premier foods plc 
annual report and accounts for the year ended 31 december 2011
stock code pfd
the best in british food
premier foods plc   annual report and accounts for the year ended 31 december 2011 premier foods plc  annual report and accounts 2011  
the best in  
british food
premier foods is home to some of the nation’s favourite food 
brands every year over 99 of british households buy a 
premier foods’ product so you’re likely to find us in every 
british kitchen and on every british table
delivering on our promises
in october 2011 we announced our five priorities to help stabilise the business
“you’re likely to find us in every british 
kitchen and on every british table”
to read more about premier foods visit
wwwpremierfoodscouk
cautionary statement 
the purpose of this annual report is to provide information to shareholders of premier foods plc “the company” the company its direc
tors 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 should be construed as a profit forecast
trademarks 
the group’s trademarks are shown in italics the group has an exclusive worldwide licence to use the loyd grossman name on certain 
products erin is a trademark of erin foods ltd and was used under licence during the year
in this annual 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
cover images
our eight power brands —  
hovis mr kipling ambrosia 
sharwood’s loyd grossman 
oxo bisto and batchelors
investment behind eight power brands — seven power brands back on tv in the 
first half of 2012
strengthen capabilities particularly sales  
and marketing
— new leadership team is now in place
divest selected businesses to sharpen focus — the brookes avana and irish brands 
disposals completed
rightsize and reduce the group’s cost base — overhead cost reduction target doubled 
to more than £40m by 2013
agree a refinancing package with the banks — consent to an extended refinancing 
package obtained our business performance governance financial statements
01
summary
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performance
headlines 01
the best in british food 02
chairman’s statement 04
group at a glance 06
chief executive’s statement 08
— our four strategic pillars 10
our business
brands 14
partners 18
focus 20
sustainability 22
operating review 26
— divisional review 28
financial review 32
— refinancing 32
governance
board of directors and group executive 38
corporate governance report 42
— risk management 53
— other statutory information 58
— shareholder information 61
directors’ remuneration report 64
financial statements
contents 77
independent auditors’ report 78
consolidated financial statements 80
notes to the financial statements 85
company financial statements 132
notes to the company financial statements 133
glossary 136
summary
headlines
consent obtained for refinancing package
on 12 march 2012 we announced we had obtained unanimous 
consent from our banking syndicate swap counterparties and 
pension schemes to the terms of a refinancing package that will 
allow the group to execute its new growth strategies 
	 banking facilities of £14bn extended to june 2016
	 banking covenants reset to reflect strategic plan
	 interest rate swaps converted to additional bank term loan
	 pension schemes to defer deficit contributions until january 
2014
2011 full year results
sales for ongoing business
2
 declined by 34 to £18110m 
reflecting the challenging consumer environment and the effect 
of previous customer disputes
	 trading profit
3
 for ongoing business £1737m 
	 impairment in bread division
4
 of £2820m resulted in a loss 
after tax from continuing operations of £2300m for the year 
	 disposals of noncore businesses realised total net proceeds 
of £3940m
	 net debt
5
 of £9951m at 31 december 2011
growth strategies
growth strategies aligned around “best in british food” vision
	 marketing investment behind eight power brands will double 
in 2012 with sustainable increases planned in subsequent 
years 
	 focus on building collaborative relationships with key 
customers to drive mutual growth
	 targeting gross 4 yearonyear supply chain savings and 
doubling of overhead savings to more that £40m by 2013 
	 longterm approach to deliver sustainable shareholder value
notes
1
 all results referred to relate to continuing operations unless otherwise stated
2
 the results of the group excluding the meatfree business east anglian canned 
grocery operations brookes avana and irish brands businesses are shown as ongoing 
business to illustrate business performance following recent divestment activity in the 
financial statements the results of the meatfree and brookes avana businesses are 
shown as discontinued operations the results of the east anglian canned grocery 
operations are included within continuing operations as a separate operating segment 
and titled ‘disposed of canning operations’ the results of the irish brands business 
are included within continuing operations within the grocery segment
3
 trading profit is defined as operating profit before refinancing costs restructuring 
costs and losses associated with disposals 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
4
 the previously named ‘hovis’ division has been renamed ‘bread’ divison
5
 net debt is defined as net borrowings
 these sections make up the directors’ report and set out the information on 
the group’s principal activities together with a review of the developments and 
performance of the group including financial performance in accordance with section 
417 of the companies act 2006
2011 premier foods plc  annual report and accounts 2011  
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made in britain
the food britain loves
every nation has their favourite food and we are no 
different what could be more british than
 roast beef and yorkshire puddings covered in 
steaming hot bisto gravy
 a spicy curry made with one of our authentic 
sharwood’s sauces
 ploughman’s made with hovis wholemeal and tangy 
branston pickle
 apple crumble with thick creamy ambrosia custard
95

of our products  
produced in britain
1
 billion
bisto meal occasions  
each year
we are britain’s biggest branded food producer
 operating from over 40 manufacturing sites we span 
the country from plymouth all the way to glasgow
 this means almost all our products are produced in 
britain
 and because we produce our food in the uk it’s food 
you can trust and also has fewer food miles which is 
good for the environment too
the best in british    food our business performance governance financial statements
03
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britain’s favourite 
food brands
supporting britain
our brands have been enjoyed by british households for 
generations
 five of our eight power brands are over 100 years old
 to remain popular these brands have had to be 
resilient adapting to changing consumer requirements 
through innovation
 our eight power brands hold no1 or no2 positions in 
their respective categories
we employ around 12000 people which makes us 
one of the largest food manufacturers in britain
 we also support the british economy by sourcing 
as many of our ingredients goods and services 
from the uk as we can supporting british farmers 
and british jobs
 it’s important to know where your food comes 
from and by sourcing locally we have effective 
traceability of our ingredients 
the best in british    food
99

of british households purchase a 
premier foods’ product each year
82

of our ingredients goods and 
services sourced in the uk premier foods plc  annual report and accounts 2011  
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chairman’s statement
a stable platform for  
sustainable growth
“the business has significant underlying 
strengths and there are many reasons to be 
positive as we look forward to 2012 and beyond”
ronnie bell
chairman
2011 was an extremely challenging year for premier foods while the 
results have been disappointing the new management team put in place 
during the second half of the year has moved quickly to stem the decline 
in profitability and to obtain consent for a refinancing package which 
will provide a stable platform for future growth i believe the business has 
significant underlying strengths and there are many reasons to be positive 
as we look forward to 2012 and beyond
2011 overview
trading in 2011 was affected by a number of significant issues poor 
underlying economic conditions had a significant impact on consumer 
confidence and spending whilst at the same time we experienced 
higher commodity inflation our price increases were not able to 
recover all of the increased input costs and this together with an 
increase in promotional activity had an impact on margin in addition 
we experienced strong competition from branded and nonbranded 
competitors which was compounded by the impact of customer 
disputes as a result sales and profitability were significantly below our 
expectations and this in turn put pressure on our banking covenants
stabilising the business
in july we announced the appointment of michael clarke as chief 
executive officer given the challenges facing the group it was essential 
that the board appoint an outstanding executive with the experience 
and track record necessary to stabilise and turn around the business i 
am delighted that michael agreed to join premier foods and believe his 
skill experience and success in managing and growing brands will be 
invaluable in returning the group to sustainable growth 
a huge amount has been achieved in a short space of time since joining 
in august michael has moved very quickly to review the business to 
understand the underlying issues and to formulate a compelling growth 
strategy the consent received for the refinancing is a major milestone 
as it removes uncertainty surrounding the group’ s financing and provides 
a solid platform to allow management to focus fully on managing and 
growing the business other key achievements include
	 the appointment of a new senior management team with 
experience in brand management and turnaround situations 
	 stabilising the decline in profitability
	 completion of a business plan to deliver longterm sustainable 
growth
	 focused investment behind our eight power brands
	 reducing costs simplifying the business and improving 
competitiveness
	 divestment of noncore businesses to add focus and 
	 building more collaborative longterm relationships with 
customers 
consent obtained for a new refinancing package
the group has obtained unanimous consent to the terms of a re
financing package from its banking syndicate swap counterparties 
and pension schemes that will allow the group to execute its future 
growth strategies 
the banking facilities will be extended to june 2016 and the 
covenants reset to reflect our strategic plan under the agreement the 
interest rate swaps will be converted to additional bank term loan and 
the amortisation payment schedule amended with payments deferred 
until mid 2014 in addition the group’s pension schemes have agreed 
to defer deficit contributions until january 2014 
we appreciate the support of both our banking syndicate and 
pension funds in establishing these new arrangements which 
provide the space needed to restore growth
further information on the refinancing can be found on pages 32 
and 33
best in british food
our vision is to be the “best in british food” as britain’s biggest 
branded food producer premier foods remains fundamentally a 
sound business with a portfolio of great british brands passionate 
employees and a significant manufacturing footprint
many of our brands have a strong heritage and remain the product 
of choice for british consumers — 99 of households buy at 
least one of our products each year our products also compare 
favourably against competitors for taste and quality — 96 of 
our top 60 skus test at parity or superior when tested against 
competitor products in blind tasting
in addition we support the british economy both as a major 
employer in the manufacturing industry with factories across the 
country and also by supporting the british businesses and farmers 
that supply 82 of our ingredients goods and services
more information on the four strategic pillars that are aligned around our 
vision are set out in the chief executive’ s statement on pages 8 to 11 our business performance governance financial statements
05
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who has extensive knowledge of working with global brands was 
appointed as chief financial officer during the year we also announced 
a number of changes within senior management — details of the new 
group executive team are set out on pages 40 and 41 i believe we 
have in place a strong and effective board and senior management 
team and look forward to working with them over the coming years 
in april 2011 robert schofield notified the board of his intention to 
retire and he stepped down as ceo in august having led the group 
for ten years in addition following changes in our management 
structure tim kelly and jim smart resigned as directors in 
november and december respectively and we wish them well for 
the future finally in august we announced with great sadness that 
paul kitchener our group technical and innovation director had 
passed away after a long fight against illness
governance
your board is committed to the principles of good governance and 
transparency we continue to review and evaluate the structure and 
quality of our governance arrangements with the aim of ensuring they 
remain robust and in line with best practice details of the work of the 
board and its committees and the overall governance framework are 
covered in detail in the governance section of this report 
36
see governance  
on page
2012 outlook
the economic outlook for the uk remains challenging however 
with consent obtained for a new refinancing package we now 
have a solid platform to stabilise the business in 2012 and a strong 
business plan from which to build momentum much has been 
achieved in a short space of time under michael clarke’s leadership 
and whilst there remain many challenges i am confident we have the 
right management team in place that will deliver sustainable growth 
and shareholder value going forward
ronnie bell
chairman
increasing efficiency and investing in growth 
over the year we have continued to make good progress with our 
efficiency initiatives targeting 4 yearonyear gross savings in 
manufacturing controllable costs and we announced early in 2012 
that we intend to double overhead savings to more than £40m 
by 2013 from the £20m we announced at the 2011 half year 
investment in the business is increasingly focused on supporting 
growth and productivity for example in 2011 we completed a 
£55m investment in an automated packing line at our mr kipling 
bakery in stoke the new line is able to pack 47000 slices per 
hour in the new “snap pack” format this is one of several major 
investments in our business and underlines our commitment to 
investing in innovation and efficiency to drive growth for 2012 we 
have also announced a doubling of our marketing investment with 
the majority focused behind our power brands
environmental initiatives
we have continued to build on our strong track record in addressing 
environmental concerns of particular note is our commitment to 
sourcing 100 rspo certified sustainable palm oil by 2015 in the 
2011 world wildlife fund ‘palm oil buyers scorecard’ we scored top 
marks achieving a 9 out of 9 rating in 2011 we also moved to sourcing 
100 free range eggs across the entire mr kipling range strong 
progress has additionally been made across all our environmental kpis 
including co
2
 emissions water usage and waste to landfill further 
details can be found on pages 22 and 23 of this annual report and also 
in our 2011 sustainability report which is available on our website 
to read more about sustainability
wwwpremierfoodscouksustainability
employees
as a business we are dependent on the hard work creativity and 
commitment of our employees over the year many achievements have 
been recognised particularly within the area of manufacturing excellence 
where premier foods was named manufacturer of the year at the 
european strategic manufacturing awards beating entries from across 
the european manufacturing industry continued improvements have 
also been achieved in terms of the health and safety resulting in 39 of our 
sites receiving rospa gold awards for workplace safety
as we complete the planned divestment of noncore businesses 
and also reduce our cost base to reflect the smaller size of the 
business we recognise that this is inevitably a difficult time for 
employees however we believe these initiatives are in the longterm 
interests of both the business and employees as they will result in a 
stronger more profitable business in the future
board changes
in addition to the appointment of michael clarke as chief executive 
officer there have been a significant number of changes in 
management in the year 
david wild joined the board in march 2011 and brings with him a 
wealth of experience in the retail industry in december mark moran 
significant increase in investment behind our eight power brands in 2012 premier foods plc  annual report and accounts 2011  
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group at a glance
britain’s biggest branded  
food producer
grocery
we operate from over 
40 sites across the uk
bread
meatfree
the grocery division encompasses a wide variety of ambient grocery 
sectors including cakes ambient desserts cooking sauces asian meal 
solutions stocks gravies soups spreads home baking and pickles the 
division also incorporates premier’s business in the republic of ireland
 
power brands
mr kipling ambrosia sharwood’s loyd grossman bisto oxo and batchelors
support brands
include branston hartley’s homepride robertson’s bird’s angel delight smash 
and paxo 
the bread division operates principally in the wrapped bread market 
and in addition manufactures nonbranded 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 nonbranded bagged flours
 
power brand
hovis
support brands
include granary and mother’s pride
meatfree manufactured and sold products under the quorn and 
cauldron brands
on 24 january 2011 the group announced the sale of its meatfree 
business to exponent private equtiy and intermediate capital group 
this disposal was completed on 7 march 2011 for the purposes of the 
financial statements the results of the meatfree business are disclosed 
within discontinued operations
group
during 2011 the group was organised into 
three segments grocery bread and disposed 
of canning operations
group trading profit
£188m
group revenue
£2000m
26
see operating review  
on page
revenue
grocery
£1122m
56 of total
bread
£711m
36 of total
disposed of 
canning operations
£167m
8 of total
branded
£1376m
69 of total
nonbranded
£624m
31 of total
branded mix
grocery
5210
45 of total
bread
5521
47 of total
disposed of 
canning operations
988
8 of total
number of employees our business performance governance financial statements
07
summary
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premier foods is britain’s biggest branded food producer with revenue 
of £20 billion we manufacture distribute and sell a wide range of 
branded and nonbranded foods the business employs around 
12000 people and operates from over 40 sites across the uk and 
ireland our sites are dedicated to manufacturing high quality great 
tasting food products which consumers know and love
we have a wide portfolio of great british brands many of which 
are market leaders and household favourites our business is 
focused behind eight power brands hovis mr kipling ambrosia 
sharwood’s loyd grossman bisto oxo and batchelors in addition 
we have a portfolio of many other iconic british food brands and also 
an extensive nonbranded food business which manufactures food in 
partnership with many of the uk’s leading food retailers
as part of our strategy to focus investment behind our eight power 
brands we have undertaken a number of business disposals in 2011 
during the year we completed the disposal of our meatfree east 
anglian canned grocery and brookes avana businesses in addition 
we announced the sale of four irish brands which completed in 
january 2012 
for the purposes of the financial statements the results of the meat
free and brookes avana businesses are disclosed within discontinued 
operations
disposed of canning operations brookes avana
on 8 february 2011 the group announced the sale of its east  
anglian canned grocery business to princes limited this disposal was 
completed on 23 july 2011 for the purposes of the financial  
statements the results of the canning operations up to the date of 
disposal have been disclosed as a separate operating segment
brookes avana was our retailer branded chilled ready meal  
cake and desserts business 
on 8 december 2011 the group announced the sale of the  
brookes avana business to 2 sisters foods group and this 
disposal was completed on 30 december 2011 for the purposes 
of the financial statements the results of the brookes avana 
business are disclosed within discontinued operations
revenue
£1122m
£1213m 10
£1122m 11
trading profit
£180m
£221m 10
£180m 11
 6 lifton
 7 middleton
 8 moreton
  9 stoke
10 worksop
 1 ashford
 2 bury
 3 carlton
 4 histon
 5 knighton
 manufacturing sites
 distributionlogistics centres
 1 corby
 2 rugby
 3 wimblington
 4 wisbech
 1 dublin — premier foods  
ireland
ireland
5
2
1
3
7
8
9
6
10
1
2
1
4
4
3
revenue
£711m
£688m 10
£711m 11
trading profit
£3m
£35m 10
£3m 11
 1 avonmouth
 2 belfast
 3 birmingham
 4 eastleigh
 5 erith
 6 forest gate
 bakeries
 mills
 1 andover
 2 barry
 3  gainsborough wheat maltings
 4 glasgow
 5 manchester
 6 selby
 7 southampton
 8 wellingborough
 7 glasgow
 8 greenford
 9 leicester
 10 leicester — charnwood
 11 mitcham — sebon
 12 nottingham
 13 wigan
 1 bradford
 2 dagenham
 3 mendelsham
 4 mossend
 5 newbridge — fleming howden
 6 plymouth
 depotsrdc
 
7
5
2
1
3
8
11
9
12
4
6
13
1
2
1
3
4
5
4
6
7
8
2
6
5
3
10
branded 
mix
branded revenue
£915m 82
nonbranded revenue
£207m 18
branded 
mix
branded revenue
£372m 52
nonbranded revenue
£339m 48 premier foods plc  annual report and accounts 2011  
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chief executive’s statement
our vision is to be  
“the best in british food”
2011 was clearly a challenging year for premier foods like many 
others in the industry we felt the impact of significant commodity 
inflation and an unprecedented decline in consumer spending 
unfortunately our price increases were not able to fully recover 
higher costs and were largely negated by higher promotional 
spending which affected margins in addition as consumers 
looked for greater value we were unable to maintain demand for 
our brands due to reduced marketing investment retail customer 
support for our brands consequently declined in favour of our 
competitors and own label a situation that was exacerbated by the 
effect of customer disputes 
 
our trading results for the year tell the story they also reflect certain 
underlying challenges facing the business despite its significant 
scale the group has been unable to fully exploit revenue and cost 
synergies the business remains complex with insufficient focus and 
has additionally suffered from a lack of investment behind its brands 
and a shortterm tactical approach to trading the need to service 
significant debt has compounded these challenges
since joining the company last august my focus has been on 
addressing these challenges we have a great portfolio of brands 
that remain hugely popular and employees who are passionate 
about the business to help build on these strengths we have 
put in place a new leadership team that has significant collective 
experience our initial focus is to continue the stabilisation of the 
business to refocus the portfolio and to invest in our future growth 
last october we announced five priorities to help stabilise the 
business and we are gaining momentum against each of these
	 invest behind eight power brands — seven of our power brands 
will be back on tv with advertising in the first half of 2012 and 
we will invest significant promotional spend behind the eighth
	 strengthen capabilities particularly sales and marketing — new 
leadership is now in place and we are reorganising to improve 
effectiveness
	 divest selected businesses to sharpen focus — the brookes 
avana and irish brands disposals have been completed
	 rightsize and reduce the group’s cost base — we have 
announced a doubling of previous overhead cost reduction 
programmes to achieve more than £40m savings by 2013
	 agree a refinancing package with the banks — we have 
obtained consent to an extended refinancing package
i’m delighted that we have been able to reach a positive outcome with 
our banking swap counterparties and pension scheme partners on 
a new financing package the consent for this refinancing package 
represents a strong sign of confidence and support for the business 
and is great news for our employees and all of our stakeholders it 
also helps us draw a line under the performance of 2011 and will 
allow us to move forward in implementing our new growth strategies 
our growth strategies are aligned around four pillars to achieve our 
vision to be the ‘best in british food’
	 brands — we plan to invest behind our eight power brands of 
hovis ambrosia mr kipling sharwood’s loyd grossman bisto 
oxo and batchelors detailed brand plans have been developed 
that leverage the ‘britishness’ of our brands as well as stepup 
our innovation in product design packaging and promotions 
our marketing spend behind these brands will be doubled in 
2012 with further sustained increases in marketing investment in 
subsequent years to help focus our efforts further we will seek 
to divest selected noncore businesses
“i am convinced we have the right team  
in place to turn this business around”
michael clarke
chief executive officer
“seven of our eight power 
brands will be back on tv 
in the first half of 2012”
new tv campaign features our sharwood’s chefs travelling the country 
to discover what makes a great british curry our business performance governance financial statements
09
summary
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	 partners — we will build more collaborative relationships with 
all of our business partners specifically we will develop joint 
business plans with key customers to drive mutual growth we 
also plan to develop specific pricing and promotional strategies 
for the fast growing discounter and wholesale segment as well 
as improve our revenue growth management through optimising 
our trade investment systems and processes
	 focus — through improving our focus we plan to drive further 
efficiency and effectiveness our supply chain will continue to 
target yearonyear savings of around 4 of manufacturing 
controllable costs and capital expenditure will be skewed to 
supporting growth and productivity programmes in addition we 
have announced that we will accelerate planned reductions in 
overhead costs the £20m overhead savings by 2013 that we 
announced at the 2011 half year will now be doubled to more 
than £40m over the same time period the costs to achieve 
these savings are approximately £21m the majority of which are 
expected to be taken in 2012
	 sustainability — we intend to take a longer term approach 
to the business by ensuring we act sustainably in everything 
we do we will continue investing in our brands people and 
partnerships driving high environmental and ethical standards 
and expanding betterforyou choices as part of our portfolio 
together this will help us deliver sustainable results
we recognise that the consumer environment remains challenging 
consumers will continue to focus on value and convenience and 
competition will again be intense there is no doubt that we will 
need to work hard to make our brands stand out nevertheless our 
performance thus far in 2012 is in line with our expectations i’m 
convinced we have the right team to turn this business around and i 
am very positive about our future i look forward to updating you as 
we progress
michael clarke
chief executive officer
£40m
reduction in overhead 
costs targeted by 2013
consent has been obtained for a landmark  
4½ year refinancing package
i am delighted that we have been able to reach a positive 
outcome with our banking syndicate swap counterparties and 
pension schemes this has been a key priority of mine since 
joining the group and represents a strong sign of confidence 
and support for the business its strategies and growth plans 
it also provides us with a stable base from which to focus 
on executing our growth strategies and is great news for 
our employees and all of our stakeholders the refinancing 
package is subject to the formalities of final documents being 
signed and this is expected by the end of march 2012
headlines
	 banking facilities of £14bn extended to june 2016
	 banking covenants reset to support strategic plan
	 interest rate swaps converted to additional bank term loan
	 pension schemes to defer deficit contributions until january 
2014
the existing term loan £733m and revolving credit facility 
£500m previously due to mature on 31 december 2013 
will be extended to a new maturity date of 30 june 2016 the 
current applicable bank margin of 225 will increase to 325 
with effect from 1 january 2014 
additionally the current amortisation payment schedule has 
been amended with amortisations to occur semiannually from 
30 june 2014 
banking covenants of net debtebitda and ebitdainterest 
remain in place they will continue to be tested biannually and 
have been reset to reflect the group’s strategic plan 
the total interest rate swap portfolio including previously 
restructured swaps will be restructured into additional term loan 
totalling approximately £199m 
the group has negotiated and obtained a commitment to a 
new securitisation programme relating to certain receivable 
balances available up to an amount of £120m 
subject to the implementation of the new refinancing 
arrangements the trustees of the group’s pension schemes 
have agreed to defer deficit contribution payments c£47m 
pa until 1 january 2014 and there will be no increase in the 
agreed deficit contributions before 2016
further details of the refinancing can be found in the financial 
review on pages 32 and 33
12
for more information 
about our business 
see page premier foods plc  annual report and accounts 2011  
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brands
we have a great portfolio of brands 
many of which hold leading positions 
in their categories we are focusing 
on those that have the best growth 
prospects
	 invest and grow eight power brands 
 we have selected eight power brands that we 
will focus our resources behind to drive growth 
 hovis mr kipling ambrosia sharwood’s  
loyd grossman bisto oxo and batchelors 
	 support brands 
 our support brands and customer brands have 
an important role to play they can help build 
category share and help utilise our existing 
asset base
	 focused disposals
 we will actively seek to dispose of selected 
noncore businesses to deleverage the 
business and align our portfolio behind our key 
focus areas
14
read more 
on page
partners
for our business to be successful 
we must develop strong longterm 
relationships with all our partners 
these relationships must be sustainable 
and offer value to both sides
	 engage our employees
 we have a new management team in 
place and will increase focus on employee 
engagement at all levels remove organisational 
complexity and simplify the reward structure to 
drive the delivery of our strategy
	 connect with consumers
 we must connect with consumers by 
producing products that taste great 
are relevant to today’s eating habits are 
convenient have innovative packaging and 
address consumer concerns around health  
and wellness
	 win with customers
 our focus going forward will be to move from a 
transactional approach to developing longterm 
sustainable relationships with customers
	 collaborate with stakeholders
 we will continue to collaborate and develop 
strong relationships with a wide range of other 
stakeholders including suppliers and investors 
18
read more 
on page
our four strategic    pillars our business performance governance financial statements
11
summary
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focus
the business has a good track record 
of increasing manufacturing efficiency 
and cost cutting we will continue our 
efforts to simplify our structure and 
processes this will further reduce our 
cost base increase efficiency and make 
us more competitive
	 lean structure
 as we resize the business following the 
rationalisation of our portfolio we will also 
reduce our cost base to reflect the smaller size 
of the business
	 simple processes
 continue to target simplification across the 
business
	 quality health  safety
 as we target cost savings it is vital that we 
remain totally focused and committed to food 
quality and health  safety
	 drive efficiency and effectiveness through 
productivity and service
 cost savings through manufacturing 
controllable costs and procurement will be 
invested to support growth
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sustainability
ultimately our vision is to be a 
sustainable business in everything  
we do 
	 results financial and productivity metrics
 we believe our strategy will return us to 
profitable growth equally important it will lay 
the foundations for a more stable sustainable 
business which will deliver shareholder value
	 better choice portfolio and innovation
 we will offer a wider choice of products to meet 
consumers’ requirements for healthier options 
and different portion sizes 
	 environmental programmes
 we will build on the strong track record of 
environmental improvement and ethical 
sourcing
	 scale
 we will leverage the breadth and scale of our 
portfolio with our customers our suppliers and 
other business partners
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our four strategic    pillars premier foods plc  annual report and accounts 2011  
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our business governance financial statements
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performance summary our business
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brands 14
partners 18
focus 20
sustainability 22 premier foods plc  annual report and accounts 2011  
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so what makes a power brand
we have a great portfolio of brands that operate in a number of 
categories many of our brands have strong market positions and 
high brand awareness to maximise our growth in the future we will 
focus on the ones that have the best growth prospects these are 
our eight power brands
power brands account for around 68 of our branded revenue 
and operate in large categories they are major players within their 
respective categories holding either no1 or no2 positions most 
importantly they have the potential to expand into umbrella brands 
and broader categories
we are significantly increasing our marketing investment behind 
the eight power brands supporting new innovation in terms of 
product packaging and promotions and ensuring our brands stand 
out in store
we will double 
our marketing 
investment in 2012
key statistics
•	 heritage	dates	back	to	1886	when	miller	
richard “stoney” smith developed 
a method for preserving wheat germ 
goodness in bread
•	 t oday	hovis is britain’s 4th largest 
grocery brand
•	 ar ound	8	million	hovis loaves produced 
each week
•	 deliver ed	daily	to	supermarkets	acr oss	
the uk
key statistics
•	 mr kipling’s “exceedingly good cakes” 
first	appear ed	in	1967
•	 britain’ s 	 no1 	 cake 	 brand 	 with 	 many	
classics like cherry bakewells french 
fancies 	 angel 	 slices 	 and 	 viennese 	 whirls
•	 the 	 entir e 	 range 	 contains 	 no 	 artificial	
colours flavours or hydrogenated fats
•	 420	million	mr kipling slices baked  
each year
key statistics
•	 ambrosia was established in devon  
in 1917
•	 britain’ s	favourite	custar d
•	 fr esh	milk	still	deliver ed	to	our	devon	
creamery every day
•	 made	with	no	artificial	colours	flavours	
or preservatives
•	 naturally	low	in	fat
focus for 2012
 only hovis has 100 british wheat and 
no artificial preservatives
 strong marketing support
 new product launch for hovis farmers 
loaf
 improvements to supply chain 
efficiency
focus for 2012
 high impact relaunch
 new pack design across the whole 
range  
 investment focused on innovative new 
“snap pack” design
 new product launches including new 
sweet shop range and british fancies
focus for 2012
 major launch based around new individual 
pudding pots to suit all occasions 
 opportunity to drive usage — ambrosia 
offers dairy goodness throughout the 
day
 focus on rice as a “healthy everyday 
snack”
category position
no2 
wrapped bread
category position
no1 
ambient 	 cake
category position
no1 
ambient 	 desserts
brands
power brands
are at the heart of our strategy
power brand revenue
£871m	675
support brand revenue
£419m 325
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key statistics
•	 founded	by	j	a	sharwood	in	1890
•	 britain’ s	leading	asian	meal	brand
•	 compr ehensive	range	of	indian	chinese	
and thai meal time solutions
•	 21	million	sharwood’s curries eaten  
each year
key statistics
•	 first	sauces	launched	by	loyd	in	1995
•	 range	now	includes	italian	indian	thai	
and	mexican	sauces
•	 recipes	specially	cr eated	for	those	who	
share a passion for flavour
•	 all	tomato	based	sauces	contain	one	of	
your 5 a day
key statistics
•	 aah bisto — established in 1908 — 
britain’s favourite gravy brings families 
and food together 
•	 range	now	includes	bisto best bisto 
granules instant pour overs and bisto 
sauce	mixes
•	 new	instant	r oast	bisto gravy launched  
in 2011
•	 used	in	mor e	than	1	billion	food	
occasions each year
key statistics
•	 invented	ar ound	1840	the	oxo name 
was created in 1900
•	 oxo was an official sponsor of the 
london	olympics	in	1908
•	 range	extended	to	include	“spag	bol”	
recipe cube
•	 new 	 r educed 	 salt 	 cube 	 launched 	 in 	 q4	
2011
•	 15	million	oxo cubes made each week
key statistics
•	 established	by	william	batchelor	in	1895
•	 first	cup a soups introduced in 1972
•	 range	includes	super noodles savoury 
rice and pasta ’n’ sauce
•	 250	million	mugs	of	cup a soup 
consumed each year in britain
focus for 2012
 new marketing campaign behind 
sharwood’s great british curry 
 extension of sharwood’s tikka range 
 major new launch of new sharwood’s 
wrap kits
 strong marketing support and instore 
execution
focus for 2012
 strong marketing support
 brand relaunch and new tv campaign 
— “share a lifetime’s passion”
 support behind range extension under 
loyd for one
focus for 2012
 strong marketing support
 return of successful bisto “aah night”  
campaign 
 focus on increasing midweek 
consumption and seasonal activity
focus for 2012
 strong marketing support
 focus behind oxo reduced salt and 
oxo squeezy 
focus for 2012
 batchelors savoury rice and pasta ’n’ 
sauce restaging
 major support behind “fuelling britain” 
promotion across the range in 2012
 new product launch of batchelors  
deli box
category position
no1
category position
no2
category position
no1 
ambient 	 gravy
category position
no1 
dry stock
category position
no1 
easy eating
asian 	 cooking 	 and 	 sauces	
accompaniments
ambient 	 wet 	 cooking	
sauce
 comprises dry soup savoury noodles savoury pasta pot snacks 
and savoury rice
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brands continued
we intend to leverage our power brands by extending them into 
broader target markets 
an umbrella brand is a brand that has the potential to expand across 
a number of categories – for example sharwood’s has expanded to 
cover sauces noodles breads poppadums crackers and now  
wrap kits 
in addition we have the opportunity to extend brands into broader 
areas – for example by using new packaging formats mr kipling has 
the potential to move from a traditional teatime treat to lunch boxes 
and impulse channels
connecting with consumers
to connect with consumers we will leverage our “britishness” which is an important point of difference with many of the 
multinational companies we compete with 
we will expand into umbrella brands and broader categories
“significant opportunity exists to grow through extending 
brands into umbrella brands and broader categories”
case study hovis 100 british wheat
of the uk’s three major bread brands only hovis has 100 
british wheat and no artificial preservatives we are changing all 
our bread packs to incorporate the union jack behind the hovis 
logo and an eyecatching consistent blue band to flag our work 
with britain’s farmers to develop premium wheat grown right here 
in the uk to produce loaves with flour made from 100 british 
wheat and our “no artificial preservatives” message 
the new packaging will be supported by tv advertising  
based on the muchloved “go on lad” story featuring  
a young boy’s journey through time highlighting 
quintessential british scenes such as the queen’s  
silver jubilee in a year which will be focused on  
being british
in addition april 2012 sees the launch of hovis british farmers 
loaf forecast to be our biggest launch of the year the loaves are 
a more premium proposition with a traditional shape flour dusted 
and hovis embossed for a unique homebaked appearance which 
taps into consumer trends of nostalgia and tradition
case study launch of new sharwood’s wrap kits
in 2012 sharwood’s launched six innovative new sharwood’s 
wrap kits in two of the nation’s favourite cuisines — indian and 
chinese 
this is another example of how the sharwood’s brand can 
extend into new areas the meal kits sector is the fastest 
growing in the cooking sauces and accompaniments category 
increasing at around 8 yearonyear the kits also recognise 
the growing popularity with consumers for “part homemade 
foods”  governance financial statements
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performance summary our business
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communicate with consumers through consistent advertising innovation and promotions 
in addition over the next three years we will increase our marketing investment significantly for 2012 spend will be doubled and the majority 
of this will focus on our eight power brands
support and customer brands 
our support brands and customer brands have an important role 
to play helping to complement and protect our power brands they 
can also help build our category share and provide total category 
solutions as well as helping us utilise our existing asset base finally 
they help to build and maintain relationships with customers our 
focus in this area is on operational efficiency and effectiveness with 
an emphasis on selected categories where we have capacity and 
capability to compete 
focused disposals
over the course of 2011 we announced the disposal of a number 
of businesses in order to increase focus behind our eight power 
brands to simplify the business and also to pay down debt we will 
continue to target selected disposals where we believe they support 
this strategy 
case study batchelors fuelling britain
batchelors is giving consumers the chance to win free fuel for a whole year in the biggest onpack promotion ever run on the brand 
batchelors fuelling britain the promotion which starts in march 2012 runs across the entire batchelors range of products and every 
week gives shoppers the chance to win free fuel for a year or a free tank of fuel every single day to take part shoppers simply go online 
and enter a unique code that is printed on promotional packs
batchelors fuelling britain looks to engage and excite consumers around 
a subject close to their hearts and purses namely soaring fuel prices 
research has shown shoppers are three times more 
likely to buy into a “free fuel” promotion than any 
previous batchelors onpack promotion the 
promotion will be advertised on radio as well as 
through activity in and around stores such as car 
park banners posters and cash machine screens
align with consumer trends for value convenience betterforyou choices and meal solutions
case study mr kipling snap packs
following major investment we have launched an innovative new 
style of packaging for mr kipling cakes which is set to unlock the 
untapped potential of cake by making it more relevant to the way 
consumers choose their sweet treats the two key areas driving 
growth are snacking and lunch boxes 
mr kipling is seen as a traditional teatime treat but not always as 
something you can easily slip into a lunch box or grab for a quick 
snack the new style “snap pack” packaging for mr kipling slices 
presents them individually wrapped in a more snackingfriendly 
format for consumers who like to eat their snacks on the go
in trials 78 of consumers rated the snap packs as better than the previous pack the new format was preferred for its attractiveness 
ease of opening and visibility of product they also said they would be more likely to eat them as a snack or pop them in their lunch box
to read more about our brands visit
wwwpremierfoodscoukourbrands premier foods plc  annual report and accounts 2011  
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partners
developing longterm 
partnerships
for our business to be successful we must develop strong long
term relationships with all our partners these relationships must be 
sustainable and offer value to both sides
winning with customers
we have a broad customer base that operates across a number of 
channels including multiple retail wholesale cash  carry impulse 
retail and international
collaborating with customers is a vital part of delivering our overall 
growth strategy our focus going forward will be to move from 
a transactional approach to developing longterm sustainable 
relationships with customers to do this we will create a clear and 
compelling strategy for each category and brand that will maximise 
the opportunities for category growth 
we have built resource within the sales function to develop a 
strong commercially aware team in addition we are improving our 
information systems to improve modelling and analytical capabilities 
to enable us to optimise pack price and promotional architecture
for our major customers we will develop longterm joint business 
plans this process involves
	 working with our customers to understand their categories and 
their strategy
	 developing ways that we can align to their strategic objectives
	 developing plans to grow key categories
	 using innovation and consumer insight
	 focusing on multiformat instore execution
	 resourcing and delivering plans with excellence
	 reviewing progress against plan and realigning if necessary
we are also moving to increase collaboration by creating cross
functional business plans with inputs from many levels within both 
organisations
engaging our employees
leadership
over the year we have moved to strengthen the group’s leadership 
team there have been a number of changes within the group 
executive and senior management as a whole and we now have a 
strong team in place with significant brand experience and a focus 
on execution and delivery
we have refined the group’s reward structure to ensure focus on 
our strategic priorities and to further develop a strong performance 
culture 
employee engagement
premier foods has surveyed its management population annually 
since 2007 in order to monitor progress in 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 88 the 
results in 2011 demonstrated consistent progress yearonyear in 
some key areas with an improvement in collaboration and team 
working the results also highlighted some areas of focus which we 
are addressing over the course of 2012 we will increase focus on 
employee engagement at all levels of the organisation 
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 communication mechanisms 
in place to achieve this goal including regular communication 
meetings the group’s intranet site the quarterly group magazine 
and specific consultation and involvement regarding major changes 
to the business
“we will develop 
sustainable relationships 
with all our partners”
connecting with consumers by producing products relevant to today’s 
eating habits governance financial statements
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recruitment
premier foods is committed to a fair 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 people as for other employees
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 during the year we delivered a broader 
portfolio of programmes which now includes coaching skills training 
commercial awareness and many others
career progression
premier foods actively encourages development from within our talent 
identification and succession planning processes are now 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 t o 
support this we now offer a suite of specific programmes to develop key 
individuals
collaborating with stakeholders
we will continue to collaborate and develop strong relationships with 
a wide range of other stakeholders including suppliers and investors 
suppliers
in 2011 we spent £16bn on externally sourced goods and services 
and we remain committed to working in close partnership with our 
key suppliers in order to facilitate and enhance longer term and 
more sustainable relationships
we have actively engaged with our key suppliers during the year 
for example our annual supplier conference which was attended 
by over 200 of our suppliers the suppliers were addressed by our 
ceo michael clarke along with the cfo and our procurement and 
sales directors the various presentations updated suppliers on our 
current corporate strategy and identified areas where they could 
best support the group going forward as well as identifying how 
they could align themselves with our 2012 growth plans 
during 2011 our team of category procurement experts continued 
to consolidate our supply base manage key supply chain risks 
through effective risk management and ensure that we have fully 
leveraged our scale across all areas of the business
 
we have actively reduced the number of suppliers over a five year 
period by 50 to 4634 in 2011 and we have targeted a further 
reduction of 10 during 2012 our top 250 suppliers now represent 
some 79 of our total spend value 
employee recognition awards
the premier foods employee recognition awards are now in 
their fourth year and recognise the outstanding achievements of 
crossfunctional teams across the business the awards cover 
areas of focus across many aspects of the group including 
brand and process innovation quality health  safety and 
manufacturing efficiency
the overall winner was the team from our factory at worksop for 
their impressive reduction in manufacturing controllable costs 
“mcc” 
worksop achieved the biggest reduction of mcc across the group through delivery of key projects the site achieved a total mcc 
reduction of 5 delivering an mcc per tonne of 15 lower than 2009 whilst reducing inventory by £45m — a huge achievement they 
also received recognition for the impressive environment and health  safety performance at the site   premier foods plc  annual report and accounts 2011  
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focus
increasing efficiency  
and competitiveness
the business has a good track record of increasing manufacturing 
efficiency and costcutting we intend to continue our focus on 
simplifying both our structure and processes to further reduce our 
cost base increase efficiency and make us more competitive
we are committed to delivering manufacturing efficiency and 
reducing costs within the supply chain over the past few years we 
have demonstrated strong delivery in the following areas
	 major rationalisation in operational sites
	 significant increase in asset utilisation
	 step change in safety with a 75 reduction in reported accident 
rate over three years
	 tight inventory control
	 yearonyear reductions in manufacturing controllable costs
however we believe that further improvements and cost reductions 
are achievable as we rightsize the business 
controllable costs
we have had significant success at reducing controllable costs 
within our manufacturing operations controllable costs include
 
	 direct and indirect labour 
	 business variances
	 operational overheads 
	 waste
we will continue to target a 4 yearonyear gross reduction
procurement
we have a centralised procurement team focused on specialised 
categories we will continue to consolidate our supplier base and 
leverage our scale to achieve lower purchase costs 
consolidation of grocery logistics
the business disposals announced in 2011 have provided an 
opportunity to significantly reduce the size of our grocery logistics 
footprint reducing complexity and reducing costs going forward
accelerating cost savings
as announced earlier in 2012 we are accelerating overhead savings 
targeting a £40m reduction by 2013 as we further reduce complexity and 
also to reflect the smaller overall size of the group it is expected that this 
will result in headcount reduction largely within overhead functions
it investment
further efficiency will be delivered as we complete the move from 
older legacy systems to a single central information system across 
the group using sap  this will also bring business reporting benefits 
simplifying the current reporting structure and aiding decision 
making with improved information available to all areas of the 
business — factory management finance procurement and sales 
investing for growth
the savings generated from improved efficiency will be used to fuel 
investment in growth behind our power brands over the year we 
commenced two major investments to fuel growth behind  
mr kipling and ambrosia 
quality and health  safety
as we target cost savings it is vital that we maintain totally focused 
and committed to food quality and health  safety
food safety and quality
premier foods is focused on food safety and quality as a core requirement 
throughout our organisation we have put in place integrated monitoring 
and traceability systems from animal and crop husbandry  via delivery of 
these raw materials to our factories through the manufacturing process 
and distribution to our products being consumed within the home
over the last four years we have achieved a 20 reduction in 
consumer complaints based on sales volumes in 2011 we achieved a 
4 reduction in complaints supported by the introduction of a quality 
benchmarking programme for the eight power brands requiring daily 
product quality evaluations in all factories to ensure our products deliver 
on quality 
during 2011 premier foods has carried out an extensive review 
of supply chain food safety and quality controls including the 
outsourcing of our supplier audit programme to a specialist 
provider these audits are carried out to the british retail 
consortium “brc” global standard for food safety andor our 
bespoke corporate technical standard to guarantee the quality and 
consistency of the ingredients we use a risk based due diligence 
chemical contaminant testing programme is in place to verify 
regulatory compliance of the ingredients we use
our worksop site achieved the highest reduction in manufacturing 
controllable costs in 2011
“premier foods was named 
manufacturer of the year 
at the european strategic 
manufacturing awards  
in 2011” governance financial statements
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we have continued to see improvements in our factory standards 
reflecting the investment made in both people and infrastructure such 
that 94 of all factories and depots achieved brc grade a audit 
results we also have a rigorous internal food safety audit programme 
where factories have unannounced visits by our trained auditors to 
check that controls and due diligence requirements are being applied
workplace health  safety
to be “the best in british food” our site management and their 
teams recognise that we must also be the best in workplace safety 
2011 marked another successful year in premier foods’ health  
safety performance with 61 of our sites recording zero riddor 
reportable accidents up from 42 in 2010
riddor accident frequency
per 1000 hours worked
040 08
026 09
018 10
012 11
at the end of 2011 at 012 reportable accidents per 100000 hours 
worked we achieved our lowest ever riddor frequency rate the 33 
yearonyear reduction in the riddor rate was also accompanied by a 
very impressive 53 reduction in major riddor accidents 
a safe workplace for all
launched early in 2011 our corporate plan “a safe workplace for 
all” set out the array of leading and lagging indicators by which 
we would measure our performance together with the initiatives 
through which we would deliver the improvements demanded in 
workplace safety including
1 t otal observation process “tops” during 2011 through 
tops our bespoke process 27000 workplace hazards were 
reported and resolved since its inception over 100000 hazards 
have been resolved and consequently over 100000 potential 
accidents have been prevented
2 bs ohsas 180012007 throughout 2011 the health and 
safety management system across all our sites was successfully 
audited by an independent accredited third party auditor
3 alarp risk assessment process the premier foods alarp 
process has been pivotal in delivering groundbreaking safety 
performance across our sites to date in excess of 1100 risk 
assessors have received competency training in our bespoke risk 
assessment methodology
4 safety leadership safety leadership at every level of an 
organisation is essential in driving the health  safety agenda 
and our certificated safety leadership programme has been a 
vital ingredient underpinning our success to date over 1000 
premier foods safety leaders have graduated through our 
bespoke safety leadership programme 
in 2011 the royal society for the prevention of accidents “rospa” 
recognised the commitment and dedication of our managers and 
their teams to workplace safety by awarding 39 gold and 12 silver 
rospa awards to our sites together with a rospa gold award for 
the management of occupational road risk
it is our deeply held conviction that an excellent organisation is by 
definition a safe organisation and we believe that there must be no 
compromise where safety is concerned we must all guard against 
complacency and will continue to drive further improvements in our health 
 safety performance in active partnership with our employees across all 
of our sites we will continue to strive for “a safe workplace for all”
case study investment in new mr kipling 
automated packing line
as part of a major investment in our cake business a £55m automated 
packing line was successfully installed at the mr kipling stoke bakery to 
pack cakes in the new “snap pack” format the project underlines our 
commitment to investing in innovation and efficiency to drive growth 
the new machinery represents the latest in food manufacturing 
technology and the fully automated line is capable of packing 47000 
slices per hour sixteen robots carry out the whole operation in three 
phases in the first individual slices are picked and placed into trays 
in the next phase individual slices are top sealed in threes then two 
stacked together and a sleeve wrapped around them the final phase 
sees 12 packs wrapped ready for dispatch to customers
the installation has created more skilled operator jobs at stoke which were filled by internal recruitment giving the successful candidates 
the opportunity to acquire new skills working with the very latest technology premier foods plc  annual report and accounts 2011  
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sustainability
ultimately our aim is to be a sustainable 
business in everything we do
we see sustainability as central to the way we run the business in 
our approach to buying goods and services in how we manufacture 
and distribute our products in our relationships with partners and in 
the health and nutrition benefits of our products
we believe that if we can get this right then it will in turn lead to 
sustainable financial results
financial and productivity kpis 
the recent change in management has resulted in a new growth 
strategy for the group aligned behind the four strategic pillars of 
brands partners focus and sustainability as a result a new set of 
kpis will be developed to help focus on the delivery of this strategy 
and to measure our success and we intend to report against 
them for 2012 our environmental targets remain unchanged and 
progress against them is set out below  
better choice portfolio and innovation 
there is a real opportunity for us to connect with consumers and 
drive growth through offering a wider range of betterforyou options 
and a range of different portion sizes 
healthier choices for consumers
our health and nutrition strategy consists of a number of strands
addition of positives the addition of wholesome healthy and 
natural ingredients such as wholegrains 
cereals oats pulses fruits and vegetables
reduction in  
ingredients  
of concern
the removal or reduction of ingredients 
where nutritional concerns exist eg salt 
saturated fat hydrogenated vegetable 
oils and nonnaturally occurring trans fats
portion size options to offer consumers a range of  
portion sizes
clear labelling t o clearly communicate the nutrition 
content of products for example through 
front of pack  guideline daily amount 
labelling complemented by detailed 
nutrition on the back of pack
salt reduction
we are working with the department of health and other partners in the 
food industry to develop programmes that will help people make healthier 
choices through providing information to consumers reevaluating the 
nutritional content of food and promoting healthier choices 
by the end of 2012 we will have reduced the salt in more than 639 
individual products across 53 branded categories from hovis bread 
to batchelors savoury rice in 2011 we launched oxo reduced salt 
cubes so consumers can now enjoy oxo with reduced salt in the 
cube they know so well oxo reduced salt cubes have shown a 
significant increase in sales over their predecessor a granular format 
in a jar indicating we are meeting consumer demand for lower salt 
versions of their favourite products already we have made salt 
reductions of 100 tonnes per annum across our brands and the 
remainder of the new recipes will roll out over 2012
case study new ambrosia range
in 2011 we started work on a range of portion sizes intended to meet the needs 
of different consumers and increasing suitability for increased eating occasions ie 
snacking in addition to the more traditional shared dessert
 
ambrosia rice is now available in 4 new formats all products are naturally low in 
fat and now come in a range of flavours 120g smaller pots perfect for lunchboxes 
or smaller appetites 190g pots which are great for adult snacking 115g which 
contains just 99 calories and is the perfect snack for weight managers and a 
500g sharing rice pot which is both resealable and suitable for the microwave to 
increase convenience
“100 free range eggs  
used across entire  
mr kipling range”
the entire mr kipling range contains no artificial colours flavours or 
hydrogenated fat governance financial statements
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performance summary our business
23
environmental programmes
we will continue to build on our strong track record of environmental improvement and ethical sourcing 
in 2011 we made good progress against all our environmental targets details of which are set out in the table below to build on this further in 
2012 we launched our ‘green matters’ programme with an aim to create a groupwide culture of environmental improvement and to embed 
‘green’ as a longterm strategic priority
target for 2011 achievement in 2011 t arget for 2012
energy — energy usage
gigawatts 30
1586 10
1322 11
17 66
30
carbon — carbon co
2
 equivalent 
emissions
tonnes 40 
448567 10
369536 11
18 68
40 
water — water usage 
excluding water embedded in our products 
megalitres 30 
5320 10
3717 11
30 213
50 
waste — waste to landfill 
tonnes 200
10246 10
6877 11
33 251
200
transport — delivery miles 
actual miles travelled m 30
66784 10
58269 11
13 135
50
 we have historically reported all environmental results in terms of absolute figures as highlighted earlier in this annual report the group has completed a  
 number of business disposals in 2011 which has impacted on environmental performance for consistency we will continue to report absolute figures but we  
 have also included relative reduction figures shown in brackets to take into account the impact of these disposals
ethical sourcing
as a major british food manufacturer we are proud of the fact we 
spend 82 of our annual procurement budget with uk suppliers and 
farmers 
in 2010 we began to develop our ‘sustainable procurement 
roadmap’ spr and last year we committed to embedding 
sustainability criteria within our ingredient category sourcing plans 
and risk logs we have now completed sustainability assessments 
in 20 key categories and we will continue to roll out this innovative 
approach to sustainable procurement in 2012 and beyond
mr kipling 100 free range eggs
in january 2011 our mr kipling cake brand moved to using 100 
free range eggs across the entire range mr kipling uses the 
equivalent of over 60 million free range eggs each year 
manufacturer of the year 2011
the hard work of employees operating across our supply chain was 
recognised when premier foods took top honours being named 
manufacturer of the year at the european strategic manufacturing 
awards in october 2011 beating competition from across the 
european manufacturing industry we also picked up the top award 
for operational excellence the awards recognise the significant 
achievements made by the group across a number of areas in the 
supply chain including manufacturing efficiency cost reduction 
environmental impact and health  safety improvements
100 sustainable palm oil
premier foods has committed to sourcing 100 rspo certified 
sustainable palm oil by 2015 our policy is to source palm oil only from 
suppliers who are members of the roundtable for sustainable palm 
oil rspo in december 2011 bm trada the leading independent 
certification body recognised our efforts in getting 21 of our sites certified 
as having rspo approved traceability systems capable of guaranteeing 
the use of palm oil from sustainable sources — more than any other 
company worldwide in the 2011 world wildlife fund wwf ‘palm oil 
buyers scorecard’ we scored top marks achieving 9 out of 9 in the wwf 
palm oil buyers rating the wwf palm oil buyers’ scorecard measures 
the performance of companies against strict criteria which show whether 
the companies assessed are acting responsibly
external recognition
our progress in sustainability received external recognition in 2011 
and we were listed on the ftse4good index and ethibel excellence 
register for the first time highlighting that the group is now meeting 
globally established corporate responsibility standards 
more information on the work we do in this area can be found in the 
2011 sustainability report and also on our website
to read more
wwwpremierfoodscouksustainability premier foods plc  annual report and accounts 2011  
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performance our business governance financial statements
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performance
operating review 26
— divisional review 28
financial review 32
— refinancing 32 premier foods plc  annual report and accounts 2011  
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operating review
investing for future growth
introduction
in the financial statements for the year ended 31 december 2011 
the meatfree and brookes avana businesses are both treated 
as discontinued operations reflecting their status as individual 
operating segments within the group structure the east anglian 
canned grocery operations is treated as a continuing operation in 
the financial statements and reported separately as an operating 
segment ‘disposed of canning operations’ the irish brands 
business the disposal of which completed on 23 january 2012 
was a constituent part of the grocery segment for the duration of 
2011 and is therefore treated as a continuing operation 
the definition of ‘ongoing business’ is used as a basis to illustrate 
the business performance of the group following recent divestment 
activity it excludes the meatfree east anglian canned grocery 
operations brookes avana and irish brands businesses all 
commentary refers to ongoing business unless otherwise stated
ongoing business revenue decreased by 34 to £18110m in the 
year a decrease of £637m compared to the prior year ongoing 
business trading profit decreased by 293 to £1737m in the 
year reflecting a challenging consumer environment and customer 
disputes
continuing operations
£m 2011 2010
revenue
grocery 11215 12126 75
bread 7113 6876 34
disposed of canning operations 1667 3342 501
total revenue 19995 22344 105
trading profit
grocery 1795 2205 186
bread 34 353 904
disposed of canning operations 54 278 806
total trading profit 1883 2836 336
amortisation of intangible assets 720 658 94
foreign exchange valuation items 
charge 17 20 150
pension financing credit 170 41 –
restructuring costs relating to 
disposals 105 – –
refinancing fees 42 – –
impairment of goodwill and 
intangible assets 2820 – –
loss on disposal of operations 112 – –
operating lossprofit 1763 2199 –
ongoing business
£m 2011 2010
revenue
grocery 10997 11871 74
bread 7113 6876 34
total revenue 18110 18747 34
trading profit
grocery 1703 2104 191
bread 34 353 904
total trading profit 1737 2457 293
note 
the brookes avana business is disclosed in the financial statements as a 
discontinued operation consequently this business is reported before the 
allocation of group overheads trading profit for grocery and bread are 
therefore stated after the allocation of group overheads previously assigned to 
brookes avana
the previously named ‘hovis’ division has been renamed the ‘bread’ division
“our immediate priorities are to continue the stabilisation  
of the business refocus the portfolio and invest in our future 
growth”
michael clarke
chief executive officer
t o read more about our financial results
wwwpremierfoodscoukinvestorsresultsandpresentations
sharwood’s tikka sauce range extension focusing on britain’s  
favourite curry our business governance financial statements
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27
performance
significant oneoff items
the reported ongoing business trading profit of £1737m in the 
year is stated after recognising pension credits of £374m and aged 
receivable reviews and associated commercial provisions of £374m
the pension credits in 2011 include a credit in h1 2011 amounting 
to £121m of which £100m related to the ongoing business and 
reflected the move from final salary scheme to care and defined 
contribution schemes an additional credit in h2 of £299m of which 
£274m related to the ongoing business was due to changes in the 
statutory inflation assumption used in calculating certain scheme 
liabilities the statutory inflation assumption change prompted by 
legislation involves replacing the retail price index rpi with the 
consumer price index cpi in calculating certain scheme liabilities 
this amendment has been made to certain of the premier foods 
pension schemes liabilities only in 2011 the group and trustees of 
the rhm pension scheme are currently seeking legal clarification to 
ascertain the extent to which certain provisions of the rhm pension 
scheme are also affected by the move from rpi to cpi in 2010 the 
group’s results included a pension credit of £116m owing to past 
service credits
additionally following recent disposal and restructuring activity 
the group has reassessed the recoverability of assets held on the 
balance sheet following this review the group has written off some 
aged receivable balances deemed unrecoverable and adjusted 
some associated commercial provisions accordingly the group 
recognised an expense of £374m in ongoing business trading 
profit
the effect on ongoing business trading profit of these oneoff items 
is neutral for the full year of the £274m pension credit recognised 
in h2 £260m was reflected in ongoing business trading profit of 
the grocery division the writeoff of aged receivable balances and 
adjusted commercial provisions were all recognised in the grocery 
division a pension credit of £116m owing to past service credits 
was also recorded in 2010 reported trading profit
group net debt as at 31 december 2011 was £9951m this is 
stated after gross disposal proceeds of £303m from the completed 
divestiture of the brookes avana business average gross borrowings 
decreased from £1439m in 2010 to £1194m in 2011 historically 
the group has experienced a low point in the working capital cycle 
at the end of december in future the group expects to have a lower 
degree of variability in net debt levels
an impairment charge of £2820m is attributable to the bread 
segment as a result of the decline in profitability of the business in 
2011 compared to the prior year and hence the assessment of future 
forecasted cash flows for this segment additionally and as a result 
of the sale of the brookes avana business an impairment charge 
of £804m was taken against the assets of the business in 2011 
reflecting the difference between the net sale proceeds and the 
carrying value of the business
“capital investment is 
increasingly moving 
from infrastructure to 
supporting growth and 
productivity”
case study make tonight your “aah night”
bisto is back on tv in 2012 with a new “aah night” campaign 
where members of the public commit to going home on time and 
spending time with their family the campaign aims to encourage 
more families to use gravy as part of their evening meal to drive 
growth in the category 
and there is definitely an opportunity to drive growth — we know that 
135 million bisto users consume the brand less than once a week 
and that more than threequarters of all sausages are eaten at home 
during the week without gravy 
this year’s investment in tv and radio is set to keep bisto at the 
top of the shopping list especially at easter as well as working on 
our longer term objective of increasing midweek consumption  premier foods plc  annual report and accounts 2011  
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operating review continued
grocery division
bread division
sales in our grocery division decreased by 74 to £10997m 
compared to £11871m in 2010 trading profit was £1703m a 
191 decline in the year
grocery category performances in 2011 were characterised by 
the effect of challenging market conditions and high promotional 
activity during the year our markets declined by 25 in volume 
terms significantly down on longterm averages although this trend 
improved in the second half of 2011 overall branded volumes in 
the grocery division declined yearonyear owing to these market 
declines and a protracted customer dispute that particularly affected 
the ambrosia batchelors loyd grossman and sharwood’s brands 
the group experienced a significant wave of input cost inflation 
during the first quarter of 2011 in response price increases were 
negotiated and achieved however these only became effective 
from the beginning of the second quarter as a result of this time lag 
gross margins declined by £14m in the first quarter 
during the year promotional activity in the market continued at 
historically elevated levels while volumes on promotion were higher 
than 2010 the annual rate of increase slowed and the depth of 
discount increased
we continue to generate savings in the supply chain both in 
increasing manufacturing efficiency at our sites and through 
procurement gains manufacturing efficiencies benefited trading 
profit by £20m as a result of improvement programmes across a 
number of sites while procurement gains delivered £14m
a pension credit of £33m is recognised in ongoing business trading 
profit owing to the change in inflation rate assumption from rpi 
to cpi and the movement of pension schemes from final salary to 
career average schemes
reported trading profit of the bread division in 2010 of £388m 
has been restated to £353m to reflect the reallocation of costs 
previously absorbed by the discontinued brookes avana business 
additionally in 2010 other group and central costs have been 
allocated to the bread division to more closely reflect support 
function activity the net effect of these items has been to reduce 
reported trading profit by £98m
total sales for the bread division increased 34 in 2011 to 
£7113m while trading profit declined from £353m in 2010 to 
£34m sales in our bakery operations were down 29 in the year 
while milling sales increased by 223 largely due to higher pricing 
compared to the previous year to cover higher raw material costs 
the performance of the bakery business reflected challenging 
market conditions with category volumes down 33 during the 
year high levels of promotional activity remained a key feature of the 
market and as a result trading profit was lower in the year hovis 
branded market share was broadly flat during the year while non
branded volumes were lower partly as a result of a contract loss 
£m 2011 2010
branded sales 8925 9728 83
nonbranded sales 2072 2143 33
total sales 10997 11871 74
gross profit 3311 4086 190
trading profit 1703 2104 191
£m 2011 2010
branded bakery sales 3720 3756 10
nonbranded bakery sales 1285 1396 80
total bakery sales 5005 5152 29
milling sales 2108 1724 223
total sales 7113 6876 34
gross profit 2080 2399 133
trading profit 34 353 904 our business governance financial statements
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performance
brookes avana
discontinued operation
£m 2011 2010
revenue 1954 2036 40
trading lossprofit 116 113 –
the disposal of the brookes avana business to 2 sisters food 
group was completed on 30 december 2011 for gross proceeds 
of £303m in line with the key priorities for the group the disposal 
of brookes avana allows the business to better focus its resources 
behind growing the eight power brands
revenue for brookes avana decreased by 40 to £1954m down 
from £2036m in 2010 this reflects the loss of a major pie contract 
at the leicester site during the middle of the year partly offset by 
pricing achieved in the first half
a trading loss of £116m was recorded in the year owing to 
competitive pricing pressure significant contract churn and the 
resultant impact on supply chain efficiencies a restructuring charge 
of £4m was taken in h1 due to redundancy costs associated with 
a lost pie contract and asset writeoffs the loss is stated before 
previously absorbed group overheads which would have amounted 
to £107m in 2011
case study oxo reduced salt
following the new launch in 2011 consumers can now 
buy reduced salt oxo in the cube shape they know 
and love available in beef chicken and vegetable 
flavours they contain 25 less salt than a standard 
oxo cube 
we’ve been offering reduced salt oxo granules in 
jars since 2008 but now consumers can enjoy the 
signature rich oxo reduced salt flavour in the cube 
box they know so well they will be able to find it 
easily in stores because retailers will display all our 
cubes together this is helping our customers by 
increasing the opportunity for multibuy promotions 
and ensuring there is no confusion with gravy granule 
products in jars
reducing the salt but retaining our favourite cube shape was a challenge for our technical team salt is the ingredient which binds the 
stock granules together so reducing salt can impact the shape and consistency of the cube the team used their detailed knowledge 
of ingredients and how they respond in recipes to create a high quality product range
hovis “go on lad” advertising back on air in 2012 premier foods plc  annual report and accounts 2011  
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operating review continued
sales
£m 2011 2010
power brands 8712 9233 56
support brands 4190 4473 63
total branded 12902 13706 59
nonbranded 5208 5041 33
total sales 18110 18747 34
branded sales  712 731 19ppt
total ongoing business sales declined 34 compared to the prior 
year and the branded sales mix reduced by 19ppt to 712
power brands sales declined 56 during the year reflecting market 
declines and the effect of major customer disputes support brands 
defined as all other brands outside the power brands group were 
down 63 to £4190m in the year
nonbranded sales increased by 33 as increased milling sales 
were partly offset by lower nonbranded bakery sales and reduced 
grocery nonbranded sales
gross profit
£m 2011 2010
gross profit £m 5391 6486 169
gross margin  298 346 48ppt
gross margin movements
branded growth product mix 
manufacturing efficiency and 
procurement 16ppt
commodity costs pricing and 
promotions 32ppt
total change ppt 48ppt
gross margin declined by 48 in 2011 to 298 manufacturing 
controllable costs improvements and procurement gains were offset 
by adverse product mix as nonbranded sales increased by 33 
while branded sales declined by 59
the impact of commodity costs pricing and promotional activity 
reduced gross margin by 32 pricing recovery to offset input 
cost inflation in the first half of the year maintained gross profit but 
increased turnover and hence reduced the gross margin additionally 
unrecovered commodity cost inflation in q1 reduced gross margin 
consumer marketing
£m 2011 2010
consumer marketing 256 316 190
marketing investment declined by 190 during 2011 as the 
business sought to reduce costs in response to the challenging 
environment the group has taken the opportunity to redefine the 
definition of consumer marketing to include but not limited to 
media spend production costs design research pr sampling 
and associated fees the table above reflects this revised definition 
costs of instore marketing with our customers are not included in 
this revised definition of consumer marketing
cash flow
£m 2011 2010
ongoing business trading profit 1737 2457
depreciation 418 393
other noncash items 254 161
interest 1083 1180
taxation 24 18
pension contributions 747 643
regular capital expenditure 617 587
working capital 01 111
recurring cash flow from ongoing 
business 571 694
group recurring cash flow from ongoing business before non
recurring items in the year was an outflow of £571m compared 
to an inflow of £694m in the prior year this adverse movement 
reflected a reduction in trading profit in the year of £720m higher 
pension contributions and an adverse movement in working capital 
of £112m historically the group’s working capital cycle reaches a 
low point in december and while this remains so the extent of this 
low point was reduced in december 2011 resulting in this working 
capital movement 
other noncash items includes the addback of the pension credit 
recognised in trading profit partly offset by the pension financing 
credit lower cash interest of £1083m was due to lower average 
debt levels following divestitures partly offset by phasing differences
£m 2011 2010
recurring cash flow from ongoing 
business
571 694
trading profit  restructuring activity from 
disposed businesses
103 651
other cash flows from disposed businesses 406 189
operating cash flow from total group 1080 1156
disposal proceeds 4002 91
financing fees  finance leases 73 396
movement in net debt 2849 851
movement in net debt in the year was £2849m an increase of 
£1998m compared to 2010 total disposal proceeds from the sale 
of meatfree east anglian canned grocery and brookes avana 
totalled £3948m and other smaller asset sales amounted to £54m 
these proceeds were partly offset by the recurring cash outflow 
from ongoing business of £571m and cash outflows from disposed 
businesses of £509m
net debt
£m 2011 2010
gross debt 10111 13013
deferred financing fees 160 213
net debt 9951 12800
group net debt at the year end was £2849m lower in the year at 
£9951m our business governance financial statements
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performance
pensions
total cash paid to the pension schemes in the year was £773m 
comprising £290m of regular contributions and administrative 
expenses and £483m of deficit contributions this is in line with 
guidance provided at the half year at 31 december 2011 the 
deficit as calculated on an ias 19 basis was £2824m equivalent to 
£2124m net of deferred tax
£m
31 dec
2011
31 dec
2010
assets
equities 4251 5881
bonds 4724 4457
property 1276 1215
absolute return 7219 5668
swaps 2316 809
cash  other 11774 9964
total assets 31560 27994
liabilities
discount rate 480 545
inflation rate rpicpi 315
195
345
na
total liabilities 34384 31203
gross deficit ias 19 2824 3209
deferred tax 700 858
net deficit ias 19 2124 2351
business disposals
the group has stated its intention to focus on investing behind 
growing eight power brands following divestitures completed 
since the beginning of 2011 the group expects further selected 
businesses to be divested in 2012 to increase the group’s focus on 
its power brands and additionally help deleverage the business
during the course of the year the group completed the disposal 
of the meatfree east anglian canned grocery and brookes avana 
chilled ready meals and cake businesses the disposal of meatfree 
to exponent private equity and intermediate capital group was 
completed on 7 march 2011 for a cash consideration of £2050m 
and the disposal of the east anglian canned grocery business 
to princes limited was completed on 23 july 2011 for a cash 
consideration of £1822m brookes avana was sold to 2 sisters 
food group on 30 december 2011 for £303m additionally on 
23 january 2012 the group announced the completed disposal 
of the irish brands business comprising the chivers gateaux and 
mcdonnell’s brands and the erin licence to the boyne valley group 
for €414m net proceeds will be confirmed in due course following 
the completion of final working capital statements
meatfree
east anglian
canned grocery irish brands brookes avana
announcement 24 january 2011 8 february 2011 7 december 2011 15 december 2011
completion 7 march 2011 23 july 2011 23 january 2012 30 december 2011
gross proceeds £2050m £1822m €414m £303m
net proceeds £1966m £1653m not concluded £316m
loss on disposal £124m £112m not concluded £22m
purchaser exponent private
equity and
intermediate 
capital group princes ltd
boyne valley 
group
2 sisters 
food group
the table below serves to illustrate key financial metrics of the four transactions outlined above meatfree and east anglian canned grocery 
are based on 2010 results and irish brands and brookes avana are based on 2011 results
£m meatfree
east anglian
canned grocery brookes avana irish brands total disposals
branded sales 1288 1475 – 218 2981
nonbranded sales – 1867 1954 – 3821
total sales 1288 3342 1954 218 6802
trading profitloss 162 278 116 92 416
ebitda 193 317 71 92 531
capital expenditure 12 21 53 – 86
outlook
the recently announced refinancing package provides the foundation on which the group’ s growth strategies can be implemented during the 
coming year the group’ s priorities remain to stabilise its operational performance while enabling the business to increase its focus through selected 
disposals the consumer environment is expected to remain challenging with continued high levels of promotional activity and ongoing cost 
inflation albeit at lower levels than 2011 the group nevertheless believes the planned increase in marketing investment proposed cost reduction 
programmes better customer collaboration and renewed focus across the group will provide the platform to deliver future branded growth 
consequently over the medium term the group expects a return to sales growth and higher gross margins this will be supported by further 
sustained increases in marketing investment and a continuation of cost reduction and efficiency programmes additionally the group will reduce 
interest charges and net debt premier foods plc  annual report and accounts 2011  
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financial review
all term loan and securitised debt attract interest charges based on 
libor
a sliding scale of new deferred fees at market rates will be 
applicable from 2014 through to 2016 which are payable on a 
subsequent refinancing planned future disposal proceeds will be 
shared between the banks in the banking syndicate including those 
swap counterparties whose swaps have been restructured into 
additional term loans as described above
subject to implementation of the new refinancing arrangements the 
trustees of the group’ s pension schemes have agreed to defer deficit 
contribution payments c£47m pa until 1 january 2014 and there will 
be no increase in the agreed deficit contributions before 2016 regular 
contributions of approximately £26m per annum will continue to be paid 
to the pension schemes
on 31 december 2013 a ‘cash sweep’ reflecting excess cash 
generated over and above an agreed level will be calculated and 
paid in early 2014 to the banking syndicate including those 
swap counterparties whose swaps have been restructured into 
additional term loans as described above and pension schemes 
in lieu of payments forgone by this date further cash sweeps will 
be included annually with amounts distributed only to the banking 
syndicate including those swap counterparties whose swaps have 
been restructured into additional term loans as described above
the company is restricted from paying dividends under the terms of 
the refinancing package
capital expenditure is to be held in line with target of approximately 
3 of sales
the group is presenting its financial results for the year ending  
31 december 2011 with comparative information for the year ending 
31 december 2010 
refinancing package
the group has obtained consent from its banking syndicate swap 
counterparties and pension schemes on a refinancing package 
subject to the formalities of final documents being signed expected 
by the end of march 2012 
the existing term loan £733m and revolving credit facility £500m 
previously due to mature on 31 december 2013 will be extended to a 
new maturity date of 30 june 2016 the current applicable bank margin 
of 225 will increase to 325 with effect from 1 january 2014 
additionally the current amortisation payment schedule has been 
amended with amortisations to occur semiannually from 30 june 
2014 banking covenants of net debtebitda and ebitdainterest 
remain in place they will continue to be tested biannually and have 
been reset to reflect the group’s strategic plan the covenant tests 
are set out in the table opposite
having already realised net disposal proceeds of £400m in 2011 
the group is required to realise proceeds from disposals of £330m 
by 30 june 2014 with 80 of this to be achieved by 31 december 
2013 and 90 of this by 31 march 2014
the total interest rate swap portfolio including previously restructured 
swaps will be restructured into additional term loan totalling 
approximately £199m of this additional term loan approximately 
£117m of the previously restructured swaps will be interest bearing 
with immediate effect the remaining £82m of previously restructured 
swaps will attract interest from 1 january 2014 these new tranches 
of additional term loan will attract the same interest margin as the main 
term loan the result of this conversion from swaps to additional term 
loan will significantly reduce the group’ s interest expense in 2012 and 
2013 and the previously arranged agreed swap settlements of £35m 
in 2012 and £82m in 2013 are no longer applicable a new amortising 
swap commencing in july 2012 with a nominal value of approximately 
£750m will be arranged attracting a swap rate of 155
the group has negotiated and obtained a commitment to a new 
securitisation programme relating to certain receivable balances 
available up to an amount of £120m subject to sufficient receivables 
being capable of being sold into the programme these balances 
will be included as part of net debt reflecting their recognition on the 
balance sheet and will attract an interest margin of 35
robust financing in place
“we have obtained unanimous consent from our banking 
syndicate swap counterparties and pensions schemes on  
a refinancing package which will allow the company  
to execute its new growth strategies”
mark moran 
chief financial officer
the bisto range was extended in 2011 to include new instant roast gravy our business governance financial statements
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performance
summary of refinancing package
bank facility maturity 30 june 2016
bank margin 225 until 31 dec 2013
325 1 jan 2014 – 30 june 2016
facilities term loan a £733m 
rcf £500m
additional term loan circa £199m
amortisation payments 30 june 2014 — £25m
31 dec 2014 — £25m
30 june 2015 — £30m
31 dec 2015 — £30m
disposals proceeds shared between banks and swap counterparties
£330m disposal proceeds required by 30 june 2014 certain progress milestones from  
31 december 2013
securitisation programme now £120m and now on balance sheet
cash sweep paid in february 2014 split between banks swaps and pension schemes further cash 
sweeps annually thereafter excluding pension schemes
consent fee 1 fee on outstanding facilities
existing deferred fee 05 on existing facilities paid dec 2013
new deferred fee 20 on facilities between 28 march 2013 – 27 march 2014
25 on facilities between 28 march 2014 – 27 march 2015
30 on facilities between 28 march 2015 – 27 march 2016
covenant test dates biannually 30 june and 31 december
net debt
ebitda 
covenant
30 june 2012 696x
31 december 2012 587x
30 june 2013 526x
31 december 2013 452x
30 june 2014 466x
31 december 2014 392x
30 june 2015 382x
31 december 2015 326x
ebitda
interest 
covenant
30 june 2012 237x
31 december 2012 369x
30 june 2013 450x
31 december 2013 450x
each test thereafter 450x
the refinancing package is subject to final documentation being put in place and the directors are confident that this will be achieved and 
signed by the end of march 2012 on this basis the directors believe it is appropriate to continue to adopt the going concern basis of 
accounting as fully described in note 2 to the financial statements premier foods plc  annual report and accounts 2011  
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financial review continued
an operating loss of £1763m was recorded for the year compared 
to a profit of £2199m in 2010 reflecting the trading profit movement 
and an impairment of goodwill and intangible assets of £2820m
the impairment charge of £2820m was recognised against the 
goodwill and intangible assets of the bread division which has 
arisen following adverse trading conditions within this operating 
segment in the year additionally a loss on disposal of £112m 
was recognised relating to the divestiture of the canned grocery 
operations a charge of £105m for restructuring costs associated 
with disposed of businesses is due to redundancy and restructuring 
costs and closure of the windsor office
finance expense
net finance expense in 2011 was £828m compared with £1914m 
in 2010 this decrease is primarily due to lower average debt levels 
following disposals and hence lower applicable bank margin in 
addition to a positive movement in the fair valuation in the mark to 
market of interest rate swaps
net regular interest costs were £1157m compared to £1452m 
in 2010 principally due to reduced average debt levels and lower 
bank margin as outlined above amortisation and deferred fees in 
the year were £134m compared to £144m in the prior year the fair 
valuation of interest rate financial instruments reduced in the year  
by £369m
taxation
the taxation credit for 2011 was £291m compared to a charge 
of £244m in 2010 in the year the current tax credit was £03m 
and the deferred tax credit amounted to £288m the deferred tax 
credit is principally due to reduction in tax liabilities following the 
impairment of intangible assets in the year and also the reduction in 
the deferred tax rate from 27 in 2010 to 25 in 2011
the corporation tax rate for 2012 is expected to be 2525 and the 
deferred tax rate is expected to be 240 from april 2012
earnings per share
a basic loss per share of 96 pence for the year on continuing 
operations is calculated by dividing the loss attributed to ordinary 
shareholders of £2300m 31 december 2010 £41m profit by 
the weighted number of shares in issue during the period this 
compares to earnings per share of 02 pence for the year to  
31 december 2010
group structure
during the year the group disposed of its meatfree business 
incorporating the quorn and cauldron brands the canned grocery 
operations business and the brookes avana chilled ready meals and 
cake business the sale of the irish brands mcdonnell’s gateaux 
chivers and erin licence also completed on 23 january 2012 
the results of the meatfree and brookes avana businesses are set 
out in note 11 to the financial statements the income statement 
for 2010 has been restated to reflect the meatfree and brookes 
avana businesses as discontinued operations the canned grocery 
operations business is treated as a continuing operation in the 
financial statements and reported separately as an operating 
segment ‘disposed of canning operations’ all commentary on 
the performance of the group included below refers to continuing 
operations unless otherwise stated and incorporates the irish 
brands business
income statement
revenue from continuing operations was £19995m a decrease of 
£2349m in the year the primary reason for the decrease was due 
to the disposal of the canned grocery operations business in july 
2011 and reduced branded sales resulting from market declines and 
customer disputes
operating profit
operating profit for continuing operations before impairment and 
loss on disposal was £1169m a 468 decrease on the year to 
31 december 2010 this decrease was largely due to a reduction 
in trading profit of £953m in the year to £1883m the grocery 
division declined due to the reasons outlined in the income 
statement above while the bread division experienced high levels of 
promotional activity in a competitive market impacting profitability
new loyd grossman tv campaign based around loyd’s lifetime passion 
for food our business governance financial statements
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performance
pension schemes
at 31 december 2011 the group’s pension schemes showed a 
gross deficit of £2824m demonstrating a reduction of £385m in 
the year from £3209m as at 31 december 2010 this comprised 
a £2677m deficit in relation to premier schemes and a deficit of 
£147m in relation to the rhm schemes the reduction in the rhm 
scheme deficit reflects a positive movement in the market value of 
the scheme assets during the year partially offset by an increase in 
liabilities as a result of a decrease in discount rate from 545 to 
480 the increase in the valuation of the premier scheme liabilities 
is primarily due to the decrease in the discount rate from 545 to 
480 the discount rate is based on uk corporate aa bond yields
a uk government change to the statutory inflation index applied to 
certain pension scheme liabilities was applied to the premier foods 
pension schemes during the year this amendment has been made 
to the premier foods pension schemes only in 2011 the effect of 
this change resulted in a credit of £299m reflected in continuing 
operations trading profit £274m in ongoing business trading 
profit the group and trustees of the rhm pension scheme are 
currently seeking legal clarification to ascertain the extent to which 
certain provisions of the rhm pension scheme are also affected by 
the move from rpi to cpi 
in the first half of the year a credit of £114m was taken in trading 
profit ongoing business £100m following the move from final 
salary to career average schemes for existing employees
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 as a result of alleged failure to adequately 
equalise retirement ages between 1990 and 1993 during 2011 
the group decided to seek a court ruling on 20 february 2012 
the case was heard in court and on 2 march 2012 the judge ruled 
in favour of the group as a result there is no material additional 
liability to be recognised and no impact on pension deficit recovery 
payments relating to this case
following the refinancing package concluded with the banking 
syndicate swap counterparties and pension schemes pension 
deficit contribution payments will be suspended from march 2012 to 
december 2013 and resume in 2014 in line with the current deficit 
contribution payment schedule
adjusted earnings per share for continuing operations was 22 
pence 31 december 2010 42 pence adjusted earnings per 
share on continuing operations has been calculated by dividing the 
adjusted earnings defined as trading profit less net regular interest 
payable and notional taxation attributed to ordinary shareholders 
of £534m 31 december 2010 £997m by the weighted number 
of ordinary shares in issue during each period these earnings have 
been calculated by reflecting tax at a notional rate of 265  
31 december 2010 280
cash flow and borrowings
in the year the net borrowings of the group decreased from 
£12800m at 1 january 2011 to £9951m a decrease of £2849m 
of this movement the cash and noncash elements were £2908m 
and £59m respectively the noncash movement related to 
amortisation of debt issuance costs
the cash outflow from operating activities was £291m 31 december 
2010 inflow of £1805m this included cash inflow from continuing 
operations of £1346m 31 december 2010 £2756m and cash 
outflow from discontinued operations of £479m 31 december 2010 
inflow of £376m additionally net cash interest paid was £1134m 
31 december 2010 £1310m of which £1083m relates to ongoing 
business reflecting lower average debt and lower bank margin levels 
tax paid in the year was £24m 31 december 2010 £17m
sale of subsidiaries and property plant and equipment in the year 
amounted to £4002m following the completed disposals of the 
meatfree and brookes avana businesses and the east anglian 
canned grocery operations
net capital expenditure in the year was £719m 31 december  
2010 £620m of which £617m relates to ongoing business  
reflecting the focus on our eight power brands investing in sites for 
our mr kipling ambrosia and hovis brands
repayment of borrowings in 2011 was £3636m 31 december 
2010 £1162m reflecting the pay down of term loan debt following 
disposals completed during the year premier foods plc  annual report and accounts 2011  
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governance our business performance financial statements
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governance
board of directors and group executive 38
corporate governance report 42
— risk management 53
— other statutory information 58
— shareholder information 61
directors’ remuneration report 64 premier foods plc  annual report and accounts 2011  
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board of directors and group executive
board of directors
ronnie bell
nonexecutive chairman
appointed to the board october 2010
skills and 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 
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 during the year ronnie 
led the process for the appointment of michael clarke as the group’s new 
ceo and also david wild as a new nonexecutive director
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 membership ronnie chairs the nomination committee and is a 
member of the finance and remuneration committees
charles miller smith
deputy chairman and nonexecutive director
appointed to the board june 2009
skills and experience charles is a senior adviser 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 of which he served as a director of finance and then foods he 
held a wide range of financial and general management positions in the uk 
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 
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
other appointments charles is a member of the international advisory 
council for principal financial in the usa and also chairman of firstsource 
solutions uk ltd 
committee membership charles is a member of the finance and 
nomination committees
michael clarke
chief executive officer
appointed to the board august 2011
skills and experience prior to joining the group michael served as 
president of kraft foods europe in this role he was responsible for managing 
the group’s entire european business with revenues of 13 billion 58 
manufacturing sites and 25000 employees reporting directly to kraft’s 
chairman  ceo previously michael was president of the cocacola 
company northwest europe including the uk  nordics and was with the 
company for 12 years in a number of senior roles previous to this michael 
was vicepresident for reebok south asiapacific and began his early career 
as a chartered accountant in south africa with deloitte he graduated with a 
degree in commerce from the university of cape town 
board contribution since joining the company in august michael’s initial 
priorities have been to agree a new business plan for the group undertake a 
strategic review of the business including identifying potential disposals and 
to agree a new refinancing plan michael has also appointed a new senior 
management team 
other appointments michael is currently nonexecutive director of  
wolseley plc
past appointments president of kraft foods europe
committee membership michael is a member of the finance committee 
and regularly attends meetings of the other board committees by invitation
mark moran
chief financial officer
appointed to the board december 2011
skills and experience prior to joining the group mark served as chief 
financial officer of ssl international plc where he gained extensive experience 
of working with global brands during his six years including strategic and day
today financial management executive board responsibilities and investor 
relations prior to this he was group finance director of porvair plc and also 
held senior roles at caradon plc mark trained as a chartered accountant with 
arthur andersen 
board contribution mark 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 mark’s 
immediate priority since joining has been to focus on the delivery of the new 
refinancing plan 
past appointments chief financial officer of ssl international plc between 
2004 and 2010 nonexecutive director of brixton plc between 2008 and 
2009
committee membership mark is a member of the finance committee and 
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governance
david beever
senior independent director and nonexecutive director
appointed to the board january 2008
skills and 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 is a nonexecutive director of stobart group ltd and 
was previously 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
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 the main focus over the year has been to review and 
approve progress in connection with the group’s refinancing plan as senior 
independent director he has responsibility for meeting with the other non
executive directors to review the chairman’s performance and is available to 
shareholders to discuss their concerns
other appointments david is a member of the board of trustees at the 
university of london
committee appointments david is chairman of the finance committee and 
also a member of the audit remuneration and nomination committees 
ian mchoul
nonexecutive director
appointed to the board july 2004
skills and 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 holding the position of finance director from 2001 
ian qualified as a chartered accountant with kpmg in 1985
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
committee appointments ian is chairman of the audit committee and also 
a member of the finance and nomination committees
david wild
nonexecutive director
appointed to the board march 2011
skills and experience david joined the group in march 2011 he is currently 
chief executive officer of halfords group plc and was previously with walmart 
where he was senior vicepresident of new business development in san 
francisco prior to this role david was president of walmart germany earlier 
in his career he was with tesco plc 1985 to 2003 where he held a variety of 
roles including developing and latterly leading their business in central europe
board contribution david brings over 20 years’ retailing experience gained 
at two worldleading businesses and the skills and ability to develop growth 
strategies
committee membership david is a member of the audit remuneration and 
nomination committees
louise makin
nonexecutive director
appointed to the board october 2006
skills and 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 a 
phd in metallurgy from the university of cambridge and an mba
board contribution louise has significant commercial and management 
expertise within the healthcare industry she chairs the remuneration 
committee which over the year has focused on the significant management 
changes within the group and consulted with major shareholders and investor 
bodies regarding the new long term incentive plan
committee appointments louise is chairman of the remuneration 
committee and a member of the nomination committee
audit committee
ian mchoul chairman  
david beever  
david wild
finance committee
david beever chairman  
ronnie bell michael clarke  
ian mchoul mark moran  
charles miller smith
nomination committee
ronnie bell chairman david beever 
ian mchoul louise makin charles 
miller smith david wild
remuneration committee
louise makin chairman  
david beever ronnie bell  
david wild
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board of directors and group executive continued
group executive
brian carlton
group hr director
skills and 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
group procurement director
skills and experience mark joined premier 
foods and the group executive in 2007 following 
the acquisition of rhm mark 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 c£15bn of spend on ingredients 
packaging energy machinery facilities 
engineering marketing and all corporate spend 
responsibilities 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
ian deste
group sales director
skills and experience ian joined premier foods 
in september 2011 as group sales director 
he previously spent 20 years with cocacola 
enterprises ltd cce including nine years as 
a member of the gb board most recently ian 
held the position of vicepresident sales and 
customer development prior to which he held 
other senior positions in sales marketing and 
communications at cce in his early career he 
worked in the beer and tobacco industries 
key responsibilities these include 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
richard johnson
group corporate affairs director
skills and experience richard joined premier 
foods in october 2011 as group corporate affairs 
director previously richard was corporate affairs 
director for kraft foods europe based at the 
company’s headquarters in switzerland he also 
held senior corporate affairs roles at kraft foods in 
the uk belgium and the us and for a time was 
vicepresident corporate affairs for mcdonald’s 
europe 
key responsibilities these include leading the 
group’s internal and external communications 
public affairs sustainability and community 
relations activities
dean holroyd
group technical and innovation director
skills and experience dean was appointed 
group technical and innovation director in july 
2011 prior to this dean was hovis supply chain 
director and joined premier foods following the 
acquisition of rhm in 2007 dean joined the rhm 
group in 1997 and served the first seven years as 
managing director initially at ledbury preserves 
before moving on to le pain croustillant prior to 
this dean worked in a number of commercial and 
operational roles with associated british foods 
plc manor bakeries and northern foods plc 
key responsibilities these include setting the 
strategy to develop and deliver a strong innovation 
pipeline ensuring product design systems and 
processes deliver consumer preferred product 
quality in our chosen areas and ensuring that all 
premier foods products comply with the highest 
standards of food safety and legislation
andrew mcdonald
general counsel and company secretary
skills and experience andrew joined the 
company in november 2011 as general counsel 
and company secretary prior to this he held the 
same position at uniq plc recently acquired by the 
greencore group andrew is a qualified solicitor 
and worked as a corporate lawyer at freshfields 
bruckhaus deringer before moving into industry 
he is a law graduate of manchester university 
key responsibilities andrew has responsibility for 
the legal company secretarial and internal audit 
functions and is actively involved in key operational 
issues facing the business he is on the steering 
group of all corporate and strategic projects 
pursued by the group he chairs the risk review 
group and policy steering group he also supports 
the chairman with the management of the board 
to ensure it fulfils its corporate governance 
obligations
the group executive is appointed by the chief executive officer the group executive is responsible for the daytoday management of the business and 
implementing the group’s strategy over the course of the year there have been a significant number of changes in membership details of the group 
executive are set out below our business performance financial statements
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governance
bob spooner
group supply chain director 
skills and experience bob joined premier foods as 
group operations director in april 2007 in october 
2011 bob was appointed group supply chain 
director with responsibility for the group’ s combined 
operations t echnical and procurement functions 
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 leading and 
implementing the group’s manufacturing logistics 
procurement technical and innovation strategy 
across the businesses
iwan williams
managing director
skills and experience iwan joined premier foods 
in november 2011 as managing director iwan has 
a wealth of general management and marketing 
experience gained through previous roles including 
president of mccormicks europe middle east and 
africa and strategic marketing director of coca 
cola asia pacific his earlier career included time 
with sc johnson wax and cadbury schweppes
key responsibilities these include responsibility 
for the daytoday operations of the group’s 
grocery and bakery businesses
mark vickery
group is  change director
skills and 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 
major system and change programmes into the 
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corporate governance report
contents
corporate governance framework 43
leadership
board skills and experience 38–39  43
board tenure 43  46
board membership 38–39  44
board biographies 38–39  44
director conflicts of interest 44
w arbur g	pincus	relationship	agr eement	 44  58
role of the board chairman ceo and sid 45
allocation	of	boar d	meeting	time	 45
bribery	act		anticorruption	policy	 45
gender diversity — board 46
gender diversity — groupwide 46
nonexecutive director tenure 46
independent professional advice 46
effectiveness
board evaluation and 2011 outcomes 47
attendance	—	boar d	and	committee	meetings	 48
director site visits 48
management	committees	 49
audit	committee	 49–50
including membership and meeting attendance  
the committee’s role and its terms of reference  
auditors and nonaudit services and key  
discussions during the year
finance committee 51
including membership and meeting attendance  
the committee’s role and its terms of reference  
and key discussions during the year
nomination committee 51–52
including membership and meeting attendance  
the committee’s role and its terms of reference  
and key discussions during the year
succession planning 52
director induction programme 52
remuneration
remuneration committee 53
including its terms of reference further details  
are set out in the remuneration report on pages  
64 to 76
accountability
risk management 53–56
internal control 53–54
risk register 54
risk radar 54
key risk factors 55–56
relations with shareholders
shareholder engagement 57
board — shareholder updates 57
other statutory information 58–60
employees 58
profit and dividends 58
research and development 58
significant agreements 58
business disposals 58
charitable and political donations 59
going concern 59
supplier payment policy 59
directors’ responsibility statement 59
auditors	 60
shareholder information 61–63
share capital information 61
substantial shareholdings 61
shar eholder	f aqs	 62
correspondence with shareholders in 2011 62–63
2012	annual	general	meeting	 63
key shareholder contacts 63 our business performance financial statements
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governance
overview of our corporate governance framework
this report sets out our approach to corporate governance and our commitment to work towards best practice recognising our position 
as one of the largest manufacturers in the uk food industry corporate governance continues to evolve and we will continue to monitor our 
procedures to respond to new issues and strive for best practice we believe in transparency in governance and in maintaining the highest 
ethical standards in all our business dealings during 2011 the company complied with all the provisions of the uk corporate governance 
code the “code” the code is available on the financial reporting council’s website 
for further details of the role of the committees above see pages 49 to 52 and 66
leadership
our board structure
executivenonexecutive 
director split
boardroom gender diversity length of board tenure 
including executive directors
board skills  
and experience
	n nonexecutive directors 62 n male 87 n 0–3 years 62 n branded retail industry 31
	 n chairman 13 n female 13 n 4–6 years 25 n finance 23 
	 n executive directors 25  n 7–9 years 13 n retail sector 31
    n marketing  sales 15
group executive
corporate policy group
treasury risk
management committee
risk review group
sustainability steering
group
internal control framework
plc board
audit
committee
finance
committee
nomination
committee
remuneration
committee
group executive premier foods plc  annual report and accounts 2011  
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below is a table summarising the directors during the year and committee membership
designation
audit
committee 
finance
committee
nomination
committee
remuneration
committee
current directors
michael clarke chief executive officer x
mark moran chief financial officer x
ronnie bell nonexecutive chairman x x x
charles miller smith nonexecutive deputy chairman x x
david beever senior independent director x x x x
ian mchoul independent nonexecutive director x x x
louise makin independent nonexecutive director x x
david wild independent nonexecutive director x x x
past directors
robert schofield chief executive officer
jim smart chief financial officer
tim kelly chief operating officer
david felwick senior independent director
q who is on the board and who are the group 
executive
a biographies of the current directors and members of the group 
executive are provided on pages 38 to 41 biographies of the board 
are also included in the notice of agm to aid shareholder election
reelection decision making
q what changes have been made to the board 
during the year
a in 2011 the following board changes took place 
 • michael clarke was appointed ceo on 16 august 2011 and 
robert schofield retired from the board on 13 september 2011 
 • mark moran was appointed as cfo on 8 december 2011 and 
jim smart resigned 
 • tim kelly resigned as coo on 25 november 2011
 • david wild was appointed as a nonexecutive director on  
7 march 2011
 • david felwick resigned as a nonexecutive director on 28 april 
2011 and
 • david beever was appointed as senior independent director on 
28 april 2011 following david felwick’s resignation
q what is the role of the nonexecutive 
directors
a the independence external experience and challenge non
executive directors bring to the board is essential to its effective 
operation the current nonexecutive directors bring extensive and 
broad ranging experience as highlighted in the biographies on pages 
38 to 39 the board considers that the nonexecutive directors with 
the exception of charles miller smith as noted below in conflicts of 
interest are independent in character and judgement
q is the board able to appoint additional 
directors
a the board has the power to appoint one or more directors 
under the articles any such director shall hold office until the next 
agm when they shall be eligible for election with the exception 
of charles miller smith as noted below in conflicts of interest an 
ordinary resolution of the shareholders is sufficient to appoint or 
remove a director 
q how does the board comply with the 
requirements of the code
a during 2011 the company complied with all aspects of the 
code the company is also compliant with the walker review 
recommendations for the annual electionreelection of directors which 
will take place at the 2012 agm details of the executive directornon
executive director split can be found on page 43 
q do any of the directors have conflicts of 
interest
a the company has procedures for managing conflicts of interest 
in place and directors have continuing obligations to update the 
board on any changes to these conflicts this process includes 
relevant disclosure at the beginning of each board meeting and also 
the company’s annual formal review of potential conflict situations 
which includes the use of a questionnaire
under the terms of the relationship agreement between the 
company and warburg pincus charles milller smith a senior 
adviser to warburg pincus 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 board 
meetings 
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 hisher service contract 
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governance
q what are the roles and responsibilities of the board and its key members
a
the board the chairman
the board has an agreed schedule of matters reserved which 
include
 • setting longterm strategic and commercial objectives
 • approving annual operating and capital budgets
 • reviewing business performance
 • overseeing the group’s internal control systems and 
 • 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 
the chairman’s responsibilities are primarily the leadership of the 
board and ensuring its effectiveness this is achieved by
 • chairing board meetings setting the agendas in consultation 
with the ceo and general counsel and company secretary and 
encouraging directors’ active participation in board discussions
 • leading the performance evaluation of the board its committees 
and individual directors
 • promoting the highest standards of corporate governance 
including compliance with the code wherever possible
 • ensuring timely and accurate distribution of information to the 
directors and effective communication with shareholders
 • establishing an effective working relationship with the ceo 
by providing support and advice whilst respecting executive 
responsibility and
 • periodically holding meetings with the nonexecutive directors 
without the executive directors present
the deputy chairman
the deputy chairman is responsible for
 • supporting the chairman in discharging his duties and
 • where appropriate deputising for the chairman in his absence
the chief executive officer the senior independent director
the ceo is responsible for 
 • the executive management of the group and 
 • ensuring the implementation of board strategy and policy  
within the approved budgets and timescales 
the ceo is assisted in meeting his responsibilities by the cfo  
and the group executive who head up the group’s principal 
operations and functions 
the sid is responsible for
 • supporting the chairman and leading the nonexecutive directors 
in the oversight of the chairman and ceo 
the sid’s specific responsibility is to be available to shareholders if 
they have concerns which the normal channels have failed to resolve 
or where such contact is inappropriate
q what are the directors paid
a details of the directors’ service contracts letters of appointment 
emoluments personal interests and beneficial interests in company 
shares and share options are found in the remuneration report on 
pages 73 to 75
q does the company maintain directors’ and 
officers’ liability insurance
a yes 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 at scheduled board 
meetings during the year to 31 december 2011
 n strategy 31
 n finance  risk 24
 n governance 18
 n operations 16
 n succession 11
q how has compliance with the uk bribery  
act 2010 been dealt with by the group
a during 2011 we undertook a full scale review of practices 
to ensure compliance with the bribery act 2010 before its 
implementation the board was presented with a paper from 
the general counsel and company secretary on the possible 
impact this legislation may have on the group it was agreed 
that an anticorruption policy would be introduced and an 
employee training programme rolled out
the corporate policy group approved the policy and with the 
support of the board and members of the group executive 
management were trained and asked to disseminate this 
information to their teams employees were communicated with 
by our internal intranet site premiernet and subsequently asked 
to confirm their acceptance of the policy when logging onto their 
computers additionally departments with a high level of risk 
received bespoke facetoface training 
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q what commitment has the company made to 
diversity and inclusion at board level
a the board announced via the group’s website its intention to 
adopt as policy an aim to have at least two female board directors 
by 2015 the board believes in the importance of diversity in its 
widest sense and the benefits that it can bring to the operation 
of an effective board this is taken into account whenever a new 
appointment is undertaken with the aim to have individuals with a 
broad range of skills backgrounds and experience reflecting both the 
type of industry and the geographical locations in which we operate
go online
wwwpremierfoodscoukaboutuscorporategovernancegenderdiversitycfm
q how are we driving the diversity agenda below 
board level
a we believe there are further opportunities to drive gender diversity 
at levels below the board both within the organisation as a whole 
and particularly within senior management we intend to focus on 
understanding how best to develop and retain women through all 
levels of the organisation and to identify and understand where 
potential blocks exist below is a graph illustrating gender diversity 
across the group
 female workforce as at 31 december 2011  
at premier foods
q how does the board keep uptodate on key 
governance issues
a the board believes that keeping uptodate with developments 
in corporate governance is important and therefore a standing item 
on the board agenda is corporate governance the general counsel 
and company secretary prepares a board paper each meeting 
and presents updates on recent legal regulatory and governance 
issues including relevant case law during the year this has included 
updates on bis’s future of narrative reporting and executive 
remuneration frc’s effective company stewardship lord davies 
report — women on boards and the bribery act 2010
effectiveness
q what is the mix between executive and non
executive directors on the board
a the directors believe that there should be an appropriate 
combination of executive and nonexecutive directors on the board 
the company complies with the code which states that at least half 
the board excluding the chairman should comprise of nonexecutive 
directors the current mix of directors is shown on page 43
q does the chairman meet with the non
executive directors in the absence of the 
executive directors
a yes this is one of the chairman’s responsibilities and is essential 
to maintain good corporate governance 
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 between length of service to ensure independent judgement 
and an appropriate level of experience and skill 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 three years seven months
8
7
6
5
4
3
2
1
0
number of years service
david wild
ronnie bell
charles	miller	smith
david beever
louise	makin
ian	mchoul
details of all directors’ appointment terms are set out on page 72
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 general counsel and company secretary if any director were 
to have a concern over any unresolved business issue following 
professional advice they are entitled to require the general counsel 
and company secretary to minute that concern should they later 
resign over a concern nonexecutive directors are asked to provide a 
written statement to the chairman for circulation to the board
corporate governance report continued
n female
n male
board
group executive
management
all	employees
87
13
30
23
100 70 77 our business performance financial statements
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governance
governance focus board and individual performance reviews
a annually a board performance review is carried out which measures its performance and that of its committees alongside this review 
each director receives an appraisal appraisals are conducted by the chairman for the ceo and by the senior independent director following 
discussions with the other nonexecutive directors for the chairman
the board has for many years maintained a policy to conduct an external board evaluation every three years the last independent 
external review was conducted in 2009 by boardroom review
in 2010 a questionnaire was used for the review however it was agreed that in 2011 facetoface interviews would be undertaken by the 
general counsel and company secretary to allow more open communications the board evaluation was completed and feedback from 
the evaluation was provided in the form of a written report to the board in december 2011 which was then debated and actions agreed
q what did the 2011 board evaluation cover
a key areas for the review were agreed with the chairman at the outset and covered eight categories
 • strategy	 •			performance
 • risk	management	 •			boar d	pr ocess	information	and	support
 • committees	 •			chairman	and
 • boar d	cultur e	 •			dir ector	development
q what were the outcomes of the 2011 evaluation
a board members are very supportive of the need to be transparent and are committed to good corporate governance as a result of the 
review an action plan was implemented which is set out below
action plan for 2012 resulting from the board effectiveness review 
strategy • deepen knowledge with additional quarterly halfday strategy reviews prior to scheduled 
board meetings with a particular focus on the external environment
performance — management  
ned interaction
 • strengthen contact between neds and management by inviting management to attend 
and present at all board meetings
performance — information to neds • increase the number of site visits during 2012
 • enhance flow of information from management by resuming monthly indepth brand and 
customer reviews
board process information and 
support
 • continue to develop board portal to ensure timely costeffective provision of board 
materials
 • management to review the optimum level of detail in presentations and papers to the 
board
committees • finance committee — review the need for this committee post completion of refinancing
 • nomination committee — talent development and management succession planning
 • nomination committee — consider 2015 diversity target with all board appointments
q how do we make sure our board and its committees are effective premier foods plc  annual report and accounts 2011  
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q how frequently did the board and committees meet in 2011 
a the board held 10 scheduled meetings in the year and in addition six meetings were convened for specific business in addition to the 
scheduled committee meetings detailed in the table below an additional two finance committee meetings an audit committee meeting and a 
nomination committee meeting were held 
meetings are usually held at the company’s head office in st albans however twice a year the board visits the group’s sites to see the 
business in action and hold their meetings details of the attendance at scheduled board and committee meetings are set out below 
group 
board 
10
audit 
committee 
4
finance 
committee
3
nomination 
committee 
2
remuneration 
committee
4
current directors
michael clarke
1
33 1
5
— 1
5
1
5
mark moran
2
11 1
5
— — —
ronnie bell 10 4
5
3 2 4
charles miller smith 9 4
5
3 2 4
5
david beever 9 3 3 2 3
ian mchoul 10 4 2 2 3
5
louise makin 10 4
5
— 2 4
david wild
3
99 33 — 11 33
past directors
robert schofield
1
77 3
5
2 1
5
2
5
jim smart
2
10 4
5
3 — 1
5
tim kelly
2
99 3
5
11 — —
david felwick
4
33 1
5
1
5
11 22
1
 michael clarke was appointed ceo on 16 august 2011 and robert schofield retired as a director on 13 september 2011
2
 mark moran was appointed as cfo on 8 december 2011 and jim smart resigned tim kelly resigned on 25 november 2011
3
 appointed as a director on 7 march 2011 
4
 retired as a director on 28 april 2011
5
 attendance by invitation
figures in brackets indicate the maximum number of meetings that could have been attended by that director david beever missed one 
board meeting and two committee meetings which were held on the same day owing to a prior work commitment known to the board in 
advance ian mchoul missed one committee meeting due to the rescheduling of a meeting by the company and charles miller smith missed 
one board meeting due to a prior work commitment known to the board in advance
q how does the board keep uptodate with business developments
a the board 
 • meets regularly with the group executive 
 • receives extensive business presentations and
 • conducts an annual strategy review 
as detailed above each year two site visits are arranged for the board to meet with senior operational management and to undertake a site 
visit before its planned board meetings due to director changes during the year the board only completed one visit to the bury st edmunds’ 
site where loyd grossman branston and haywards products are manufactured
q what committees does the board have
a the board has four committees which assist in the discharge of its responsibilities 
 • audit committee
 • finance committee
 • nomination committee and
 • remuneration committee
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governance
q does the group have any other committees
a michael clarke is assisted by the work of the group executive 
and its subcommittees together these form part of the company’s 
corporate governance framework but are not formally appointed 
committees of the board
 • group executive — responsible under the leadership of 
michael clarke for the daytoday management of the business 
setting performance targets and implementing the group’s 
strategy and direction as determined by the board members of 
the committee include michael clarke mark moran and members 
of the group executive
other management committees
 • corporate policy group — responsible for the effective 
implementation of policies taking into account changes in 
regulations and other business risks members of the committee 
include members of the group executive and senior operational 
management
 • sustainability steering group — responsible for providing 
direction to and oversight of the implementation of the group’s 
sustainability programme which is built around the four core 
themes of marketplace environment workplace and community 
its objective is to identify and mitigate both environmental 
and social risks in order to protect and enhance the group’s 
reputation and build trust amongst its many stakeholders 
members of the committee include the ceo members of the 
group executive and senior operational management
 • risk review group — responsible for sponsoring and driving 
effective risk management throughout the business and making 
recommendations to the audit committee as appropriate 
monitoring and reporting on all material business risks which 
might impact the delivery of the group’s strategic goals and 
objectives and agreeing with management appropriate mitigating 
actions members of the committee include the cfo members of 
the group executive and senior operational management
 • treasury risk management committee — responsible 
for the oversight of designated material foreign currency and 
commodity exposures and agreeing with senior management 
appropriate mitigating actions members of the committee 
include members of the group executive and senior operational 
management
audit committee
the committee has responsibility for reviewing the effectiveness 
of the group’s financial reporting systems 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 external 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 group’s 
website
go online
wwwpremierfoodscoukaboutuscorporategovernanceboardcommitteescfm
q who is on the committee
a
committee member position comments
ian mchoul chairman independent ned
david beever member sid
david wild member independent ned
both ian mchoul and david beever have recent and relevant financial 
experience ian mchoul as the cfo 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 in addition one meeting was convened for specific business 
the committee met with the internal and external auditors on 
four occasions in the year without the presence of management 
attendance at the scheduled meetings is shown in the table on  
page 48
 
q what is the role of the committee
a the committee has been delegated authority by the board to
 • monitor financial reporting including the annual and interim 
reports preliminary results announcements and formal 
announcements relating to financial performance and reporting
 • ensure the effectiveness of the group’s internal controls and risk 
management systems
 • review and update the whistleblowing arrangements
 • monitor and review the effectiveness of the group’s internal audit 
function including the approval of any appointment or removal of 
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corporate governance report continued
 • consider and make recommendations to the board on the 
appointment reappointment and removal of external auditors 
including the setting of their remuneration 
 • review the external auditors’ independence and objectivity and 
the effectiveness of the audit processes and 
 • develop and implement a policy on the engagement of the 
external auditors to supply nonaudit services and report to the 
board matters identified where action or improvement is required
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 group has with pwc and for the year ended 31 december 2011 
the committee was satisfied with the independence objectivity and 
effectiveness of the relationship with the external auditor 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 
with the next rotation occurring in 2012 there are no contractual 
obligations restricting the group’s choice of external auditors at the 
2012 agm the reelection of pwc as the group’s auditors will be 
proposed to shareholders
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 was engaged to advise on the group’s financing arrangements 
in particular reviewing and assessing the group’s strategy operations 
and performance forecasts for the purposes of the group refinancing 
fees incurred in relation to this work were £21m
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 the committee 
is aware of and sensitive to investor body guidelines on nonaudit 
fees however given the nature of work required in connection with 
the refinancing of the group in 20112012 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 the likely cost 
following the unanimous consent from the group’s banking 
syndicate swap counterparties and pension schemes to the terms of 
a refinancing package which is expected to be signed by the end of 
march 2012 the committee expects that the level of nonaudit fees 
will be significantly lower going forward
q what key issues did the committee discuss 
during the year
a during the year the committee
 • received regular reports from the internal audit function 
ensured it was adequately resourced monitored its activities and 
effectiveness and agreed the annual audit plan 
 • conducted a review of the effectiveness of the internal audit 
function including internal control self assessments
 • 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
 • considered the external auditors’ report for the year ended  
31 december 2010 and recommended the reappointment of the 
external auditors
 • considered the impact of key accounting issues which included 
the impact on accounting for changes in the group’s pension 
scheme
 • reviewed the nonaudit services spend policy and approved the 
engagement of pwc as an adviser in relation to certain internal 
projects
 • rolled out the new anticorruption policy and groupwide 
awareness programme
 • approved the group’s risk management policy and key business 
risks and
 • received updates on the group’s whistleblowing arrangements 
 
ian mchoul
chairman of the audit committee our business performance financial statements
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governance
finance  
committee
the committee is responsible for reviewing the group’s 
financial strategy approving any changes to this strategy 
and overseeing 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 group’s 
website
go online
wwwpremierfoodscoukaboutuscorporategovernanceboardcommitteescfm
q who is on the committee
a
committee member position comments
david beever chairman sid
michael clarke member ceo
mark moran member cfo
ronnie bell member chairman ned
charles miller smith member deputy chairman ned
ian mchoul member independent ned
paul leach member group treasurer
q how many meetings were held during  
the year
a the committee held three scheduled meetings in the year and 
in addition two meetings were was convened for specific business 
attendance at the meetings is shown in the table on page 48
q what is the role of the committee
a the committee has been delegated authority by the board to
 • review and make recommendations to the board on matters 
relating to the group’s capital structure financing and pensions 
strategy
 • oversee the governance and activities of the treasury risk 
management committee
 • review the investment strategy and funding levels of the group’s 
pension schemes in order to reduce risk
 • review the group’s financial policy and strategy and
 • monitor the group’s liquidity covenant and going concern 
positions
q what key issues did the committee discuss 
during the year
a during the year the committee
 • reviewed the group’s financial strategy including the group’s 
swap arrangements and sources of funding
 • reviewed and recommended a new refinancing structure for 
approval by the board
 • reviewed the investments strategy of the group’s pension 
schemes in order to reduce risk
 • approved amendments to the group’s treasury policy 
 • reviewed the group’s directors’ and officers’ insurance cover 
and
 • conducted a comprehensive review of corporate advisers 
 
david beever
chairman of the finance 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 group’s 
website
go online
wwwpremierfoodscoukaboutuscorporategovernanceboardcommitteescfm
q who is on the committee
a
committee member position comments
ronnie bell chairman chairman ned
charles miller smith member deputy chairman ned
david beever member sid
ian mchoul member independent ned
louise makin member independent ned
david wild member independent ned premier foods plc  annual report and accounts 2011  
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corporate governance report continued
governance focus director induction programme
q does the company have a director induction programme
a yes all directors receive a tailored 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 group’s business and they may request further information as they 
consider necessary a typical nonexecutive director induction would include
stage one matters covered
provision of documents duties of a director board procedures corporate governance 
including provision of an icsa compliant governance manual
stage two matters covered
meeting with ceo  cfo business overview current trading key commercial issues
meetings with nonexecutive directors open discussion forums
meeting with general counsel and company secretary board process and governance issuesupdates key legal risk 
and internal audit matters
meetings with each of the group executive commercial issues and projects as applicable for operations 
sales supply chain corporate affairs hr procurement 
marketing technology and innovation and isc
meeting with investor relations investor relations matters and any updates
meeting with treasury treasury and insurance matters and any updates
stage three matters covered
site visits understanding of the business and operations
q how many meetings were held during the 
year
a the committee held two scheduled meetings in the year and 
additionally was convened on a further occasion for specific business 
attendance at the meetings is shown in the table on page 48
 
q what is the role of the committee
a the committee has been delegated authority by the board to
 • 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
 • give full consideration to succession planning taking into account 
the challenges and opportunities facing the group and what skills 
and expertise would benefit the board in the future 
 • regularly review the structure size and composition including 
independence and knowledge of the board and make 
recommendations to the board regarding changes and
 • agree the job specification for the chairman including an 
assessment of the time commitment expected recognising the 
need for availability in the event of a crisis
q what key issues did the committee discuss 
during the year
a during the year the committee
 • undertook an extensive recruitment process and recommended 
the appointment of a new ceo using an external search agency 
 • recommended the approval of mark moran as cfo
 • recommended the appointment of david wild as a nonexecutive 
director
 • undertook an annual review of the composition and expertise of 
the board 
 • recommended the directors for reappointment at the 2011 agm 
and
 • reviewed performance appraisals for members of the group 
executive
q what processes are in place for succession 
planning
a the committee reviews the succession requirements of the 
board including the need for diversity on an annual basis and 
makes recommendations to the board as appropriate 
  
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chairman of the nomination committee our business performance financial statements
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governance
➜
➜
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
group 
executive
corporate
policy
group
plc 
board
remuneration
remuneration  
committee
the committee is responsible for determining and agreeing the 
overall remuneration strategy for executive directors and senior 
management determining the individual remuneration packages 
for the chairman executive directors general counsel and 
company secretary and senior management and approving the 
design of all share incentive plans 
 
the committee’s terms of reference are available on the group’s 
website
go online
wwwpremierfoodscoukaboutuscorporategovernanceboardcommitteescfm
further details on the remuneration committee including a list of its 
members can be found in the directors’ remuneration report on pages 
64 to 76
louise makin
chairman of the remuneration committee
accountability
risk management
our risk control framework operates as follows
q what are the board’s responsibilities for risk 
management
a managing risk effectively is integral to the achievement of the 
group’s strategic objectives we have an established governance 
structure which has continued throughout 2011 this supports the 
early identification and mitigation of key business risks
the board has ultimate responsibility for ensuring that business risks 
are effectively managed the board has considered and approved 
the risk management policy risk appetite of the group and has 
delegated the regular review of the risk management process to the 
audit committee the audit committee 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 
given below
daytoday risk management is the responsibility of senior 
management as part of their everyday business processes and is 
underpinned by the group’s policies and procedures to ensure that it 
is fully embedded there is a structured business review process that 
operates across all business areas and this along with the corporate 
governance framework further underpins the ongoing management 
of risk
q what are the aims of the internal control 
system
a the internal control system principally provides 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 system is designed to manage rather than to 
eliminate risk and provides reasonable but not absolute assurance 
against material misstatement or loss the system also supports 
senior management’s decisionmaking improves the reliability of 
business performance and assists in the preparation of the group’s 
consolidated accounts
q how is the group’s internal audit programme 
decided
a each year the audit committee meets to discuss and approve 
the nature and scope of the internal 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 additional internal audits are added to the schedule in 
circumstances such as the acquisition or disposal of a business or 
any other significant business development
q how are internal controls monitored
a annually comprehensive internal control self assessment 
questionnaires are required from senior management from business 
areas across the group these self assessment questionnaires 
are designed to ensure that any material control breakdowns are 
highlighted and the operation of internal controls are addressed 
to 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 by member of the group executive prior to 
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following each independent internal audit a report is produced 
showing the findings which are reported to the group executive and 
any corrective action is agreed summaries of these reports and 
details of progress against action plans are presented to the audit 
committee for discussion and review
q does the board conduct an annual review of 
internal controls
a yes in accordance with the turnbull guidance an annual 
review is conducted 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 and also risk management 
systems in place throughout the year under review 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
q what financial reporting controls are in place
a 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 does the group maintain a risk register
a each member of the group executive is 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 group executive reviews the overall corporate 
risk register and assesses progress on the implementation of 
mitigation strategies along with consideration of new and emerging 
risks 
once reviewed by the group executive the corporate risk register 
is presented to the audit committee for consideration additionally 
once a year a separate risk meeting 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 marketplace and
 • the group’s specific risks
the results of the nonexecutive directors’ risk meeting forms part of 
the overall process for reviewing the corporate risk register at the 
end of the financial year
economic  
conditions
competition  
consumer
pension 
obligations
food manufacturing 
industry
customer 
relationships
refinancing
business 
strategy
external
internal
steady changing disposals
price 
volatility
the ‘risk radar’ below sets out our key risk factors our business performance financial statements
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governance
q what are the group’s key risk factors
a
business strategy and reliance on business recovery competition and consumer risk
risk
the group suffered a significant deterioration in its trading 
performance during 2011 in order to achieve the group’s recovery 
plan and address unsatisfactory trading performance management’s 
strategic focus and investment is on its eight power brands which 
management believes have the strongest potential for longterm 
sustainable growth this strategic focus is likely to result in further 
selective divestments of noncore businesses and significant 
cost saving initiatives to improve the underlying performance of 
the business all or any of these initiatives may fail to improve 
performance or fail to occur and consequently have adverse 
consequences on the group’s financial position 
mitigation
in the summer of 2011 the board appointed michael clarke as ceo 
michael clarke has conducted a strategic review of the business and 
is now executing a clear and focused strategy michael clarke has 
moved quickly to strengthen the senior management structure there 
is regular review of progress against key milestones and to ensure 
the strategy is communicated and understood the group regularly 
engages with a wide range of stakeholders including shareholders 
colleagues customers and suppliers
risk
the group operates in a highly competitive environment and in fast 
moving sectors of the food industry if we are unable to respond 
to competitor actions or to deliver products that meet consumer 
demand and preferences this could adversely impact the group’s 
results furthermore there is currently excess supply in the bread 
market resulting in intense competition between suppliers and 
customers regularly transferring business between suppliers in 
response to a changing competitive environment and the actions 
of competitors the group may make pricing service or marketing 
decisions that could have a material impact on revenues and results
mitigation
the group has a strategy to invest in new product development 
packaging 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 further developed 
our innovation process and increased resources for innovation and 
marketing and plan to continue this further in 2012 additionally the 
board has approved investment for a number of capital expenditure 
projects related to new product development
debt burden changes in the cost and availability of raw materials
risk
the group has bank borrowings of £14bn and supports three 
defined benefit pension schemes in the uk all three pension 
schemes have significant funding deficits which could have a 
significant adverse impact on the financial condition of the group 
the company does not pay dividends and is restricted from paying 
dividends under the terms of its financing arrangements the group 
is also restricted from raising additional forms of debt finance and is 
not able to use free cash flow for acquisitions
mitigation
the group obtained unanimous consent to its new refinancing 
arrangements which will provide funding until june 2016 the re
financing package is subject to final documentation being put in 
place the directors are confident this will be achieved and signed 
by the end of march 2012 in addition the group has agreed 
deficit recovery plans with its three pension schemes and is actively 
exploring liability containment strategies during the year the group 
closed its final salary pension schemes and replaced them with 
career average schemes which were closed to new entrants new 
employees are now provided with pensions on a defined contribution 
basis
risk
the group purchases its raw materials many of which are 
commodities from numerous suppliers and many of these raw 
materials are subject to potentially significant price fluctuations if 
the costs of raw materials were to rise and the group was unable to 
absorbmitigate or pass such increases on to its customers in full or 
in a timely manner then its operating profits and cash flow would be 
adversely affected if the supply of any of the group’s raw materials 
is constrained for any reason this could also have an adverse impact 
on the business
mitigation
we have continued to experience significant inflation both within 
raw materials and packaging costs and we expect this to continue 
in 2012 however we have a centralised procurement function with 
significant category expertise and we seek to mitigate the position 
by the targeted forward buying of products value engineering 
innovation and through our relationships with suppliers and 
customers premier foods plc  annual report and accounts 2011  
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corporate governance report continued
customer relationship risk economic conditions
risk
the group’s top five customers are all major uk retailers and account 
for approximately 56 of the group’s revenue in line with industry 
practice the majority of the group’s sales are by means of shortterm 
standard purchase orders rather than longterm contracts in recent 
years the major multiple retailers have increased their share of the 
uk grocery market and price competition between these retailers has 
intensified this price competition has led the major multiple retailers 
to seek lower prices and increased promotions from their suppliers 
there can be no assurance that the group’s customers will continue 
to purchase its products at current volumes at current pricing or on 
current terms in addition if any major customer reduced or ceased 
its business with the group or were to experience a decline in the 
marketplace there could be a significant adverse effect on the group’s 
financial condition and prospects
mitigation
a key element of the group’s strategy is to develop longterm 
sustainable relationships with its customers the group invests 
significant resources to maintain strong multilevel commercial 
relationships with its customers these relationships can provide the 
group with a deep understanding of its customers’ needs which 
means the group is well placed to derive competitive advantage to 
increase its share of its customers’ business and benefit from their 
growth in the market
risk
during 2011 the risks and uncertainties around the uk’s general 
economic conditions and volatility of international markets have 
continued to impact the group our suppliers customers and 
consumers a deeper andor more prolonged downturn or a 
‘doubledip’ recession may lead to an overall decline in the volume 
of the group’s sales and ‘down trading’ may also continue whereby 
consumers move away from the group’s branded products to more 
value orientated nonbranded products
mitigation
the group has a broad portfolio of well known and much loved 
products and operates over a large number of categories which 
allows it to actively respond to changing market conditions given  
the uncertain outlook in the general economic environment the 
group continues to closely manage its costs and cash flows
risks relating to business restructuring food manufacturing industry risk
risk
the group has sold a number of businesses over the last 12 
months and under various disposal agreements has given certain 
representations warranties and indemnities in favour of the 
purchasers which if breached may result in financial claims against 
the group the group is part way through its divestment programme 
and further disposal agreements with representations warranties  
and indemnities will be entered in to
mitigation
in each sale process the group has undertaken an appropriately 
thorough disclosure process and has achieved limitation of liability 
provisions in the sale documentation the group has an experienced 
deal team with a good track record of managing post completion 
risk
risk
as a food manufacturer the group is subject to legislation and 
regulations in the uk the eu and elsewhere in relation to food 
and its production to health to employees and their safety and to 
the environment and its preservation violations of any laws could 
result in fines and sanctions as well as reputational risk  should 
any product contamination occur it could lead to product recalls 
or liabilities to customers or consumers health scares can impact 
demand for certain food
mitigation
it is the group’s policy to require that its entire business comply with 
relevant laws and regulations the group has an excellent food  
safety record and the group continues to focus on high levels of 
operational control and continued improvement in all of the above 
areas the group has a leading technical function which sets high 
standards for hygiene and product quality which is subject to regular 
internal and external monitoring during the year we were awarded 
manufacturer of the year at the european manufacturing summit 
which recognised the group’s significant achievements in supply 
chain management the group maintains crisis management and 
business continuity plans which are subject to periodic testing 
additionally the group has insurance cover in place to mitigate the 
financial impact of these risks our business performance financial statements
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governance
relations with shareholders
q how does the company engage with 
shareholders
a an important 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 group
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 group’s half year and yearend 
results presentations are made to analysts and major shareholders 
to update them on the progress the group has made towards its 
goals and invite them to ask questions 
following the announcement of the group’s trading updates and 
interim management statements conference calls take place with 
analysts and major shareholders to update them on the group’s 
progress full details on results presentations rns releases interim 
management statements and conference calls are available on the 
group’s website
go online
wwwpremierfoodscoukinvestors
the company held an investor seminar on 13 may 2011 for 
investors and analysts presenting strategic plans and providing 
an opportunity for attendees to ask questions of directors and the 
group executive a webcast of the event and presentation materials 
are available to view on the group’s website
go online
wwwpremierfoodscoukinvestorsresultsandpresentations
the main channel of communication to institutional investors is 
through the ceo cfo and head of investor relations the ceo 
and cfo are available to meet with shareholders during the year the 
chairman deputy chairman and senior independent director are 
also available to discuss any issues and concerns of shareholders 
and welcome questions posed to the board and committees 
additionally key senior management may host ad hoc meetings and 
events for institutional shareholders currently around 12 sellside 
research analysts publish research on the group their details are 
published on the group’s website
go online
wwwpremierfoodscoukinvestorsshareholderinformationanalystscfm
in 2011 the remuneration committee chairman consulted with 
shareholders to discuss proposed changes in longterm incentive 
arrangements and other remuneration issues
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 register movements analyst reports a 
summary of investor meetings and other recent activity the board 
also receives comprehensive feedback from the company’s brokers 
following investor roadshows after half year and yearend results
ronnie bell
chairman premier foods plc  annual report and accounts 2011  
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other statutory information
pages 1 to 76 together with the sections of the annual report 
incorporated by reference constitute the directors’ report the 
financial statements are presented on pages 77 to 135
principal activities
premier foods plc the “company” is the holding company of the premier 
foods group of companies the “group” the group manufactures 
processes and distributes some of britain’ s favourite food brands we 
employ around 12000 people and operate from over 40 sites in the uk
general
articles of association
the company’s articles may only be amended by a special 
resolution at a general meeting the articles are available on the 
group’s website
go online
wwwpremierfoodscoukaboutuscorporategovernancearticlesofassociationcfm
employees
disclosures on employee policies and the employment of disabled 
people are set out on pages 18 to 19
profit and dividends
the loss on continuing operations before tax for the financial 
year was £2591m 2010 £285m profit the directors do not 
recommend the payment of a dividend for 2011 2010 £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 costs 
and to improve service to customers research and development 
costs of £84m 2010 £106m were incurred in continuing 
operations during the year
significant agreements
the following significant agreements contain provisions that take 
effect alter or terminate upon a change of control of the company 
following a takeover bid
 • the group has a term and revolving facilities agreement originally 
for £21bn entered into in 2006 and a receivables purchase 
agreement and guarantee dated 30 december 2007 recent 
unanimous consent from the company’s banking syndicate 
swap counterparties and pension schemes will lead to a restated 
refinancing package which is expected to be signed by the end 
of march 2012 the current and new facilities agreements contain 
customary change of control provisions which allow the lenders 
or an individual lender to demand repayment of the facilities 
in full on a change of control the new receivables purchase 
agreement contains change of control provisions which allow the 
provider of the funding to terminate or suspend the operation of 
the agreement and demand payment of all amounts outstanding 
under the agreement on a change of control 
 • 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 in the event of a change of 
control or if the shareholding of warburg pincus falls below 
239802158 shares the company may give notice to terminate 
the appointment of charles miller smith
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 may cause options and 
awards granted under such schemes to vest
business disposals
the group entered into the following agreements to dispose of 
certain businesses in 2011
 • on 15 december 2011 the group entered into an agreement 
with the boyne valley group for the sale of four irish brands 
comprising chivers gateaux mcdonnells and the erin licence for 
a gross cash consideration of €414m this disposal completed 
on 23 january 2012 as part of the disposal the group and 
the boyne valley group entered in to an agreement for certain 
transitional services provided by the group to the boyne valley 
group and vice versa for a period following closing
 • on 8 december 2011 the group entered into an agreement 
with 2 sisters food group for the disposal of the brookes avana 
business comprising of rf brookes chilled foods and avana 
bakeries for a cash consideration of £303m on a debt free 
and cash free basis this disposal completed on 30 december 
2011 as part of the disposal the group and 2 sisters food 
group entered in to an agreement for certain transitional services 
provided by the group to the 2 sisters food group and vice 
versa for a period following closing
 • on 7 february 2011 the group 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 this disposal completed on  
23 july 2011 as part of the disposal the group and princes ltd 
entered into an agreement for certain transitional services to be 
provided by the group to the princes group and vice versa these 
arrangements will end by 31 march 2012
 • on 24 january 2011 the group 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 £2050m 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 
group and exponent private equity llp entered into an agreement 
for certain transitional services provided by the group to the 
exponent group and vice versa these arrangements ended in 
october 2011 our business performance financial statements
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governance
financial
charitable and political donations
during the year the group made charitable donations to the following 
charities the royal british legion £3760 the caldecott foundation 
£5000 red nose day £6000 scottish sports futures £6000 and 
the irish bakers benevolent society £8827 t otal charitable donations 
during the year amounted to £85097 2010 £166555 in line with group 
policy no political donations were made during the year 2010 £nil
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
going concern
the group has obtained consent from its banking syndicate swap 
counterparties and pension schemes on a refinancing package 
subject to the formalities of final documents being signed expected 
by the end of march 2012
the directors are confident that the necessary documentation will be 
finalised and signed by the end of march 2012 and that all conditions 
precedent will be met the directors therefore have a reasonable 
expectation that the group has adequate resources to operate in the 
ordinary course of business and to meet its obligations as they fall 
due thus the financial statements have been prepared on a going 
concern basis
supplier payment policy
the company had no amounts owing to trade creditors at  
31 december 2011 2010 £nil the group’s creditor days 
outstanding at 31 december 2011 were 727 days 2010 688 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 group’s website
go online
wwwpremierfoodscoukaboutusoursuppliers
payment terms for purchases under major contracts are agreed as 
part of the contract negotiations
statement of directors’ responsibilities for the 
annual report
the directors are responsible for preparing the annual report the 
directors’ 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 “ifrss” as adopted by the eu and the parent 
company financial statements in accordance with uk generally 
accepted accounting practice uk accounting standards and 
applicable law 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 group and the 
company and of the profit or loss for that period in preparing these 
financial statements the directors are required to
 • select suitable accounting policies and then apply them 
consistently
 • make judgements and accounting estimates that are reasonable 
and prudent
 • state whether ifrss as adopted by the eu and applicable 
uk accounting standards have been followed subject to any 
material departures disclosed and explained in the group and 
parent company financial statements respectively and
 • prepare the group and company financial statements on the 
going concern basis unless it is inappropriate to presume that the 
group will continue in business
the directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the 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 directors’ remuneration 
report comply with the companies act 2006 and as regards the 
group financial statements article 4 of the ias regulation they are 
also responsible for safeguarding the assets of the company and the 
group and hence for taking reasonable steps for the prevention and 
detection of fraud and other irregularities premier foods plc  annual report and accounts 2011  
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the directors are responsible for the maintenance and integrity of 
the group’s website wwwpremierfoodscouk legislation in the uk 
governing the preparation and dissemination of financial statements 
may differ from legislation in other jurisdictions 
 
information made available on the website does not constitute part 
of this annual report the information has been prepared under the 
relevant acounting standards and legislation
each of the directors whose names and functions are listed on 
pages 38 to 39 confirm that to the best of their knowledge
 • the group financial statements which have been prepared in 
accordance with ifrss as adopted by the eu give a true and fair view 
of the assets liabilities financial position and loss of the group and
 • the directors’ report contained on pages 1 to 76 includes a 
fair review of the development and performance of the business 
and the position of the group together with a description of the 
principal risks and uncertainties that it faces
subsequent events
since the balance sheet date the group has continued to progress 
its strategy in line with this details of postbalance sheet events are 
set out in note 31 of the group financial statements
auditors
independent auditors
the audit committee has recommended pricewaterhousecoopers 
llp’s “pwc” reappointment and pwc has indicated its willingness 
to continue as auditors the reappointment of pwc and the setting 
of their remuneration will be proposed at the 2012 agm
auditors and the disclosure of information to 
auditors
the companies 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
 • so far as each director is aware there is no relevant audit 
information of which the group’s auditors are unaware and 
 • each director has taken all the steps that they ought to have 
taken as a director to make themselves aware of any relevant 
audit information and to establish that the group’s auditors are 
aware of that information
approved by the board and signed on its behalf by
andrew mcdonald
general counsel and company secretary
18 march 2012
other statutory information continued our business performance financial statements
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governance
shareholder information
share capital information
the company’s issued share capital at 31 december 2011 comprised 2398058019 ordinary 1p shares during the period 36438 ordinary 
shares were issued details of the movements can be found in note 25 all of the ordinary shares rank equally with respect to voting rights the 
rights to receive dividends and distributions on a winding up
analysis of share register
as at 31 december 2011 there were 8352 registered holders of the 2398058019 ordinary 1p shares in issue the company’s 
shareholdings are analysed below
number of shares
number of 
holdings
 of total 
shareholders
number of 
ordinary 
shares
 of ordinary 
shares
1–500 830 994 242206 001
501–1000 997 1194 838159 003
1001–2000 1357 1625 2131578 009
2001–5000 1979 2369 6775340 028
5001–10000 1094 1310 8413755 035
10001–100000 1621 1941 50625889 211
100001–highest 474 567 2329031092 9713
total 8352 100 2398058019 100
holders
number of 
holdings
 of total 
shareholders
number of 
ordinary 
shares
 of ordinary 
shares
private 6331 758 76724254 32
institutional and corporate 2021 242 2321333765 968
total 8352 100 2398058019 100
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 group’s website as at 18 march 2012 the company is aware of the following 
interests of 3 or more in the company
shareholder
ordinary
shares
 of 
 capital
nature
 of holding
warburg pincus llc 380853510 1588 direct
paulson  co inc 262927422 1096 direct
templeton investment counsel llc 179962642 750 direct
td waterhouse europe ltd 121841921 508 indirect
barclays private bank uk 110263698 460 indirect
norges bank investment management 96798824 404 direct
legal  general investment management ltd 84634534 353 direct
dimensional fund advisors lp 79615779 332 direct
restrictions on transfer of securities
in accordance with the articles 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 other than as disclosed in significant agreements on page 58
powers of the company to issue or buy back its own shares
at the 2011 agm over 99 of shareholders voted in favour of the directors being granted authority to allot shares up to a predetermined 
amount and for the directors to make market purchases of ordinary shares any ordinary shares purchased in the market may be cancelled 
or held in treasury these authorities will expire at the conclusion of the 2012 agm when authority to allot shares only will be sought shares 
acquired through company share schemes rank pari passu with the shares in issue and have no special rights no share purchases were 
made in 2011 premier foods plc  annual report and accounts 2011  
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shareholder information continued
shareholder faqs
many of the information requests received by our shareholder helpline can be found in the investor section of our website shareholders 
can also sign up for regulatory news alerts to receive an email when news on the group is released these include additional financial news 
releases throughout the year which are not mailed to shareholders
go online
wwwpremierfoodscoukinvestors
managing your shares
the company’s register of members is maintained by our registrar equiniti shareholders with queries relating to their shareholding should 
contact equiniti directly using the details given in key contacts 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 
category and would like to combine your accounts please contact equiniti
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 inform 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 
found an old share certificate for premier foods plc
shareholders who find they have an old share certificate and wish to find out its value should contact equiniti directly using the details below 
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
viewing the articles of the company
the articles and other documents referred to in this annual report are available for inspection at the registered office the articles are available 
on the group’s website
go online
wwwpremierfoodscoukaboutuscorporategovernancearticlesofassociationcfm
correspondence with shareholders during the year
electronic communications with shareholders
in january 2012 shareholders were consulted and encouraged to sign up to receive electronic communications instead of paper copies this 
enables the group to operate in a more environmentally friendly and costeffective way  our business performance financial statements
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governance
shareholder security
in november 2011 shareholders were reminded via an update to the website to remain vigilant regarding share scams and fraud for further 
details refer to the group’s website
go online
wwwpremierfoodscoukinvestorsshareholderinformationsharescamsandfraudcfm
annual general meeting agm
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 the notice of agm a copy of this annual report if they request a copy in writing and a 
form of proxy are issued to shareholders all documents relating to the agm are available on the group’s website
go online
wwwpremierfoodscoukinvestorsshareholderinformation
the notice of agm sets out the proposed resolutions and a brief synopsis of each of them 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 group’s website 
after the agm
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 2011 agm
2012 agm — 3 may 2012 at 1000 am
the 2012 agm will be held at the holiday inn — bloomsbury coram street london wc1n 1ht 
key contacts
registered office and head office
premier foods plc premier house centrium business park griffiths way st albans hertfordshire al1 2re 
registered in england and wales 5160050
tel 44 01727 815850
general counsel and company secretary
andrew mcdonald
email companysecretarypremierfoodscouk
tel 44 01727 815850
investor relations
richard godden
email investorrelationspremierfoodscouk 
tel 44 01727 815850
registrar 
equiniti aspect house spencer road lancing west sussex bn99 6da 
tel 0871 384 2030 or 44 0121 415 7047 
textphone 0871 384 2255 or 44 0121 415 7028  premier foods plc  annual report and accounts 2011  
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directors’ remuneration report
part 1 unaudited information
remuneration committee chairman’s letter 65
the committee
remuneration committee membership 66
committee advisers 66
role of the committee 66
key issues discussed in the year 66
appointment	payment	–	michael	clarke	 67
recruitment	a war ds	–	michael	clarke	 67  71
retir ement	payment	–	robert	schofield	 67
resignation	payment	–	jim	smart	 67
resignation	payment	–	tim	kelly	 67
remuneration policy
remuneration policy 68
director shareholding policy 68
fixed vs variable remuneration 68
director remuneration fixed pay
executive director’s salaries 69
pay across the group 69
director remuneration variable pay
structure of variable remuneration 69
executive director’s other benefits 69
short and mediumterm incentives
annual	cash	bonus	 70
deferred share bonus plan dsb 70
longterm incentives
longt erm	incentive	plan	l tip	 70–71  75
clawback provisions 70
a war ds	in	2012	 70
l tip	performance	conditions	2011	and	2012	 71
coinvestment plan cip 71  75
executive share option scheme esos 71  74
save	as	y ou	ear n	scheme	sa ye	 71  74
dilution of share capital 72
details of appointment
executive director service agreements 
and notice periods 72
director termination payments 72
executive director’s external ned appointments 72
nonexecutive directors
nonexecutive director appointment terms 
and notice periods 72
ned fee structure 72
shareholdings
director shareholdings 73
total shareholder return graph 73
part 2 audited information
total director remuneration 74
executive director interests in share schemes
esos 74
sa ye	 74
l tip	 75
cip 75
pension benefits 75–76
contents our business performance financial statements
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65
governance
part 1 unaudited information
the directors’ remuneration report provides information on the group’s overall remuneration strategy as well as detailed disclosure of 
directors’ remuneration and longterm incentive arrangements a resolution will be put to shareholders at the company’s 2012 agm inviting 
them to approve this report
dear shareholders
2011 has been a challenging year for the remuneration committee the first half of the year saw the successful introduction of 
the long term incentive plan with the first awards made in may 2011 the second half of the year has focused on the significant 
management changes within the group and determining the remuneration arrangements that should be in place for 2012 taking in to 
account the group’s underperformance in 2011 but also recognising that the new management team should be fairly rewarded and 
incentivised for delivering a turnaround in business performance 
as covered in detail in the earlier sections of this annual report the group was impacted by a number of challenges during the year 
which have led to the results for the year being significantly below expectation this in turn led the group to enter into discussions with 
its banks to put in place a new refinancing facility 
following the announcement of robert schofield’s intention to retire the board moved quickly to identify a successor with the 
experience and track record to stem the decline in profitability and stabilise the business michael clarke has extensive experience 
within the branded food industry and proven ability in managing and growing brands which we believe will be essential in returning the 
group to profitable growth
in order to achieve michael clarke’s successful appointment in extremely challenging circumstances it was deemed necessary to 
compensate michael clarke for his forfeited 2011 bonus entitlement and outstanding share awards from his previous employer full 
details of these arrangements are set on page 67 of this report
following michael clarke’s appointment as ceo in august 2011 a new senior management structure was introduced in addition mark 
moran was appointed as the group’s new cfo in december 2011 
payments to robert schofield jim smart and tim kelly who left during the year were in line with the terms of their employment 
contracts and full details are set out on page 67 of this report 
the challenge for the committee has been consideration of the 2012 remuneration arrangements while the refinancing discussions 
were still being concluded the committee was conscious that the 2012 variable pay arrangements should be closely aligned with the 
delivery of the strategic plan to restore profitable growth in line with the growth strategy as outlined in the chief executive’s statement  
on pages 8 to 11  
the annual bonus arrangements for 2012 reflect the focus on turnover branded sales profit and cash flow and for michael clarke this 
includes targets associated with the successful refinancing a key objective for the group  
the committee has determined that awards under the 2012 ltip will be solely 
in the form of performance shares the performance targets will be based on a 
combination of eps and absolute tsr which are closely aligned with improving the 
profitability of the group and delivering shareholder returns
louise makin
chairman of the remuneration committee premier foods plc  annual report and accounts 2011  
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directors’ remuneration report continued
the committee
q who is on the committee 
a the table below identifies 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 hisher 
own terms and conditions of service or remuneration only independent 
nonexecutive directors may become members of the committee 
the chairman of the board may also serve on the committee if he was 
considered independent on appointment
committee member
1
 position comments
louise makin chairman independent ned
ronnie bell member chairman ned
david beever member sid
david wild member independent ned
david felwick member former sid
committee attendee
2
position comments
michael clarke ceo attends 
by invitation
brian carlton group hr director attends 
by invitation
andrew mcdonald general counsel 
company secretary
secretary 
to the committee
new bridge street nbs — attend 
by invitation
robert schofield ceo former ceo
suzanne wise general counsel 
company secretary
former secretary 
to the committee
1
  david wild was appointed to the committee on 7 march 2011 and david  
 felwick resigned on 28 april 2011 
2
 michael clarke was appointed ceo on 16 august 2011 and robert  
 schofield retired from the board on 13 september 2011 and andrew  
 mcdonald replaced suzanne wise as secretary to the committee on  
 1 november 2011 
over the course of the year the committee held four meetings 
details of attendance at the meetings are shown in the attendance 
table on page 48
q who advises the committee
a the committee invites individuals to attend meetings to provide 
advice so as to ensure that the committee’s decisions are informed 
and take account of pay and conditions across the group these 
individuals include the group hr director 
during the year the committee considered the role of the 
remuneration advisors and it decided that new bridge street nbs 
should advise the committee
during the year nbs provided advice in connection with executive 
remuneration arrangements and the company’s share incentive 
arrangements aon hewitt the parent company of nbs provided 
advice to the group in relation to pension contribution salary 
exchange administration of our pension schemes and investment 
advice to our trustees
q what is the role of the committee
a the committee adheres 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 uk corporate 
governance code the “code” and associated guidance 
the committee has delegated authority from the board to 
 • determine and agree the remuneration strategy for executive 
directors and senior management
 • review and approve the remuneration packages for the 
chairman executive directors general counsel and company 
secretary and senior management
 • agree 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 
 • approve the design of all share incentive plans including all
employee share schemes and where appropriate oversee any 
subsequent changes 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 committee terms of reference are available on the group’s 
website 
go online
wwwpremierfoodscoukaboutuscorporategovernanceboardcommitteescfm
 
q what key issues did the committee discuss 
during the year
a in addition to the issues discussed in the letter from the 
remuneration committee chairman on page 65 the committee also
 • agreed the remuneration arrangements for the new ceo and 
cfo on appointment in 2011 
 • performed an annual review in april 2011 of executive directors’ 
and senior managers’ base salaries
 • reviewed and recommended executive directors’ and senior 
managers’ annual bonuses in respect of 2010 and set the targets 
for the annual bonus in respect of 2011
 • reviewed the performance outcome for cip and ltip awards 
granted in 2008
 • granted 2011 awards under the ltip
 • granted 2011 awards under the saye scheme for all eligible 
employees in the uk and ireland and
 • undertook a review of remuneration advisers our business performance financial statements
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governance
q what was paid to michael clarke on joining
a michael clarke’s appointment was announced on 14 july 2011 
and he joined the group on 16 august 2011 in order to achieve 
his successful appointment in extraordinary circumstances the 
committee agreed to the following compensatory payments
 • in recognition of forfeited 2011 bonus entitlement from his previous 
employer michael clarke was eligible to receive an annual bonus 
of £400000 to be paid entirely in cash in respect of 2011 the 
payment of this bonus was dependent on the formulation of a 
recovery plan for the group the committee considered that this 
condition was satisfied and the bonus should be payable  
in full
 • as compensation for forfeited equity awards from his previous 
employer that would have vested in januaryfebruary 2012 a 
cash bonus of £15m was paid immediately on acceptance of the 
appointment the net proceeds of which were to be and have 
been invested in company shares and
 • in recognition of the forfeiture of long term incentive awards from 
his previous employer due to vest in february 2013 and february 
2014 the company agreed with michael clarke that as soon 
as possible following the commencement of his employment 
he would be awarded shares to compensate for the expected 
value of these forfeited ltip awards £149m in aggregate the 
expected value of those forfeited awards was determined based 
on a prudent assessment of the extent to which the performance 
conditions had been achieved up to the date of cessation of 
employment with his previous employer  
 
since michael clarke’s appointment the company has been in 
a prohibited period and therefore unable to make the longterm 
incentive awards in light of the recent share price volatility the 
committee decided that although it was important that there 
should be a significant sharebased element to these awards an 
award solely in the form of shares could result in excessive share 
usage and could make the level of gearing in the award too high 
accordingly the committee determined to deliver the value ie 
£149m by way of a mix of 875 million shares comprising two 
awards over a maximum of 5 million shares the “2013 award” 
and a maximum of 375 million shares the “2014 award” and 
together with the 2013 award the “recruitment awards” plus the 
right to receive two conditional cash payments for the balance 
of the value determined at the date of grant the recruitment 
awards are due to vest in line with the original vesting dates 
after the announcement of the 2012 results 2013 award and 
after the announcement of the 2013 results 2014 award the 
cash payment if any will only be paid when and to the extent 
the recruitment awards are exercised if the recruitment 
awards lapse any cash payment due will be scaled back to take 
account of the number of shares that have lapsed in accordance 
with listing rule 943 a summary of the principal terms of the 
recruitment awards is set out on page 71  
q what was paid to the executive directors on 
leaving
a details of these payments are given below
robert schofield 
at the 2011 agm robert schofield gave notice of his intention to 
retire on 28 april 2012 but remain in post until a successor was 
appointed following the successful recruitment of michael clarke it 
was agreed that he step down as ceo on 16 august 2011 and retire 
as a director of the company with effect from 13 september 2011
the committee determined he should be paid the remainder of his 
notice and accordingly he will receive salary payments benefits in 
kind and a cash allowance in lieu of pension at the rates applicable 
at the time of the announcement on a monthly basis for the period to 
28 april 2012 amounting to a payment of £419205 
jim smart
jim smart was entitled to receive 12 months’ notice under the terms 
of his employment contract and received a payment amounting to 
£509350 this included his pension supplement above the premier 
foods pension scheme “earnings cap” pension optout allowance 
and compensation for loss of accrued holiday entitlement in 
addition he will continue to be provided with health insurance for a 
period of 12 months or such earlier date alternative employment is 
secured
the committee noted that he had a contractual right to receive 
a payment in respect of an ontarget bonus however it was 
determined that this would not be paid
 
tim kelly
tim kelly was entitled to receive 12 months’ notice under the terms 
of his employment contract and received a payment amounting to 
£492050 this included his pension supplement above the rhm 
pension scheme “earnings cap” pension optout allowance and 
location supplement in addition he will continue to be provided with 
a company car and health insurance for a period of 12 months or 
such earlier date alternative employment is secured  premier foods plc  annual report and accounts 2011  
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directors’ remuneration report continued
remuneration policy
q what is the overall remuneration policy
a our policy is set out below
broad policy to set remuneration levels so as to attract and retain high calibre executives and to encourage and 
reward superior business performance which is linked to the delivery of our business strategy
how do we seek to apply our  
policy in the boardroom
remuneration for executive directors is intended to reward against criteria that are relevant and 
realistic but also challenging so that superior performance is encouraged 
executive directors should have sufficient focus on the longterm performance of the group and  
be aligned with the interests of shareholders we are therefore committed to the use of equity
based performancerelated schemes and encourage executives to build up meaningful 
shareholdings in the company a significant proportion of remuneration is performance linked see 
below details of executive director share ownership guidelines are set out below
when is the policy reviewed during 2011 the remuneration committee reviewed the policy to ensure performancerelated 
incentives as well as annual salary are supportive of operating objectives and conducive to the 
delivery of shareholder value it is considered that the policy continues to remain appropriate 
the policy will continue to be reviewed annually
in march every year the committee reviews the remuneration of senior management to ensure it 
remains competitive and challenging
what are we doing for 2012 the committee believes that the remuneration structure will continue to support the group 
however given the new strategic priorities of the group as set out in the chief executive’s 
statement on pages 8 to 11 the committee will keep under review the current remuneration 
structure to ensure it is adequately aligned with these priorities
the committee will ensure that the remuneration arrangements for 2012 are affordable without 
excessive share dilution and that the performance conditions used in our plans are consistent with 
delivering strong returns to shareholders
q are there share ownership guidelines for 
executive directors
a 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 the committee 
believes that these shareholding guidelines can be an effective 
means of aligning directors’ interests with those of our shareholders 
as at the year end michael clarke and mark moran were in 
compliance with this policy and details of all directors’ shareholdings 
are set out on pages 73 to 75 
q what is the balance between the fixed and 
variable elements of executive remuneration
a michael clarke and mark moran are remunerated through a 
combination of base salary annual bonus pension benefits and 
sharebased performancerelated awards the committee believes 
that it is important for a significant proportion of their remuneration 
package to be performancerelated at maximum award levels 
excluding share price movements 74 of the remuneration 
package for michael clarke and 70 of the remuneration package 
for mark moran is based on variable elements our business performance financial statements
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governance
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 
the committee continues 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 however the committee is mindful 
that it may be necessary to set salaries outside of the stated policy 
for instance in circumstances where it is necessary to hire an 
individual of exceptional calibre
michael clarke was appointed ceo on 16 august 2011 on an annual 
salary of £750000 and mark moran was appointed cfo on 8 december 
2011 on an annual salary of £425000 these salaries will not be subject 
to review until the first anniversary of appointment and 1 april 2013 
respectively
q does the committee consider pay conditions 
for all employees within the group when agreeing 
arrangements for executive directors
a 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 
group at large with the ceo 
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 life insurance telecommunication 
services and an allowance for personal tax and financial planning 
director remuneration variable pay 
q how is executive variable remuneration 
structured and how does it align with the group’s 
strategy
a the structure of incentives for the executive directors comprise of 
four elements 
1 annual cash bonus
2 deferred share bonus plan “dsb” 
3 ltip performance shares and
4 ltip matching shares 
in 2012 while the business is in recovery the company will only 
use elements one two and three the committee determined that 
at a time of share price volatility the use of matching shares was 
inappropriate
when determining the structure of variable pay the committee is mindful 
of the need to maintain a good line of sight so that executive directors 
can clearly see how their actions lead to their reward and to have 
incentives that have specific and clear goals which are clearly linked to 
business strategy and the key priorities that have been outlined 
q what are the performance criteria to be used in 2012 for each of these three elements
a variable elements of executive directors’ remuneration in 2012 
targets underpins reasons
annual cash bonus range of measures 
including revenue trading 
profit recurring cash flow 
and personal performance
quality of profit review target recurring 
cash flow bonuses will have an  
affordability test and personal bonuses 
require threshold profit to be attained
trading profit is driven by sales and 
margin cash flow repays debt
deferred share bonus 
dsb
branded sales value 
growth and trading profit
growth in market share for total brands 
must be achieved for the bonus to 
become payable and the group trading 
profit target must be met 
clear link to the strategy of continuous 
improvement in the sale of branded 
products emphasising the importance 
of profitability through the use of sales 
value and the inclusion of trading profit 
for 2012
ltip performance 
shares
eps and absolute tsr the committee considers that the 
achievement of both the eps and 
absolute tsr targets will be fully 
reflective of the group’s underlying 
financial performance
the targets capture improvements in 
trading profit and are also aligned with 
shareholder return premier foods plc  annual report and accounts 2011  
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directors’ remuneration report continued
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 the performance targets for 2011 were not met and no 
annual cash bonuses will be paid out in respect of 2011
for 2012 mark moran’s bonus will be dependent on performance 
against four key performance indicators revenue gross profit after 
sales marketing and distribution trading profit and recurring cash 
flow the bonus outcome from these four indicators will be adjusted 
to take account of his performance rating the maximum bonus that 
mark moran can receive is capped at 75 of salary
for 2012 michael clarke has the opportunity to earn a bonus of 150 
of salary the committee considers that given the particular challenges 
that face the group for 2012 it is necessary to operate a specific 
bonus plan for michael clarke that focuses on our key priorities and 
the steps that need to be taken to improve our trading performance 
1 half of the bonus will be dependent on the achievement of 
financial targets focused on turnover branded sales value 
growth trading profit and cash flow and in addition a range of 
other measures aligned with our strategic priorities as set out on 
pages 8 to 11 payment of a bonus against these measures will 
be underpinned by the requirement to deliver a threshold level of 
trading profit 
2 the other half of the bonus will be dependent on the delivery of a 
successful refinancing agreement this is a key priority for 2012 
and aligned with the interests of shareholders the level of bonus 
paid against this measure will be dependent on the achievement 
of the refinancing and will take account of whether the new 
arrangement is judged to have been a success and in the best 
interests of shareholders the assessment of the quality of the re
financing will be performed at the end of the 2012 financial year 
taking account of the views of the finance committee
q how does the dsb operate
a the dsb operates alongside the annual cash bonus executive 
directors can earn an award based on the achievement of a group
wide 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 a target based on total volume sales of branded product 
growth was used as it provided a clear link to the strategy of 
continuous improvement in the sale of branded products for a 
deferred bonus to be payable the group trading profit target must also 
have been met for above target payout the committee had discretion 
to reduce the payouts for reasons of affordability the 2011 targets 
were not met and accordingly no awards will be made under the dsb 
in respect of 2011
the committee has reviewed the targets to apply for the 2012 
performance period and has determined that these awards should 
continue to be subject to a condition based on branded sales 
subject to a trading profit underpin but that this should be reduced 
to 50 of the award and that the measure should be based on 
sales value growth and not sales volume it is felt that this measure 
emphasises the importance of profitability and margin performance  
the remaining 50 of the award will be dependent on trading profit
in respect of 2012 performance the maximum award that can be 
earned by mark moran is 30 of salary michael clarke will not 
participate in the dbs in 2012
longterm incentives
q how are the longterm incentives structured
a the awards under the ltip approved by shareholders in 2011 
have two elements
— performance shares
— matching shares
the matching shares require participants to make an investment into 
company shares in order to receive a match of up to 21 on shares 
invested into the scheme the maximum grant of performance 
shares and matching shares is 200 of salary 
 
in 2011 executives directors and senior management were awarded 
both performance shares and matching shares the committee has 
decided that for 2012 at least while the business is in recovery and 
the share price may continue to fluctuate awards will take the form 
of performance shares only
q are clawback provisions in place for the dsb 
and ltip awards 
a yes in relation to awards granted under the ltip the committee 
may reduce unvested awards and seek repayment of vested awards 
if by the second anniversary of vesting the committee forms the 
view that the vesting was determined based on materially misstated 
financial results or in the event of misconduct
in relation to dsb awards the committee may reduce unvested 
awards if prior to vesting the committee forms the view that the 
number of shares over which awards were granted was higher than 
the number that should have been granted because of materially 
misstated financial results for the relevant bonus year or the 
committee relied on inaccurate or misleading information
q what awards will be made in 2012
a as mentioned it is intended that for 2012 only performance 
share awards will be made for 2012 it is the committee’s intention 
to award michael clarke and mark moran performance shares with a 
face value of 200 and 150 of salary respectively our business performance financial statements
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71
governance
q what performance conditions were used for 
awards made under the ltip in 2011
a for the 2011 grant the performance share element of the ltip 
was linked to growth in adjusted earnings per share “eps” targets 
over a period of three years eps captures both improvements in the 
trading performance and the generation of cash to pay down debt 
thus reducing the interest charge the matching share element of 
the ltip was linked to achieving growth targets in absolute share 
price plus reinvested dividends by 2014
these measures were selected as they ultimately capture 
improvements in the group’s trading performance as well as 
measuring the returns to shareholders the specific targets are set 
out in the notes to the ltip table on page 75
q what performance conditions will be used for 
awards to be made under the ltip in 2012
a the committee strongly believes that the performance conditions 
attached to the 2012 ltip awards should be aligned with the 
strategy of the group its plan to restore profitable growth and 
with shareholders interests by focusing on absolute share price 
performance awards will only vest following the achievement of 
stretching performance targets 
accordingly it is the committee’s current intention that the 2012 
award will be subject to an eps condition two thirds of the award 
and an absolute tsr condition one third of the award the 
proposed targets are set out in the table below
 of relevant 
portion of award 
vesting
eps for  
the year ended  
31 december 2014 absolute tsr
0 below 45p below 30p
20 up to 50 45p up to 51p 30p up to 35p
50 up to 100 51p up to 65p 35p up to 50p
100 65p or greater 50p or greater
q what were the terms of michael clarke’s 
recruitment awards
a as set out on page 67 it was agreed to make certain recruitment 
awards to michael clarke on appointment as ceo in recognition 
of awards forfeited from his previous employer in accordance 
with listing rule 943 a summary of the principal terms of the 
recruitment awards are set out below
 • the recruitment awards shall be satisfied using shares purchased 
in the market by the trustees of the company’s employee benefit 
trust
 • the recruitment awards will be structured as nilcost options and 
no consideration is payable by michael clarke for the grant
 • the recruitment awards are nontransferable and shall not be 
pensionable
 • the recruitment awards will normally vest and become 
exercisable on the date of the announcement of the group’s results 
for the 2012 financial year and 2013 financial year respectively 
subject to remaining employed by the group and the committee 
being satisfied with michael clarke’s and the group’s performance 
up to the relevant date of announcement
 • the recruitment awards will only become exercisable to the 
extent that the committee is satisfied that the performance 
conditions have been satisfied to the extent that the committee 
determines that the performance conditions have not been 
satisfied in full that part of the recruitment awards including any 
cash payment that the committee determines shall not vest
 • once vested the recruitment awards may normally be exercised 
by michael clarke during a period of 12 months commencing on 
the date of vesting provided that he is employed by the group on 
the date of exercise
 • the recruitment awards will lapse if michael clarke ceases 
employment before the relevant announcement date however 
if he ceases employment by reason of death injury disability 
redundancy or any other reason the committee may in its 
discretion permit some or all of the recruitment awards and 
any associated cash payment to vest and become payable early 
subject to the satisfaction of the performance conditions and a time 
pro rata adjustment unless the committee determines otherwise
 • in the event of a change of control of the company excluding 
certain internal reorganisations or restructurings whether by way 
of a general offer or scheme of arrangement the recruitment 
awards and any associated cash payment will vest and become 
payable early subject to michael clarke remaining employed at 
the time of the relevant event and a time pro rata adjustment 
unless the committee determines otherwise
 • if there is a variation in the share capital of the company or a 
demerger or special dividend or in such other circumstances the 
committee considers appropriate the committee may adjust the 
recruitment awards as deemed appropriate to ensure that the 
recruitment awards remain at the same value
 • the company may change the terms of the recruitment awards 
to get or keep favourable tax exchange control or regulatory 
treatment for michael clarke or the company and may make 
minor changes to ease its administration no change can be 
made to michael clarke’s advantage without the prior approval of 
shareholders and
 • the draft deed of grant is available for inspection at the 
company’s registered office
q will further awards be made under the co
investment plan “cip” and executive share 
option scheme “esos”
a it is not envisaged that any further awards will be made under 
either scheme
q does the company operate any allemployee 
share plans
a yes the company operates an allemployee save as you earn 
“saye” scheme which executive directors can join on the same 
terms as other participants 
the saye scheme is government approved and is available to all 
employees who meet certain basic eligibility criteria and is not subject 
to any performance conditions the saye scheme 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 
the 2011 saye scheme offered employees an opportunity to join the 
scheme at an option price of 955p premier foods plc  annual report and accounts 2011  
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directors’ remuneration report continued
q what is the policy on dilution of share capital 
by employee share plans
a awards under all group share plans may be satisfied using either 
newly issued shares or shares purchased in the market and held 
in the company’s employee benefit trust the group’s policy is to 
comply with the association of british insurers “abi” guidelines in 
respect of new share issues in all share plans 
details of appointment
q what are the terms of the executive directors’ 
service agreements
a details of the service agreements of the executive directors 
appear below
executive director contract date
1
notice period
michael clarke 16 august 2011 12 months
mark moran 8 december 2011 12 months
1 
 rolling contract
q what are the terms of the past executive 
directors’ service agreements
a details of the service agreements of the past executive directors 
appear below
past executive director contract date
1
notice period
robert schofield 20 july 2004 12 months
jim smart 11 february 2009 12 months
tim kelly 5 october 2009 12 months
1 
 rolling contract
q how are the executive directors compensated 
in the event of the termination of their 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 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 
in line with market practice there is no entitlement to a bonus 
payment in lieu of notice in the service agreements for michael clarke 
or mark moran service agreements do not provide for any enhanced 
payments in the event of a change of control of the company 
q what is the group’s policy on executive 
directors holding external appointments
a the group is supportive of executive directors who wish to take on 
a nonexecutive directorship with a publicly quoted company in order 
to broaden their experience and they are entitled to retain any fees 
they may receive michael clarke is currently a nonexecutive director 
of wolseley plc and receives fees of £63000 pa for this role 
nonexecutive directors
q what are the appointment terms and notice 
periods 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 
nonexecutive 
director
date of 
appointment
date of current 
appointment 
notice 
period
ronnie bell 1 october 2010 1 october 2010 3 months
charles miller 
smith 16 june 2009 16 june 2009 1 month
1
david beever 22 january 2008 21 january 2011 3 months
ian mchoul 19 july 2004 19 july 2010 3 months
louise makin 13 october 2006 1 october 2009 3 months
david wild 7 march 2011 7 march 2011 3 months
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 months  
 notice in writing see page 44 for further information
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 is the policy on nonexecutive directors’ 
fees
a the remuneration of the nonexecutive directors is determined 
by the chairman and executive directors the remuneration of the 
chairman is determined by the committee there were no changes 
to the fees for the chairman and other nonexecutive directors for 
2011 with the exception that david beever was appointed senior 
independent director in april 2011 and received an increase in total 
fees of £5000 in recognition of the additional responsibilities
non executive directors fees
chairman – pay is independent of basic ned fee £325000
deputy chairman – pay is independent of basic 
ned fee
£90000
basic nonexecutive ned fee £57000
additional remuneration
audit committee chairman £13000
finance committee chairman £13000
remuneration committee chairman £10500
senior independent director £5000
to maintain independence and comply with the code the chairman 
and the other nonexecutive directors are not eligible to participate in 
the group’s bonus arrangements share option schemes long term 
incentive plans or pension arrangements  our business performance financial statements
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governance
shareholdings
q what interests did the directors have in the company’s shares on 31 december 2011
a the beneficial interest in shares of the board and connected persons as at 31 december 2011 are presented below 
director
ordinary shares 
as at 31 dec 2011
ordinary shares
as at 31 dec 2010
michael clarke
1
3740785 —
mark moran
2
17540000 —
ronnie bell 854700 —
charles miller smith 680272 680272
david beever 319000 169000
ian mchoul 100000 100000
louise makin 58636 58636
david wild
3
50000 —
1
 appointed ceo on 16 august 2011
2
 appointed cfo on 8 december 2011
3
 appointed as a director on 7 march 2011
between 31 december 2011 and 18 march 2012 no company shares were purchased by directors
total shareholder return graph
the graph illustrates the performance of the company against the ftse 250 index and the ftse food producers and processors index over 
the past five years the ftse 250 index was chosen as the company was a member of the ftse 250 during the year and the ftse food 
producers and processors index was chosen as it contains the company’s key comparators
the	market	price	of	a	shar e	in	the	company	on	31	december	2011	was	581	pence	the	range	
during the 2011 financial year was 33 pence to 351 pence the company’s register of directors’ 
interests which is open to inspection contains full details of directors’ share interests
1400
1200
1000
800
600
400
200
31 dec 06 31 dec 07 31 dec 08 31 dec 09 31 dec 10 31 dec 11
00
premier foods plc
ftse 250 ex inv trusts
ftse allshare food producers premier foods plc  annual report and accounts 2011  
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directors’ remuneration report continued
part 2 audited information 
directors’ emoluments
the remuneration of each director excluding longterm sharebased incentive schemes during the year ended 31 december 2011 is shown 
below
directors’ emoluments
salaryfee
2
£
annual bonus
£
taxable
benefits
3
£
other
payments
£
total 
2011
£         
total 
2010
£
executive directors
1
michael clarke 339130 — 440 1937500
4
 2277070 —
mark moran 34060 — 50 — 34110 —
robert schofield 466780 — 9500 419205
5
895485 715052
jim smart 494905 — 1050 509350
6
1005305 545463
tim kelly 418618 — 40500 492050
6
951168 450707
nonexecutive directors
1
ronnie bell 325000 — 580 — 325580 81250
charles miller smith 90000 — — — 90000 65250
david beever 73480
7
— — — 73480 70000
ian mchoul 70000 — — — 70000 70000
louise makin 67500 — — — 67500 67500
david wild 46700 — — —  46700 —
david felwick 20420 — — 250 20670 62000
1
 in 2011 the following board changes took place michael clarke was appointed ceo on 16 august 2011 and robert schofield resigned but continued as a  
 director until 13 september 2011 mark moran was appointed cfo and a director on 8 december 2011 and jim smart resigned tim kelly resigned as coo  
 and as a director on 25 november 2011 david wild was appointed nonexecutive director on 7 march 2011 and david felwick resigned on 28 april 2011
2
 includes a supplement in lieu of pension of £56520 2010 £nil £2280 2010 £nil £27220 2010 £37080 £38430 2010 £37080 and £53400 2010  
 £38813 in respect of michael clarke mark moran robert schofield jim smart and tim kelly
3
 benefits include payments made in relation to car and fuel cost private health insurance tax advice relocation and memberships
4
 includes all payments made on appointment
5
 includes all payments made until retirement on 28 april 2012
6
 includes all payments made on leaving
7
 includes a prorated £5000 pa uplift in salary following his appointment as sid on 28 april 2011 
no director waived emoluments in respect of the year ended 31 december 2011 or 31 december 2010
other payments
details of payments made to executive directors who were appointed retired or resigned during the year are set out on pages 67 and 71
directors’ interest in share options — esos and saye
the esos was adopted in 2004 at the time of admission outstanding vested options held by executive directors under this plan would 
require the share price to reach 16138p prior to exercise 
at 31 december 2011 the following executive directors had options to subscribe for shares granted under the esos and saye schemes
options 
as at 
31 dec 
2010
options
granted
during 
the year
options
exercised
during the
year
options
forfeited
during 
the year
options 
as at 
31 dec
2011
1
option 
price 
p
option 
period
robert schofield
esos 2004 1165686 – – – 1165686 16138 23 jul 2007 to 22 jul 2014
saye 2010 23210 – – – 23210 1520 1 dec 2013 to 31 may 2014
2
tim kelly
saye 2010 23210 – – – 23210 1520 1 dec 2013 to 31 may 2014
2
in 2011 the following board changes took place robert schofield retired from the board on 13 september 2011 and tim kelly resigned as 
coo and as a director on 25 november 2011 during the year no awards vested
1
  or at date of cessation of employment
2
  option period effective for six months from date of leaving our business performance financial statements
wwwpremierfoodscouk stock code pfd
2110302  15032012 proof 13
summary
75
governance
directors’ interests in long term incentive plans
at the 2011 agm the shareholders approved a ltip  the following table shows the awards made under this scheme
awards grant 
date
performance
shares 
granted 
in the year
2
matching
shares
granted 
in the year
3
shares 
lapsed 
during the 
year
as at 
31 dec
2011
1
share price 
at date of 
award performance period
robert schofield 23 may 2011 1407475 1407474 – 2814949 333p 23 may 2014 to 23 may 2016
jim smart 23 may 2011 997223 997220 1994443 – 333p 23 may 2014 to 23 may 2016
tim kelly 23 may 2011 899180 899176 1798356 – 333p 23 may 2014 to 23 may 2016
1
   or at date of cessation of employment
2
 subject to growth in adjusted eps in excess of inflation over the three year period ending 31 december 2013 100 of the award vests for rpi  19 pa  
 reducing on a straightline basis to 25 of the award vesting for rpi  4 pa no awards vest for eps growth of less than rpi  4 pa
3
 subject to achievement of share price targets plus dividends reinvested measured over the three months following the announcement of the 2013 preliminary results  
 100 vests for share price plus dividends reinvested of 80p reducing on a straightline basis to no award vesting for share price plus dividends reinvested of 37p or less
during the year no awards vested
directors’ interests in coinvestment plans
the cip is 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 2009 and 2010 the matching award was 
subject to eps and relative tsr performance  details of the cip award were set out in full in the 2009 directors’ remuneration report
the following table shows the executive directors’ interests in shares awarded under the cip
award 
grant 
date
as at
31 dec 
2010
granted in
the year
shares lapsed
during the 
year
as at
31 dec 
2011
1
 share price 
on date of 
award p vesting date
robert schofield
cip 2008 15 apr 2008 3187741 – 3187741
2
         – 12550   15 apr 2011
cip 2009 9 jun 2009 3187740 – – 3187740
4
4050 9 jun 2012
cip 2010 30 mar 2010 3187740 – – 3187740
4
3216 30 mar 2013
jim smart
cip 2009 13 nov 2009 2250000 – 2250000
3
–  3463 13 nov 2012
cip 2010 30 mar 2010 2032671 – 2032671
3
– 3216 30 mar 2013
tim kelly
cip 2008 15 apr 2008 841056 – 841056
2
– 12550   15 apr 2011 
cip 2009 9 jun 2009 1665284 – 1665284
3
– 4050 9 jun 2012
cip 2010 30 mar 2010 1665285 – 1665285
3
 – 3216 30 mar 2013
in 2011 the following board changes took place robert schofield retired from the board on 13 september 2011 jim smart resigned as cfo 
and as a director on 8 december 2011 and tim kelly resigned as coo and as a director on 25 november 2011 during the year no awards 
vested the opening balance is the potential maximum matching award under each plan
1
 or at date of cessation of employment
2
 lapsed during the year as vesting conditions were not met
3
 lapsed following resignation as a director
4
  prorated award to 28 april 2012 subject to meeting the vesting criteria this award will vest on the original vesting date
pension benefits
for each executive director the total accrued benefit at 31 december 2011 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 2010
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 directors’ pension 
benefits they do not represent sums payable to the director and therefore cannot be added meaningfully to annual director emoluments
the increase in transfer value during the year is the increase in the transfer value of the accrued benefits at 31 december 2011 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 
2011 of the increase in accrued benefits during the period excluding inflation less contributions made by the directors during the period premier foods plc  annual report and accounts 2011  
2110302  15032012 proof 13
76
directors’ remuneration report continued
q what pension benefits do the executive directors receive 
a all pension figures are set out below and in the footnotes on page 74 a brief overview of each director’s benefits is detailed below
michael clarke
michael clarke receives an allowance of 20 of salary in lieu of pension provision
mark moran
mark moran receives an allowance in lieu of pension provision of £20000 per annum which increases in line with rpi to a maximum of 5 
plus 9 of the notional earnings cap which increases in line with the increases in the premier foods pension scheme “pfps” “earnings 
cap” 
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 pfps 
for future service accrual instead he received an allowance in lieu of pension accrual which increases in line with the increases in the pfps 
“earnings cap” his pension accrued up to 6 april 2006 continued to be linked to his final salary subject to the pfps “earnings cap”  
jim smart
jim smart received an allowance in lieu of pension accrual which increases in line with the pfps “earnings cap”  
tim kelly
tim kelly was a member of the rhm pension scheme “rhmps” which is a funded registered scheme that provides benefits on a defined 
benefits basis up to 30 june 2011 he was entitled to a pension at the rate of 125th of pensionable salary for each year of pensionable 
service the accrued pension at 30 june 2011 is linked to the rise in the rpi up to a maximum of 5 in any year from 1 july 2011 he 
became entitled to a defined benefit on a career average revalued earnings basis building up pension at 1 of pensionable salary under 
both the pre and post 1 july 2011 pension terms pensionable salary was subject to the rhmps “earnings cap” he received a salary 
supplement in lieu of receiving no pension in respect of earnings above the “earnings cap” 
the following table sets out the executive directors’ pension benefits as members of the group’s defined benefit pension schemes as at  
31 december 2011 
age at 
31 dec 
2011
 
accrued
pension
entitlement
at 31 dec
2010
£
accrued
pension
entitlement
at 31 dec
2011
£
additional
pension
earned 
during
the year
£
additional
pension
earned 
during
the year 
excluding
inflation
£
transfer
value
of accrued
pension
at 31 dec
2010
£
transfer
value
of accrued
pension
at 31 dec
2011
1
£
increase
in transfer
value of
accrued
pension
during
the year
2
£
transfer
value of the
increase
in accrued
pension 
excluding
inflation
£
robert schofield 60 10000 10300 300 – 150700 272000 121300
3
–
tim kelly 54 30100 33400 3300 1400 494400 684400 183600
3
20300
4
in 2011 the following board changes took place robert schofield retired from the board on 13 september 2011 and tim kelly resigned as 
coo and as a director on 25 november 2011
1
 or at date of cessation of employment
2
 net of contributions paid by contributing member
3
 increase in 2011 is due to reduced interest rates
4
 at date of cessation of employment
louise makin
chairman of the committee
18 march 2012 wwwpremierfoodscouk stock code pfd
77
financial statements summary our business governance performance
financial statements
contents
independent auditors’ report — group 78
independent auditors’ report — company 79
consolidated income statement 80
consolidated statement of comprehensive income 81
consolidated balance sheet 82
consolidated statement of cash flows 83
consolidated statement of changes in equity 84
notes to the financial statements 
note
general information 85
accounting policies 85
critical accounting policies estimates 
and judgements 91
segmental analysis 92
net other operating expenseincome 94
operating lossprofit for continuing operations 94
employees 95
finance income and expense 96
taxation 97
lossearnings per share 100
discontinued operations 102
disposal of businesses 102
assets and liabilities held for sale 103
property plant and equipment 104
goodwill 105
other intangible assets 106
investments 107
inventories 108
trade and other receivables 108
trade and other payables 108
bank and other borrowings 108
financial instruments 109
provisions for liabilities and charges 117
retirement benefit schemes 118
reserves and share capital 124
notes to the cash flow statement 128
operating lease commitments 129
capital commitments 129
contingencies 129
related party transactions 130
subsequent events 130
company financial statements 132
notes to the company financial statements 133
note
accounting policies 133
operating profit 133
investments 134
debtors 134
creditors  134
deferred tax 134
share capital and other reserves 135
operating lease commitments 135
contingencies and guarantees 135
subsequent events 135
contents premier foods plc  annual report and accounts 2011  
78
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 2011 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 directors’ responsibilities statement set out on page 59 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 
in addition we read all the financial and nonfinancial information in the annual report to identify material inconsistencies with the audited financial 
statements if we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report
opinion on financial statements 
in our opinion the group financial statements 
 • give a true and fair view of the state of the group’s affairs as at 31 december 2011 and of its loss and cash flows for the year then ended 
 • have been properly prepared in accordance with ifrss as adopted by the european union and 
 • have been prepared in accordance with the requirements of the companies act 2006 and article 4 of the las regulation 
opinion on other matters prescribed by the companies act 2006 
in our opinion
 • the information given in the directors’ report for the financial year for which the group financial statements are prepared is consistent with 
the group financial statements
matters on which we are required to report by exception 
we have nothing to report in respect of the following
under the companies act 2006 we are required to report to you if in our opinion  
 • certain disclosures of directors’ remuneration specified by law are not made or 
 • we have not received all the information and explanations we require for our audit 
under the listing rules we are required to review 
 • the directors’ statement set out on page 59 in relation to going concern 
 • the part of the corporate governance statement relating to the company’s compliance with the nine provisions of the uk corporate 
governance code specified for our review and
 • certain elements of the report to shareholders by the board on directors’ remuneration
 
other matter 
we have reported separately on the parent company financial statements of premier foods plc for the year ended 31 december 2011 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 
18 march 2012 wwwpremierfoodscouk stock code pfd
79
financial statements summary our business governance performance
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 2011 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 directors’ responsibilities set out on pages 59 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 affairs as at 31 december 2011
 • have been properly prepared in accordance with united kingdom generally accepted accounting practice and 
 • have been prepared in accordance with the requirements of the companies act 2006 
opinion on other matters prescribed by the companies act 2006 
in our opinion 
 • the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the companies act 2006 
and 
 • the information given in the directors’ report for the financial year for which the parent company financial statements are prepared is 
consistent with the parent company financial statements
matters on which we are required to report by exception 
we have nothing to report in respect of the following matters where the companies act 2006 requires us to report to you if in our opinion 
 • adequate accounting records have not been kept by the parent company or returns adequate for our audit have not been received from 
branches not visited by us or 
 • the parent company financial statements and the part of the directors’ remuneration report to be audited are not in agreement with the 
accounting records and returns or 
 • certain disclosures of directors’ remuneration specified by law are not made or 
 • we have not received all the information and explanations we require for our audit
other matter 
we have reported separately on the group financial statements of premier foods plc for the year ended 31 december 2011  
ranjan sriskandan 
senior statutory auditor
for and on behalf of pricewaterhousecoopers llp
chartered accountants and statutory auditors
london
18 march 2012 premier foods plc  annual report and accounts 2011  
80
consolidated income statement
 
 
note
year ended
31 dec 2011
  
£m
year ended
31 dec 2010
restated
1
£m
continuing operations
revenue 4 19995  22344 
cost of sales 14361 15227
gross profit 5634  7117 
selling marketing and distribution costs 2722 3008
administrative costs 4668 1929
net other operating expenseincome 5 07 19 
operating lossprofit 6 1763 2199 
before impairment and loss on disposal of operations 1169  2199 
impairment of goodwill and intangible assets 15 2820 – 
loss on disposal of operations 12 112 – 
finance expense 8 1269 1601
finance income 8 72  120 
net movement on fair valuation of interest rate financial instruments 8 369  433
lossprofit before taxation from continuing operations  2591 285 
taxation creditcharge 9 291  244 
lossprofit after taxation from continuing operations 2300 41 
loss from discontinued operations 11 1090 1034
loss for the year attributable to equity shareholders of the parent company 3390 993
       
basic and diluted loss per share pence 10 141 41
basic and diluted lossearnings per share pence — continuing 10 96 02 
basic and diluted loss per share pence — discontinued 10 45 43
adjusted earnings per share pence — continuing
2
10 22  42 
1 
comparatives have been restated to reflect the reclassification of the retailer branded chilled business as a discontinued operation
2  
adjusted earnings per share is defined as trading profit less net regular interest payable less a notional tax charge at 265 2010 280 divided by the  
 weighted average number of ordinary shares of the company
the notes on pages 85 to 131 form an integral part of the consolidated financial statements wwwpremierfoodscouk stock code pfd
81
financial statements summary our business governance performance
 
 
note
year ended
31 dec
2011
£m
year ended
31 dec
2010
£m
loss for the year   3390 993
other comprehensive lossesincome
actuarial lossesgains on pensions 24 793 464
deferred tax charge 9 41 299
exchange differences on translation 04 03
fair value movement on net investment hedge   – 08
total other comprehensive lossesincome for the year net of tax 830 170
total comprehensive losses attributable to owners of the company   4220 823
the notes on pages 85 to 131 form an integral part of the consolidated financial statements
consolidated statement of comprehensive income premier foods plc  annual report and accounts 2011  
82
consolidated balance sheet
 
 
 
note
as at
31 dec
2011
£m
as at
31 dec
2010
£m
assets
noncurrent assets
property plant and equipment 14 4173  4851 
goodwill 15 8562  10961 
other intangible assets 16 8227 10172
    20962  25984 
current assets
assets held for sale 13 338  4063 
inventories 18 1368  1352 
trade and other receivables 19 2974  3563 
financial assets — derivative financial instruments 22 05  14 
current income tax assets 05 – 
cash and bank deposits 26 458  19 
    5148 9011 
total assets   26110  34995 
liabilities
current liabilities 
trade and other payables 20 4348 4962
financial liabilities 
— shortterm borrowings 21 1136 1901
— derivative financial instruments 22 126 296
— other financial liabilities at fair value through profit or loss 22 1870 2063
accrued interest payable 09 123
provisions 23 83 105
current income tax liabilities –   20
liabilities held for sale 13 –   488
    7572 9958
noncurrent liabilities
financial liabilities 
— longterm borrowings 21 9273 10918
retirement benefit obligations 24 2824 3209
provisions 23 386 284
other liabilities 219 170
deferred tax liabilities 9 109 561
    12811 15142
total liabilities   20383 25100
net assets   5727  9895 
equity
capital and reserves
share capital 25 240  240 
share premium 25 11247  11247 
merger reserve 25 6060  8907 
other reserves 25 93  93
profit and loss reserve 25 11728 10407
capital and reserves attributable to the company’s equity shareholders   5726 9894 
noncontrolling interest 25 01  01 
total shareholders’ funds   5727  9895 
the notes on pages 85 to 131 form an integral part of the consolidated financial statements
the financial statements on pages 80 to 131 were approved by the board of directors on 18 march 2012 and signed on its behalf by
 
 
 
 
michael clarke mark moran
chief executive officer chief financial officer wwwpremierfoodscouk stock code pfd
83
financial statements summary our business governance performance
 
 
 
note
year
ended
31 dec 2011
£m
year
ended
31 dec 2010
£m
cash generated from operating activities 26 867 3132 
interest paid 1209 1435
interest received 75  125 
taxation paid 24  17
cash outflowinflow from operating activities 291 1805 
sale of subsidiariesbusinesses 3948 – 
purchase of property plant and equipment 580  511
purchase of intangible assets 209  166
sale of property plant and equipment 54  52 
sale of intangible assets – 39 
cash inflowoutflow from investing activities 3213  586
repayment of borrowings  3636 1162
proceeds from borrowings 1241  –
financing fees and other costs of finance 16 188
cash outflow from financing activities 2411  1350
net inflowoutflow of cash and cash equivalents   511 131
cash and cash equivalents at beginning of year 287 151
effect of movement in foreign exchange   03  05
cash and cash equivalents at end of year 26 221 287
the notes on pages 85 to 131 form an integral part of the consolidated financial statements
consolidated statement of cash flows premier foods plc  annual report and accounts 2011  
84
consolidated statement of changes in equity
 
 
share 
capital
£m
share 
premium
£m
merger 
reserve
£m
other 
reserves
£m
profit 
and loss 
reserve 
£m
non
controlling 
interest
£m
 
total
£m
at 1 january 2011 240 11247 8907 93 10407 01 9895
loss for the year – – – – 3390 – 3390
actuarial losses on pensions – – – – 793 – 793
deferred tax charge – – – – 41 – 41
exchange differences on translation – – – – 04 – 04
other comprehensive losses – – – – 830 – 830
total comprehensive losses  –  –  – – 4220  – 4220
sharebased payments – – – – 52 – 52
realisation of merger reserve – – 2847 – 2847 – –
at 31 december 2011 240 11247 6060 93 11728 01 5727
at 1 january 2010 240 11247 8907 101 9645 01 10649
loss for the year – – – – 993 – 993
actuarial gains on pensions – – – – 464 – 464
deferred tax charge – – – – 299 – 299
exchange differences on translation – – – – 03 – 03
fair value movement on net investment hedge – – – 08 –  – 08
other comprehensive income – – – 08 162 – 170
total comprehensive incomelosses  –  –  – 08 831  – 823
sharebased payments – – – – 69 – 69
at 31 december 2010 240 11247 8907 93 10407 01 9895
the notes on pages 85 to 131 form an integral part of the consolidated financial statements wwwpremierfoodscouk stock code pfd
85
financial statements summary our business governance performance
1 general information
premier foods plc the “company” is a public limited company incorporated and domiciled in england and wales registered number 
5160050 with its registered office at premier house centrium business park griffiths way st albans hertfordshire al1 2re the 
principal activities of the 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 on pages 6 to 7 copies of the 
annual report and accounts are available from this address
these group consolidated financial statements were authorised for issue by the board of directors on 18 march 2012
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 consolidated financial statements of premier foods plc have been prepared in accordance with international financial reporting 
standards “ifrs” as adopted by the european union eu “adopted ifrs” in response to ias regulation ec16062002 related 
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 which are incorporated using fair value amounts are presented to the nearest £01m
the preparation of financial statements in conformity with adopted 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
international financial reporting standards
ias 24 amendment ‘related party disclosures’
ias 32 amendment ‘financial instruments presentation’ on classification of rights issues
ifrs 1 amendment ‘firsttime adoption’ on financial instrument disclosures interim information deemed cost exemption 
and rate regulated entities
ifric 14 amendment ‘ias 19 — the limit on a defined benefit asset minimum funding requirements and their interaction’
ifric 19 ‘extinguishing financial liabilities with equity instruments’
 
the following accounting standards and interpretations have had amendments made as part of the 2010 annual improvements project 
are effective for annual periods beginning on or after 1 january 2011 and have been adopted by the group 
international financial reporting standards
ias 1 ‘presentation of financial statements’
ias 27 ‘consolidated and separate financial statements’
ias 34 ‘interim financial reporting’
ifrs 1 ‘firsttime adoption of ifrs’
ifrs 3 ‘business combinations’ — contingent consideration sharebased payment transactions and non
controlling interests
ifrs 7 ‘financial instruments disclosures’ — nature and extent of risks arising from financial instruments
ifric 13 ‘customer loyalty programmes’ — fair value
the application of these 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
the following standard has been endorsed by the eu but has not been applied it is effective for financial years beginning on or after  
1 july 2011 
international financial reporting standards
ifrs 7 amendment ‘financial instruments disclosures’ on derecognition
notes to the financial statements premier foods plc  annual report and accounts 2011  
86
notes to the financial statements
2 accounting policies continued
the following standards and amendments to published standards have not been endorsed by the eu
international financial reporting standards
ias 1 amendment ‘presentation of financial statements’ regarding other comprehensive income
ias 12 amendment ‘income taxes’ on deferred tax
ias 19 amendment ‘employee benefits’ these amendments eliminate the corridor approach and calculate finance 
costs on a net funding basis
ias 27 ‘consolidated and separate financial statements’
ias 28 ‘investments in associates and joint ventures’
ifrs 1 amendment ‘first time adoption’ on hyperinflation and fixed dates
ifrs 9 ‘financial instruments’
ifrs 10 ‘consolidated financial statements’
ifrs 11 ‘joint arrangements’
ifrs 12 ‘disclosure of interests in other entities’
ifrs 13 ‘fair value measurement’
 
it is not expected that any of the new standards will have a material impact on the results of net assets of the group other than the 
amendment to ias 19 this changes the basis on which the financing charge is calculated by applying the discount rate to the net defined 
benefit obligation it is expected that the amended standard which is effective for year ending 31 december 2013 will increase the 
group’s pension financing charge 
basis for preparation of financial statements on a going concern basis
the group has obtained consent from its banking syndicate swap counterparties and pension schemes on a refinancing package 
subject to the formalities of final documents being signed expected by the end of march
as a result of the consent obtained for refinancing the group will extend the maturity of its current term loan and revolving credit 
facilities from 31 december 2013 to 30 june 2016 the existing term loan £733m and revolving credit facility £500m previously due to 
mature on 31 december 2013 will be extended to a new maturity date of 30 june 2016 the current applicable bank margin of 225 
will increase to 325 with effect from 1 january 2014
banking covenants of net debtebitda and ebitdainterest remain in place they are tested biannually and have been reset to reflect 
the group’s strategic plan
the total interest rate swap portfolio including previously restructured swaps will be restructured into additional term loan totalling 
approximately £199m the result of this conversion from swaps to additional term loan will significantly reduce the group’s interest 
expense in 2012 and 2013 and the previously agreed swap settlements of £35m in 2012 and £82m in 2013 are no longer applicable
the group has negotiated and obtained a commitment to a new securitisation programme relating to certain receivable balances available 
up to an amount of £120m subject to sufficient receivables being capable of being sold into the programme these balances will be 
included as part of net debt reflecting their recognition on the balance sheet and attract an interest margin of 35
planned future disposal proceeds will be shared between the banking syndicate and swap counterparties
subject to implementation of the new refinancing arrangements the trustees of the group’s pension schemes have agreed to defer 
deficit contribution payments c£47m pa until 1 january 2014 additionally there will be no increase in the agreed deficit contributions 
before 2016
as a result of the consent to this refinancing package the directors believe that the company is well placed to manage its business risks 
successfully despite the current uncertain economic outlook
the directors are confident that the necessary documentation will be finalised and signed by the end of march and that all conditions 
precedent will be met the directors therefore have a reasonable expectation that the group has adequate resources to operate in the 
ordinary course of business and to meet its obligations as they fall due thus the financial statements have been prepared on a going 
concern basis 
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 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 material 
disposed businesses into discontinued operations
accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group wwwpremierfoodscouk stock code pfd
87
financial statements summary our business governance performance
2 accounting policies continued
all intragroup 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 at the time of sale 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 a 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 over the vesting period 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 and 
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 as a separate 
component of equity in other reserves when a foreign operation is sold exchange differences previously taken to equity are recognised in 
the income statement as part of the gain or loss on sale 
goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and 
translated at the closing rate
all other exchange gains or losses are recorded in the income statement
27 property plant and equipment “ppe”
property plant and equipment is initially recorded at cost cost includes the original purchase price of the asset and the costs attributable 
to bringing the asset to its working condition for its intended use 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 
28 business combinations and goodwill 
business combinations are accounted for using the acquisition method the consideration for each acquisition is measured at the 
aggregate of the acquisition date fair values of assets given liabilities incurred or assumed and equity instruments issued by the group in 
exchange for control of the acquiree acquisition related costs are recognised in profit or loss as incurred
on the acquisition of a business fair values are attributed to the identifiable assets liabilities and contingent liabilities acquired goodwill 
arises when the fair value of the consideration for a business exceeds the fair value 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  premier foods plc  annual report and accounts 2011  
88
notes to the financial statements
2 accounting policies continued
the group has applied ifrs 3 revised ‘business combinations’ to business combinations after 1 july 2009 the accounting for 
business combinations transacted prior to this date has not been restated
29 intangible assets
in addition to goodwill the group recognises the following intangible assets 
acquired intangible assets
acquired trademarks 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 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 product or process is technically and commercially feasible in which case they are capitalised and amortised over the useful 
economic lives in accordance with ias 38 ‘intangible assets’
software development costs
development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the 
group are recognised as intangible assets when the project or process is technically and commercially feasible directly attributable costs 
that are capitalised as part of the software product include the software development employee costs and an appropriate portion of 
relevant overheads
software development costs are amortised over their estimated useful lives on a straightline basis over a range of 3 to 10 years 
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
210 impairment 
the carrying value of nonfinancial assets other than goodwill and inventories is reviewed at least annually to determine whether there 
is an indication of impairment where such indication exists the recoverable amount is estimated based on the greater of its value in use 
and its fair value less costs to sell in assessing value in use the estimated future cash flows adjusted for the risks specific to each asset 
are discounted to their present value using a discount rate that reflects current market assessment of the time value of money and the 
general risks affecting the food manufacturing industry
impairment losses are recognised in the income statement in the year in which they occur
for the purpose of impairment testing assets are grouped together into the smallest group of assets that generates cash inflows from 
continuing use that are largely independent of the cash flows of other assets 
211 financing cost
i finance expense
borrowing costs are accounted for on an accruals basis in the income statement using the effective interest method
ii finance income
finance 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
212 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 present value of future 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 within 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 
leases in which a significant portion of risks and rewards of ownership are retained by the lessor are classified as operating leases rental 
costs under operating leases net of any incentives received from the lessors are charged to the income statement on a straightline basis 
over the lease period
213 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 net realisable value is the estimated selling 
price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale wwwpremierfoodscouk stock code pfd
89
financial statements summary our business governance performance
2 accounting policies continued
all inventories are reduced to net realisable value where the estimated selling price is lower than cost
provision is made for slow moving obsolete and defective inventory where appropriate
214 taxation
income tax on the profit or loss for the year comprises current and deferred tax
current tax
income tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity in which 
case it is recognised in equity current tax is the expected tax payable on the taxable income for the year using tax rates enacted or 
substantively enacted at the reporting date and any adjustment to tax payable in respect of previous years
deferred tax
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
215 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 using assumptions determined by the group with the assistance of 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 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 past service 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 past service 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 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 
differences between contributions payable in the year and contributions actually paid are recognised as either accruals or prepayments in 
the balance sheet
216 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 
when the reimbursement is virtually certain where material the group discounts its provisions using a pretax rate that reflects current 
market assessments of the time value of money and the risks specific to the liability where discounting is used the increase in the 
provision due to the passage of time is recognised as a finance expense premier foods plc  annual report and accounts 2011  
90
notes to the financial statements
2 accounting policies continued
217 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
218 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 8 and 22 for further details wwwpremierfoodscouk stock code pfd
91
financial statements summary our business governance performance
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 expense
219 noncurrent assets held for sale
noncurrent assets and associated liabilities that are expected to be recovered primarily through sale rather than continuing use are 
classified as held for sale immediately before classification as held for sale the assets and associated liabilities are remeasured in 
accordance with the group’s accounting policies thereafter the assets are measured at the lower of their carrying amount and fair 
value less costs to sell impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are 
recognised in profit or loss gains are not recognised in excess of any cumulative impairment loss
3 critical accounting policies estimates and judgements
the following are areas of particular significance to the group’s financial statements and include the use of estimates and the application 
of judgement which is fundamental to the compilation of a set of financial statements
31 employee benefits
the present value of the group’s defined benefit 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 ias 19 key assumptions used are mortality rates discount rates and inflation set with 
reference to bond yields 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 33 each 01 decreaseincrease in bond yields 
would increasedecrease the deficit by a further £58m£56m each 01 increasedecrease in the assumed inflation rate would increase
decrease the deficit by a further £24m each of the underlying assumptions is set out in more detail in note 24 
32 goodwill and other intangible assets
impairment reviews in respect of goodwill are performed annually unless an event indicates that an impairment review is necessary impairment 
reviews in respect of intangible assets are performed when an event indicates that an impairment review is necessary examples of such 
triggering events include a significant planned restructuring a major change in market conditions or technology expectations of future operating 
losses or a significant reduction in cash flows the recoverable amounts of cashgenerating units “cgus” are determined based on the higher 
of realisable value and value in use calculations these calculations require the use of estimates
the group has considered the impact of the assumptions used on the calculations and has conducted sensitivity analysis on the 
impairment tests of the cgus carrying values see note 15 for further details
acquired trademarks 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 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
35 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  premier foods plc  annual report and accounts 2011  
92
notes to the financial statements
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 refinancing 
costs restructuring costs and losses associated with divestment activity 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 and reporting segments are “grocery” “bread” and “disposed of canning operations” in 2010 the group 
reported the retailer branded chilled business as a separate operating segment and the results of the meatfree operation within 
discontinued operations as a result of the group’s disposal of the retailer branded chilled business in december 2011 and the 
completion of the disposal of the meatfree business in march 2011 results previously shown for these operating segments are presented 
as discontinued operations in both the current year and the prior year 
in july 2011 the group disposed of its east anglian canned grocery operations which was previously part of the grocery segment the 
results of the east anglian canned grocery operations for the year ended 31 december 2011 were reported separately to the codm 
throughout the year and therefore have been recognised as a separate operating segment for both the current year and the prior year  
during the year the hovis operating segment was renamed “bread” 
the grocery segment sells ambient food products the bread segment sells bread morning goods flour products and frozen pizza 
bases and the disposed of canning operations segment sold canned goods 
the segment results for the year ended 31 december 2011 and for the year ended 31 december 2010 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 2011
 
 
grocery
£m
bread
£m
disposed 
of canning 
operations
£m
total for 
group
£m
revenue from continuing operations        
external 11215  7113  1667  19995 
intersegment 25  266  –  291 
result
trading profit 1795  34  54  1883 
amortisation of intangible assets       720
fair value movements on foreign exchange and 
other derivative contracts
      17
restructuring costs relating to disposal activities       105
refinancing costs       42
pension financing credit       170 
operating profit before impairment and loss on disposal  
of operations
      1169 
impairment of goodwill and intangible assets 2820
loss on disposal of operations       112
operating loss       1763
finance expense       1269
finance income       72 
net movement on fair valuation of interest rate financial instruments       369 
loss before taxation for continuing operations       2591
depreciation 242  176  –  418 
amortisation 539  181  –  720 
impairment of goodwill and other intangibles –  2820  –  2820 
balance sheet
segment assets 20422  4122  –   24544 
unallocated assets      1566 
consolidated total assets       26110  wwwpremierfoodscouk stock code pfd
93
financial statements summary our business governance performance
4 segmental analysis continued
  year ended 31 dec 2010 restated
12
 
 
grocery
£m
bread
£m
disposed 
of canning 
operations
£m
total for 
group
£m
revenue from continuing operations
external 12126 6876 3342 22344
intersegment 39  277 –  316 
result
trading profit 2205  353  278  2836 
amortisation of intangible assets       658
fair value movements on foreign exchange and other  
derivative contracts
      20
pension financing credit       41 
operating profit       2199 
finance expense       1601
finance income       120 
net movement on fair valuation of interest rate financial instruments       433
profit before taxation from continuing operations       285 
depreciation 220  173  39  432 
amortisation 473  183  02  658 
impairment of property plant and equipment 07  –  –  07 
balance sheet        
segment assets 21461  6631  1511  29603 
unallocated assets       5392 
consolidated total assets       34995 
1
 comparatives have been restated to reflect the reclassification of the retailer branded chilled business as a discontinued operation
2
 comparatives have been restated to reflect the separation of the canning business which was previously reported within grocery
revenues on a continuing basis of approximately £3456m and £2857m 2010 £4540m and £3369m are derived from two external 
customers these revenues are attributable across the three 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 and receivables 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 retirement benefit assets derivative financial assets group
wide software and hardware and head office assets 
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 noncurrent assets excluding retirement benefit assets by geographical location 
continuing operations — revenue
 
 
year ended
31 dec 
2011
£m
year ended
31 dec 
2010
restated
1
£m
united kingdom 18808 21116
other europe 874 1001
rest of world 313 227
total 19995 22344
1
 comparatives have been restated to reflect the reclassification of the retailer branded chilled business as a discontinued operation premier foods plc  annual report and accounts 2011  
94
notes to the financial statements
4 segmental analysis continued
noncurrent assets
 
  
 
as at
31 dec 
2011
£m
as at
31 dec 
2010
£m
united kingdom 20661 25348
other europe 301 636
total for group 20962 25984
5 net other operating expenseincome
 
 
 
 
year
ended
31 dec
2011
£m
year
ended
31 dec
2010
£m
fair value movements on foreign exchange contracts and other derivatives 17 20
gain on disposal of noncurrent assets 09 47
net other operating incomeexpense 01 08
total net other operating expenseincome 07 19
6 operating lossprofit for continuing operations
6a analysis of costs by nature
year
ended
31 dec 
2011
£m
year
ended
31 dec 
2010
restated
1
£m
cost of inventories sold 12498 12921
employee benefits expense note 7 4025 4345
depreciation of property plant and equipment
— owned assets 404 408
— under finance leases 14 24
amortisation of intangible assets
— software and licences 174 133
— brands and trademarks 330 310
— customer relationships 216 215
impairment of property plant and equipment note 14 –  07 
impairment of goodwill note 15 1854  – 
impairment of intangible assets note 15 966 –
operating lease rental payments
— plant and machinery 84 124
— land and buildings 112 148
repairs and maintenance expenditure 520 458
research and development costs 84 106
gain on disposal of noncurrent assets 09 47
net foreign exchange lossgain 04 04
past service credits relating to defined benefit schemes 413 110
impact of oneoff aged receivable and commercial provision review 374 –
refinancing costs 42 – 
auditor remuneration 14 12
1
 comparatives have been restated to reflect the reclassification of the retailer branded chilled business as a discontinued operation
operating lease obligations are further disclosed in note 27 wwwpremierfoodscouk stock code pfd
95
financial statements summary our business governance performance
6b auditor remuneration
year
ended
31 dec 
2011
£m
year
ended
31 dec 
2010
£m
fees payable to the company’s auditor for the audit of the parent company and consolidated  
financial statements
04 06
fees payable to the company’s auditor and its associates for other services
— the audit of the company’s subsidiaries pursuant to legislation 04 05
— services relating to corporate finance transactions 21 12
— other services 01 01
total auditor remuneration 30 24
included within total fees paid to the auditors of £30m 2010 £24m were £21m of costs directly attributable to coordination support and 
advice on corporate finance transactions principally related to the group’s refinancing in 2011 £16m of the £21m relating to corporate 
finance transactions was capitalised resulting in a total of £26m of auditor remuneration held on the balance sheet at 31 december 2011 
the remaining £05m was charged to operating profit the total operating profit charge for auditors remuneration was £14m 2010 £12m
in 2010 included within total fees paid to the auditors of £24m of costs were £12m of costs which were directly attributable to the 
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
7 employees 
 
 
year
ended
31 dec
2011
£m
year
ended
31 dec
2010
restated
1
£m
staff costs for the group during the year — continuing operations
wages and salaries 3801 3842
social security costs 315 324
termination benefits 112 29
share options granted to directors and employees 39 69
contributions to defined contribution schemes note 24 01 – 
creditcharge for defined benefit schemes note 24 243 81
total 4025 4345
staff costs for the group during the year — discontinued operations
wages and salaries 459 602
social security costs 41 54
termination benefits 25 03
share options granted to directors and employees 09 – 
contributions to defined contribution schemes note 24 02 11
charge for defined benefit schemes note 24 21 11
total 557 681
total — continuing and discontinued 4582 5026
1
 comparatives have been restated to reflect the reclassification of the retailer branded chilled business as a discontinued operation
average monthly number of people employed including executive directors
 
 2011 
 number 
 2010 
 number 
management 1769 1907 
administration 1116 1285 
production distribution and other 10916 12385 
total  13801  15577 
2010 average employee numbers have been restated to include both continuing and discontinued operations and to align classifications 
with revised internal definitions within the employee numbers above 2081 2010 2856 relate to discontinued operations 
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 65 to 76 which form part of these financial statements premier foods plc  annual report and accounts 2011  
96
notes to the financial statements
8 finance income and expense
 
 
 
 
year
ended
31 dec
2011
£m
year
ended
31 dec
2010
£m
interest payable on bank loans and overdrafts 136 202
interest payable on term facility 286 452
interest payable on revolving facility 76 60
interest payable on interest rate derivatives 191 595
interest payable on interest rate financial liabilities designated as other financial liabilities at  
fair value through profit or loss
406 119
unwind of discount on provisions 24 13
amortisation of debt issuance costs and deferred fees 134 144
 1253 1585
writeoff of financing costs 16 16
total finance expense 1269 1601
interest receivable on bank deposits 72 120 
total finance income 72  120 
movement on fair valuation of interest rate derivatives 176 1337 
movement on fair valuation of interest rate financial liabilities designated as other financial liabilities  
at fair value through profit or loss 193 1770 
net movement on fair valuation of interest rate financial instruments 369  433
net finance expense 828 1914
the fair value of interest rate swaps and other financial liabilities at fair value through profit or loss has decreased from a £2345m liability 
at 31 december 2010 to a £1976m liability at 31 december 2011 resulting in a net movement of £369m for the year 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 2011 
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 
the total facility as at 31 december 2011 was £1233m
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 
these 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 total facility as at 31 december 2010 was £1680m 
subsequent events
for details of amendments to the group’s financing arrangements please see note 31 wwwpremierfoodscouk stock code pfd
97
financial statements summary our business governance performance
9 taxation
current tax
analysis of the creditcharge for the year
 
 
 
continuing 
operations
£m
discontinued 
operations
£m
total
£m
2011      
current tax
— current year – – – 
— prior years 15 – 15
overseas current tax
— current year 12 – 12
 — prior years – – – 
deferred tax
— current year 206 115 321
— prior years 03 – 03
— adjustment to restate opening deferred tax at 250 79 07 86
income tax credit for the year 291 122 413
2010      
current tax
— current year 362 361 01
— prior years – 12 12 
overseas current tax 
— current year 13  –  13 
— prior years –  14 14
deferred tax
— current year 54 39 93
— prior years 143 22 165
— adjustment to restate opening deferred tax at 270 42 13 55
income tax chargecredit for the year 244 359 115
tax relating to items recorded in equity for continuing operations was
 
 
 
 
 year 
 ended 
31 dec 
2011
£m
 year 
 ended 
31 dec 
2010
£m
deferred tax charge on reduction of corporate tax rate 45 36 
deferred tax creditcharge on pension movements 04 124 
deferred tax charge on losses relating to pensions – 139 
  41 299  premier foods plc  annual report and accounts 2011  
98
notes to the financial statements
9 taxation continued
the tax charge for the year differs from the standard rate of corporation tax in the united kingdom of 265 2010 280 the reasons 
for this are explained below
 
 
 
 
 
 year 
 ended 
31 dec 
2011
£m 
 year 
 ended 
31 dec 
2010
 £m 
lossprofit before taxation for continuing operations 2591 285 
tax creditcharge at the domestic income tax rate of 265 2010 280 687 80 
tax effect of    
nondeductible items 478 349 
other disallowable items 05 07
adjustment for overseas results taxed at different rates 14 10
adjustment for sharebased payments 13 19 
previously unrecognised losses utilised 163 – 
capital gain on disposal of business 163 –
adjustment due to current year deferred tax being provided at 250 2010 270 11 02
adjustment to restate opening deferred tax at 250 2010 270 79 42
adjustments to prior years 18 143
income tax creditcharge 291 244 
the finance bill 2011 which was published on 31 march 2011 includes legislation reducing the main rate of corporation tax from 28 to 
26 from 1 april 2011 this gives rise to an effective rate of corporation tax for the year of 265 
deferred tax balances at 31 december 2010 were calculated at 27 the rate which was substantively enacted to apply from 1 april 
2011 the finance no 3 act 2011 substantively enacted on 5 july 2011 reduces the main rate of corporation tax to 25 from 1 april 
2012 this 2 reduction for the 2011 financial year has been reflected in the financial statements by restating the deferred tax liability at 
31 december 2010 giving a credit of £79m to continuing operations this is offset by a charge to equity of £45m to reflect where the 
credits were originally made in addition the deferred tax movements in the period have been reflected at 25 being the rate at which 
the liabilities are expected to reverse which has resulted in a £11m decrease to the income tax credit
further reductions to the main rate of corporation tax are proposed to reduce the rate by 1 per annum to 23 by 1 april 2014 however 
as these further reductions in the main rate of corporation tax have not been substantively enacted at the balance sheet date they are not 
reflected in the deferred tax recognised on the balance sheet
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 250 2010 270 
except for a liability relating to irish retirement benefit obligations where the local rate of 125 has been used
 
 
2011
£m
2010
£m
at 1 january 561  647 
credited to the income statement 410 127
charged to equity 41 299 
transferred to held for sale – 258
disposal of subsidiariesbusinesses 83 – 
at 31 december 109 561 
due to the unpredictability of future profit streams the group has not recognised deferred tax assets of £276m 2010 £481m relating 
to capital losses £234m 2010 £93m relating to uk corporation tax losses and £311m 2010 £348m relating to act under current 
legislation these losses can generally be carried forward indefinitely  wwwpremierfoodscouk stock code pfd
99
financial statements summary our business governance performance
9 taxation continued
deferred tax liabilities
intangibles
£m
other
£m
total
£m
at 1 january 2010 2334  17 2351
prior year restatement of opening balances
— to income statement 83 01 84
— to equity – 04 04
current year creditcharge 169 02 167
deferred tax charge on discontinued activities 27 – 27
prior year charge
— to income statement – 15 15
transferred to held for sale 203 09 194
at 31 december 2010 1906  46 1952
prior year restatement of opening balances 142 03 145
disposal of subsidiariesbusinesses 70 – 70
current year credit 365 – 365
at 31 december 2011 1329  43 1372
deferred tax assets
accelerated 
tax 
depreciation
£m
retirement 
benefit 
obligation
£m
sharebased 
payments
£m
financial
instruments
£m
losses
£m
total
£m
at 1 january 2010 311 1186 05 548 276 1704
prior year restatement of opening 
balances
— to income statement 11 15 – 19 05 28
— to equity – 27 –  05 32
current year chargecredit 176 162 01 122 06 221
prior year creditcharge
— to income statement 299 – 03 14 124 158
— to equity – – – – 139 139
charged to equity – 124 – – – 124
deferred tax credit on discontinued 
activities
09 – – – – 09
transferred to held for sale 64 – – – – 64
at 31 december 2010 104 858 03 637 03 1391
prior year restatement of opening 
balances
— to income statement 07 18 01 47 – 59
— to equity – 45 – – – 45
current year creditcharge 32 99 03 89 – 159
prior year credit
— to income statement – – – – 03 03
— to equity – 04 – – – 04
deferred tax credit on discontinued 
activities
115 – – – – 115
disposal of subsidiariesbusinesses 13 – – – – 13
at 31 december 2011 63 700 01 501 – 1263
net deferred tax liability         £m
at 31 december 2011 109
at 31 december 2010         561
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 premier foods plc  annual report and accounts 2011  
100
notes to the financial statements
10 lossearnings per share
basic loss per share has been calculated by dividing the loss attributable to ordinary shareholders of £3390m loss 2010 £993m loss by 
the weighted average number of ordinary shares of the company 
           year ended 31 dec 2011           year ended 31 dec 2010
                      restated
1
  basic
dilutive 
effect 
of share 
options diluted basic
dilutive 
effect 
of share 
options diluted
continuing operations
lossprofit after tax £m  2300 – 2300 41 – 41
weighted average number 
of shares m 
 
23981  –  23981 
 
23980  –  23980 
lossearnings per share pence  96 – 96 02 – 02
discontinued operations
loss after tax £m 1090 – 1090 1034 – 1034
weighted average number 
of shares m  23981  –  23981 
 
23980 – 23980 
loss per share pence  45 – 45 43 – 43
total 
loss after tax £m  3390 – 3390 993 – 993
weighted average number 
of shares m 
 
23981  –  23981 
 
23980 – 23980 
loss per share pence  141 – 141 41 – 41
1
  comparatives have been restated to reflect the reclassification of the retailer branded chilled 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 performed 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 2011 and 31 december 2010 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 
no adjustment is made to the profit or loss in calculating basic and diluted lossearnings per share
 
 
2011
 number 
2010
number
weighted average number of ordinary shares for the purpose of basic lossearnings per share 2398058019 2398021581
effect of dilutive potential ordinary shares
— share options – –
weighted average number of ordinary shares for the purpose of diluted lossearnings per share 2398058019 2398021581
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 265 2010 
280 divided by the weighted average number of ordinary shares of the company 
trading profit is defined as operating profit before refinancing costs restructuring costs and losses associated with divestment activity 
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 the following noncash items 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 by which the 
shareholders can assess the group’s underlying trading performance wwwpremierfoodscouk stock code pfd
101
financial statements summary our business governance performance
10 lossearnings per share continued
                                 year ended 31 dec 2011
 
 
continuing
£m
discontinued
£m
total
£m
operating loss 1763 1065 2828
impairment of goodwill and intangible assets 2820 804 3624
loss on disposal of operations 112 – 112
operating profitloss before impairment and loss on disposal of operations 1169 261 908
pension financing credit 170 – 170
fair value movements on foreign exchange and other derivative contracts 17 – 17
amortisation of intangible assets 720 119 839
restructuring costs relating to disposal activities 105 – 105
refinancing costs 42 – 42
trading profitloss 1883 142 1741
less net regular interest payable 1157 01 1158
adjusted profitloss before tax 726 143 583
notional tax at 265 192 38 154
adjusted profitloss after tax 534 105 429
average shares in issue m 23981 23981 23981
adjusted eps pence 22 04 18
net regular interest payable
net interest payable 828 01 829
exclude writeoff of financing costs 16 – 16
exclude fair value adjustments on interest rate financial instruments 369 – 369
exclude unwind of discount on provisions 24 – 24
net regular interest payable 1157 01 1158
                 year ended 31 dec 2010 restated
1
 
 
continuing
£m
discontinued
£m
total
£m
operating profitloss 2199 1391 808
impairment – 1500 1500
operating profit before impairment 2199 109 2308
pension financing credit 41 – 41
fair value movements on foreign exchange and other derivative contracts 20 – 20
amortisation of intangible assets 658 164 822
trading profit 2836 273 3109
less net regular interest payable 1452 02 1454
adjusted profit before tax 1384 271 1655
notional tax at 280 387 76 463
adjusted profit after tax 997 195 1192
average shares in issue m 23980 23980 23980
adjusted eps pence 42 08 50
net regular interest payable
net interest payable 1914 02 1916
exclude writeoff of financing costs 16 – 16
exclude fair value adjustments on interest rate financial instruments 433 – 433
exclude unwind of discount on provisions 13 – 13
net regular interest payable 1452 02 1454
1
   comparatives have been restated to reflect the reclassification of the retailer branded chilled business as a discontinued operation premier foods plc  annual report and accounts 2011  
102
notes to the financial statements
11 discontinued operations
discontinued operations for the year comprise the meatfree and the retailer branded chilled businesses
on 7 march 2011 the group completed the sale of its meatfree business to exponent private equity and intermediate capital group
the results of the meatfree business for the period to 7 march 2011 and the prior year comparatives are included in discontinued 
operations in the group’s consolidated income statement 
on 30 december 2011 the group completed the sale of its retailer branded chilled business to solway foods limited part of the  
2 sisters food group
the results of the retailer branded chilled business for the period to 30 december 2011 are included in discontinued operations in the 
group’s consolidated income statement comparatives have been restated to include the results of the retailer branded chilled business
 
 
year
ended
31 dec
2011
£m
year
ended
31 dec
2010
restated
1
£m
revenue 2186 3350 
operating expenses 3251 4741
operating loss before loss on disposal  1065 1391
interest payable 01 06
interest receivable – 04 
loss before taxation 1066 1393
taxation credit 122 359
loss after taxation on discontinued operations for the year 944 1034
loss on disposal before taxation 146 – 
tax credit on loss on disposal –  – 
loss on disposal after taxation 146 – 
total loss arising from discontinued operations 1090 1034
1
  comparatives have been restated to reflect the reclassification of the retailer branded chilled business as a discontinued operation
included in the operating expenses for the yearend 31 december 2011 above is an impairment charge of £804m recognised against 
the assets allocated to the retailer branded chilled cgu
included in the operating expenses for the yearend 31 december 2010 above is an impairment charge of £250m recognised against 
the goodwill allocated to the meatfree cgu and £1250m recognised against the goodwill allocated to the retailer branded chilled cgu
during the year discontinued operations contributed a net outflow of £479m 2010 £376m inflow to the group’s net operating cash 
flows and a £69m outflow to investing activities 2010 £57m outflow
12 disposal of businesses
meatfree
on 7 march 2011 the group completed the sale of its meatfree business to exponent private equity and intermediate capital group for 
£2050m before disposal costs and working capital adjustments the impact on the results of the group is disclosed in note 11 
canning
 on 23 july 2011 the group completed the sale of its east anglian canned grocery operations to princes limited for £1822m before 
disposal costs and working capital adjustments 
retailer branded chilled
on 30 december 2011 the group completed the sale of its brookes avana business to solway foods limited part of the 2 sisters food 
group for £303m before disposal costs and working capital adjustments the impact on the results of the group is disclosed in note 11  wwwpremierfoodscouk stock code pfd
103
financial statements summary our business governance performance
12 disposal of businesses continued
on the relevant dates of disposal the net assets of the businesses the consideration and the losses on disposal were as follows
 
 
meatfree
£m
canning
£m
brookes 
avana
£m
property plant and equipment 684 587 310
intangible assets and goodwill 1397 629 – 
inventories 236 546 96
trade and other receivables 249 03 269
trade and other payables 214 – 262
provisions and lease obligations 262 – 75
net assets disposed 2090 1765 338
less net consideration 1966 1653 316
loss on disposal 124 112 22
net cash inflow arising on disposal      
initial consideration 2050 1822 303
working capital adjustments and disposal costs 84 169 13
net cash inflow 1966 1653 316
13 assets and liabilities held for sale
 
 
2011
£m
2010
£m
noncurrent assets
 property plant and equipment – 1142
 goodwill 312 1252
 other intangible assets 09 774
current assets
 inventories 17 681
 trade and other receivables – 214
total assets held for sale 338 4063
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 338 3575
as at 31 december 2011 the assets and associated liabilities relating to certain irish brands were held for sale in light of the decision to 
sell these brands the disposal completed on 23 january 2012
as at 31 december 2010 the assets and associated 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  premier foods plc  annual report and accounts 2011  
104
notes to the financial statements
14 property plant and equipment
 
freehold 
land and 
buildings
£m
long 
leasehold 
land and 
buildings
£m
short 
leasehold 
land and 
buildings
£m
vehicles 
plant and 
equipment
£m
assets 
under 
construction
£m
total
£m
cost
at 1 january 2010 1469 88 311 4825 771 7464
additions  – –  – 276 384 660
disposals 13 –  05 16 –  34
reclassifications 122  23  04 129 –  20 
transferred from intangible assets –  –  – 38 –  38 
transfer of assets into use 35 – – 672 707 – 
transferred to held for sale 279 –  27 1223 – 1529
at 31 december 2010 1334 111 283 4443 448 6619
additions 05 –  – 61 475 541
disposals 364 –  – 664 – 1028
reclassifications – – – 02 – 02 
transfer of assets into use 38 – – 201 239 – 
transferred from held for sale – – 25  – – 25 
at 31 december 2011 1013 111 308 4043 684 6159
aggregate depreciation and impairment
at 1 january 2010 140 11 51 1420 – 1622
depreciation charge for the year 40 02 08 457 – 507
disposals 03  –  01 05 – 09
impairment charge –  –  – 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
depreciation charge for the year 50 05 07 401 – 463
disposals 73  – – 451 – 524
impairment charge –  – – 272 – 272
reclassifications –  – – 02  – 02
transferred from held for sale – – 05 – – 05
at 31 december 2011 97 46 52 1791 – 1986
net book value
at 31 december 2010 1214 70 243 2876 448 4851
at 31 december 2011 916 65 256 2252 684 4173
the net book value of the group’s vehicles plant and equipment includes an amount of £04m 2010 £212m in respect of assets held 
under finance leases none of the additions of £541m for the year related to 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 
certain of these assets were then sold to princes limited as part of the disposal of the group’s east anglian canned grocery operations
the group’s borrowings are secured on the assets of the group including property plant and equipment
impairment
an impairment charge of £272m has been recognised against assets relating to the retailer branded chilled business as a result of an 
impairment review carried out in light of the decision to sell this business refer to note 15 wwwpremierfoodscouk stock code pfd
105
financial statements summary our business governance performance
15 goodwill 
 
 
2011
£m
2010
£m
carrying value
at 1 january  10961  13713 
impairment — continuing  1854 – 
impairment — discontinued  233 1500
transferred to held for sale  312 1252
at 31 december  8562  10961 
goodwill attached to each of the group’s cgus is as follows
 
 
2011
 £m 
2010
 £m 
grocery 8562 8874
bread — 1854
retailer branded chilled — 233
net carrying value of goodwill 8562  10961 
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
key assumptions
the key assumptions for calculating value in use are those relating to the cash flows longterm growth rate and discount rate
in 2010 and 2011 fair value less costs to sell in respect of the meatfree and retailer branded chilled business respectively has been 
determined by reference to the value of the offer received less the expected costs of disposing of the businesses 
cash flow assumptions
the cash flows used in the value in use calculation are pretax cash flows based on the latest approved management forecasts in respect 
of the following four years assumptions regarding these future cash flows are based upon actual results in prior periods 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 four year management forecasts are extrapolated in perpetuity using growth assumptions relevant for the business sector the 
growth rate applied is 225 2010 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 2011 the pretax rate used to discount the forecasted cash flows has been determined to be 121 2010 123
impairment
a total impairment charge of £3624m has been recognised in the year against goodwill other intangible assets and tangible fixed assets 
2010 £1500m 
included within this charge is £2820m recognised against the goodwill and intangible assets allocated to the bread cgu 2010 £nil the 
impairment has arisen as a result of adverse trading conditions experienced during the year further impairment would be required in the 
future if future performance fell below that which was used in the value in use calculation or the discount rate were to increase a change 
of plus or minus 05 in the pretax discount rate would decreaseincrease the recoverable amount by £17£15m a change of plus or 
minus 1 in the perpetual growth rate would increasedecrease the recoverable amount by £28£22m lastly a 5 increasedecrease in 
cash flows after the fifth year would increase or decrease the recoverable amount by £12m
with regards to the grocery cgu the directors believe that no reasonable change in the key assumptions used in the impairment testing 
would cause the carrying value to exceed its recoverable amount 
also included within this charge is £804m recognised against the assets allocated to the retailer branded chilled cgu which has been 
recorded within discontinued operations 2010 £1250m this reduces the goodwill and intangible assets to £nil and also reduces the 
value of tangible fixed assets to their recoverable amount the remaining assets and associated liabilities attributable to the retailer 
branded chilled business were sold on 30 december 2011 premier foods plc  annual report and accounts 2011  
106
notes to the financial statements
15 goodwill continued
a further charge of £250m was recognised against the goodwill allocated to the meatfree business in 2010 and was recorded within 
discontinued operations the residual goodwill attributable to the meatfree business of £646m was transferred to assets held for sale as 
at 31 december 2010 
impairment charge
2011
goodwill
£m
other 
intangibles
£m
property 
plant and 
equipment
£m
total
£m
bread 1854 966 – 2820
retailer branded chilled 233 299 272 804
  2087 1265 272 3624
2010
retailer branded chilled 1250 – – 1250 
meatfree 250 – – 250 
  1500 – – 1500 
16 other intangible assets
 
 
software 
licences
£m
brands 
trademarks
£m
customer 
relationships
£m
assets under 
construction
£m
total 
£m
cost
at 1 january 2010 1150  9897  2430 510 13987 
additions   – –  – 204 204 
transfer to property plant and equipment 38 –  – –  38
reclassifications 10  –  – –  10 
transfer into use 482 –  – 482 – 
transferred to held for sale –  965 – –  965
at 31 december 2010 1604  8932  2430 232 13198 
additions –   –  – 168 168 
disposals –  –  915 – 915
transfer into use 27 – – 27 –
transferred to held for sale –  –  24 – 24
at 31 december 2011 1631  8932  1491 373 12427 
amortisation
at 1 january 2010 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
disposals –  –  915 –  915 
charge for the year 173 330 336 –  839
impairment –  679 586 –  1265
transferred to held for sale –  –  15 –  15 
at 31 december 2011 551 2341 1308 –  4200
net book value 31 december 2010 1226  7600  1114 232 10172 
net book value 31 december 2011 1080  6591  183 373 8227 
during 2010 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 trademarks 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 all amortisation is recognised in administrative expenses for 
2011 and 2010 wwwpremierfoodscouk stock code pfd
107
financial statements summary our business governance performance
16 other intangible assets continued
included in the assets under construction additions for the year are £56m of internal costs 2010 £65m
as at 31 december 2011 the group’s borrowings are secured on the assets of the group including other intangible fixed assets
impairment
an impairment charge of £1265m has been recognised against other intangible assets 2010 £nil refer to note 15
 
the material brands held on the balance sheet are as follows
brandtrademark 
carrying value at
31 dec 2011
£m
estimated useful 
life remaining
years
bisto 1513 25
hovis 729 35
oxo 951 35
batchelors 795 25
sharwood’s 716 25
mr kipling 587 25
17 investments
 principal subsidiaries
name of subsidiary
country of 
incorporation or 
registration and 
principal operations principal activity
effective interest in ordinary 
share capital at 31 december
2011 2010
operating subsidiaries
premier foods group limited united kingdom manufacture and distribution of 
ambient food products cakes 
bread own label and other food 
products
100 100
premier grocery products ireland limited republic of ireland distribution of ambient food 
products cakes own label and 
other food products
100 100
premier foods group services limited united kingdom head office company 100 100
other subsidiaries
premier foods investments limited united kingdom financing company 100 100
each of the principal subsidiary undertakings has the same yearend as premier foods plc the companies listed above are those that 
materially affect the results and the assets of the group the company has taken advantage of s410 2 of the companies act 2006 and 
in accordance a full list of subsidiary undertakings will be annexed to the company’s next annual return 
on 1 january 2010 the group undertook an internal reorganisation which resulted in the transfer of the trade and assets of chivers 
hartley limited hl foods limited premier ambient products uk limited and premier international foods uk limited to a fellow 
subsidiary premier foods group limited  premier foods plc  annual report and accounts 2011  
108
notes to the financial statements
18 inventories
 
 
2011
£m
2010
£m
raw materials 504 479
work in progress 36 42
finished goods and goods for resale 828 831
inventories 1368 1352
inventory writeoffs in the year amounted to £164m 2010 £183m
the borrowings of the group are secured against all the assets of the group including inventory 
19 trade and other receivables
 
 
2011
£m
2010
£m
trade receivables 2749 3178
trade receivables impaired 275 91
net trade receivables 2474 3087
prepayments 325 259
interest receivable 04 06
other tax and social security receivable 153 160
other receivables 18 51
trade and other receivables 2974 3563
the borrowings of the group are secured against all the assets of the group including trade and other receivables
20 trade and other payables
 
 
2011
£m
2010
£m
trade payables 3270 3996
other tax and social security payable 146 54
other payables and accruals 932 912
trade and other payables 4348 4962
21 bank and other borrowings
 
 
2011
£m
2010
£m
due within one year  
secured senior credit facility — term note a 673 1000
debt issuance costs 08  13 
  665 987
bank overdrafts 237 306
total bank borrowings due within one year 902 1293
finance lease obligations note 22 02 74
other unsecured loans note b  232 534
total borrowings due within one year 1136 1901
due after more than one year
secured senior credit facility — revolving note a 2761 200
debt issuance costs 65  65 
  2696 135
secured senior credit facility – term note a 6658 10800
debt issuance costs 87  135 
  6571 10665
finance lease obligations note 22 05 117
other unsecured loans note b 01 01
total other 06 118
total borrowings due after one year 9273 10918
total bank and other borrowings 10409 12819 wwwpremierfoodscouk stock code pfd
109
financial statements summary our business governance performance
21 bank and other borrowings continued
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
 
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 £733m 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
subsequent events
for details of amendments to the group’s financing arrangements please see note 31
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 australian dollars and japanese yen 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 
the principal foreign currency affecting the translation of subsidiary undertakings within the group financial statements is the euro the 
rates applicable are as follows
principal rate of exchange eur£ 
year ended 
31 dec 
2011
year ended 
31 dec 
2010
yearend 11917 11601
average 11508 11584
the majority of the group’s assets and liabilities are denominated in the functional currency of the relevant division or subsidiary premier foods plc  annual report and accounts 2011  
110
notes to the financial statements
22 financial instruments continued
the table below shows the group’s currency exposures as at 31 december 2011 and 2010 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
£m
euro
£m
total
£m
at 31 december 2011      
net foreign currency monetary assets
sterling – 05 05
euro 55 – 55
us dollar 04 – 04
other currencies 60 – 60
total 01 05 06
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
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
2011
payable 
receivable
£m
2010
payable 
receivable
£m
euro 543 426
us dollar 78 369
swiss franc – 11
swedish krona – 15
australian dollar – 02
total 621 767
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 £07m 2010 £33m 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 £09m 2010 £41m 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 
£27m 2010 £31m 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 
£32m 2010 £30m 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 
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  wwwpremierfoodscouk stock code pfd
111
financial statements summary our business governance performance
22 financial instruments continued
iii interest rate risk
the group’s borrowing facilities comprise term debt and a revolving facility principally in sterling interest is charged at floating rates plus 
a margin on the amounts drawn down and at half the margin for the nonutilised portion of the facility hence the borrowings are sensitive 
to changes in interest rates
the group then seeks to mitigate the effect of adverse movements in interest rates by entering into derivative financial instruments that 
reduce the level of exposure to floating rates the target of fixedcapped debt is defined in the group treasury policy and procedures 
however the amount hedged can be amended subject to agreement by the finance committee hedge accounting is not sought for 
these transactions
the gross cash flows on the interest rate derivatives are sensitive to changes in interest rates as they are driven by three month libor 
which is reset on a quarterly basis as at 31 december 2011 the reset rate was 108006 2010 07575
the weighted average interest rate for these derivative financial instruments is as follows
 
weighted 
average 
interest rate 

currency sterling
at 31 december 2011 57
at 31 december 2010 57
the following table reflects as at 31 december 2011 the likely contractual maturity date of the interest rate derivative contracts taking 
into account zero cost call features where market rates at the balance sheet date indicate they will be triggered by the banks as a result 
of amendments to the financing arrangements the maturity profile and structure of interest rate derivative contracts will be revised please 
see note 31 for further details
 
 
within 1 
year
£m
1 and 2 
years
£m
2 and 3 
years
£m
3 and 4 
years
£m
4 and 5 
years
£m
over 5 
years
£m
total
£m
2011
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
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
fixed rate derivative financial liabilities constitute one swap with a nominal value of £50m 2010 £50m 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 2010 £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 certain long dated swaps into six fixed rate swaps with a nominal value totalling £675m all 
maturing in 2013 these 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 90 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 from september 2011  premier foods plc  annual report and accounts 2011  
112
notes to the financial statements
22 financial instruments continued
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 2011 is £363m 
2010 £324m and based on the current yield curve the mark to market payment in august 2012 would be £350m 2010 £294m
to compensate for the shorter maturity date these swaps have fixed bullet payments on maturity totalling £821m 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 £469m as at 31 december 2011 2010 £389m include £117m relating to onerous leases 2010 £141m 
which are considered to be floating rate financial liabilities these cash flows are discounted where the effect is material 
at 31 december 2011 for every 50 basis points reduction in rates below the last floating reset rate of 108006 based on three month 
libor with all other variables held constant annualised net interest expense would increase by £04m 2010 £17m decrease 
at 31 december 2011 if interest rates were 200 basis points higher than the last floating reset rate of 108006 based on three month 
libor with all other variables held constant annualised net interest expense would decrease by £16m 2010 £68m increase 
the group’s other financial assets and liabilities are not exposed to material interest rate risk
b credit risk
the group’s principal financial assets are cash and cash deposits 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 2011 trade and other receivables of £858m 2010 £499m 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
£m
1–30 days
£m
31–60 days
£m
61–90 days
£m
91–120 days
£m
120 days
£m
total
£m
trade and other receivables
2011 1638 426 11 23 77 321 2496
2010 2645 200 36 25 15 223 3144
at 31 december 2011 trade and other receivables of £275m 2010 £91m were determined to be specifically impaired and provided 
for the total reflects the writeoff of some aged receivable balances following recent disposal and restructuring activities and 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
 
 
2011
£m
2010
£m
at 1 january 91 77
receivables written off during the year as uncollectable 50 33
provision for receivables released 30 18
provision for receivables impairment raised 264 65
at 31 december 275 91
the group has benefitted 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 wwwpremierfoodscouk stock code pfd
113
financial statements summary our business governance performance
22 financial instruments continued
c liquidity risk
the group manages liquidity risk through both the treasury and finance functions cash flow forecasts are prepared and reviewed on a 
weekly basis normally covering a period of three months
in addition cash flow forecasts are prepared as part of the group’s overall budgeting and forecasting processes and performance is 
monitored against this each month this is intended to give the board sufficient forward visibility of debt levels
the group’s net debt level can vary significantly from month to month and there is some volatility within months this reflects trading 
patterns timing of receipts from customers and payments to suppliers patterns of inventory holdings and the timing of the spend on 
major capital and restructuring projects for these reasons the debt levels at the yearend date may not be indicative of debt levels at 
other points throughout the year
the following table analyses the group’ s financial liabilities into relevant maturity groupings based on the contractual undiscounted cash flows
 
 
within 1 
year
£m
1 and 2 
years
£m
2 and 3 
years
£m
3 and 4 
years
£m
4 and 5 
years
£m
over 5 
years
£m
total
£m
at 31 december 2011
trade and other payables 4202 –  –  –  –  – 4202
bank overdraft 237 –  –  –  –  – 237
bank term loan 673 6658 – –  –  – 7331
bank revolver facility drawn down – 2761 – –  –  – 2761
finance leases 02 06 – – – – 08
other loans 232 01 –  –  –  – 233
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
the bank t erm loan and bank revolver facility are repriced quarterly to libor and other liabilities are not repriced before the maturity date
the group has £1783m 2010 £4209m of facilities available and not drawn as at 31 december 2011 expiring between one and two 
years
the borrowings are secured by a fixed and floating charge over all the assets of the group
the following table analyses the contractual undiscounted cash flows of interest on the floating rate debt to maturity based on the last 
fixed rate refix of 108006 2010 07575 plus applicable margin
 
 
within 1 
year
£m
1 and 2 
years
£m
2 and 3 
years
£m
3 and 4 
years
£m
4 and 5 
years
£m
over 5 
years
£m
total
£m
interest       
2011 380 363 – – – – 743
2010 449 375 313 – – – 1137 premier foods plc  annual report and accounts 2011  
114
notes to the financial statements
22 financial instruments continued
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 
 
 
within 1 
year
£m
1 and 2 
years
£m
2 and 3 
years
£m
3 and 4 
years
£m
4 and 5 
years
£m
over 5 
years
£m
total
£m
at 31 december 2011
forward foreign exchange 
contracts
outflow 621 –  –  –  –  – 621
inflow 608 –  –  –  –  – 608
commodities
outflow 63 – –  –  –  – 63
interest rate swaps
outflow 124 10 – –  –  – 134
inflow 24 02 – –  –  – 26
other financial liabilities at fair 
value through profit or loss
outflow 794 1240 – –  –  – 2034
inflow 73 68 – –  –  – 141
 897 1180 – –  –  – 2077
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
the above table incorporates the contractual cash flows of the interest rate derivatives with floating rates of interest calculated based 
on libor of 108006 2010 07575 at the balance sheet date in addition the cash outflow between one and two years relating to 
“other financial liabilities at fair value through profit or loss” includes £821m of fixed payments on maturity of the swaps restructured last 
year 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 2010 no 
contracts are expected to be called at nil prior to their contractual maturity based on the current yield curve wwwpremierfoodscouk stock code pfd
115
financial statements summary our business governance performance
22 financial instruments continued
d fair value
the following table shows the carrying amounts which approximate to fair value except as noted below of the group’s financial assets 
and financial liabilities fair value is the amount at which a financial instrument could be exchanged in an arm’s length transaction between 
informed and willing parties other than a forced or liquidation sale and excludes accrued interest set out below is a summary of methods 
and assumptions used to value each category of financial instrument
 
2011
book  
market value
£m
2010
book  
market value
£m
loans and receivables 
cash and bank deposits 458 19
trade and other receivables 2496 3144
financial assets at fair value through profit or loss
derivative financial instruments
— forward foreign currency exchange contractscurrency options 03 07
— commodity and energy derivatives 02 07
financial liabilities at fair value through profit or loss
derivative financial instruments
— forward foreign currency exchange contractscurrency options 19 14
— commodity and energy derivatives 01 –
— interest rate swaps 106 282
other financial liabilities at fair value through profit or loss
— interest rate swaps 1870 2063
financial liabilities at amortised cost
trade and other payables 4202 4908
bank term loan 7331 11800
bank revolver facility drawn down 2761 200
bank overdraft 237 306
finance leases 07 191
other 233 535
interest payable 09 123
the following table presents the group’s assets and liabilities that are measured at fair value at 31 december 2011 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 are observable for the asset or liability either directly that is as prices or 
indirectly that is derived from prices level 2
 • inputs for the asset or liability that are not based on observable market data that is unobservable inputs level 3
the following table presents the group’s assets and liabilities that are measured at fair value at 31 december
 
2011
level 2
2010
level 2
financial assets at fair value through profit or loss
derivative financial instruments
— forward foreign currency exchange contractscurrency options 03 07
— commodity and energy derivatives 02 07
financial liabilities at fair value through profit or loss
derivative financial instruments
— forward foreign currency exchange contractscurrency options 19 14
— commodity and energy derivatives 01 –
— interest rate swaps 106 282
other financial liabilities at fair value through profit or loss
— interest rate swaps 1870 2063 premier foods plc  annual report and accounts 2011  
116
notes to the financial statements
22 financial instruments continued
fair value estimation
derivatives
forward exchange contracts are marked to market using prevailing market prices hedge accounting has not been applied to forward contracts 
and as a result the movement in the fair value of £09m has been charged to the income statement in the year 2010 £22m charge 
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 £08m 2010 £02m credit has been charged 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 £176m has been credited to the income statement in the year 2010 £1337m 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 £193m has been 
credited to the income statement in the year 2010 £1770m charge 
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 
payments
present value of 
minimum lease 
payments
 
2011
£m
2010
£m
2011
£m
2010
£m
not later than one year 02 74 02 74
later than one year but not later than five years 06 128 05 115
later than five years – 03 – 02
  08 205 07 191
less future finance charges 01 14 na na
present value of lease obligations 07 191 07 191
less amounts due for settlement within 12 months     02 74
amounts due for settlement after 12 months     05 117
it is the group’s policy to lease certain items of plant and equipment under finance leases the average lease term is 15 years the 
longest being two years 
for the year ended 31 december 2011 the average effective borrowing rate was 39 2010 39
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 
the directors do not recommend the payment of a dividend for the year then ended 31 december 2011 2010 nil
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 wwwpremierfoodscouk stock code pfd
117
financial statements summary our business governance performance
22 financial instruments continued
the gearing ratios at 31 december 2011 and 31 december 2010 were as follows
 
 
2011
£m
2010
£m
total borrowings 10409 12819
less cash and bank deposits 458 19
net borrowings 9951 12800
total equity 5727 9895
total capital 15678 22695
gearing ratio 63 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 at june 2011 and has agreed with its 
banking group to defer the yearend tests from 31 december 2011 to 31 march 2012
please refer to note 31 for details of the amendments to the group’s financing arrangements 
23 provisions for liabilities and charges
 
 
restructuring 
£m
other
£m
total
£m
at 1 january 2010 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
utilised during the year 63  35 98
additional charge in the year 87 99 186
unwind of provision 12 12 24
released during the year 26  06 32
reclassifications 03 03 –
at 31 december 2011 229 240 469
analysis of total provisions
2011
£m
current  81 02 83
noncurrent  148 238 386
  229 240 469
analysis of total provisions
2010
£m
current  86 19 105
noncurrent  130 154 284
  216 173 389
at 31 december 2011 restructuring and redundancy provisions have been raised mainly in respect of various programmes aimed at 
reducing the group’s cost base in line with the group’s strategy the charge in the year relates to the closure of the group’s windsor 
office and reduction of headcount in overhead functions it is expected that the majority of these provisions will be utilised in 2012 the 
remaining provisions largely relate to onerous leases that have arisen due to exiting certain of the group’s premises which range from 2 to 
21 years
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 which range from 3 to 22 years
other provisions at 31 december 2011 and 2010 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 064 and 296 the unwinding of the discount is charged to the income statement 
under interest payable premier foods plc  annual report and accounts 2011  
118
notes to the financial statements
24 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 
career average 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 in 2009 and the premier foods ireland van sales scheme which was wound up in 2010 
the most recent full actuarial valuation of both the pfps and rhm pension schemes was carried out on 5 april 2010
the exchange rates used to translate the overseas euro based schemes are £100  11508 euros for the average rate during the year 
and £100  11917 euros for the closing position at 31 december 2011
until 30 june 2011 the employees of the above schemes accrued retirement benefits which varied as a percentage of final salary on 
retirement on 30 june 2011 the link to final salary was closed to future accrual for uk schemes and members’ retirement benefits are 
now linked to their salary on that date index linked at retail price index subject to a 5 cap until retirement date from 1 july 2011 
employees accrued career average benefits or chose to transfer to the new defined contribution scheme those contributing members of 
the papps and pgpps choosing career average benefits joined the pfps on 1 july 2011 and transferred their past service entitlements 
to the scheme membership of the group’s defined benefit pension schemes is now closed to new employees who are entitled to join the 
group’s main defined contribution scheme the group personal pension plan the closure of the final salary schemes resulted in a past 
service credit of £121m 
in july 2010 the uk government announced changes to the inflation index used for statutory pension increases both for pensions in 
payment and pensions in deferment to apply to private sector pension schemes this has resulted in a credit to past service costs of 
£299m in respect of the premier pension schemes during 2011 discussions with the trustees of the rhm scheme in relation to any 
potential impact of this change are ongoing
the assets of all defined benefit schemes are held by the trustees of the respective schemes and are independent of the group’s finances
the schemes invest through investment managers appointed by the trustees in uk and european equities and in investment products 
made up of a broader range of assets the plan assets do not include any of the group’s own financial instruments nor any property 
occupied by or other assets used by the group 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 
schemes
2011
rhm 
schemes
2011
discount rate 480 480
inflation — rpi 315 315
inflation — cpi 195 na
expected salary increases 415 415
future pension increases 210 210
  2010 2010
discount rate 545 545
inflation — rpi 345 345
inflation — cpi na na
expected salary increases 445 330
future pension increases 220 220 
for the smaller overseas schemes the discount rate used was 545 2010 550 expected salary increases of 300 2010 300 
and future pension increases of 175 2010 175  wwwpremierfoodscouk stock code pfd
119
financial statements summary our business governance performance
24 retirement benefit schemes continued
the mortality assumptions are based on standard mortality tables which allow for future mortality improvements the assumptions are  
as follows
2011 life expectancy
premier 
schemes
rhm 
schemes total
male pensioner currently aged 65 879 860 865
female pensioner currently aged 65 901 884 888
male nonpensioner currently aged 45 893 873 878
female nonpensioner currently aged 45 917 900 904
2010 life expectancy
premier 
schemes
rhm 
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
the fair values of plan assets split by type of asset are as follows
pension scheme assets
premier 
schemes
£m
rhm 
schemes
£m
total
£m
assets at 31 december 2011
equities 274 3977 4251
government bonds 142 84 226
corporate bonds 961 3537 4498
property 10 1266 1276
absolutetarget return products 2698 4521 7219
interest rate and inflation swaps 255 2061 2316
cashother 802 10972 11774
fair value of scheme assets 5142 26418 31560
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
the schemes invest in interest rate and inflation swaps to protect from fluctuations in interest and inflation
the expected rates of return on assets were
 
premier 
schemes
rhm 
schemes total
2011 for 2012 return
expected rate  66 58 59
market value £m 5142 26418 31560
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 premier foods plc  annual report and accounts 2011  
120
notes to the financial statements
24 retirement benefit schemes continued
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 08 2010 85 gain for premier schemes and a gain of 181 for rhm 
schemes 2010 144 gain 
the amounts recognised in the balance sheet arising from the group’s obligations in respect of its defined benefit schemes is as follows
 
 
premier 
schemes
£m
rhm 
schemes
£m
total
£m
2011
present value of funded obligations 7819 26565 34384
fair value of plan assets 5142 26418 31560
deficit in scheme 2677 147 2824
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
the aggregate deficit has decreased by £385m 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 545 to 480  wwwpremierfoodscouk stock code pfd
121
financial statements summary our business governance performance
24 retirement benefit schemes continued
experience gainslosses on the two schemes are as follows
 
 
premier 
schemes
£m
rhm 
schemes
£m
total
£m
2011
experience adjustments on
scheme assets
amount £m
percentage of scheme assets
355
69 
2619
99
2264
72
scheme obligations
amount £m
percentage of scheme obligations
33
04
02
–
35
01
2010
experience adjustments on
scheme assets
amount £m
percentage of scheme assets 
28
05
1532
67
1560
56
scheme obligations
amount £m
percentage of scheme obligations 
10
01
358
15
368
12
2009
experience adjustments on
scheme assets
amount £m
percentage of scheme assets
425
89
1350
66
925
37
scheme obligations
amount £m
percentage of scheme obligations
64
09
24
01
88
03
2008
experience adjustments on
scheme assets
amount £m
percentage of scheme assets
1316
317
503
24
1819
72
scheme obligations
amount £m
percentage of scheme obligations
64
11
22
01
86
03
2007
experience adjustments on
scheme assets
amount £m
percentage of scheme assets
148
29
117
06
31
01
scheme obligations
amount £m
percentage of scheme obligations
306
53
–
–
306
11 premier foods plc  annual report and accounts 2011  
122
notes to the financial statements
24 retirement benefit schemes continued
changes in the present value of the defined benefit obligation were as follows
 
 
premier 
schemes
£m
rhm 
schemes
£m
total
£m
2011
opening defined benefit obligation 7480 23723 31203
current service cost 88 96 184
past service costcredit 468 48 420
interest cost 401 1269 1670
actuarial loss 588 2469 3057
other incomeexchange differences 09 05 14
curtailmentssettlements 03 17 14
contributions by plan participants 52 132 184
benefits paid 310 1184 1494
closing defined benefit obligation 7819 26565 34384
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
changes in the fair value of plan assets were as follows
 
 
premier 
schemes
£m
rhm 
schemes
£m
total
£m
2011    
opening fair value of plan assets 5128 22866 27994
expected return 395 1516 1911
administrative and life insurance costs 36 35 71
actuarial lossgain 355 2619 2264
contributions by employer 275 508 783
contributions by plan participants 52 132 184
other costsexchange differences 07 04 11
benefits paid 310 1184 1494
closing fair value of plan assets 5142 26418 31560
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 wwwpremierfoodscouk stock code pfd
123
financial statements summary our business governance performance
24 retirement benefit schemes continued
actuarial gains and losses are as follows
premier
schemes
£m
rhm
schemes
£m
total
£m
2011
actuarial loss on plan liabilities 588 2469 3057
actuarial lossgain on plan assets 355 2619 2264
net actuarial lossgain for the year 943 150 793
cumulative actuarial loss 3593 167 3760
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
the actual return on plan assets was a £4175m gain 2010 £3350m gain which is £2264m more 2010 £1560m more than the 
expected return on plan assets of £1911m 2010 £1790m at the start of the relevant periods 
the actuarial loss on liabilities of £3057m 2010 £1096m loss comprises a gain on member experience of £35m 2010 £368m gain 
and an actuarial loss due to changes in assumptions of £3092m 2010 £1464m loss
the net actuarial loss taken to the statement of comprehensive income was £793m 2010 £464m gain this was £834m 2010 
£165m gain net of taxation with tax at 250 for uk schemes and 125 for irish schemes
the group expects to contribute approximately £319m 2011 £783m to its defined benefit plans in 2012 £264m 2011 £300m of 
regular contributions and expenses and £55m 2011 £483m of additional contributions to fund the scheme deficits the decrease in 
future deficit funding is a result of the amendments to the group’s financing arrangements detailed in note 31
the total amounts recognised in the group’s income statement are as follows
 
 
premier 
schemes
£m
rhm 
schemes
£m
total
£m
2011
operating profit
current service cost 88 96 184
past service creditcost 468 48 420
gainloss on curtailment 03 17 14
interest cost 401 1269 1670
expected return on plan assets 395 1516 1911
administrative and life insurance costs 36 35 71
total 341 51 392
2010
operating profit
current service cost 132 75 207
past service credit 67 49 116
losses on curtailment – 01 01
interest cost 392 1291 1683
expected return on plan assets 376 1414 1790
administrative and life insurance costs 31 35 66
total 112 61 51
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 £03m 
2010 £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 premier foods plc  annual report and accounts 2011  
124
notes to the financial statements
25  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 less subsequent realised losses relating to those acquisitions
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
share capital
 
 
2011
£m
2010
£m
authorised
3500000000 2010 3500000000 ordinary shares of 1 pence each 350 350
issued and fully paid    
2398058019 2010 2398021581 ordinary shares of 1 pence each 240 240
during 2011 36438 ordinary shares of 1p each were issued to certain employees at a price of 152p per ordinary share pursuant to 
exercise of share options
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 850m 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 2011 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 three and ten 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 no further awards are anticipated under this scheme 
2  a savings related share option scheme for employees the employees involved in the scheme have the right to subscribe for up 
to 619m 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 
51m 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 three 
years no further awards are anticipated under this plan 
 
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 
2008 award lapsed in full  
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 three years no further awards are 
anticipated under this plan 
 
the vesting of matching awards is conditional on achievement against a combination of eps and tsr performance targets during 
the year performance conditions were not met and so the 2008 cip award lapsed in full  wwwpremierfoodscouk stock code pfd
125
financial statements summary our business governance performance
25  reserves and share capital continued
5   in 2011 the company introduced two new executive remuneration schemes the details of the two new schemes are as follows
51 a longterm incentive plan performance share award for directors and senior managers the individuals in this scheme have the right 
to subscribe to ordinary shares at nil cost 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 three years 
 
the vesting of the 2011 award is conditional on achievement of an eps performance target
52 a longterm incentive plan matching share award 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 three years  
 
the vesting of the 2011 award is conditional on achievement of an absolute share price target
6  deferred share bonus plan for directors this will operate alongside the cash annual bonus growth of market share for total brands 
must be achieved for the bonus to become payable and the group trading profit must be met
details of the share options of the premier foods esos are as follows
premier foods plc executive share option scheme
  2011 2010
 
year of 
expiry options
weighted 
average 
exercise 
price p options
weighted 
average 
exercise price 
p
outstanding at beginning of year 1560119 162 1600782 162
forfeited during the year 241268 162 40663 162
outstanding at the end of the year 2014 1318851 162 1560119 162
exercisable at the end of the year   1318851 162 1560119 162
the options outstanding at 31 december 2011 had a weighted average exercise price of 162 pence 2010 162 pence and a weighted 
average remaining contractual life of 26 years 2010 36 years
details of the share options of the premier foods savings related share option schemes are as follows
premier foods plc savings related share option scheme
  2011 2010
  options
weighted 
average 
exercise 
price p options
weighted 
average 
exercise price 
p
outstanding at beginning of year 63465915 24 58771948 45
exercised during the year 36438 15 – –
granted during the year 23981613 10 47756192 15
forfeited during the year 25500367 27 43062225 43
outstanding at the end of the year 61910723 17 63465915 24
exercisable at the end of the year 2052202 68 975564 186
during the year 240m 2010 478m options were granted under the savings related share option schemes with a weighted average 
exercise price at the date of exercise of 10 pence per ordinary share 2010 15 pence 
the options outstanding at 31 december 2011 had a weighted average exercise price of 17 pence 2010 24 pence and a weighted 
average remaining contractual life of 21 years 2010 26 years premier foods plc  annual report and accounts 2011  
126
notes to the financial statements
25  reserves and share capital continued
details of the share awards of the premier foods ltip are as follows
premier foods plc longterm incentive plan
  2011 2010
  awards
weighted 
average 
exercise 
price p awards
weighted 
average 
exercise price 
p
outstanding at beginning of year 8503418 1 6130231 1
granted during the year –  – 4373565 1
forfeited during the year 3411749 1 2000378 1
outstanding at the end of the year 5091669 1 8503418 1
exercisable at the end of the year –  – – –
during the year no awards were granted under the ltip 2010 44m the weighted average share price at the date of exercise was 1 
pence the awards outstanding at 31 december 2011 had a weighted average remaining contractual life of one year 2010 17 years 
the weighted average fair value of awards granted during the year was nil pence per award 2010 39 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
2011 2010
weighted average share price p – 32
annual riskfree interest rate  – 17
expected dividend at grant date  – –
expected award life years – 3
expected volatility  – 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
premier foods plc coinvestment plan
  2011 2010
  awards
weighted 
average 
exercise 
price p awards
weighted 
average 
exercise price 
p
outstanding at beginning of year 10898240 1 8265837 1
granted during the year –  – 4520685 1
forfeited during the year 2563959 1 1888282 1
outstanding at the end of the year 8334281  1 10898240 1
exercisable at the end of the year –  – – –
the awards outstanding at 31 december 2011 had a weighted average remaining contractual life of 14 years 2010 21 years the 
weighted average fair value of awards granted during the year was nil pence per award 2010 39 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
2011 2010
weighted average share price p – 32
annual riskfree interest rate  – 17
expected dividend  – –
expected award life years – 3
expected volatility  – 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  wwwpremierfoodscouk stock code pfd
127
financial statements summary our business governance performance
25  reserves and share capital continued
details of the share awards of the premier foods longterm incentive plan — eps target are as follows
premier foods plc longterm incentive plan — performance share award
  2011
  awards
weighted 
average 
exercise 
price p
outstanding at beginning of year –  – 
granted during the year 8741250 1
forfeited during the year 3094720 1
outstanding at the end of the year 5646530 1
exercisable at the end of the year –  – 
the awards outstanding at 31 december 2011 had a weighted average remaining contractual life of 24 years the weighted average 
fair value of awards granted during the year was nil pence per award no charge has been recognised in the income statement in 2011 
because it is anticipated that the performance conditions will not be met and therefore the awards will not vest
details of the share awards of the premier foods longterm incentive plan — average share price target are as follows
premier foods plc longterm incentive plan — matching share award
  2011
  awards
weighted 
average 
exercise 
price p
outstanding at beginning of year –  – 
granted during the year 5344038 1
forfeited during the year 2670282 1
outstanding at the end of the year 2673756 1
exercisable at the end of the year –  – 
the awards outstanding at 31 december 2011 had a weighted average remaining contractual life of 24 years the weighted average 
fair value of awards granted during the year was nil pence per award no charge has been recognised in the income statement in 2011 
because it is anticipated that the performance conditions will not be met and therefore the awards will not vest
in 2011 the group’s continuing operations recognised an expense of £39m 2010 £69m related to all equitysettled sharebased 
payment transactions a further £09m was recognised in relation to discontinued operations
a summary of the range of exercise price and weighted average remaining contractual life is shown below 
weighted average remaining life and exercise prices
  31 dec 2011 31 dec 2010
 
number 
outstanding 
at end of the 
year
weighted 
average 
remaining 
contractual 
life years
weighted 
average 
exercise 
price p
number 
outstanding 
at end of the 
year
weighted 
average 
remaining 
contractual life 
years
weighted 
average 
exercise price 
p
at 1 pence 21746236 17 1 19401658 19 1
£001 to £099 61910723 21 17 62490351 26 22
£100 to £200 1318851 26 162 2535683 22 171
total 84975810 20 15 84427692 25 21 premier foods plc  annual report and accounts 2011  
128
notes to the financial statements
26  notes to the cash flow statement
reconciliation of operating profit to cash flows from operating activities
 
 
year
ended
31 dec 
2011
£m
year
ended
31 dec 
2010
restated
1
£m
continuing operations
operating lossprofit 1763 2199
depreciation of property plant and equipment 418 432
amortisation of intangible assets 720 658
loss on the sale of canning operations 112 – 
gain on disposal of property plant and equipment 09 02
gain on disposal of intangible assets – 39
impairment of goodwill and intangible assets 2820 – 
fair value movements on foreign exchange and other derivative contracts 17 20
noncash movement relating to retirement benefits 413 57
sharebased payments 39 69
net cash inflow from operating activities before interest and tax and movements  
in working capital
1941 3394
increasedecrease in inventories 263 67
increasedecrease in trade and other receivables 538 246
decreaseincrease in trade and other payables and provisions 109 184
movement in retirement benefit obligations 761 643
cash generated from continuing operations 1346 2756
discontinued operations 479  376
cash generated from operating activities 867 3132
1
 comparatives have been restated to reflect the reclassification of the retailer branded chilled business as a discontinued operation
reconciliation of cash and cash equivalents to net borrowings
 
 
year
ended
31 dec 
2011
£m
year
ended
31 dec 
2010
£m
net inflowoutflow of cash and cash equivalents 511 131
decreaseincrease in finance leases 184 177
decrease in borrowings 2213 1217
other noncash movements 59 58
decrease in borrowings net of cash 2849 851
total net borrowings at beginning of year 12800 13651
total net borrowings at end of year 9951 12800 wwwpremierfoodscouk stock code pfd
129
financial statements summary our business governance performance
26  notes to the cash flow statement continued
analysis of movement in borrowings 
 
 
as at 
1 jan 
2011
£m
cash flow
£m
other 
noncash  
movements
£m
as at 
31 dec 
2011
£m
bank overdrafts 306 69 –  237
cash and bank deposits 19 442 03  458 
net cash and cash equivalents 287 511 03  221
borrowings — term facilities 11800 4469 –  7331
borrowings — revolving credit facilities 200 2561 – 2761
finance leases 191 184 – 07
other 535 302 –  233
gross borrowings net of cash
1
 13013 2905 03 10111
debt issuance costs 213 03 56 160 
total net borrowings
1
 12800 2908 59  9951
1
  borrowings excludes derivative financial instruments and other financial liabilities fair valued through profit or loss
27  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
 2011 2010
 
property
£m
plant and
 equipment
£m
property
£m
plant and
 equipment
£m
within one year 113 80 130 146
between two and five years 387 110 462 184
after five years 662 02 744 01
total operating lease commitments 1162 192 1336 331
leases primarily relate to the group’s properties which principally comprise offices and factories lease payments are typically subject 
to market review every five years to reflect market rentals but because of the uncertainty over the amount of any future changes such 
changes have not been reflected in the table above within our leasing arrangements there are no significant contingent rentals renewal 
purchase or escalation clauses
the group sublets various properties under noncancellable lease arrangements sublease receipts of £14m 2010 £09m were 
recognised in the income statement during the year the total future minimum sublease payments at the yearend is £45m 2010 £55m
28  capital commitments
  2011
£m
2010
£m
contracts placed for future capital expenditure not provided in the financial statements
intangible assets 20 22
tangible assets 160 64 
total 180 86
29  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 as a result of alleged failure to adequately equalise retirement ages between 1990 and 1993 during 2011 the group 
decided to seek a court ruling on 20 february 2012 the case was heard in court and on 2 march 2012 the judge ruled in favour of the 
group as a result there is no material additional liability to be recognised and no impact on pension deficit recovery payments relating to 
the case
there were no other material contingent liabilities at 31 december 2011 other contingencies and guarantees in respect of the parent 
company are described in note 9 of the parent company financial statements premier foods plc  annual report and accounts 2011  
130
notes to the financial statements
30  related party transactions
key management personnel of the group are considered to be the executive and nonexecutive directors and the group executive 
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 65 to 76
 
year 
ended 
31 dec
2011
£m
year 
ended 
31 dec
2010
£m
salaries and other shortterm employee benefits 73  44 
post employment benefits 03  03 
termination benefits 20  – 
sharebased payments 12  15 
total 108  62 
wp x investments limited “warburg pincus” is considered to be a related part of the group by virtue of its 158 2010 158 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
31  subsequent events
disposal of the irish brand business
on 15 december 2011 the group announced that it had agreed to sell its four irish brands chivers gateaux mcdonnells and the erin 
licence to the boyne valley group for €414m the disposal of the irish brands completed on 23 january 2012 
financing arrangements
on 12 march 2012 the group announced that it had obtained consent from its banking syndicate swap counterparties and pension 
schemes on a refinancing package subject to the formalities of final documents being signed expected by the end of march
pension arrangements
subject to implementation of the new refinancing arrangements the trustees of the group’s pension schemes have agreed to defer 
deficit contribution payments c£47m pa until 1 january 2014 and there will be no increase in the agreed deficit contributions before 
2016 regular contributions of approximately £26m per annum will continue to be paid to the pension schemes
lending arrangements
the existing term loan £733m and revolving credit facility £500m previously due to mature on 31 december 2013 will be extended to a 
new maturity date of 30 june 2016 the current applicable bank margin of 225 will increase to 325 with effect from 1 january 2014
additionally the current amortisation payment schedule has been amended with amortisations to occur semiannually from 30 june 
2014 banking covenants of net debtebitda and ebitdainterest remain in place they will continue to be tested biannually and have 
been reset to reflect the group’s strategic plan the covenant tests are set out in the table below
having already realised net disposal proceeds of £400m in 2011 the group is required to realise proceeds from disposals of £330m by 
30 june 2014 with 80 of this to be achieved by 31 december 2013 and 90 of this by 31 march 2014
the total interest rate swap portfolio including previously restructured swaps will be restructured into additional term loan totalling 
approximately £199m of this additional term loan approximately £117m of the previously restructured swaps will be interest bearing with 
immediate effect the remaining £82m of previously restructured swaps will attract interest from 1 january 2014 these new tranches 
of additional term loan will attract the same interest margin as the main term loan the result of this conversion from swaps to additional 
term loan will significantly reduce the group’s interest expense in 2012 and 2013 and the previously arranged agreed swap settlements 
of £35m in 2012 and £82m in 2013 are no longer applicable a new amortising swap commencing in july 2012 with a nominal value of 
approximately £750m will be arranged attracting a swap rate of 155
all term loan and securitised debt attract interest charges based on libor
a sliding scale of new deferred fees at market rates will be applicable from 2014 through to 2016 which are payable on a subsequent 
refinancing planned future disposal proceeds will be shared between the banks in the banking syndicate including those swap 
counterparties whose swaps have been restructured into additional term loans as described above
on 31 december 2013 a ‘cash sweep’ reflecting excess cash generated over and above an agreed level will be calculated and paid in 
early 2014 to the banking syndicate including those swap counterparties whose swaps have been restuctured into additional term loans 
as described above and pension schemes in lieu of payments foregone by this date further cash sweeps will be included annually with 
amounts distributed to the banking syndicate including those swap counterparties whose swaps have been restructured into additional 
term loans as described above wwwpremierfoodscouk stock code pfd
131
financial statements summary our business governance performance
 31 subsequent events continued
the company is restricted from paying dividends under the terms of the refinancing package
summary of refinancing package
bank facility maturity 30 june 2016
bank margin 225 until 31 dec 2013
325 1 jan 2014–30 june 2016
facilities term loan a £733m
rcf £500m 
additional term loan circa £199m                     
amortisation payments 30 june 2014 – £25m
31 dec 2014  – £25m
30 june 2015 – £30m
31 dec 2015  – £30m
disposals proceeds shared between banks and swap counterparties
£330m disposal proceeds required by 30 june 2014 certain progress 
milestones from 31 december 2013
securitisation programme now £120m and now on balance sheet
cash sweep paid in feb 2014 split between banks swaps and pension schemes
further cash sweeps annually thereafter excluding pension schemes
consent fee 1 fee on outstanding facilities
existing deferred fee 05 on existing facilities paid dec 2013
new deferred fee 20 on facilities between 28 march 2013 – 27 march 2014
25 on facilities between 28 march 2014 – 27 march 2015
30 on facilities between 28 march 2015 – 27 march 2016
covenant test dates biannually 30 june and 31 december
net debt ebitda covenant 30 june 2012 696x
31 dec 2012 587x
30 june 2013 526x
31 dec 2013 452x
30 june 2014 466x
31 dec 2014 392x
30 june 2015 382x
31 dec 2015 326x
ebitda interest covenant 30 june 2012 237x
31 dec 2012 369x
30 june 2013 450x
31 dec 2013 450x
each test thereafter 450x
receivables purchase agreement
the group’s receivables purchase agreement with dlli a wholly owned subsidiary of rabobank group is due to expire on 31 march 
2012
the group has negotiated and obtained a commitment to a new securitisation programme relating to certain receivable balances available 
up to an amount of £120m subject to sufficient receivables being capable of being sold into the programme these balances will be 
included as part of net debt reflecting their recognition on the balance sheet and will attract an interest margin of 35  premier foods plc  annual report and accounts 2011  
132
premier foods plc — company financial statements
the following statements reflect the financial position of the company premier foods plc as at 31 december 2011 and 2010 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 company 
profit and loss account
balance sheet
 
 
 
 
 
 
note
as at
31 dec
2011
£m
as at
31 dec
2010
£m
assets      
fixed assets    
investments 3 7297  17497 
current assets    
debtors 4 6477  6367 
deferred tax assets 6 08  06 
cash at bank and in hand  03  03 
total assets  13785  23873 
liabilities   
current liabilities    
creditors amounts falling due within one year 5 554 519
total liabilities  554 519
total assets less total liabilities  13231  23354 
equity   
capital and reserves   
share capital 7 240  240 
share premium 7 11247  11247 
merger reserve 7 2280  10275 
profit and loss reserve 7 536  1592 
total shareholders’ funds  13231  23354 
the notes on pages 133 to 135 form an integral part of the financial statements
the financial statements on pages 132 to 135 were approved by the board of directors on 18 march 2012 and signed on its behalf by
michael clarke mark moran
chief executive officer chief financial officer wwwpremierfoodscouk stock code pfd
133
financial statements summary our business governance performance
1  accounting policies
basis of preparation 
the financial statements have been prepared on the going concern basis and in accordance with the companies act 2006 and applicable 
accounting standards in the united kingdom “uk gaap” under the historical cost convention the loss for the year of £10175m 2010 
£67m profit 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 directors consider that the accounting policies set out below are the most appropriate and have been consistently applied
the company has taken advantage of the exemption from preparing a cash flow statement under the terms of frs revised 1996 on the 
grounds that the group includes the company in its consolidated financial statements that are publically available
the company is 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
sharebased payments
the fair value of employee share option plans is calculated using an optionpricing model in accordance with financial reporting 
standard 20 “sharebased payment” “frs 20” the resulting cost is charged to the profit and loss account over the vesting period 
of the options for employees employed by the parent company or treated as an investment in subsidiaries in respect of employees 
employed by the subsidiaries where the cost is recharged the value of the charge is adjusted to reflect expected and actual levels of 
options vesting
dividends
dividend distribution to the company shareholders is recognised as a liability in the company’s financial statements in the period in which 
the dividends are approved by the company’s shareholders and for interim dividends in the period in which they are paid
operating lease agreements
leases in which a significant portion of risks and rewards of ownership are retained by the lessor are classified as operating leases rental 
costs under operating leases net of any incentives received from the lessor are charged to the income statement on a straightline basis 
over the lease period
2 operating profit
audit fees in respect of the company are £nil 2010 £nil note 6b of the group consolidated financial statements provides details of the 
remuneration of the company’s auditors on a group basis
at 31 december 2011 the company had two employees 2010 three and their remuneration totalled £23m 2010 £27m this 
excludes the company’s six 2010 seven nonexecutive directors whose remuneration totalled £07m 2010 £06m directors’ 
emolument disclosures are provided in the directors’ remuneration report on pages 65 to 76 of this annual report
notes to the company financial statements premier foods plc  annual report and accounts 2011  
134
notes to the company financial statements
3 investments
 
 
2011
£m
2010
£m
shares in subsidiary undertakings  
at 1 january 17497 17437
additions 42  60
impairment 10242 –
at 31 december 7297 17497
impairment
an impairment charge of £10242m is recognised against the value of the company’s investment in subsidiaries as a result of various 
disposals made during the year combined with adverse trading conditions
during 2011 a capital contribution of £42m 2010 £60m 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 in the group financial statements for a list of the principal 
subsidiary undertakings a full list of subsidiary undertakings will be annexed to the company’s next annual return
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 
4 debtors
 
2011
£m
2010
£m
amounts falling due within one year  
amounts owed by group undertakings 6477 6367
the above balances are not subject to interest rate risk as they are interest free with the exception of £3070m 2010 £2959m which 
attracted interest at a rate of libor plus 30 2010 libor plus 30 carrying value approximates fair value
5 creditors
 
2011
£m
2010
£m
amounts falling due within one year  
amounts owed to group undertakings 435  424 
current tax 119  95 
total creditors falling due within one year 554 519
the above balances are not subject to interest rate risk as they are interest free with the exception of £372m 2010 £358m which 
attracted interest at a rate of libor plus 30 2010 libor plus 30 carrying value approximates fair value
6  deferred tax
 
 
2011
£m
2010
£m
at 1 january  06  03 
charged to the profit and loss account 02  03 
at 31 december 08  06 
the deferred tax asset relates to sharebased payments wwwpremierfoodscouk stock code pfd
135
financial statements summary our business governance performance
7 share capital and other reserves
 
 
share 
capital
£m
share 
premium
£m
merger 
reserve
£m
profit and 
loss reserve 
£m
total
£m
at 1 january 2010 240  11247  10275  1456  23218 
profit for the year –  –  –  67  67 
sharebased payments a –  –  –  69  69 
at 31 december 2010 240  11247  10275  1592  23354 
loss for the year –  –  –  10175 10175 
realisation of merger reserve b   – –  7995  7995 – 
sharebased payments a –  –  – 52  52 
at 31 december 2011 240  11247 2280  536  13231 
share capital
 
 
2011
£m
2010
£m
authorised    
3500000000 2010 3500000000 ordinary shares of 1 pence each 350 350
issued and fully paid    
2398058019 2010 2398021581 ordinary shares of 1 pence each 240 240
a sharebased payments
2011 and 2010
the costs reflect the company’s share option schemes in operation further details are available per note 25 of the group’s consolidated 
financial statements
the charge relating to its employees of the company amounted to £10m 2010 £09m further details of these schemes can be found 
in the directors’ remuneration report on pages 74 to 75
b realisation of merger reserve
the company has transferred to the profit and loss reserve an amount that has become realised on disposal and write down of the 
related investment
8 operating lease commitments
at 31 december 2011 the company had annual commitments under noncancellable operating leases in respect of land and buildings as follows
 
2011
£m
2010
£m
after five years 03  03 
the lease expense has been borne by a subsidiary company
9 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 2011 is £12bn 2010 £17bn
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 as a result of alleged failure to adequately equalise retirement ages between 1990 and 1993 during 2011 the group 
decided to seek a court ruling on 20 february 2012 the case was heard in court and on 2 march 2012 the judge ruled in favour of the 
group as a result there is no additional material liability to be recognised and no impact on pension deficit recovery payments relating to 
this case
10 subsequent events
the group has obtained consent from its banking syndicate swap counterparties and pension schemes on a refinancing package 
subject to the formalities of final documents being signed expected by the end of march
further details of the amendments to the financing arrangements are shown in note 31 to the group financial statements premier foods plc  annual report and accounts 2011  
136
glossary
adjusted earnings per share
adjusted earnings per share is defined as 
adjusted profit before tax less a notional 
tax charge for the group divided by the 
weighted average number of shares in 
issue during the period see note 10 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 
bis
uk department for business innovation  
and skills
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
ceo
chief executive officer
cfo
chief financial officer
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
chief operating decision maker
a function or person that is responsible for 
allocating resources to and assessing the 
performance of operating segments
code
the uk corporate governance code 2010 
published by the frc
companies act 
the companies act 2006 
company the
premier foods plc
coo 
chief operating officer
csr
corporate social responsibility
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
group executive
the group executive support the ceo in 
carrying out the duties delegated to him by 
the board
haccp
hazard analysis critical control point
higgs report
report in the uk by derek higgs on the role 
and effectiveness of nonexecutive 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 glossary
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 approved 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 the following 
noncash items 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
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 non
payment 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
ordinary share
an ordinary share of 1 pence each in the 
share capital of the company
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
rhm
rank hovis mcdougall
riddor
reporting of injuries diseases and 
dangerous occurrences regulations
retailer branded
also known as “private label” or “own label” 
products
rpi
retail price index
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
sid
senior independent director
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 refinancing costs 
restructuring costs and losses associated 
with disposals 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
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
wwwpremierfoodscouk stock code pfd wwwpremierfoodscouk
premier house
centrium business park
griffiths way
st albans
hertfordshire
al1 2re
t 01727 815850
f 01727 815982
registered in england and wales no 5160050
premier foods plc   annual report and accounts for the year ended 31 december 2011


Summary:
 premier foods plc  annual report and accounts 2011  
04
2110302  15032012 proof 13
chairman’s statement
a stable platform for  
sustainable growth
“the business has significant underlying 
strengths and there are many reasons to be 
positive as we look forward to 2012 and beyond”
ronnie bell
chairman
2011 was an extremely challenging year for premier foods while the 
results have been disappointing the new management team put in place 
during the second half of the year has moved quickly to stem the decline 
in profitability and to obtain consent for a refinancing package which 
will provide a stable platform for future growth i believe the business has 
significant underlying strengths and there are many reasons to be positive 
as we look forward to 2012 and beyond
2011 overview
trading in 2011 was affected by a number of significant issues poor 
underlying economic conditions had a significant impact on consumer 
confidence and spending whilst at the same time we experienced 
higher commodity inflation our price increases were not able to 
recover all of the increased input costs and this together with an 
increase in promotional activity had an impact on margin in addition 
we experienced strong competition from branded and nonbranded 
competitors which was compounded by the impact of customer 
disputes as a result sales and profitability were significantly below our 
expectations and this in turn put pressure on our banking covenants
stabilising the business
in july we announced the appointment of michael clarke as chief 
executive officer given the challenges facing the group it was essential 
that the board appoint an outstanding executive with the experience 
and track record necessary to stabilise and turn around the business i 
am delighted that michael agreed to join premier foods and believe his 
skill experience and success in managing and growing brands will be 
invaluable in returning the group to sustainable growth 
a huge amount has been achieved in a short space of time since joining 
in august michael has moved very quickly to review the business to 
understand the underlying issues and to formulate a compelling growth 
strategy the consent received for the refinancing is a major milestone 
as it removes uncertainty surrounding the group’ s financing and provides 
a solid platform to allow management to focus fully on managing and 
growing the business other key achievements include
	 the appointment of a new senior management team with 
experience in brand management and turnaround situations 
	 stabilising the decline in profitability
	 completion of a business plan to deliver longterm sustainable 
growth
	 focused investment behind our eight power brands
	 reducing costs simplifying the business and improving 
competitiveness
	 divestment of noncore businesses to add focus and 
	 building more collaborative longterm relationships with 
customers 
consent obtained for a new refinancing package
the group has obtained unanimous consent to the terms of a re
financing package from its banking syndicate swap counterparties 
and pension schemes that will allow the group to execute its future 
growth strategies 
the banking facilities will be extended to june 2016 and the 
covenants reset to reflect our strategic plan under the agreement the 
interest rate swaps will be converted to additional bank term loan and 
the amortisation payment schedule amended with payments deferred 
until mid 2014 in addition the group’s pension schemes have agreed 
to defer deficit contributions until january 2014 
we appreciate the support of both our banking syndicate and 
pension funds in establishing these new arrangements which 
provide the space needed to restore growth
further information on the refinancing can be found on pages 32 
and 33
best in british food
our vision is to be the “best in british food” as britain’s biggest 
branded food producer premier foods remains fundamentally a 
sound business with a portfolio of great british brands passionate 
employees and a significant manufacturing footprint
many of our brands have a strong heritage and remain the product 
of choice for british consumers — 99 of households buy at 
least one of our products each year our products also compare 
favourably against competitors for taste and quality — 96 of 
our top 60 skus test at parity or superior when tested against 
competitor products in blind tasting
in addition we support the british economy both as a major 
employer in the manufacturing industry with factories across the 
country and also by supporting the british businesses and farmers 
that supply 82 of our ingredients goods and services
more information on the four strategic pillars that are aligned around our 
vision are set out in the chief executive’ s statement on pages 8 to 11