebitda to 325 over the 
medium term
competitive 
advantage 
through scale 
and efficiency 
improvements
generating cash 
to pay down debt
❯❯❯ ❯❯❯
❯❯❯ ❯❯❯
❯❯❯ ❯❯❯
strategy
measures and 
targets
performance
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business review
“we use kpis to help drive focus and measure 
performance across a number of areas which are 
aligned to the strategic priorities of the group that 
we set out in 2010”
trading operating  
expenses
08 09 10
£512m
£495m
£478m
trading gross 
margin
08 09 10
305
302
307
average debt
ebitda
08 09 10
4855 4575 4225 average  
net debt
08 09 10
£1617m
£1651m
£1529m
drive brand 
sales 
value £
08 09 10
£760m
£840m
£865m
branded sales 
as a  of total 
sales
08 09 10
605
631
652
80
•	 pr ogr ess 	against	2009 	despite	
difficult trading conditions
•	 str ong 	r ecurring	cash	flow	of	
£124m well ahead of target
•	 as	a	r esult	of 	this	cash	flow 	
average debt reduced by £122m 
and average debtebitda to 
4225
•	 savings 	of	£16m	generated	
within grocery supply chain from 
working more strategically with 
suppliers
•	 gr ocery	manufacturing	costs	
reduced by 8 6 from 
efficiencies well ahead of our 4 
target
•	 gr oss	margin	enhanced	by	
50bp to 307
•	 branded 	sales 	wer e	up	31 	in	
volume versus category market 
decline of 08
•	 sales 	 r evenue 	 was 	 down 	 slightly	
due to increased promotional 
activity but within this drive 
brands were up 30
•	 t otal 	branded	shar e	incr eased 	
by 21pp to 652 of total sales
•	 t o	continue	to	take	
branded market share
•	 t o	gr ow 	the	per centage 	
of grocery branded sales 
from new and improved 
products
•	 disposal 	of 	canning	
businesses will increase 
focus on branded sales 
with the grocery division
•	 t o	generate 	further 	
procurement savings from 
consolidating suppliers 
and strategic supply chain 
initiatives
•	 t o	r educe 	manufacturing	
costs within grocery by 4 
per annum
•	 t o	incr ease 	consumer	
marketing investment funded 
by administrative savings
•	 t o	make 	pr ogr ess 	against 	
2010 trading profit 
•	 t o	generate 	£80m 	of	
recurring cash flow
•	 sale	of	meatfr ee 	and	east	
anglian canned grocery 
businesses will accelerate 
debt reduction — average 
debtebitda to fall to 
3725
❯❯❯ ❯❯❯
❯❯❯ ❯❯❯
❯❯❯ ❯❯❯
commentary performance focus for 2011
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operating review
2010 has been an important year in the history of premier foods 
during the year we have progressively implemented our financial 
strategy by closing out our interest rate swap exposure closing 
our final salary pension scheme generating £124m in a recurring 
cash flow and obtaining a credit rating to allow us to access the 
bond markets since the end of the year we have also agreed the 
sale of two businesses which will reduce our debt level to less 
than £900m compared to £1365m a year ago
our business has proved resilient with branded volume 
market share growth increased margin from procurement and 
manufacturing efficiency and lower operating expenses
all financial metrics refer to the continuing business plus the meat
free business unless otherwise indicated for the purposes of the 
financial statements the meatfree business is disclosed within 
discontinued operations
   continuing meatfree continuing
   business business  meatfree
 2010  £m £m  £m
 revenue 2438 129 2567
 cost of sales 1691 87 1778
 trading gross profit 747 42 789
 gross margin  306 321 307
 trading operating  
 expenses 452 26 478
 trading profit 295 16 311
   continuing meatfree continuing
   business business  meatfree
 2009  £m £m  £m
 revenue 2530 131 2661
 cost of sales 1766 91 1857
 trading gross profit 764 40 804
 gross margin  302 302 302
 trading operating  
 expenses 463 32 495
 trading profit 301 8 309
trading gross profit is defined as gross profit excluding exceptional 
items which were £nil 2009 £6m continuing
trading operating expenses are defined as operating expenses before 
exceptional items of £nil 2009 £40m continuing amortisation and 
impairment 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
summary 
     10 v 09
   2010 2009  
 branded sales £m 1673 1678 03
 branded sales volume 
 growth  31 92
 total sales £m 2567 2661 35
 total sales volume 
 growth  27 18
 branded market share 
 — volume  223 218 05pp
 branded market share 
 — value  239 243 04pp
 trading profit £m 311 309 06
 lossprofit before tax 
 — continuing £m 98 42
 pro forma adjusted 
 eps pence 50 47 64
 eps — continuing pence 36 17
 cash flow before non
 recurring items £m 124 49
 ebitda £m 362 361
 net debt £m 1261 1364
 net debtebitda times 3485 3785 average debt £m 1529 1651
 average debtebitda 
 times  4225 4575 operating review
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business review
robert schofield
chief executive officer
trading profit
   2010 2009 10 v 09
   £m £m 
 sales  2567 2661 35
 cost of sales 1778 1857 43
 gross profit 789 804 19
 gross margin  307 302 50bp
 operating expenses 478 495 34
 trading profit 311 309 06
trading profit increased 06 to £311m owing to an improvement in 
gross margin and lower operating expenses
   2010 2009 10 v 09
   £m £m  
 grocery 256 255 04
 hovis  39 31 258
 chilled
  brookes avana — 15 1000
  meatfree 16 8 1000
 trading profit 311 309 06
grocery hovis and meatfree divisions all increased profit in the 
year brookes avana suffered a £15m fall in trading profit owing 
to lower volumes lower prices poorer mix and higher commodity 
costs we are in constructive dialogue with our main customer 
marks and spencer which we believe will result in an amended 
product range and revised pricing and supply arrangements which 
we believe will return the business to profit in 2011
jim smart
chief financial officer
sales
     10 v 09
   2010 2009 
 branded £m 1673 1678 03
 nonbranded £m 894 983 91
 total sales 2567 2661 35
 total branded sales  652 631 21pp
 branded market share 
 in grocery
  volume  200 191 09pp
  value  221 223 02pp
 hovis branded market 
 share in bread
  volume  252 249 03pp
  value  249 257 08pp
 
total sales fell by 35 volume contributed 27 to the reduction 
with positive mix offset by price contributing 08
branded sales were down 03 at £1673m and now account for 
652 of total sales an increase of 21pp on 2009 market share 
for the grocery division increased by 09pp to 200 by volume as 
a result of innovation and promotional activity market share fell by 
02pp to 221 by value as the higher volumes were offset by the 
effect of increased promotional activity on net prices 
promotional activity continues to escalate in the market across 
all grocery categories during 2010 328 of items were bought 
on promotion in 2009 this was 304 the promotional activity 
increased during the year with q4 reaching 342 premier foods’ 
promotional cost in grocery categories similarly increased by 8 in 
2010 although this was more concentrated in q4 
market share for the hovis division increased by 03pp to 252 by 
volume as a result of additional distribution but fell by 08pp to 249 
by value as a result of promotional activity
above in january 2011 mr kipling announced a move to using 100 free 
range eggs in all products containing egg as an ingredient mr kipling uses the 
equivalent of over 60 million free range eggs to bake his famous cakes
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nonbranded sales
   2010 2009 10 v 09
   £m £m  
 grocery 401 421 50
 hovis  290 348 168
 chilled 203 214 47
 total  894 983 91
nonbranded sales which comprise retailer brand business to 
business products and milling were down by 91 
in the grocery division nonbranded sales declined by 50 
this decline largely reflects a decline in the canning category with 
sales down 103 and volumes down 112 market volumes 
for canning were down 100 as a result of increased brand 
promotions the contract losses were lapped at the end of q3 and 
own label volumes were in line with the market in q4 
in hovis sales of retailer brand bakery products were down 221 
volumes were down 211 reflecting a retailer brand bread market 
down 136 and the exit from certain contracts the volume lost 
by this decline was partly offset by increased volumes of branded 
bread leaving total bread volumes down 34 
also in hovis milling sales revenue was down 113 in volume 
however sales were down only 49 owing to competition and 
slight declines in market demand price deflation accounted for the 
remaining 64 of sales decline the price deflation however has 
little effect on profitability as the cost of raw materials is similarly 
reduced in q4 this effect reversed with volumes down 49 but 
sales revenue up 109 
in the chilled division nonbranded sales fell by 47 driven by mix 
of contracts and less successful promotional activity
branded sales 
   2010 2009 10 v 09
   £m £m 
 hovis   359 349 28
 mr kipling  136 132 33
 quorn  117 118 14
 ambrosia  85 83 29
 sharwood’s  65 62 45
 hartley’s  58 54 87
 loyd grossman 45 42 72
 subtotal — drive brands 865 840 30
 batchelors  131 132 11
 bisto   95 96 15
 branston — 
 pickles and relishes 38 38 06
 branston — beans 33 36 80
 cadbury cakes  58 60 34
 oxo  36 38 48
 subtotal — core brands 391 400 25
 defend brands 417 438 46
 total branded sales 1673 1678 03
drive brands grew by 30 to £865m helped by promotional spend 
and new products drive brand volumes were up 49 compared 
with a category market decline of 22 hovis mr kipling ambrosia 
and hartley’s all succeeded in gaining volume market share loyd 
grossman benefited from the launch of the loyd for one range 
which contributed to second half sales growth of 167 quorn 
sales were down 14 as we pulled back on promotional and 
marketing spend particularly in the first half during the second half 
the brand returned to growth with sales up 04
core brands fell by 25 to £391m volumes were down 20 
compared with a category market decline of 07 batchelors and 
oxo faced strong competition in their markets and branston beans 
and bisto had a lighter promotional programme cadbury cakes 
sales fell reflecting lower promotional activity 
defend brands declined by 46 to £417m volumes were up 26 
compared with a category market growth of 16 volumes were 
helped by growth in crosse  blackwell beans homepride cooking 
sauces and elephant atta flour price deflation was driven by the 
ireland market and wheat deflation
operating review continued
“our business has proved resilient with branded 
volume market share growth increased margin 
from procurement and manufacturing efficiency 
and lower operating expenses” 
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business review
trading gross profit
   2010 2009 10 v 09
   £m £m  
 trading gross profit 789 804 19
 trading gross margin  307 302 50bp
 trading gross margin  
 movement bp
 branded growth product 
 mix manufacturing 
 efficiency and 
 procurement  200
 commodity costs 
 pricing and promotions 150
 total change bp 50
trading gross profit decreased by 19 to £789m owing to the 
reduction in sales revenue 
the mix of products improved with branded sales now accounting  
for 652 of total sales this added 20bp to gross margin the 
group’s strategy of improving procurement and manufacturing 
efficiency combined to add a further 180bp to gross margin in total 
the benefit of the group’s strategy of growing branded sales of  
using scale with suppliers and of increasing efficiency in 
manufacturing added 200bp to group gross margin 
from march 2011 you will be able to buy bisto gravy and oxo stock instant pastes in a squeezy tube format the innovation is 
the first of its kind in a convenient and modern squeezy tube format premiumisation remains a key growth opportunity within 
the category as consumers tradeup for products that offer them great quality and convenience with a total share of 46 in 
the gravy stocks  stuffings category bisto and oxo are leading brands and strongly positioned to inject momentum into the 
category with this the new premium offering
bisto instant roast gravy is a concentrated paste that allows you to easily create a smooth deliciously rich home made tasting 
gravy in an instant it contains real meat juices and no artificial flavour enhancers or colours bisto instant gravy comes in three 
flavours beef onion and chicken
oxo squeezy stock is a convenient and easy way to bring fresh flavours to your dishes made with real meat and vegetable 
extracts with no artificial flavour enhancers the new format allows you to add as much or as little as you want to your dish also 
in three flavours to choose from beef chicken or vegetable
case study
input costs in some of our largest spend areas were higher in 2010 
reflecting the rises in various commodity markets commodities 
particularly affected included cocoa dairy diesel and packaging 
in the second half we experienced significant wheat inflation with 
consequential increases in other cereals meat and vegetable oils 
the group continues to foresee upward pressures in commodity 
input costs 
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 2010 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 total the combination of promotional activity pricing and input 
cost changes reduced group gross margin by 150bp
 
the net effect of all these changes was an increase of 50bp in 
group gross margin
new bisto and oxo gravy and stock instant pastes
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operating review continued
support functions and corporate costs decreased by 17 to 
£172m pension service costs decreased from £12m in 2009 to 
£9m as a result of changes in bond yields and inflation assumptions 
current service cost was £21m as expected however this was 
offset by a past service credit of £12m which resulted from the 
amendment of future benefit accrual in two of the group’s pension 
funds based on the current levels of bond yields and inflation 
assumptions we expect the current service cost to be around £20m 
in 2011 further past service amendments are likely to be seen 
in 2011 the level of which will depend on the way in which new 
benefits are implemented 
during the year we continued to roll out our sap system over the 
next few years we intend to complete the transition to sap and to 
simplify our processes our aim is to reduce the administrative costs 
over this period sufficiently to fund the increase in marketing costs
restructuring costs
in the year a total of £12m was spent on restructuring compared 
with £14m in 2009 the main project was reducing the size of 
the irish supply chain owing to a developing trend of retailers 
sourcing products directly from the uk of the £12m charge £2m 
2009 £5m is included in cost of sales and £10m 2009 £9m in 
operating expenses the charge in grocery is £8m 2009 £1m and 
in hovis is £2m 2009 £11m
bringing women back to bread with hovis wholemeal
hovis brand ambassador and olympic cyclist victoria pendleton is fronting our new hovis wholemeal campaign which went on 
air in january 2011 using the strap line ‘stops me snacking’ the campaign encourages more women to eat hovis wholemeal 
for breakfast tv was supported by another first using facebook as our key digital platform to help drive the campaign and 
engage people in the ‘bread debate’ this topic was of particular interest during january when consumers are at their most 
health conscious 
caroline jary head of marketing for hovis says “victoria is a great ambassador for the hovis brand and we are proud to have 
her fronting our campaign which will reinforce that hovis wholemeal with a healthy topping is a great alternative to cereal 
hovis wholemeal is rich in fibre which can help you feel fuller for longer a great tool to stop snacking we want to bring back 
consumers to bread at breakfast and will be utilising our biggest ever digital campaign to engage consumers through healthy 
recipe ideas”
case study
trading operating expenses
   2010 2009 10 v 09
   £m £m  
 consumer and instore 
 marketing 89 91 22
 distribution 217 229 52
 support functions and 
 corporate costs 172 175 17
 operating expenses 478 495 34
the strategy is to grow our branded sales without growing operating 
expenses in the year operating expenses fell by 34 to £478m
consumer and instore marketing was down £2m year on year and 
this was deployed to support the growth in branded sales volumes 
our strategy is to increase consumer marketing as we increase 
support to our brands in the year marketing spend was increased 
in grocery but was reduced in hovis and meatfree we decided 
not to increase marketing budgets this year owing to the tough 
consumer environment however we expect marketing costs to 
increase in 2011 as we increase innovation activity 
distribution costs were down 52 to £217m the reduction 
in volumes allowed costs to be reduced lower fuel costs also 
contributed however the main reduction was as a result of 
improved efficiency which was equivalent to a 47 reduction
 
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business review
grocery
“in 2010 the grocery division 
succeeded in growing market share 
by 09pp to 200 by volume through 
innovation and promotional activity”
sales for the grocery division decreased by 18 branded sales 
were down 06 to £1146m nonbranded sales were down 50 
to £401m
branded sales volumes increased by 27 with negative price and 
mix reducing revenue by 33 
branded sales in uk retail channels were up 01 in value and up 
23 in volume 
sales in the catering and specialist channels were down 19 
muted market trends owing to consumers eating out less frequently 
was exacerbated by some contract losses in suet and beans
sales in ireland were £81m down 88 on 2009 as the market 
suffered with the economic conditions and as the euro weakened 
on a constant currency basis sales were down 60 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 in 2010 
we restructured our business in ireland to reflect these changes and 
anticipate that further restructuring may be required as the retail 
sector continues to adapt the supply chain savings were sufficient 
to offset the loss of gross margin from the fall in sales
international sales amounted to £37m an increase of 158
retailer brand sales were down 50 in the year with volume decline 
reducing sales revenue by 53 with price and mix contributing 03 
the loss of volume was largely a reflection of trends in the category 
markets which were down 22 in the year this is a steeper fall than 
normal which reflects a switch toward branded goods as promotional 
activity increased our performance lagged the market in the first 
three quarters of the year largely as a result of a material retailer brand 
beans contract lost in q3 of 2009 
trading profit increased by 04 to £256m
2010 highlights
   2010 2009 10 v 09
   £m £m 
 branded sales  1146 1153 06
 nonbranded sales 401 421 50
 total sales 1547 1574 18
 trading profit 256 255 04
 volume market  
 share  200 191 09pp
 value market  
 share  221 223 02pp
 
� 8 reduction in grocery manufacturing costs
�  l aunch of loyd for one helped l oyd grossman 
deliver sales growth of 72
�  promotional activity continues to escalate in the 
market increasing from 304 to 328 across all 
grocery categories for 2010
�  nonbranded sales down 50 to £401m
�  sale of east anglian canned grocery business 
announced
divisional review
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divisional review continued
lower sales volumes were partially offset by a superior product 
mix with branded sales steady versus nonbranded decline this 
reduced profit by £5m our strategy of improving procurement 
efficiency added £16m to profit 
in the year input costs increased reflecting commodity markets this 
was largely offset by pricing but promotional costs were higher in 
the year these factors combined meant that the business incurred 
a net cost of £18m 
the increase in promotional costs reflects an increase in the level of 
deal activity across all grocery markets with retailers competing to 
offer value during the recession 
there was a £21m net benefit as a result of reduced manufacturing 
costs this was achieved as a result of increased efficiency from 
various initiatives for example better operating practices reduced 
waste and better scheduling reduced the need to use overtime 
or third party manufacturing this amounted to a 6 reduction of 
controllable costs in line with our strategic target in addition in 
2010 deflation in energy prices contributed a further 2 reduction 
this is liable to reverse in 2011 as fuel prices increase 
there was a £13m increase in operating expenses of this increase 
£4m of higher bonus costs reflected a return to more normal levels as 
guided in 2009 pension costs were flat year on year an additional £8m 
was spent in restructuring costs as the project to decrease the size of 
the irish supply chain got under way additional marketing costs of £4m 
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 other costs were reduced by £3m 
particularly owing to lower volumes and efficiencies in distribution 
in conclusion in 2010 grocery’ s results are substantially in line with the 
business strategy branded volume market share grew and despite 
increased promotional investment and subdued consumer demand 
sales revenue was flat we grew sales through innovation and improved 
gross margin by better procurement and manufacturing efficiency 
we found savings to fund increased consumer marketing activity 
nonbranded sales were lower year on year but this relates to market 
trends and to contracts lost on grounds of profitability in 2009 we are 
confident that our strategy will result in further progress in 2011 above launch of new frujies range helps hartley’s to deliver  
sales increase of 87 in 2010
mr kipling range refresh
mr kipling had retails sales of £136m in 2010 so ensuring the core product range retains its relevancy with consumers is 
extremely important our range refreshment programme launched in 2009 aims to drive new news and interest for consumers in 
our key product sectors 
2010 saw mr kipling’s continued commitment to the programme with the launch of mr kipling’s ice cream inspirations in may 
recreating some of the best loved ice cream flavours in his most iconic and best loved cakes mr kipling’s neapolitan bakewells 
raspberry ripple slices and tutti frutti pies have been made with the same care and attention to detail that mr kipling gives to all 
his cake creations
the range performed well particularly over the summer months finishing the year having delivered £45m in retail sales value
the range refresh continues in 2011 with the replacement of the ice cream range with the launch of mr kipling’s great british 
puds spotted dick slices trifle bakewells and rhubarb  custard pies these are proving to be a hit with consumers and are 
already on track to deliver increased yoy sales for the brand
case study
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business review
hovis
“hovis branded volume increased by 
35 contributing to a 03pp increase 
in volume market share”
branded bakery sales grew 17 to £376m volumes were up 35 
with pricing and mix reducing revenue by 18 this reduction was 
a function of year on year promotional increases and wheat cost 
declines in the early part of the year which was equivalent to a 06 
reduction in revenue this merely reflects wheat input costs and has 
little effect on profitability in q4 this effect reversed as pricing was 
amended to reflect the sharp increase in the market cost of wheat 
as a consequence price and mix was 55 favourable in q4 
branded sales benefited from the launch of our new hearty oats 
loaf and by market share gains in white bread 
hovis branded volume increased by 35 contributing to a 03pp 
increase in volume market share volume growth reflected success 
in growing sales of white bread this volume growth was partially 
offset by pricing and mix as the proportion of bread sold on deal 
was higher in 2010 than in the previous year as a consequence 
market share in value terms decreased by 08pp to 249
in retailer brand bakery sales were down 221 reflecting volumes 
down 211 the majority of this fall reflected a 136 fall in the 
market volume for retailer brand bread as consumers switched to 
branded bread as increased promotional activity improved value 
the remainder of the decline was due to exit of bread contracts  
and lower sales of other bakery products
2010 highlights
   2010 2009 10 v 09
   £m £m 
 branded bakery  376 370 17
 retailer brand  
 bakery 140 179 221
 total bakery  
 sales  516 549 61
 milling  172 193 106
 trading sales 688 742 73
 trading profit 39 31 258
 branded bread volume  
 market share  252 249 03pp
 branded bread value  
 market share  249 257 08pp
�  h ovis moved to sourcing 100 of wheat from british 
farmers
� l aunch of hovis hearty oats
�  hovis seed sensations raised over £100000 for the 
royal british l egion
�  sharp increase in the market cost of wheat in q4
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divisional review continued
hovis hearty oats “sometimes it’s good to be good”
new hovis hearty oats the first ever loaf to be baked with 50 wholegrain oats and 50 wheatflour
1
 launched into stores  
in 2010
it has taken two years to develop this oat packed bread in association with heart uk — the cholesterol charity just two slices 
of hovis hearty oats contain 10g of betaglucan providing a quick and tasty way to get 13 of your daily suggested intake as 
part of a healthy lifestyle and diet low in saturated fat this has been shown to help maintain normal cholesterol levels
jon goldstone group marketing director says “hovis has a long history of innovation and a commitment to baking a range of 
healthy breads we are extremely proud of hovis hearty oats not only is it the first bread to be baked with 50 oats and 50 
wheatflour helping maintain normal cholesterol but it is also uniquely approved by heart uk”
the launch of hovis hearty oats was supported by a new marketing campaign including a hearty oats community website and a 
tv campaign with a new advert
1
 based on finished cereal weight
case study
the total volume of bread sold fell by 34 with a 35 growth in hovis 
offset by a 241 decline in other brands and nonbranded bread 
in milling pricing is closely related to raw material costs the year on 
year decline in wheat cost in the early part of 2010 was thus largely 
mirrored in flour sales value this effect has little effect on profitability 
and reversed in q4 which saw a 130 contribution from pricing 
and mix volumes were down 41 owing to the loss of certain 
nonbranded flour contracts owing to additional capacity causing 
competitive pricing in the market branded volumes were up 72 
reflecting successful promotions of elephant atta 
the lower volume in bread and milling was only partly offset by an 
improved mix of product the effect was a £10m decrease in profit
the combination of pricing promotion and inflation in manufacturing 
costs was partially offset by lower input costs and efficiencies in 
manufacturing and this reduced profit by £9m 
operating expenses were £27m lower than in 2009 the main 
reduction was in distribution where efficiencies and lower fuel costs 
contributed to a £11m reduction in costs restructuring costs were 
£5m lower since there was high spend in 2009 for additional capacity 
and improved quality not all of which was recurring marketing costs 
were £3m lower as the plans for marketing were scaled back in light 
of the difficult trading environment in the second half pension costs 
were £2m lower and other costs were £6m lower
in conclusion despite a rise in wheat costs hovis had another 
successful year growing trading profit by 258 to £39m aided 
by efficiencies branded growth continued as we launched our 
100 british wheat across the range we remain confident of 
making further strategic progress with the brand in 2011 but are 
cautious about the continuing rise in the market cost of wheat and 
competitive pressures in milling 
1855004premierf frontindd   28 09032011   112841 tim kelly
chief operating officer
since the acquisition of rhm the business has operated through a divisional 
structure we are now returning to a more centralised structure with clear 
brand focus and functional alignment
the first step in the process was the appointment of tim kelly as chief 
operating officer in january 2011 with responsibility for managing all 
brands across premier to ensure greater functional alignment we have 
created two new roles group marketing director and group technical 
director both of whom now sit on the group executive this in turn will lead 
to greater focus on brand growth within our drive and core brands
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business review
chilled
in the year sales for the chilled division decreased by 36 in 
brookes avana sales were down 47 owing to contract losses 
and lower volumes sold on existing contracts meatfree sales 
decreased 19 cauldron sales fell 96 as the market for 
premium and organic products fell 11 quorn sales decreased 
14 a good result for a premium priced product in a recessionary 
environment as guided at the half year as a result of a refresh of 
the quorn range of products sales improved in the second half with 
sales up 04 versus a decline of 32 in the first half 
meatfree trading profit increased substantially in the year as better 
margins and lower supply chain costs were realised as a result of the 
changes made in 2009 and early 2010 marketing costs were lower 
as the difficult consumer environment led us to minimise our activity
brookes avana trading profit was down substantially the business 
operates in an industry characterised by overcapacity and 
consequently by decreasing margins in the past the business 
has offset this by increasing volumes in 2010 however lower 
volumes were accompanied by lower margins as pricing on 
retained contracts was reduced by more than could be saved in 
manufacturing and operating expenses in the year in addition 
substantial escalations in the market cost of key commodities such 
as wheat dairy products and packaging could not be recovered 
despite this severe downturn in profitability we believe the brookes 
avana business continues to produce excellent quality products and 
that it has innovation credentials we are in constructive dialogue 
with the main customer marks and spencer with regard to revised 
product ranges pricing and supply arrangements which we believe 
will return the business to profitability in 2011 
2010 highlights
   2010 2009 10 v 09
   £m £m 
 brookes avana 203 214 47
 meatfree 129 131 19
 total sales 332 345 36
 brookes avana — 15 1000
 meatfree 16 8 1000
 trading profit 16 23 304
 
�  brookes avana profitability impacted by commodity 
inflation and pricing
� sale of meatfree business completed on 7 march  
 2011
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financial review
financial review
above new batchelors saucy super noodles launched in 2010 the new 
product contains two flavour sachets the familiar seasoning sachet and an 
additional concentrated sauce sachet for an extra flavour hit
expect our programme to be slightly larger in 2011 as we invest in 
innovation and efficiency working capital fell £13m as we reduced 
stocks of finished goods and raw materials it is our intention to 
continue to reduce stocks in 2011 
    2010 2009
    £m £m
 cash flow before  
 nonrecurring items  124 49
 exceptional items  7 38
 integration capital  
 expenditure  — 2
 operating cash flow  117 9
 disposal proceeds  9 54
 net equity proceeds  — 380
 settlement of swap  
 obligations  8 —
 financing fees discontinued  
 operations and other items  15 41
 movement in net debt  103 402
the combination of exceptional items disposals and derisking the 
swap portfolio resulted in a net outflow of £21m leaving £103m 
to reduce net debt this was sufficient to ensure that headroom is 
maintained as the banking facility reduced by £100m in 2010 in 
2010 there was a cash outflow of £7m relating to creditors and 
provisions for exceptional items such as onerous leases which were 
provided in 2009 disposals of fixed assets and some small defend 
brands realised £9m as disclosed in october 2010 the derisking 
of the swap portfolio required us to settle early part of the locked 
in mark to market this reduced our swap obligations by £8m an 
additional £8m was paid in fees to the bank group to permit the 
restructure to take place and there were £7m of other items
financing
   2010 2009 10 v 09
   £m £m 
 gross borrowings 1301 1383 59
 deferred refinancing fees 21 18 167
 net borrowings  
 — year end 1280 1365 62
 less obligations under  
 finance leases 19 1
 net debt — year end 1261 1364 76
 ebitda 362 361 03
 net debtebitda 3485 3785 0305 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 the financial position was substantially strengthened in 
the year by a reduction of £103m in net debt as a result of strong 
operational cash flows by the derisking of the swap portfolio and 
the pension funds and more recently by the attainment of a credit 
rating which will allow us to raise funds from the bond market
cash flow
   2010 2009 10 v 09
   £m £m  
 trading profit 311 309 06
 depreciation  51 52 19
 other noncash items 7 3 1333
 interest 131 152 138
 tax  2 1
 pension  57 52 96
 regular capital expenditure 68 83 313
 working capital 13 29
 cash flow before  
 nonrecurring items 124 49 1531
in the year cash flow before nonrecurring items was £124m ahead 
of our target to generate at least £100m per annum cash interest 
was lower than in 2009 owing to lower debt levels and in q4 to 
the removal of additional interest on digital swaps the pension 
cash flow was higher than in 2009 owing to the amount included 
for additional deficit contribution being £38m 2009 £33m capital 
expenditure was £68m this is slightly higher than the combined 
depreciation and software amortisation charge of £64m we would 
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business review
as a result of cash flows the group’s net debt fell £103m to 
£1261m ebitda increased by £1m leading to a 030 reduction in 
the net debtebitda ratio to 348 times
   2010 2009 10 v 09
   £m £m 
 average bank borrowings 
 — 12 month rolling 1439 1561
 securitisation 90 90
 average debt 1529 1651 73
 ebitda — 12 month 
 r olling  362 361 03
 average debtebitda 4225 4575 0355 the key indicator in managing the group’s finances is the average 
debt its being the driver of the group’s regular interest charge 
average debt for 2010 was £1529m compared with £1651m for 
2009 adjusted for the equity raised in the first half of 2009 this is a 
reduction of £122m as a consequence the average debtebitda 
ratio was reduced from 457 times to 422 times
the group’s target set out in its financial strategy is to reduce this 
ratio to 325 times
 
l eases
in addition to the bank debt and securitisation set out above the 
group has a number of operating and finance leases 
operating lease rental payments
   2010 2009 10 v 09
   £m £m 
 plant  machinery 13 17 235
 land  buildings 15 14 71
 total  28 31 97
 
outstanding finance lease obligations
   2010 2009 10 v 09
   £m £m 
 plant  machinery 19 1 —
great little	ideas
we’ve launched the biggest cross brand initiative in the uk food industry this year
  
great little ideas provides simple and inspiring recipe ideas for exciting mealtimes our little yellow stars are on over 300 branded 
skus across 16 key brands representing over 50 of premier’s grocery brands by value
since launch in april 2010 the greatlittleideascom site has welcomed 15 million visitors and now has almost 30000 registered 
members tv in january 2011 was a fantastic success with just two weeks on air we boosted our brand awareness to 33 and 
had over 300000 hits to the site in just one month  our biggest month so far
case study
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financial review continued
new cup a pasta from batchelors
to meet the increasing consumer demand for convenient flexible meals on the go batchelors has added an exciting new 
product to its portfolio batchelors cup a pasta
cup a pasta is a warm filling pasta snack you make in a cup each product in the four strong range has less than 2 fat and 
takes only four minutes to prepare just add boiling water and stir it’s available in chicken tomato creamy cheese and roast 
vegetable flavours
 
jo marshall batchelors senior brand manager said “the new cup a pasta range is for the growing number of consumers 
looking for a quick convenient snack but who are not prepared to compromise on taste it’s perfect for home or work cup a 
pasta has performed extremely strongly in consumer taste tests and complements our already successful range” 
batchelors is the no 1 brand in the hot snacks category with a 44 share and is a trusted brand that consumers actively look 
for in store this launch demonstrates our commitment to delivering innovation and driving category growth
case study
during the year one lease was converted from an operating lease 
to a finance lease in order to facilitate the sale of the canning 
operations this is shown as a £21m acquisition in fixed assets 
and a liability in bank and other borrowings no cash changed 
hands in 2010 and the amendment of the lease did not change the 
underlying lease payment profile the assets were bought from the 
lessor in 2011 and around half were included in the net assets of the 
canning business which we have agreed to sell
financial instruments
   2010 2009 10 v 09
   £m £m 
 nominal value of derivative  
 interest rate related  
 financial instruments 1225 1350 93
 mark to market on  
 derivative interest rate  
 related financial  
 instruments  235 199 181
    
 mark to market  2010 2010 2009 2009
 of financial  nominal mtm nominal mtm
 instruments £m £m £m £m
 economic 
 hedging element
 conventional swaps 1075 125 525 36
 conventional swaps 
 — agreed settlement  78
 long dated swaps    400 27
 digital swaps    275 17
 subtotal — future 
 economic hedging 
 interest 1075 203 1200 80
 noneconomic 
 hedging element
 long dated swaps     44
 digital swaps     38
 other financial 
 instrument 150 32 150 37
 subtotal — future 
 additional interest  32  119
 total  1225 235 1350 199
the portfolio hedges £1075m of the bank debt at an average rate 
of 62 
the mark to market of the interest rate derivatives portfolio has 
worsened by £36m in the year as a result of a reduction in the 
interest rate yield curve however the profile of the portfolio has 
been substantially altered during the year as a consequence 
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business review
“the financial position of the group was substantially 
strengthened in the year by a reduction in net debt derisking 
of the swap portfolio and the attainment of a credit rating”
the noneconomic element of the portfolio has been substantially 
reduced previously the long swaps and the digital swaps 
represented an open risk to interest rates which could have resulted 
in a cash outflow of up to £450m in 2012 and 2013 as a result of 
the restructure this risk has been removed a settlement amount 
representing the mark to market of the instruments of £78m has 
been agreed for 2013 the remainder of the mark to market is 
accommodated by increasing the interest rate of the swaps from 
52 previously to the current 62
the only remaining noneconomic hedging element is the other 
financial instrument which represents a settlement of a previous 
long dated swap which is due in 2012 the terms of this instrument 
have been left unchanged unlike the agreed settlement on the 
other swaps the value of this settlement varies with interest rates 
with the total risk approximately £10m during the year £8m of the 
settlement amount on this instrument was paid as part of the swap 
restructure
the remaining settlement amounts are £32m due in 2012 and £78m 
due in 2013 in the event of a bond issue part of the proceeds will 
be used to settle the £32m due under the other financial instrument 
and £20m of the 2013 amounts
interest
    2010 2009 10 v 09
 interest cost £m £m 
 bank debt interest 58 78 256
 securitisation interest  2 2 —
 swap contract interest 
 — conventional 54 47 149
 amortisation and 
 deferred fees 14 13 77
 normal interest 128 140 85
 swap contract 
 — additional interest 17 15 133
 net regular interest cost 145 155 65
net regular interest cost fell to £145m with the effect of lower debt 
levels bank interest was payable at libor plus 288bp in the year 
the cost of the hedging swaps increased to £54m as interest 
rates fell the cost of the additional interest on the non economic 
hedging digital swaps increased substantially but was mitigated by 
the swap restructure which avoided the cost in the fourth quarter 
nevertheless the additional interest for three quarters of 2010 
exceeded that paid for the whole of 2009
debt covenants
    2010 2009
 covenant headroom  £m £m
 covenant indebtedness  1254 1378
 covenant ebitda  365 376
 covenant interest  128 140
 covenant tests
 leverage test  344 367
 limit    450 475
 headroom  24 23
 interest cover test  285 269
 limit   240 200
 headroom  19 35
at december 2010 leverage is 344 times giving 24 headroom 
against the covenant test interest cover was 285 times giving 19 
headroom against the covenant there was adequate headroom 
against both the financial limits at year end the interest covenant 
headroom was tighter than would normally be the case solely 
because of the additional interest payable under the digital swap for 
the first three quarters of the year this has now been restructured 
hence reducing this cost for 2011 if this restructuring had been in 
place throughout 2010 interest cost would have been £7m lower 
giving an interest cover test of 302 and headroom of 26 although 
each will become tighter in 2011 we expect to continue to have 
adequate headroom the maximum leverage ratio for 2011 is 390 
and the maximum interest cover limit is 275
pensions
    31 dec 2010 31 dec 2009
 pensions  £m £m
 liabilities  3120 2959
 discount rate  545 580
 inflation rate  345 350
 assets
 equities  588 599
 bonds   445 395
 property  122 166
 absolute return and swaps  648 509
 cash  other  996 861
 total assets  2799 2530
 gross deficit ias 19  321 429
 deferred tax  86 119
 net deficit ias 19  235 310
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financial review continued
“cash flow before nonrecurring items was £124m 
ahead of our target to generate at least £100m”
at the end of 2010 the deficit was £321m on an ias 19 basis 
which is equivalent to £235m net of deferred tax this compares 
with £429m and £310m respectively in 2009 the discount rate 
used which is based on the aa bond yield decreased from 580 
to 545 and the inflation rate assumption decreased from 350 
to 345 as a consequence the real interest rate assumed fell 
from 230 to 200 the size of the reported deficit will continue 
to be volatile based on market returns movements in bond yields 
and future price inflation expectations however ongoing deficit 
contributions and improved hedging should mean that the medium
term trend should be one of improvement and lower volatility
the charge to trading profit was £9m versus £12m in 2009 the 
current service cost was £21m for the year versus £12m in 2009 
reflecting a significant reduction in real interest yields between 2008 
and 2009 past service credits in relation to changes to two of the 
group’s pension scheme rules reduced the total service charge 
to £9m we expect the service cost to be around £20m in 2011 
there are likely to be further past service charges or credits as 
the remainder of the group’s future pension benefits provision is 
amended in 2011 
total cash paid to the pension fund including deficit funding was 
£66m in 2010 versus £65m in 2009 deficit payments were £38m 
in 2010 versus £33m in 2009 the deficit payment in 2011 will be 
£48m before falling to £42m in 2012 and £38m in 2013
the movement of the deficit is explained as follows
movement in pension fund deficit
     £m
 gross deficit dec 2009   429
 total return on investment assets  241
 movements on hedging assets   94
 change in discount rate on liabilities  182
 other actuarial assumptions   73
 employer contributions   66
 charge to trading profit   9
 unwind of discount rate   168
 expenses   7
 gross deficit dec 2010   321
in the year actual investment return on assets was 132 this 
exceeded expected returns of 72 the benefits of hedging 
added a further £94m to assets this offset some of the change in 
the liability discount rate which fell from 580 to 545 following 
the fall in aa corporate bond yields other assumptions such as 
inflation rates changed slightly and this reduced the deficit by £73m 
total contributions including the additional deficit contributions by 
the group exceeded the cost of new benefit accruals and expenses 
paid by the fund
the sensitivities of the pension funds are as follows
     impact on 
     liabilities 
     £m
  01 change in discount rate  4951
  01 change in price inflation  1821
  01 change in real salary growth  22
 1 year life expectancy   117
     impact on 
     assets
     £m
  10 on equity values   7070
during the year the group agreed with the trustees a programme to 
increase the amount of hedging between assets and liabilities within 
the funds this should help to reduce the volatility of the deficit
discussions with the trustees regarding the triennial actuarial 
valuations of the four uk pension schemes as at 5 april 2010 are 
continuing and the results should be known in the first half of 2011 
the discount rate is expected to be based on the yield available on 
appropriate gilts plus 1 pa at april 2010 this was equivalent to a 
discount rate of 55 pa the other liability assumptions have not 
yet been finalised but will in aggregate contain additional prudence 
to those used in the ias 19 figures given above we expect the 
technical deficit to be around £550m 
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 and averages £40m a year the agreement with 
the trustees is that deficit contributions after 2014 will depend upon 
the 2013 actuarial valuation the trustees and the group will aim 
to make up any deficit over the subsequent eight years until 2022 
however this is subject to affordability and hence the period can be 
lengthened or shortened accordingly the 2010 valuation result if 
it were confirmed at £550m would imply an annual contribution of 
around £40m over the eight years to 2022
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business review
the group also took action in the year to reduce the rate at which 
the actuarial liabilities increase this entailed proposing to close the 
final salary pension funds to future accrual in its place we will offer a 
market competitive money purchase scheme for new starters and a 
market competitive career average scheme for existing pension fund 
members these changes have been agreed with the unions and 
will be implemented in 2011 the result of the changes will be to 
leave the annual service charge at around the same level as before 
but to significantly cap the rate at which the defined benefit pension 
liability escalates 
profit after tax
     2010 2009
    £m £m
 trading profit continuing 
  meatfree  311 309
 less meatfree 
 trading profit  16 8
 exceptional items  — 46
 goodwill impairment  125 —
 software amortisation  13 9
 intangible amortisation   66 66
 pension financing  4 2
 forex mark to market  2 6
 net regular interest   145 155
 other interest incl 
 swap mark to market  46 25
 lossprofit before tax  98 42
 tax creditcharge  11 6
 lossprofit after tax 
 — continuing  87 36
 discontinued operations  12 11
 lossprofit after tax  99 25
loss after tax was £99m versus a profit of £25m in 2009 three 
factors contributed to this change 
firstly 2009 had an exceptional charge for restructuring and 
refinancing there were no exceptional items in 2010 other than the 
impairment charge discussed below 
secondly in 2010 £125m of goodwill relating to brookes avana 
was impaired leaving goodwill for the business at £23m the 
previous carrying value represents the original amount of goodwill 
based on the purchase price allocated to brookes avana when it 
was acquired as part of the rhm acquisition the goodwill has been 
impaired reflecting the steep fall in profitability which the business 
has experienced this year and our view of the prospects for margins 
and input cost inflation in the near future there was no equivalent 
impairment in 2009 
thirdly the mark to market on the interest rate swap portfolio and 
other interest deteriorated by £46m whereas it improved by £25m 
in 2009 this volatility is a result of the group’s not applying hedge 
accounting for the economic hedging portion of the portfolio and of 
the noneconomic hedging portion which has now been addressed
earnings per share
    2010 2009 10 v 09
   pence pence 
 basic eps — 
 continuing operations 36 17
 trading profit £m 311 309
 pro forma net regular 
 interest £m 145 153
 tax at 28 £m 47 44
 pro forma adjusted 
 profit after tax £m 119 112
 pro forma shares 
 in issue m 2398 2398
 pro forma adjusted eps  50 47 64
basic earnings per share on a continuing basis was a loss of 
36 pence versus earnings of 17 pence in 2009 the reduction 
was caused by the negative mark to market on swaps and the 
impairment of goodwill none of these items entail any cash flows
adjusted earnings per share is a better reflection of the underlying 
business performance it uses trading profit regular interest and a 
notional tax charge based on the statutory tax rate in 2010 adjusted 
eps was 50 pence the equivalent pro forma figure for 2009 was 47 
pence this accounts for the march 2009 equity issue and refinancing 
as if it had been in place for the whole year this represents a 64 
improvement driven by a reduction in regular interest 
jim smart
chief financial officer
robert schofield
chief executive officer
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corporate social responsibility
corporate social  
responsibility
over the year we have made further significant progress in our 4 
core corporate social responsibility csr areas of marketplace 
environment workplace and community involvement 
our customers and consumers are increasingly concerned about 
the quality and provenance of the food they eat they also want us 
to make sure that their food is sourced ethically with concern for the 
environment and that generally accepted animal welfare standards 
are practiced 
2010 highlights 
• ambrosia has moved to using milk certified by the ‘dairy 
assurance scheme’ and applied the ‘red tractor’ logo on its 
core products packaging
• continued commitment to uk sourcing — hovis bread made 
from flour 100 sourced in the uk
• environmental targets for reducing energy consumption co
2
e 
emissions delivery miles water use waste to landfill and the 
carbon co
2
e intensity of our packaging all exceeded
• employees raised a fantastic £445000 for our corporate charity 
partner ‘cancer research uk’ and 
• as from january 2011 mr kipling began using 100 free range 
eggs across the cake range
a summary of our key achievements is provided in this section of 
the annual report and further details can be found in the csr report 
which is available on our website
doing the right 
thing
practising good environmental and 
social stewardship is in the best 
interest of stakeholders and also 
aligned with our overall business 
strategy to deliver long term and 
sustainable business growth
❯❯❯ ❯❯❯
kpi target 2010
1
performance
energy usage  
gigawatts 
41
08 09 10
1735
1654
1586
co
2
 equivalent emissions  
tonnes
62
08 09 10
515309
478114
448567
noningredient 
water usage 
megalitres 
87
08 09 10
6185
5816
5320
waste to landfill  
tonnes
483
08 09 10
29368
19784
10246
energy   
usage  
gigawatts
co
2
  
equivalent emissions 
tonnes 
delivery miles  
miles m
noningredient  
water usage  
megalitres 
waste to landfill  
tonnes
riddor 
accident frequency rate 
per 100000 hours 
worked
1
 all environmental targets  
 were against a 2009  
 baseline
30
30
50
200
023
25
to read more
wwwpremierfoodscouk
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business review
royal society for the prevention of accidents rospa
food and beverage sector award in 2010 rospa awarded the food and beverage sector award for health and safety to 
premier foods and 48 of our sites were individually awarded health and safety achievement awards in addition to this premier 
foods also received a gold award for their management of occupational and at work road risk 
in winning the sector award premier foods successfully demonstrated effective and continuously improving safety performance 
providing evidence of its innovative approach to reducing risk particularly through our total observation process tops
case study
we were able to make excellent 
progress in 2010 and exceed all our 
csr targets 
we are particularly pleased with the 
reduction of waste to landfill which 
has reduced by 65 since 2008 and 
leaves us well positioned to achieve 
our long term goal of zero waste to 
landfill by 2015
in addition our commitment to 
safety has led to another significant 
reduction in reportable accident 
rates
❯❯❯ ❯❯❯
commentary performance focus for 2011
co
2
 equivalent emissions  
tonnes
62
riddor frequency 
rate per  100000 
hours worked
310
08 09 10
040
026
018
delivery miles  
miles m
11
08 09 10
77281
74963
66784
energy   
usage  
gigawatts
co
2
 equivalent 
emissions  
tonnes 
delivery miles  
miles m 
noningredient 
water usage  
megalitres 
waste to landfill  
tonnes
riddor 
accident frequency rate 
per 100000  
hours worked
30
40
30
200
017
30
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target 2010
to meet or exceed the voluntary food 
standards agency’s fsa 2010 salt 
reduction target 2006
to seek to increase guideline daily 
amounts gda’s on front of pack to  
75 of our branded products
to review 100 of our own brand 
products against our  
internal health and nutrition guidelines
to source 100 british wheat across  
the entire hovis range in 2010
performance
97 of our branded retail products now 
meet the fsa 2010 salt reduction  
target 2006
90 of our branded products now carry 
gda’s on front of pack
 
review against internal health and 
nutrition guidelines 100 complete
 
all hovis products are now made from 
100 british wheat
focus for 2011
develop a procurement sustainability 
awareness programme
 
source 25 roundtable on sustainable 
palm oil rspo certified ‘physically 
segregated’ sustainable palm oil
use 100 free range eggs in our mr 
kipling brand
 
develop and formalise a stakeholder 
engagement programme sep
performance 
in 2010 we began to develop a sustainable procurement roadmap 
spr which is designed to further strengthen our approach 
to responsible sourcing and factoring in social economic and 
environmental criteria to our procurement process in order to achieve 
real long term benefits our spr will be delivered through an outcome 
focused action plan with welldefined deliverables setting out 
how we intend to embed sustainable sourcing practices within our 
procurement function 
our customers and consumers are increasingly concerned about 
the quality and provenance of the food they eat they also want us 
to make sure that their food is sourced ethically with concern for the 
environment and that generally accepted animal welfare standards 
are practiced 
across the year we continued to consolidate our support for uk 
producers 
in 2010 100 of the wheat used in our hovis bread products was 
uk sourced as were our milk and sugar in addition to this 80 
of all the vegetables used in the manufacture of our great british 
brands came from british farmers 
corporate social responsibility continued
marketplace
ambrosia is set to unveil a fresh new design this month and 
be back on prime time tv
the new look should help consumers understand ambrosia’s 
natural and wholesome qualities — there is a misconception 
that as ambrosia sits in the ambient aisle that it is full of 
preservatives which is untrue the redesign is a radical move 
from the old look and places the countryside at the centre of 
the design bringing the world of ambrosia to life
we are also introducing the red tractor logo onto packs 
reassuring consumers that all of our milk can be traced back 
to the farms it comes from this is a first for premier foods 
and a first for the ambient desserts category and we’re really 
proud to be registered with the scheme
case study
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business review
target 2010
to reduce energy usage by 3 from a 
2009 baseline year
to reduce carbon equivalent emissions 
by 3 from a 2009 baseline year
to reduce delivery miles travelled by 5 
from a 2009 baseline year
t o reduce noningredient water 
consumption by 25 from a 2009  
baseline year
to reduce waste sent to landfill by 20 
from a 2009 baseline year
performance
energy usage reduced by 41 
carbon equivalent emissions reduced  
by 62
delivery miles travelled reduced by 11  
noningredient water consumption 
reduced by 87 
waste sent to landfill reduced by 483 
focus for 2011
reduce energy usage by 3
 
reduce carbon equivalent emissions 
by 4
reduce actual delivery miles travelled  
by 3
reduce noningredient water usage 
by 3 
reduce waste sent to landfill by 20  
premier foods is aware of its responsibility to the environment and 
is committed to reducing the overall environmental impact of its 
operations by monitoring managing and continually improving its 
environmental performance our aim is to achieve this by providing 
a comprehensive framework of good environmental management 
practices that are embedded across the group and extend 
throughout our supply chain
we will continue our drive to use resources more efficiently which in 
turn reduces the environmental impact of producing our food and 
saves money by reducing waste
five star environmental award programme
the premier foods five star environmental award programme 
fseap developed and launched in 2009 is fundamental to the 
delivery of the premier foods environment strategy
the programme has been closely aligned with the environmental 
management standard iso 14001 but places particular emphasis 
upon a sound practical approach and encourages businesses to 
integrate environmental management within all their operational 
activities unlike iso 14001 the fseap incorporates a requirement 
for businesses to achieve specific targets for energy water and waste
in 2010 the fseap received an excellent response with measurable 
performance improvement throughout all our manufacturing sites 
achieved a satisfactory standard as a minimum in all categories and 
we received an additional 20 gold and 29 silver awards compared to 
last year 
environment
hovis downgauged their bread bag film and modified the 
dimensions to improve fit of the product in the bag the 
project involved consumer group research to analyse ‘quality’ 
perceptions around the use of thinner film compared to the 
original bag   
using less material has delivered the following savings
•	 550	metric	tonnes 	of	plastic	film
•	 1485 	metric	tonnes 	of	co
2
e
“hovis is always looking for ways to reduce its impact on the 
environment while still delivering great taste and quality for 
our consumers” 
julia	herring	pr emier 	foods	packaging	development	manager 
case study
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corporate social responsibility continued
workplace
l eadership
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
• 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
our rewards and benefits
premier foods offers employees a competitive pay and benefits 
package 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 this has been further bolstered in 2010 
through the addition of a coaching and mentoring framework across 
the group enabling colleagues where appropriate to benefit from 
coaching and mentoring during the year we also introduced a 
broader portfolio of programmes which now includes coaching 
skills training commercial awareness and many others along with 
interventions provided functionally
career progression
premier foods actively encourages development from within our 
talent identification and succession planning processes are 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 wherever possible to support this in 2010 premier 
foods further developed specific programmes to develop key 
individuals this was based on the success of earlier initiatives where 
over 50 of the talent pool had been promoted
however to anticipate future requirements we will also look to 
bring the right people into the business 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 and in 
2010 we introduced graduates into supply chain roles across the 
group to ensure we have a pipeline of talent in this critical area of 
the business
employee assistance programme
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
occupational h ealth  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
recruitment
premier foods 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 our policy 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 premier foods provides the same opportunities 
for training career development and promotion for disabled as for 
other employees
communication
we recognise the value of good communication in engaging our 
employees in order to achieve 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 the quarterly company magazine
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business review
following a sustained period of acquisition integration and 
transformation we felt it was important to communicate the 
group’ s vision and strategy to employees during 2010 to ensure 
that the whole group understood and was aligned with it 
a route map of the journey premier foods was embarking 
on was designed ‘stratnav’ to help employees to navigate 
their way through the strategy be excited by its potential 
and know their part in it the cascade process started with 
60 senior managers who became stratnav ‘ambassadors’ 
and created the material they took a further 600 managers 
through the stratnav at a one day conference in march 2010
after the conference this group of employees were given access 
to a microsite from which they could download the conference 
materials and order stratnav briefing packs for use in onward 
communication to the remainder of our 16000 employees
the pre and post conference surveys showed that those who 
participated in the stratnav exercise at the conference not 
only felt informed about the vision 99 but understand it 
99 and believed in it 97
cascading our vision 
and strategy
case study
employee engagement
premier foods has surveyed its management population since 2007 
as we are continually striving to make improvements in the way we 
manage and develop our people how we lead the business and the 
way in which we work with a response rate of 90 the results in 
2010 demonstrated significant improvements in how we empower 
and develop our people and how proud our employees are of our 
products and brands the results also highlighted an improvement 
in moving to “one” culture the results also highlighted some areas 
of focus which we are addressing and we will survey the same 
population in september 2011 before moving to an all employee 
engagement survey in 2012
workplace h ealth  safety
over recent years we have achieved very significant and 
demonstrable improvements in the premier foods’ workplace 
safety programme with 42 of our sites having reported zero 
riddor accidents throughout 2010
we are passionate about safety within are business and our 
performance compares very favourably with the uk food 
manufacturing sector and uk manufacturing industry overall 
employee recognition awards
first introduced in 2008 the ‘employee recognition awards’ is now 
in its third year the awards recognise the huge effort our employees 
go to which contribute to our success and allow employees to see 
and learn about what success looks like each year our judges 
are more impressed by the huge number of employees with skill 
dedication and creativity despite the tough working environment we 
operate in from 100 entries in the first year the 2009 awards had 
180 entries the 2010 awards have a staggering 230 entries and 
winners will be announced in april 2011
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target 2010
achieve a group riddor rate of 023 of 
reportable accidents per 100000 hours 
worked in 2010
embed the ‘premier way’ leadership 
framework throughout the business
 
embed the ‘talent identification and 
succession planning process’
 
complete a groupwide occupational 
health surveillance programme
 
undertake groupwide workplace health 
screening programme
performance
achieved a group riddor rate of 018  
of reportable accidents per 100000 
hours worked
‘premier way’ leadership framework 
effectively communicated and 
embedded across the group
talent identification and succession 
planning process established and 
implemented
groupwide occupational health surveillance 
rolling programme implemented based on 
individual site risk assessments
groupwide workplace health screening 
rolling programme implemented based  
on individual site risk assessments 
focus for 2011
to achieve a riddor accident frequency 
rate of 017 
to achieve a 30 yoy reduction in major 
riddor accidents 
group occupational health to focus on 
back and skin care
against a corporate target of 023 riddor reportable accidents per 
100000 hours worked we achieved 018 delivering an impressive 
31 improvement over 2009
corporate h ealth  safety plan
the corporate health  safety plan ensures that a common 
strategy is adopted across our sites applying a consistent ‘best 
practice’ approach to our health  safety management system 
and practice
initiatives which support our site teams in their efforts to drive our 
safety performance include
• safety leadership 585 premier foods’ employees have 
successfully completed a 2 day bespoke training programme 
underpinning their competence in health  safety
• as low as reasonably practicable alarp workshops 
throughout our sites alarp workshops were run in which over 
200 lead risk assessors were trained in addition to this to 
date approximately 500 additional alarp risk assessors have 
been brought into the programme
 the initiative was designed to ensure a more inclusive approach 
to undertaking the ‘suitable and sufficient’ risk assessments 
which drive our risk elimination and risk control programme 
• total observation process top’s during 2010 top’s teams 
across the country identified over 34000 hazards these were 
resolved thereby avoiding over 34000 potential accidents to our 
workforce 
 the top’s process demands the active engagement of all 
employees and provides them with a clear mandate to raise 
their health and safety concerns with their management and to 
collaborate with them in developing and implementing effective 
solutions
 top’s which underlines our fundamental approach to workplace 
safety was further supported through the launch of a dvd 
detailing our effective preventative approach to workplace safety
workplace 
continued
corporate social responsibility continued
riddor accident frequency  
rate per 100000 hours
08
09
10
040
026
018
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business review
target 2010
raise £300000 for our corporate charity 
partner “cancer research uk” 
consult employees in order to identify a 
preferred corporate charity partner  
post 2010
 
support the royal british legion’s 2010 
“poppy appeal” at all our 50 sites 
ensure that a minimum of 20 of our 50 
sites complete a local community project
support the redistribution of surplus food 
to those in social need within the uk and 
abroad
performance
raised £445000 for “cancer research 
uk”
employees were consulted on their 
preferred corporate charity partner post 
2010 and overwhelmingly voted for  
‘help for heroes’
support for the royal british legion’s 
2010 “poppy appeal” raised in excess  
of £140000
5 of our sites completed a local 
community project
provided 3500 cartons of surplus food 
for redistribution to those in social need 
within the uk and abroad
focus for 2011
to raise £100000 for our new corporate 
charity partner “help for heroes”
to work in partnership with a number 
of organisations in making surplus food 
donations available to those in social 
need both in the uk and abroad
to develop a structured approach to 
community involvement across the 
group
community
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
premier foods believes that corporate charity sponsorship can bring 
genuine and lasting benefits to our company not only improving the 
public perception of our brands but also improving our employees’ 
motivation
many of our sites have long histories with deep roots in their local 
communities each of our sites has a community champion 
who along with their colleagues decides which local charities 
and activities to get involved with and support we feel that it’s 
important for employees to support local charities and community 
organisations because ‘they live there too’ and therefore have a 
personal stake in their communities’ wellbeing 
in december 2010 our charity partnership with cancer research 
uk cruk came to an end the partnership proved a great 
success all our employees really got behind fundraising activities 
for cruk so much so that employees raised £445000 against an 
initial target to raise £250000 
 
in october 2010 we asked our employees to nominate their 
‘charity of choice’ for 2011 employees were given 
the opportunity the vote for their favourite charity either 
online or via an insert included in the company magazine 
‘being premier’ 
the only criteria were that the charity needed to be a 
‘national charity recognised as british and providing a 
much needed service’ the charity ‘help for heroes’ h4h 
was the overwhelming choice of our employees and we 
have committed to raise £100000 in the first year of our 
partnership 
case study
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risk management and risk factors
risk management
suzanne wise
general counsel  company secretary
risk management at premier foods
effective risk management is an integral part of the overall 
achievement of the company’s strategic objectives we have 
established a governance structure that supports the early 
identification and mitigation of key business risks and this has 
continued throughout 2010
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 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
the finance committee chaired by david beever nonexecutive 
director has continued to meet regularly throughout 2010 to oversee 
the management of financial and financing risks and the activities of 
the company’s treasury committee and treasury risk management 
committee it includes as members the company chairman two 
further nonexecutive directors the chief executive officer chief 
financial officer and group treasurer 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 meets quarterly and considers the effective 
implementation of corporate policies taking into account 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 
underpinned by 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 further 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 registers are submitted to the risk review 
group for review
the risk review group is chaired by suzanne wise general 
counsel  company secretary and performs the following activities
• reviews the effectiveness of the risk management process and 
makes recommendations to the audit committee as appropriate
• considers emerging risks and their potential impact on the 
company for onward review with the group executive and
• receives presentations from management and provides challenge in 
relation to risk mitigation 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 once a year a separate 
risk session is held with the nonexecutive directors without the 
presence of management the purpose of this session is 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 market place and
• premier foods specific risks
the results of the nonexecutive directors’ discussion form part of the 
overall process for reviewing the corporate risk register at the end of the 
financial year
➜
➜
audit 
 finance
committees
risk
review
group rrg
embed and monitor
• divisional and functional risk registers
• internal control self assessment
• policies and procedures
• organisational design
• project governance
• assurance
identify 
and assess
• biannual risk 
      review 
• board oversight
• risk ownership
• rrg process 
mitigate 
and manage
• risk action plans
• performance 
  review
• governance 
  framework
business operations
group functions and 
divisional executives
plc 
board
group 
executive
policy
steering
group
page 60
page 54
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business review
review of risks
external
a key risk facing the group during 2010 has been the continued 
impact of the market downturn in the uk and its impact on our 
suppliers customers and consumers premier foods has a broad 
portfolio of staple food products and operates over a large number 
of categories and we believe that this makes us relatively resilient in 
periods of recessionary economic activity as shown by our results 
for the year we have been successful in maintaining volumes despite 
a general slowdown in sales across our categories however 
margins have been impacted by an increase in promotional 
activity which has been experienced across our markets we 
do not anticipate that this slowdown in sales and the increase in 
promotional activity will be a permanent feature but we do expect 
them to continue in 2011 
we have also experienced inflation both within raw materials we 
use to produce our products and also with indirect supplies such 
as energy and packaging and we expect this to continue in 2011 
however we have a centralised procurement function with a 
global sourcing strategy we have also demonstrated that we can 
successfully pass costs onto customers through pricing albeit with 
a timing lag 
industry and market
to operate successfully in a competitive marketplace and to grow 
our sales we must continue to invest in new product development 
innovation and marketing we regularly monitor consumer trends 
and consumption habits and have a good track record of new 
product development during the year we have introduced a new 
innovation process and increased resources for innovation and 
marketing we have also moved to align our organisational structure 
to manage our drive and core brands together so that innovation 
can be managed as one pipeline during the year the board has 
also approved investment for a number of capital expenditure 
projects related to new product development 
strategic
the group’s business strategy is set out on page 12 and our 
progress against this strategy is set out in this annual report 
as highlighted above there has been an increased strategic focus 
on brand innovation and new product development and a change in 
the group’s management structure 
operational 
the completion of the rationalisation programme within the 
grocery division in 2009 has reduced a number of risks around 
operational capability in 2010 the rationalisation was one 
of the largest undertaken within the uk food industry and its 
success demonstrates premier’s ability to manage major change 
programmes successfully 
further major projects are ongoing within the business both within 
our operations systems and organisational structure however 
the group has tested project management processes in place to 
mitigate these risks 
financial 
the group’s financial strategy is set out on page 12 the board and 
finance committee have worked closely with management and 
premier has made significant progress in 2010 in implementing this 
strategy and thereby reducing financial risk 
the group restructured its interest rate swap portfolio in october 
this acted to shorten the maturity of the swap portfolio remove 
early termination options and reduce volatility thereby reducing the 
overall risk of the portfolio
during the year the group has reviewed the investment strategy of the 
pension funds and established an investment forum to foster greater 
dialogue with the trustees and to review and discuss investment 
strategy performance and risk with the aim of reducing volatility within 
the funds following a review of current arrangements the company 
has also announced the closure of the final salary pension scheme to 
further accrual from existing members from april 2011
premier foods has also obtained a credit rating which will allow us 
to diversify our sources of funding and also stagger the maturity 
of our funding postyear end we have announced two significant 
business disposals which will significantly accelerate the group’s 
debt reduction
effective management of risk is critical to achieving 
the group’s strategic objectives protecting our 
people and reputation and creating sustainable 
shareholder value
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risk management and risk factors continued
risk management and risk factors
risks arising from external factors such as the 
economy legal and regulatory environmental
risks relating to operating in the food industry 
including competitors suppliers customers 
consumers and brands
risks arising from the design and implementation 
of the group’s business model and strategy
risks arising from the internal operations of 
the group its manufacturing sites people and 
systems
risks arising from the group financial strategy 
financing arrangements funding and hedging
•	 changes 	in	general	economic	conditions 	eg	inflation	inter est	rates 	
availability of credit
•	 raw 	material 	cost 	inflation
•	 changes 	in	gover nment	policy 	eg	taxation
•	 changes 	in	r egulatory 	r equir ements 	eg	in	r espect	to	pr oduct	
composition manufacturing packaging and safety
•	 impact 	of 	unseasonable 	 weather
•	 str ongly 	competitive 	market	place
•	 thr eat 	fr om 	rival	pr oducts
•	 dependency 	on	key 	suppliers
•	 a vailability 	of	supplier 	cr edit 	insurance
•	 concentration 	and 	str ength 	of	customers
•	 pr omotional 	trade	spend
•	 changes 	in	consumer	pr efer ences 	and	consumption	habits
•	 failur e 	to 	innovate 	or	r eact 	to 	changing 	consumer	tr ends
•	 brand 	management
•	 dependency 	on	thir d 	party	licences
•	 business 	model
•	 design 	and	implementation	of	gr oup 	strategy
•	 impact 	of 	and 	successful	implementation	of	change	management
•	 health 		safety	
•	 pr oduct 	quality 	and	safety	issues	r esulting 	in	r ecalls 	
reputational damage
•	 damage 	and	disruption	to 	 sites 	eg	fir e 	or 	flood
•	 dependency 	on	it	systems
•	 pr oject 	execution
•	 failur e 	of	contr ols 	and 	delegated	authority
•	 employee 	r elations
•	 leverage
•	 liquidity
•	 inter est 	rate	swaps
•	 curr ency	exchange	fluctuations
•	 pension	scheme 	funding	and	investment	strategy
key strategic risks key strategic risks risk
external
industry  market
strategic
operational
financial
1855004premierf frontindd   46 09032011   112934 wwwpremierfoodscouk stock code pfd 47
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business review
•	 str ongly	competitive	market	place
•	 thr eat	fr om	rival	pr oducts
•	 dependency	on	key	suppliers
•	 a vailability	of	supplier	cr edit	insurance
•	 concentration	and	str ength	of	customers
•	 pr omotional	trade	spend
•	 changes	in	consumer	pr efer ences	and	consumption	habits
•	 failur e	to	innovate	or	r eact	to	changing	consumer	tr ends
•	 brand	management
•	 dependency	on	thir d	party	licences
•	 business	model
•	 design	and	implementation	of	gr oup	strategy
•	 impact	of	and	successful	implementation	of	change	management
•	 leverage
•	 liquidity
•	 inter est	rate	swaps
•	 curr ency	exchange	fluctuations
•	 pension	scheme	funding	and	investment	strategy
•	 br oad 	portfolio	of	brands
•	 gr oup	operates	over	15	food	categories
•	 staple 	 food	pr oducts
•	 w ide	customer 	base
•	 ability	to	pass	on	incr eased	input	costs	to 	customers
•	 engagement	with	industry	bodies	on	issues	r elating	to	
food industry
•	 monitoring	of 	developments	in	r egulatory	envir onment
•	 gr oup 	risk	management	pr ocess
•	 largest 	 ambient	gr ocery 	pr oducer 	in	the	uk
•	 focus 	on	uk 	 market
•	 scale 	of 	business	to 	develop	r elationships 	with 	customers
•	 focus 	on	consumer	insight	and 	uk	consumer 	tr ends
•	 pr oduct 	development	and	 innovation
•	 building 	contingency	and	holding 	stock
•	 centralised 	pr ocur ement 	team
•	 long 	term	r elationships 	with	suppliers
•	 regular 	r eview 	of	size 	and 	availability	of	supply	and 	 wher e 	
necessary contingency arrangements
•	 long	term	r elationships 	and	agr eements 	with	licensees
•	 active 	 management 	of	trade	mark	and 	patent	portfolio
•	 regular 	r eview 	of	strategy	by	boar d 	and 	gr oup 	executive
•	 review 	of 	major	tr ends 	in	food	industry
•	 review 	of 	performance	against	strategy  	kpis	and	
forecasts
•	 formal 	schedule 	of 	delegated 	authorities
•	 gr oup 	risk	management	pr ocess
•	 food 	 quality	and	safety	embedded 	in	quality	 
management system
•	 commitment 	to	health		safety
•	 whistleblowing 	policy	with 	 exter nal 	confidential 	 call	line	
•	 regular	monitoring	 and	r eview 	by 	management
•	 pr oject 	management	tools
•	 t rack 	r ecor d 	of	successful	pr oject 	management
•	 business 	 continuity	and 	disaster 	r ecovery 	plans
•	 good 	communications	with	employees
•	 gr oup 	risk	management	pr ocess
•	 boar d 	and	finance	committee	r egularly 	r eviews 	the	
group’s level of debt and liquidity levels
•	 t r easury 	committee
•	 inter est 	rate	swaps
•	 selective 	use	of	curr ency 	hedging
•	 regular 	r eview 	of	gr oup 	tr easury 	policy
•	 regular 	r eview 	of	pension	fund 	deficit 	and 	investment	
strategy and performance
•	 continuing	adverse	economic	
conditions
•	 slowdown	in	markets
•	 incr ease	in	inflation 	in	raw 	 materials 	
and other input costs
•	 incr ease	in	v a t
•	 new	food	r egulations
•	 consolidation 	of	customers	base
•	 new 	innovation 	pr ocess
•	 incr ease 	in	pr omotional 	spend
•	 registration 	of 	trade	marks
•	 renewal 	of	thir d 	party 	trade	mark	
licences
•	 annual 	boar d 	 r eview 	of	gr oup 	
strategy
•	 regular	boar d 	r eviews 	of	brand	
strategy
•	 gr oup 	organisation 	 r estructuring
•	 successful 	completion 	of	gr ocery 	
rationalisation
•	 major	capex	pr ojects
•	 closur e 	of 	final 	salary 	pension	
scheme
•	 significant	pr ocess 	and	systems	
change programmes
•	 review 	of	overall	financial	strategy
•	 restructuring 	of	swap	portfolio
•	 formal 	cr edit 	rating	obtained
•	 review 	of	pension	fund	investment	
strategy
•	 debt	r eduction
•	 business 	disposals
up
•	 chairman’ s 	 
statement
•	 chief 	
executive’s 
statement
•	 our	markets
•	 chief 	
executive’s 
statement
•	 our 	markets
•	 chairman’ s 	 
statement
•	 chief 	
executive’s 
statement
•	 csr
•	 w orkplace
•	 chairman’ s 	 
statement
•	 operating 	
and financial 
reviews
level
key strategic risks mitigation development trend
further 
information
external
industry  market
strategic
operational
financial
level
level
down
1855004premierf frontindd   47 09032011   112934 premier foods plc  annual report and accounts 2010  48
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board of directors and senior management
executive directors
robert schofield aged 59
chief executive officer
date of appointment january 2002
experience
robert joined the group in 2001 taking responsibility for its 
branded business he was appointed chief executive officer 
in january 2002 robert 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 
previously he spent eight years with nestlé international in 
the far east robert served as chairman of burton’s foods 
group ltd between 2003 and 2005 he graduated from 
the university of east anglia and completed postgraduate 
studies at imd in switzerland in 1994
other appointments
robert currently has no external appointments
committee appointments
robert is a member of the finance committee and regularly 
attends meetings of the other board committees by 
invitation
board contribution
as chief executive officer robert is responsible for 
formulating the group’s objectives and strategy for approval 
by the board working with the cfo he sets the annual 
budget and mediumterm plan and is responsible for 
reporting performance against plan to the board robert 
also plays a key role in identifying and executing acquisitions 
and disposals  
jim smart aged 51
chief financial officer
date of appointment october 2009
experience
prior to joining the group jim served as chief financial 
officer of friends provident plc between 2006 and 2008 and 
before that was chief financial officer at alliance boots plc 
jim started his career at abbey national plc where he spent 
15 years holding a number of senior finance and operational 
roles including group financial controller group personnel 
and hr director and corporate resources director he 
was trained as an accountant with coopers  lybrand and 
is a member of the chartered institute of public finance 
 accountancy the chartered association of certified 
accountants and holds an mba 
other appointments
jim was previously a nonexecutive director of fc asset 
management plc
committee appointments
jim is a member of the finance committee and attends 
meetings of the audit committee by invitation
board contribution
jim is responsible for overseeing the financial operations of 
the group and setting its financial strategy in conjunction with 
the finance committee and the board he also oversees the 
overall framework for financial forecasting planning analysis 
and reporting since joining the group jim has undertaken a 
review of the financial strategy of the group this has resulted 
in the successful restructuring of the group’s swap portfolio 
and the obtaining of a credit rating
tim kelly aged 53
chief operating officer
date of appointment october 2008
experience
tim joined the group in march 2007 following the 
company’s acquisition of rhm plc where he was chief 
operating officer cakes  customer partnerships in 
december 2007 he assumed additional responsibility for 
the group’s hovis division and in january 2011 took on 
the new role of chief operating officer which combines all 
of the brands and commercial operations within both the 
grocery and hovis divisions tim originally joined rhm in 
2002 and prior to that served as chief operating officer at 
constellation brands inc he previously held a number of 
senior marketing and sales roles at diageo plc and coca
cola schweppes beverages ltd
other appointments
tim was until december 2010 a nonexecutive director and 
remuneration committee chairman of cpp group plc 
committee appointments
tim regularly attends board committee meetings by 
invitation
board contribution
during the year tim was responsible for the daytoday 
operations of the hovis and chilled divisions including 
marketing and sales and for reporting progress on 
performance to the board tim is undertaking a review of 
brand strategy for the group following his appointment as 
chief operating officer in january 2011
suzanne wise aged 49
general counsel  company secretary
date of appointment january 2008
experience
suzanne 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 solicitor in a private 
practice suzanne qualified as a solicitor with lewis silkin 
and was admitted to practice in 1987 she graduated from 
the university of east anglia
suzanne also has responsibility for the internal audit 
communications and csr functions she chairs the risk 
review group and policy steering group committees
other appointments
suzanne currently has no external appointments
committee appointments
suzanne is secretary to the board and its committees
board contribution
suzanne’s key responsibilities are to assist the chairman 
with the management of the board and to ensure that it 
operates in accordance with corporate governance best 
practice as general counsel suzanne also provides legal 
advice on the key operational and strategic issues facing 
the group  
audit committee
ian mchoul chair
david beever
david felwick
remuneration committee
louise makin chair
david beever
ronnie bell
david felwick
nomination committee
ronnie bell chair
david beever
david felwick
ian mchoul
louise makin
charles miller smith
finance committee
david beever chair
ronnie bell
ian mchoul
charles miller smith
robert schofield
jim smart
committee memberships
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governance
nonexecutive directors
ronnie bell aged 60
nonexecutive chairman
date of appointment october 2010
experience
ronnie spent a 30 year career with kraft foods inc the 
world’s second largest food company during this time 
he gained extensive experience in marketing business 
development and general and international management  
ronnie assumed his first country general management 
role for the uk and republic of ireland in 1990 he then 
widened his responsibilities geographically to include 16 
european countries following his appointment as president 
of kraft foods europe a position he held for five years 
in this role he was responsible for all the group’s coffee 
chocolate and grocery brands in the region 
other appointments
ronnie is currently nonexecutive chairman of milk link ltd 
and nonexecutive director of ansell ltd and the edrington 
group ltd he was previously a nonexecutive director of 
northern foods plc and gallaher group plc
committee appointments
ronnie chairs the nomination committee and is a member 
of the finance and remuneration committees
board contribution
ronnie has extensive marketing and sales experience within 
the uk and international food industry he is responsible 
for leading the board and ensuring it operates in an 
effective manner as chairman he is responsible for setting 
board agendas and ensuring sufficient time is available for 
discussing key strategic issues he is also responsible for 
promoting constructive relations between the executive 
and nonexecutive directors and ensuring effective 
communication with shareholders 
charles miller smith aged 71
nonexecutive deputy chairman
date of appointment june 2009
experience
charles is a senior advisor at warburg pincus llc and 
prior to this was an international adviser at goldman sachs 
international from 2001 until 2005 charles worked with 
unilever plc for over 30 years the last five years of which 
he served as a director of finance he held a wide range of 
financial and general management positions in the united 
kingdom the netherlands and india charles was chief 
executive officer and then chairman at ici plc from 1994 
to 2001 and served as chairman of scottish power plc 
between 2000 and 2007 
other appointments
charles’ other appointments include senior adviser to 
deutsche bank rreef infrastructure and to defence 
strategy  solutions member of the international advisory 
council for principal financial in the usa and also chairman 
of firstsource solutions uk ltd 
committee appointments
charles was appointed as deputy chairman in october 
2010 and is a member of the finance and nomination 
committees
board contribution
as deputy chairman charles is responsible for assisting the 
chairman in performing his duties and where appropriate 
deputising in his absence charles has extensive commercial 
experience both as an executive director of a number of 
multinational companies and also in advising a range of 
financial organisations
david felwick cbe aged 66
senior independent director
date of appointment july 2004
experience
david served as deputy chairman and general inspector 
of john lewis partnership plc between 2002 and 2004 
having served as a managing director of waitrose and 
director for trading food for the john lewis partnership 
from 1991 he joined waitrose in 1987 as director of selling 
having originally joined the john lewis partnership in 1982 
as a senior management trainee prior to that david was 
in the royal air force from which he retired as a wing 
commander he was awarded a cbe for services to the 
retail industry in january 2004
other appointments
david previously served as chairman of the british retail 
consortium product of the year ltd and leckford estate 
ltd he is a fellow of the institute of grocery distribution
committee appointments
david is the company’s senior independent director and 
also a member of the audit remuneration and nomination 
committees
board contribution
david has significant marketing and commercial experience 
within the uk food industry as senior independent 
director he has responsibility for meeting with the other 
nonexecutives to review the chairman’s performance 
and is available to shareholders to discuss their concerns 
during the year david led the process for the selection of 
the company’s new chairman david will step down as a 
director at the agm in 2011
david beever aged 69
nonexecutive director
date of appointment january 2008
experience
after qualifying as a chartered engineer david has 
spent most of his career in the financial sector he was 
a vicechairman of s g warburg where he handled 
many corporate finance transactions for major uk and 
international companies he was later a board member 
of kpmg and chairman of corporate finance earlier he 
worked for several years at 3i group plc he has been 
chairman of a number of listed and other companies 
including volex group plc and london and continental 
railways plc builders of the channel tunnel link he was 
also a nonexecutive director of jjb sports plc and paragon 
group of companies plc
other appointments
david is currently deputy chairman of royal holloway 
college and a member of the board of trustees university 
of london
committee appointments
david is chairman of the finance committee and also 
a member of the audit remuneration and nomination 
committees 
board contribution
david has a wealth of experience within the finance industry 
and provides advice and counsel to the board on major 
strategic financial issues as chairman of the finance 
committee and a member of the audit committee during 
the year the finance committee has reviewed the group’s 
financial strategy swap portfolio and pension investment 
strategy david will be appointed as senior independent 
director following david felwick’s retirement in april 2011
ian mchoul aged 51
nonexecutive director
date of appointment july 2004
experience
ian is currently chief financial officer of amec plc ian’s 
earlier career was spent in the brewing industry where he 
spent ten years with courage ltd and its parent company 
foster’s brewing group in a variety of roles and served as 
general manager of strategy of foster’s brewing group and 
executive director of strategy and planning of courage ltd 
from 1992 to 1995 he was finance and strategy director 
of the inntrepreneur pub company ltd from 1995 to 1998 
ian then served at scottish  newcastle plc between 1998 
and 2008 and holding the position of finance director from 
2001 ian qualified as a chartered accountant with kpmg 
in 1985
other appointments
ian currently has no other appointments
committee appointments
ian is chairman of the audit committee and also a member 
of the finance and nomination committees
board contribution
ian has extensive financial experience and expertise which 
is utilised by the board in his capacity as chairman of the 
audit committee and also as a member of the finance 
committee the audit committee has responsibility for 
monitoring the integrity of the group’s financial reporting 
systems financial controls and the effectiveness of the 
internal audit function
dr louise makin aged 50
nonexecutive director
date of appointment october 2006
experience
louise is currently chief executive officer of btg plc an 
international specialist healthcare company louise was 
appointed ceo in october 2004 and has led the turnaround 
strategic positioning and growth of the company previously 
louise was president of the biopharmaceuticals division 
of baxter healthcare europe after having joined baxter in 
2000 as vicepresident strategy  business development 
europe prior to baxter louise spent 13 years with ici 
plc and english china clay louise holds an ma in natural 
sciences and a phd in metallurgy from the university of 
cambridge and an mba
other appointments
louise currently has no other appointments
committee appointments
louise is chairman of the remuneration committee and a 
member of the nomination committee
board contribution
louise has significant commercial and management 
expertise within the healthcare industry she chairs the 
remuneration committee which over the year has reviewed 
and approved a major review of executive remuneration 
involving consultation with shareholders and investor bodies
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board of directors and senior management continued
group executive
brian carlton aged 54
group hr director
experience
brian 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 foods brian held hr and 
operational roles in chrysler uk k shoes 
metal box and smurfit packaging
key responsibilities
these include leadership development 
talent management remuneration 
resourcing and employee relations 
management across the business
mark hughes aged 50
group procurement director
experience
mark joined premier foods and the group 
executive in 2007 following the acquisition 
of rhm mark hughes joined rhm in 
2003 as divisional services director 
bread bakeries and became a member 
of the bread bakeries division executive 
in 2004 and was group procurement and 
logistics director and a member of the 
group executive of rhm in 2006 mark was 
previously director at archer daniels midland 
milling uk and has held a number of senior 
positions with associated british foods plc
key responsibilities
control and risk management of over 
£15bn of spend on ingredients packaging 
energy machinery facilities engineering 
marketing and all corporate spend these 
include ensuring the group remains 
competitive and well placed within a 
changing market through the provision of 
innovative procurement processes policies 
stakeholder engagement and external 
supplier relationship management
bob spooner aged 56
group operations director 
experience
bob joined premier foods and the group 
executive in april 2007 before joining 
bob was group supply director for northern 
foods plc 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 
key responsibilities
these include responsibility for operations 
strategy for the group including line 
management responsibility for all 
manufacturing logistics health and safety 
group engineering and environmental 
management
paul kitchener aged 55
group technical and innovation 
director
experience
paul joined premier foods and the group 
executive in september 2010 as group 
technical and innovation director paul 
has extensive operational and commercial 
experience within the uk food industry and 
was previously chief executive of burtons 
biscuits prior to this paul was uk chief 
executive of brakes foodservice and before 
that he held a number of senior supply chain 
roles within united biscuits
key responsibilities
these include managing all food safety 
regulatory and compliance testing as well 
as factory and supplier audits leading the 
new product development technical teams 
and developing and embedding the group 
innovation process
ian york aged 51
group sales director 
experience
ian joined premier foods 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 ian held a variety of 
positions in the uk grocery market with 
quaker oats ltd associated british foods 
plc and blue crest
key responsibilities
these include responsibility for developing 
strategy tactics sales plans and profit 
targets identifying and reporting on 
business opportunities in target markets 
and working towards achieving targets for 
revenue profitability and sales growth
mark vickery aged 56
group is  change director
experience
mark 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 mark started his career at unilever 
plc 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
key responsibilities
these include managing the information 
services function and delivering operational 
services and projects to the group 
programme director for the major system 
and change programmes in the business 
and leading approaches change and project 
management for the group
jon goldstone aged 43
group marketing director
experience
jon was appointed group marketing 
director in january 2011 prior to this jon 
was marketing director for the hovis division 
having joined premier foods in 2008 prior 
to this he was with pepsico uk where he 
was marketing vp for the walkers snacks 
business
key responsibilities
these included responsibility for setting 
group marketing strategy improving 
marketing process and capability and 
ensuring excellence in marketing execution
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governance
political donations
no political donations were made during the year 2009 £nil 
the group has a policy of not making donations to political 
organisations independent election candidates or incurring political 
expenditure as defined in the political parties elections and 
referendums act 2000
charitable donations
during the year the group made charitable donations to the 
following charities the royal british legion £101088 and the 
national grocer benevolent fund £20000 total charitable 
donations during the year amounted to £166555 2009 £167000 
further information on charitable giving can be found on page 43 
directors and directors’ interests
biographies of the current directors are found on pages 48 to 49 
details of the directors who resigned within the year can be found 
on page 54
details of the directors’ interests in the share capital of the company 
as at 31 december 2010 are set out within the remuneration report 
on pages 69 to 71
statement of directors’ responsibilities for the annual report
the directors are responsible for preparing the annual report 
the remuneration report and the group and 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 prepared 
the group financial statements in accordance with international 
financial reporting standards ifrs as adopted by the eu and the 
parent company financial statements in accordance with applicable 
law and united kingdom generally accepted accounting practice 
ukgaap under company law the directors must not approve the 
group or company financial statements unless they are satisfied 
that they give a true and fair view of the state of affairs of the 
company and the group and of the profit or loss for that period
in preparing those financial statements the directors are required to
l select suitable accounting policies and then apply them 
consistently 
l make judgements and accounting estimates that are reasonable 
and prudent
l state whether applicable ifrs as adopted by the eu have 
been followed in the group financial statements and whether 
applicable accounting standards have been followed in 
the company financial statements subject to any material 
departures disclosed and explained in the financial statements 
and 
l prepare the group and company financial statements on a going 
concern basis unless it is inappropriate to presume that the 
group and the company will continue in business
directors’ report
the directors present their report and audited financial statements of 
the group for the year ended 31 december 2010
business review
a review of the group’s business activities performance during the 
year 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
l our business pages 1 to 17
l business review pages 18 to 47
l environmental employee social and community issues pages 
36 to 43
l risk management and risk factors pages 44 to 47 and
l group key performance indicators kpis pages 18 to 19
the corporate governance report forms part of this report and is 
incorporated into it by reference
principal activities
premier foods plc 5160050 is a public limited company incorporated 
in england and wales 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 on pages 1 to 17
financial statements
the audited financial statements are presented on pages 74 to 125
profit and dividends
the results of the group for the year are set out in the consolidated 
income statement on page 76 the loss on ordinary activities before 
tax for the year ended 31 december 2010 was £983m 2009 
£418m profit the directors do not recommend the payment of a 
dividend for the year ended 31 december 2010 2009 £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 £106m 2009 £37m 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 
directors’ report
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directors’ report continued
the directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the company’s 
and group’s transactions and disclose with reasonable accuracy 
at any time the financial position of the company and the group 
and enable them to ensure that the financial statements and the 
remuneration report comply with the companies act 2006 the act 
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 wwwpremierfoodscouk it should 
be noted that legislation in the uk governing the preparation and 
dissemination of financial statements may differ from legislation in 
other jurisdictions
directors’ statement pursuant to the disclosure and 
transparency rules
each of the directors whose names and functions are listed 
on pages 48 to 49 confirms that to the best of each person’s 
knowledge and belief
l the group financial statements prepared in accordance 
with ifrs as adopted by the eu and the company financial 
statements prepared in accordance with uk gaap  give a true 
and fair view of the assets liabilities financial position and profit 
or loss of the group and the company and
l the business review section in the annual report contains a fair 
review of the development and performance of the business 
and the position of the group and the company together with a 
description of the principal risks and uncertainties they face
auditors and the disclosure of information to auditors
the act requires directors to provide the group’s auditors with 
every opportunity to take whatever steps and undertake whatever 
inspections they consider to be appropriate for the purpose of 
enabling them to give their audit report the directors having made 
appropriate enquiries confirm that
l so far as each director is aware there is no relevant audit 
information of which the group’s auditors are unaware and 
l 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
information provided to the company pursuant to the financial 
services authority’s fsa disclosure and transparency rules 
dtrs is published on a regulatory information service and on the 
company’s website 
as at 7 march 2011 the company has been notified in accordance 
with dtrs of the following interests of 3 or more in the ordinary 
shares of the company
     of  
  ordinary issued nature
 shareholder shares  capital of holding
 warburg pincus llc 378847258 1584 indirect
 franklin resources inc 282830605 1179 indirect
 paulson europe llp 269049683 1122 indirect
 axa sa 116326874 485 indirect
 legal  general  
 investment management 90236848 376 indirect
share capital and control
the company’s 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 amongst other rights to 
receive the company’s annual 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 share transfers 
limitations on the holding of any class of shares or any requirement 
for prior approval of any transfer no shares in issue have any special 
rights including in respect of voting dividends or distributions on a 
windingup 
the group has two offshore and one uk employee benefit trusts 
which are discretionary trusts for the benefit of group employees 
as at 31 december 2010 these trusts held 1159956 shares 
the voting rights in respect of the shares held in these trusts are 
exercisable by the trustees there are no known agreements or 
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 the directors of the 
company have general powers to manage its affairs in accordance 
with the company’s articles of association the articles and 
applicable legislation
at the agm 2010 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 agm 2011 at which further authority 
will be sought no share purchases were made during the year
changes to the articles must be approved by the shareholders in 
accordance with the legislation in force from time to time
directors may be appointed or removed in accordance with the 
legislation in force from time to time the relevant provisions of the 
articles and as disclosed in contractual relationships below 
the company does not have agreements with any director or 
employee that would provide compensation for loss of office or 
employment as a result of a successful takeover bid except that 
provisions of the company’s share schemes and plans may cause 
options and awards granted under such schemes and plans to vest
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governance
creditor payment policy
the company had no amounts owing to trade creditors at  
31 december 2010 2009 £nil the group’s creditor days 
outstanding at 31 december 2010 were 688 days 2009 640 
days of purchases based on the ratio of group trade creditors at 
the end of the year to the amounts invoiced during the year
the group has standard payment terms of end of the month 
plus 60 days our terms and conditions are available 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 22 to the group financial statements
postbalance sheet events
details of postbalance sheet events are set out in note 32 of the 
group financial statements
independent auditors
pricewaterhousecoopers llp pwc has indicated its willingness to 
continue as auditors accordingly the reappointment of pwc and 
the setting of their remuneration will be proposed at the agm 2011
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 a going 
concern basis in preparing the accounts
agm 2011 
the agm of the company will be held at haberdashers’ hall  
18 west smithfield london ec1a 9hq on 28 april 2011 at  
1000 am the notice convening the agm will be issued separately 
together with details of the business to be considered and full 
explanations of each resolution that is being proposed
the chairmen of the audit finance nomination and remuneration 
committees are normally available at the agm to take any relevant 
questions and all other directors are expected to attend all 
directors attended the agm 2010
by order of the board
suzanne wise
general counsel  company secretary
7 march 2011
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 and a receivables purchasing 
agreement and guarantee dated 30 december 2007
the group entered into a relationship agreement with warburg 
pincus llc in march 2009 setting out the terms and conditions 
under which warburg pincus have the right to appoint a director 
to the board and also governing the retention of its shareholding 
in the company and the purchase of further shares under the 
relationship agreement 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 cadbury’s trade marks in 
connection with ambient packaged cakes and baking mixes for 
a period to expire not earlier than mid 2013 the group also has 
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
on 24 january 2011 the company entered into an agreement with 
exponent private equity llp for the sale of the entire issued share 
capital of marlow foods ltd the owner of the meatfree business 
for an aggregate consideration of £205m on a cash and debt free 
basis this disposal was approved by shareholders on 3 march and 
completed on 7 march 2011 as part of the disposal the company 
and exponent have entered into an agreement for certain transitional 
services to be provided by the group to the exponent group and 
vice versa for a period following closing
on 7 february 2011 the company entered into an agreement with 
princes ltd a wholly owned subsidiary of mitsubishi corporate of 
japan for the sale of the east anglian canned grocery operations and 
related assets for an aggregate consideration of £1822m payable in 
cash on closing and subject to adjustments in respect of stock and a 
normalised level of debtors and creditors closing is conditional upon 
obtaining shareholder consent and antitrustcompetition clearance 
as part of the disposal the company and princes have entered into 
an agreement for certain transitional services to be provided by the 
group to the princes group and 
vice versa for a period following closing
employment policies 
a summary of the group’s employment policies and the actions to 
involve employees is set out on pages 40 to 43
health and safety policy
a summary of the group’s health and safety policy risks and 
controls and actions taken is set out on pages 40 to 42
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corporate governance report
q how is the board structured
a on 31 december 2010 the board consisted of a nonexecutive 
chairman three executive directors and five nonexecutive directors 
in accordance with the code separate individuals held the office 
of chairman and chief executive officer following his retirement 
david kappler was retained on a three month consultancy contract 
to assist with the handover process to ronnie bell at the agm 
2011 ronnie bell robert schofield david beever and david wild 
appointed on 7 march 2011 will seek reelection david felwick will 
be stepping down at the agm 2011
the independence external experience and challenge nonexecutive 
directors bring to the board is essential to its effective operation the 
current nonexecutive directors bring extensive and broad ranging 
experience covering marketing sales commercial retail corporate 
finance general finance and corporate governance the board 
considers that the nonexecutive directors with the exception of 
charles miller smith as noted below are independent in character and 
judgement
under the terms of the relationship agreement between the 
company and warburg pincus charles milller smith a senior 
adviser to warburg pincus llc was appointed to the board 
under the agreement warburg pincus with the agreement of the 
company may appoint to the board a director so long as they 
retain a minimum interest of 239802158 shares in the company
ronnie bell is also chairman of milk link ltd a supplier of milk to the 
group the board reviewed this relationship on his appointment and 
was satisfied that it does not impact on his independence ronnie 
will absent himself from any discussions regarding milk link at the 
board 
save as disclosed above no director had a material interest at any 
time in any contract of significance with the company or group 
other than their service contract 
biographies of the current directors and members of the group 
executive are provided on pages 48 to 50 biographies of those 
directors seeking reelection at the forthcoming agm 2011 can also 
be found in the notice of agm
details of the directors’ service contracts letters of appointment 
emoluments directors’ interests and beneficial interests in company 
shares and share options are found in the remuneration report on 
pages 62 to 72
q what are the board’s responsibilities
a the board has an agreed schedule of matters reserved to it 
these include
l setting longterm strategic and commercial objectives
l approving annual operating and capital budgets
l reviewing business performance
l overseeing the group’s internal control systems and 
l ensuring appropriate resources are in place to enable the group 
to meet its objectives
the board delegates to the group executive responsibility for 
overseeing the implementation of the group’s policies and strategy 
corporate governance report
we are the uk’s largest ambient grocery producer manufacturing 
distributing and selling branded and nonbranded food to the 
uk market we strive for best practice in corporate governance 
to ensure this area reflects our position in the uk food industry 
we believe in fairness and transparency in governance and in 
maintaining the highest ethical standards in all our business 
dealings
the following corporate governance report forms part of the 
directors’ report and is incorporated into it by reference this report 
shows how the group has applied the principles of good corporate 
governance as set out in section 1 of the 2008 combined code on 
corporate governance the code which is available on the frc’s 
website except in relation to the temporary fall in membership levels 
on the remuneration committee explained on page 63 footnote 4 
the company complied with all the provisions of the code this 
year we have decided to align this report with the themes found 
in the code
l leadership pages 54 to 55
l effectiveness pages 55 to 60
l accountability page 60
l communication page 61
l remuneration found in the remuneration report on pages  
62 to 72
leadership
q what changes have been made to the board during  
the year
a the most significant change in the year has been the 
appointment of ronnie bell as nonexecutive chairman following the 
retirement of david kappler in september 2010 an overview of all 
the directors who held office during the year is set out below
 dir ector   designation
 ronnie bell nonexecutive chairman
 charles miller smith nonexecutive deputy chairman
 robert schofield chief executive officer
 jim smart chief financial officer
 tim kelly chief operating officer
 david beever     independent nonexecutive director
 david felwick senior independent director
 louise makin      independent nonexecutive director
 ian mchoul independent nonexecutive director
 david kappler
1
 nonexecutive chairman 
 christine cross
2
 independent nonexecutive director
 
1
  retired as a director on 30 september 2010
2  
retired as a director on 31 january 2010
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governance
q what are the chief executive officer’s responsibilities
a robert schofield is responsible for the executive management 
of the group and for ensuring the implementation of board strategy 
and policy within the approved budgets and timescales jim smart 
tim kelly and the group executive who head up the group’s 
principal operations and functions assist robert schofield in 
meeting his responsibilities 
q what are the chairman’s responsibilities
a the chairman’s responsibilities are primarily the leadership of 
the board and ensuring its effectiveness this is achieved by
l chairing board meetings setting the agendas in consultation 
with the chief executive officer and company secretary and 
encouraging directors’ active participation in board discussions
l leading the performance evaluation of the board its committees 
and individual directors
l promoting the highest standards of corporate governance 
including compliance with the code wherever possible
l ensuring timely and accurate distribution of information to the 
directors and effective communication with shareholders
l establishing an effective working relationship with the chief 
executive officer by providing support and advice whilst 
respecting executive responsibility and
l periodically holding meetings with the nonexecutive directors 
without the executive directors present
q does the chairman hold any other appointments
a ronnie bell is the nonexecutive chairman of milk link ltd and a 
director of the edrington group ltd 
q does the company arrange new director inductions
a yes all directors receive an induction on joining the board 
covering their duties and responsibilities as directors nonexecutive 
directors also receive a full briefing document on all areas of the 
company’s business and they may request such further information 
as they consider necessary
q does the company have insurance to cover the 
directors
a yes the company purchases directors’ and officers’ liability and 
indemnity insurance this insurance covers the directors and officers 
against the costs of defending themselves in civil proceedings taken 
against them in their capacity as a director or officer of the company 
and in respect of damages resulting from the unsuccessful defence 
of any proceedings
q how does the board allocate its time 
a below is a chart which summarises the approximate time the 
board has spent discussing agenda items during the year to  
31 december 2010
effectiveness
q what is the mix between executive and nonexecutive 
directors on the board
a the directors believe that there should be an appropriate 
combination of executive and nonexecutive directors on the 
board the code states that at least half the board excluding the 
chairman should comprise nonexecutive directors the current mix 
of directors is shown below excluding david wild appointed on  
7 march 2011
q what is the average length of time directors are 
appointed to the board 
a the board believes it is important to maintain an appropriate 
balance of length of service to ensure independent judgement and 
also an appropriate level of skills and experience the board regularly 
undertakes a review of succession plans for both executive and non
executive directors the length of service of the current nonexecutive 
directors is shown in the graph below against the average length of 
service which currently stands at four years
in addition shareholders must approve the reappointment of the 
directors and accordingly at each agm onethird of the directors 
rounded down will retire by rotation and be eligible for reelection 
the directors to retire will be those who wish to retire and those who 
have served on the board the longest since their last appointment or 
reappointment under the current articles every director must offer 
themselves for reelection every three years
■ strategy 29
■ operations 30
■ finance  risk 22
■ governance 8
■ capex 7
■ succession 4
■ chairman ned 1
■ executive directors 3
■ nonexecutive directors 5
ronnie
bell
charles miller
smith
david
beever
louise
makin
david
felwick
ian
mchoul
7
6
5
4
3
2
1
0
number of years appointed
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corporate governance report continued
q has the company adopted the uk corporate 
governance code’s recommendations for the annual 
reelection of directors
a during the year the company discussed its policy on the re
election of directors following the recommendations of the code 
the company is reviewing market practice in this area and intends 
to comply with the code requirements and adopt annual reelection 
with effect from the agm 2012 during the transitional period re
election will continue to be governed by the company’s articles
q does the company offer the directors access to 
independent professional advice
a yes procedures are in place which allow directors to take 
independent professional advice in the course of their duties in 
addition all directors have access to the advice and services of the 
company secretary if any director were to have a concern over any 
unresolved business issue they are entitled to require the company 
secretary to minute that concern should they later resign over this 
issue the chairman would bring these concerns to the attention of 
the board
q how do we make sure our board and its committees are 
effective
board and individual performance
annually the board carries out a performance review which 
measures its performance and that of its committees it is the policy 
of the board to conduct an external board evaluation every three 
years in 2009 an independent external review was conducted by 
boardroom review which involved onetoone meetings with the 
board and attendance at board and committee meetings 
for 2010 the review was carried out by way of a questionnaire and 
the findings of this review will be presented to the board in march 
2011 where possible the recommendations will be incorporated 
into the operation and practices of the board and its committees 
in addition the chairman carries out a performance review of 
each director on an annual basis appraisals are conducted by 
the chairman for the chief executive officer and by the senior 
independent director following discussions with the other non
executive directors for the chairman
q how frequently did the board and committees meet in 2010 
a the board held 11 scheduled meeting in the year and in addition four meetings were convened for specific business meetings are usually 
held at the company’s head office in st albans however twice a year the board visits the group’s operating facilities to see the business in 
action and hold their meetings details of the attendance at scheduled board and committee meetings of all directors who held office during 
2010 are set out below 
  group audit finance nomination remuneration
 director board committee committee committee committee
 ronnie bell
1
 33 22
2
 11
2
 11
2
 11
24
 robert schofield 1111 44
2
 44
2
 22
2
 44
24
 jim smart 1111 44
2
 44
2
 22
2
 11
24
 tim kelly 1111 44
2
  11
2
  22
2
 –
24
 david beever 1111 44
2
 44
2
 22
2
 33
24
 david felwick 1111 44
2
 11
2
 22
2
 44
24
 louise makin 1111 44
2
 11
2
 22
2
 44
24
 ian mchoul 1111 44
2
 44
2
 22
2
 –
24
 charles miller smith 1111 33
2
 44
2
 22
2
 22
24
 david kappler
1
 1010 33
2
 33
2
 22
2
 44
24
 christine cross
3
 22 –
2
 –
2
 –
2
 11
24
1
  ronnie bell was appointed nonexecutive chairman on 1 october 2010 david kappler retired on 30 september 2010 
2
  denotes attendance by invitation
3
  retired as a director on 31 january 2010
4
  no meetings have been held since their appointment to the remuneration committee on 25 november 2010
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governance
q what committees does the board have
a the board has four committees which assist in the discharge of 
its responsibilities 
l audit committee
l finance committee
l nomination committee and
l remuneration committee
each committee has its own terms of reference which are compliant 
with the code and sets out its duties and responsibilities copies of 
these terms of reference are available on the company’s website  
wwwpremierfoodscouk 
q who is on the committee
 committee  
 member position comments
 ian mchoul chairman  independent ned
 david beever member independent ned
 david felwick member senior independent director
both ian mchoul and david beever have recent and relevant 
financial experience ian mchoul as the chief financial officer of 
amec plc and david beever as a member of the kpmg advisory 
board
q how many meetings were held during the year
a the committee held four scheduled meetings in the year and 
met with the internal and external auditors twice in the year without 
the presence of management during the year the committee was 
convened on two further occasions to deal with specific business 
attendance at the scheduled meetings is shown in the table on 
page 56
q what is the role of the committee
a the committee has been delegated authority by the board to
l monitor financial reporting including the annual and interim 
reports preliminary results announcements and formal 
announcements relating to financial performance and reporting
l ensure the effectiveness of the company’s internal controls and 
risk management systems
l review and update the whistleblowing arrangements
l monitor and review the effectiveness of the company’s internal 
audit function including the approval of any appointment or 
removal of the head of the internal audit function
l consider and make recommendations to the board on the 
appointment reappointment and removal of external auditors 
including the setting of their remuneration and
l review the external auditors’ independence which includes 
reviewing the impact of any nonaudit services provided by the 
group’s external auditors to the board
q who are the group’s auditors
a since the company was listed on the london stock exchange 
in july 2004 pricewaterhousecoopers llp “pwc” have been the 
group’s auditors annually the committee reviews the relationship 
the company has with pwc and for the year ended 31 december 
2010 the committee considered that the relationship was working 
well and remains satisfied with their effectiveness accordingly the 
committee does not consider it necessary to require pwc to tender 
for the group’s audit work 
the external auditors are required to rotate the audit partners 
responsible for the group and subsidiary audits every five years 
there are no contractual obligations restricting the company’s 
choice of external auditors at the agm 2011 the reelection of pwc 
as the group’s auditors will be proposed to shareholders
audit 
committee
the committee has responsibility for reviewing the effectiveness 
of the group’s financial reporting system and the internal control 
policies and procedures for the identification assessment 
and reporting of risk the committee also keeps under review 
the relationship with the auditors including the terms of their 
engagement and fees their independence and expertise resources 
and qualification and the effectiveness of the audit process
  
the committee’s terms of reference are available on the 
company’s website 
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corporate governance report continued
finance 
committee
the committee is responsible for reviewing the group’s financial 
strategy and approving any changes to this strategy it oversees 
the group’s treasury operations and policies including the use of 
financial instruments such as interest rate swaps the committee 
also reviews the investment strategy and performance of the 
group’s pension schemes  
 
the committee’s terms of reference are available on the 
company’s website
q what nonaudit services were provided by the group’s 
auditors during the year
a there is an established policy governing the engagement of 
pwc for nonaudit services designed to ensure that any services 
provided do not impair the objectivity of the external auditors the 
policy includes a fee limit for the provision of nonaudit services 
above which a formal tender process must normally be undertaken 
during the year pwc were employed to complete a number of 
projects as part of the group’s review of financing arrangements 
most notably in connection with obtaining a formal credit rating and 
the restructuring of the group’s swap portfolio fees incurred during 
the year in relation to this work amounted to £12m 
before commissioning pwc to undertake this work the committee 
reviewed the proposal in detail with both management and pwc 
to assess any potential threat to their independence in the case 
of work carried out during the year it was assessed that pwc were 
best placed to perform these additional services in view of their 
knowledge of the business the time constraints in completing the 
work and likely cost
the committee is aware of the investor guidelines in respect of non
audit fees and has agreed with management to bring the levels of 
nonaudit fees down in subsequent years
q what key issues did the committee discuss during  
the year
a during the year the committee
l  received regular reports from the internal audit function 
ensured it was adequately resourced monitored its activities and 
effectiveness and agreed the annual audit plan 
l  conducted a review of the effectiveness of the internal audit 
function including internal control self assessments
l  considered the external auditors’ report for the year ended 31 
december 2009 and reappointed the external auditors
l  conducted an internal review of the group’s external auditors 
which included a review of the auditors’ independence 
objectivity and the effectiveness of the audit process
l  reviewed the nonaudit services spend policy and approved the 
engagement of pwc as an adviser in relation to certain internal 
projects
l  approved the company’s risk management policy and key 
business risks and
l  reviewed the group’s whistleblowing service
ian mchoul
chairman of the audit committee
q who is on the committee
 committee  
 member position comments
 david beever chairman  independent ned
 ian mchoul member independent ned
 ronnie bell member chairman ned
 charles miller smith member  deputy chairman ned
 robert schofield member chief executive officer
 jim smart member chief financial officer
 paul leach member group treasurer
q how many meetings were held during the year
a the committee held four scheduled meeting in the year and 
additionally was convened on one further occasion for specific 
business attendance at the meetings is shown in the table on  
page 56
q what is the role of the committee
a the committee has been delegated authority by the board to
l review and make recommendations to the board on matters 
relating to the group’s capital structure financing and pensions 
strategy
l oversee the governance and activities of the company’s 
treasury committee and treasury risk management committee
l review the investment strategy and funding levels of the group’s 
pensions schemes
l review the company’s financial policy and strategy and
l monitor the company’s liquidity covenant and going concern 
positions
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governance
q what is the role of the committee
a the committee has been delegated authority by the board to
l lead the formal rigorous and transparent process for board 
appointments including a review of the skills experience and 
knowledge of the existing directors to ensure any potential 
shortlisted candidates will benefit the balance of the board
l give full consideration to succession planning taking into account 
the challenges and opportunities facing the company and what 
skills and expertise would benefit the board in the future and
l regularly review the structure size and composition of the board 
and make recommendations to the board regarding changes
q what key issues did the committee discuss during  
the year
a during the year the committee
l  undertook an extensive recruitment process and recommended 
the appointment of a new nonexecutive chairman under the 
leadership of the company’s senior independent director
l  approved the appointment of charles miller smith as deputy 
chairman
l  approved the directors for reappointment at the agm 2010 
l  undertook an annual review of the composition and expertise of 
the board
l  undertook a selection process to appoint an additional non
executive director to the board
l  reviewed the group executive performance appraisals and
l  reviewed and approved proposals for a new group 
management structure
ronnie bell
chairman of the nomination committee
nomination 
committee
the committee is responsible for considering the size structure 
and composition of the board retirement and appointment of 
additional and replacement directors and making appropriate 
recommendations so as to maintain an appropriate balance of 
skills and experience on the board
the committee’s terms of reference are available on the 
company’s website
q what key issues did the committee discuss during  
the year
a during the year the committee
l  reviewed the company’s financial strategy including the group’s 
swap arrangements and sources of funding
l  reviewed the investments strategy of the group’s pension 
schemes in order to reduce risk
l  approved amendments to the group’s treasury policy and 
l  reviewed the group’s directors’ and officers’ insurance cover
david beever
chairman of the finance committee

q who is on the committee
 committee  
 member position comments
 ronnie bell chairman chairman ned
 david beever member independent ned
 david felwick member senior independent director
 ian mchoul member independent ned
 louise makin member independent ned
 charles miller smith member deputy chairman ned
q how many meetings were held during the year
a the committee held two scheduled meetings in the year and 
additionally was convened on six further occasions for specific business 
attendance at the meetings is shown in the table on page 56
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corporate governance report continued
remuneration 
committee
the committee is responsible for determining and agreeing the 
overall remuneration strategy for executive directors and senior 
managers determining the individual remuneration packages for 
the chairman executive directors company secretary and senior 
management and approving the design of all share incentive plans  
 
the committee’s terms of reference are available on the 
company’s website 
q who is on the committee
 committee  
 member position comments
 louise makin chairman  independent ned
 david beever member independent ned
 ronnie bell member chairman ned
 david felwick member senior independent director
information on the activities of the remuneration committee is set 
out in the remuneration report on pages 62 to 72
louise makin
chairman of the remuneration committee
accountability
q how does the board ensure internal controls are 
effective
a the board conducts an annual review of the group’s systems of 
internal control and their effectiveness in accordance with the turnbull 
guidance the board has delegated authority to the audit committee 
to regularly monitor internal controls and conduct the annual review 
this review covers all material controls such as financial operational 
and compliance controls and risk management systems in place 
throughout the year under review and up to the date of this annual 
report processes underpinning the financial reporting systems are 
managed and monitored by line and financial management following 
the audit committee’s review the board receives a report of their 
findings for discussion and to implement the necessary actions to 
remedy any control weaknesses
data in the group’s financial statements is reconciled to the 
underlying financial systems a review of the data is undertaken to 
ensure that the true position and results of the group are reflected 
through compliance with approved accounting practices
q what are the aims of the internal control system
a the internal control systems principally 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 systems are designed to manage rather than to 
eliminate risk and provide reasonable but not absolute assurance 
against material misstatement or loss the system also supports 
management’s decisionmaking improves the reliability of business 
performance and assists in the preparation of the company’s 
consolidated accounts
q how does the company’s internal audit  
programme work
a each year the audit committee meets to discuss and approve 
the nature and scope of the audit programme for the year the audit 
committee then instructs the internal audit function to undertake 
the agreed schedule of audits during which the effectiveness of the 
controls operating within the business are reviewed occasionally 
additional audits are added to the schedule in circumstances such 
as the acquisition or disposal of a business or any other significant 
business development
in addition the completion of comprehensive internal control self 
assessment questionnaires are required from senior business managers 
within each business unit these self assessment questionnaires 
are designed to ensure that any material control breakdowns are 
highlighted and the operation of internal controls are addressed 
within their respective business units t o ensure their accuracy these 
assessments are tested as part of the internal audit process the 
results are initially reviewed by the divisional units and then the group 
executive prior to formal review by the audit committee 
further information on risk management and risk factors can be 
found on pages 46 to 47
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governance
q how is the board updated on the latest shareholder 
information
a the board receive a detailed investor relations update at each 
board meeting which covers amongst other things share price 
movements shareholder movements and analyst reports 
q what happens at the agm
a the agm usually takes place in london and is an opportunity 
for all shareholders to ask questions and vote on the resolutions put 
forward by the board at least 20 working days before the agm 
shareholders receive the notice of agm a copy of this report if they 
request a copy in writing and a form of proxy 
the notice of agm sets out the proposed resolutions and a brief 
synopsis of each shareholders are invited to either attend the agm in 
person or appoint a proxy to vote on their behalf voting at the agm 
is by poll as this gives a more democratic outcome given that the 
proxy votes are added to the votes cast in person details of the proxy 
votes for against and withheld are made available on the company’s 
website after the agm
takeover directive
information on the impact to the company as required by the 
takeover directive is given in the directors’ report see page 53 and 
forms part of this corporate governance report
remuneration
details on remuneration are found in the remuneration report on 
pages 62 to 72
ronnie bell
chairman
communication
q how does the company engage with shareholders
a the primary role of the board is to represent and promote the 
interests of its shareholders as well as being accountable to them for 
the performance and activities of the company
the board believes it is very important to engage with its 
shareholders and does this in a number of ways through 
presentations conference calls facetoface meetings and the 
agm following the announcement of the company’s half year 
and year end results presentations are made to analysts and major 
shareholders to update them on the progress the company has 
made towards its goals and invite them to ask questions 
following the announcement of the company’s trading updates 
and interim management statements conference calls take place 
with analysts and major shareholders to update them on company 
progress full reports on all shareholder presentations are available 
on the group’s website wwwpremierfoodscouk the website also 
contains all london stock exchange announcements released to 
the market 
the chief executive officer and chief financial officer are also 
available to meet with shareholders during the year the chairman 
deputy chairman and senior independent director are available 
to discuss the issues and concerns of shareholders and welcome 
questions posed to the board and committees 
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directors’ remuneration report
directors’ remuneration report
part 1 unaudited information
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 fsa
dear shareholders
this year the remuneration committee has undertaken a fullscale review of our approach to remuneration this is the first time the 
remuneration structure has been fully reviewed since 2007 and the external market and the goals of premier foods have clearly changed 
over the past four years
although remuneration serves various functions such as attracting and retaining key talent we approached the review with the intention 
that the outputs should be primarily driven by our corporate strategy you will see that we have not looked to increase overall levels of 
variable pay as part of this review
as stated elsewhere in the annual report our current corporate priorities are
l growing our branded sales faster than their respective markets by strengthening our brands
l gaining a competitive advantage by utilising our consumer insight to deliver value to customers
l delivering efficiency benefits such that supply chain costs and overheads are held flat or decline while volumes grow and
l focusing on cash generation and debt reduction
the combination of sales growth improvements in margin and increasing trading profit will all help to reduce our debt levels and this 
should ultimately be positive for shareholder value as part of the review our objective was to design a framework whereby management 
would be incentivised towards achieving these corporate goals
overall we have looked to design a cohesive structure — a bonus plan linked to generating profit and cash flow a deferred share  
bonus which is linked to branded sales volumes to increase our market share and a long term plan which drives long term eps growth 
and ultimately delivery of share price growth further details regarding the structure are set out in the remuneration report below
in january 2011 the committee carried out a consultation exercise with major shareholders and investor bodies and comments received 
as part of this exercise have been reflected in the proposals set out below as part of the new arrangements the company intends to 
seek shareholder approval for the new long term incentive plan at the agm 2011
this has undoubtedly been a busy year for the remuneration committee however we believe that the new remuneration structure will 
help to support the company to successfully deliver its strategy over the short and longer term
louise makin
chairman of the remuneration committee
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governance
the committee
q who is on the committee 
a below is a table identifying the committee members and attendees in accordance with the committee’s terms of reference no one 
attending a committee meeting may participate in discussions relating to their own terms and conditions of service or remuneration only 
independent nonexecutive directors may become members of the committee
 committee member  position comments
 louise makin chairman of the committee independent ned
 david beever
14
 member independent ned
 ronnie bell
24
 member chairman ned
 david felwick member senior independent director
 christine cross
3
 member independent ned
 committee attendee position comments
 robert schofield chief executive officer attends by invitation
 brian carlton group hr director attends by invitation
 suzanne wise company secretary  general counsel secretary to the committee
 deloitte llp deloitte — attend by invitation as the committee’s  
   independent adviser
 hewitt new bridge street hnbs — attend by invitation as the company’s adviser
1 
 appointed to the committee on 25 november 2010 
2 
 appointed to the committee on 25 november 2010 independent on appointment
3 
 retired from the board on 31 january 2010
4 
 following the retirement of christine cross the number of committee members temporarily fell below the recommended level of three it was originally 
anticipated that an additional nonexecutive director would be appointed to the board during the year however this was postponed due to the appointment of 
the new chairman and it was therefore agreed that david beever and ronnie bell would be appointed in november 2010
during the year the committee held five meetings details of attendance at the meetings are shown in the attendance table on page 56
q who advises the committee
a 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 tax and organisational consulting 
services to the group additional advice in relation to remuneration 
was provided to the company’s senior management by hnbs
q what is the role of the committee
a the committee 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 relevant legal and regulatory 
requirements provisions and recommendations of the combined 
code on corporate governance and associated guidance 
the committee has been delegated authority by the board to 
l determine and agree the remuneration strategy for executive 
directors and senior managers — it is vital to our business that 
we retain individuals and reward performance and contributions 
towards the success of the company
l review and approve the remuneration packages for the 
chairman executive directors company secretary and senior 
managers
l determine the terms of employment including recruitment and 
termination terms of executive directors ensuring any payments 
on departure are fair to the individual and the company whilst 
avoiding payment for failure and recognising the departing 
individual’s duty to mitigate loss 
l approve the design of all share incentive plans including all
employee share schemes and where appropriate oversee any 
subsequent changes and
l review and recommend appropriate performance conditions 
and targets for the variable element of remuneration packages 
and determine the extent to which performance targets have 
been achieved
the full terms of reference for the committee can be found on the 
company’s website wwwpremierfoodscouk or can be obtained 
from the company secretary 
q what key issues did the committee discuss during  
the year
a during the year the committee
l undertook a fullscale review of remuneration arrangements for 
senior executives designed new incentive arrangements and 
consulted with shareholders on the changes a detailed summary 
of the proposed changes is set out below
l performed an annual review of executive directors’ and senior 
managers’ base salaries for 2010
l approved the 2010 awards under the cip and ltip 
l reviewed and recommended executive directors’ and senior 
executives’ annual bonuses in respect of 2009 including where 
appropriate deferral into the deferred bonus scheme and set 
the targets for the annual bonus in respect of 2010
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directors’ remuneration report continued
l reviewed the performance outcome for cip and ltip awards 
granted in 2007
l carried out a review of executive director shareholding guidelines 
and achievement of these targets and
l granted awards for 2010 under the saye scheme which 
included all eligible employees in the uk and ireland
remuneration policy
q what is the overall remuneration policy
a 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 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 the remuneration policy is 
reviewed annually to ensure performancerelated incentives as 
well as annual salary are supportive of operating objectives and 
conducive to delivery of shareholder value
our policy is to rigorously test review and set salaries at levels 
not normally exceeding market rates against relevant comparator 
companies taking into account factors such as revenue market 
share and complexity in relation to bonuses and long term incentive 
plans the policy is to provide an opportunity for executives to earn 
more significant levels of total remuneration but only if stretching and 
demanding performance conditions are met
the remuneration policy in place for senior executives is designed to 
complement the company’s overall corporate strategy and intended 
to place emphasis on delivery of key performance objectives 
executive directors should have sufficient focus on the long term 
performance of the company and be aligned with the interests 
of shareholders and we are therefore committed to the use of 
equitybased performancerelated schemes and further encourage 
executives to build up meaningful shareholdings in the company
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 officer
during the year the committee undertook a review of the 
remuneration arrangements for senior executives in the group 
the details of the arrangement are set out below the revised 
remuneration arrangements remain consistent with the broad policy 
set out above
q are there guidelines for executive directors to own shares 
in the company
a the committee believes that shareholding guidelines can 
be an effective means of aligning directors’ interests with those 
of shareholders since 2006 all executive directors have been 
expected to build a holding of shares within three years of 
appointment at least equal to their annual salary valued at the time 
of purchase details of directors’ shareholdings are set out on  
pages 69 to 71
q what is the balance between fixed and variable elements
a executive directors were remunerated through a combination 
of base salary annual bonus pension benefits and sharebased 
performancerelated remuneration the committee believes that it is 
important for a significant proportion of their remuneration package 
to be performancerelated 
at target performance around 57 of the package for executive 
directors is based on variable elements increasing to around 71 
where maximum targets are achieved for the purpose of this 
comparison fixed remuneration relates to base salary only whilst 
the variable remuneration includes both annual bonuses and long 
term incentive arrangements 
director remuneration fixed pay
q what salaries do the executive directors receive
a salary levels are set with reference to the relevant marketplace 
and incorporate an assessment by the committee of the 
responsibilities and performance of the individual salaries for senior 
executives are generally reviewed annually and any changes take 
effect from 1 april unless there is a significant change in role or 
areas of responsibility
the committee considers that the current salary levels are within 
an appropriate market range based on a review of salary levels 
prevalent amongst companies of a comparable revenue 
the committee is sensitive to the pay and employment conditions 
elsewhere in the group especially when determining any base 
salary increases executive directors received no pay increases in 
2010 or in 2009 in respect of robert schofield where relevant 
salary is the only pensionable component of remuneration bonuses 
are based on base pay ie excluding payments in lieu of pension
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governance
director remuneration variable pay
during the year the committee carried out a full review of all aspects 
of remuneration for the senior executive population which covers 
about 180 individuals the main conclusion of this review was that 
the company should have a new set of incentive arrangements for 
2011 and future years which better support the corporate strategy 
and are more effective from an hr perspective 
in january 2011 the committee carried out a consultation exercise 
with major shareholders and investor bodies and comments 
received as part of this exercise have been reflected in the proposals 
set out below as part of the new arrangements the company 
intends to seek shareholder approval for a new long term incentive 
plan new ltip at the agm 2011 
alignment of incentive arrangement with group strategy
the proposals for the structure of 2011 incentives for the executive 
directors comprise four elements annual cash bonus deferred 
share bonus new ltip performance shares and new ltip 
matching shares the driving factors behind the proposed changes 
are to improve line of sight so that executives can clearly see how 
their actions lead to their reward and to have incentives that have 
specific and clear goals as described below
l annual cash bonus — this element will continue to be based 
on operational and individual performance targets
l new deferred share bonus dsb — this award will be linked 
to a groupwide strategic measure which for the 2011 financial 
year will be growth in sales volume of branded products the 
awards will be deferred into shares to provide alignment with 
shareholders as well as enhance retention
l new ltip — awards under this plan are made up of 
performance shares and matching shares the new ltip will 
initially be based on threeyear adjusted eps and absolute share 
growth targets for performance shares and matching shares 
respectively which are aligned with the key areas of focus for 
shareholders
the new structure is intended to support delivery of the corporate 
strategy and the proposals are not intended to increase overall levels 
of variable pay for executive directors award levels and participation 
below main board level will be appropriately calibrated based 
on seniority however it is envisaged that the use of consistent 
metrics and targets across grades will harmonise areas of focus for 
the senior executive population as part of a unified remuneration 
strategy
these proposals and the decision to seek shareholder approval 
for the new ltip have been arrived at following a comprehensive 
review of remuneration the proposed policy has the following key 
advantages
l the new suite of incentives will be focused on the delivery of the 
corporate strategy
l participants will be provided with a more tangible and visible link 
between reward and performance which results in creation of 
shareholder value and
l the structure and balance of incentives is also intended to be 
more conventional in nature and reflective of typical ftse 350 
market practices
 name  salary 2010 salary 2011
 robert schofield  £606900 £625107
 jim smart  £430000 £442900
 tim kelly  £352275 £399357
tim kelly’s salary was increased to £399357 which recognised 
both his appointment as chief operating officer with responsibility 
for both the grocery and hovis divisions with effect from 1 january 
2011 and a 3 increase from 1 april 2011 all three executive 
directors will receive a 3 pay increase from 1 april 2011
q what pension benefits do the executive directors receive 
a all pension figures are set out below in the audited section of the 
report a brief overview of each director’s benefits is detailed below
robert schofield
robert schofield elected for enhanced protection under the finance 
act 2004 with effect from 6 april 2006 and thus opted out of the 
premier foods pension scheme pfps for future service accrual 
instead he receives an allowance in lieu of pension accrual which 
increases in line with the increase in the pfps “earnings cap” his 
benefit accrued up to 6 april 2006 continues to be linked to his final 
salary subject to the pfps “earnings cap” robert schofield has 
80 of salary above the “earnings cap”
jim smart
jim smart receives an allowance in lieu of pension accrual which 
increases in line with the increase in the pfps “earnings cap” jim 
smart has 71 of salary above the “earnings cap”
tim kelly
tim kelly is a member of the rhm pension scheme rhmps which 
is a funded registered scheme that provides benefits on a defined 
benefit basis under the rhmps he is entitled to pension at the rate 
of 125th of pensionable salary for each year of pensionable service 
pensionable salary for this purpose is subject to an “earnings cap” 
broadly related to that previously imposed by the finance act 1989 
this pension is subject to certain restrictions set down in the scheme 
rules in 2009 the scheme restrictions applied and his accrual was 
restricted to 130th the restrictions did not apply in 2010 so his 
accrual is 125th he receives a salary supplement in lieu of receiving 
no pension in respect of these earnings above the “earnings cap” 
tim kelly has 65 of salary above the “earnings cap”
q what additional benefits do the executive directors 
receive
a each executive director is entitled to a car allowance and 
fuel cost private health insurance telecommunication services 
relocation memberships and an allowance for personal tax and 
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directors’ remuneration report continued
the proposed structure for 2011 performance conditions and their link to strategy are summarised in the table below
  annual deferred  new ltip new ltip 
  cash bonus share bonus performance shares matching shares
 targets trading profit 60  total volume sales of adjusted earnings per for 2011 absolute share 
  recurring cash flow 20   branded products growth share growth price growth plus reinvested
  and personal targets 20   dividends
 underpins quality of profit review  growth in market share for not considered necessary remuneration committee
  target recurring cash flow  total brands must be in light of wide and to be satisfied that the
  bonuses will have an   achieved for the bonus to demanding range — share price performance
  affordability test and personal  become payable the group see below is reflective of the
  bonuses require threshold trading profit target must   company’s underlying
  profit to be attained be met and for a payout at   financial performance
   levels above target the 
   committee retains a 
   discretion to amend the 
   payouts for reasons of 
   affordability
 reasons trading profit is driven by  clear link to the strategy targets capture both same as for the
  sales and margin cash flow  of continuous improvements in the performance shares
  repays debt improvement in  trading performance but also requires the
   the sales of branded  and the earning of company’s shares to be
   products  cash to pay down debt  rerated clear link to
    and thus reduce  focus of the company’s
    interest charge  largest shareholders
short and mediumterm incentives
q what annual cash bonuses do the executive directors 
receive
a each year the committee sets individual performance targets 
and bonus potentials for each of the executive directors annually 
the committee reviews the level of achievement against the 
performance targets set and based on the committee’s judgement 
approves the bonus of each executive director annual bonus 
payments are not pensionable
performance targets for 2010 were set such that 60 of the 
bonus was based on the delivery of trading profit 20 was linked 
to the year end debt figure and the remaining 20 linked to the 
achievement of personal performance targets 
the committee believes the overall balance of the bonus plan has 
worked well and therefore for 2011 the metrics and weightings for 
the bonus scheme will remain unchanged save that recurring cash 
flow will replace the target relating to the year end debt figure the 
committee believes that the combination of metrics are supportive 
of strategy since trading profit is driven by sales and margin while 
cash flow repays debt 
the annual cash bonus potentials for 2011 will remain at the 2010 
level of 75 of salary for each of the executive directors  
in previous years to help directors build up a significant 
shareholding in the company directors were provided with a facility 
to voluntarily defer a portion of the cash bonus into company 
shares following the implementation of the dsb and long term 
incentive arrangements it is not envisaged that any further deferrals 
will be made under this arrangement
q how will the dsb operate
a the dsb will operate alongside the cash annual bonus 
executive directors can earn an award based on the achievement of 
a groupwide strategic target which will be set at the start of each 
financial year if the objective is met the bonus will be paid at the 
end of the financial year in shares deferred for a period of two years 
these shares will be subject to forfeiture over the period of deferral 
all shares for these awards will be sourced in the market
for 2011 it is proposed that a target based on total volume sales 
of branded products growth is used as it provides a clear link to 
the strategy of continuous improvement in the sales of branded 
products for a deferred bonus to be payable the group trading 
profit target must also be met for above target payout the 
committee shall also retain discretion to reduce the payouts for 
reasons of affordability
for 2011 the maximum award to executive directors under this 
element will be 25 of salary
in line with best practice the committee will also retain the ability 
to adjust unvested awards in the event that the company’s financial 
results for the relevant bonus year are found to have been materially 
misstated or if the basis for awards is found to have been made on 
inaccurate or misleading information 
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governance
long term incentives
as noted above during the year the committee reviewed the 
structure of long term incentives as a result of this review 
it is proposed that a new long term incentive scheme will 
be implemented in 2011 and this plan will be presented to 
shareholders at the agm 2011 further details regarding the 
operational features of the new plan are set out in the notice  
of agm
q how will the new long term incentives be structured
a the awards under the new ltip will have two elements
— performance shares
— matching shares
performance shares will be based on adjusted eps performance 
the matching shares will require participants to make an investment 
into company shares and will be based on absolute share price 
growth targets
under the rules of the new plan the maximum grant of performance 
shares and matching shares will be 200 of salary however these 
limits will not be utilised in the current year 
in respect of 2011 it is proposed that executive directors will be 
granted a performance share award of 75 of salary and will 
be allowed to invest up to 375 of salary in order to receive a 
maximum matching share award of up to 75 of salary overall 
the maximum incentive opportunity under the long term incentive 
scheme has been reduced from awards granted under the co
investment plan between 2007 and 2010
in line with best practice and consistent with the approach taken 
for the dsb the committee will also retain the ability to adjust 
unvested awards in the event that the company’s financial results 
for a relevant performance year is found to have been materially 
misstated or if the basis for awards is found to have been made on 
inaccurate or misleading information 
q what are the performance conditions for the performance 
shares
a for the 2011 grant the performance share element of the 
new ltip will be linked to growth in adjusted earnings per share 
eps targets eps captures both improvements in the trading 
performance and the earning of cash to pay down debt thus 
reducing the interest charge 
the committee is proposing to set targets which would require 
delivery of outstanding performance in 2013 and considerable 
growth on adjusted eps for 2010 achievement of the eps target 
needed for full vesting would require improvements in operating 
performance and a significant reduction in the group’s financing 
costs in future years the committee will set targets of an equally 
challenging nature but which are not likely to have the same high 
percentage growth numbers 
 annual eps growth in excess of  vesting
 rpi over the eps performance period
1
  percentage
  rpi  4   0
 rpi  4   25
 pro rata between rpi  4 and 19 pro rata 25 to 100
 rpi  19   100
1
  eps performance will be measured over three financial years commencing 
with the financial year in which a performance share award is granted
q what are the performance conditions for the matching 
shares
a for the 2011 grant the matching share element will be subject 
to absolute share price growth targets in order to fully recognise 
value created for shareholders the targets will include reinvestment 
of dividends paid during the period the committee considered 
feedback from the company’s largest shareholders when selecting 
this metric and concluded that for the current year absolute share 
price targets were more appropriate than relative performance 
hurdles which have been utilised under previous schemes 
as with the eps performance condition the share price targets will 
ultimately capture both improvements in the trading performance 
and the earning of cash to pay down debt in addition the 
achievement of the performance hurdles set for vesting will also 
require the company’s shares to be rerated thus providing a clear 
link with the priorities of the company’s largest shareholders the 
committee will continue to monitor whether this approach remains 
appropriate for grants in future years
under the terms of the plan participants will be able to receive 
a match of up to 21 on shares invested into the scheme the 
proposed targets and vesting schedule for matching shares for the 
2011 awards are
    vesting 
    percentage 
 share price in 2014   for maximum 
 including reinvested   matching 
 dividends   shares
 37p or lower   0
 pro rata between 37p and 80p  pro rata 0 to 100
 80p or higher   100
the closing share price will be the average share price for the three 
months after the announcement of the 2013 preliminary results in 
order for awards to vest the committee must be satisfied that the 
share price performance is reflective of the company’s underlying 
financial performance
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directors’ remuneration report continued
q what executive share plans did the company use  
in 2010
a in 2010 awards to executive directors and senior managers 
were granted under the coinvestment plan cip at more junior 
levels the company granted awards under the old ltip  
in summary the cip was a three year share matching plan based 
on the achievement of performance conditions participants pledge 
or purchase shares in the company which the company can 
choose to match to reward achievement of performance targets 
the maximum share match ratio is 31 which is only given for the 
achievement of exceptionally stretching targets for awards granted 
in 2010 the matching award was subject to eps and relative tsr 
performance details of the 2010 cip award were set out in full in 
the 2009 remuneration report
it is not anticipated that any further awards would be granted under 
the cip  full details of outstanding cip awards can be found on 
page 71
q does the company operate any allemployee share 
plans
a the company runs an allemployee save as you earn saye 
scheme which executive directors can join on the same terms as 
other participants 
the saye scheme is approved by hmrc and is available to all 
employees including executive directors who meet certain basic 
eligibility criteria and are not subject to any performance conditions 
the saye schemes offers employees the opportunity to join a 
regular monthly savings contract for a period of three years at the 
end of which the employees have the opportunity to purchase 
shares in the company with their savings at the share price set at 
the beginning of their savings contract 
due to differences in the applicable share scheme legislation in the 
uk and ireland the company offers two saye schemes one to our 
uk employees and another identical scheme to our irish employees
q what are the terms of the executive director service 
contracts
a the committee periodically reviews its policy on the duration of 
notice periods and termination provisions of its executive directors 
and along with the company believes that these entitlements 
continue to be appropriate 
details of the service agreements of the executive directors of the 
company appear below
    unexpired 
  notice contract term 
 executive director period date of contract
 robert schofield 12 months 20 jul 2004 rolling contract
 jim smart 12 months 11 feb 2009 rolling contract
 tim kelly 12 months 5 oct 2009 rolling contract
q are the executive directors compensated in the event of 
termination of contract
a in the event of 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 directors in lieu of notice salary benefits and pension 
contributions during the notice period calculated on a pro rata 
daily basis termination payments may 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 they 
are receiving such termination payments the payments shall be 
reduced by the amount of such sums 
ontarget bonus payments in lieu of notice are included in the 
service agreements for robert schofield and jim smart the 
committee believes that these entitlements continue to be 
appropriate in certain circumstances when recruiting executive 
directors however the committee continues to monitor this policy 
in the context of evolving market practice in this area 
the service agreements of executive directors do not provide for 
any enhanced payments in the event of a change of control of the 
company
q what is the company’s policy on executive directors 
holding external appointments
a the company 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 tim kelly was until 31 december 
2010 a nonexecutive director to cpp group plc and received fees 
of £47000 pa for this role
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governance
q what are the appointment terms for nonexecutive 
directors
a all nonexecutive directors have entered into letters of 
appointment as detailed in the table below the appointments 
are subject to the provisions of the companies act 2006 and the 
company’s articles in particular the need for periodic reelection 
nonexecutive directors’ continued appointments are evaluated 
annually based on their contributions and satisfactory performance 
there are no provisions for compensation being payable upon early 
termination of an appointment of a nonexecutive director
q what are the nonexecutive directors notice periods
a during the year nonexecutive director notice periods were 
reviewed by the company and it was agreed it was appropriate to 
increase these from one month to three months details of non
executive director appointment periods appear below
   date of 
 nonexecutive notice current 
 director period appointment  expiry date
 ronnie bell 3 months 1 oct 2010 agm 2013
 david beever 3 months 21 jan 2011 20 jan 2014
 david felwick  3 months 1 jul 2010 agm 2011
 louise makin 3 months 1 oct 2009 30 sep 2012
 ian mchoul 3 months 19 jul 2010 18 jul 2013
 charles miller smith
1
 1 month 12 jun 2009 —
1  
the appointment of charles miller smith is governed by the relationship 
agreement between the company and warburg pincus llc under which 
he may terminate his appointment as a director by giving one month’s 
notice in writing see page 54 for further information
q what interests did the directors have in company shares 
on 31 december 2010
a the beneficial interest in shares of the board and connected 
persons as at 31 december 2010 are presented below 
   ordinary  ordinary
   shares  shares
   as at  as at
   31 dec  31 dec
 director  2010 2009
 robert schofield
1
  2662693 2651358
 jim smart  750000 750000
 tim kelly
2
  387498 112500
 ronnie bell
3
  — —
 david beever  169000 168750
 david felwick  235737 235737
 louise makin  58636 58636
 ian mchoul  100000 100000
 charles miller smith  680272 680272
1 
  includes 11335 and 23623 shares under the deferred bonus scheme 
2006 and 2007
2 
 includes 274998 shares under the deferred bonus scheme 2010 
3
  appointed 1 october 2010
between 31 december 2010 and 7 march 2011 the directors 
purchased the following company shares ronnie bell 854700 
robert schofield 207038 and david felwick 227742
fiveyear total shareholder returns
the graph below shows the value as at 31 december 2010 of a 
£100 investment in premier foods shares on 31 december 2005 
compared with £100 invested in the ftse 250 index and the ftse 
food producers and processors index the ftse 250 index was 
chosen as the company is a member of the ftse 250 and the 
ftse food producers and processors index which was chosen as 
it contains the company’s key comparators
0
20
40
60
80
100
120
140
160
180
jan06 jul06 dec06 jun07 dec07 jun08 dec08 jun09 dec09 jun10 dec10
tsr rebased to 100 at 2 january 2006
premier foods
ftse 250 excluding investment trusts
ftse food producers index
source  datastream
0
20
40
60
80
100
120
140
160
180
jan06 jul06 dec06 jun07 dec07 jun08 dec08 jun09 dec09 jun10 dec10
tsr rebased to 100 at 2 january 2006
premier foods
ftse 250 excluding investment trusts
ftse food producers index
source  datastream
0
20
40
60
80
100
120
140
160
180
jan06 jul06 dec06 jun07 dec07 jun08 dec08 jun09 dec09 jun10 dec10
tsr rebased to 100 at 2 january 2006
premier foods
ftse 250 excluding investment trusts
ftse food producers index
source  datastream
premier foods 5year total 
shareholder return  
to 31 december 2010 
relative to appropriate 
comparators
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directors’ remuneration report continued
part 2 audited information 
directors’ emoluments
the remuneration of each director excluding long term sharebased incentive schemes and pensions during the year ended 31 december 
2010 compared to 2009 is shown below
  salaryfee annual bonus benefits
4
 total 2010 total 2009
 directors’ emoluments £ £ £ £ £
 executive directors
 robert schofield
1
 643980 45518 25554 715052 797967
 jim smart
2
 483880 60469 1114 545463 98975
 tim kelly
3
 393172 29079 28456 450707 520274
 nonexecutive directors
 ronnie bell
5
 81250 — — 81250 —
 david kappler
6
 175950 — — 175950 234600
 david beever 70000 — — 70000 60250
 christine cross
7
 4750 — — 4750 57000
 david felwick 62000 — — 62000 70750
 louise makin 67500 — — 67500 58750
 ian mchoul 70000 — — 70000 70000
 charles miller smith 65250 — — 65250 30875
1
  included in the figure for mr schofield’s salary  fees is a supplement in lieu of pension of £37080 2009 £36630
2 
 included in the figure for mr smart’s salary  fees is a supplement in lieu of pension of £37080 2009 £7584
3 
 included in the figure for mr kelly’s salary  fees is a supplement in lieu of pension of £38813 2009 £38813
4 
 benefits include payments made in relation to car and fuel cost private health insurance tax advice relocation and memberships
5 
  appointed on 1 october 2010
6
  retired on 30 september 2010 following his retirement he was retained on a three month consultancy agreement for a fee of £58650 for the period
7
  retired on 31 january 2010
the remuneration of the nonexecutive directors is determined by the chairman and executive members of the board the remuneration of 
the chairman is determined by the committee
ronnie bell was appointed as chairman with effect from 1 october 2010 his basic fee was agreed as £325000 charles miller smith was 
appointed deputy chairman also with effect from 1 october 2010 and his basic fee was increased to £90000 to reflect the additional 
commitments of the role the basic fee for a nonexecutive director which includes committee membership fees did not increase during the 
year remaining at £57000 2009 £57000 the chairman of the remuneration committee receives an additional £10500 and the chairmen 
of the audit and finance committees receive an additional £13000 the senior independent director receives an additional fee of £5000 
there are no changes to the fees for the chairman and other nonexecutive directors for 2011
annual bonuses were awarded to the executive directors for the meeting their personal targets the chairman and the other nonexecutive 
directors are not eligible to participate in the company’s bonus arrangements share option schemes long term incentive plans or pension 
arrangements no director waived emoluments in respect of the year ended 31 december 2010 or 31 december 2009
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governance
directors’ interest in share options
at 31 december 2010 the following executive directors had options to subscribe for shares granted under the esos and saye schemes
  options options options options options
  as at  granted exercised forfeited as at option
  31 dec  during the during the during the 31 dec price
  2009 year year  year 2010 p option period
 robert schofield
 esos 2004 1165686 — — — 1165686 16138 23 jul 2007 to 22 jul 2014
 saye 2009 25208 — — 25208 — 3600 1 dec 2012 to 31 may 2013
 saye 2010 — 23210 — — 23210 1520 1 dec 2013 to 31 may 2014
 tim kelly
 saye 2009 25208 — — 25208 — 3600 1 dec 2012 to 31 may 2013
 saye 2010 — 23210 — — 23210 1520 1 dec 2013 to 31 may 2014
the market price of a share in the company on 31 december 2010 was 193 pence the range during the 2010 financial year was 160 pence 
to 374 pence there were no changes in the options held by the directors between 31 december 2010 and 7 march 2011 the company’s 
register of directors’ interests which is open to inspection contains full details of directors’ share interests
directors’ interests in long term incentive schemes
the following table shows the executive directors’ interests in shares awarded under the cip
      shares  share
   opening granted lapsed closing  price on
   balance on  during during balance on date of award
  date of award 1 jan 2010
1
 the year the year 31 dec 2010 p vesting date
 robert schofield
 cip 2007 160507 1230418  1230418
2
 — 31550 16 may 2010
 cip 2008 150408 3187741  — 3187741 12550 15 apr 2011
 cip 2009 090609 3187740  — 3187740 4050 9 jun 2012
 cip 2010 300310 — 3187740 — 3187740 3216 30 mar 2013
 jim smart
 cip 2009 131109 2250000  — 2250000 3463 13 nov 2012
 cip 2010 300310 — 2032671 — 2032671 3216 30 mar 2013
 tim kelly
 cip 2007 160507 315360  315360
2
 — 31550 16 may 2010
 cip 2008 150408 841056  — 841056 12550 15 apr 2011
 cip 2009 090609 1665284  — 1665284 4050 9 jun 2012
 cip 2010 300310 — 1665285 — 1665285 3216 30 mar 2013
1
  the opening balance is the maximum matching award under each plan
2
  lapsed during the year as vesting conditions were not met
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directors’ remuneration report continued
pension benefits
for each director the total accrued benefit at 31 december 2010 represents the annual pension that is expected to be payable on eventual 
retirement of each director the additional pension earned during the year represents the increase in this expected pension including the 
effect of inflation when compared with the position at 31 december 2009
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 pension 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 the director and therefore cannot be added meaningfully to annual remuneration
the increase in transfer value during the year is the increase in the transfer value of the accrued benefits at 31 december 2010 after deducting 
directors’ pension contributions to the scheme the transfer value of the increase in accrued benefits under the listing rules is the transfer 
value at 31 december 2010 of the increase in accrued benefits during the period excluding inflation less contributions made by the directors 
during the period
the following table sets out the executive directors’ pension benefits as members of the company’s defined benefit pension schemes as at 
31 december 2010 
         increase transfer 
      additional transfer transfer in transfer value of the
   accrued accrued  pension value value value of increase
   pension pension additional earned during of accrued of accrued accrued in accrued
  age at  entitlement entitlement pension the year  pension pension pension pension 
  31 dec  at 31 dec at 31 dec earned during excluding at 31 dec at 31 dec during excluding
  2010 2009 2010 the year inflation 2009 2010 the year
2
 inflation
   £ £ £ £ £ £ £ £
 robert  
 schofield 59 9800 10000 200 — 142600 150700 8100 —
 tim kelly
1
 53 25800 30100 4300 3300 409200 494400 77000 43500
1 
 tim kelly’s transfer value at 31 december 2009 is based on total accrued benefit calculated using an accrual of 125th rather than 130th used in 
previous years
2
  net of contributions paid by contributing member
louise makin
chairman of the remuneration committee
7 march 2011
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financial statements
page 122 company financial statements
page 123 notes to the company financial statements
 note
 1 accounting policies
 2 operating profit
 3 investments
 4 debtors
 5 creditors
 6 share capital and other reserves
 7 operating lease commitments
 8 contingencies and guarantees
 9 postbalance sheet events
73 125
contents
page 74 independent auditors’ report — group and company
page 76 primary statements
page 81 notes to the financial statements
 note
 1 general information
 2 accounting policies
 3 critical accounting policies estimates and judgements
 4 segmental analysis
 5 net other operating incomeexpenses
 6 exceptional items
 7 operating profit for continuing operations
 8 employees
 9 interest payable and receivable
 10 tax on lossprofit on ordinary activities
 11 earnings per share
 12 discontinued operations
 13 assets and liabilities held for sale
 14 property plant and equipment
 15 goodwill
 16 other intangible assets
 
note
 17 investments
 18 inventories
 19 trade and other receivables
 20 trade and other payables
 21 bank and other borrowings
 22 financial instruments
 23 deferred tax
 24 provisions for liabilities and charges
 25 retirement benefit schemes
 26 reserves and share capital
 27 notes to the cash flow statement
 28 operating lease commitments
 29 capital commitments
 30 contingencies
 31 related party transactions
 32 postbalance sheet events
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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 2010 which comprise the 
consolidated income statement consolidated statement of comprehensive income consolidated balance sheet consolidated statement of 
cash flows 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 51 to 52 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 and 
express an opinion on 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 	gr oup’ s 	af fairs	as	at 	31	december	2010	and	of	its	loss	and	cash	flows	for 	the	year 	then	ended	
•	 have	been	pr operly	pr epar ed 	 in 	 accor dance 	with	ifrss	as	adopted	by 	the 	eur opean 	union	and 	
•	 have	been	pr epar ed 	in	accor dance	with 	 the	r equir ements	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 	dir ectors’	r eport 	for	the	financial	year	for	which	the 	gr oup	financial	statements	ar e 	pr epar ed	is	consistent	with	
the group 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 	 disclosur es	of	dir ectors’	r emuneration	specified	by	law	ar e	not	made	or	
•	 we	have	not	r eceived 	all	the 	information	and	 explanations 	we 	r equir e 	for	our	audit
under the listing rules we are required to review 
•	 the 	dir ectors’	statement	 set	out	on	page	53 	in	r elation 	to	going	concer n	
•	 the	part	of	the	corporate	gover nance	statement	r elating	to	the 	company’ s	compliance 	with	the	nine	pr ovisions	of 	the 	june	2008	
combined code specified for our review and
•	 certain	 elements	of	the 	r eport	to	 shar eholders	by 	the 	boar d	on	dir ectors’	r emuneration
other matter
we have reported separately on the parent company financial statements of premier foods plc for the year ended 31 december 2010 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
7 march 2011
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financial statements
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 2010 which comprise of 
the parent 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 51 to 52 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 and express an opinion on 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 	af fairs	as	at 	31	december 	 2010
•	 have 	been	pr operly	pr epar ed 	in	accor dance	with	 united 	kingdom	generally	accepted 	accounting 	practice	and	
•	 have 	been	pr epar ed	in	accor dance	with	the	r equir ements	of 	the 	companies	act	2006 	
opinion on other matters prescribed by the companies act 2006
in our opinion 
•	 the 	part 	of	the 	dir ectors’ 	 r emuneration	r eport	to 	 be 	audited	has 	been	pr operly	pr epar ed 	in	accor dance 	with	the	companies	act	2006	and	
•	 the 	information	given	in	the	dir ectors’ 	r eport 	for 	 the	financial	year	for	which 	the	par ent	company	financial	statements	ar e 	pr epar ed 	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	r ecor ds	have	not	been	kept	by	the	par ent	company  	or 	r etur ns 	adequate	for	our 	audit	have	not	been	r eceived 	fr om	
branches not visited by us or 
•	 the	par ent	 company	financial	statements	and 	the	part	of	the	dir ectors’	r emuneration	r eport	to	be	audited	ar e	not	in	agr eement	with	the	
accounting records and returns or 
•	 certain 	disclosur es	of	dir ectors’ 	r emuneration	specified	 by	law	ar e	not	made	or 	
•	 we 	have	not	r eceived	all	the	information	and 	explanations	we	r equir e 	for	our	audit	
other matter
we have reported separately on the group financial statements of premier foods plc for the year ended 31 december 2010
ranjan sriskandan
senior statutory auditor
for and on behalf of pricewaterhousecoopers llp
chartered accountants and statutory auditors
london
7 march 2011
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consolidated income statement
         year ended year ended
         31 dec  31 dec
         2010 2009
          restated
12
        note £m £m
 continuing operations
 revenue      4  24380   25297 
 cost of sales      16909 17714
 gross profit      7471  7583 
 selling marketing and distribution costs     3146 3327
 administrative costs      3413 2418
 net other operating incomeexpenses    5 19  121
 operating profit     7 931  1717 
 before exceptional items
2
      2181  2175 
 impairment of goodwill     6 1250 – 
 other exceptional items
2
     6 –   458
 interest payable and other financial charges    9 1601 1797
 interest receivable and other financial income    9 120  111 
 net movement on fair valuation of interest rate financial instruments   9 433 387 
 lossprofit before taxation for continuing operations     983 418 
 taxation creditcharge     10 116  58
 lossprofit after taxation for continuing operations    867 360 
 loss from discontinued operations     12 126 108
 lossprofit for the year attributable to equity shareholders    993 252 
 basic and diluted lossearnings per share pence    11 41 12 
 basic and diluted lossearnings per share pence — continuing
1
   11 36 17 
 basic and diluted loss per share pence — discontinued
1
   11 05 05
 adjusted earnings per share pence — continuing
123
   11 45  51 
 adjusted earnings per share pence — continuing and meatfree   11 50 54
1
 comparatives have been restated to reflect the classification of the meatfree business as a discontinued operation
2
 comparatives have been restated to reflect the change in classification of certain exceptional items as business restructuring  investment costs which have 
now been included within trading profit
3
 adjusted earnings per share is defined as trading profit less net regular interest payable less a notional tax charge at 28 2009 28 divided by the weighted 
average number of ordinary shares of the company 
the notes on pages 81 to 121 form an integral part of the consolidated financial statements
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financial statements
consolidated statement of comprehensive income
         year ended year ended
         31 dec 31 dec
         2010 2009
        note £m £m
 lossprofit for the year      993 252
 other comprehensive income
 actuarial gainslosses on pensions    25 464 4688
 deferred tax chargecredit on actuarial gainslosses on pensions   10 299 1321
 exchange differences on translation     03 44
 fair value movement on net investment hedge     08 57
 translation reserves relating to disposals     –  61
 net investment hedge relating to disposals     –  72
 total other comprehensive incomelosses for the year    170 3343
 total comprehensive losses attributable to owners of the company   823 3091
 
the notes on pages 81 to 121 form an integral part of the consolidated financial statements
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consolidated balance sheet
         as at as at
         31 dec 31 dec
         2010 2009
        note £m £m
 assets
 noncurrent assets
 property plant and equipment     14  5386  6352 
 goodwill      15 10961  13713 
 other intangible assets     16 9637  11084 
 total noncurrent assets      25984  31149 
 current assets
 assets held for sale     13 4063  18 
 inventories     18 1352  2140 
 trade and other receivables     19 3563  3470 
 financial assets — derivative financial instruments    22 14  25 
 cash and cash equivalents     27 19  194 
 total current assets      9011  5847 
 total assets      34995  36996 
 liabilities
 current liabilities 
 trade and other payables     20 4962 4850
 financial liabilities 
 — shortterm borrowings     21 1901 1525
 — derivative financial instruments     22 296 1624
 — other financial liabilities at fair value through profit or loss   22 2063 368
 accrued interest payable      123 137
 provisions     24 105 159
 current income tax liabilities      20 25
 liabilities held for sale     13 488 – 
 total current liabilities      9958  8688
 noncurrent liabilities
 financial liabilities 
 — longterm borrowings     21 10918 12320
 retirement benefit obligations     25 3209 4285
 provisions     24 284 310
 other liabilities      170 97
 deferred tax liabilities     23 561 647
 total noncurrent liabilities       15142 17659
 total liabilities      25100 26347
 net assets      9895  10649 
 equity
 capital and reserves
 share capital     26  240  240 
 share premium     26 11247  11247 
 merger reserve     26 8907  8907 
 other reserves     26 93 101
 profit and loss reserve     26 10407 9645
 capital and reserves attributable to the company’s equity shareholders   9894  10648 
 noncontrolling interest     26 01  01 
 total shareholders’ funds      9895  10649 
 
the notes on pages 81 to 121 form an integral part of the consolidated financial statements
signed on behalf of the board of directors who approved the financial statements on 7 march 2011
  
robert schofield jim smart
director and  director and
chief executive officer chief financial officer
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financial statements
consolidated statement of cash flows
         year ended year ended
         31 dec  31 dec
         2010 2009
        note £m £m
 cash generated from operating activities    27 3132  2194 
 interest paid      1435 1625
 interest received      125  108 
 taxation paidreceived      17 06 
 cash inflow from operating activities     1805  683 
 sale of subsidiaries       –  452 
 purchase of property plant and equipment     511 573
 purchase of intangible assets      166 276
 sale of property plant and equipment     52  94 
 sale of intangible assets      39  – 
 cash outflow from investing activities     586 303
 repayment of borrowings      1162 4388
 financing fees and other costs of finance    27 188 261
 proceeds from share issue     26 –   4039 
 share issue costs     26 –  243
 cash outflow from financing activities     1350 853
 net outflow of cash and cash equivalents     131 473
 cash and cash equivalents at beginning of year     151 337 
 effect of movement in foreign exchange     05 15
 cash and cash equivalents at end of year    27 287 151
the notes on pages 81 to 121 form an integral part of the consolidated financial statements
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consolidated statement of changes in equity
         non
    share  share merger other profit and controlling
    capital premium reserve reserves loss reserve  interest total
    £m £m £m £m £m £m £m
 at 1 january 2010 240 11247 8907 101 9645 01 10649
 loss for the year – – – – 993 – 993
 other comprehensive income – – – 08 162 – 170
 sharebased payments – – – – 69 – 69
 at 31 december 2010 240 11247 8907 93 10407 01 9895
 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
 
the notes on pages 81 to 121 form an integral part of the consolidated financial statements
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financial statements
notes to the financial statements
1  general information
premier foods plc the “company” is a public limited company incorporated and domiciled 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 7 march 2011
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 
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 as 
endorsed by the eu are effective for the first time in the current financial year and have been adopted by the group
ias 1 revised — “first time adoption of ifrs”
ifrs 1 amendment — “additional exemptions”
ifrs 1ias 27 amendment — “cost of an investment in a subsidiary jointly controlled entity or associate”
ifrs 2 amendment — “sharebased payments — group cashsettled sharebased payment transactions”
ifrs 3 revised — “business combinations”
ias 27 revised — “consolidated and separate financial statements”
ias 39 amendment — “financial instruments recognition and measurement on eligible hedged items”
ifric 15 — “agreement for the construction of real estate” 
ifric 16 — “hedges of a net investment in a foreign operation”
ifric 17 — “distributions of noncash assets to owners”
ifric 18 — “transfers of assets from customers”
the application of the standards and interpretations has not had a material effect on the net assets results and disclosures of the group 
new standards and interpretations not applied
up to and during the year ended 31 december 2010 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 amendment  first time adoption of financial instrument disclosures 1 july 2010
 ias 24 revised related party disclosure 1 january 2011
 ias 32 amendment financial instruments presentation on classification of rights issues 1 february 2010
 international financial reporting interpretations committee
 ifric 14 amendment prepayments of a minimum funding requirement 1 january 2011
 ifric 19 extinguishing financial liabilities with equity instruments 1 july 2010
these standards will be adopted by the group in future accounting periods 
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 
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notes to the financial statements continued
2 accounting policies continued
the following standards and amendments to published standards have not been endorsed by the eu
 international financial reporting standards
 ifrs 1 amendment first time adoption on hyperinflation and fixed dates
 ifrs 7 amendment financial instruments disclosures
 ifrs 9 financial instruments
 ias 12 amendment income taxes on deferred tax
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 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 revenue
revenue comprises the invoiced value for the sale of goods net of sales rebates discounts value added tax and other taxes directly 
attributable to revenue and after eliminating sales within the group revenue 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 revenue is 
recognised on the following basis
i sale of goods
sales of goods are recognised as revenue 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
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 company operates a number of equitysettled sharebased compensation plans the fair value of the employee services received 
in exchange for the grant of the options is recognised as an expense the total amount to be expensed over the vesting period is 
determined by reference to the fair value of the options granted excluding the impact of any nonmarket vesting conditions for example 
profitability and sales growth targets nonmarket vesting conditions are included in assumptions about the number of options that 
are expected to vest at each balance sheet date the entity revises its estimates of the number of options that are expected to vest it 
recognises the impact of the revision to original estimates if any in the income statement with a corresponding adjustment to equity
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
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2 accounting policies continued
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 property plant and equipment “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 ifrs 
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
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
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notes to the financial statements continued
2 accounting policies continued
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 firstin firstout 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 
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 
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financial statements
2 accounting policies continued
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
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 22 for further details
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notes to the financial statements continued
2 accounting policies continued
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 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 38 each 01 decreaseincrease in bond 
yields would increasedecrease the deficit by a further £51m£49m each 01 increasedecrease in the assumed inflation rate would 
increasedecrease the deficit by a further £18m£21m each of the underlying assumptions is set out in more detail in note 25 
 
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 
“cgu’s” 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 cgu’s carrying values see note 15 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 16
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 integration of an acquisition disposal of a business or major asset material impairments or refinancing related transactions 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
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financial statements
2 accounting policies continued
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 
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 and impairment 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 group’s operating segments are “grocery” “hovis” “retailer branded chilled” and “meatfree” the group previously aggregated 
and reported the retailer branded chilled and meatfree operating segments in the “other” segment as they did not meet the relevant 
quantitative thresholds and did not have similar economic characteristics and therefore could not be aggregated into their own separate 
reporting segment under ifrs 8 as a result of the group’s announcement to sell the meatfree business results for the meatfree 
operating segment are presented as discontinued operations in both the current year and prior year comparatives 
subsequent to year end the group announced that it had reached an agreement to sell its east anglian canned grocery operations 
which is part of the grocery segment the results of the east anglian canned grocery operations for the year ended 31 december 2010 
are included within continuing operations as it is not a separate operating segment 
the group reports the remaining operating segments on three continuing segments within the business “grocery” “hovis” and “retailer 
branded chilled” 
the grocery segment sells ambient food products the hovis segment sells bread morning goods flour products and frozen pizza 
bases and the retailer branded chilled segment includes businesses which sell chilled ready meals and cakes 
the segment results for the year ended 31 december 2010 and for the year ended 31 december 2009 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 2010
         retailer
         branded total for 
       grocery hovis chilled group
       £m £m £m £m
 revenue from continuing operations
 external     15468  6876  2036  24380 
 intersegment    39  277  25  341 
 result
 trading profitloss    2562  388  01 2949 
 amortisation of intangible assets      789
 fair value movements on foreign exchange and other derivative contracts    20
 pension financing credit       41 
 operating profit before exceptional items      2181 
 exceptional items       1250
 operating profit        931 
 interest payable and other financial charges      1601
 interest receivable and other financial income      120 
 net movement on fair valuation of interest rate financial instruments    433
 loss before taxation for continuing operations     983
 depreciation    259  173  44  476 
 amortisation    474  183  132  789 
 impairment of property plant and equipment   07  –  –  07 
 impairment of goodwill    –  –   1250   1250 
 balance sheet
 segment assets    22972  6631  4241  33844 
 unallocated assets       1151 
 consolidated total assets       34995
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notes to the financial statements continued
4 segmental analysis continued
 year ended 31 dec 2009 restated
12
         retailer
         branded total for
       grocery hovis chilled group
       £m £m £m £m
 revenue from continuing operations
 external     15745  7416  2136  25297 
 intersegment    40  270  44  354 
 result
 trading profit    2554  308  148  3010 
 amortisation of intangible assets      754
 fair value movements on foreign exchange and other derivative contracts    63
 pension financing charge       18
 operating profit before exceptional items      2175 
 exceptional items       458
 operating profit        1717 
 interest payable and other financial charges      1797
 interest receivable and other financial income      111 
 net movement on fair valuation of interest rate financial instruments    387 
 profit before taxation for continuing operations     418 
 depreciation    272  170  40  482 
 amortisation    439  183  132  754 
 impairment of asset held for sale   –  10  –  10 
1
  comparatives have been restated to reflect the classification of the meatfree business as a discontinued operation
2
  comparatives have been restated to reflect the change in classification of certain exceptional items as business restructuring  investment costs which  
 have now been included within trading profit
 
balance sheet
 segment assets    24142  6940  5640  36722 
 unallocated assets        274 
 consolidated total assets       36996 
revenues on a continuing basis of approximately £4540m and £3369m 2009 £4783m and £3402m are derived from two external 
customers these revenues are attributable across the three reporting segments above
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 
unallocated assets comprise cash and cash equivalents taxation balances derivative financial assets and head office assets in 2010 
this includes groupwide software and hardware assets that were previously reported within the grocery segment 
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 revenue which is allocated on the basis of geographical market 
destination and an analysis of the group’s non current assets excluding retirement benefit assets by geographical location 
continuing operations — revenue
         year ended year ended
         31 dec  31 dec
         2010 2009
          restated
1
         £m £m
 united kingdom       23147 23979
 other europe       1006 1126
 rest of world       227 192
 total for group       24380 25297
1
 comparatives have been restated to reflect the classification of the meatfree business as a discontinued operation
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financial statements
4 segmental analysis continued
noncurrent assets
         as at as at
         31 dec  31 dec
         2010 2009
         £m £m
 united kingdom       25348 30499
 other europe       636 650
 total for group       25984 31149
5  net other operating incomeexpenses
         year ended year ended
         31 dec 31 dec
         2010 2009
          restated
1
         £m £m
 loss on mark to market valuation of foreign exchange contracts and other derivatives  20 63
 gainloss on disposal of noncurrent assets     47 12
 net other operating expenses      08 46
 total net other operating incomeexpenses     19 121
1
 comparatives have been restated to reflect the classification of the meatfree business as a discontinued operation
6 exceptional items
up to 2009 the group was incurring a large amount of spend for restructuring and investment in the business these items were treated 
as exceptional items and excluded from trading profit the level of restructuring is now likely to run at a normal level from 2010 and as a 
result the group has included the costs of restructuring and investment within trading profit the comparatives for the year ended  
31 december 2009 have been restated to reflect the change in this classification
the group has completed its major integration and manufacturing rationalisation programmes following the acquisitions of rhm and 
campbell’s as a result the group has not incurred any exceptional expenditure during the year other than the impairment charge 
recognised against the goodwill allocated to the brookes avana cgu see note 15
         year ended year ended
         31 dec 31 dec
         2010 2009
          restated
1
         £m £m
 exceptional items — continuing operations
 integration of rhm uk operations    a –   252 
 integration of campbell’s uk operations    b –   15 
 integration of irish operations     c –   23 
 impairment of goodwill     d  1250  – 
 total operating exceptional items      1250   290 
 refinancing costs     e –   168 
 total exceptional items      1250 458
1
 comparatives have been restated to reflect the change in classification of certain exceptional items as business restructuring  investment costs which  
 have now been included within trading profit
a integration of rhm uk operations
on 16 march 2007 the group acquired rhm plc during 2009 the group completed its factory closure programme but residual costs 
were incurred in the previous year from the commissioning of equipment and production transferred to remaining group manufacturing 
sites redundancy and restructuring costs were also incurred in the previous year relating to the move of administrative functions to a 
groupwide share service centre in manchester and the integration of certain warehousing facilities to other group warehouses the 
adverse market conditions during 2009 also resulted in a charge to increase onerous property lease provisions 
b integration of campbell’s uk operations
the charge in the previous year primarily related to an increase in an onerous property lease provision to reflect the adverse market conditions 
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 in the previous year a 
charge was recognised as the group announced its decision to rationalise part of its irish operations
d impairment of goodwill
an impairment charge of £1250m has been recognised against the goodwill allocated to the brookes avana cgu see note 15
 
e refinancing costs
advisory fees were incurred during the previous year relating to the placing and open offer and firm placing amended lending 
agreements renegotiation of interest rate swaps and new pensions framework
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notes to the financial statements continued
7  operating profit for continuing operations
7a analysis of costs by nature
         year ended year ended
         31 dec  31 dec
         2010 2009
          restated
1
         £m £m
 cost of inventories sold      13866 14573
 employee benefits expense note 8     4945 5039
 depreciation of property plant and equipment
 — owned assets      452 480
 — under finance leases      24 02
 amortisation of intangible assets
 — software and licences      132 97
 — brands and trade marks      310 310
 — customer relationships      347 347
 impairment of inventory      26 42
 impairment of assets held for sale     –  10
 impairment of property plant and equipment     07  – 
 impairment of goodwill      1250  – 
 operating lease rental payments
 — plant and machinery      128 169
 — land and buildings      149 135
 repairs and maintenance expenditure     487 530
 research and development costs     106 37
 gain on disposal of property plant and equipmentintangible assets   47 29
 net foreign exchange gain      04 98
 auditor remuneration      12 38
1
 comparatives have been restated to reflect the classification of the meatfree business as a discontinued operation
operating lease obligations are further disclosed in note 28
7b  auditor remuneration
         year ended year ended
         31 dec  31 dec
         2010 2009
         £m £m
 fees payable to the company’s auditor for the audit of the parent company and 
 consolidated financial statements     06 06
 fees payable to the company’s auditor and its associates for other services
 — the audit of the company’s subsidiaries pursuant to legislation   05 06
 — services relating to corporate finance transactions    12 23
 — other services      01 –
 total auditor remuneration      24 35
included within total fees paid to the auditors of £24m 2009 £35m were £12m of costs directly attributable to coordination support 
and advice on corporate finance transactions such as restructuring of the group’s interest rate swaps financing negotiations and 
obtaining a credit rating in 2010 £08m of the £12m relating to corporate finance transactions was held on the balance sheet at 
yearend the remaining £04m was charged to exceptional writeoff of financing costs the total operating profit charge for auditors’ 
remuneration was £12m 2009 £38m
in 2009 included within total fees paid to the auditors of £35m of costs were £23m of costs which were directly attributable to the 
financing negotiations and equity raising 
in 2009 £10750 was paid to the company’s auditors in respect of the audit and services in relation to the group’s pension schemes
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financial statements
8  employees 
         year ended year ended
         31 dec 31 dec
         2010 2009
          restated
1
         £m £m
 staff costs for the group during the year for continuing operations
 wages and salaries      4291  4371 
 social security costs      363  403 
 termination benefits      29 125 
 share options granted to directors and employees    69  26 
 pension current service costs — defined benefit plans note 25    193 114 
 total staff costs      4945  5039 
1
  comparatives have been restated to reflect the classification of the meatfree business as a discontinued operation
average monthly number of people employed including executive directors for continuing operations
          2010  2009 
         number   number 
          restated
1
 management      948  1000 
 administration      1491  1307 
 production distribution and other     12125  13043 
 total average headcount       14564   15350 
1
  comparatives have been restated to reflect the classification of the meatfree business as a discontinued operation
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 70 to 72 which form part of these financial statements
9  interest payable and receivable
2010
in october 2010 the group restructured all of its five long dated swaps and its two “other” callable swaps into six new fixed rate swaps all 
maturing in 2013 these new fixed rate swaps are hybrid instruments comprising an underlying host with embedded derivatives and have 
been reclassified as “other financial liabilities at fair value through profit or loss” the fair value movements below includes the reclassification 
of fair value from interest rate derivatives to “other financial liabilities at fair value through profit or loss” for those six swaps
the total facility as at 31 december 2010 was £1680m and will be amortised by £50m in both june and december of each year until 
december 2013
2009
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 
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”
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notes to the financial statements continued
9 interest payable and receivable continued
         year ended year ended
         31 dec 31 dec
         2010 2009
          restated
1
         £m £m
 interest payable on bank loans and overdrafts     202 166
 interest payable on term facility     452 617
 interest payable on revolving facility     60 126
 interest payable on interest rate derivatives     595  607 
 interest payable on interest rate financial liabilities designated as other financial liabilities 
 at fair value through profit or loss     119  17 
 unwind of discount on provisions     13  10 
 amortisation of debt issuance costs and deferred fees    144 126
          1585   1669 
 exceptional writeoff of financing costs      16  30 
 accelerated amortisation of debt issuance costs    –   98 
 total interest payable and other financial charges    1601  1797 
 interest receivable on bank deposits     120  104
 interest receivable on interest rate derivatives     –  07
 total interest receivable and other financial income    120  111
 movement on fair valuation of interest rate derivatives    1337  755
 movement on fair valuation of interest rate financial liabilities designated as other 
 financial liabilities at fair value through profit or loss    1770  368 
 net movement on fair valuation of interest rate financial instruments   433  387
 net interest payable      1914  1299 
1
 comparatives have been restated to reflect the classification of the meatfree business as a discontinued operation
the fair value of interest rate swaps and other financial liabilities at fair value through profit or loss has increased from a £1987m liability 
at 31 december 2009 to a £2345m liability at 31 december 2010 resulting in a net movement of £358m for the year this constitutes 
an adverse change on fair value of £433m offset by a £75m cash payment relating to the restructuring of one swap within “other 
financial liabilities at fair value through profit or loss” with a nominal value of £150m the change in fair value in the year is due to a 
change in the yield curve offset by amortisation refer to note 22 the liability at 31 december 2010 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 lossprofit on ordinary activities
analysis of the creditcharge for the year
        continuing  discontinued
        operations operations total
        £m £m £m
 2010
 current tax
 — current year     30  31   01 
 — prior years     –   12  12 
 overseas current tax
 — current year     13  –   13 
 — prior years     –   14  14
 deferred tax note 23
 — current year     90  04  94 
 — prior years     143  22  165
 — adjustment to restate opening deferred tax at 270   46 10  56
 income tax creditcharge for the year    116  01   115
 2009 restated
1
 current tax
 — current year     13 13  – 
 — prior years     58 32  26
 overseas current tax 
 — current year     07   07   14 
 — prior years     02  09   07 
 deferred tax note 23
 — current year     151   157  06
 — prior years     27  22  49
 income tax chargecredit for the year    58   118 60
1
 comparatives have been restated to reflect the classification of the meatfree business as a discontinued operation
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financial statements
10 tax on lossprofit on ordinary activities continued
tax relating to items recorded in equity for continuing operations was
          year ended year ended
         31 dec  31 dec
         2010 2009
         £m £m
 deferred tax charge on reduction of corporate tax rate    36  – 
 deferred tax chargecredit on pension movements    124 1177
 current tax credit on pension movements     – 144
 deferred tax charge on losses relating to pensions    139 –
          299  1321
the tax charge for the year differs from the standard rate of corporation tax in the united kingdom of 280 2009 280the reasons 
for this are explained below
         year ended  year ended 
         31 dec  31 dec
         2010 2009
          restated
1
          £m   £m 
 lossprofit before taxation for continuing operations     983 418 
 tax creditcharge at the domestic income tax rate of 280 2009 280   275 117 
 tax effect of
 non deductible exceptional items     350  45 
 other disallowable items      07 03 
 adjustment to reflect the abolition of tax relief for industrial buildings   10 – 
 adjustment for sharebased pay     19  09 
 previously unrecognised losses utilised     –  29
 adjustment due to current year deferred tax being provided at 270   04 – 
 adjustment to restate opening deferred tax at 270    46 – 
 adjustments to prior years      143 87
 income tax creditcharge      116 58 
1
 comparatives have been restated to reflect the classification of the meatfree business as a discontinued operation
the finance no 2 act 2010 which was substantively enacted on 20 july 2010 includes legislation reducing the main rate of 
corporation tax from 280 to 270 from 1 april 2011 the 10 reduction for the 2011 financial year has been reflected in the financial 
statements for the year ended 31 december 2010 by restating the deferred tax liability at 31 december 2009 giving a reduction of 
£56m in addition the movements in deferred tax in the year have been reflected at 270 being the rate at which the liabilities are 
expected to reverse which has resulted in a £04m increase in the income tax credit
further reductions to the main rate of corporation tax are proposed to reduce the rate by 10 per annum to 240 by 1 april 2014 
however as these further reductions in the main rate of corporation tax have not been substantially enacted at the balance sheet date 
they are not reflected in the deferred tax recognised on the balance sheet
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notes to the financial statements continued
11  earnings per share
basic lossearnings per share has been calculated by dividing the profit attributable to ordinary shareholders of £993m loss 2009 
£252m profit by the weighted average number of ordinary shares of the company 
 year ended 31 dec 2010 year ended 31 dec 2009
  restated
1
      dilutive effect    dilutive effect
      of share    of share
     basic options diluted basic options diluted
 continuing operations
 lossprofit after tax £m    867 –   867 360  –  360 
 weighted average number of shares m  23980  –  23980  20790  –  20790 
 lossearnings per share pence  36 –   36 17  –  17 
 discontinued operations
 loss after tax £m    126 –   126  108 –  108
 weighted average number of shares m  23980  –  23980  20790  –  20790 
 loss per share pence   05 –   05  05 –   05
 total 
 lossprofit after tax £m   993 –   993  252  –   252 
 weighted average number of shares m  23980  –  23980  20790  –  20790 
 lossearnings per share pence  41 –   41  12  –   12 
1
 comparatives have been restated to reflect the classification of the meatfree business as a discontinued operation
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 2010 and 31 december 2009 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 previous year has been included in determining the weighted average for the 
previous year see note 26
no adjustment is made to the profit or loss in calculating undiluted and diluted lossearnings per share
         2010 2009
          number  number
 weighted average number of ordinary shares for the purpose of basic lossearnings per share  2398021581 2079022507
 effect of dilutive potential ordinary shares
 — share options      – –
 weighted average number of ordinary shares for the purpose of diluted lossearnings  
 per share      2398021581 2079022507
 
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 2009 
280 divided by the weighted average number of ordinary shares of the company 
trading profit is defined as operating profit before exceptional items amortisation and impairment 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
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financial statements
11 earnings per share continued
 year ended 31 dec 2010
       discontinued total  
       meatfree continuing discontinued
      continuing business  meatfree other total
      £m £m £m £m £m
 operating profitloss   931 121 810 02 808
 exceptional items   1250 250 1500 – 1500
 operating profitloss before exceptional items 2181 129 2310 02 2308
 pension financing credit   41 – 41 – 41
 fair value movements on foreign exchange 
 and other derivative contracts   20 – 20 – 20
 amortisation of intangible assets  789 33 822 – 822
 trading profitloss   2949 162 3111 02 3109
 less net regular interest payable  1452 02 1454 – 1454
 adjusted profitloss before tax  1497 160 1657 02 1655
 notional tax at 280   419 45 464 01 463
 adjusted profitloss after tax   1078 115 1193 01 1192
 average shares in issue m   23980 23980 23980 23980 23980
 adjusted eps pence   45 05 50 – 50
 net regular interest payable
 net interest payable   1914 02 1916 – 1916
 exclude exceptional writeoff of financing costs  16 – 16 – 16
 exclude fair value adjustments on interest 
 rate financial instruments   433 – 433 – 433
 exclude unwind of discount on provisions  13 – 13 – 13
 net regular interest payable   1452 02 1454 – 1454
 year ended 31 dec 2009 restated
12
       discontinued  total
       meatfree  continuing discontinued
      continuing business  meatfree other total
      £m £m £m £m £m
 operating profitloss   1717 48 1765 274 1491
 exceptional items   458 – 458 245 703
 operating profitloss before exceptional items 2175 48 2223 29 2194
 pension financing charge   18 – 18 – 18
 fair value movements on foreign exchange 
 and other derivative contracts   63 – 63 – 63
 amortisation of intangible assets  754 33 787 – 787
 trading profitloss   3010 81 3091 29 3062
 less net regular interest payablereceivable  1548 01 1547 – 1547
 adjusted profitloss before tax  1462 82 1544 29 1515
 notional tax at 280   409 23 432 08 424
 adjusted profitloss after tax  1053 59 1112 21 1091
 average shares in issue m   20790 20790 20790 20790 20790
 adjusted eps pence   51 03 54 01 53
 net regular interest payable
 net interest payablereceivable  1299 01 1298 01 1299
 exclude exceptional writeoff of financing costs  30 – 30 – 30
 exclude accelerated amortisation of debt issuance costs 98 – 98 – 98
 exclude fair value adjustments on interest 
 rate financial instruments   387 – 387 – 387
 exclude unwind of discount on provisions  10 – 10 01 11
 net regular interest payablereceivable  1548 01 1547 – 1547
1
  comparatives have been restated to reflect the classification of the meatfree business as a discontinued operation
2
   comparatives have been restated to reflect the change in classification of certain exceptional items as business restructuring  investment costs which 
have now been included within trading profit
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notes to the financial statements continued
12  discontinued operations
on 24 january 2011 the group announced that it had reached an agreement to sell its meatfree business to exponent private equity 
and intermediate capital group for £2050m before disposal costs the sale of the meatfree business is expected to complete during 
the first quarter of 2011 
the results of the meatfree business for the year ended 31 december 2010 are included in discontinued operations in the group’s 
consolidated income statement the results of discontinued operations for the year are as follows
         year ended year ended
         31 dec 31 dec
         2010 2009
          restated
1
         £m £m
 revenue       1288 1527 
 operating expenses      1411 1508
 operating lossprofit before loss on disposal     123 19 
 interest payable      06 02
 interest receivable      04  02 
 lossprofit before taxation     125 19 
 taxation charge       01  17
 lossprofit after taxation on discontinued operations for the year    126 02 
 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     126 108
1
 comparatives have been restated to reflect the classification of the meatfree business as a discontinued operation
included in the operating expenses above is an impairment charge of £250m recognised against the goodwill allocated to the  
meatfree cgu
the total loss in the previous year from discontinued operations included the results of the speciality bakery businesses 
during the year discontinued operations contributed to a net inflow of £183m 2009 £18m inflow to the group’s net operating cash 
flows and a £12m outflow to investing activities 2009 £74m outflow
13 assets and liabilities held for sale
         2010 2009
         £m £m
 noncurrent assets
  property plant and equipment     1142 18
  goodwill      1252 –
  other intangible assets      774 –
 current assets
  inventories      681 – 
  trade and other receivables      214 – 
 total assets held for sale      4063  18
 current liabilities
  trade and other payables      230 – 
 noncurrent liabilities
  deferred tax liabilities      258 – 
 total liabilities held for sale      488 – 
 net assets and liabilities held for sale     3575  18
as at 31 december 2010 the assets and liabilities relating to the meatfree and the east anglian canned grocery operations were held 
for sale in light of the decision to sell these businesses 
as at 31 december 2009 the nonoperational property at hull was classified as an asset held for sale this disposal was completed in 
early 2010 
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financial statements
14  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 2009   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
 additions    35 –  –  650 685
 disposals    13 –   05 16 34
 reclassifications   122 23 04 129  20 
 transferred from intangible assets  –  –  –  38  38 
 transferred to held for sale    279 –   27  1223 1529
 at 31 december 2010   1334 111 283 5426 7154
 aggregate depreciation and impairment
 at 1 january 2009   83 06 43 985 1117
 depreciation charge for the year  57 05 08 453 523
 disposals    –  –  –  17 17
 foreign exchange   –  –  –  01 01
 at 31 december 2009   140 11 51 1420 1622
 depreciation charge for the year  40 02 08 457 507
 disposals    03 –   01 05 09
 impairment   –  –  –  07 07
 reclassifications   05 28 13 – 20
 transferred from intangible assets  –  –  –  08 08
 transferred to held for sale   62 –  05 320 387
 at 31 december 2010   120 41 40 1567 1768
 net book value
 at 31 december 2009   1329 77 260 4686 6352
 at 31 december 2010   1214 70 243 3859 5386
the net book value of the group’s vehicles plant and equipment includes an amount of £212m 2009 £07m in respect of assets held 
under finance leases included in the additions of £685m for the year are £210m of additions of assets held under finance leases
on 31 january 2011 the group purchased £188m of plant and machinery that was held as a finance lease at 31 december 2010
at 31 december 2010 the group had entered into contractual commitments for the acquisition of property plant and equipment 
amounting to £86m 2009 £148m
the group’s borrowings are secured on the assets of the group including property plant and equipment
15  goodwill 
         2010 2009
         £m £m
 carrying value
 at 1 january       13713  13713 
 impairment — continuing        1250 – 
 impairment — discontinuing        250 – 
 transferred to held for sale       1252 – 
 at 31 december       10961  13713 
the cgu’s for the group are as follows 
         2010 2009
          £m  £m 
 grocery       8874 9480
 hovis       1854 1854
 brookes avana      233 1483
 meatfree       –  896
 net carrying value of goodwill     10961  13713 
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notes to the financial statements continued
15  goodwill continued
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 value in use calculations or fair value less costs to sell depending on the way in which the 
value of the cgu is expected to be recovered
an impairment assessment of the carrying value of the goodwill assigned to the meatfree business has been undertaken by assessing 
the fair value less costs to sell in light of the decision to dispose of this business the goodwill assigned to the meatfree business was 
tested for impairment prior to its classification as held for sale 
key assumptions
the key assumptions for calculating value in use are those relating to the cash flows longterm growth rate and discount rate
fair value less costs to sell in respect of the meatfree business has been determined by reference to the value of the offer received less 
the expected costs of disposing the business 
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 2009 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 2010 the pretax rate used to discount the forecasted cash flows has been determined to be 123 2009 118
impairment
a total impairment charge of £1500m has been recognised in the year 2009 £nil 
included within this charge is £1250m recognised against the goodwill allocated to the brookes avana cgu thereby reducing the 
carrying value of this cgu to its recoverable amount this impairment has arisen as a result of adverse trading conditions and an 
increase in discount rate as noted above any favourable change in assumptions in future periods will result in additional headroom  
however any adverse change would result in additional impairment 
a further charge of £250m is recognised against the goodwill allocated to the meatfree business and has been recorded within 
discontinued operations the residual goodwill attributable to the meatfree business of £646m has been transferred to assets held 
for sale 
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 hovis cgu’s carrying value this has not resulted 
in any impairment of the carrying value at 31 december 2010 as the cgu’s recoverable amount exceeds its carrying value by £556m 
however the cgu’s recoverable amount would be comparable to its carrying value if the discount rate were to increase by 10 any 
favourable change in assumptions in future periods will result in additional headroom
with regards to the remaining grocery cgu 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
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16  other intangible assets
       software brands customer
       licences trade marks relationships total 
       £m £m £m £m
 cost
 at 1 january 2009    885  9897  2430  13212 
 additions     276  – – 276 
 disposals     11 –  –   11
 at 31 december 2009    1150  9897  2430  13477 
 additions     179  –  –  179 
 transfer to property plant and equipment   38 –  –  38
 reclassifications    10  –  –  10 
 transferred to held for sale    –  965 –   965
 at 31 december 2010    1301  8932  2430  12663 
 amortisation
 at 1 january 2009    158  837  622  1617 
 charge for the year    97  343  347  787 
 disposals     11 –  –  11
 at 31 december 2009    244  1180  969  2393 
 charge for the year    132  343  347  822 
 transfer to property plant and equipment   08 –  –  08
 reclassifications    10  –  –  10 
 transferred to held for sale    –   191 –  191
 at 31 december 2010    378  1332  1316  3026 
 net book value 31 december 2009   906  8717  1461  11084 
 net book value 31 december 2010   923  7600  1114  9637 
during the year the group disposed of certain irish brands including yr and goodalls for £39m the net book value of these brands 
was £nil and as a result a gain on disposal of £39m was recognised 
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 £65m of internal costs 2009 £73m
as at 31 december 2010 the group’s borrowings are secured on the assets of the group including other intangible fixed assets
 
the material brands held on the balance sheet are as follows
        carrying value at   estimated
        31 dec 2010 useful life remaining
 brandtrade mark     £m  years
 bisto      1570  26
 hovis      1447  36
 oxo      979  36
 batchelors     827  26
 sharwood’s     741  26
 mr kipling     611  26
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17 investments
principal subsidiaries
    effective interest
   country of incorporation  in ordinary share
  or registration and   capital at 31 december
 name of subsidiary principal operations principal activity 2010 2009
 operating subsidiaries
 premier foods group limited united kingdom manufacture and distribution of ambient  100 100
   food products cakes bread own label 
   and other food products
 premier grocery products  republic of ireland distribution of ambient food products 100 100
 ireland limited  cakes own label and other food products
 premier foods group  united kingdom head office company 100 100
 services limited
 marlow foods limited united kingdom meatfree manufacturing 100 100
 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 united kingdom intermediate holding company 100 100
 limited
 premier foods investments united kingdom financing company 100 100
 limited
 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
 rhm limited united kingdom intermediate holding company  100 100
premier foods investments no 3 limited is a direct wholly owned subsidiary undertaking of premier foods plc all other subsidiary 
undertakings are held indirectly by premier foods plc
each of the principal subsidiary undertakings has the same year end 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 
on 24 january 2011 the group announced the sale of its meatfree business through the disposal of 100 of the shares in marlow 
foods limited 
18 inventories
         2010 2009
         £m £m
 raw materials      479 793
 work in progress      42 45
 finished goods and goods for resale      831 1302
 inventories      1352 2140
the borrowings of the group are secured against all the assets of the group including inventory 
19  trade and other receivables
         2010 2009
         £m £m
 trade receivables      3178 3082
 trade receivables impaired      91 77
 net trade receivables      3087 3005
 prepayments      259 223
 interest receivable      06 11
 other tax and social security receivable      160 132
 other receivables      51 99
 trade and other receivables     3563 3470
the borrowings of the group are secured against all the assets of the group including trade and other receivables
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20  trade and other payables
         2010 2009
         £m £m
 trade payables      3996 3862
 other tax and social security payable      54 78
 other payables and accruals      912 910
 trade and other payables      4962 4850
21 bank and other borrowings
         2010 2009
         £m £m
 due within one year
 secured senior credit facility — term note a     1000  1000 
 debt issuance costs      13 10
          987  990 
 bank overdrafts      306  345 
 total bank borrowings due within one year     1293  1335 
 finance lease obligations note 22     74  05 
 other unsecured loans note b      534  185 
 total borrowings due within one year     1901  1525 
 due after more than one year
 secured senior credit facility — revolving note a    200  679 
 debt issuance costs      65 50
          135  629 
 secured senior credit facility — term note a     10800  11799 
 debt issuance costs      135 117
         10665  11682 
 finance lease obligations note 22     117  09 
 other unsecured loans      01  – 
 total other      118  09 
 total borrowings due after one year     10918  12320 
 total bank and other borrowings     12819  13845 
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 presentation”
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 £1180m of term 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  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
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22 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  
subcommittee 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 the treasury risk management committee 
a subcommittee of the finance committee monitors and reviews the group’s foreign currency exchange commodity price and energy 
price exposures and recommends appropriate hedging strategies for each
a  market risk
i  foreign exchange risk
the group’s main operating entities’ functional currency 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 sterling 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 as  
at 31 december 2010 the group has euro denominated borrowings of €nil 2009 €223m 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 eur£     2010 2009
 year end       11601 11185
 average       11584 11142
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 2010 and 2009 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 2010
 net foreign currency monetary assets
 sterling      – 04 04
 euro      59 – 59
 us dollar      22 – 22
 other currencies     39 – 39
 total      120 04 124
 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
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in addition the group also has forward foreign currency exchange contracts outstanding at the yearend in order to manage the 
exposures above but also to hedge future transactions in foreign currencies the sterling nominal amounts outstanding are as follows
         2010 2009
         payable payable
         receivable receivable
         £m £m
 euro       426 460
 us dollar       369 469
 swiss franc      11 18
 swedish krona      15 27
 australian dollar      02 –
 total       767 884
if the us dollar were to weaken against sterling by 20 us dollar cents with all other variables held constant post tax profit would 
decrease by £33m 2009 £34m decrease
if the us dollar were to strengthen against sterling by 20 us dollar cents with all other variables held constant post tax profit would 
increase by £41m 2009 £49m increase
if the euro were to weaken against sterling by 10 euro cents with all other variables held constant post tax profit would decrease by 
£31m 2009 £17m decrease
if the euro were to strengthen against sterling by 10 euro cents with all other variables held constant post tax profit would increase by 
£30m 2009 £27m increase
this is primarily driven by the effect on the mark to market valuation of the foreign exchange derivatives of the group where the hedged 
rates differ from the spot rate 
if the euro were to weaken against sterling by 10 euro cents the foreign exchange movement taken to equity in relation to the net 
investment hedge would be an additional £nil 2009 £16m gain
if the euro were to strengthen against sterling by 10 euro cents the foreign exchange movement taken to equity in relation to the net 
investment hedge would be an additional £nil 2009 £20m loss
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 interalia 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 
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 2010 the reset rate was 07575 2009 0605
the weighted average interest rate for these derivative financial instruments is as follows
         weighted average 
          interest rate 
 currency sterling
 at 31 december 2010       57
 at 31 december 2009       60
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22 financial instruments continued
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 
 
    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
 2010
 derivative financial liabilities
 fixed rate  –  –  500 –  –  –  500
 cap and floor structure –  3500  –  –  –  –  3500
 other financial liabilities 
 at fair value through 
 profit or loss
 fixed rate  –  –  6750  –  –  –  6750
 other callable swaps –  1500  –  –  –  –  1500
    –  5000  7250  –  –  –  12250
 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
fixed rate derivative financial liabilities constitute one swap with a nominal value of £50m 2009 £175m which is a conventional interest 
rate swap maturing in 2013 it 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 2009 £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
in october 2010 the group restructured all of its five long dated swaps nominal value £400m and its two other callable swaps nominal 
value £275m into six new fixed rate swaps with a nominal value totalling £675m all maturing in 2013 these new fixed rate swaps are 
hybrid instruments comprising an underlying host with embedded derivatives and have been reclassified as “other financial liabilities at 
fair value through profit or loss” these swaps have an average fixed rate of 657 ranging between 455 and 9 of these swaps 
with a nominal value of £400m have callable options whereby the counterparty bank can cancel the swap at nil cost at certain specified 
dates £250m being currently callable and a further £150m becoming callable in september 2011 
the other callable swaps classified as “other financial liabilities at fair value through profit or loss” comprise a single swap with an optional 
break at august 2012 and a mandatory break at june 2013 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 hence the swap comprises both an underlying host as well as embedded derivatives the current fair value as at 31 december 2010 
is £324m 2009 £368m and based on the current yield curve the mark to market payment in august 2012 would be £294m  
2009 £326m
to compensate for the shorter maturity date these swaps have fixed bullet payments on maturity totalling £82m a portion of this 
becomes immediately payable up to a maximum of 25 if the group raises a bond before maturity
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 £389m as at 31 december 2010 2009 £469m include £141m relating to onerous leases 2009 £166m 
which are considered to be floating rate financial liabilities these cash flows are discounted where the effect is material 
at 31 december 2010 for every 50 basis points reduction in rates below the last floating reset rate of 07575 based on three month 
libor with all other variables held constant annualised net interest expense would decrease by £17m 2009 £28m increase 
at 31 december 2010 if interest rates were 200 basis points higher than the last floating reset rate of 07575 based on three month 
libor with all other variables held constant annualised net interest expense would increase by £68m 2009 £111m decrease 
the group’s other financial assets and liabilities are not exposed to material interest rate risk
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b  credit risk
the group’s principal financial assets are cash and cash deposits and trade and other receivables
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 2010 trade and other receivables of £499m 2009 £313m 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
 2010  2645 200 36 25 15 223 3144
 2009  2802 176 43 19 17 58 3115
at 31 december 2010 trade and other receivables of £91m 2009 £77m 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
         2010 2009
         £m £m
 at 1 january      77 60
 receivables written off during the year as uncollectable    33 24
 provision for receivables released     18 –
 provision for receivables impairment raised     65 41
 at 31 december       91 77
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
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
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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 2010
 trade and other payables 4908 –  –  –  –  –  4908
 bank overdraft 306 –  –  –  –  –  306
 bank term loan 1000 1000 9800 –  –  –  11800
 bank revolver facility 
 drawn down –  –  200 –  –  –  200
 finance leases 74 124 02 01 01 03 205
 other loans 534 01 –  –  –  –  535
 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 
 drawn down –  –  –  679 –  –  679
 finance leases 05  03   02   02   01   04  17
 other loans 185 –  –  –  –  –  185
the bank term loan and bank revolver facility are repriced quarterly to libor and other liabilities are not repriced before the  
maturity date
the group has £4209m 2009 £3876m of facilities available and not drawn as at 31 december 2010 expiring between 2 and 3 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 07575 2009 0605 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
 2010  449 375 313 – – – 1137
 2009  510 451 385 336 – – 1682
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 one of the swaps within “other financial liabilities at fair value 
through profit or loss” with a nominal value of £150m where the outflows include the expected mark to market value at the call date 
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    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 2010
 forward foreign exchange 
 contracts
 outflow  740 –  –  –  –  –  740
 inflow  735 –  –  –  –  –  735
 outflow on options 85 –  –  –  –  –  85
 inflow on options 86 –  –  –  –  –  86
 commodities
 outflow  131 12 –  –  –  –  143
 interest rate swaps
 outflow  224 124 10 –  –  –  358
 inflow  36 33 05 –  –  –  74
 other financial liabilities 
 at fair value through 
 profit or loss
 outflow  509 781 1240 –  –  –  2530
 inflow  105 143 166 –  –  –  414
    727 741 1079 –  –  –  2547
 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
the above table incorporates the contractual cash flows of the interest rate derivatives with floating rates of interest calculated based 
on libor of 07575 2009 0605 at the balance sheet date in addition the cash outflow between 2 and 3 years relating to “other 
financial liabilities at fair value through profit or loss” includes £82m of fixed payments on maturity of the swaps in lieu of the post 2013 
cash flows which have now been restructured note that a portion of this becomes immediately payable up to a maximum of 25 if the 
group raises a bond before maturity
the cash flows above are based on the contractual maturity of the swaps except for one swap within “other financial liabilities at fair 
value through profit or loss” with a nominal value of £150m which is based on an optional break date of august 2012 where the bank 
can call the swap at its mark to market value 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 2009 no 
contracts are expected to be called at nil prior to their contractual maturity based on the current yield curve
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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
         2010 2009
         book and  book and
         market value market value
         £m £m
 loans and receivables
 cash and cash equivalents      19 194
 trade and other receivables       3144 3115
 financial assets at fair value through profit or loss
 derivative financial instruments
 — forward foreign currency exchange contractscurrency options   07 20
 — commodity and energy derivatives     07 05
 financial liabilities at fair value through profit or loss
 derivative financial instruments
 — forward foreign currency exchange contractscurrency options   14 05
 — interest rate swaps      282 1619
 other financial liabilities at fair value through profit or loss
 — interest rate swaps      2063 368
 financial liabilities at amortised cost
 trade and other payables      4908 4772
 bank term loan      11800 12799
 bank revolver facility drawn down     200 679
 bank overdraft      306 345
 finance leases      191 14
 other       535 185
 interest payable      123 137
the following table presents the group’s assets and liabilities that are measured at fair value at 31 december 2010 using 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 	ar e	observable 	for	the	asset	or	liability 	either	dir ectly 	that	is	as	prices	or	
indirectly that is derived from prices level 2
•	 inputs	for	the 	asset	or	liability	that	ar e	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
         2010 2009
         level 2 level 2
 financial assets at fair value through profit or loss
 derivative financial instruments
 — forward foreign currency exchange contractscurrency options   07 20
 — commodity and energy derivatives     07 05
 financial liabilities at fair value through profit or loss
 derivative financial instruments
 — forward foreign currency exchange contractscurrency options   14 05
 — interest rate swaps      282 1619
 other financial liabilities at fair value through profit or loss
 — interest rate swaps      2063 368
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 £22m has been debited to the income statement in the year 2009 £186m debit 
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 £02m 2009 £117m credit 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 £1337m has been credited to the income statement in the year 2009 £755m credit 
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 £1770m has been 
charged to the income statement in the year 2009 £368m charge 
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financial statements
22 financial instruments continued
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
       2010 2009 2010 2009
       £m £m £m £m
 not later than one year    74 05 74 05
 later than one year but not later than five years  128 08 115 06
 later than five years    03 04 02 03
       205 17 191 14
 less future finance charges    14 03 na na
 present value of lease obligations   191 14 191 14
 less amounts due for settlement within 12 months    74  05
 amounts due for settlement after 12 months      117 09
it is the group’s policy to lease certain items of plant and equipment under finance leases the average lease term is two years the 
longest being 7 years 
for the year ended 31 december 2010 the average effective borrowing rate was 39 2009 82
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
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 2010 and 31 december 2009 were as follows
         2010 2009
         £m £m
 total borrowings      12819 13845
 less cash and cash equivalents     19 194
 net borrowings      12800 13651
 total equity      9895 10649
 total capital      22695 24300
 gearing ratio      56 56
under the group’s financing arrangement the group is required to meet two covenant 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 
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notes to the financial statements continued
23  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 270 2009 280 
except for an asset of £07m 2009 £10m relating to irish retirement benefit obligations where the local rate of 125 has been used
         2010 2009
         £m £m
 at 1 january       647   1931 
 creditedcharged to the income statement     127 103 
 debitedcredited to equity      299  1321
 transferred to held for sale      258 – 
 disposal of subsidiariesbusinesses     – 66
 at 31 december      561  647 
due to the unpredictability of future profit streams the group has not recognised deferred tax assets of £481m 2009 £481m relating 
to capital losses £93m 2009 £nil relating to uk corporation tax losses £nil 2009 £04m irish corporate tax losses and £348m 
2009 £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 2009      728   2544   3272 
 current year credit     06 148 154
 prior years credit     345 62 407
 disposal of subsidiariesbusinesses    66 –  66
 at 31 december 2009     311  2334  2645 
 prior years restatement of opening balances    11 83 94
 current year chargecredit     176 133 43 
 deferred tax chargecredit on discontinued activities   09 09 18
 prior year credit     299 –  299
 transfer to held for sale     64 203 267
 at 31 december 2010     104  1906  2010 
     retirement 
     benefit  sharebased financial
     obligation payments instruments losses other total
 deferred tax assets  £m £m £m £m £m £m
 at 1 january 2009  12 01 633 625 70 1341
 current year creditcharge  – 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
 prior years restatement of opening 
 balances 
 — to income statement  15 – 19 05 01 38
 — to equity  27 – – 05 04 36
 current year chargecredit  162 01 122 06 02 47
 prior years chargecredit
 — to income statement  – 03 14 124 15 156
 — to equity  – – – 139 – 139
 credited to equity  124 – – – – 124
 transferred to held for sale  – – – – 09 09
 at 31 december 2010  858 03 637 03 46 1449
 net deferred tax liability       £m
 at 31 december 2010       561
 at 31 december 2009       647
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
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financial statements
24  provisions for liabilities and charges
        restructuring  other total
        £m £m £m
 at 1 january 2009     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 
 utilised during the year     104 73 177
 additional charge in the year     28  60  88
 unwind of provision     08  05  13
 released during the year     –  04 04
 at 31 december 2010     216   173   389 
          2010
 analysis of total provisions       £m
 current       86  19  105
 noncurrent      130  154  284
         216   173   389 
          2009
 analysis of total provisions       £m
 current       89   70  159
 noncurrent       195   115  310
         284   185  469
at 31 december 2010 restructuring and redundancy provisions have been raised mainly in respect of the supply chain of the group’s 
irish operations the remaining provisions largely relate to onerous leases raised in previous years other than onerous lease provisions 
which range from 3 to 22 years it is anticipated that the majority of these provisions will be utilised during 2011
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 lease provisions which range from 3 to 23 years it is anticipated that the majority of these provisions will be utilised during 2010
other provisions at 31 december 2010 and 2009 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 51 the unwinding of the discount is charged to the income statement 
under interest payable
25  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 previous year and the premier foods ireland van sales scheme which was 
wound up during the year 
the exchange rates used to translate the overseas euro based schemes are £100  €11584 for the average rate during the year and 
£100  €11601 for the closing position at 31 december 2010
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 
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notes to the financial statements continued
25  retirement benefit schemes continued
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 the pension schemes hold a charge over the assets of the group
at the balance sheet date the combined principal actuarial assumptions used for all the schemes were as follows
         premier  rhm
         schemes schemes
         2010 2010
 discount rate      545 545
 inflation       345 345
 expected salary increases      445 330
 future pension increases      220 220
         premier  rhm
         schemes schemes
         2009 2009
 discount rate      580 580
 inflation       350 350
 expected salary increases      450 350
 future pension increases      220 220 
for the smaller overseas schemes the discount rate used was 550 expected salary increases of 300 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
 2010 life expectancy     schemes schemes total
 male pensioner currently aged 65    874 855 860
 female pensioner currently aged 65    894 877 881
 male nonpensioner currently aged 45    885 866 871
 female nonpensioner currently aged 45    906 889 893
        premier  rhm
 2009 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
        schemes schemes total 
 pension scheme assets     £m £m £m
 assets at 31 december 2010
 equities      987 4894 5881
 government bonds     153 67 220
 corporate bonds     930 3307 4237
 property      10 1205 1215
 absolutetarget return products    2410 3258 5668
 interest rate and inflation swaps    248 561 809
 cashother     390 9574 9964
 fair value of scheme assets    5128 22866 27994
 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
the schemes invest in interest rate and inflation swaps to protect from fluctuations in interest and inflation
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financial statements
25  retirement benefit schemes continued
the expected rates of return on assets were
        premier  rhm
        schemes schemes total
 2010 for 2011 return
 expected rate      78 67 69
 market value £m     5128 22866 27994
 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 85 2009 175 gain for premier schemes and a gain of 144 for rhm 
schemes 2009 02 loss 
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
 2010
 present value of funded obligations    7480 23723 31203
 fair value of plan assets     5128 22866 27994
 deficit in scheme     2352 857 3209
 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
the aggregate deficit has decreased by £1076m during the year primarily due to an increase in the fair value of plan assets offset by an 
increase in the defined benefit obligation this was primarily a result of a fall in discount rate assumption used which is based on the aa 
bond yield from 580 to 545 
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notes to the financial statements continued
25  retirement benefit schemes continued
changes in the present value of the defined benefit obligation were as follows
        premier  rhm
        schemes schemes total
        £m £m £m
 2010
 opening defined benefit obligation    6855 22730 29585
 current service cost     132 75 207
 past service credit     67 49 116
 interest cost     392 1291 1683
 actuarial loss     428 668 1096
 other incomeexchange differences    15 05 20
 curtailmentssettlements     – 15 15
 contributions by plan participants    51 108 159
 benefits paid     296 1080 1376
 closing defined benefit obligation    7480 23723 31203
 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 costsexchange 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
changes in the fair value of plan assets were as follows
        premier  rhm
        schemes schemes total
        £m £m £m
 2010
 opening fair value of plan assets    4771 20529 25300
 expected return     376 1414 1790
 administrative and life insurance costs    31 35 66
 actuarial gain     28 1532 1560
 assets disposed due to settlement    – 16 16
 contributions by employer     241 419 660
 contributions by plan participants    51 108 159
 other costsexchange differences    12 05 17
 benefits paid     296 1080 1376
 closing fair value of plan assets    5128 22866 27994
 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 incomeexchange differences    27 14 41
 benefits paid     285 1081 1366
 closing fair value of plan assets    4771 20529 25300
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financial statements
25  retirement benefit schemes continued
the history of the plans for the current and prior years is as follows
        premier  rhm
        schemes schemes total
        £m £m £m
 2010
 actuarial loss on plan liabilities     428 668 1096
 actuarial gain on plan assets     28 1532 1560
 net actuarial lossgain for the year    400 864 464
 cumulative actuarial loss     2650 317 2967
 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
the actual return on plan assets was a £3350m gain 2009 £693m gain which is £1560m more 2009 £925m less than the 
expected return on plan assets of £1790m 2009 £1618m at the start of the relevant periods 
the actuarial loss on liabilities of £1096m 2009 £3763m loss comprises a gain on member experience of £368m 2009 £89m gain 
and an actuarial loss due to changes in assumptions of £1464m 2009 £3852m loss
the net actuarial gains taken to the statement of comprehensive income were £464m 2009 £4688m losses these were £342m 
2009 £3367m loss net of taxation with tax at 270 for uk schemes and 125 for irish schemes
the group expects to contribute approximately £771m 2010 £660m to its defined benefit plans in 2011 £288m 2010 £280m of 
regular contributions and expenses and £483m 2010 £380m of additional contributions to fund the scheme deficits
the total amounts recognised in the group’s income statement are as follows
        premier  rhm
        schemes schemes total
        £m £m £m
 2010
 current service cost     132 75 207
 past service credit     67 49 116
 administrative and life insurance costs    31 35 66
 interest cost     392 1291 1683
 expected return on plan assets    376 1414 1790
 loss on curtailment     – 01 01
 total expenseincome     112 61 51
 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
 losses on curtailment     01 09 10
 total expenseincome     160 24 136
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notes to the financial statements continued
25  retirement benefit schemes continued
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 
2009 £11m represents contributions payable to the plans by the group at rates specified in the rules of the plans 
other post retirement benefits
the group does not provide any other post retirement benefits
26  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
noncontrolling interest reserve
the noncontrolling interest reserve represents the reserves attributable to noncontrolling interests
         2010 2009
 share capital      £m £m
 authorised
 3500000000 2009 3500000000 ordinary shares of 1 pence each   350 350
 issued and fully paid
 2398021581 2009 2398021581 ordinary shares of 1 pence each   240 240
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 
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 844 million 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 2010 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 635 million 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 
85 million 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 performance and vesting conditions of the scheme have been aligned with those of the coinvestment plan below since the 
company was positioned below the median tsr performance target the required performance conditions were not met and the 
2007 award lapsed in full in april 2010 
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financial statements
26  reserves and share capital continued
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 
 the vesting of matching awards is conditional on achievement against a combination of eps and tsr performance targets during the 
year the performance conditions were not met and so the 2007 cip award lapsed in full
 as set out in the directors’ remuneration report the company is proposing to adopt new executive remuneration arrangements in 
2011 and no further awards are expected under either the cip or ltip  
during the previous 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
 2010 2009
        weighted  weighted
        average  average
      year of   exercise price  exercise price
      expiry options p options p
 outstanding at beginning of year   1600782 162 2559360 162
 granted from placing and open offer and firm placing  –  –  128597 162
 forfeited during the year    40663 162 1087175 162
 outstanding at the end of the year  2014 1560119 162 1600782 162
 exercisable at the end of the year   1560119 162 1600782 162
 
the options outstanding at 31 december 2010 had a weighted average exercise price of 162 pence 2009 162 pence and a weighted 
average remaining contractual life of 36 years 2009 46 years
details of the share options of the premier foods savings related share option schemes are as follows
 2010 2009
        weighted  weighted
        average  average
        exercise price  exercise price
       options p options p
 outstanding at beginning of year   58771948 45 20783748 89
 granted from placing and open offer and firm placing  – – 854871 89
 granted during the year    47756192 15 50685147 36
 forfeited during the year    43062225 43 13551818 81
 outstanding at the end of the year   63465915 24 58771948 45
 exercisable at the end of the year   975564 186 9700 177
during the year 478 million 2009 507 million options were granted under the savings related share option schemes with a 
weighted average exercise price at the date of exercise of 152 pence per ordinary share 
the options outstanding at 31 december 2010 had a weighted average exercise price of 24 pence 2009 45 pence and a weighted 
average remaining contractual life of 26 years 2009 27 years
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notes to the financial statements continued
26  reserves and share capital continued
details of the share awards of the premier foods ltip are as follows
 2010 2009
        weighted  weighted
        average  average
        exercise price  exercise price
       awards p awards p
 outstanding at beginning of year   6130231 1 5035277 1
 granted from placing and open offer and firm placing  – – 128400 1
 granted during the year    4373565 1 3991150 1
 forfeited during the year    2000378 1 3024596 1
 outstanding at the end of the year   8503418 1 6130231 1
 exercisable at the end of the year   – – – –
during the year 44m 2009 40m 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 2010 had a weighted average remaining contractual life of 17 years 2009 19 years 
the weighted average fair value of awards granted during the year was 39 pence per award 2009 49 pence this was determined 
using a closedform approach as a proxy for a stochastic monte carlo valuation model which takes into account market based 
performance conditions except for the savings related share option scheme where the black–scholes model was used the significant 
inputs into the model were
         2010 2009
 weighted average share price p     32 41
 annual riskfree interest rate      17 25
 expected dividend at grant date      – –
 expected award life years      3 3
 expected volatility       37 37
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 
details of the share awards of the premier foods cip are as follows
 2010 2009
        weighted  weighted
        average  average
        exercise price  exercise price
       awards p awards p
 outstanding at beginning of year   8265837 1 4427418 1
 granted from placing and open offer and firm placing  – – 226684 –
 granted during the year    4520685 1 5236033 1
 forfeited during the year    1888282 1 1624298 1
 outstanding at the end of the year   10898240 1 8265837 1
 exercisable at the end of the year   – – – –
the awards outstanding at 31 december 2010 had a weighted average remaining contractual life of 21 years 2009 19 years the 
weighted average fair value of awards granted during the year was 39 pence per award 2009 48 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
         2010 2009
 weighted average share price  p     32 40
 annual riskfree interest rate      17 25
 expected dividend       – –
 expected award life years      3 3
 expected volatility       37 37
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 2010 the group’s continuing operations recognised an expense of £69m 2009 £26m related to all equitysettled share based 
payment transactions
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financial statements
26  reserves and share capital continued
a summary of the range of exercise price and weighted average remaining contractual life is shown below 
 31 dec 2010 31 dec 2009
      weighted   weighted
     number  average weighted number average weighted
     outstanding  remaining average outstanding remaining average
     at end  contractual life exercise price at end contractual life exercise price
     of the year years p of the year years p
 at 1 pence  19393324 19 1 14396068 22 1
 £001 to £099  62498685 26 22 55951636 28 40
 £100 to £200  2535683 22 171 4421094 19 170
 total   84427692 25 21 74768798 26 40
27  notes to the cash flow statement
reconciliation of operating profit to cash flows from operating activities
         year ended year ended
         31 dec 31 dec
          2010 2009
          restated
1
         £m £m
 continuing operations
 operating profit      931 1717
 depreciation of property plant and equipment     476 482
 amortisation of intangible assets     789 754
 impairment and gainloss on disposal of property plant and equipment   02 19
 gain on disposal of intangible assets     39 – 
 impairment of goodwill      1250 – 
 revaluation losses on financial instruments     20 63
 share based payments      69 26
 net cash inflow from operating activities before interest and tax and movements in working capital 3494 3023
 decrease in inventories      65 247
 increase in trade and other receivables     252 107
 increasedecrease in trade and other payables and provisions    251 478
 movement in net retirement benefit obligations     609 509
 cash generated from continuing operations    2949 2176
 discontinued operations      183 18
 cash generated from operating activities     3132 2194
 exceptional items cash flow      69 713
 cash generated from operations before exceptional items    3201 2907
1
 comparatives have been restated to reflect the classification of the meatfree business as a discontinued operation
additional analysis of cash flows
         year ended year ended
         31 dec  31 dec
         2010 2009
         £m £m
 interest paid      1435 1625
 interest received      125 108
 financing fees and other costs of finance     188 261
 return on financing      1498 1778
 sale of subsidiariesbusinesses     –   452 
reconciliation of cash and cash equivalents to net borrowings
         year ended year ended
         31 dec  31 dec
         2010 2009
         £m £m
 net outflow of cash and cash equivalents     131 473
 increasedecrease in finance leases     177 03
 decrease in borrowings       1217 4640
 other noncash changes      58 153
 decrease in borrowings net of cash      851 4017
 total net borrowings at beginning of year     13651 17668
 total net borrowings at end of year     12800 13651
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notes to the financial statements continued
27  notes to the cash flow statement continued
analysis of movement in borrowings 
       as at   other as at
       1 jan   noncash 31 dec
       2010 cash flow changes 2010
       £m £m £m £m
 bank overdrafts     345  39  –   306
 cash and bank deposits     194  170  05  19 
 net cash and cash equivalents   151 131  05 287
 borrowings — term facilities     12799  999  –  11800
 borrowings — revolving credit facilities    679  471   08  200
 finance leases     14  42   219 191
 other     185 350 –  535
 gross borrowings net of cash
1
    13828 1031   216 13013
 debt issuance costs     177   97   61  213 
 total net borrowings
1
     13651 1128   277 12800
1
  borrowings excludes derivative financial instruments and other financial liabilities fair valued through profit or loss
28  operating lease commitments
the group has lease agreements in respect of property plant and equipment for which future minimum payments extend over a number 
of years
 2010 2009
        plant and  plant and
       property equipment property equipment
       £m £m £m £m
 within one year    130 146 147 149
 between two and five years    462 184 501 282
 after five years    744  01  847 21
 total operating lease commitments   1336 331 1495 452
the group sublets various properties under noncancellable lease arrangements
29  capital commitments
         2010 2009
         £m £m
 contracts placed for future capital expenditure not provided in the financial statements  86 148
30  contingencies
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 2010 other contingencies and guarantees in respect of the parent 
company are described in note 8 of the parent company financial statements
1855004premierf backindd   120 09032011   112618 wwwpremierfoodscouk stock code pfd 121
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financial statements
31  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 70 to 72
         year ended year ended
         31 dec 31 dec
         2010 2009
         £m £m
 salaries and other short term benefits      44   51 
 post employment benefits      –   03 
 termination benefits      –   13 
 share based payments      15   09 
 total        59  76 
wp x investments limited “warburg pincus” is considered to be a related part of the group by virtue of its 158 2009 157 equity 
shareholding in premier foods 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
32  post balance sheet events
on 24 january 2011 the group announced that it had reached an agreement to sell its meatfree business to exponent private equity 
and intermediate capital group for £2050m before disposal costs the sale completed on 7 march 2011 
the results of the meatfree business for the year ended 31 december 2010 are included in discontinued operations in the group’s 
consolidated income statement
at 31 december 2010 the group has recognised an impairment charge of £250m against the carrying value of its goodwill and as a 
result no material loss on disposal is expected in the group’s 2011 results 
on 31 january 2011 the group purchased £188m of plant and machinery that was held as a finance lease at 31 december 2010
on 8 february 2011 the group announced that it had reached an agreement to sell its east anglian canned grocery operations 
which is part of the grocery segment to princes limited for £1822m before disposal costs the sale is subject to receiving european 
commission merger control clearance and shareholder consent the sale is expected to complete during the second quarter of 2011 
the results of the east anglian canned grocery operations for the year ended 31 december 2010 are included within continuing 
operations as it is not a separate operating segment at 31 december 2010 the assets of the operations were recognised within assets 
held for sale no material profit on disposal is expected from the sale in the group’s 2011 results 
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premier foods plc company financial statements
the following statements reflect the financial position of the company premier foods plc as at 31 december 2010 and 2009 these financial 
statements have been prepared in accordance with generally accepted accounting practice 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
         2010 2009
        note £m £m
 assets
 fixed assets
 investments     3  17497   17437 
 deferred tax assets       06   03 
 current assets
 debtors      4  6367   6245 
 cash at bank and in hand      03  03 
 total assets      23873  23688 
 liabilities
 current liabilities 
 creditors amounts falling due within one year    5 519  470
 total liabilities       519  470
 total assets less total liabilities       23354   23218 
 equity
 capital and reserves
 called up share capital     6  240   240 
 share premium account     6  11247   11247 
 merger reserve     6 10275   10275 
 profit and loss account     6 1592   1456 
 total shareholders’ funds       23354   23218 
the notes on pages 123 to 125 form an integral part of the financial statements
signed on behalf of the board of directors who approved the financial statements on 7 march 2011
  
robert schofield jim smart
director and  director and
chief executive officer chief financial officer
1855004premierf backindd   122 09032011   112618 wwwpremierfoodscouk stock code pfd 123
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financial statements
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 share based payments which are incorporated 
using fair value the profit for the year of £67m 2009 £81m 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 wholly owned subsidiaries 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
share based 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 2009 £nil
at 31 december 2010 the company had 3 employees 2009 3 and their remuneration totalled £27m 2009 £31m this excludes the 
company’s 6 2009 7 nonexecutive directors whose remuneration totalled £06m 2009 £06m
3  investments
         2010 2009
         £m £m
 shares in subsidiary undertakings
  at 1 january      17437 17415
 additions       60 22
 at 31 december      17497 17437
on 1 january 2010 the group undertook an internal reorganisation and the company entered into a deed of gift under which the 
company transferred the shares in rhm limited to a subsidiary undertaking premier foods investments limited 
during 2010 a capital contribution of £60m 2009 £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 17 on page 100 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
1855004premierf backindd   123 09032011   112618 premier foods plc  annual report and accounts 2010  124
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notes to the company financial statements continued
4 debtors
         2010 2009
         £m £m
 amounts falling due within one year
 amounts owed by group undertakings     6367 6245
 total debtors falling due within one year     6367 6245
the above balances are not subject to interest rate risk as they are interest free with the exception of £2959m 2009 £2839m which 
attracted interest at a rate of libor plus 30 2009 libor plus 1875 carrying value approximates fair value
5 creditors
         2010 2009
         £m £m
 amounts falling due within one year
 amounts owed to group undertakings      424   408 
 current tax       95   62 
 total creditors falling due within one year     519 470
the above balances are not subject to interest rate risk as they are interest free with the exception of £358m 2009 £344m which 
attracted interest at a rate of libor plus 30 2009 libor plus 1875 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 2009    85   7606   10275   1349   19315 
 share issue a    155   3884  –  –   4039 
 share issue costs a   –   243 –  –   243
 profit for the year   –  –  –   81   81 
 share based payments b   –  –  –   26   26 
 at 31 december 2009    240   11247   10275   1456   23218 
 profit for the year   –  –  –   67   67 
 share based payments b   –  –  –   69   69 
 at 31 december 2010    240   11247   10275   1592   23354 
share capital
         2010 2009
         £m £m
 authorised
 3500000000 2009 3500000000 ordinary shares of 1 pence each   350 350
 issued and fully paid
 2398021581 2009 2398021581 ordinary shares of 1 pence each   240 240
a share issue
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 
b share based payments
2010 and 2009
these costs reflect the cost of the company’s share option schemes in operation further details are available per note 26 of the group’s 
consolidated financial statements in respect of the company the charge relating to its employees amounted to £09m 2009 £06m
1855004premierf backindd   124 09032011   112619 wwwpremierfoodscouk stock code pfd 125
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financial statements
7 operating lease commitments
at 31 december 2010 the company had annual commitments under noncancellable operating leases in respect of land and buildings 
as follows
 
         2010 2009
         £m £m
 after five 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 2010 is £17bn 2009 £18bn
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
9 post balance sheet events
on 24 january 2011 the group announced that it had reached an agreement to sell its meatfree business to exponent private equity 
and intermediate capital group for £2050m before disposal costs the sale completed on 7 march 2011 
the results of the meatfree business for the year ended 31 december 2010 are included in discontinued operations in the group’s 
consolidated income statement
at 31 december 2010 the group has recognised an impairment charge of £250m against the carrying value of its goodwill and as a 
result no material loss on disposal is expected in the group’s 2011 results 
on 31 january 2011 the group purchased £188m of plant and machinery that was held as a finance lease at 31 december 2010
on 8 february 2011 the group announced that it had reached an agreement to sell its east anglian canned grocery operations 
which is part of the grocery segment to princes limited for £1822m before disposal costs the sale is subject to receiving european 
commission merger control clearance and shareholder consent the sale is expected to complete during the second quarter of 2011 
the results of the east anglian canned grocery operations for the year ended 31 december 2010 are included within continuing 
operations as it is not a separate operating segment at 31 december 2010 the assets of the operations were recognised within assets 
held for sale no material profit on disposal is expected from the sale in the group’s 2011 results
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shareholder information
electronic communications with shareholders
in 2008 shareholders agreed that the company could use its website 
as its main method of communication with shareholders if you are 
looking for information about our heritage our social environmental 
and ethical responsibilities our approach to governance financial 
reports or the latest press releases please go to our website  
wwwpremierfoodscouk 
furthermore much of the information requested from our 
shareholder helpline can be found in the investor section of our 
website shareholders can also sign up for news alerts to receive 
an email when news on the company is released these include 
additional financial news releases throughout the year which are not 
mailed to shareholders
shareholders can also register at wwwshareviewcouk or contact 
the registrar contact details below to receive an email notifying them 
of new company publications shareview 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 agm
information made available on the website does not constitute 
part of this annual report the directors are responsible for the 
maintenance and integrity of the financial information on our website 
the information has been prepared under the relevant accounting 
standards and legislation
sharegift
shareholders with a small number of shares the value of which 
makes it uneconomic to sell them may wish to consider donating 
them to charity through sharegift a registered charity administered 
by the orr mackintosh foundation find out more at  
wwwsharegiftorg or call 44 020 7930 3737
managing your shares
the company’s register of shareholders is maintained by our 
registrar equiniti shareholders with queries relating to their 
shareholding should contact equiniti directly using the details below
duplicate documents
many shareholders still receive duplicate documentation from having 
more than one account on the share register if you think you fall into 
this group and would like to combine your accounts please contact 
equiniti
shareholder faqs
notifying the company of a change of address
shareholders should notify equiniti in writing of any change if shares 
are held in joint names the notification must be signed by the first 
named shareholder
notifying the company of a change of name
to notify the company of a change of name please notify equiniti in 
writing a copy of any marriage certificate or change of name deed 
should be provided as evidence of the name change
transferring premier foods plc shares
transferring shares to someone else requires the completion of a 
stock transfer form these forms are available by calling equiniti 
lost premier foods plc share certificates
shareholders who have lost their share certificates or have had their 
certificates stolen should inform equiniti immediately by phone 
agm 2011
date  time 28 april 2011 at 1000 am
venue haberdashers’ hall 18 west smithfield london ec1a 9hq
documents on display
the articles of association memorandum of the company and 
other documents referred to in this annual report are available for 
inspection at the registered office
key contacts
registered office and head office
premier foods plc premier house centrium business park griffiths 
way st albans hertfordshire al1 2re tel 44 01727 815850
for consumer relations tel 0800 0327111
registrar 
equiniti aspect house spencer road lancing west sussex  
bn99 6da tel 0871 384 2030 or 44 0121 415 7047  
wwwequiniticom
for shareholders with hearing difficulties a text phone number is 
available 0871 384 2255 or 44 0121 415 7028
investor relations 
gwyn tyley premier foods plc premier house centrium business 
park griffiths way st albans hertfordshire al1 2re  
email investorrelationspremierfoodscouk  
tel 44 01727 815850
general counsel  company secretary 
suzanne wise
auditors
pricewaterhousecoopers llp  1 embankment place london 
wc2n 6rh
lawyers
slaughter and may one bunhill row london ec1y 8yy
principal bankers
the group’s principal bankers are barclays bank plc bayerische 
landesbank bnp paribas lloyds tsb bank plc rabobank 
london and the royal bank of scotland plc
corporate brokers
citigroup global markets ltd citigroup centre 25 canada square 
canary wharf london e14 5lb
rbs hoare govett ltd 250 bishopsgate london ec2m 4aa
1855004premierf backindd   126 09032011   112619 wwwpremierfoodscouk stock code pfd 127
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other information
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 see 
note 11 to the financial statements for 
a full definition
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
articles
articles of association — the 
constitution of the company 
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
cashgenerating 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
code
the 2008 combined code on 
corporate governance published by 
the frc
chief operating decision maker
a function or person that is 
responsible for allocating resources 
to and assessing the performance of 
operating segments
companies act 
the companies act 2006 
company the
premier foods plc
dsb 
premier foods plc new deferred 
share bonus
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
eu
european union
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
frc
financial reporting council
free cash flow
the amount of money that 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
ftse 250 index
index comprising of the 250 largest 
companies listed on the london 
stock exchange in terms of their 
market capitalisation
gdas
guidance daily amounts
group the
the company and its subsidiaries
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
new ltip
premier foods plc new longterm 
incentive plan to be proposed at the 
agm 2011
mark to market
the recording of a financial asset or 
liability to reflect its fair value rather 
than its book value
ned
nonexecutive director
net regular interest payable
the net interest after excluding non
cash items namely exceptional write
off 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
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
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
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
save as you earn 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
trading profit
operating profit before exceptional 
items amortisation and impairment 
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 in pension assets 
administration costs and interest 
costs on pension liabilities
treasury shares
shares as defined by the companies 
acquisitions of own shares treasury 
shares regulations 2003
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
1855004premierf backindd   127 09032011   112619 premier foods plc  annual report and accounts 2010  128
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notes
1855004premierf backindd   128 09032011   112619 all financial metrics refer to the continuing group plus the meatfree business 
unless otherwise indicated for the purposes of the financial statements the 
meatfree business is disclosed within discontinued operations
1 trading profit is defined as operating profit before exceptional items 
amortisation and impairment 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 expected 
return on pension assets administration costs and interest costs on 
pension liabilities
2 source iri infoscan total grocery outlets 52 weeks ended  
25 december 2010
3 pro forma adjusted profit is defined as trading profit less net regular 
interest payable less a notional tax charge at 280 2009 280 
adjusted in 2009 as if the equity raising and refinancing in march 2009 
had been in place for the whole year
 net regular interest payable is defined as net interest after excluding non
cash 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
4 pro forma adjusted earnings per share is defined as pro forma adjusted 
profit divided by the weighted average number of ordinary shares of 
the company adjusted in 2009 as if the equity raising and refinancing in 
march 2009 had been in place for the whole year
5 net debt is defined as net borrowings less obligations due under finance 
leases
6 comparatives have been restated to reflect the classification of the 
meatfree business as a discontinued operation and to reflect the change 
in classification of certain exceptional items as business restructuring and 
investment costs which have now been included within trading profit
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 financial 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 profit 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
premier foods cover webindd   4 09032011   113109 wwwpremierfoodscouk
premier house
centrium business park
griffiths way
st albans
hertfordshire
al1 2re
t 01727 815850
f 01727 815982
premier foods cover webindd   1 09032011   113123


Summary:
 premier foods plc  annual report and accounts 2010  12
1855004  09032011 proof 13
last year we set out the group’s business strategy and in 
addition at the half year we provided details of our financial 
strategy i would now like to report on the significant progress 
we have made in 2010 in implementing these strategies and 
also our plans for 2011 
strategy
introduction
our vision is to be “the best in british food with brands that you 
really love”
the group’s business strategy is
• 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 and
• to deliver efficiency benefits such that supply chain costs  
and overheads are held flat or decline while volumes grow
the group’s financial strategy is
• to focus on cash generation and to reduce average debt to 
ebitda to 325 or less
• to derisk the swap portfolio and pension arrangements and
• to diversify our sources of funding
despite the continuing difficult consumer environment we have been 
able to progress with both our business and financial strategies in 2010
note all financial metrics refer to the continuing group plus 
the meatfree business unless otherwise indicated for the 
purposes of the financial statements the meatfree business is 
disclosed within discontinued operations
branded sales
branded sales are up 31 in volume versus category markets 
down 08 sales revenue was down 03 on 2009 in line with the 
market within this total drive brands are up 30
 
competitive advantage through scale
in the year procurement gains from working more strategically with 
our suppliers added £16m to the grocery trading profit 
improve efficiency
grocery manufacturing costs in the year were reduced by 8 being 
6 from efficiencies ahead of our 4 per annum strategic target 
and 2 from deflation in energy costs in group operating expenses 
savings of £17m were found chiefly from efficiencies in distribution 
cash generation
recurring cash flow was £124m versus the £100m target set 
out in our strategy the outperformance was generated by good 
management of working capital including reducing stock holding 
by five days’ cover to 36 £16m of recurring cash flow was used to 
enable the swap restructure to take place being £8m of settlement 
of a mark to market liability and £8m of fee for bank approval after 
other nonrecurring items amounting to £5m this left £103m which 
has been used to pay down bank debt 
derisking swap portfolio and pensions
the swap portfolio was restructured to remove the elements 
which did not provide an economic hedge to the bank debt 
these elements were diverting cash flow by increasing short term 
interest rates and were building up a large cash call risk in 2012 by 
restructuring the swap portfolio these risks have been removed 
the short term interest cost has been reduced and the cash call has 
been fixed at the then current mark to market and deferred to the 
end of the current financing period ie 2013
the closure of the final salary pension fund has been agreed with the 
trade unions and pension trustees and will be implemented in the 
second half of 2011 the previous final salary offer is replaced with a 
market competitive career average scheme for existing pension fund 
members and a money purchase scheme for new starters
in conjunction with the trustees of the pension fund we have also 
agreed a programme to increase the amount of hedging between the 
fund investments and liabilities this will reduce the volatility of the deficit 
diversifying sources of funds
the swap restructure removed a considerable risk from the group’ s 
balance sheet which would otherwise have prevented the group 
obtaining a credit rating we have now obtained a credit rating of ba2 
stable outlook from moody’ s and bb stable outlook from both fitch 
and standard  poors it is our intention to access the debt capital 
markets and raise a bond during the course of 2011 this will diversify 
our sources of funding and reduce our reliance on bank debt
proposed disposal of meatfree and canning 
businesses
after the year end the group agreed the sale of its meatfree 
chief executive’s statement
our strategy 
 focus
robert schofield 
chief executive officer
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our business
1855004  09032011 proof 13
business and its east anglian canned grocery businesses for a total 
of £387m equivalent to 76 times the combined ebitda of £51m 
after costs and pension contributions of around £17m and subject to 
working capital adjustments on completion the remaining proceeds 
of around £370m will be used to reduce bank facility borrowings 
the disposals will leave the group’ s branded sales percentage largely 
unchanged at 664 but both the gross margin and the trading profit 
margin will be improved the main effect will be in the grocery business 
where the branded sales percentage will increase from 741 to 
823 the nonbranded grocery sales will be halved and the brands 
sold are largely in the core and defend categories 
the disposal will contribute materially to our objective of deleveraging 
on a pro forma basis the group’ s net debt will be below £900m and 
net debtebitda would be around 287 times in addition average 
debtebitda would be reduced to around 372 times which is well on 
the way to achieving the group’ s stated target of 325 times
once the disposals are complete the group expects to have 
recurring cash generation of at least £80m per annum the group 
believes that the ebitda growth prospects are largely unchanged 
as the meatfree business had growth prospects whereas the 
canning business faced more difficult markets 
initially the effect of the disposals will be to dilute eps however the 
group believes this is a temporary effect firstly the initial interest 
saving is at the marginal cost of bank funds once a bank refinancing 
is undertaken the saving will increase to the average rate secondly 
the simplification of the business achieved by the disposals will facilitate 
improving processes which will result in cost savings 
corporate social responsibility
last year we also published our first stand alone csr report setting 
out the progress we had made against a number of objectives and 
also setting out our future plans to strengthen our approach to csr 
in 2010 we have also made significant progress in aligning our 
commitment to csr with our overall business strategy to deliver 
longterm and sustainable business growth details of our key 
achievements are set out on pages 36 to 43
plans for 2011
in 2010 we have made significant progress in resolving the balance 
sheet issues which have up until now weighed heavily on the 
business with the financial path now clear and the journey well under 
way we can focus our resources more firmly on building our brands 
to achieve this we have now  implemented a new organisation 
structure in which tim kelly was appointed chief operating officer 
with effect from january 2011 
this structure will
• manage all brands together rather than separately by division 
allowing for better prioritisation of resources
• establish a group marketing function facilitating the sharing 
of consumer insight and maximising value from marketing 
spend
• concentrate more resources behind innovation in our drive 
and core brands leading to a bigger contribution from new 
and improved products
• manage the defend brands and nonbranded businesses 
separately to ensure their contribution is maximised and 
• consolidate back office functions to simplify back office  
processes and facilitate cost reduction
we will elaborate on these plans at an investor conference in  
may 2011
outlook
promotional activity increased significantly in 2010 for 2011 we do 
not believe that it will continue to escalate at the same rate but we 
are cautious about whether it will decline very quickly 
commodity inflation has been running at mid single digit 
percentages this has required us to increase prices for our 
products at this level we believe that inflation is manageable 
in 2010 the most dramatic effect of pricing and commodity inflation  
was felt in the significant fall in profitability in our brookes avana 
business we are talking constructively with marks and spencer to  
agree new product ranges and revised pricing and supply arrangements 
which we believe will return the business to profitability in 2011
our focus in 2011 will be
• to continue to take branded market volume share
• to grow our percentage of grocery branded sales from new 
and improved products as our innovation pipeline matures 
• to continue our drive for efficiencies and
• to generate at least £80m of recurring cash flow
we would expect our focus to result in the group showing progress in 
2011 without any further deterioration in the consumer environment
robert schofield
chief executive officer
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