celebrating 100 years 
and planning for  
our future
thorntons plc 
annual report and accounts 2011 who we are
our vision
to be britain’s best 
loved chocolate 
brand making every 
customer smile
our delicious treats have been delighting 
customers for 100 years today thorntons is 
a £218m turnover company and our products 
can be found across a multichannel network 
comprising shops franchisees online and 
through a wide choice of retail partners
100 years of making 
every customer smile wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 1
highlights
  revenues increased by 17 to £2183 million 2010 £2146 million 
	 	 p rofit	before	tax	and	exceptional	items	was	£43	m illion	
2010 £69 million 
	 	 exceptional	items	total	£54	million	2010	£08	 million	consisting	
of	impairment	and	onerous	lease	provisions	and	other	one	off	charges
	 	 net	debt	down	£15	mil lion	to	£245	million	201 0	£260	million
	 	 the 	 board 	 recommends 	 a 	 nominal 	 final 	 dividend 	 of 	 025p 	 2010 	 410p	
making	the	total	dividend	for	the	year	220p	2010	605p
	 thorntons’ 	 share 	 of 	 the 	 uk 	 chocolate 	 market 	 grew 	 to 	 77 	 2010 	 74
revenue £m
2007
2008
2009
2010
2011
185989
208122
214805
214553
218255
earning per share preexceptionals p
2007
2008
2009
2010
2011
80
91
65
73
62
profit before tax and exceptionals £m
2007
2008
2009
2010
2011
7081
8470
6288
6912
4336
full year dividend p
2007
2008
2009
2010
2011
68
68
605
605
220
ifc	 who	we	are
1	 highlights
2	 chairm an ’s	statement
4	 at	a	glance
6	 chief	executive’s	repor t
10	 f inance	director ’s	repor t
13	 corporate	social	responsibility
16	 board	of	directors
17	 	 corporate	inform ation	and	financial	cal endar
18	 r epor t	of	the	directors
22	 corporate	governance
26	 	 r epor t	on	the	dir ectors’	remuneration
33	 independent	aud itors’	repor t	
35	 consolidated	income	statement
36	 	 statements	of	comprehensive	income
37	 statements 	 of 	 changes 	 in 	 equity
39	 balance	sheets
40	 cash	flow	statements
41	 	 statement	of	accounting	policies
47	 	 notes	to	the	finan cial	statements
75	 f ive	year	summa r y
76	 shareholder	anal ysis
in this report thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
2
chairman’s statement
thorntons	achieved	a	respectable	increase	
in	sales	of	17	to	£2183	million	
2010	£2146	million	in	a	year	which	
saw	extremely	difficult	trading	conditions	
reflecting 	 the 	 continuing 	 strength 	 of 	
the	brand	
last	year	we	announced	that	restructuring	
the	r etail	estate	was	necessar y	because	of	
the	deteriorating	conditions	on	many	high	
streets 	 as 	 a 	 result 	 of 	 the 	 current 	 challenging	
economic	and	financial	environment	and	
the 	 changes 	 in 	 customer 	 shopping 	 behaviour	
that 	 have 	 taken 	 place 	 over 	 the 	 past 	 decade	
f ollowing 	 the 	 arrival 	 in 	 januar y 	 2011 	 of 	 our	
new	chief	executive	jonathan	har t	we	
completed	a	strategic	review 	the	results	
of 	 which 	 were 	 presented 	 in 	 june 	 and	
demonstrate 	 a 	 clear 	 plan 	 to 	 transform	
and 	 derisk 	 our 	 business 	 over 	 the 	 next	
three 	 years 	 this 	 plan 	 will 	 create 	 a 	 profitable	
and	rebalanced	organisation 	a	customer 
focused	multichannel	business	and	a	
revitalised brand 
in 	 2006 	 almost 	 80 	 of 	 the 	 entire	
production	of	chocolates	at	thorntons	
was	sold	through	our	own	stores	and	our	
f ranchise	network	anticipating	the	risk	
of	this	ver tically	integrated	retail	model	
in	2006	we	accelerated	the	development	
of	our	commercial	sales	to	supermarkets	
as 	 well 	 as 	 growing 	 our 	 online 	 sales 	 through	
thorntons 	 direct 	 the 	 objective 	 of 	 this 	 change	
was	to	“decouple”	our	manufacturing	
operations	from	our	own	stores
this	strategy	has	proved	highly	successful	
the 	 commercial 	 channel 	 has 	 grown 	 strongly	
over recent years and last year sales increased 
259 	 to 	 £788 	 million 	 2010 	 £626 	 million 
through	our	commercial	c h a n n e l 	 w e 	 n o w	
lead	the	inlaid	box	chocolate	market	
in	terms	of	market	share	and	through	
our	actions	are	also	the	main	driver	
of	growth	in	our	market	
through	this	development	thorntons	is	
now	in	a	good	position	to	deal	with	the	
underper formance	and	restructuring	of	
the	own	stores	estate	without	causing	
any	significant	impact	on	our	
manufacturing	capacity 
w e	have	concluded	that	we	can	profitably	
and	sustainably	manage	an	own	store	
estate	of	between	180	and	200	stores	
in	light	of	this	over	the	next	three	years	
we	plan	to	close	up	to	180	of	our	own	
stores	in	the	majority	of	these	locations	
however 	we	plan	to	open	franchises	
this	restructuring	of	our	own	stores	retail	
estate	is	fur ther	suppor ted	by	a	favourable	
lease 	 expir y 	 profile 	 179 	 of 	 our 	 leases 	
expire	over	the	next	three	years	of	which	
we	plan	to	close	two thirds	thus	capital	
expenditure	requirements	to	maintain	
a 	 quality 	 store 	 por tfolio 	 will 	 be	
substantially reduced
the	current	restructuring	of	the	thorntons	
business 	 has 	 led 	 to 	 a 	 number 	 of 	 exceptional	
costs 	 impairment 	 and 	 onerous 	 lease	
charges 	 provision 	 to 	 cover 	 the 	 costs	
associated	with	the	outsourcing	of	the	
warehousing	and	distribution	functions	
and	bank	refinancing	p retax	profit	before	
exceptionals 	 for 	 the 	 period 	 was 	 £43 	 million	
2010	£69	million	the	combined	
total	of 	 these 	 exceptional 	 items 	 amounts	
t o 	£54	m illion	for	the	period	2010	
£08	 million	 resulting	 in	 an	 overall	 pretax	
loss 	 for 	 the 	 period 	 of 	 £11 	 million	
2010	pretax	profit	of	£61	million	
in	june	2011	the	banking	facilities	were	
renewed 	 and 	 the 	 group 	 now 	 has 	 committed	
banking	facilities	with	hsbc	lloyds	tsb	
and 	 barclays 	 totalling 	 £575 	 million 	 through	
to	october	2015	and	an	overdraf t	facility	
of	£50	million 	
in summary
  thorntons achieved a 
respectable increase in sales 
of 17 to £2183 million 
2010 £2146 million
  the commercial channel has 
grown strongly over recent years 
last year sales increased 259 
to £788 million providing the 
platform from which to deliver 
our transformation plan
  the group now has committed 
banking facilities with hsbc 
lloyds tsb and barclays totalling 
£575 million through to october 
2015 and an overdraft facility 
of £50 million
  the board is therefore 
recommending the payment 
of a nominal final dividend of 
025p 2010 410p making 
a total dividend for the year 
of 220p 2010 605p  wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 3
thorntons	believes	in	delivering	a	
s u s t a i n a b l e 	 and 	 progressive 	 dividend 	 return	
to 	 its 	 shareholders 	 however  	 given 	 the	
circumstances	of	the	last	financial	year	it	
has 	 not 	 been 	 possible 	 to 	 maintain 	 the 	 current	
level 	 of 	 dividend 	 the 	 board 	 is 	 therefore	
recommending 	 the 	 payment 	 o f 	 a 	 n o m i n a l	
final 	 dividend 	 of 	 025p 	 2010 	 410p 	
making 	 a 	 total 	 dividend 	 for 	 the 	 year 	 of	
220p 	 2010 	 605p 	 and 	 expects 	 to	
move	to	a	dividend	cover	in	line	with	the	
sector	average	over	the	coming	years
directors and employees 
our 	 exciting 	 new 	 plans 	 have 	 been	
communicated 	 and 	 discussed 	 widely	
throughout	thorntons	including	with	
ever y	store 	 manager 	 and 	 many 	 franchisees	
t h e 	 r e s p o n s e 	from	across	the	business	has	
been	positive	and	my	thanks	go	to	all	our	
colleagues	for	suppor ting	these	changes	
and	also	for	their	solid	and	wholehear ted	
contribution	over	the	past	year 
in	januar y	2011	jonathan	har t	joined	us	
as	the	new	ceo	of	thorntons	taking	over	
from	mark	r obson	who	had	ser ved	on	
an	interim	basis	following	the	depar ture	
of 	 mike 	 davies 	 in 	 september 	 2010	
mike’s	experience	in	brand	marketing	
and	manufacturing	operations	were	
instrumental	in	developing	the	successful	
growth	of	our	commercial	channel	and	
improving	efficiency	in	our	factor y 	he	
leaves	with	our	thanks	and	we	wish	him	
well	mark	has	now	rever ted	to	his	role	as	
f inance	director	and	i	am	grateful	to	him	
for 	 covering 	 both 	 roles 	 during 	 this	
c h a l l e n g i n g 	interim	period
at 	 the 	 end 	 of 	 june 	 p eter 	 w right 	 our	
marketing 	 director  	 resigned 	 from 	 the	
board 	 and 	 lef t 	 thorntons 	 i 	 would 	 like	
to 	 thank 	 p eter 	 for 	 his 	 contribution 	 to 	 the	
business	over	the	past	four	years	and	wish	
him	well	for	the	future
in	appointing	jonathan	har t	we	have	
recruited	an	experienced	chief	executive	
with 	 extensive 	 retail 	 and 	 brand 	 management	
experience	he	ser ved	on	the	executive	
board	at	dixons	and	latterly	managed	the	
successful	growth	of	caffè	nero	for	the	
past	five	years	as	managing	director 
the	board	has	also	decided	to	enhance	its	
structure	in	line	with	best	practice	and	will	
be	commencing	a	search	for	an	additional	
two 	 independent 	 directors 	 to 	 join 	 the 	 board
outlook
w e	anticipate	that	the	weakness	in	footfall	
and 	 consumer 	 sentiment 	 experienced	
through 	 our 	 own 	 store 	 and 	 f ranchise	
channels 	 during 	 the 	 first 	 half 	 of 	 2011 	
will	continue	at	least	into	2012	w e	are	
however 	looking	for ward	to	another	strong	
year	of	growth	in	our	commercial	channel	
as	we	gain	fur ther	distribution	and	market	
share	our	confidence	is	reinforced	by	a	
healthy	order	book	for	christmas	2011	
w e	expect	thorntons	direct	to	grow	in	line	
with	the	online	gif ting	market	w e	have	
budgeted 	 our 	 costs 	 and 	 expenditure	
prudently	and	aggressively	continue	to	
pursue	oppor tunities	to	improve	business	
efficiency 	 and 	 customer 	 ser vice 	 accordingly 
as	we	embark	on	the	implementation	of	
our	new	strategy	our	foremost	challenge	
is	to	deliver	a	successful	christmas	2011	
it	is	during	this	key	selling	season	that	
customers	will	star t	to	see	improvements	
to	their	shopping	experience	in	our	
own	stores
john von spreckelsen
chairman
6	september	2011
following the arrival 
in january 2011 of our 
new chief executive 
jonathan hart we 
completed a strategic 
review the results 
of which were 
presented in june and 
demonstrate a clear 
plan to transform 
and derisk our 
business over the 
next three years  thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
4
at a glance
our strategic aim is to rebalance the organisation and 
capitalise on thorntons’ brand strength through a more 
focused retail estate with a differentiated customer 
proposition a renewed customer focus and a compelling 
commercial franchise and online offering
strategic overview
what they will deliver
	 	 p ositio n	the	company	for	sustainable	future	growth
	 	 our	f ranchise	estate	will	grow	as	own	stores	are	closed	
and	replaced	with	a	franchise	in	the	majority	of	locations	
thereby	protecting	contribution	and	customer	goodwill
	 	 our	commercial	channel	will	contin ue	to	grow	strongly	
benefiting	from	increases	in	breadth	and	depth	of	distribution
	 	 thorntons	direct	will	see	its	role	change	as	the	“customer	
direct”	segment	aligns	with	and	suppor ts	own	stores
	 	 improved	business	efficiency 	reduc ed	costs	
and	increased	profitability
our priorities
	 	 create	a	derisked	business	delivering	returns	over	the	medium	
term	in	line	with	the	sectors	in	which	we	operate	
	 	 create 	 a 	 profitable 	 and 	 sustainable 	 own 	 store 	 channel 	 of 	 around	
180 	 stores 	 with 	 a 	 differentiated 	and	less	seasonal	proposition
  f ocus 	 on 	 driving 	 good 	 growth 	 from 	 our 	 f ranchise 	commercial	
and	thorntons	direct	channels
  maintain	and	grow	our	factor y	production	levels	w i t h i n 	 c u r r e n t	
capacity 	 to 	 rebalance 	 our 	 business 	across	all	channels
im a g i n a t i on 
e x c el l en c e 
t o g e t he r ne s s
our values
our values continue to 
underpin thornton’s strategy 
of putting the customer at the 
forefront of our thinking wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 5
our business
revenue by business segment £m
retail £1395m
sales  
operations	£788m
operating profit by business segment £m
retail £78m
sales  
operations	£154m
our business comprises two divisions 
retail and sales  operations
retail
364 own stores and cafés across the uk and ireland
a franchise estate of 227 stores
thorntons direct – online consumer and corporate sales
revenue operating profit
£1395m £78m
sales  operations
commercial sales
purchasing
manufacturing and distribution
brand support
revenue operating profit
£788m £154m thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
6
chief executive’s report
the	past	year	has	been	challenging	for	
thorntons 	 our 	 customers 	 and 	 the 	 economy 	
never theless 	 overall 	 sales 	 in 	 the 	 year 	 grew	
17	to	£2183	million	and	our	share	of	
the 	 uk 	 chocolate 	 market 	 grew 	 to 	 circa 	 77	
which	is	a	reflection	of	the	considerable	
strength 	 of 	 our 	 brand 	 the 	 quality 	 and 	 value	
it 	 delivers 	 and 	 the 	 role 	 it 	 plays 	 in 	 our	
customers’ 	 lives 	 this 	 sales 	 growth 	 was	
achieved 	 despite 	 the 	 unprecedented 	 impact	
of	the	poor	weather	before	christmas	and	
the	hottest	easter	on	record	this	clearly	
demonstrates	the	significant	strategic	
benefit	of	our	multichannel	strategy 	
201011	has	seen	one	of	the	toughest	
consumer	spending	environments	we	have	
experienced	and	as	such	r etail	with	the	
exception	of	thorntons	direct	has	had	a	
difficult	year 	this	contrasts	with	another	
strong 	 year 	 of 	 growth 	 for 	 our 	 sales 	 	
operations	channel	where	we	continued	
to 	 grow 	 our 	 market 	 share 	 in 	 our 	 core	
categories 	 during 	 key 	 seasons 	 in 	 par ticular	
easter  	 as 	 well 	 as 	 through 	 increased 	 breadth	
and	depth	of	distribution 	
r epor ted	pretax	profit	before	exceptionals	
was	£43	million	2010	£69	million	
whilst 	 net 	 debt 	 was 	 £245 	 million	
2010 £260 million
w e	have	continued	to	manage	our	costs	
ver y	tightly	over	the	period	and	invested	
where	appropriate	to	improve	efficiency 	
f ollowing 	 the 	 renegotiation 	 of 	 the	
outsourcing	agreement	of	our	it	ser vices	
in	2010	we	have	recently	completed	
the 	 outsourcing 	 of 	 our 	 warehousing	
and 	 distribution 	 activities 	 this 	 together 	 with	
the	ongoing	benefits	of	our	procurement	
review	and	the	recent	restructuring	of	our	
head	office	cost	base	should	deliver	a	full	
year	benefit	of	£20	million	that	will	flow	
through 	 in 	 full 	 in 	 the 	 201213 	 financial 	 year 
the year in review
thorntons centenary
2011 is our centenary year and as a 
business	we	wanted	to	mark	this	occasion	
with	innovative	products	and	moments	
to 	 remember 	 with 	 our 	 customers 	 and 	 staff 	
in 	 the 	 course 	 of 	 the 	 year  	 we 	 have 	 produced	
a	number	of	unique	products	including	
the	“ jubilee	box”	which	contains	100	
of	thorntons	favourite	chocolates	as	well	
as	new	flavours	such	as	lime	and	chilli	
r aspberr y 	 and 	 r ose 	 w e 	 have 	 also 	 brought	
back 	 some 	 old 	 favourites 	 in 	 our 	 sugar 	 range	
including	chocolate	éclairs	and	launched	a	
collectable	ceramic	toffee	cabin 	as	well	as	
limited	edition	chocolate	blocks	including	
classic 	 flavours 	 such 	 as 	 english 	 rose 	
cloudy	lemonade	and	bakewell	tar t
thorntons	master	chocolatier	has	created	
a	limited	edition	“w onder	box”	that	are	a	
mix	of	heritage	and	contemporar y	flavours	
and	also	include	a	bar	of	chocolate	which	
tastes	as	chocolate	would	have	done	100	
years	ago 	all	the	chocolates	have	been	
handmade	in	thorntons’	kitchens
t o 	 celebrate 	 our 	 anniversar y 	 with 	 our	
customers	we	have	hidden	100	golden	
k eys	in	our	chocolate	blocks	and	the	lucky	
winners	will	get	a	behindthescenes	trip	
to	the	thorntons	chocolate	factor y	during	
chocolate	w eek	in	october 	visiting	22	
city	centre	locations	over	the	first	half	of	
this 	 year  	 our 	 “live 	 mechanical 	 chocolatier ”	
has	brought	some	theatre	to	the	streets	
of	britain 	in	addition 	in	the	summer 	
a	team	of	five	thorntons	employees	cycled	
from	john	o ’groats	to	lands	end	covering	
1200	miles	and	visiting	100	thorntons	
stores 	 along 	 the 	 way  	 all 	 in 	 the 	 name 	 of 	 the	
company ’s	nominated	charity 	the	nspcc
f rom	september	onwards	thorntons	has	
invited	 chocolate	 lovers	 around	 the	 countr y	
to	step	inside	its	amazing	chocolate	kabin	
in summary
  overall sales in the year grew 
17 to a record £2183 million 
and our share of the uk chocolate 
market grew to circa 77
  thorntons’ centenary presents 
opportunities to celebrate with 
wonderful products and customer 
and staff involvement
  a strategic review that found 
significant underlying strength 
in our brand our multichannel 
distribution model our market
leading manufacturing capability 
and our great people
   confident that our plan is right for 
the company and the challenging 
times in which we live wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 7
to	find	a	golden	k ey	to	the	chocolate	
factor y 	the	kabin	is	a	recreation	of	
the	delightful	little	chocolate	shop	first	
opened	by	norman	and	stanley	thornton 	
the	kabin	was	unveiled	in	l ondon	
on	2 	 september 	 and 	 will 	 travel 	 to	
liverpool 	 nottingham 	 edinburgh	
and	sheffield	thereaf ter 
along 	 with 	 all 	 these 	 exciting 	 activities	
we 	 have 	 also 	 been 	 celebrating 	 our 	 centenar y	
with	our	staff 	a	gala	day	for	employees	
and	their	families	at	thornton	p ark	was	
a	great	success	and	we	will	be	holding	
a	centenar y	ball	in	december 
product innovation
the 	 development 	 of 	 new 	 and 	 exciting	
products	will	always	be	key	to	the	success	
and 	 vibrancy 	 of 	 the 	 thorntons 	 brand	
the 	 period 	 under 	 review 	 saw 	 the 	 successful	
relaunch	of	our	two	core	boxed	chocolate	
brands	continental	and	classics	in	r etail	
as	well	as	a	refreshed	classic	collection	
in	our	commercial	channel
our	new	melts	brand	grew	well	over	the	
period	and	was	joined	by	a	new	caramel	
variety	which	was	created	with	a	unique	
two tone	shell	delivered	through	our	new	
“tripleshot”	technology 
our	children ’s	range	has	been	relaunched	
and 	 we 	 have 	 seen 	 some 	 strong 	 development	
in 	 our 	 key 	 seasonal 	 lines 	 such 	 as 	 the 	 launch	
of	our	bramble	bunny	range	at	easter 
w e	relaunched	our	hampers	and	
photoboxes	in	thorntons	direct	which	
along	with	our	alphabet	t ruffles	drove	
significant	sales	growth
in 	 spring 	 2011 	 we 	 were 	 thrilled 	 to	
be 	 awarded 	 four 	 gold 	 awards 	 from	
the	academy	of	chocolate	three	for	the	
chocolates	in	our	centenar y	“w onder	box”	
and 	 one 	 for 	 our 	 outstanding 	 t onka 	 chocolate	
block 	 finally 	 our 	 master 	 chocolatier	
k eith	hurdman	was	awarded	the	accolade	
of	joint	chocolatier	of	the	y ear 	recognition	
from	within	our	industr y	not	only	of	k eith’s	
remarkable	skill	but	also	of	the	quality	
of	thorntons’	products
retail
t otal 	 r etail 	 sales 	 including 	 own 	 stores	
f ranchise 	 and 	 thorntons 	 direct 	 declined	
82 	 to 	 £1395 	 million 	 2010	
£1520	million
own stores
sales 	 in 	 own 	 stores 	 fell 	 89 	 to	
£1183 	 million 	 over 	 the 	 period 	2010	
£1298 	 million 	 like 	 for 	 like 	 sales 	 declined	
by	79	reflecting	the	significant	impact	
of 	 the 	 weak 	 consumer 	 environment	
the 	 reduced 	 footfall 	 on 	 high 	 streets 	 and	
the 	 aforementioned 	 weather 	 impacts	
at	christmas	and	easter 
during 	 the 	 period 	 18 	 stores 	 were 	 refurbished	
or	reformatted	16	stores	were	closed	and	
three 	 successfully 	 resited 	 resulting 	 in 	 a 	 total	
of 	 364 	 stores 	 at 	 the 	 year 	 end 	 2010 	 377
franchise
f ranchise 	 sales 	 for 	 the 	 period 	 declined 	 108	
to £116 million 2010 £130 million 
as	they	too	suffered	from	the	consumer	
downturn  	 over 	 the 	 year  	 eight 	 independent	
f ranchise 	 locations 	 closed 	 and 	 six 	 bir thdays	
units 	 in 	 eire 	 went 	 into 	 liquidation 	 and 	 were	
also 	 closed 	 never theless 	 we 	 continue	
to 	 be 	 encouraged 	 by 	 the 	 interest 	 in 	 the	
thorntons 	 f ranchise 	 with 	 19 	 new	
f ranchise 	 locations 	 opening 	 during 	 the	
period	this	resulted	in	an	overall	increase	
in	the	f ranchise	estate	to	227	by	the	year	
end 2010 222
thorntons direct
overall	thorntons	direct	sales	grew	43	
to £96 million 2010 £92 million 
w e	continue	to	invest	in	improving	the	
customer	experience	optimising	online	
conversion 	 levels 	 and 	 creating 	 a 	 new 	 contact	
centre	to	improve	our	customer	ser vice	
sales  operations
commercial sales
2011	was	another	strong	year	for	our	
commercial	channel	with	sales	increasing	
259	to	£788	million	2010	£626	
million	the	period	was	characterised	by	
our	continued	positive	relationships	with	
the	major	supermarkets	where	our	
“masspremium”	positioning	has	helped	
us	to	deliver	categor yleading	initiatives	
and	fur ther	drive	our	leadership	in	our	
core	markets	as	well	as	the	overall	
growth	in	these	markets	
thorntons	now	has	34	2010	30	
of	the	inlaid	box	chocolate	market	in	
the	uk	nielsen 	july	2011
during	the	period	we	were	par ticularly	
pleased	with	our	29	market	share	at	
easter 	 2010 	 19 	 where 	 we 	 par ticipated	
with	our	commercial	par tners	in	their	
core	easter	promotions	for	the	first	time	
in	addition	to	this	we	have	also	seen	
some	pleasing	development	in	gif ting	
oppor tunities	for	eid	and	diwali
manufacturing operations
in 	 our 	 manufacturing 	 operations 	 we 	 delivered	
strong	and	sustained	improvements	over	
the 	 period 	 p roductivity 	 improvements	
continued 	 to 	 offset 	 cost 	 increases	
in 	 par ticular 	 in 	 utilities 	 w e 	 achieved	
volume	growth	of	circa	5	with	a	vir tually	
flat	overhead	cost	and	the	investment	in	
our	new	moulding	line	has	delivered	the	
anticipated	savings
service levels to our internal and commercial 
customers 	 increased 	 fur ther 	 during 	 the	
period 	 exceeding 	 97 	 2010 	 96	
since 	 the 	 year 	 end 	 we 	 outsourced 	 our	
warehouse 	 and 	 distribution 	 functions	
under 	 a 	 sixyear 	 contract 	 over 	 130 	 of	 thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
8
chief executive’s report continued
the year in review continued
sales  operations continued
manufacturing operations continued
our	colleagues	have	now	transferred	from	
thorntons	to	our	par tner 	w e	thank	them	
and 	 wish 	 them 	 well 	 as 	 we 	 star t 	 this	
new	relationship
r aw	material	prices	saw	fur ther	significant	
increases 	 during 	 the 	 period 	 dair y 	 products	
increased	by	more	than	20	and	sugar	by	
more	than	50	p ackaging	materials	and	
diesel 	 have 	 also 	 experienced 	 significant 	 price	
increases	our	for ward	cover	purchasing	
during	the	period	enabled	us	to	avoid	the	
spike 	 in 	 the 	 price 	 of 	 cocoa 	 witnessed 	 during	
the	period	of	political	uncer tainty	in	the	
ivor y	coast	this	is	one	of	a	number	of	
strategies 	 that 	 we 	 have 	 deployed 	 to 	 mitigate	
these	price	increases	improvements	in	
our	procurement	approach	combined	with	
product 	 and 	 ingredient 	 reengineering 	 have	
also 	 continued 	 to 	 help 	 reduce 	 some 	 though	
not	all	of	these	effects
export sales
although	star ting	from	a	low	base	
expor t	sales	increased	strongly	by	333	
to £36 million 2010 £27 million 
there	was	strong	growth	in	duty	free	sales	
and 	 in 	 the 	 development 	 of 	 sales 	 to 	 a 	 number	
of 	 territories 	 including 	 south 	 africa	
singapore 	 cyprus 	 and 	 p oland 	 our 	 business	
in 	 the 	 r epublic 	 of 	 ireland 	 also 	 grew 	 despite	
the	challenging	economic	conditions	
notwithstanding 	 these 	 encouraging 	 results	
we	will	shor tly	be	commencing	a	strategic	
review	of	international	oppor tunities	and	
will	repor t	the	results	in	approximately	
twelve	months’	time
future plans
at	the	end	of	the	period	i	presented	
our	plans 	 for 	 the 	 future 	 of 	 thorntons	
this 	 followed 	 a 	 strategic 	 review 	 that	
f o u n d 	 significant 	 underlying 	 strength 	 in 	 our 	
b r a n d 	our	multichannel	distribution	
model	our	marketleading	manufacturing	
capability	and	our	great	people	the	most	
significant	issues	were	identified	in	our	
own	stores	and	addressing	these	
challenges	is	at	the	hear t	of	our	plan 
our	plan	sets	out	to	achieve	three	
key	objectives
•	 	 a 	 profitable 	 and 	 rebalanced 	 organisation 	
a	smaller	r etail	estate	with	a	clear	
proposition	and	offer 	growth	in	sales	
and	earnings	from	our	commercial	and	
f ranchise	channels	which	will	more	
than	offset	the	reduction	in	own	store	
sales	and	earnings
•	 	 a	customer focused	business	ser ving	
our 	 customers 	 where 	 they 	 choose 	 to 	 buy	
from	us	with	increased	frequency	of	
purchase	and	improved	advocacy 	and
•	 	 a	revitalised	brand	brought	to	life	
instore and online
a profitable and 
rebalanced organisation
our	own	stores	have	been	affected	
in	three	ways	over	the	past	decade
•	 	 there	have	been	significant	changes	in	
consumer	shopping	habits	notably	the	
growth 	 of 	 out 	 of 	 town 	 centres 	 and 	 malls	
supermarkets	and	online	shopping
•	 	 our	commercial	sales	growth	has	
also	impacted	sales	in	our	own	stores	
to	some	extent	despite	this	growth	
however 	it	is	impor tant	to	note	that	the	
growth	in	our	commercial	channel	has	
outweighed	any	possible	loss	to	our	
own	stores	many	times	over 	and
•	 	 the	current	downturn	has	exacerbated	
the	weakness	in	many	smaller	towns	
and	shopping	centres
achieving this 
transformation over 
the next three years 
will deliver a stronger 
derisked business in 
a position of strength 
for sustainable and 
profitable growth 
in the future wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 9
as 	 a 	 result 	 of 	 the 	 above 	 a 	 significant 	
number 	 of 	 our 	 own 	 stores 	 now 	 find 	
themselves 	 poorly 	 located 	 with 	 low	
o r 	 declining	profitability 
our 	 own 	 stores 	 can  	 and 	 will 	 be 	 key 	 to	
the 	 future 	 success 	 of 	 thorntons 	 driving	
profitable 	 and 	 sustainable 	 sales 	 and 	
showcasing 	 our 	 brand 	 w e 	 believe 	 that	
this 	 can 	 be 	 achieved 	 with 	 an 	 estate 	 of	
between 	 180 	 and 	 200 	 stores 	 located	
primarily 	 in 	 the 	 top 	 150 	 retail 	 locations	
t aking	advantage	of	the	179	lease	expiries	
over	the	next	three	years	we	plan	to	close	
around 	 120 	 stores 	 and 	 explore 	 oppor tunities	
to 	 close 	 a 	 fur ther 	 60 	 stores 	 in 	 weak 	 locations	
in	the	same	time	frame
this	will	have	significant	implications	
for	our	other	channels
•	 	 our 	 f ranchise 	 estate 	 will 	 grow 	 rapidly	
as 	 we 	 open 	 franchises 	 in 	 the 	 majority 	 of	
locations 	 where 	 we 	 close 	 our 	 own 	 stores
•	 	 our	commercial	channel	will	become	
the	main	sales	channel	over	the	next	
three	years	as	we	see	fur ther	growth	
in	supermarket	sales	driven	by	more	
stores 	 and 	 greater 	 demand 	 from	
customers	and
•	 	 our	thorntons	direct	channel	will	
continue	to	grow	in	line	with	the	online	
gif ting	market	w e	will	invest	fur ther	
in	our	website	and	in	new	customer	
relationship	management	systems	as	
we	star t	to	align	the	direct	consumer	
element	of	this	channel	with	our	
own	stores	channel
r ebalancing	our	business	across	our	
channels	in	this	way	will	ensure	that	we	
protect	the	capacity	utilisation	levels	in	our	
factor y	by	maintaining	modest	growth	in	
overall	production	levels
a customerfocused business
w e 	 know 	 and 	 understand 	 our 	 core	
customers	well	since	many	purchase	
thorntons 	 across 	 a 	 number 	 of 	 our 	 channels	
they	tell	us	that	they	want	us	to	improve	
their	experience	in	our	own	stores	and	
we	have	committed	to	investing	in	our	
stores	in	our	products	and	in	delivering	
a	truly	engaging	experience	through	our	
store teams 
on 	 average 	 our 	 customers 	 visit 	 and 	 purchase	
from	us	five	times	a	year 	just	under	half	
of	our	customers	visit	us	only	once	or	
twice	a	year 	our	key	customer	o b j e c t i v e	
is 	 to 	 encourage 	 existing 	 customers 	t o	
visit 	 and 	 purchase 	 more 	 frequently 	
achieving 	 just 	 one 	 extra 	 visit 	 and	
purchase 	 per 	 year 	 would 	 transform	
o u r 	 o w n 	 stores	business
a revitalised brand
w e	will	revitalise	our	brand	by	bringing	
it 	 to 	 life 	 in 	 our 	 own 	 stores 	 creating 	 a	
“theatre 	 of 	 the 	 senses” 	 that 	 puts 	 the 	 special	
touch	back	into	the	customer	experience	
k ey 	 to 	 delivering 	 this 	 is 	 the 	 creation 	 of	
a 	 differentiated 	 and 	 less 	 seasonal 	 offer 	
whilst	the	brand	will	always	be	famous	
for	the	key	seasonal	events	we	will	grow	
the	relevance	for	other	gif ting	occasions	
in 	 our 	 customers’ 	 lives 	 for 	 example	
b i r t h d a y s 	anniversaries	congratulations	
or	simple	“i	love	you”	“thank	you”	and	
“just	because”	moments
w e 	 will 	 deliver 	 this 	 by 	 developing 	 and	
introducing 	 new 	 products 	 including 	 a	
new 	 range 	 of 	 delightful 	 innovative 	 and	
affordable 	 gif ts 	 as 	 well 	 as 	 introducing 	 a	
new 	 flagship 	 range 	 of 	 boxed 	 chocolates 	
w e 	 will 	 significantly 	 increase 	 the 	 number 	 of 	
oppor tunities	to	personalise	and	customise	
gif ts	building	on	our	heritage	for	the	icing	
of	names	and	messages	w e	will	introduce	
some	of	the	successful	lines	from	our	
thorntons	direct	channel	into	our	stores	
including	hampers	and	alphabet	t ruffles	
all	of	this	will	be	implemented	in	stores	
that 	 are 	 easier 	 to 	 shop 	 in 	 and 	 that 	 highlight	
the	quality	of	our	product	suppor ted	by	
engaging 	 and 	 friendly 	 store 	 teams 	 our 	 own	
stores 	 will 	 be 	 the 	 place 	 to 	 come 	 for 	 the 	 “full”	
thorntons	brand	experience
i	am	pleased	to	repor t	that	we	are	already	
making 	 progress 	 in 	 delivering 	 these	
improvements 	 in 	 may 	 of 	 this 	 year 	 we	
successfully	introduced	a	number	of	new	
initiatives	in	two	of	our	stores	these	new	
initiatives	included	new	fixtures	and	visual	
merchandising 	 approaches 	 many 	 of 	 which	
will 	 be 	 rolled 	 out 	 across 	 the 	 estate	
this 	 autumn
achieving	this	transformation	over	the	next	
three 	 years 	 will 	 deliver 	 a 	 stronger  	 derisked	
business 	 in 	 a 	 position 	 of 	 strength 	 for	
sustainable	and	profitable	growth	in	the	
future	there	is	no	doubt	that	we	will	be	
under taking	this	transformation	in	the	face	
of 	 considerable 	 and 	 unprecedented 	 adverse	
economic	headwinds	these	headwinds	
never theless 	 reinforce 	 our 	 need 	 for 	 change
this	transformation	will	not	be	possible	
without	the	continued	suppor t	from	the	
passionate	and	committed	people	across	
thorntons	including	our	loyal	franchisees	
our	colleagues’	response	to	our	plan	has	
been	positive	and	enthusiastic	i	would	
like	to	express	my	thanks	for	all	their	hard	
work	and	effor ts	over	the	past	year	and	for	
their	continued	suppor t	during	the	exciting	
and	challenging	period	ahead	of	us	
jonathan hart
chief executive
6	september	2011 thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
10
finance director’s report
profit before taxation
r epor ted	profit	before	taxation	and	
exceptionals	fell	373	to	£43	million	
2010	£69	million	whilst	group	sales	
grew	by	17	to	£2183	million	2010	
£2146	million	trading	was	par ticularly	
challenging	in	the	r etail	channels	due	
in	par t	to	the	adverse	effect	of	weather	
conditions	over	the	key	christmas	and	
easter	trading	periods	l ower	own	stores	
and	f ranchise	sales	in	the	key	trading	
periods 	 resulted 	 in 	 higher 	 levels 	 of	
discounting	to	clear	stocks	par ticularly	
in	the	lead	up	to	easter 
at	the	end	of	the	first	half	of	the	year	the	
company	repor ted	a	profit	before	taxation	
of 	 £83 	 million 	 2010 	 £91 	 million	
however 	own	stores	sales	declined	by	
£66 	 million 	 to 	 £442 	 million 	 in 	 the 	 second	
half	of	the	year	with	like	for	like	sales	of	
120	in	own	stores	w ith	lower	own	
store 	 sales 	 and 	 higher 	 levels 	 of 	 discounting	
charges 	 the 	 loss 	 before 	 taxation 	 and	
exceptionals 	 in 	 the 	 second 	 half 	 was	
£40 million 2010 £22 million
as 	 a 	 result 	 of 	 the 	 significant 	 decline 	 in 	 own 	
store	trading	and	profitability	over	the	y e a r 	
a 	 substantial 	 provision 	 has 	 been 	 made 	for	
onerous 	 leases 	 of 	 the 	 charge 	 £10 	 million	
relates	to	two	stores	in	eire	where	trading	
has	been	par ticularly	challenging
f ur ther	details	of	the	calculation	of	the	
asset	impairment	charge	of	£18	million	
are	set	out	in	note	12	to	these	accounts
the	charge	incurred	on	the	outsourcing	of	
the	warehousing	and	distribution	facilities	
relates	to	one off	redundancy	charges	and	
transition 	 costs 	 as 	 the 	 supplier 	 takes	
control	of	the	operations
the	company ’s	banking	facilities	were	
due	for	renewal	in	august	2012	but	were	
successfully	renegotiated	in	june	2011	
the	charge	of	£04	million	includes	the	
key performance indicators
the	board	uses	five	key	per formance	indicators	to	measure	progress	in	building	
shareholder	value	these	are	shown	below	for	the	last	two	years
  2011 2010
net sales movement  17 01
own	stores	like	for	like	sales	growth	 	 79 	 35
p rofit	before	tax	and	exceptional	items	 	 £43m £69m
gross	margin	return	on	sales	 	 462 497
cash	flow	from	operating	activities	 	 £148m 	 £151m
	 f or	comparative	purposes	profit	before	tax	and	exceptional	items	for	2010	has	been	represented	in	
2011	in	order	to	reflect	the	treatment	of	onerous	lease	and	impairment	provision	charges	as	exceptional	
items	and	bank	arrangement	fees	as	finance	costs	as	per	the	2011	financial	accounts	throughout	this	
repor t	the	represented	numbers	are	used	to	discuss	per formance
sales
thorntons’	sales	are	made	through	a	number	of	channels	whose	per formance	
is	summarised	below 
 2011 2010  increase 
 £m £m decrease
own	stores	 1183 1298 89
f ranchise	 116 130 108
thorntons	direct	 96 92 43
total retail sales 1395 	 1520 82
sales  operations 788 626 259
total sales 2183 2146 17
a	detailed	review	of	the	sales	per formance	by	channel	is	set	out	in	the	
chief	executive’s	repor t
exceptionals
the	exceptional	charge	for	2011	is	made	up	of	the	following	items
  2011 2010 
  £m £m
onerous	lease	provisions	 	 25 06
asset	impairment	charge	 	 18 02
one off	charge	incurred	with	the	outsourcing	 
of	the	warehousing	and	distribution	facilities	 	 07 —
bank	refinancing	fees	 	 04 —
total  54 08
 wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 11
write off	of	arrangement	fees	amor tised	in	
line	with	the	term	of	the	old	facilities	and	
professional	fees	incurred	in	setting	up	
the	new	facilities
gross margin return on sales
gross	profit	margin	percentage	reduced	by	
35 	 percentage 	 points 	 for 	 the 	 year 	 to 	 462	
2010	497	a	number	of	factors	
contributed	to	this	decline	
•	 	 as	a	result	of	the	successful	growth	of	
commercial	sales	from	this	channel	
now	represent	361	of	total	company	
sales 2010 292 commercial 
sales	are	made	at	wholesale	prices	
and	consequently	reduce	the	overall	
gross	margin	percentage
•	 	 higher 	 levels 	 of 	 discounting 	 and	
promotional 	 suppor t 	 costs 	 were	
incurred	in	both	the	own	stores	
and	commercial	channels
•	 	 changes	in	product	mix	principally	due	
to 	 the 	 growth 	 in 	 lower 	 margin 	 value 	 boxes	
in	own	stores	and	seasonal	exclusive	
lines	in	the	commercial	channel
•	 	 raw	material	costs	increased	over	the	
period	and	despite	the	continuation	
of	for ward	purchasing	ingredient	
optimisation 	product	reengineering	
plus	selective	price	increases	overall	
gross	margin	was	still	impacted	and
•	 	 incremental	costs	were	incurred	across	
all	channels	as	a	result	of	the	adverse	
weather	conditions	in	the	christmas	
period	these	costs	were	estimated	
to	be	approximately	£05	million 
w e	believe	that	the	new	strategy	plus	the	
continued	improvements	in	manufacturing	
efficiencies	and	the	management	of	raw	
material	costs	will	over	time	contribute	to	
a	recover y	in	our	gross	margin	percentage
operating expenses
operating	expenses	reduced	by	32	
to £964 million 2010 £996 million 
as 	 a 	 percentage 	 of 	 sales 	 operating 	 expenses	
reduced	from	464	in	2010	to	442	
in 2011
the	reduction	in	operating	expenses	
has	come	from	the	closure	of	16	stores	
in	the	year 	 as 	 well 	 as 	 from 	 the 	 benefits 	
of 	 implementing 	 sustainable 	 costsaving	
initiatives 	 in 	 both 	 the 	 current 	 and 	 last	
financial 	 year  	 these 	 initiatives 	 have 	
included 	 headcount 	 reductions 	 and	
procurement 	 work 	 in 	 it  	 telecoms	
point	of	sale	marketing	and	other	
areas	of	discretionar y	spend
during	the	period	£06	million	2010	
£01	million	of	costs	w e r e 	 i n c u r r e d 	 i n	
respect 	 of 	 the 	 closure 	 of 	 16 	 stores
other operating income
other	operating	income	increased	to	
£17 million 2010 £14 million 
w ithin	other	operating	income	licensing	
income 	 increased 	 from 	 £10 	 million 	 in 	 2010	
to	£13	million	in	2011	this	includes	
the	full	year	benefit	of	thorntons	branded	
biscuit 	 and 	 chilled 	 desser ts 	 licences 	 which	
commenced	during	2010	and	the	new	
chocolate 	 liquor 	 licence 	 which 	 commenced	
during 	 2011 	 the 	 levels 	 of 	 franchise 	 income	
and	rent	receivable	remained	relatively	flat	
year on year
taxation
the	£08	million	tax	credit	for	the	year	
represents 	 764 	 of 	 the 	 loss 	 before 	 taxation	
2010 	 charge 	 291 	 of 	 profit 	 before 	
taxation 	 the 	 credit 	 is 	 higher 	 than 	 the	
effective 	 statutor y 	 rate 	 of 	 275 	 and 	 is 	 due	
to 	 the 	 tax 	 effect 	 of 	 permanently 	 disallowable	
items 	 and 	 the 	 effect 	 of 	 the	c h a n g e 	 i n 	 t h e	
corporation 	 tax 	 rate 	 announced 	in	the	period
the company’s 
banking facilities 
were due for renewal 
in august 2012 but 
were successfully 
renegotiated in 
june 2011 thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
12
finance director’s report continued
in	the	first	half	of	the	year	£14	million	
was	spent	on	18	store	refits	and	three	
resites	no	fur ther	expenditure	on	store	
refits	was	incurred	in	the	second	half	of	
the	year	as	the	development	of	a	new	
store	format	is	under way 	the	balance	of	
£45	million	was	spent	on	completing	a	
new	moulding	line	product	tooling	and	
other	supply	chain	and	it	improvements
pensions
the 	 ias 	 19 	 pension 	 scheme 	 deficit 	
increased	from	£242	million	in	2010	to	
£253	million	at	the	2011	year	end	the	
increase	in	the	value	of	the	equity	markets	
over 	 the 	 twelve 	 months 	 to 	 june 	 2011	
contributed	to	a	£51	million	increase	in	
the 	 valuation 	 of 	 the 	 pension 	 scheme 	 assets	
the	increase	was	offset	by	the	basis	on	
which	the	present	value	of	the	scheme’s	
obligations 	 are 	 measured 	 the 	 key 	 changes	
were	an	increase	in	inflation	assumption	
from	330	per	annum	to	350	per	
annum	and	an	adjustment	to	the	mor tality	
assumption	for	both	current	and	future	
pensioners	to	reduce	the	age	adjustment	
factor	to	1	year	to	reflect	improvements	
in 	 life 	 expectancy  	 these 	 changes 	 contributed	
to	actuarial	losses	of	£52	million 	
information systems
system	developments	have	continued	
to	ensure	that	the	business	remains	
compliant	with	the	credit	card	industr y ’s	
pcidss	standard	which	sets	the	security	
standards	for	handling	credit	and	debit	
card transactions
mark robson
finance director
6	september	2011
shareholders’ returns 
and dividends
as 	 a 	 consequence 	 of 	 the 	 challenging 	 trading	
conditions	and	the	exceptional	charges	
the	basic	loss	per	share	equates	to	04p	
2010	earnings	per	share	of	65p	
dividends	paid	in	the	year	amounted	to	
605p	per	share	2010	680p	which	
following	the	reasonable	trading	repor ted	
for	the	first	half	of	the	year 	included	an	
interim 	 dividend 	 of 	 195p 	 per 	 share	
2010	195p	w ith	the	trading	losses	
and 	 exceptional 	 charges 	 repor ted 	 in	
the	second 	 half 	 of 	 the 	 year  	 the 	 board	
i s 	 recommending	a	nominal	final	div idend	
of	025p	be	paid	to	shareholders	in	
november	2011	thus	making	a	total	
dividend	of	220p	2010	605p
cash and debt
cash	generated	from	operating	activities	
before 	 taxation 	 decreased 	 from 	 £151 	 million	
t o 	 £ 1 4  8 	 m i l l i o n  	the	continued	gro wth	
in	commercial	sales	combined	with	the	
planned 	 stock 	 phasing 	 for 	 the 	 new 	 financial	
year 	 and 	 the 	 effects 	 of 	 cost 	 inflation 	
contributed 	 to 	 higher 	 year 	 end 	 stock 	 levels	
which 	 increased 	 by 	 £66 	 million 	 to	
£370	million 	the	increased	investment	
in	stock	was	par tially	funded	through	
improved	payment	terms	from	suppliers	
net	debt	was	£245	million	at	the	year	
end	2010	£260	million	in	june	2011	
the 	 banking 	 facilities 	 were 	 renewed	
the	group	now	has	committed	banking	
facilities 	 with 	 hsbc 	 lloyds 	 tsb 	 and	
barclays	totalling	£575	million	through	
to	october	2015	and	overdraf t	facilities	
of	£50	million 
capital expenditure
investment	in	fixed	assets	totalled	
£59	million	2010	£57	million	of	
which	£19	million	2010	£15	million	
was	funded	through	finance	leases
in summary
  group sales grew by 
17 to £2183 million 
2010 £2146 million
   profit before taxation 
and exceptionals fell 
373 to £43 million 
2010 £69 million
  the company’s banking 
facilities were due for renewal 
in august 2012 but were 
successfully renegotiated 
in june 2011
  operating expenses before 
exceptional items reduced 
by 32 to £964 million 
2010 £996 million
  net debt was £245 million 
at the year end 
2010 £260 million wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 13
corporate social responsibility
thorntons	plc	recognises	it	has	social	
ethical	and	environmental	responsibilities	
arising 	 from 	 its 	 operations 	 and 	 it 	 is	
committed	to	the	welfare	of	its	colleagues	
customers	suppliers	and	the	communities	
in	which	it	operates	
marketplace
manufacturing our products
f ood	safety	is	of	paramount	impor tance	to	
our 	 manufacturing 	 processes 	 and 	 our 	 single	
site	production	facilities	at	thornton	p ark	
are	 regularly	 independently	 audited	 against	
the	exacting	requirements	of	the	british	
retail 	 consor tium’s 	 global 	 standard	
for 	 food 	 safety 	 and 	 were 	 reaccredited	
in 	 june 	 2011 	 with 	 its 	 highest 	 grade 	 a	
status additionally our commercial and 
r etail	brand	customers	regularly	audit	and	
monitor	our	per formance	against	their	own	
high	standards
sourcing our materials
our	products	use	over	300	different	raw	
materials	which	are	sourced	by	suppliers	
from	all	around	the	world	the	majority	
of	our	product	range	is	made	with	natural	
colouring	and	flavours	and	our	entire	
children ’s	range	contains	no	ar tificial	
colours	or	added	preser vatives	
w e 	 ensure 	 ethical 	 social 	 and 	 environmental	
standards 	 are 	 maintained 	 through 	 the 	 supply	
chain	by	auditing	and	visiting	over	95	
of	our	suppliers	including	those	overseas	
on	a	regular	basis	our	main	concern	
is	food	safety	but	our	audits	also	review	
ethics	health	and	safety 	employee	pay 	
employment 	 conditions 	 use 	 of 	 child 	 labour	
and	environmental	policies	and	practices	
thorntons 	 is 	 a 	 registered 	 member 	 of	
greenp alm 	 a 	 cer tificated 	 trading 	 programme	
exclusively	endorsed	by	the	r oundtable	on	
sustainable 	 p alm 	 oil 	 whereby 	 manufacturers	
offset	their	use	of	palm	products	by	paying	
a 	 producer 	 for 	 an 	 equivalent 	 amount	
produced	sustainably 	this	gives	producers	
an 	 incentive 	 to 	 work 	 sustainably 	 and 	 allows	
people	whose	livelihoods	depend	on	palm	
oil	production	to	continue	making	a	living	
thorntons 	 buys 	 all 	 of 	 its 	 cocoa 	 from	
suppliers 	 that 	 actively 	 suppor t 	 the	
international cocoa initiative and world 
cocoa	f oundation	“wcf ”	programmes	
to	improve	the	livelihoods	of	cocoa	farm	
families	and	promote	responsible	labour	
practices 	 this 	 ensures 	 the 	 ethical 	 sourcing	
of	our	cocoa	and	in	par ticular 	minimises	
the	risk	of	purchasing	cocoa	from	sources	
which	illegally	use	abusive	or	enforced	
child	labour 	thorntons	is	also	itself	a	
member	of	the	wcf	which	encourages	
responsible	sustainable	cocoa	farming	
amongst	small	familyrun	farms	
our customers
w e	believe	in	offering	customers	choices	
about	what	they	purchase	and	our	product	
ranges 	 include 	 organic 	 f air trade 	 no 	 added	
sugar 	 and 	 dair yfree 	 products 	 as 	 our	
p r o d u c t s 	are	luxur y	gif t	items	they	are	
not 	 viewed 	 as 	 par t 	 of 	 a 	 balanced 	 diet	
but	we	do	provide	advice	on	consumption	
and	feature	detailed	nutritional	advice	on	
pack	labelling 	 where 	 size 	 permits 	 so 	 that	
c u s t o m e r s 	can	make	an	informed	choice	
thorntons	also	provides	information	on	
specific 	 ingredients 	 on 	 request 	 for 	 example 	
whether 	 products 	 are 	 gluten 	 free 	 or	
contain	alcohol
w e	under take	regular	consumer	sur veys	
which	include	questions	about	ethics	and	
respond 	 to 	 the 	 results 	 of 	 these 	 sur veys	
when	developing	our	products	in	addition	
we 	 obtain 	 feedback 	 from 	 staff 	 ser ving	
customers	in	our	stores	of	their	perception	
of	issues	that	affect	customer	satisfaction	
and	build	them	into	our	plans
customer	complaints	and	compliments	are	
handled	centrally	and	we	are	proud	of	the	
process	 we	 have	 established	 all	 complaint	
investigations	are	star ted	within	24	hours	
of	receipt	and	we	attempt	to	resolve	each	
one	to	the	satisfaction	of	our	customers	
our	policy	is	to	communicate	with	our	
customers 	 in 	 “plain 	 english” 	 all 	 complaints	
are 	 recorded 	 so 	 that 	 we 	 can 	 under take	
detailed 	 analysis 	 monitor 	 trends 	 and	
identif y 	 key 	 issues 	 to 	 fur ther 	 improve	
our	per formance
workplace
our employees
in	addition	to	providing	core	remuneration	
benefits 	 including 	 annual 	 incentive	
schemes	holidays	sick	pay 	life	assurance	
and	pension	provision 	thorntons	offers	a	
flexible	benefits	programme	training	and	
development	programmes	discounts	and	
par ticipation	in	company	share	scheme	
offers	employees	and	their	immediate	
families	also	have	access	to	a	confidential	
counselling	and	legal	assistance	helpline	
that	operates	24	hours	a	day 	365	days	
a	year	and	the	company	has	a	published	
procedure	for	employees	to	repor t	any	
concerns 	 confidentially 	 “whistle 	
blowing	policy ”	
w e 	 regularly 	 sur vey 	 our 	 employees 	 covering	
a	wide	range	of	issues	including	company	
benefits	working	conditions	and	working	
relationships	with	the	results	of	the	sur vey	
fed	back	to	employees	and	used	to	identif y	
and	implement	improvements	
the	company	has	a	formal	process	for	
succession	planning	to	ensure	we	develop	
the	capability	to	grow	the	business	in	line	
with	our	longterm	goals	management	
per formance	and	development	reviews	
are conducted at least annually we also 
regularly	monitor	our	staff	turnover	rates	
and 	 use 	 exit 	 inter views 	 to 	 understand	
reasons 	 why 	 staff 	 leave 	 and 	 ensure	
improvements 	 are 	 made 	 where 	 appropriate thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
14
corporate social responsibility continued
workplace continued
our employees continued
t raining	is	available	to	all	staff	and	we	aim	
to	develop	both	individuals	and	teams	in	
line	with	our	business	needs	such	that	we	
grow	our	organisational	capability 
health and safety 
in	order	to	ensure	continual	improvement	
in 	 health 	 and 	 safety  	 thorntons 	 has 	 a	
threeyear	safety	improvement	programme	
and	central	to	this	programme	are	regular	
health 	 and 	 safety 	 risk 	 assessments	
incidents and accidents are monitored and 
reviewed	in	the	workplace	so	that	we	can	
take	appropriate	action	to	improve	working	
conditions 	 whilst 	 remaining 	 focused	
on 	 reducing 	 both 	 the 	 absolute 	 number	
of 	 accidents 	 and 	 repor table 	 accidents	
the 	 lost 	 time 	 accident 	 frequency 	 rating	
a	measure	of	the	number	of	accidents	per	
100000 	 hours 	 worked 	 continues 	 to 	 improve	
2011	21	2010	24	2009	26
a	p roduction	health	and	safety	committee	
meets 	 regularly 	 to 	 discuss 	 unresolved 	 health	
and	safety	matters	and	reviews	statistics	
on accidents and lost time accidents 
independent	external	health	and	safety	
audits are conducted at least once every 
two	years	in	both	manufacturing	and	
own	stores	and	improvements	are	made	
in	line	with	any	recommendations
occupational health
whilst 	 always 	 aiming 	 to 	 minimise 	 accidents	
occurring	in	the	workplace	we	also	work	
with	our	insurers	and	have	improved	our	
occupational	health	ser vice	to	employees	
by 	 providing 	 postaccident 	 access 	 to 	 private	
medical 	 ser vices 	 which 	 can 	 assist 	 with	
the	rehabilitation	process	w e	also	use	an	
external 	 occupational 	 health 	 company 	 and 	 a	
doctor 	 to 	 provide 	 us 	 with 	 health 	 management	
ser vices	f ree	eye	tests	and	spectacles	
where	required	are	provided	for	all	vdu	
operatives	w e	also	have	a	wellbeing	
policy	to	help	deal	with	stress	at	work	
environment 
energy and waste
our	major	impacts	on	the	environment	
are	energy	use	and	the	generation	of	
waste	and	our	priorities	lie	in	improving	
our	environmental	per formance	in	these	
areas	our	usage	of	gas	electricity	and	
water	is	regularly	monitored	as	is	our	
waste	recycling	and	landfill	per formance	
submeters	for	all	utilities	are	installed	
throughout 	 our 	 manufacturing 	 facility 	 which	
improves	our	monitoring	and	aids	us	in	
targeting	specific	areas	for	improvements	
a	number	of	initiatives	have	helped	reduce	
energy	consumption	and	costs	across	the	
site	and	the	production	process	including	
replacing 	 over 	 500 	 metal 	 halide 	 lights	
in	the	warehouse	with	energy	efficient	t5	
fluorescent	 lighting	 and	 controls	 modif ying	
the	steam	system	and	reducing	the	stirring	
time 	 of 	 chocolate 	 in 	 our 	 bulk 	 tanks	
energy	consumption	per	tonne	of	product	
produced 	 has 	 consequently 	 reduced	
from 	 4330 	 kwhtonne 	 in 	 200910	
to	3817	kwhtonne	in	201011	where	
possible	when	replacing	or	purchasing	
new 	 equipment 	 energy 	 efficient	
equipment	is	selected	
l ooking 	 for ward 	 a 	 major 	 project 	 for 	 a	
2145mw 	 combined 	 heat 	 and 	 power	
generating 	 plant 	 “chp ” 	 has 	 been	
provisionally 	 approved 	 by 	 the 	 board	
the 	 chp 	 plant 	 to 	 be 	 sited 	 in 	 thornton	
p ark 	 will 	 generate 	 almost 	 all 	 of 	 our	
electricity 	 requirements 	 on 	 site 	 as 	 well	
as 	 generating 	 steam 	 hot 	 water 	 and	
cooling 	 for 	 the 	 production 	 facilities	
energy	efficient	fittings	and	lamps	are	
fitted	in	all	our	own	stores	and	a	rolling	
programme	to	replace	our	air	conditioning	
with	energy	efficient	equipment	free	from	
thorntons plc 
recognises it has 
social ethical and 
environmental 
responsibilities arising 
from its operations 
and it is committed 
to the welfare of its 
colleagues customers 
suppliers and the 
communities in which 
it operates wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 15
ozone	depleting	refrigerants	is	close	to	
completion 	this	is	expected	to	deliver	
energy	savings	of	around	20	per	site	
w ith	regard	to	waste	management	an	
integrated	waste	management	contract	
seeks	to	improve	both	the	segregation	and	
the	propor tion	of	waste	recycled	including	
plastic 	 wrapping 	 sheets 	 and 	 moulds 	 metal	
straps	and	cardboard	w e	have	continued	
to 	 maintain 	 the 	 overall 	 propor tion 	 of	
recycled	waste	70	at	the	previous	two	
years’	level	despite	continuing	increases	in	
volumes	produced	other	recent	recycling	
initiatives 	 include 	 the 	 introduction 	 of 	 refuse	
derived 	 fuel 	 from 	 our 	 packing 	 factor y 	 waste	
and	dedicated	recycling	stations	across	our	
factories 	 to 	 help 	 encourage 	 staff 	 to 	 segregate	
waste 	 and 	 improve 	 our 	 overall 	 waste	
per formance	cardboard	generated	in	our	
r etail	outlets	is	returned	to	our	production	
site	at	thornton	p ark	in	the	returning	
lorries	and	then	recycled
packaging
w e	continue	to	monitor	the	overall	
environmental 	 impact 	 of 	 using 	 more 	 recycled	
materials	in	all	components	p ackaging	is	
also	a	key	issue	for	the	company	and	we	
have	developed	environmental	policies	for	
the 	 procurement 	 of 	 packaging 	 and 	 continue	
to 	 progress 	 towards 	 sourcing 	 f orest	
stewardship	council	approved	materials	
for	our	car tons	
w e 	 continue 	 to 	 find 	 ways 	 to 	 reduce 	
packaging	as	measured	by	the	percentage	
of	cardboard	packaging	to	product	across	
our	products	range
transport
initiatives	to	reduce	the	impact	of	our	
products 	 on 	 the 	 environment 	 are 	 principally	
designed 	 to 	 reduce 	 fuel 	 consumption 	 through	
improved 	 efficiency 	 of 	 vehicles 	 or 	 their 	
movements 	 as 	 vehicles 	 are 	 replaced 	 more	
fuel	efficient	and	lower	emission	vehicles	
which	exceed	current	european	emission	
requirements	are	purchased	the	vehicle	
manufacturer	also	provides	training	to	
drivers	on	more	efficient	driving	methods
w ith	regard	to	lorr y	movements	we	
backhaul	raw	materials	and	packaging	
from	suppliers	as	well	as	cardboard	for	
recycling	from	our	own	stores	in	empty	
vehicles	returning	to	our	production	site	
and	also	make	use	of	“thermal	containers”	
in	our	trailers	these	containers	are	frozen	
at	our	production	site	and	loaded	onto	
vehicles 	 at 	 the 	 last 	 possible 	 moment	
as 	 chiller 	 units 	 are 	 not 	 required 	 fuel	
efficiency 	 increases 	 and 	 there 	 is 	 more 	
efficient 	 utilisation 	 of 	 space 	 within 	
the	trailer 
the	outsourcing	of	the	distribution	and	
warehousing	functions	to	dhl	a	leading	
exper t 	 in 	 the 	 distribution 	 field 	 was 	
completed 	 in 	 july 	 2011 	 dhl 	 is 	 committed	
to 	 improving 	 its 	 co
2
	 efficiency 	 and 	
minimising	its	environmental	impact	in	
line	with	its	“gogreen ”	approach	towards	
environmental	protection 
community 
the	seasonal	nature	of	our	business	
means	that	we	employ	a	large	number	of	
temporar y	staff	from	the	local	community	
at	both	our	production	site	and	nationally	
in	our	own	stores	we	have	a	policy	to	
recruit	staff	locally	in	order	to	provide	a	
benefit	to	the	local	community 	w e	have	
subsequently	been	able	to	offer	a	number	
of	temporar y	staff	permanent	positions	
many	of	our	ingredients	are	sourced	from	
local	uk	based	suppliers	and	this	factor	is	
considered	in	our	purchasing	decisions	for	
both	ingredients	and	packaging	of	goods	
thorntons	seeks	to	build	new	relationships	
through	local	school	activities	and	work	
placement	schemes
a	staff	charity	committee	is	actively	
involved	in	raising	money	for	children ’s	
charities	last	year	staff	raised	in	the	
region	of	£52000	for	the	nspcc	with	the	
charity	committee	co  ordinating	a	range	
of	initiatives	these	included	sponsorship	
from	suppliers	and	staff	for	runners	in	the	
l ondon	marathon 	arranging	collection	
points	in	stores	and	running	a	charity	
f ootball	day	for	the	company ’s	suppliers	
at	derby	county ’s	football	ground	together	
with	a	number	of	centenar y	celebration	
events	continuing	through	the	remainder	
of	2011	during	the	year	a	special	limited	
edition 	 chocolate 	 block 	 made 	 with 	 chocolate	
from 	 haiti 	 was 	 sold 	 with 	 a 	 donation 	 of 	 90p	
from	each	block	raising	£45000	for	save	
the	children ’s	haiti	ear thquake	appeal	
our 	 own 	 stores 	 are 	 also 	 actively 	 encouraged	
to	suppor t	local	charitable	activities	
it	is	the	policy	of	the	board	not	to	make	
any	political	donations
f ur ther	information	on	thorntons’	
approach	to	corporate	social	responsibility	
can	be	found	on	the	company ’s	web	site	
www thorntonsco uk thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
16
board of directors
chairman
john von spreckelsen 
chairman n
joined 	 thorntons 	 in 	 june 	 2006 	 he 	 was	
previously 	 chief 	 executive 	 officer 	 of 	
budgens 	 plc 	 and 	 chairman 	 of 	 somerfield 	 plc	
currently 	 his 	 other 	 appointments 	 include	
those 	 of 	 an 	 operating 	 p ar tner 	 of	
merchant 	 equity 	 p ar tners 	 llp 	 in 	 the 	 uk	
and	chairman	of 	 but 	 sas 	 in 	 f rance 	 and	
he 	 is 	 a 	 non  executive 	director	of	r oseholdco	
limited	imo	car wash	group	he	is	
chairman 	 of 	 the 	 nomination 	 committee
executive directors
jonathan hart
chief executive
joined 	 thorntons 	 in 	 januar y 	 2011 	 he 	 was	
previously	managing	director	of	caffè	nero	
for	five	years	prior	to	which	he	held	senior	
positions 	 at 	 abbey  	 w oolwor ths 	 and	
itm 	 communications 	 and 	 spent 	 more	
than 	 a 	 decade 	 with 	 dixons 	 group 	 plc	
where 	 latterly  	 he 	 was 	 responsible 	 for	
the	group’s	high	street	brands	including	
dixons	the	link	and	dixons	t axf ree	
as	group	managing	director	and	as	group	
managing 	 director 	 of 	 pc 	 w orld 	 international	
barry bloomer
managing director 
sales  operations
joined	thorntons	in	july	2005	and	was	
appointed	to	the	board	in	july	2006	
he	previously	spent	ten	years	at	black		
decker 	latterly	as	european	operations	
director	and	prior	to	that	eight	years	in	
various	positions	including	manufacturing	
and 	 quality 	 director 	 for 	 philips	
components 		limited
mark robson
finance director
joined 	 thorntons 	 in 	 november 	 2009 	 and	
appointed 	 to 	 the 	 board 	 in 	 december 	 2009	
a 	 qualified 	 char tered 	 accountant 	 with 	
extensive 	 experience 	 in 	 the 	 retail 	 and	
consumer 	 goods 	 sectors 	 most 	 recently	
with 	 somer field 	 limited 	 now 	 par t 	 of 	 the 	
co  operative 	 group 	 where 	 he 	 was 	 f inance	
director  	 p reviously 	 f inance 	 director 	 of	
sfi 	 holdings 	 limited 	 the 	 pub 	 and 	 bar	
c h a i n  	 claire’s	accessories	uk	limited	
and	alldays 	 the 	 convenience 	 store 	 group
key 
a audit committee  
n nomination committee  
r remuneration committee
nonexecutive directors
diana houghton
nonexecutive director a r n
joined	thorntons	in	december	2008	
a	corporate	development	and	strategy	
specialist	with	broad	experience	of	the	
consumer	goods	retail	and	leisure	retail	
sectors	and	also	possesses	extensive	
corporate	finance	exper tise	she	spent	
six	years	as	the	corporate	development	
director	of	allied	domecq	before	working	
as	a	consultant	to	a	number	of	companies	
investment 	 banks 	 and 	 private 	 equity 	 houses	
other	appointments	include	a	senior	
advisor y 	 role 	 with 	 the 	 national 	 audit 	 office 	
she	is	chair	of	the	audit	committee
paul wilkinson 
nonexecutive director a r n
joined	thorntons	in	august	2006	
he 	 holds 	 a 	 por tfolio 	 of 	 executive	
nonexecutive 	 and 	 advisor y 	 roles 	 in	
the 	 food 	 consumer 	 and 	 retail 	 sectors	
as 	 well 	 as 	 the 	 public 	 sector  	 p revious	
appointments	include	chairman	of	r ank	
hovis	mcdougall	and	prior	to	that	he	
held	management	roles	at	unilever	and	
grand	metropolitan 	he	was	previously	
an	independent	director	of	ar yzta	ag	
a	major	international	food	group	based	
in	zurich	other	appointments	include	
chairman	of	f engrain	and	nonexecutive	
director	of	f uerst	day	lawson 	he	also	
chairs	the	national	skills	academy 	he	is	
chairman	of	the	r emuneration	committee	
and	the	senior	independent	director  wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 17
corporate information
company secretary and 
registered office
mark r henson fcis 
thornton	p ark 
somercotes 
alfreton 
derbyshire	de55	4xj 
t el	0845	075	7565 
www thorntonsco uk 
r egistered	in	the	united	kingdom	 
number 174706 
independent auditors
pricewaterhousecoopers llp
benson	house 
33	w ellington	street 
l eeds	ls1	4jp
registrars
capita registrars 
the	r egistr y 
34	beckenham	r oad	 
beckenham 
k ent	br3	4tu 
tel 0871 664 0300 
calls	cost	10p	per	minute	plus	network	
extras	lines	open	mondayf riday	
800am430pm	 
f ax	01484	601512	 
www capitaregistrarscom
principal bankers
barclays bank plc
hsbc plc
lloyds tsb bank plc
financial advisers and 
corporate brokers
investec investment banking 
financial pr advisers
cardew group limited
risk and insurance advisers
marsh limited
for 52 weeks ended 25 june 2011
7	september	2011		 	 r esults	and	final	dividend	announced 
september	2011		 	 annual	r epor t	circulated 
20	october	2011		 	 agm 
25	november	2011		 f inal	dividend	payable
for 53 weeks ending 30 june 2012
7	januar y	2012	 	 interim	accounting	period	end	28	weeks 
february 2012  interim results and dividend announced 
april	2012		 	 interim	dividend	payable 
30	june	2012	 	 accounting	period	end	53	weeks 
september	2012	 	 r esults	and	final	dividend	announced 
september	2012	 	 annual	r epor t	circulated 
october	2012	 	 agm
share dealing service
if	you	want	to	buy	or	sell	shares	
capita	share	dealing	ser vice	offers	an	
easyto use	competitive	execution only	
ser vice	this	means	that	they	will	only	
buy	and	sell	shares	and	will	not	offer	
any	other	ser vice	for	example	financial	
advice	if	you	want	to	use	this	ser vice	
phone	0871	664	0454	calls	cost	10p	
per 	 minute 	 plus 	 network 	 extras 	 lines 	 open	
mondayf riday	800am430pm	or	visit	
www capitadealcom	capita	share	
dealing	ser vices	is	a	trading	name	of	
capita	irg	t rustees	limited	which	is	
authorised	and	regulated	by	the	f inancial	
ser vices	authority	www fsagov uk
register184113	and	is	also	authorised	
to conduct business in ireland under 
the	provisions	of	the	eu	markets	in	
financial instruments directive and 
is	par t	of	the	capita	group	plc	
t erms	and	conditions	apply 
financial calendar thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
18
report of the directors
the directors of thorntons plc together with its subsidiaries “the group” have pleasure in presenting their annual report and the audited 
financial statements of the company and group for the 52 weeks ended 25 june 2011
principal activities and business review
the principal activities of the group during the period were the manufacturing retailing and distribution of high quality confectionery and other 
sweet foods a review of the group’s performance during the period with commentary on the financial results future development and principal 
risks and uncertainties facing the company is contained in the chairman’s statement pages 2 and 3 the chief executive’s report pages 6 to 9 
the finance director’s report pages 10 to 12 the corporate responsibility report pages 13 to 15 and the corporate governance statement pages 
22 to 25 which are incorporated into this report by reference
results and dividends
the profit for the financial year before tax and exceptional items was £43 million 2010 £69 million an interim dividend of 195p per share 
was paid on 28 april 2011 2010 195p the directors recommend a final dividend of 025p per share 2010 410p which is not reflected in 
the attached accounts representing a total dividend for the period of 220p 2010 605p subject to shareholder approval the final dividend will 
be paid on 25 november 2011 to shareholders on the register at the close of business on 28 october 2011
financial risk management
details of the group’s financial risk management policies are set out in note 18 on pages 58 to 61
directors
the current directors of the company together with their biographical details are shown on page 16 the directors during the year who served for 
the whole of the period and up to the date of signing these financial statements except where stated were
chairman
j a von spreckelsen
nonexecutive directors
d j houghton  
p n wilkinson 
executive directors
j d hart appointed 4 january 2011 
b bloomer  
w h m robson 
m r davies resigned 30 september 2010  
p d j wright resigned 1 july 2011
the director retiring by rotation at the annual general meeting “agm” is john von spreckelsen who being eligible offers himself for 
reappointment j d hart having been appointed by the board since the last agm also offers himself for reappointment in accordance with the 
company’s articles of association the interests of the directors and their immediate families in the shares of the company and in options over 
such shares granted under the company’s share option schemes are shown in the report on the directors’ remuneration on pages 26 to 32 
no director held a material interest either during or at the end of the period in any contract of significance in relation to the business of the 
company or its subsidiaries wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 19
share capital
details of the company’s voting and share capital structure and any changes during the year under review are shown in note 23 to the accounts 
on pages 67 and 68 no person has any special rights of control over the company’s share capital and all issued shares are fully paid
the directors were granted a general authority at the 2010 agm to allot relevant securities up to a nominal amount of £1663448 and the 
authority applies until the conclusion of this year’s agm when shareholders will be asked to grant a similar authority in line with current investor 
guidelines separate authorities will also be proposed to renew the directors’ limited authority to disapply shareholders’ preemption rights and to 
purchase a proportion of the company’s share capital in the market again in line with investor guidelines
change of control significant agreements
there are no agreements that the company considers significant and to which the company is a party that would take effect alter or terminate 
upon change of control of the company following a takeover bid with the exception of a number of banking and leasing agreements which upon a 
change of control of the company are terminable at the banks’ and lessors’ discretion
there are no agreements between any group company and any of its employees or any director of the company which provide for compensation to 
be paid to the employee or director for termination of employment or for loss of office as a consequence of a takeover of the company other than 
provisions that would normally apply on any termination of employment
interests in voting rights
the company has been notified of the following significant interests in voting rights of the company’s issued share capital as at 6 september 2011
      ordinary  
      shares 
oppenheimer funds      6974640 102
svg capital plc incl strategic equity capital plc below      6271975 92
joseph rowntree charitable trust      4000000 58
henderson global investors      3476714 51
ameriprise financial inc threadneedle asset management     3430955 50
mrs j s harcus      2806186 42
fidelity international limited      2794616 41
strategic equity capital plc      2790618 41
investmentaktiengesellschaft fuer langfristige investoren tgv     2753962 40
 these include joint holdings as trustees and consequently certain shares are allocated against more than one name
employee share schemes
the company operates a number of share option schemes for the benefit of employees information regarding the schemes and the number of 
options outstanding is given in note 23 on pages 67 and 68
employee involvement
it is the group’s policy to keep employees fully informed of matters affecting them as employees and to make them aware of the financial and 
economic factors influencing group performance the views of employees are taken into account in making decisions affecting their interests and 
information of relevance to all employees is communicated through a council system of employee representation and regular business updates 
encouragement is given to colleagues to contribute towards the group’s financial performance by annual bonus schemes and participation in the 
company’s share schemes thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
20
report of the directors continued
equal opportunities and employment of disabled persons
employment policies are designed to provide equal opportunity irrespective of age gender sexual orientation disability religion race or marital status 
applications for employment by disabled persons are given full and fair consideration and whenever practicable provision is made for their 
special needs the group applies the same criteria to disabled employees for training career development and promotion as to any other employee 
if existing employees become disabled every effort is made to ensure their continued employment
research and development
the group continues an active programme of research and development in all areas of its activities with the constant review of existing products 
and development of new products being an integral part of this programme
charitable and political contributions
during the period the group made local and national charitable contributions of £50500 2010 £2000 including a £45000 donation to save 
the children in relation to our haiti chocolate block sold to raise funds for the earthquake disaster it is the policy of the board not to make 
political donations and accordingly none were made in the period 2010 £nil
payment of suppliers
the group does not follow any specific external code or standard on payment practice its policy is to
• agree the terms of payment with suppliers when agreeing the terms of each transaction
• ensure that those suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts and
• pay in accordance with its contractual and other legal obligations
the payment policy applies to all creditors for revenue and capital supplies of goods and services without exception the group and company’s 
average creditor payment period at 25 june 2011 was 46 days 2010 39 days
independent auditors
following a recommendation of the audit committee to the board a resolution to reappoint pricewaterhousecoopers llp as auditors to the 
company will be proposed at the agm 
disclosure of information to auditors
in the case of each of the persons who were directors at the date this report was approved
•  so far as each of the directors is aware there is no relevant audit information as defined in the companies act 2006 of which the company’s 
auditors are unaware and
•  each of the directors has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any 
relevant audit information and to establish that the company’s auditors are aware of that information wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 21
statement of directors’ responsibilities
the directors are responsible for preparing the annual report the report on the directors’ remuneration and the 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 
and parent company financial statements in accordance with international financial reporting standards “ifrs” as adopted by the european 
union “eu” under company law the directors must not approve the 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 of the group for that period in preparing these financial 
statements the directors are required to
• select suitable accounting policies and then apply them consistently
• make judgements and accounting estimates that are reasonable and prudent
•  state whether applicable ifrs as adopted by the eu have been followed subject to any material departures disclosed and explained in the 
financial statements and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business
the directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and 
disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial 
statements and the report on the directors’ remuneration comply with the companies act 2006 and as regards the group financial statements 
article 4 of the ias regulation they are also responsible for safeguarding the assets of the company and the group and hence for taking 
reasonable steps for the prevention and detection of fraud and other irregularities
the directors are responsible for the maintenance and integrity of the company’s web site legislation in the united kingdom “uk” governing the 
preparation and dissemination of financial statements may differ from legislation in other jurisdictions 
each of the directors whose names and functions are listed on page 16 confirm that to the best of their knowledge and belief
•  the financial statements which have been prepared in accordance with ifrs as adopted by the eu give a true and fair view of the assets 
liabilities financial position and profit of the group and company and
•  the report of the directors on pages 18 to 21 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
articles of association
the company’s articles of association may only be amended by a special resolution at a general meeting of shareholders
annual general meeting
the notice convening the company’s agm on 20 october 2011 can be found in the separate notice of agm accompanying this annual report 
and includes full details of the business to be transacted
approved by the board on 6 september 2011 and signed by order of the board by
mark r henson
company secretary thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
22
corporate governance
statement on compliance
the company recognises the importance of and is committed to high standards of corporate governance the board is accountable to the 
shareholders for good corporate governance this report describes how the board applies the principles of good governance and best practice 
as set out in the uk corporate governance code issued by the financial reporting council in 2008 “the code” available from wwwfrcorg
throughout the year under review the board considers that the company has complied fully with all provisions recommended in section 1 of the code
the information required under rule 726 of the disclosure and transparency rules of the financial services authority is included in the report 
of the directors on pages 18 to 21
the board
the company is headed by a board of directors collectively responsible for the success of the company the board provides leadership within a 
framework of prudent and effective controls designed to enable risk to be assessed and managed it sets the company’s strategy and is responsible 
for reviewing management performance and for ensuring that the necessary financial and human resources are in place in order to meet the 
company’s objectives the board also sets the company’s values and standards mindful of its obligations to shareholders and other stakeholders
the board currently comprises the chairman three executive directors and two nonexecutive directors the board regards p n wilkinson and 
d j houghton as being independent on recommendation from the nomination committee the board has decided to enhance its structure 
in line with best practice and will be commencing a search for an additional two independent directors to join the board the chairman and 
chief executive both have clearly defined roles and responsibilities which are set out in writing and approved by the board the chairman has 
responsibility for the leadership and the running of the board including but not limited to ensuring that a fixed schedule of matters is exclusively 
retained for the board’s review and approval and that a framework exists to allow the clear dissemination of relevant and timely information to all 
directors for such discussion to occur he is also responsible for communications with shareholders and for ensuring effective contributions from 
the nonexecutive directors the chairman has commitments outside of the company as detailed in his biography on page 16 all directors are 
subject to reappointment by shareholders at the first agm following their appointment and thereafter at intervals of no more than three years
the board meets regularly normally nine times per financial year and during the period under review there was full attendance at the eleven board 
meetings that took place by directors eligible to attend except for apologies received from b bloomer in respect of two meetings on 2 and 3 may 2011 
the board regularly reviews the operational performance and plans of the company and as necessary determines the company’s current and 
proposed strategy the executive directors also meet under the chairmanship of the chief executive on a weekly basis to discuss operational 
matters all board members receive agendas and comprehensive papers prior to each board meeting all directors have access to the services of 
the company secretary who is responsible to the board for ensuring that board procedures are followed and that applicable rules and regulations 
are adhered to the board maintains a register of potential conflicts of interest with its directors and confirms no such conflicts exist the register is 
reviewed and updated as necessary throughout the year directors may also obtain further information from any manager or employee of the company 
and there is a procedure for directors to obtain independent advice from external advisers consultants or any such further professional individual or 
entity at the company’s expense the company maintains appropriate liability insurance for the benefit of its directors
the chairman meets at least annually with the nonexecutive directors without executive directors present and the nonexecutive directors 
led by the senior independent director p n wilkinson meet annually to consider the chairman’s performance taking into account the executive 
directors’ views the senior independent director is also available to shareholders if they have any concerns that contact through the normal 
channels of the chairman chief executive or finance director has failed to resolve or for which such contact is inappropriate
the terms and conditions of appointment of the nonexecutive directors are available during normal business hours at the company’s registered 
office and will be available for inspection at the agm
new appointments to the board receive an appropriate induction to gain an understanding of the company’s business which includes meetings 
with senior management
given the skills and experience of the nonexecutive directors their general training requirements are left to their own discretion the company makes 
the necessary resources available to meet any identified requirements the chairman conducts a formal annual appraisal process for the board its 
committees and individual directors including those directors due to offer themselves for reappointment at the agm through use of a questionnaire 
and onetoone meetings which facilitates a board discussion and where appropriate agreed actions for improvements the executive directors are 
also included in the company’s annual performance appraisal arrangements which include development and training requirements
the board delegates its authority for certain matters to its audit remuneration and nomination committees the board approves the terms of 
reference of each of the committees and they are available on the company’s web site wwwthorntonscouk and upon request from the company 
secretary during the period under review there were three meetings of the audit committee and one formal meeting of each of the remuneration 
and nomination committees with full attendance of all eligible directors in addition to formal committee meetings ad hoc decisions of the 
committees are taken after discussion throughout the year as necessary through the form of written resolutions wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 23
nomination committee
the nomination committee is composed of the two independent directors and the chairman of the board j a von spreckelsen the committee 
is chaired by j a von spreckelsen and is responsible for reviewing the credentials of each and every potential director before such nominee 
is proposed to the board in considering potential appointments to the board the committee evaluates the balance of skills knowledge and 
experience on the board when considering the role and capabilities required for a particular appointment when appointments are being 
considered the committee uses professional external recruitment specialists as and when appropriate as it did in relation to the appointment 
of j d hart as chief executive as well as contacts of its directors and the company’s advisers the committee also reviews the contribution 
of those directors offering themselves for reappointment by shareholders at the agm
remuneration committee
the remuneration committee is composed of the two independent directors and is chaired by p n wilkinson the board has delegated authority 
to the committee for setting the chairman’s the executive directors’ and the company secretary’s remuneration and performancerelated awards 
further details of the committee and directors’ remuneration are set out in the report on the directors’ remuneration on pages 26 to 32
audit committee
the audit committee throughout the year comprised the two independent directors and was chaired by d j houghton it meets three times a year 
with the external auditors and considers any issues which are identified during the course of their audit work the board is satisfied that both 
committee members have recent and relevant financial experience meetings are also attended by invitation by the chairman chief executive 
finance director and financial controller the committee meets at least annually with the external auditors without the executive directors present
the audit committee is responsible for monitoring the integrity of the company’s financial statements reviewing the company’s internal financial 
controls and internal control and risk management systems monitoring and reviewing the effectiveness of the internal audit function making 
recommendations to the board regarding the appointment reappointment or removal of the external auditors and approving their remuneration 
and terms of engagement reviewing and monitoring the external auditors’ independence and objectivity and the effectiveness of the audit process 
and developing and implementing a policy on the engagement of the external auditors to supply nonaudit services
in respect of safeguarding the objectivity and independence of the external auditors the committee has a formal policy regarding the provision of 
nonaudit services by the external auditors including certain services which they cannot provide so as not to compromise their independence for 
example bookkeeping or other internal accounting services internal audit management roles or legal services the policy also provides for 
tendering for services where appropriate and has specific preapproved categories of work subject to the level of fees involved a formal rotation 
policy of the audit partner also exists which limits tenure to a maximum of five years
the committee also specifically reviews the levels of all fees paid to the auditors for audit and nonaudit services annually the external auditors report 
to the audit committee each year on the actions they have taken to comply with professional and regulatory requirements and best practice designed 
to ensure their independence the committee reviews whether the auditors believe there are any relationships that may affect their independence and 
additionally the auditors formally confirm their independence in writing to the board in respect of the period covered by these financial statements
the committee also receives regular detailed reports from the internal audit function and to ensure its activities are appropriate reviews its 
proposed work plan for future periods
internal control
the company’s control environment is the responsibility of the company’s directors and managers at all levels the board is therefore responsible 
for establishing and maintaining the company’s system of internal control and for reviewing its effectiveness no control system can provide 
absolute protection against material misstatement or loss but it is designed to manage rather than eliminate the risk of failure to achieve business 
objectives and to provide the directors with reasonable assurance that problems should be identified on a timely basis and dealt with appropriately
the board has delegated responsibility for reviewing the company’s system of internal control and its effectiveness to the audit committee due to 
the size of the company the executive directors are able to monitor performance and evaluate and manage on a continual basis the risks faced by 
the company the key procedures that have been established to provide effective internal control including over the financial reporting process and 
the preparation of consolidated financial statements and to comply with the financial reporting council’s guidance on internal control revised 
guidance for directors on the combined code october 2005 include
•  a formalised reporting structure which includes the setting of detailed annual budgets and key performance indicators which are updated on a 
regular basis to form forecasts which are reviewed at both management and board meetings
•  regular board meetings are held at which all key aspects of the business are discussed including comparison of actual performance against 
budgets and forecasts thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
24
corporate governance continued
internal control continued
• monthly reports are made to the board by the chief executive finance director and other executive directors
• there is a weekly review of operational performance and operational matters by the executive directors
•  meetings are held by each executive director on a weekly and monthly basis to review the progress of specific financial and nonfinancial 
responsibilities within their functions
•  the control review and monitoring of key business projects by specific steering committees each headed by an executive director who sponsors 
the project
• defined authorisation levels for capital expenditure
• defined authorisation levels for the placing of orders and contracts
• clear authorisation levels and segregation of accounting duties to control major financial risks
•  daily cash movements are reconciled and monitored by the finance department and the company’s cash flow is monitored monthly 
in comparison to budget and forecast
• the company’s reporting systems provide weekly updates on key statistics including sales production and gross margin analysis
•  an internal audit function which monitors maintains and controls a retail audit risk report regularly conducting store audits in line with 
risk strategy and also evaluates the effectiveness of systems of internal control and operational processes businesswide
•  the executive directors and senior management meet to identify and review key operational and compliance risks and then implement 
appropriate procedures to address those risks a corporate risk register is maintained and reviewed
•  major commercial technological and financial risks are assessed by the board throughout each financial year the conclusions are then 
incorporated in the company’s business strategy and adopted by the board and
• a formal arrangement for staff to raise any concerns over financial reporting or other matters in confidence
the board and audit committee review management reports prepared by the external and internal auditors and consider the suitability of suggested 
improvements to the system of internal controls
the board and audit committee have reviewed the effectiveness of the internal control system including financial operational and compliance 
controls and risk management in accordance with the code on an ongoing basis for the period from 27 june 2010 to the date of this report and 
have determined that they were not aware of any significant failings or weaknesses in the system of internal control
principal risks and uncertainties
as described above in the internal control procedures key risks are reviewed by the executive directors and senior management during the year 
marsh limited were engaged to deliver a strategic risk assessment to review identify evaluate update and prioritise the key strategic risks to 
thorntons the assessment of risks on the basis of likelihood and potential impact together with the controls and actions to manage or mitigate 
them are reviewed by the audit committee and board the key risks and uncertainties facing the business are considered to be as follows
economic and industry risks
a competitive marketplace
the uk confectionery market has many strong players and maintaining our competitive position depends on our continued ability to offer products 
that have a strong appeal to consumers and which are readily available in the places that they wish to purchase them any significant shift in 
consumer trends coupled with a failure to anticipate and react to such changes or a failure to invest adequately in our business could reduce demand 
for our products resulting in loss of market share reduced sales reduced attractiveness to potential franchisees or harm to the image of our brand 
product innovation is critical to maintaining consumer relevance and the company has a rigorous process for identifying researching and developing 
new product ideas which is regularly reviewed the company’s multichannel strategy is also a means by which it can satisfy consumers’ needs better 
than some of its competitors whilst also mitigating the overall risk to the business from a downturn in any specific channel
economic downturn or recession
we believe that during times of economic uncertainty or hardship consumer demand for products may fall or consumers may choose to purchase 
lower value consumer goods as opposed to higher value consumer goods resulting in a fall in demand for our products thorntons consequently 
offers a range of products across various price points and has flexible trading and promotional plans that enable it to respond to consumer and 
market trends rapidly the economic climate may also result in the failure of commercial or franchise businesses and consequently customers  wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 25
principal risks and uncertainties continued
economic and industry risks continued
economic downturn or recession continued
andor franchisees defaulting on supply payments reduced sales as a result of an economic downturn or recession in the uk may have an adverse 
effect on the profitability and cash flow of our business
key input prices are driven by commodity markets
material adverse changes in certain commodity prices could affect the company’s profitability the company buys key inputs forward and works 
with suppliers to choose the optimal time and quantity for purchases whilst this policy may sometimes preclude the company from taking 
advantage of shortterm dips in prices it provides a stable cost base for the company to make its trading decisions 
operational risks
a substantial decrease in our ability to supply our customers with our products 
a major interruption or substantial decrease in our ability to supply customers could damage our sales and image as well as our relationships with 
customers and consumers the majority of the company’s products for sale are produced at thornton park in alfreton derbyshire thornton park 
has significant fire protection across the site contingency and emergency recovery plans for it utilities and major incidents which are regularly 
reviewed and appropriate insurance cover is also in place
food products must have the highest integrity
product contamination accidental or malicious is a risk faced by all food producers thorntons has extremely rigorous policies and security 
systems for guarding against accidental or malicious contamination of ingredients or finished products in the unlikely event that these policies 
and systems fail a robust process for product recall and consumer communication in addition to comprehensive insurance cover is in place
people risks
the business is dependent upon the skills enthusiasm and wellbeing of its people
management evaluates the balance of skills knowledge and experience within the team when considering the role and capabilities required for a 
particular senior appointment the company uses professional external recruitment specialists as and when appropriate as well as contacts of its 
directors and the company’s advisers management aspires to keep colleagues informed of internal and external developments and regularly reviews 
how staff are feeling through surveys and communication sessions a channel outside the normal line structures for communication and resolution 
of issues exists through the joint industrial council for thornton park and the retail council for storebased colleagues strong recruitment processes 
formalised succession planning together with ongoing individual training and development plans help mitigate the risk of the loss of key staff
relations with shareholders
communications with shareholders are given high priority following the announcement of the company’s interim and final results the directors normally 
represented by at least the chairman chief executive and finance director make detailed business presentations to institutional shareholders the senior 
independent director is also available to all shareholders feedback directly from shareholders and via the company’s brokers after these regular analyst 
and shareholder meetings ensures that the board understands shareholder views finally the company’s web site wwwthorntonscoukinvestor allows 
shareholders to view company results and announcements and other relevant information and also raise questions to put back to the board
the board uses the agm to communicate with private and institutional investors and welcomes their participation each year the board reviews 
the governance and voting guidelines issued by the principal representative bodies of its shareholders at each agm the directors present 
a business review to all attending shareholders who may ask any questions they wish it is not a requirement that these be previously submitted 
to the company in writing furthermore at each agm the chairman aims to ensure that the chair persons of the board committees are available 
all code provisions regarding constructive use of the agm are complied with
going concern
the directors are satisfied on the basis of current financial projections and facilities available that the company and the group have adequate 
financial resources to continue to operate for the foreseeable future for this reason the directors continue to adopt the going concern basis in 
preparing the financial statements 
approved by the board on 6 september 2011 and signed on its behalf by
mark r henson
company secretary thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
26
report on the directors’ remuneration
information not subject to audit
remuneration committee
the remuneration committee is composed of the company’s two independent nonexecutive directors p n wilkinson chairman and d j houghton 
the committee is responsible for setting the chairman’s executive directors’ and company secretary’s remuneration and performancerelated 
awards it also monitors the remuneration of the company’s senior managers during the period the chief executive attended committee meetings 
by invitation and provided advice on issues other than those relating to his remuneration the company secretary attends the meetings as secretary 
to the committee during the year the committee received independent general remuneration and share scheme advice from deloitte llp who 
were appointed by the committee and also advised the company on tax and pension matters the committee also had access to professional 
market surveys on boardroom pay no director is involved in any decision relating to his own remuneration the terms of reference of the 
committee are available on the company’s web site wwwthorntonscouk and upon request from the company secretary
remuneration policy
the policy for the current and future periods for the remuneration and incentivisation of the executive directors is as follows
• to ensure that individual rewards and incentives are aligned with the performance of the company and the interests of shareholders
• to ensure that performancerelated elements of remuneration constitute a significant proportion of an executive’s remuneration package and
• to maintain a competitive remuneration package which enables the company to attract retain and motivate high calibre executives
the committee reviews the company’s executive remuneration arrangements and implements incentive arrangements to support the objective 
of rewarding those individuals who deliver real and genuine shareholder value in developing the arrangements the committee and its advisers 
carefully consider the best practice provisions in the combined code and current market practice
salaries
salaries for the executive directors are targeted at remaining competitive for the market size of the business and unless they fall below what the 
committee considers to be competitive will not normally be changed beyond a cost of living increase outside of this target the level of salary of the 
executive directors is reviewed each year by the remuneration committee and takes into account a range of issues including primarily underlying 
group performance comparative salary levels market forces and having regard to pay and conditions elsewhere in the company taxable benefits 
comprise principally healthcare insurance policies a fully expensed company car or car allowance a fuel allowance and relocation expenses
annual incentive plan
the remuneration committee reviews and approves the annual bonus scheme targets each year for the 2012 financial year the bonus potential 
for executive directors is up to 100 of base salary dependant on profit performance there are clear financial targets based on the achievement 
of group profit and the committee is satisfied that these are challenging and in order for the maximum bonus to be earned will demonstrate 
significant improvement in the profit performance of the business
no bonus was payable to the executive directors in respect of the 2011 financial year
longterm incentive plan “ltip”
the committee introduced longterm incentive arrangements approved by shareholders in october 2007 designed to deliver genuine 
performance related pay with a clear line of sight for executives and a direct alignment with shareholders’ interests
under the ltip  annual awards of share options may be granted with an exercise price equal to the market value of the shares at the date 
of grant executive directors may receive an award under the ltip in any financial year over shares worth up to 150 of their basic annual salary 
excluding bonuses commissions and benefits in kind provided that to the extent that an award exceeds 100 of their basic annual salary 
the vesting of such excess will be dependent on the achievement of a significantly more stretching performance target
the participants will not be entitled to exercise their options for a period determined by the committee which is generally no earlier than three 
years from the date of award the vesting of awards at the end of the performance period will be subject to the relevant participant remaining 
in employment and the achievement of specified stretching performance conditions wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 27
information not subject to audit continued
longterm incentive plan “ltip” continued
there are currently three grants of awards in respect of the periods 2008 to 2011 and 2009 to 2012 under the ltip with a performance target 
based on the company’s total shareholder return “tsr” tsr will normally be averaged across a period of three months before the start of the 
performance period and three months before the date on which the performance period ends this is in keeping with normal market practice and is 
a practical adjustment to smooth the impact of shortterm market influences and to provide a more robust measure of the company’s performance 
awards vest on a sliding scale between each step as follows
       compound 
       equivalent 
      annual tsr over three year 
total award vesting  of salary      growth required vesting period
150      20 73
100      15 52
25      8 26
in order to reassure shareholders that executives will not benefit simply from an upward turn in the market the committee will require underlying 
real eps performance to increase by at least retail prices index “rpi” 10 per annum before any awards vest even if the tsr targets are achieved 
in addition for any award above 100 to vest the underlying annual growth in real eps must be at least rpi 12
absolute tsr was chosen as the measure for awards under the ltip because it requires executives to increase shareholder value against the 
company’s prevailing business position the remuneration committee monitors the performance of existing awards against the above targets on an 
annual basis and reviews the performance conditions for future awards to ensure that the conditions continue to be appropriate for the company 
and the prevailing market based on the company’s tsr performance to date since the introduction of the ltip  no options awarded would vest 
the actual percentage of the award vesting will be determined by the remuneration committee at the end of each threeyear performance period 
as reported last year the committee did not make a grant of options under the ltip in october 2010 the committee has reviewed 
the performance conditions and level of award that will apply to the options which it is proposed be granted under the ltip in 2011 
the committee is proposing to scale back the awards granted in 2011 to a maximum of 75 of salary rather than the 150 permitted 
under the scheme rules the performance target for the 2011 award will be based on a stretching share price improvement over a threeyear 
period with a cumulative eps underpin to ensure there is no benefit arising simply from an upward turn in the market at the point of 
measurement the committee intends to discuss the proposed targets with major shareholders prior to the grant of the ltip awards 
full details will also be disclosed in next year’s remuneration report
share option scheme
prior to the introduction of the ltip in october 2007 some of the directors had previously been granted share options under the thorntons plc 
2001 executive share option scheme subject to the achievement of performance targets these options may be exercised between three and ten 
years after the date of grant following the introduction of the ltip in 2007 no further awards under this scheme to directors are anticipated
executive directors with twelve months’ service along with all eligible employees are also entitled to participate in the company’s all employee 
sharesave scheme
supplementary notes regarding existing share scheme options and awards
the thorntons plc 2001 executive share option scheme “the scheme”
options granted under the scheme can be exercised at any time between three and ten years after the grant date subject to the fulfilment of certain 
performance criteria
options granted in 2006 and 2007 were split into three equal tranches with a requirement that a share price of 160p 2006 and 200p 2007 
be achieved within a minimum of three and a maximum of six years from the date of grant before the first tranche could be exercised with regard 
to the second and third tranches the share price is required to reach 185p 2006 and 225p 2007 and 210p 2006 and 250p 2007 
respectively in addition before any tranche may be exercised growth in eps must exceed the rpi by at least 3 per annum cumulatively over at 
least a three year and a maximum six year period the share price must have reached the relevant targets on the day prior to the exercise and the 
remuneration committee must be satisfied that there has been an improvement in the underlying performance of the company in line with these 
requirements the first two tranches of options granted on 5 june 11 july and 2 october 2006 are now exercisable subject to the company’s share 
price reaching the required target prices on the day prior to any exercise thorntons plc 
annual report and accounts 2011
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28
report on the directors’ remuneration continued
information not subject to audit continued
supplementary notes regarding existing share scheme options and awards continued
the thorntons plc 2001 executive share option scheme “the scheme” continued
under the scheme rules in the event of a change of control of the company options may be exercised within one month or such longer period 
as the remuneration committee determines and provided that such options have met their attaching performance criteria the remuneration 
committee also has discretion but always acting fairly reasonably and objectively to determine whether and if so to what extent beyond that 
indicated by the performance condition options shall be exercisable having regard to all the circumstances
all employees sharesave scheme
options granted under the hm revenue and customs approved sharesave scheme can be exercised at any time during the six month period 
commencing three or five years from the start of the savings contract options may be granted under the sharesave scheme at a discount 
of up to 20 of the market value of a share in the company on the date immediately preceding the date on which employees are invited 
to participate in the scheme there are no performance criteria under the sharesave scheme
share price
the midmarket price of the ordinary shares at 25 june 2010 the last dealing day prior to 26 june 2010 was 82p and at 24 june 2011 
the last dealing day prior to 25 june 2011 was 6025p and the range for the period was from 60p to 112p
the company’s register of directors’ interests which is open to inspection contains full details of directors’ shareholdings and options to subscribe 
during the period from 26 june 2011 to 6 september 2011 the interests of the directors named in the table on page 30 in the shares of the 
company were unchanged
performance graph
the graph below shows the tsr performance for the company’s shares in comparison to the ftse small cap index for the five years to 25 june 2011 
for the purposes of the graph tsr has been calculated as the percentage change during the fiveyear period in the market price of the shares 
assuming that dividends are reinvested
this graph shows the value by the end of the 2011 financial year of £100 invested in thorntons over the last five financial years compared 
with £100 invested in the ftse small cap index which the directors believe is the most appropriate comparative index
pensions
the executive directors with the exception of j d hart who does not participate in any company pension arrangement have private pensions 
to which the company contributes a fixed percentage 14 of basic salary due to previous restrictions on the amount of contributions that could 
be paid annually into his personal pension w h m robson received a reduced contribution from the company for the period to 5 april 2011 into 
his pension and a nonpensionable nonbonusable “pension salary supplement” of £5077 which together with the pension contributions equated 
to 14 of his basic salary since 6 april 2011 he has received the full 14 as employer pension contributions with no salary supplement
a table identifying the contributions made on behalf of directors to defined contribution arrangements are identified in the directors’ pension 
benefits table on page 30
pensionable salary is based on basic salary only and excludes any other form of remuneration including bonus payments or benefits in kind wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 29
information not subject to audit continued
contracts of service and early termination
all of the executive directors have service contracts with the company currently these contracts may be terminated by the company or director 
by giving one year’s notice the notice period of all executive directors’ service contracts is kept under review by the remuneration committee 
it is the remuneration committee’s view that the notice period for the executive directors is appropriate and consistent with current market 
practice it is the practice of the committee that if the employment of an executive director is terminated any compensation payment is calculated 
in accordance with normal legal principles including the application of mitigation to the extent appropriate to the circumstances of the termination 
there are no specific contractual obligations in the event of a change of control of the company
all nonexecutive directors have initial fixedterm agreements with the company of no more than three years there is no entitlement to any 
compensation in the event of such agreement not being renewed or the agreement terminating earlier
details of the directors’ service contracts notice periods and where applicable expiry dates are set out below
name   commencement  expiry  notice period
j d hart   4 january 2011  —  1 year
b bloomer   18 july 2006  —  1 year
w h m robson   2 november 2009  —  1 year
m r davies resigned 30 september 2010   2 october 2006  —  1 year
p d j wright resigned 1 july 2011   13 august 2007  —  1 year
j a von spreckelsen   5 june 2006  —  1 year
d j houghton   5 december 2008  5 december 2011  3 months
p n wilkinson   15 august 2006  15 august 2012  na
 p n wilkinson’s contract was renewed on 15 august 2009 for a further threeyear term
nonexecutive directors’ fees
the fees paid to nonexecutive directors for their services are approved by the board these fees are paid on a pro rata basis if they hold office 
for part of the year in recognition of legislative and corporate governance responsibilities a supplement of £5000 per annum is paid to the 
senior independent director and nonexecutives who chair one or more board committees
information subject to audit
the following table shows an analysis of the various elements of remuneration receivable by those directors who served during the 52 weeks 
ended 25 june 2011
   compensation performance   basic annual 
 salary  taxable for loss related   salaryfees 
 and fees benefits of office payments total total july 
 2011 2011 2011 2011 2011 2010 2011 
 £’000 £’000 £’000 £’000 £’000 £’000  £’000
chairman       
j a von spreckelsen 150 — — — 150 150 150
executive directors       
j d hart appointed 4 january 2011 165 13 — — 178 — 345
b bloomer 180 20 — — 200 184 180
w h m robson appointed 4 december 2009 190 22 — — 212 142 190
m r davies resigned 30 september 2010 310 17 — — 327 358 —
j r wall resigned 4 december 2009 — — — — — 129 —
p d j wright
†
 resigned 1 july 2011 171 18 — — 189 189 —
nonexecutive directors       
d j houghton  38 — — — 38 38 38
p n wilkinson
§
 43 — — — 43 43 43
 1247 90 — — 1337 1233 946
  w h m robson additionally received a salary supplement of £41240 in recognition of his period as acting chief executive from september 2010 until the appointment of j d hart as 
chief executive on 4 january 2011 which at the company’s discretion was paid as a lump sum employer contribution into his personal pension and is reflected in the directors’ pension 
benefits table overleaf 
† p d j wright resigned on 1 july 2011 and received compensation of £187775 
§ £12000 2010 £40000 of the fees in respect of the services provided by p n wilkinson were paid to parkside capital limited thorntons plc 
annual report and accounts 2011
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30
report on the directors’ remuneration continued
information subject to audit continued
directors’ pension benefits
      pension  pension 
      contributions contributions 
      2011 2010 
      £’000 £’000
executive directors  
j d hart appointed 4 january 2011      — —
b bloomer      23 23
w h m robson appointed 4 december 2009      62 7
m r davies resigned 30 september 2010      — —
j wall resigned 4 december 2009      — 16
p d j wright resigned 1 july 2011      24 24
directors’ interests
the interests of the directors and their immediate families in the company’s ordinary shares as at 26 june 2010 or date of appointment if later 
at 25 june 2011 and up to the date of signing of these financial statements were as follows
ordinary shares
the directors’ holdings in ordinary shares were
      25 june  26 june 
      2011 2010 
      number number
chairman  
j a von spreckelsen      1090000 1090000
executive directors  
j d hart appointed 4 january 2011      20000 —
b bloomer      5512 5512
w h m robson       10000 10000
m r davies resigned 30 september 2010      200400 200400
p d j wright resigned 1 july 2011      30000 30000
nonexecutive directors  
d j houghton      100000 100000
p n wilkinson      25000 25000
all the above are beneficial interests
it is a policy of the board that all directors must hold a minimum of 1000 shares such shares must be purchased as soon as practicable 
following the director’s appointment subject to the restrictions imposed by the model code on directors’ dealings wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 31
information subject to audit continued
share options and awards
the interests of the executive directors in share options held under the executive share option schemes and the sharesave scheme were as follows
    awards and    awards and  
    options held at awards and   options last date 
    26 june 2010 options options  held at awards and 
   subscription or date of granted in exercised options 25 june options can 
director scheme date of grant price pence appointment period  shares sold lapsed 2011 be exercised
j a von spreckelsen 2001 executive 5 jun 2006 116 1200000 — — — 1200000 5 jun 2016
j d hart 2011 share 16 feb 2011 99 — 696969 — — 696969 16 feb 2021
  option plan

b bloomer 2001 executive 11 jul 2006 1285 500000 — — — 500000 11 jul 2016
 ltip 2007 23 nov 2007 192 123904 — — 123904 — —
 ltip 2007 16 oct 2008 113 218038 — — — 218038 16 oct 2018
 ltip 2007 20 oct 2009 13225 186301 — — — 186301 20 oct 2019
 sharesave 9 oct 2006 113 5151 — — 5151 — —
 sharesave 10 oct 2007 148 4358 — — — 4358 31 may 2013
 sharesave 18 nov 2010 84 — 11165 — — 11165 30 june 2016
w h m robson ltip 2007 9 nov 2009 11725 243070 — — — 243070 9 nov 2019
 restricted share award

  9 nov 2009 11725 44150 — — — 44150 9 nov 2012
m r davies  2001 executive 2 oct 2006 153 1200000 — — — 1200000 30 sep 2011 
 ltip 2007 23 nov 2007 192 255849 — — 255849 — —
 ltip 2007 16 oct 2008 113 450226 — — 450226 — —
 ltip 2007 20 oct 2009 13225 384692 — — 384692 — —
 sharesave 18 nov 2009 108 8402 — — 8402 — —
p d j wright

 2001 executive 13 sep 2007 170 500000 — — — 500000 
 ltip 2007 16 oct 2008 113 226692 — — — 226692 
 ltip 2007 20 oct 2009 13225 193696 — — — 193696 
  to facilitate the recruitment of j d hart as chief executive on 16 february 2011 he was granted an option over 696969 ordinary shares in the company with an exercise 
price of 99p per share this award was made pursuant to listing rule 942 2 the option will become exercisable subject to the satisfaction of a performance condition 
to be measured over the period from 4 january 2011 to 4 january 2014 based on the annual increase in absolute tsr for the company over that period as follows
annual increase in absolute tsr     percentage of the option that will vest
15       100
11       75
8       50
less than 8       0
  for tsr performance between these points vesting will be calculated on a straightline interpolation rounded to the nearest whole share the company’s tsr will be averaged 
across a period of three months before the start of the performance period and three months before the date on which the performance period ends in addition for the option 
to vest the remuneration committee must be satisfied that the underlying financial performance of the company is satisfactory if j d hart ceases employment as a good 
leaver before his option has become exercisable the committee shall determine the extent to which the option shall become exercisable taking into account the period of time 
that has elapsed between grant and cessation and the extent to which the performance condition is satisfied at the relevant date in the event of a change of control or other 
relevant transaction before the option has become exercisable the option will become exercisable at the time of the relevant event to the extent determined by the committee 
taking into account the period of time that has elapsed between grant and the relevant event and the extent to which the performance condition is satisfied the option shall 
not be taken into account for pension purposes 
  to facilitate the recruitment of w h m robson as finance director he was granted a oneoff restricted share award over 76759 ordinary shares in the company in lieu of 
entitlements foregone from his previous employer this award was made pursuant to listing rule 942 2 32609 shares were sold immediately on receiving the award 
solely to meet the income tax and national insurance liability arising when the award was made the award which includes the right to receive the equivalent of any dividends 
paid during the intervening period vests on 9 november 2012 subject to w h m robson continuing to be employed by the company at that time the award will be satisfied 
by the transfer of existing shares held by the company’s employee benefit trust 
 awards made to p d j wright all lapsed on 1 july 2011 thorntons plc 
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32
report on the directors’ remuneration continued
information subject to audit continued
share options and awards continued
there is no requirement for the directors to pay any contributions on the granting of any options under any of the company’s share schemes
the earliest dates of exercise for the options set out in the table above are shown in note 23 on page 68
approved by the board on 6 september 2011 and signed on its behalf by
paul wilkinson
chairman of the remuneration committee
  wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 33
independent auditors’ report
to the members of thorntons plc
we have audited the financial statements of thorntons plc for the 52 weeks ended 25 june 2011 which comprise the consolidated income 
statement the statements of comprehensive income the statements of changes in equity the balance sheets the cash flow statements the 
statement of accounting policies 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 and as regards the parent company financial 
statements as applied in accordance with the provisions of the companies act 2006
respective responsibilities of directors and auditors 
as explained more fully in the statement of directors’ responsibilities the directors are responsible for the preparation of the 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 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 and 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 in addition we 
read all the financial and nonfinancial information in the annual report and accounts 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 financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 25 june 2011 and of the 
group’s loss and group’s and parent company’s cash flows for the 52 weeks then ended
• the group financial statements have been properly prepared in accordance with ifrss as adopted by the european union 
•  the parent company financial statements have been properly prepared in accordance with ifrss as adopted by the european union and 
as applied in accordance with the provisions of the companies act 2006 and
•  the financial statements have been prepared in accordance with the requirements of the companies act 2006 and as regards the group 
financial statements article 4 of the las regulation 
opinion on other matters prescribed by the companies act 2006 
in our opinion 
• the part of the report on the directors’ remuneration to be audited has been properly prepared in accordance with the companies act 2006
•  the information given in the report of the directors for the financial year for which the financial statements are prepared is consistent with the 
financial statements and
•  the information given in the corporate governance statement with respect to internal control and risk management systems and about share 
capital structures is consistent with the financial statements thorntons plc 
annual report and accounts 2011
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34
independent auditors’ report continued
to the members of thorntons plc
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 
•  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 report on the directors’ remuneration 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 or
• a corporate governance statement has not been prepared by the parent company 
under the listing rules we are required to review 
• the statement of directors’ responsibilities in relation to going concern
•  the parts 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
randal casson senior statutory auditor
for and on behalf of pricewaterhousecoopers llp
chartered accountants and statutory auditors
leeds
6 september 2011  wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 35
consolidated income statement
52 weeks ended 25 june 2011
  52 weeks ended 25 june 2011  52 weeks ended 26 june 2010 
  before   before   
  exceptionals exceptionals total exceptionals exceptionals total 
 note £’000 £’000 £’000 £’000 £’000 £’000
revenue 1 218255 — 218255 214553 — 214553
cost of sales  117516 — 117516 108009 — 108009
gross profit  100739 — 100739 106544 — 106544
operating expenses 2 96403 5158 101561 99573 775 100348
other operating income 3 1674 — 1674 1386 — 1386
operating profitloss  6010 5158 852 8357 775 7582
finance income 4 11 — 11 212 — 212
finance costs 5 1685 249 1934 1657 — 1657
profitloss before taxation 6 4336 5407 1071 6912 775 6137
taxation creditcharge 7 174 992 818 2000 217 1783
profitloss attributable to owners of the parent  4162 4415 253 4912 558 4354
lossearnings per share 9      
basic    04p   65p
diluted    04p   65p
 exceptional items have been reanalysed for comparative purposes see basis of preparation on page 42
all activities in both the current and previous year relate to continuing operations 
the accounting policies and notes on pages 41 to 74 are an integral part of these consolidated financial statements thorntons plc 
annual report and accounts 2011
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36
statements of comprehensive income
52 weeks ended 25 june 2011
     group  company 
    52 weeks  52 weeks 52 weeks 52 weeks 
    ended  ended ended ended 
    25 june 2011 26 june 2010 25 june 2011 26 june 2010 
   note £’000 £’000 £’000 £’000
lossprofit for the period    253 4354 4559 3200
other comprehensive expenseincome     
– actuarial loss recognised in the defined benefit pension scheme  21 2375 4040 2375 4040
– movement of deferred tax on pension liability   20 133 1131 133 1131
total other comprehensive expense    2242 2909 2242 2909
total comprehensive expenseincome for the financial period 
attributable to owners of the parent     2495 1445 2317 291
the accounting policies and notes on pages 41 to 74 are an integral part of these consolidated financial statements  wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 37
statements of changes in equity
52 weeks ended 25 june 2011
    share share retained  
    capital premium earnings total 
group   note £’000 £’000 £’000 £’000
at 27 june 2009    6835 13752 8151 28738
profit for the period    — — 4354 4354
other comprehensive expense     
– actuarial loss recognised in the defined benefit pension scheme   — — 4040 4040
– movement of deferred tax on pension liability    — — 1131 1131
total comprehensive income for the period ended 26 june 2010   — — 1445 1445
transactions with owners     
– new share capital issued   23 2 16 — 18
– sharebased payment charge    24 — — 379 379
– effect of tax on share option movement    20 — — 59 59
– dividends    10 — — 4553 4553
at 26 june 2010    6837 13768 5363 25968
loss for the period    — — 253 253
other comprehensive expense     
– actuarial loss recognised in the defined benefit pension scheme   — — 2375 2375
– movement of deferred tax on pension liability    — — 133 133
total comprehensive expense for the period ended 25 june 2011   — — 2495 2495
transactions with owners     
– sharebased payment charge    24 — — 110 110
– dividends    10 — — 4054 4054
at 25 june 2011    6837 13768 1296 19309 thorntons plc 
annual report and accounts 2011
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38
statements of changes in equity continued
52 weeks ended 25 june 2011
    share share retained  
    capital premium  earnings total 
company   note £’000 £’000 £’000 £’000
at 27 june 2009    6835 13752 11517 32104
profit for the period    — — 3200 3200
other comprehensive expense     
– actuarial loss recognised in the defined benefit pension scheme   — — 4040 4040
– movement of deferred tax on pension liability    — — 1131 1131
total comprehensive income for the period ended 26 june 2010   — — 291 291
transactions with owners     
– new share capital issued   23 2 16 — 18
– sharebased payment charge    24 — — 379 379
– effect of tax on share option movement    20 — — 59 59
– dividends    10 — — 4553 4553
at 26 june 2010    6837 13768 7575 28180
profit for the period    — — 4559 4559
other comprehensive expense     
– actuarial loss recognised in the defined benefit pension scheme   — — 2375 2375
– movement of deferred tax on pension liability    — — 133 133
total comprehensive income for the period ended 25 june 2011   — — 2317 2317
transactions with owners     
– sharebased payment charge    24 — — 110 110
– dividends    10 — — 4054 4054
at 25 june 2011    6837 13768 5728 26333
retained earnings are net of investments in own shares of £2163000 2010 £2163000 being held by trusts operating the following plans
• 2007 ltip with 504610 shares 2010 504610 at an original cost of £1035000 2010 £1035000 and
• 2001 executive share option scheme with 905070 shares 2010 905070 at an original cost of £1128000 2010 £1128000
  wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 39
balance sheets
as at 25 june 2011
     group  company 
    2011 2010 2011 2010 
   note £’000 £’000 £’000 £’000
assets     
noncurrent assets     
intangible assets   11 2792 3451 2792 3451
property plant and equipment   12 52667 58533 26760 31769
investment in subsidiaries   13 — — 27368 27368
deferred tax assets   20 — — 4826 4085
    55459 61984 61746 66673
current assets     
inventories   14 37018 30393 37010 30382
trade and other receivables   15 16017 15977 16720 15987
cash and cash equivalents   25b 1752 1626 1452 1553
    54787 47996 55182 47922
total assets    110246 109980 116928 114595
equity and liabilities     
shareholders’ equity attributable to owners of the parent     
ordinary shares   23 6837 6837 6837 6837
share premium    13768 13768 13768 13768
deficitretained earnings    1296 5363 5728 7575
total equity    19309 25968 26333 28180
liabilities     
current liabilities     
trade and other payables   16 32457 25390 32714 29965
borrowings   17 22886 24090 22886 24090
current tax liabilities    — 614 — 242
provisions for liabilities   19 967 297 967 297
    56310 50391 56567 54594
noncurrent liabilities     
borrowings   17 3355 3557 3355 3557
deferred tax liabilities   20 599 1800 — —
retirement benefit obligations   21 25264 24219 25264 24219
other noncurrent liabilities   22 2699 2827 2699 2827
provisions for liabilities   19 2710 1218 2710 1218
    34627 33621 34028 31821
total liabilities    90937 84012 90595 86415
total equity and liabilities    110246 109980 116928 114595
the accounting policies and notes on pages 41 to 74 are an integral part of these consolidated financial statements
the financial statements on pages 35 to 74 were approved by the board of directors on 6 september 2011 and were signed on its behalf by
mark robson
finance director  thorntons plc 
annual report and accounts 2011
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40
cash flow statements
52 weeks ended 25 june 2011
     group  company 
    52 weeks  52 weeks 52 weeks 52 weeks 
    ended  ended ended ended 
    25 june 2011 26 june 2010 25 june 2011 26 june 2010 
   note £’000 £’000 £’000 £’000
cash flows from operating activities     
cash generated from operations   25a 14823 15123 14588 15052
corporate taxation paid    1392 2255 1392 2251
interest received    12 177 12 177
cash flows generated from operating activities    13443 13045 13208 12978
cash flows from investing activities     
proceeds from sale of property plant and equipment    46 136 46 136
purchase of property plant and equipment    4208 4605 4199 4559
net cash used in investing activities    4162 4469 4153 4423
cash flows from financing activities     
net proceeds from issue of ordinary shares    — 18 — 18
interest paid    1802 1890 1803 1890
capital element of finance lease rental payments    2499 3613 2499 3613
borrowings repaidadvanced    800 2500 800 2500
dividends paid   10 4054 4553 4054 4553
net cash used in financing activities    9155 7538 9156 7538
net increasedecrease in cash and cash equivalents and bank overdrafts  126 1038 101 1017
cash and cash equivalents at beginning of period   25b 1626 588 1553 536
cash and cash equivalents at end of period   25b 1752 1626 1452 1553 wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 41
statement of accounting policies
basis of preparation
thorntons plc “the company” is a company incorporated and domiciled in the uk and is listed on the london stock exchange the address 
of the company’s registered office is thornton park somercotes derbyshire de55 4xj 
these consolidated financial statements have been prepared in accordance with international financial reporting standards “ifrs” and 
international financial reporting interpretations committee “ifric” interpretations as adopted by the eu and with those parts of the companies 
act 2006 applicable to companies reporting under ifrs these consolidated financial statements have been prepared under the historical cost 
convention a summary of the more important group accounting policies adopted in the preparation of the consolidated financial statements is set 
out below together with an explanation of where changes have been made to previous policies on the adoption of new accounting standards in the 
financial year these policies have been consistently applied to all the years presented unless otherwise stated
the preparation of financial statements in conformity with ifrs requires the use of estimates and assumptions that affect the reported amounts 
of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period 
although these estimates are based on management’s best knowledge actual results may ultimately differ a summary of critical accounting 
estimates used in the preparation of the financial statements is set out on page 46
interpretations effective in the period ended 25 june 2011 but which had no significant impact
the following interpretations to existing standards are mandatory for the accounting period ended 25 june 2011 but they have not had 
a significant impact on the group or company
• amendment to ias 27 ‘consolidated and separate financial statements’ 
• amendment to ias 32 ‘financial instruments presentation’ on classification or rights issues 
• amendment to ifrs 1 ‘first time adoption’ on additional exemptions 
•  amendments to ifrs 2 ‘sharebased payments’ on group cashsettled transactions these amendments provide a clear basis to determine the 
classification of share based payment awards in both consolidated and separate financial statements and 
• ifric 18 ‘transfer of assets from customers’
amendments and interpretations that are not yet effective and have not been early adopted which are not expected 
to have a significant impact
the following standards and interpretations have been published and are mandatory for accounting periods beginning on or after 25 june 2011 or later 
periods but which the group and the company have not early adopted and are not expected to have a significant impact on the group or company
• amendment to ias 1 ‘presentation of financial statements’ on other comprehensive income “oci” 
• amendment to ias 12’ income taxes’ on deferred tax 
• ias 19 revised ‘employee benefits’ 
•  ias 24 revised ‘related party disclosures’ this amends the definition of a related party and modifies certain related party disclosure 
requirements for government related entities 
• ias 27 revised ‘separate financial statements’ 
• ias 28 revised ‘associates and joint ventures’ 
• amendments to ias 39 ‘eligible hedged items’ 
• amendments to ifrs 1 ‘first time adoption’ on financial instrument disclosures hyperinflation and fixed dates 
• amendment to ifrs 7 ‘financial instruments disclosures on derecognition’ 
• ifrs 9 ‘financial instruments’ 
• ifrs 10 ‘consolidated financial statements’  thorntons plc 
annual report and accounts 2011
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42
statement of accounting policies continued
basis of preparation continued
amendments and interpretations that are not yet effective and have not been early adopted which are not expected 
to have a significant impact continued
• ifrs 11 ‘joint arrangements’ 
• ifrs 12 ‘disclosures of interests in other entities’ 
• ifrs 13 ‘fair value measurement’ 
• amendment to ifric 14 ‘ias 19 – the limit on a defined benefit assets minimum funding requirements and their interaction’ and 
• ifric 19 ‘extinguishing financial liabilities with equity instruments’
income and cash flow statements
the income and cash flow statements for the prior year have been represented to show a consistent approach to that used in the current year 
bank arrangement fees previously included in operating expenses are now shown in finance costs and adjustments to the onerous lease and 
impairment provisions are shown as exceptional neither adjustment is material to the financial statements and both relate to representation only 
no prior year adjustment is therefore considered necessary
basis of consolidation
the consolidated financial statements incorporate the results of the company and each of its subsidiaries for the financial year ended 25 june 2011 
subsidiaries are entities controlled by the group where control is deemed to exist when the group has the power directly or indirectly to govern the 
financial and operating policies of an entity so as to obtain benefits from its activities the results of subsidiaries are included in the consolidated 
financial statements from the date the control commences until the date that control ceases
the purchase method of accounting is used to account for the acquisition of subsidiaries by the group the cost of an acquisition is measured as 
the fair value of the assets given equity instruments issued and liabilities incurred or assumed at the date of exchange identifiable assets acquired 
and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date 
irrespective of the extent of any minority interest the excess of the cost of acquisition over the fair value of the group’s share of the identifiable 
net assets acquired is recorded as goodwill if the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired the 
difference is recognised directly in the income statement
intercompany transactions balances and unrealised gains on transactions between group companies are eliminated unrealised losses are also 
eliminated but considered an impairment indicator of the asset transferred accounting policies of subsidiaries have been changed where necessary 
to ensure consistency with the policies adopted by the group
property plant and equipment
property plant and equipment are stated at cost less accumulated depreciation cost comprises the purchase price of property plant and 
equipment together with any incidental costs of acquisition
subsequent costs are included in the asset’s carrying value or recognised as a separate asset as appropriate only when it is probable that future 
economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably all other repairs and 
maintenance expenditure is charged to the income statement as incurred
all property plant and equipment other than land and assets in the course of construction are depreciated to write their cost down to residual 
value over their remaining useful lives by equal annual instalments as follows
long leasehold and freehold premises 50 years
short leasehold land and buildings  period of the lease
other plant vehicles and equipment 3–15 years
retail fittings and equipment  up to 10 years
the assets’ residual values and useful lives are reviewed and adjusted if appropriate at each balance sheet date the need for an impairment 
writedown is assessed by comparison of the carrying value of the asset against the higher of its net realisable value or value in use
gains and losses on disposals are determined by comparing the proceeds net of disposal costs with the carrying amount and are recognised 
within operating expenses in the income statement wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 43
intangible assets
acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring into use the specific software 
these costs are amortised over their estimated useful lives three to five years
costs associated with maintaining computer software programmes are recognised as an expense as incurred costs that are directly associated with 
the production of identifiable and unique software products controlled by the group and that will probably generate economic benefits exceeding 
costs beyond one year are recognised as intangible assets
computer software development costs are recognised as assets and are amortised over their estimated useful lives not exceeding five years
employee share option schemes
where share options are granted to employees as part of their remuneration the fair value of options granted is recognised as an employee expense 
in the income statement with a corresponding increase in equity the fair value is measured at the grant date and expensed through the income 
statement over the period during which the employees become unconditionally entitled to the options the amount recognised in the income 
statement is adjusted at each balance sheet date for the expected and actual number of options vesting with a corresponding entry in equity
the fair value of the options is measured using a blackscholes option valuation model for options with nonmarket performance conditions and 
a monte carlo model for options with market performance conditions
the proceeds received net of any directly attributable transaction costs are credited to share capital and share premium when the options are 
exercised exercised options are equity settled
own shares held by the employee share ownership plan “esop” trusts are carried at cost and disclosed within note 24
investments in subsidiaries
investments in subsidiaries are stated at cost provision being made where appropriate for impairment assessed by comparing the carrying value 
to the higher of net realisable value or value in use
inventories
inventories are stated at the lower of cost and net realisable value cost includes materials direct labour and an attributable proportion of 
manufacturing overheads based on normal operating capacity according to the stage of production reached and valued on a first in first 
out basis net realisable value is the estimated value which would be realised after deducting all costs of completion marketing and selling 
provision is made to reduce the cost to net realisable value having regard to the age and condition of inventory as well as its anticipated saleability
trade receivables
trade receivables are recognised initially at fair value and subsequently carried net of provisions for impairment a provision for impairment is 
established where there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the 
receivables significant financial difficulties of the debtor probability that the debtor will enter bankruptcy or financial reorganisation and default or 
delinquency in payments more than 60 days overdue are considered indicators that the trade receivable is impaired the amount of the provision 
is the difference between the asset’s carrying amount and the present value of estimated future cash flows the carrying amount of the asset is 
reduced through the use of an allowance account and the amount of the loss is recognised in the income statement within operating expenses 
when a trade receivable is uncollectible it is written off against the allowance account for trade receivables subsequent recoveries of amounts 
previously written off are credited against operating expenses in the income statement
cash and cash equivalents
cash and cash equivalents include cash in hand deposits on call with banks other shortterm liquid investments with maturities of three months 
or less and bank overdrafts bank overdrafts are shown within borrowings in current liabilities on the balance sheet
trade and other payables
trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method
borrowings
borrowings are recognised initially at fair value net of transaction costs subsequent measurement is based on amortised cost and any difference 
between the proceeds net of transaction costs and the redemption value is recognised in the income statement over the period of the borrowings 
using the effective interest rate method if borrowings are renegotiated before the end of the their term remaining nonamortised transaction costs 
are written off to the income statement thorntons plc 
annual report and accounts 2011
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44
statement of accounting policies continued
borrowings continued
borrowing facilities are provided by a number of different banks and are subject to continued covenant compliance these covenants being 
measured half yearly in line with the annual and interim reporting cycles use of these facilities is generally short term in nature with loan maturity 
dates ranging from less than one week to several months borrowings are actively monitored in order to manage their cost and level of exposure to 
each individual bank which in the normal course of business results in the settlement of these liabilities and the separate drawdown of new loans 
within twelve months of the balance sheet date in light of this these borrowings are classified as current
current taxation
the charge for current tax is based on the results for the period after making allowance for nonassessable or disallowable items it is calculated 
using rates of tax that have been enacted at the balance sheet date
deferred taxation
deferred taxation is recognised using the liability method on temporary differences arising between the tax bases of assets and liabilities and their 
carrying amounts in the consolidated financial statements
deferred tax liabilities are recognised in full for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable 
that taxable profits will be available against which deductible temporary differences can be utilised however if the deferred tax arises from the initial 
recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor 
taxable profit it is not accounted for deferred taxation is measured based on tax rates and laws enacted or substantively enacted at the balance sheet 
date and are expected to apply when the related deferred income tax asset is realised or deferred income tax liability is settled
deferred tax assets and liabilities are offset when there is a legal enforceable right to set off current tax assets against current tax liabilities and when 
they relate to income taxes levied by the same taxation authority and the group intends to settle its current tax assets and liabilities on a net basis
provisions
a provision is recognised in the balance sheet when the group has a legal or constructive obligation whereby as a result of a past event it is 
probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the 
obligation if the effect is material provisions are determined by discounting the expected future cash flows at a pretax rate that reflects current 
market assessments of the time value of money and where appropriate the risks specific to the liability
share capital
ordinary shares are classified as equity
incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction net of tax from the proceeds 
when applicable
revenue
revenue comprises the amounts receivable for goods and services provided outside the group in the normal course of business net of trade 
discounts and value added tax
retail sales and allowances are recognised at the date of the transaction with consumers in addition provisions are made for expected returns as 
necessary for sales promotion purposes thorntons plc operates a variety of schemes that give rise to goods being sold at a discount to the standard 
retail price these include staff discounts and the redemption of promotional vouchers revenue is adjusted to show sales net of all related discounts
wholesale sales including sales to franchise outlets are recognised either when goods are dispatched to customers or the customer has accepted the 
products depending on the sales channel provision is made for expected returns and allowances as necessary including discounts and rebates
segmental reporting
following the adoption of ifrs 8 ‘operating segments’ segments are reported in a manner consistent with the internal reporting provided to the 
chief operating decision maker “codm” which has been identified as the executive committee “executive” which comprises the executive 
directors and the directors of retail and human resources the codm is responsible for allocating resources and assessing performance of the 
operating segments wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 45
other operating income
other operating income comprises amounts receivable in respect of licensing income franchise fees and rental income net of value added 
tax where applicable licence income and rental income are recognised on an accruals basis in accordance with the risks and rewards of the 
relevant agreements franchise fees are nonrefundable and are charged in return for the initial grant of a fiveyear franchise and the income is 
therefore held as deferred income on the balance sheet and released to the income statement on a straightline basis over this fiveyear period 
fees in respect of subsequent renewals are likewise amortised over the renewal period
postretirement benefits
defined benefit pension scheme
the retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation and unfunded 
liabilities as reduced by the fair value of defined benefit scheme assets this scheme was closed to new entrants with effect from august 2002
the defined benefit obligation is calculated annually by independent actuaries using the projected unit method the present value of the defined 
benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high quality corporate bonds that are 
denominated in the currency in which the benefits will be paid and that have terms to maturity approximating to the terms of the related 
pension liability
with effect from 6 april 2009 benefits under the scheme for active members were amended for service from that date from the previous basis 
of final salary accrual to a career average revalued earnings “care” basis
actuarial gains and losses are recognised in full in the period in which they occur they are recognised directly in equity and are presented in the 
statement of comprehensive income other income and administrative expenses associated with the defined benefit scheme are recognised in the 
income statement
the contributions made by the employees and the group are held in a trust fund separate from the group’s finances
defined contribution pension scheme
the group also operates a defined contribution pension scheme which requires contributions to be made to a separately administered fund 
contributions to the fund are determined as a percentage of employees’ earnings and are charged to the income statement as incurred
foreign currencies
transactions in foreign currencies are translated in sterling at the exchange rate ruling at the date of transaction monetary assets and liabilities 
denominated in foreign currencies are retranslated to sterling at the exchange rates ruling at the balance sheet date and any exchange differences 
arising are taken to the income statement
finance leases
leases are classified as finance leases where the terms of the lease transfer substantially all the risks and rewards of ownership to the group 
all other leases are classified as operating leases
property plant and equipment held under finance leases is capitalised in the balance sheet at fair value of leased assets or if lower the present 
value of the minimum lease payments assets are depreciated over the shorter of their lease term and their expected useful lives the interest 
element of leasing payments represents a constant proportion of the capital balance outstanding and is charged to the income statement over 
the period of the lease
operating leases
the costs of all operating leases are charged against operating profit on a straightline basis at existing rental levels incentives to sign leases 
including reverse premiums and rentfree periods are treated as deferred income and are credited to the income statement in equal instalments 
over the term of the lease
rental income from operating leases is recognised on a straightline basis over the period of the lease at current rental levels
new store expenditure
pretrading expenditure on new stores is charged to the income statement as incurred thorntons plc 
annual report and accounts 2011
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46
statement of accounting policies continued
derivatives and other financial instruments
derivatives are initially recognised at fair value on the date the contract is entered into and are subsequently remeasured at fair value where appropriate 
the group enters into derivatives in order to minimise relevant currency and interest rate exposure these are designated as hedges of the cost of 
a highly probable forecast transaction or commitment “cash flow hedging instrument”
to qualify for hedge accounting the group is required at inception to document in advance the relationship between the item being hedged 
and the hedging instrument and to document and reassess at each reporting date whether the hedge will be highly effective in offsetting changes 
in cash flows of the hedged item on an ongoing basis
the effective portion of changes in the fair value of cash flow hedging derivatives is recognised in other comprehensive income within the 
hedging reserve the change in fair value relating to the ineffective portion of the hedge is recognised in the income statement immediately within 
finance costs amounts accumulated within equity are recycled to the income statement in the periods when the hedged item will affect profit
when a hedging instrument expires or is sold or no longer meets the criteria for hedge accounting any cumulative gain or loss on the hedging 
instrument previously recognised in equity is retained in equity and is recognised when the forecast transaction is ultimately recognised in the 
income statement if the hedged transaction is no longer expected to occur the cumulative gain or loss that was recognised in equity is immediately 
transferred to the income statement
the group seeks to limit its exposure to volatility in raw material and energy costs by buying these forward where possible for a period 
of up to a year under ias 39 the group takes advantage of the “own use” exemption and does not fair value these contracts
grants
grants and other contributions towards the cost of property plant and equipment are included in payables as deferred income and credited to the 
income statement over the life of the asset and recognised at fair value where there is a reasonable assurance the grant will be received and that 
the group will comply with conditions of the grant
exceptional items
exceptional items are material items that derive from events or transactions which individually or if of a similar type in aggregate need to be 
disclosed by virtue of their size or incidence if the financial statements are to give a true and fair view
dividends
final dividends are recognised as a liability in the period in which they are approved by the company’s shareholders interim dividends are 
recognised when they are paid
net debt
net debt is cash and cash equivalents bank and other loans and finance leases
research and development
expenditure in respect of research and development is written off against profits in the period in which it is incurred unless the development costs 
meet the criteria for capitalisation under ias 38 ‘intangible assets’
critical accounting estimates and judgements
provisions
the group makes judgements to determine whether there is objective evidence which indicates that inventory should be held at net realisable 
value store dilapidation provision is estimated based on past experience of cash outflows the group provides against onerous leases where there 
is doubt over future estimated trading cash flows and a discount rate is used in this calculation a 1 change in this discount rate would result 
in a £120000 change in the provision at year end
retirement benefit obligation
the valuation of the retirement benefit obligation is dependent upon a series of assumptions the key ones being discount rates mortality rates 
investment returns and inflation on the rate of salary and pension increases these judgements and estimates are determined after taking into 
account the requirements of ias 19 ‘retirement benefit obligations’ and after taking expert advice from the group actuaries these are set out 
in note 21 to the financial statements wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 47
notes to the financial statements
1 segmental reporting
the executive reviews the group’s internal reporting in order to assess performance and allocate resources the operating segments of the group 
have been determined on this basis
all revenue arises from uk operations to external customers and therefore the executive does not consider the business from a geographic 
perspective only an operational one two reportable segments “retail” which incorporates own stores franchise and thorntons direct 
and “sales  operations” “so” encompassing the commercial trading channel and manufacturing operations have been identified 
one commercial customer now represents greater than 10 of group revenue with revenue in the period of £273 million 2010 £178 million
the executive assesses the performance of the operating segments based on a measure of operating profit costs specific to head office and 
finance costs are not included in the result for each operating segment as these costs are not managed on a segmented basis
total segment assets exclude it assets nontrade receivables and cash and cash equivalents as these are managed centrally assets are 
substantially located in the uk
  52 weeks ended 25 june 2011    52 weeks ended 26 june 2010  
  retail so central total retail so central total 
  £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
total revenue 139448 78807 — 218255 151947 62606 — 214553
depreciation and amortisation 5481 5206 1531 12218 3994 5239 2032 11265
segment operating profit 7811 15362 — 23173 9340 13994 — 23334
head office costs    17163    14977
exceptional items 4334 — 824 5158 775 — — 775
operating profit    852    7582
net finance costs    1923    1445
lossprofit before taxation    1071    6137
additions to noncurrent assets 
other than deferred tax assets 2226 2232 1429 5887 2626 2639 435 5700
total assets 12721 83717 13808 110246 16888 79363 13729 109980
2 exceptional items 
exceptional items comprise
        52 weeks 52 weeks 
        ended ended 
         25 june 2011 26 june 2010 
        £’000  £’000
impairment and onerous lease charges       4334 775
outsourcing costs       687 —
refinancing costs       386 —
total exceptional items       5407 775
tax credit attributable to exceptional items       992 217
total exceptional items after tax       4415 558
impairment and onerous lease charges
as a result of the performance of retail own stores during the year significant impairment and onerous lease charges have been required 
further detail of the impairment charge can be found in note 12 and the onerous lease charge in note 19
outsourcing costs
on 27 june 2011 the group announced the outsourcing of its distribution and warehousing functions as the decision to sign the contract in an 
agreed form had been made and approved by the board prior to the year end date exceptional transition costs relating to this contract have been 
included in the accounts for the year ended 25 june 2011 thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
48
notes to the financial statements continued
2 exceptional items continued
refinancing costs
on 24 june 2011 the group agreed and signed new committed bilateral revolving credit facilities totalling £575 million with a maturity date of 
october 2015 to replace the existing bank facilities of £525 million at 25 june 2011 loans against the existing facilities were in place expiring 
by 28 june 2011 at which point the new facilities commenced these facilities continue to be unsecured 
the associated exceptional costs relate to professional fees for the arrangement of the new bank facility agreements and the writeoff of remaining 
unamortised arrangement fees of the previous facilities which were due to expire in august 2012
tax charge attributable to exceptional items
this is the tax charge arising in relation to the exceptional items which are an allowable deduction for tax and it has been calculated at the 
uk standard corporation tax rate of 275
3 other operating income
        52 weeks  52 weeks 
        ended  ended 
        25 june 2011 26 june 2010 
        £’000 £’000
franchise fee income       139 158
licensing income       1297 973
rent receivable       238 255
        1674 1386
4 finance income
        52 weeks  52 weeks 
        ended  ended 
        25 june 2011 26 june 2010 
        £’000 £’000
interest on bank deposits       — 1
net exchange differences on foreign currency payments      — 35
other finance income       11 176
        11 212
5 finance costs
        52 weeks  52 weeks 
        ended  ended 
        25 june 2011 26 june 2010 
        £’000 £’000
interest payable on bank borrowings       653 328
arrangement fee amortisation on bank borrowings      527 328
net exchange differences on foreign currency payments      9 —
interest payable on finance leases       356 448
provisions unwinding of discount rate       42 —
other finance costs       347 553
        1934 1657
arrangement fee amortisation on bank borrowings includes exceptional costs of £249000 2010 £nil see note 2 wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 49
6 profitloss before taxation
        52 weeks  52 weeks 
        ended  ended 
        25 june 2011 26 june 2010 
       note £’000 £’000
the following items have been included in arriving at profit before taxation   
employee benefits expense      27 64930 66583
oneoff restructuring costs – redundancies       625 639
store closure costs       574 125
cost of inventories recognised as an expense      72229 63137
onerous lease charges   
– unwinding of existing provisions       343 —
– new provisions during the year       2537 605
depreciation of property plant and equipment     12  
– impairment charges       1797 170
– depreciation on owned assets excluding impairment charges     5389 6863
– depreciation on assets held under finance leases      3390 2093
amortisation of intangible assets      11 1642 2139
lossprofit on disposal of property plant and equipment      148 76
operating lease rentals payable      28  
– land and buildings       20928 21447
– other       1074 958
repairs and maintenance expenditure on property plant and equipment     5539 4942
trade receivables impairment charge      18  164 12
government grant income       21 21
product research and development       369 453
services provided by the company’s auditors
during the period the group obtained the following services from the company’s auditors as detailed below
        52 weeks  52 weeks 
        ended  ended 
        25 june 2011 26 june 2010 
        £’000 £’000
audit services  
– audit of the parent and consolidated accounts      88 93
– audit of thorntons plc subsidiaries pursuant to legislation     5 5
– other services supplied pursuant to legislation      32 28
advice in respect of the company’s pension scheme      — 15
        125 141 thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
50
notes to the financial statements continued
7 taxation
analysis of charge in period
        52 weeks  52 weeks 
        ended  ended 
        25 june 2011 26 june 2010 
       note £’000 £’000
current tax  
– current period       339 2107
– adjustment in respect of prior period       89 280
        250 1827
deferred tax      20
– current period       436 133
– adjustment in respect of prior period       20 89
– effect of change in tax rate       612 —
taxation creditcharge       818 1783
tax on items charged to equity
        52 weeks  52 weeks 
        ended  ended 
        25 june 2011 26 june 2010 
        £’000 £’000
deferred tax charge on sharebased payments      — 59
deferred tax credit on actuarial loss       617 1131
effect of changes in the rate of taxation       484 —
        133 1072
tax reconciliation
the tax for the period is higher 2010 higher than the standard rate of corporation tax in the uk of 275 2010 28 the differences are 
explained below
        52 weeks  52 weeks 
        ended  ended 
        25 june 2011 26 june 2010 
        £’000 £’000
lossprofit on ordinary activities before tax      1071 6137
lossprofit on ordinary activities multiplied by rate of corporation tax in the uk of 275 2010 28  295 1718
effects of  
– adjustments to tax provision in respect of prior periods      109 191
– expenses not deductible for tax purposes       173 257
– effect of other timing differences       1 1
– effect of reduction in tax rate       588 —
– effect of change in law concerning ibas       — —
total taxation       818 1783
a number of changes to the uk corporation tax system were announced in the june 2010 budget statement and in subsequent announcements 
the finance act no 3 2011 includes legislation to reduce the main rate of corporation tax from 28 to 26 from 1 april 2011 and further 
reductions to the main rate are proposed to reduce the rate by 1 per annum to 23 by 1 april 2014 these further reductions had not been 
substantively enacted at the balance sheet date and therefore are not included in these financial statements wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 51
8 profit for the financial period
the parent company has not prepared its own income statement as permitted by section 408 of the companies act 2006 of the group profit 
attributable to shareholders a profit after tax of £4559000 2010 profit of £3200000 has been dealt with in the accounts of the company
9 earningsloss per share
basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary 
shares outstanding during the period excluding those held in the esop trusts which are treated as cancelled
for diluted earnings per share the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential 
ordinary shares dilutive potential ordinary shares are those share options granted to employees where the exercise price is less than the average 
market price of the company’s ordinary shares during the period
reconciliations of the earnings and weighted average number of shares used in the calculations are set out below
  52 weeks ended 25 june 2011  52 weeks ended 26 june 2010 
    earnings basic earnings diluted earnings earnings basic earnings diluted earnings 
    £’000 per share per share £’000 per share per share
profit before exceptional items   4162 62p 62p 4912 73p 73p
effect of exceptional items   4415 66p 66p 558 08p 08p
lossprofit attributable to owners of the parent  253 04p 04p 4354 65p 65p
        2011 2010
weighted average number of ordinary shares      66955838 66948474
dilutive effect of shares from share options       536726 7440
fully diluted weighted average number of ordinary shares     67492564 66955914
10 ordinary dividends
        2011 2010 
group and company       £’000 £’000
final dividend paid for the 52 weeks ended 26 june 2010 of 410p 
52 weeks ended 27 june 2009 485p       2748 3247
interim dividend paid in respect of the 52 weeks ended 25 june 2011 of 195p 
52 weeks ended 26 june 2010 195p       1306 1306
amounts recognised as distributions to owners of the parent     4054 4553
in addition the directors are proposing a final dividend in respect of the year ended 25 june 2011 of 025p per share which will absorb 
an estimated £167000 of shareholders’ funds it will be paid on 25 november 2011 to shareholders who are on the register of members 
on 28 october 2011
the trusts operating the long term incentive plan scheme “ltip 2007” have fully waived dividends on the 504610 2010 504610 shares held at 
25 june 2011 and all but 001p per share on the 905070 2010 905070 shares held in respect of the 2001 executive share option scheme thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
52
notes to the financial statements continued
11 intangible assets
         computer 
         software 
group and company        £’000
cost 
at 27 june 2010        26328
additions – externally acquired        983
disposals        —
at 25 june 2011        27311
accumulated amortisation 
at 27 june 2010        22877
charge for the year        1642
disposals        —
at 25 june 2011        24519
net book amount at 25 june 2011        2792
net book amount at 26 june 2010        3451
         computer 
         software 
group and company        £’000
cost 
at 28 june 2009        25797
additions – externally acquired        763
disposals        232
at 26 june 2010        26328
accumulated amortisation 
at 28 june 2009        20947
charge for the year        2139
disposals        209
at 26 june 2010        22877
net book amount at 26 june 2010        3451
net book amount at 27 june 2009        4850
intangible assets held under finance leases were valued at £459000 2010 £857000
amortisation costs for intangible assets directly involved in production are recognised in cost of sales within the income statement totalling 
£617000 2010 £858000 all other amortisation costs are recognised within operating expenses wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 53
12 property plant and equipment
    land and buildings   
     long   other plant   
     leasehold short vehicles and  retail fittings  
     and freehold leasehold equipment and equipment total 
group    £’000 £’000 £’000 £’000 £’000
cost     
at 27 june 2010    38906 8200 84221 53307 184634
additions at cost    6 216 2678 2004 4904
disposals    — 180 409 1755 2344
at 25 june 2011    38912 8236 86490 53556 187194
accumulated depreciation     
at 27 june 2010    11459 5777 62631 46234 126101
charge for the year    886 957 4873 3860 10576
disposals    — 150 397 1603 2150
at 25 june 2011    12345 6584 67107 48491 134527
net book amount at 25 june 2011    26567 1652 19383 5065 52667
    land and buildings   
     long   other plant   
     leasehold short vehicles and  retail fittings  
     and freehold leasehold equipment and equipment total 
group    £’000 £’000 £’000 £’000 £’000
cost     
at 28 june 2009    38845 8044 82237 52334 181460
additions at cost    61 217 2812 1847 4937
disposals    — 61 828 874 1763
at 26 june 2010    38906 8200 84221 53307 184634
accumulated depreciation     
at 28 june 2009    10576 5262 58509 44354 118701
charge for the year    883 567 4939 2737 9126
disposals    — 52 817 857 1726
at 26 june 2010    11459 5777 62631 46234 126101
net book amount at 26 june 2010    27447 2423 21590 7073 58533
net book amount at 27 june 2009    28269 2782 23728 7980 62759 thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
54
notes to the financial statements continued
12 property plant and equipment continued
    land and buildings    
     long   other plant   
     leasehold short vehicles and  retail fittings  
     and freehold leasehold equipment and equipment total 
company    £’000 £’000 £’000 £’000 £’000
cost     
at 27 june 2010    884 8161 84221 53162 146428
additions at cost    6 216 2678 1995 4895
disposals    — 180 409 1755 2344
at 25 june 2011    890 8197 86490 53402 148979
accumulated depreciation     
at 27 june 2010    192 5746 62631 46090 114659
charge for the year    23 955 4873 3859 9710
disposals    — 150 397 1603 2150
at 25 june 2011    215 6551 67107 48346 122219
net book amount at 25 june 2011    675 1646 19383 5056 26760
    land and buildings   
     long   other plant   
     leasehold short vehicles and  retail fittings  
     and freehold leasehold equipment and equipment total 
company    £’000 £’000 £’000 £’000 £’000
cost     
at 28 june 2009    868 8005 82237 52189 143299
additions at cost    16 217 2812 1847 4892
disposals    — 61 828 874 1763
at 26 june 2010    884 8161 84221 53162 146428
accumulated depreciation     
at 28 june 2009    171 5233 58509 44212 108125
charge for the year    21 565 4939 2735 8260
disposals    — 52 817 857 1726
at 26 june 2010    192 5746 62631 46090 114659
net book amount at 26 june 2010    692 2415 21590 7072 31769
net book amount at 27 june 2009    697 2772 23728 7977 35174
depreciation costs for property plant and equipment directly involved in production are recognised within cost of sales within the income statement 
totalling £4623000 2010 £4619000 all other depreciation costs are recognised within operating expenses
property plant and equipment held under finance leases have the following net book amount
    land and    land and   
    buildings –  other plant  buildings – other plant  
    long leasehold  vehicles and retail fittings long leasehold vehicles and retail fittings 
    and freehold equipment and equipment and freehold equipment and equipment 
    2011 2011 2011 2010 2010 2010 
group and company   £’000 £’000 £’000 £’000 £’000 £’000
cost    784 12512 13300 784 10741 13879
aggregate depreciation   290 8337 11750 237 7746 11153
net book amount   494 4175 1550 547 2995 2726 wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 55
12 property plant and equipment continued
assets are reviewed for impairment on a regular basis and a provision made where necessary a discounted cash flow is calculated for each retail store 
including attributable overheads using the group’s weighted average cost of capital the net book value of assets attributable to the retail store 
is impaired to the extent that the net present value of the cash flows is lower than the net book value
the impairment charge for the year of £1797000 2010 £170000 has been recognised within the depreciation charge for the year and has 
been classified as an exceptional item see note 2 
13 investment in subsidiaries
        2011 2010 
company       £’000 £’000
cost  
at 25 june 2011 and 26 june 2010       27369 27369
provisions for impairment  
at 25 june 2011 and 26 june 2010       1 1
net book value       27368 27368
the company owns the whole of the issued ordinary share capital of the following principal operating subsidiaries to avoid a statement of 
excessive length details of investments in dormant companies included in the consolidated accounts have been omitted a full list of subsidiaries 
can be obtained upon request from the company’s registered office
subsidiary  country of incorporation principal activity country of operation
strand court properties limited  england property investment united kingdom
thorntons jersey limited  jersey retail trading company jersey
the directors believe that the carrying value of the investments is supported by their underlying net assets
14 inventories
     group  company 
      2011 2010 2011 2010 
      £’000 £’000 £’000 £’000
raw materials     3834 3216 3834 3216
work in progress     3666 3193 3666 3193
finished goods and goods for resale     29518 23984 29510 23973
      37018 30393 37010 30382
during the year £253000 2010 £159000 relating to the writedown of inventory to net realisable value in prior years was released and 
reflected in cost of sales
15 trade and other receivables
     group  company 
      2011 2010 2011 2010 
      £’000 £’000 £’000 £’000
trade receivables     7273 7660 7273 7660
less provision for impairment     446 829 446 829
net trade receivables     6827 6831 6827 6831
amounts owed by group undertakings     — — — 25
other receivables     535 593 534 593
prepayments and accrued income     8127 8553 8113 8538
corporation tax     528 — 1246 —
      16017 15977 16720 15987 thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
56
notes to the financial statements continued
15 trade and other receivables continued
the group’s exposure to credit risk and impairment losses related to trade receivables is disclosed in note 18 trade receivables are denominated 
in sterling
amounts owed by other group companies are unsecured interest free and have no fixed repayment terms
prepayments and accrued income include £5746000 2010 £5300000 of property related rent rates insurances and surcharge prepayments
16 trade and other payables 
     group  company 
      2011 2010 2011 2010 
      £’000 £’000 £’000 £’000
trade payables     15072 14169 15072 14169
other taxation and social security payable     6585 2639 6575 2636
amounts owed to other group companies     — — 283 4594
other payables     176 109 176 109
accruals and deferred income     10624 8473 10608 8457
      32457 25390 32714 29965
amounts owed to other group companies are unsecured interest free and have no fixed repayment terms
within accruals and deferred income is a balance in respect of government grants within the group and company of £21035 2010 £21035 
primarily relating to a grant received in the year ended june 2004 for the relocation of toffee manufacturing operations from the original belper site 
to thornton park this government grant totalling £400000 is being released to the income statement on a straightline basis over 20 years
17 borrowings
     group  company 
      2011 2010 2011 2010 
current     £’000 £’000 £’000 £’000
bank loans and overdrafts due within one year or on demand
– unsecured bank loans and overdrafts     20900 21700 20900 21700
– finance lease obligations     1986 2390 1986 2390
      22886 24090 22886 24090
     group  company 
      2011 2010 2011 2010 
noncurrent     £’000 £’000 £’000 £’000
finance lease obligations     3355 3557 3355 3557
bank loans and overdrafts are denominated in sterling and incur interest based on libor or uk base rates 
the effective interest rates at the balance sheet dates were as follows
        2011 2010 
         
bank borrowings       255 125
finance leases       201 324
the group’s borrowings are all denominated in sterling wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 57
17 borrowings continued
maturity of financial liabilities
the table below analyses the group’s financial liabilities excluding trade and other payables which are all less than one year and shown in note 
16 into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date the amounts 
disclosed in the table below are the contractual undiscounted cash flows
  2011  2010 
     finance   finance  
    debt leases total debt leases total 
    £’000 £’000 £’000 £’000 £’000 £’000
less than one year   20907 2186 23093 21704 2651 24355
between one and two years   — 1647 1647 — 3098 3098
between two and five years   — 1906 1906 — 711 711
    20907 5739 26646 21704 6460 28164
the group entered into new committed bank facilities on 24 june 2011 totalling £575 million and expiring in october 2015 debt due in less 
than one year reflects the ongoing utilisation on a shortterm basis of four year revolving facilities described in the following borrowing facilities 
note and in line with group accounting policy all loans in place at 25 june 2011 are classified as current on the basis that they will be settled 
within twelve months
borrowing facilities
the group must comply with the principal lending covenants in respect of interest cover net debt to earnings and earnings before interest tax 
depreciation amortisation and rent “ebitdar” to fixed costs ratio for both interest cover and net debt to earnings earnings is defined as 
earnings before interest tax depreciation and amortisation “ebitda” with the commencement of new borrowing facilities on 24 june 2011 
the covenants are tested semiannually with the first test on 7 january 2012
the group has the following undrawn committed floating rate borrowing facilities available at 25 june 2011
        2011 2010 
        £’000 £’000
expiring within one year       5000 13300
expiring between two and five years       36600 52500
        41600 65800
the facility in place at 25 june 2011 that expires within one year is an overdraft facility which is renewable annually those expiring between 
two and five years are part of the new four year revolving facilities their utilisation being managed via regular review during their term all these 
facilities incur commitment fees at market rates 
the minimum lease payments under finance leases fall due as follows
  2011  2010 
    minimum  future present value  minimum future present value 
    lease finance of finance lease  lease finance of finance lease 
    payments charges liabilities payments  charges liabilities 
    £’000 £’000 £’000 £’000 £’000 £’000
less than one year   2186 200 1986 2651 261 2390
between one and two years   1647 117 1530 3098 226 2872
between two and five years   1906 81 1825 711 26 685
    5739 398 5341 6460 513 5947
the fair value of obligations under finance leases equates to their carrying value as the interest rates being paid on these are substantially those 
prevailing in the open market
the fair values of other financial instruments are not materially different to their carrying value due to their relatively short maturity or small size 
the group does not have any financial instruments that are measured in the balance sheet at fair value thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
58
notes to the financial statements continued
18 financial instruments
the group’s financial instruments comprise cash and cash equivalents bank loans finance leases and other items such as trade payables and 
trade receivables that arise from its operations the principal function of these financial instruments is to raise finance for the group’s operations 
the group’s activities expose it to a variety of financial risks which relate to interest rates liquidity capital pricing and credit the group’s overall 
risk management programme focuses on the potential movements in interest rates pricing in particular raw material costs and credit and 
on minimising the potential adverse effects on the group’s financial performance risk management is carried out by both the finance and 
procurement teams under policies approved by the board the group uses either forward purchasing or derivative financial instruments 
to hedge certain risk exposures
interest rate risk 
funding received from banks is at floating rates fixed in the short term for the duration of each loan floating rate borrowings are exposed to the 
risk of rising interest rates given the seasonality of the group’s trading the level of bank borrowings fluctuates during each financial year particularly 
in the lead up to the christmas and easter trading periods where borrowings increase on a shortterm basis this leaves a level of core bank 
borrowings which is monitored and assessed for potential movements in interest rates and the cost of using hedging instruments to manage the 
interest rate risk management estimates that a 1 movement in interest rates would result in post tax increasedecrease of around £02 million 
borrowings of a longerterm nature such as those required to fund fixed asset acquisitions are funded through finance leases such that the total 
finance lease exposure remains broadly constant from year to year and to this extent provides an element of fixed interest borrowing
liquidity risk 
the group uses banking facilities and finance leases as its primary sources of funding and is therefore exposed to liquidity risk the group has 
historically been very cash generative the bank position and headroom of the group is monitored daily and capital expenditure has to be approved 
in accordance with its policy which defines the level of authorisation required at the end of the financial year the group has a shortterm 
committed overdraft facility of £5 million
capital risk
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 adjust the amount of dividends paid to shareholders return capital to 
shareholders issue new shares or sell assets to reduce debt further details on the group’s borrowings and the dividends proposed by the group 
are outlined in the finance director’s report on page 12 and the chairman’s statement on pages 2 and 3
consistent with others in the industry the group monitors capital on the basis of gearing ratio this ratio is calculated as net debt divided by total 
equity net debt is calculated as total borrowings including current and noncurrent borrowings as shown in the balance sheet less cash and 
cash equivalents total equity is taken from shareholders’ equity attributable to owners of the parent as shown in the balance sheet
the group’s aim is to seek to maintain or reduce the level of net debt and improve operating cash flow the gearing ratios at 25 june 2011 
and 26 june 2010 were as follows
        2011 2010 
        £’000 £’000
total borrowings       26241 27647
less cash and cash equivalents       1752 1626
net debt       24489 26021
equity       19309 25968
gearing ratio       1268 1002
price risk 
the group seeks to limit its exposure to volatility in raw material and energy costs by buying these forward where possible for a period of up to 
a year under ias 39 the group takes advantage of the “own use” exemption and does not fair value these contracts
foreign currency risk 
the group’s exposure to foreign currency risk on trading transactions is not significant however hedging arrangements are made in respect of the 
largest purchase contracts when placed it is the group’s policy to hedge significant fixed asset or capital transactions where appropriate wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 59
18 financial instruments continued
credit risk 
retail sales represent a large proportion of the group’s sales and present no credit risk as they are made for cash where credit sales are concerned 
the group operates effective credit control procedures in order to minimise exposure to overdue debts and where possible also carries insurance 
against the cost of bad debts the insurance counterparties involved in transactions are limited to high quality financial institutions
at 25 june 2011 there were no significant concentrations of credit risk the maximum exposure to credit risk is represented by the carrying 
amount of each financial asset included in the balance sheet
the carrying amount of financial assets representing the maximum credit exposure at the reporting date was
        2011 2010 
        £’000 £’000
trade receivables       6827 6831
cash and cash equivalents       1752 1626
the carrying amounts of the group’s trade and other receivables are denominated in sterling 
the maximum exposure to credit risk for trade receivables at the reporting date by geographic region was
        2011 2010 
        £’000 £’000
uk        6649 6729
europe       79 56
rest of world       99 46
        6827 6831
the maximum exposure to credit risk for trade receivables at the reporting date by sales channel was
        2011 2010 
        £’000 £’000
franchise       1024 1415
commercial       4866 4412
thorntons direct       187 102
international       374 591
central       376 311
        6827 6831
the ageing of gross trade receivables at the reporting date was
     2011  2010 
      gross impaired gross impaired 
      £’000 £’000 £’000 £’000
current     6543 — 6149 —
30 days past due     217 — 366 —
60 days past due     4 — 57 —
more than 60 days past due     509 446 1088 829
      7273 446 7660 829
a significant proportion of the receivables less than 60 days past due relates to large corporate customers for which there is no objective evidence 
that the group will not be able to recover amounts owing and therefore no impairment has been made past due not impaired receivables total 
£284000 2010 £682000 thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
60
notes to the financial statements continued
18 financial instruments continued
credit risk continued
the movement in impairment in respect of trade receivables during the year was as follows
         £’000
at 26 june 2010        829
charged to income statement        164
utilised in period        547
at 25 june 2011        446
the impairment charge recognised in the income statement net of amounts recovered previously written off amounted to £164000 2010 £12000
the other classes within trade and other receivables do not contain impaired assets
currency exposure
net monetary assets and liabilities of the group that are not denominated in sterling were as follows
     euro  usd 
      2011 2010 2011 2010 
      £’000 £’000 £’000 £’000
net foreign currency monetary assetsliabilities    
cash and cash overdraft     134 96 116 21
trade and other payables     744 1143 43 61
      610 1047 73 40
the following significant exchange rates applied during the year
     average rate  reporting date spot rate 
      2011 2010 2011 2010
euro     11686 11376 11265 12143
usd     15893 15837 15985 14963
currency sensitivity analysis
the group has used a sensitivity analysis technique that calculates the estimated change to the income statement and equity had a 10 
weakening in sterling occurred against all other currencies from the rates applicable at 25 june 2011 this analysis assumes that all other 
variables in particular interest rates remain constant and represents management’s estimate of the volatility that could be material to the group’s 
results historically the sensitivity of profit and loss to a weakening of sterling has been calculated based on the balance of financial assets held in 
foreign currency at the year end this year the sensitivity calculation has been based on foreign currency payments made during the year in order 
that the impact on profit and loss be more accurately reflected the sensitivity for the year ended 26 june 2010 has been recalculated for comparison 
the amounts generated from the sensitivity analysis are estimates of the impact of market risk assuming that specified changes occur
a 10 weakening of sterling against the following currencies at 25 june 2011 would have decreased profit and loss by the following amounts
     profit and loss  equity 
      2011 2010 2011 2010 
      £’000 £’000 £’000 £’000
euro     612 516 444 372
usd     19 34 14 24
a 10 strengthening of sterling against the above currency would have had an equal and opposite effect to the amounts shown wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 61
18 financial instruments continued
interest rate risk
the financial assets of the group that were exposed to interest rate risk at 25 june 2011 consisted of cash and shortterm deposits and financial 
liabilities consisted of shortterm bank borrowings and finance leases these are detailed along with their effective interest rates in note 17 
interest rate sensitivity analysis
the interest rates applicable to finance leases is fixed and not therefore subject to movements in interest rates historically the sensitivity of profit 
and loss to an adverse movement in the effective interest rates applicable at the year end date has been calculated based on the balance and term 
of loans drawn down at the year end this year the sensitivity calculation has been based on average borrowings during the year in order that the 
impact on profit and loss be more accurately reflected the sensitivity for the year ended 26 june 2010 has been recalculated for comparison 
a 1 adverse movement in the effective interest rates applicable to shortterm bank borrowings at 25 june 2011 representing management’s 
estimate of the volatility that could be material to the group’s results would have decreased profit by the amounts shown below
     profit and loss  equity 
      2011 2010 2011 2010 
      £’000 £’000 £’000 £’000
bank borrowings     247 218 179 157
19 provisions for liabilities
        group onerous  company onerous 
        leases and  leases and 
        dilapidations dilapidations 
        £’000 £’000
at 27 june 2010       1515 1515
charged to income statement       2581 2581
utilised in period net of unwinding of discount rate      373 373
released in period       46 46
at 25 june 2011       3677 3677
provisions are analysed between current and noncurrent as follows
     group  company 
      2011 2010 2011 2010 
      £’000 £’000 £’000 £’000
current     967 297 967 297
noncurrent     2710 1218 2710 1218
      3677 1515 3677 1515
the provision for onerous leases is held in respect of leasehold properties for which the group is liable to fulfil rent and other property commitments 
for stores from which either the group no longer trades or for which future trading cash flows are projected to be insufficient to cover these costs 
amounts have been provided for the shortfall between projected cash flows and the property costs up to the lease expiry date on a discounted basis 
the charge in the current financial year is deemed to be exceptional given its nature and size and it is therefore shown in note 2
obligations are payable within a range of one to 20 years 2010 one to 17 years the weighted average being eight years 2010 seven years 
the group provides for property dilapidations where appropriate based on estimated undiscounted costs of the dilapidation repairs spread over the 
period of the tenancy thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
62
notes to the financial statements continued
20 deferred tax
deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 26 2010 28
the movement on the deferred tax account is shown below
deferred tax liabilitiesassets
     group  company 
      2011 2010 2011 2010 
      £’000 £’000 £’000 £’000
at beginning of period     1800 2917 4085 2991
income statement charge     456 44 417 22
taken to equity employee benefits     — 59 — 59
actuarial loss     617 1131 617 1131
effect of other timing differences     — 1 — —
effect of changes in the rate of taxation ias 19    484 — 484 —
effect of changes in the rate of taxation income statement   612 — 191 —
at end of period     599 1800 4826 4085
of the total group and company deferred tax balance at 25 june 2011 £599000 2010 £242000 is expected to be released within one year
the movements in deferred tax assets and liabilities prior to the offsetting of balances within the same jurisdiction as permitted by ias 12 during 
the period are as follows
deferred tax liabilities
       accelerated   
       capital   
       allowances other total 
group      £’000 £’000 £’000
at 27 june 2010      8534 48 8582
charged to income statement      1409 4 1413
at 25 june 2011      7125 44 7169
deferred tax assets
       retirement   
       benefit   
      provisions obligations other total 
group     £’000 £’000 £’000 £’000
at 27 june 2010     — 6782 — 6782
charged to income statement     — 345 — 345
deferred tax on actuarial loss credited to equity    — 133 — 133
at 25 june 2011     — 6570 — 6570
deferred tax liabilities
       accelerated   
       capital   
       allowances other total 
company      £’000 £’000 £’000
at 27 june 2010      2696 — 2696
credited to income statement      953 — 953
effect of other timing differences      1 — 1
at 25 june 2011      1744 — 1744 wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 63
20 deferred tax continued
deferred tax assets
       retirement   
       benefit   
      provisions obligations other total 
company     £’000 £’000 £’000 £’000
at 27 june 2010     — 6781 — 6781
charged to income statement     — 344 — 344
deferred tax on actuarial loss credited to equity    — 133 — 133
at 25 june 2011     — 6570 — 6570
deferred tax liabilities
       accelerated   
       capital   
       allowances other total 
group      £’000 £’000 £’000
at 28 june 2009      8835 48 8883
charged to income statement      301 — 301
at 26 june 2010      8534 48 8582
deferred tax assets
       retirement   
       benefit   
      provisions obligations other total 
group     £’000 £’000 £’000 £’000
at 28 june 2009     1 5966 1 5966
chargedcredited to income statement     1 257 1 257
effect of other timing differences     — 1 — 1
deferred tax on actuarial loss credited to equity    — 1131 — 1131
deferred tax on sharebased payments charged to equity    — 59 — 59
at 26 june 2010     — 6782 — 6782
deferred tax liabilities
       accelerated   
       capital   
       allowances other total 
company      £’000 £’000 £’000
at 28 june 2009      2975 — 2975
credited to income statement      279 — 279
at 26 june 2010      2696 — 2696
deferred tax assets
       retirement   
       benefit   
      provisions obligations other total 
company     £’000 £’000 £’000 £’000
at 28 june 2009     1 5966 1 5966
chargedcredited to income statement     1 257 1 257
deferred tax on actuarial loss credited to equity    — 1131 — 1131
deferred tax on sharebased payments charged to equity    — 59 — 59
at 26 june 2010     — 6781 — 6781
deferred income tax assets are recognised for tax loss carry forwards to the extent that the realisation of the related tax benefit through future 
taxable profits is probable thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
64
notes to the financial statements continued
21 retirement benefit obligations
pension arrangements are operated through a defined contribution scheme and a defined benefit scheme for both the group and the company
defined contribution scheme
pension costs for defined contribution scheme are as follows
        2011 2010 
       note £’000 £’000
defined contribution scheme included within employee benefit expense    27 299 274
defined benefit scheme
the company operates a defined benefit pension scheme with effect from 6 april 2009 the benefit structure changed from a final salary basis 
to a care basis pension benefits are built up each year linked to the members’ pensionable salaries in that year the benefits are then increased 
each year in line with inflation the scheme has been closed to new entrants since 31 july 2002
the company has opted to recognise all actuarial gains and losses immediately via the statement of comprehensive income
a formal actuarial valuation was carried out with an effective date of 31 may 2008 the results of this valuation have been updated 
to 25 june 2011 by a qualified independent actuary
the thorntons’ pension scheme was valued by an independent professionally qualified actuary as at 25 june 2011 under ias 19 
the principal actuarial assumptions at the balance sheet date were
       2011 2010 2009 
         
rate of increase in pensionable salaries      na na na
rate of increase to care benefits before retirement     350 330 350
rate of increase in pensions   
– in deferment      350 330 350
– postapril 1997      340 315 340
discount rate      550 550 640
inflation assumption      350 330 350
expected return on plan assets      570 570 610
the assumption as to how many members will take up the maximum taxfree commutation on retirement is based on the scheme’s own 
experience of commutation levels
the sensitivities regarding the principal assumptions used to measure the scheme liabilities are set out below
       change in  impact on 
       assumption  scheme liabilities
rate of increase in pensions postapril 1997    increase by 01 increase by £05m
discount rate     increase by 01 decrease by £15m
inflation assumption     increase by 01 increase by £14m
the mortality rates used are as follows
       life expectancy at age 65 years 
2011     mortality table  male female
current pensioners   pa92mc yob  1935 1  206 237
future pensioners   pa92mc yob  1965 1  230 262
       life expectancy at age 65 years 
2010     mortality table  male female
current pensioners   pa92mc yob  1935 3  191 221
future pensioners   pa92mc yob  1965 3  213 244 wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 65
21 retirement benefit obligations continued 
defined benefit scheme continued
the expected return on plan assets is a blended average of projected longterm returns for the various asset classes equity returns are based on a 
selection of an equity risk premium above the riskfree rate which is measured in accordance with the yields on government bonds bond returns 
are selected by reference to yields on government and corporate debt as appropriate to the scheme’s holdings of these instruments returns are 
projected over the entire life of the benefit obligation
the assets of the scheme were invested as follows
 25 june 2011 26 june 2010 27 june 2009 28 june 2008 30 june 2007 
  £’000  £’000  £’000  £’000  £’000 
equities 30945 62 25274 59 20977 60 24338 64 27164 69
bonds 12295 25 11106 26 8481 25 6845 18 5905 15
gilts 6601 13 5645 13 5211 15 6845 18 5905 15
other 206 — 1060 2 81 — — — 394 1
  50047 100 43085 100 34750 100 38028 100 39368 100
actual return on plan assets 5105  6723  4466  2975   4284 
history of assets liabilities experienced gains and losses
     25 june 2011 26 june 2010 27 june 2009 28 june 2008 30 june 2007 
     £’000 £’000 £’000 £’000 £’000
lossesgains arising on scheme liabilities     
due to experience    — — 4695 — —
percentage of defined benefit obligation    0 0 8 0 0
due to change of basis    5177 8751 3067 3489 472
percentage of defined benefit obligation    7 13 5 6 1
experience adjustments     
gainslosses arising on scheme assets    2802 4711 7001 5637 1982
percentage of assets    6 11 20 15 5
pensions and other postretirement obligations
the amounts recognised in the balance sheet are determined as follows
     2011 2010 2009 2008 2007 
     £’000 £’000 £’000 £’000 £’000
present value of funded obligations    75311 67304 56063 53993 54785
fair value of plan assets    50047 43085 34750 38028 39368
net deficit    25264 24219 21313 15965 15417
the amounts recognised in the income statement are as follows
        2011 2010 
       note £’000 £’000
current service cost       656 460
interest cost       3679 3554
expected return on plan assets       2303 2012
total included within employee benefit expense     27 2032 2002
of the total charge £07 million 2010 £14 million and £13 million 2010 £06 million were included in cost of sales and administrative 
expenses respectively thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
66
notes to the financial statements continued
21 retirement benefit obligations continued
pensions and other postretirement obligations
changes in the present value of the defined benefit obligations are as follows
        2011 2010 
        £’000 £’000
present value of obligation at beginning of period      67304 56063
current service cost       656 460
interest cost       3679 3554
employee contributions       741 798
benefit payments       2246 2322
actuarial losses       5177 8751
present value of obligation at end of period      75311 67304
in october 2009 and as part of the schedule of contributions agreed with the trustees to thorntons’ pension scheme it was agreed that in 
addition to an annual contribution of £2200000 the company would make a supplementary contribution over each of the next three financial 
years equivalent to the higher of either
• a third of any reduction in the net debt reported in the statutory accounts for the years ending june 2010 2011 and 2012 or
• the ongoing annual contribution of £2200000 multiplied by the percentage increase in the annual dividend above a minimum of £4000000
as part of the group’s arrangements with the trustees of the pension scheme a £50 million bank guarantee 2010 £50 million is in place 
that will be paid into the scheme in the event of the group’s insolvency
changes in the fair value of plan assets are as follows
        2011 2010 
        £’000 £’000
fair value of plan assets at beginning of period      43085 34750
employer contributions       3362 3136
employee contributions       741 798
benefits paid       2246 2322
expected return on scheme assets       2303 2012
actuarial gain       2802 4711
closing fair value of plan assets at end of period      50047 43085
analysis of the movement in the balance sheet deficit
        2011 2010 
        £’000 £’000
at beginning of period       24219 21313
employer pension cost       2032 2002
employer contributions       3362 3136
actuarial losses recognised in the period       2375 4040
at end of period       25264 24219
cumulative actuarial gains and losses recognised in equity
        2011 2010 
        £’000 £’000
at beginning of period       16041 12001
net actuarial losses recognised in the period      2375 4040
cumulative loss       18416 16041
the pension contributions to be paid by the group during the financial period ending 30 june 2012 are expected to be in the region of £3190500 wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 67
22 other noncurrent liabilities
        2011 2010 
group and company       £’000 £’000
accruals and deferred income       2699 2827
included in the above are amounts totalling £230000 2010 £251000 held in respect of government grants
23 ordinary shares
        2011 2010 
group and company       £’000 £’000
authorised  
ordinary shares of 10p each 85000000 2010 85000000     8500 8500
issued and fully paid  
ordinary shares of 10p each 68365518 2010 68365518     6837 6837
allotments during the year
during the year no shares 2010 nil were issued under the provision of the company’s executive share option schemes and no shares 
2010 15681 were issued under the sharesave scheme representing a total nominal value of £nil 2010 £1568
the average price of shares issued under the sharesave scheme in the year was £nil 2010 £113 and the aggregate consideration received 
under this scheme was £nil 2010 £17720
since the end of the year no shares have been issued under the provisions of the executive share option schemes 2010 nil and no shares 
2010 nil have been issued under the sharesave scheme
rights and restrictions attaching to shares
holders of the company’s ordinary shares of 10p each are entitled to participate in the payments of dividends pro rata to their holdings the directors 
may propose and pay interim dividends and recommend a final dividend for shareholders’ approval for any accounting period out of the profits 
available for distribution under english law
the rights attached to the company’s ordinary shares in addition to those conferred on their holders by law are set out in the company’s articles 
of association “the articles” a copy of which can be obtained on request from the company secretary 
the articles contain certain restrictions on the transfer of ordinary shares and on the exercise of voting rights attached to them including where the 
company has exercised its right to prohibit transfer following the omission of their holder or any person interested in them to provide the company 
with information requested by it in accordance with part 22 of the companies act 2006 
rules about the appointment and replacement of directors are set out in the articles changes to the articles must be approved by shareholders 
passing a special resolution the directors’ powers are conferred on them by uk legislation and by the articles 
at any general meeting a resolution put to the vote of the meeting is decided on a show of hands unless before or on the declaration of the result 
of a show of hands a poll is properly demanded on a show of hands every member who is present in person at a general meeting of the company 
has one vote proxies may not vote on a show of hands on a poll every member who is present in person or by proxy has one vote for every share 
of which heshe is the holder thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
68
notes to the financial statements continued
23 ordinary shares continued
share options
options outstanding including those held by directors are listed below
executive schemes
  number of options during the        
  52 weeks ended 25 june 2011     exercisable 
  at 26 june granted or    at 25 june exercise   
date of grant 2010 reinstated forfeited exercised lapsed 2011 price from to
12 mar 2002 16516 — — — — 16516 111p 12 mar 2005 12 mar 2012
2 oct 2002 16516 — — — — 16516 111p 2 oct 2005 2 oct 2012
3 apr 2006 544000 — 500000 — — 44000 119p 3 apr 2009 3 apr 2016
5 jun 2006 1200000 — — — — 1200000 116p 5 jun 2009 5 jun 2016
11 jul 2006 500000 — — — — 500000 129p 11 jul 2009 11 jul 2016
2 oct 2006 1200000 — — — — 1200000 153p 2 oct 2009 2 oct 2016
13 sep 2007 500000 — — — — 500000 170p 13 sep 2010 13 sep 2017
23 nov 2007 379753 — 255849 — 123904 — 192p 23 nov 2010 23 nov 2017
16 oct 2008 894956 — 450226 — — 444730 113p 16 oct 2011 16 oct 2018
20 oct 2009 818016 — 418151 — — 399865 132p 20 oct 2012 20 oct 2019
9 nov 2009 243070 — — — — 243070 117p 9 nov 2012 9 nov 2019
16 feb 2011 — 696969 — — — 696969 99p 16 feb 2014 16 feb 2021
  6312827 696969 1624226 — 123904 5261666   
sharesave scheme
  number of options during the        
  52 weeks ended 25 june 2011     exercisable 
  at 26 june granted or    at 25 june exercise   
date of grant 2010 reinstated forfeited exercised lapsed 2011 price from to
12 oct 2004 166971 — — — 166971 — 150p 1 jan 2010 30 jun 2010
9 oct 2006 2107 — — — 2107 — 113p 1 jan 2010 30 jun 2010
9 oct 2006 166022 — — — 35176 130846 113p 1 jan 2012 30 jun 2012
10 oct 2007 134246 — — — 123221 11025 148p 1 jan 2011 30 jun 2011
10 oct 2007 195899 — — — 37591 158308 148p 1 jan 2013 30 jun 2013
18 nov 2009 438737 — — — 153309 285428 108p 1 jan 2013 30 jun 2013
18 nov 2009 434402 — — — 117990 316412 108p 1 jan 2015 30 jun 2015
18 nov 2010 — 401928 — — 36083 365845 84p 1 jan 2014 30 jun 2014
18 nov 2010 — 490164 — — 71122 419042 84p 1 jan 2016 30 jun 2016
  1538384 892092 — — 743570 1686906   
24 sharebased payments
under the company’s executive share option schemes the remuneration committee can grant options over shares in the company to directors 
and employees of the company options are granted with a fixed exercise price equal to the market price of the shares under option at the date of 
grant the contractual life of an option is ten years awards of options under the scheme are generally reserved for employees at senior 
management level and above details of the performance conditions attaching to awards of options are described in the report on the directors’ 
remuneration on pages 26 to 32 fair value is measured by the use of the blackscholes model for options with internal performance criteria and 
the monte carlo model for options with external performance conditions
the thorntons sharesave scheme enables eligible employees to acquire options over ordinary shares of the company at a discount of up to 20 to 
the market price in conjunction with a save as you earn contract the options are exercisable within a period of six months commencing three or 
five years from the date of the savings contract wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 69
24 sharebased payments continued
the fair values per option granted during the year and the assumptions used in their calculation are as follows
   2011   2010  
   executive sharesave sharesave executive executive sharesave sharesave 
   1 1 2 1 2 1 2
grant date  16 feb 11 18 nov 10 18 nov 10 20 oct 09 9 nov 09 18 nov 09 18 nov 09
share price at grant date  92p 1015p 1015p 134p 116p 120p 120p
exercise price  99p 84p 84p 132p 117p 108p 108p
number of employees  1 161 124 6 1 240 133
shares under option  696969 401928 490164 842969 243070 450666 455304
vesting period years  3 3 5 3 3 3 5
expected volatility  5004 5836 5836 4642 4695 4699 4699
option life years  10 3 5 10 10 3 5
expected life years  3 3 5 3 3 3 5
riskfree rate  196 143 222 190 203 189 273
expected dividends expressed as a dividend yield 658 740 740 451 522 820 820
possibility of ceasing employment before vesting  na 4997 4723 na na 4571 4723
fair value per option  20p 32p 33p 37p 59p 27p 28p
the expected volatility is based on historical volatility over the last three years the expected life is the average expected period to exercise the risk
free rate of return is the yield on zerocoupon uk government bonds of a term consistent with the assumed option life 
a reconciliation of executive share option movements over the period to 25 june 2011 is shown below
     2011  2010 
       weighted  weighted 
       average  average 
executive share options     number exercise price number exercise price
outstanding at start of period     6312827 135p 5850026 135p
granted     696969 99p 1086039 129p
forfeited     1624226 135p — —
exercised     — — — —
lapsed     123904 192p 623238 126p
outstanding at end of period     5261666 123p 6312827 135p
exercisable at end of period     33032 111p 33032 111p
for share options outstanding at the end of the period the range of exercise prices and weighted average contractual life is disclosed below
  2011  2010 
      contracted   contracted 
     weighted weighted  weighted weighted 
     average average  average average 
     exercise remaining life  exercise remaining life 
range of exercise prices   number price  years number price years
90p–111p   2374731 97p 69 33032 111p 20
116p–153p   2386935 140p 61 5400042 128p 71
170p–192p   500000 170p 50 879753 180p 73
the weighted average share price during the period for options exercised over the period was £nil 2010 £nil the total credit for the period 
relating to employee sharebased payment plans was £200000 2010 charge of £304000 this net credit comprised a charge of £145000 
and a credit of £345000 relating to the reversal of charges for schemes forfeited on resignation after deferred tax the total credit was £145000 
2010 charge of £219000 thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
70
notes to the financial statements continued
24 sharebased payments continued
a reconciliation of sharesave scheme option movements over the period to 25 june 2011 is shown below
     2011  2010 
       weighted  weighted 
       average  average 
sharesave scheme options     number exercise price number exercise price
outstanding at start of period     1538384 122p 1176856 127p
granted     892092 84p 905970 108p
forfeited     — — — —
exercised     — — 15681 113p
lapsed     743570 123p 528761 111p
outstanding at end of period     1686906 101p 1538384 122p
exercisable at end of period     11025 148p 169078 150p
for share options outstanding at the end of the period the range of exercise prices and weighted average contractual life is disclosed below
  2011  2010 
      contractual   contractual 
     weighted weighted  weighted weighted 
     average average  average average 
     exercise remaining life  exercise remaining life 
sharesave scheme   number price  years number price years
oct 2004   — — — 166971 150p 00
oct 2006   — — — 2107 113p 00
oct 2006   130846 113p 10 166022 113p 20
oct 2007   11025 148p 00 134246 148p 10
oct 2007   158308 148p 20 195899 148p 30
oct 2009   285428 108p 20 438737 108p 30
oct 2009   316412 108p 40 434402 108p 50
nov 2010   365845 84p 30 — — —
nov 2010   419042 84p 50 — — —
the weighted average share price during the period for options exercised over the period was £nil 2010 113p the total charge for the period 
relating to employee sharebased payment plans was £89000 2010 £75000 after deferred tax the total charge was £65000 2010 £54000 wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 71
25 cash flow from operating activities
a cash generated from operations
     group  company 
      2011 2010 2011 2010 
      £’000 £’000 £’000 £’000
continuing operations
operating profit     852 7582 5405 6117
adjustments for
depreciation and amortisation     12218 11265 11352 10399
amortisation of government grants received    21 21 21 21
profit on disposal of property plant and equipment    148 76 148 76
sharebased payment charge     110 379 110 379
operating cash flow before working capital movements    13087 19129 16774 16798
changes in working capital
increase in inventories     6625 5023 6628 5019
decreaseincrease in trade and other receivables    264 1723 661 1635
increase in payables     7265 3265 2949 5432
increase in provisions     2162 609 2162 610
increase in postemployment benefit obligations    1330 1134 1330 1134
cash generated from operations     14823 15123 14588 15052
b cash and cash equivalents for the cash flow statement
     group  company 
      2011 2010 2011 2010 
      £’000 £’000 £’000 £’000
cash and cash equivalents     1752 1626 1452 1553
bank overdraft     — — — —
net position     1752 1626 1452 1553
26 reconciliation of movement in net debt
     group  company 
      2011 2010 2011 2010 
     note £’000 £’000 £’000 £’000
increase in cash and cash equivalents     126 1038 101 1017
cash flows from decrease in debt     3300 1113 3300 1113
change in net debt resulting from cash flow    3426 2151 3199 2130
inception of new finance leases    30 1894 1498 1894 1498
movement in net debt in the period     1532 653 1305 632
net debt at beginning of period     26021 26674 26094 26726
net debt at end of period    18 24489 26021 24789 26094 thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
72
notes to the financial statements continued
26 reconciliation of movement in net debt continued
net debt comprises
     group  company 
      2011 2010 2011 2010 
      £’000 £’000 £’000 £’000
cash      1752 1626 1452 1553
overdraft     — — — —
unsecured bank loans     20900 21700 20900 21700
finance leases     5341 5947 5341 5947
      24489 26021 24789 26094
27 employees and directors
     group  company 
      2011 2010 2011 2010 
employee benefit expense during the period    note £’000 £’000 £’000 £’000
wages and salaries     57591 58271 57533 58216
social security costs     4727 5259 4724 5256
health cover medical and life assurance     283 294 283 294
staff incentives and relocation costs     108 104 108 104
sharebased payments     110 379 110 379
pension costs    21 2331 2276 2331 2276
      64930 66583 64869 66525
     group  company 
      2011 2010 2011 2010 
average monthly number of people including executive directors employed   number number number number
management and administration     253 270 252 269
selling and distribution     2495 2592 2491 2588
manufacturing     1462 1520 1462 1520
      4210 4382 4205 4377
group and company
        2011 2010 
key management compensation       £’000 £’000
salaries and shortterm employee benefits       1551 1757
postemployment benefits       109 70
termination benefits       100 —
sharebased payments       201 305
        1559 2132 wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 73
27 employees and directors continued
group and company continued
the key management figures given on the previous page include directors and all other members of the executive committee
        2011 2010 
directors       £’000 £’000
aggregate emoluments       1337 1233
aggregate gains made on the exercise of share options      — —
company contributions to money purchase pension schemes     109 70
        1446 1303
pension scheme contributions above represent the total contributions made by the company on behalf of all directors in respect of approved 
pension arrangements retirement benefits are no longer accruing to directors 2010 nil under defined benefit schemes
further detail in respect of directors’ remuneration can be found in the report on the directors’ remuneration on pages 26 to 32
28 operating lease commitments – minimum lease payments
     2011  2010 
      land and   land and  
      buildings other buildings other 
group     £’000 £’000 £’000 £’000
commitments under noncancellable operating leases     
within one year     19881 860 20592 831
later than one year and less than five years    46511 1563 52762 1651
after five years     25576 — 30865 16
      91968 2423 104219 2498
     2011  2010 
      land and   land and  
      buildings other buildings other 
company     £’000 £’000 £’000 £’000
commitments under noncancellable operating leases     
within one year     19821 860 20532 831
later than one year and less than five years    46271 1563 52522 1651
after five years     25478 — 30707 16
      91570 2423 103761 2498
the group has entered into operating leases in respect of retail stores vehicles fork lift trucks and equipment retail store leases have remaining 
terms of between three months and 20 years with renewal by mutual agreement at the expiry of the lease term and commonly with five year 
upwards only rent review periods contingent rentals are payable on approximately 10 of retail stores where leases contain a store revenue 
based component standard institutional restrictions common to those in place with other high street retailers are applicable to the group’s retail 
leases nonstore leases have remaining lease terms of between three months and six years thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
74
notes to the financial statements continued
29 contingent liabilities
as at 25 june 2011 the group had provided guarantees in respect of customs and excise duty deferment of £100000 2010 £100000
30 capital and other financial commitments
     group  company 
      2011 2010 2011 2010 
      £’000 £’000 £’000 £’000
bulk supplies of raw ingredients     15162 20635 15162 20635
the majority of bulk raw material supply contracts are denominated in sterling and therefore carry no foreign currency exposure
the volatility of pricing within key raw material ingredients continues to prompt the use of forward contracts where practical
in addition to the bulk contracts detailed above further contracts have been agreed to set market ratios of cocoa liquor and butter up to december 
2012 although the price is not fixed the company has a commitment to purchase fixed volumes at the contracted ratios which at the latest 
agreed contract prices values this commitment at £16480000
major noncash transactions
during the period the group and company entered into finance lease agreements in respect of various shop fitting costs and plant and equipment 
with capital values at the inception of the leases of £1894000 2010 £1498000
31 related party transactions
group
there are no related party transactions requiring disclosure in the financial statements 2010 £nil
company
funds are transferred within the group dependent on the operational needs of individual companies the directors do not consider it meaningful to 
set out the gross amounts of transfers between individual companies balances owed by and to other group undertakings are shown in notes 15 
and 16 to the financial statements and the majority of the movement in these balances relates to intragroup dividends  wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 75
five year summary
the figures below are extracted from this annual report and are prepared under ifrs
     2011 2010 2009 2008 2007 
     £’000 £’000 £’000 £’000 £’000
consolidated income statement     
revenue    218255 214553 214805 208122 185989
operating profit    852 7582 9740 10326 8852
net finance costs    1923 1445 1652 1856 1771
profit before taxation    1071 6137 8088 8470 7081
taxation    818 1783 4483 2402 1785
profit attributable to equity shareholders    253 4354 3605 6068 5296
balance sheet     
net assets    19309 25968 28738 35035 34886
net borrowings    19148 20074 18612 19912 16142
net debt    24489 26021 26674 28264 26411
gearing ratio    1268 1002 928 807 757
additions to intangible assets and property plant and equipment  5887 5700 10345 7905 7938
other financial data     
basic earnings per share    04p 65p 54p 91p 80p
dividends per share    22p 61p 61p 68p 68p
number of outlets – continuing operations
own stores    364 377 379 379 368
franchises    227 222 197 250 218
stock market ratios     
year end share price    60p 82p 74p 114p 175p
shares in issue    684m 684m 683m 683m 681m
market capitalisation    £412m £557m £505m £779m £1192m
dividend yield    37 74  82 60 39
 53 week period
 thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
76
shareholder analysis
shareholder ownership analysis at 25 june 2011
      shareholders shareholders shares shares 
shareholding range     number  number 
up to 500     5427 579 1413665 21
501–1000     1552 166 1288663 19
1001–10000     2148 229 6583056 96
10001–100000     178 19 5471734 80
100000     67 07 53608400 784
      9372 1000 68365518 1000
      shareholders shareholders shares shares 
category of shareholding     number  number 
corporate bodies and nominees     468 50 52456018 767
private shareholders     8904 950 15909500 233
      9372 1000 68365518 1000 thorntons’ commitment to environmental issues is reflected in this annual report 
which has been printed on olin smooth absolute white an fsc
®
 certified paper
this document was printed by  group using their environmental print 
technology which minimises the impact of printing on the environment vegetable 
based inks have been used and 99 of all dry waste associated with this production 
is diverted from landfill
 group is a carbonneutral
®
 printer thorntons plc
thornton park 
somercotes 
alfreton 
derbyshire de55 4xj 
tel 0845 075 7565 
wwwthorntonscouk
thorntons direct
tel 0845 121 1911 
wwwthorntonscouk
for information on investor relations visit
wwwthorntonscouk


Summary:
 thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
6
chief executive’s report
the	past	year	has	been	challenging	for	
thorntons 	 our 	 customers 	 and 	 the 	 economy 	
never theless 	 overall 	 sales 	 in 	 the 	 year 	 grew	
17	to	£2183	million	and	our	share	of	
the 	 uk 	 chocolate 	 market 	 grew 	 to 	 circa 	 77	
which	is	a	reflection	of	the	considerable	
strength 	 of 	 our 	 brand 	 the 	 quality 	 and 	 value	
it 	 delivers 	 and 	 the 	 role 	 it 	 plays 	 in 	 our	
customers’ 	 lives 	 this 	 sales 	 growth 	 was	
achieved 	 despite 	 the 	 unprecedented 	 impact	
of	the	poor	weather	before	christmas	and	
the	hottest	easter	on	record	this	clearly	
demonstrates	the	significant	strategic	
benefit	of	our	multichannel	strategy 	
201011	has	seen	one	of	the	toughest	
consumer	spending	environments	we	have	
experienced	and	as	such	r etail	with	the	
exception	of	thorntons	direct	has	had	a	
difficult	year 	this	contrasts	with	another	
strong 	 year 	 of 	 growth 	 for 	 our 	 sales 	 	
operations	channel	where	we	continued	
to 	 grow 	 our 	 market 	 share 	 in 	 our 	 core	
categories 	 during 	 key 	 seasons 	 in 	 par ticular	
easter  	 as 	 well 	 as 	 through 	 increased 	 breadth	
and	depth	of	distribution 	
r epor ted	pretax	profit	before	exceptionals	
was	£43	million	2010	£69	million	
whilst 	 net 	 debt 	 was 	 £245 	 million	
2010 £260 million
w e	have	continued	to	manage	our	costs	
ver y	tightly	over	the	period	and	invested	
where	appropriate	to	improve	efficiency 	
f ollowing 	 the 	 renegotiation 	 of 	 the	
outsourcing	agreement	of	our	it	ser vices	
in	2010	we	have	recently	completed	
the 	 outsourcing 	 of 	 our 	 warehousing	
and 	 distribution 	 activities 	 this 	 together 	 with	
the	ongoing	benefits	of	our	procurement	
review	and	the	recent	restructuring	of	our	
head	office	cost	base	should	deliver	a	full	
year	benefit	of	£20	million	that	will	flow	
through 	 in 	 full 	 in 	 the 	 201213 	 financial 	 year 
the year in review
thorntons centenary
2011 is our centenary year and as a 
business	we	wanted	to	mark	this	occasion	
with	innovative	products	and	moments	
to 	 remember 	 with 	 our 	 customers 	 and 	 staff 	
in 	 the 	 course 	 of 	 the 	 year  	 we 	 have 	 produced	
a	number	of	unique	products	including	
the	“ jubilee	box”	which	contains	100	
of	thorntons	favourite	chocolates	as	well	
as	new	flavours	such	as	lime	and	chilli	
r aspberr y 	 and 	 r ose 	 w e 	 have 	 also 	 brought	
back 	 some 	 old 	 favourites 	 in 	 our 	 sugar 	 range	
including	chocolate	éclairs	and	launched	a	
collectable	ceramic	toffee	cabin 	as	well	as	
limited	edition	chocolate	blocks	including	
classic 	 flavours 	 such 	 as 	 english 	 rose 	
cloudy	lemonade	and	bakewell	tar t
thorntons	master	chocolatier	has	created	
a	limited	edition	“w onder	box”	that	are	a	
mix	of	heritage	and	contemporar y	flavours	
and	also	include	a	bar	of	chocolate	which	
tastes	as	chocolate	would	have	done	100	
years	ago 	all	the	chocolates	have	been	
handmade	in	thorntons’	kitchens
t o 	 celebrate 	 our 	 anniversar y 	 with 	 our	
customers	we	have	hidden	100	golden	
k eys	in	our	chocolate	blocks	and	the	lucky	
winners	will	get	a	behindthescenes	trip	
to	the	thorntons	chocolate	factor y	during	
chocolate	w eek	in	october 	visiting	22	
city	centre	locations	over	the	first	half	of	
this 	 year  	 our 	 “live 	 mechanical 	 chocolatier ”	
has	brought	some	theatre	to	the	streets	
of	britain 	in	addition 	in	the	summer 	
a	team	of	five	thorntons	employees	cycled	
from	john	o ’groats	to	lands	end	covering	
1200	miles	and	visiting	100	thorntons	
stores 	 along 	 the 	 way  	 all 	 in 	 the 	 name 	 of 	 the	
company ’s	nominated	charity 	the	nspcc
f rom	september	onwards	thorntons	has	
invited	 chocolate	 lovers	 around	 the	 countr y	
to	step	inside	its	amazing	chocolate	kabin	
in summary
  overall sales in the year grew 
17 to a record £2183 million 
and our share of the uk chocolate 
market grew to circa 77
  thorntons’ centenary presents 
opportunities to celebrate with 
wonderful products and customer 
and staff involvement
  a strategic review that found 
significant underlying strength 
in our brand our multichannel 
distribution model our market
leading manufacturing capability 
and our great people
   confident that our plan is right for 
the company and the challenging 
times in which we live wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 7
to	find	a	golden	k ey	to	the	chocolate	
factor y 	the	kabin	is	a	recreation	of	
the	delightful	little	chocolate	shop	first	
opened	by	norman	and	stanley	thornton 	
the	kabin	was	unveiled	in	l ondon	
on	2 	 september 	 and 	 will 	 travel 	 to	
liverpool 	 nottingham 	 edinburgh	
and	sheffield	thereaf ter 
along 	 with 	 all 	 these 	 exciting 	 activities	
we 	 have 	 also 	 been 	 celebrating 	 our 	 centenar y	
with	our	staff 	a	gala	day	for	employees	
and	their	families	at	thornton	p ark	was	
a	great	success	and	we	will	be	holding	
a	centenar y	ball	in	december 
product innovation
the 	 development 	 of 	 new 	 and 	 exciting	
products	will	always	be	key	to	the	success	
and 	 vibrancy 	 of 	 the 	 thorntons 	 brand	
the 	 period 	 under 	 review 	 saw 	 the 	 successful	
relaunch	of	our	two	core	boxed	chocolate	
brands	continental	and	classics	in	r etail	
as	well	as	a	refreshed	classic	collection	
in	our	commercial	channel
our	new	melts	brand	grew	well	over	the	
period	and	was	joined	by	a	new	caramel	
variety	which	was	created	with	a	unique	
two tone	shell	delivered	through	our	new	
“tripleshot”	technology 
our	children ’s	range	has	been	relaunched	
and 	 we 	 have 	 seen 	 some 	 strong 	 development	
in 	 our 	 key 	 seasonal 	 lines 	 such 	 as 	 the 	 launch	
of	our	bramble	bunny	range	at	easter 
w e	relaunched	our	hampers	and	
photoboxes	in	thorntons	direct	which	
along	with	our	alphabet	t ruffles	drove	
significant	sales	growth
in 	 spring 	 2011 	 we 	 were 	 thrilled 	 to	
be 	 awarded 	 four 	 gold 	 awards 	 from	
the	academy	of	chocolate	three	for	the	
chocolates	in	our	centenar y	“w onder	box”	
and 	 one 	 for 	 our 	 outstanding 	 t onka 	 chocolate	
block 	 finally 	 our 	 master 	 chocolatier	
k eith	hurdman	was	awarded	the	accolade	
of	joint	chocolatier	of	the	y ear 	recognition	
from	within	our	industr y	not	only	of	k eith’s	
remarkable	skill	but	also	of	the	quality	
of	thorntons’	products
retail
t otal 	 r etail 	 sales 	 including 	 own 	 stores	
f ranchise 	 and 	 thorntons 	 direct 	 declined	
82 	 to 	 £1395 	 million 	 2010	
£1520	million
own stores
sales 	 in 	 own 	 stores 	 fell 	 89 	 to	
£1183 	 million 	 over 	 the 	 period 	2010	
£1298 	 million 	 like 	 for 	 like 	 sales 	 declined	
by	79	reflecting	the	significant	impact	
of 	 the 	 weak 	 consumer 	 environment	
the 	 reduced 	 footfall 	 on 	 high 	 streets 	 and	
the 	 aforementioned 	 weather 	 impacts	
at	christmas	and	easter 
during 	 the 	 period 	 18 	 stores 	 were 	 refurbished	
or	reformatted	16	stores	were	closed	and	
three 	 successfully 	 resited 	 resulting 	 in 	 a 	 total	
of 	 364 	 stores 	 at 	 the 	 year 	 end 	 2010 	 377
franchise
f ranchise 	 sales 	 for 	 the 	 period 	 declined 	 108	
to £116 million 2010 £130 million 
as	they	too	suffered	from	the	consumer	
downturn  	 over 	 the 	 year  	 eight 	 independent	
f ranchise 	 locations 	 closed 	 and 	 six 	 bir thdays	
units 	 in 	 eire 	 went 	 into 	 liquidation 	 and 	 were	
also 	 closed 	 never theless 	 we 	 continue	
to 	 be 	 encouraged 	 by 	 the 	 interest 	 in 	 the	
thorntons 	 f ranchise 	 with 	 19 	 new	
f ranchise 	 locations 	 opening 	 during 	 the	
period	this	resulted	in	an	overall	increase	
in	the	f ranchise	estate	to	227	by	the	year	
end 2010 222
thorntons direct
overall	thorntons	direct	sales	grew	43	
to £96 million 2010 £92 million 
w e	continue	to	invest	in	improving	the	
customer	experience	optimising	online	
conversion 	 levels 	 and 	 creating 	 a 	 new 	 contact	
centre	to	improve	our	customer	ser vice	
sales  operations
commercial sales
2011	was	another	strong	year	for	our	
commercial	channel	with	sales	increasing	
259	to	£788	million	2010	£626	
million	the	period	was	characterised	by	
our	continued	positive	relationships	with	
the	major	supermarkets	where	our	
“masspremium”	positioning	has	helped	
us	to	deliver	categor yleading	initiatives	
and	fur ther	drive	our	leadership	in	our	
core	markets	as	well	as	the	overall	
growth	in	these	markets	
thorntons	now	has	34	2010	30	
of	the	inlaid	box	chocolate	market	in	
the	uk	nielsen 	july	2011
during	the	period	we	were	par ticularly	
pleased	with	our	29	market	share	at	
easter 	 2010 	 19 	 where 	 we 	 par ticipated	
with	our	commercial	par tners	in	their	
core	easter	promotions	for	the	first	time	
in	addition	to	this	we	have	also	seen	
some	pleasing	development	in	gif ting	
oppor tunities	for	eid	and	diwali
manufacturing operations
in 	 our 	 manufacturing 	 operations 	 we 	 delivered	
strong	and	sustained	improvements	over	
the 	 period 	 p roductivity 	 improvements	
continued 	 to 	 offset 	 cost 	 increases	
in 	 par ticular 	 in 	 utilities 	 w e 	 achieved	
volume	growth	of	circa	5	with	a	vir tually	
flat	overhead	cost	and	the	investment	in	
our	new	moulding	line	has	delivered	the	
anticipated	savings
service levels to our internal and commercial 
customers 	 increased 	 fur ther 	 during 	 the	
period 	 exceeding 	 97 	 2010 	 96	
since 	 the 	 year 	 end 	 we 	 outsourced 	 our	
warehouse 	 and 	 distribution 	 functions	
under 	 a 	 sixyear 	 contract 	 over 	 130 	 of	 thorntons plc 
annual report and accounts 2011
wwwthorntonscouk
8
chief executive’s report continued
the year in review continued
sales  operations continued
manufacturing operations continued
our	colleagues	have	now	transferred	from	
thorntons	to	our	par tner 	w e	thank	them	
and 	 wish 	 them 	 well 	 as 	 we 	 star t 	 this	
new	relationship
r aw	material	prices	saw	fur ther	significant	
increases 	 during 	 the 	 period 	 dair y 	 products	
increased	by	more	than	20	and	sugar	by	
more	than	50	p ackaging	materials	and	
diesel 	 have 	 also 	 experienced 	 significant 	 price	
increases	our	for ward	cover	purchasing	
during	the	period	enabled	us	to	avoid	the	
spike 	 in 	 the 	 price 	 of 	 cocoa 	 witnessed 	 during	
the	period	of	political	uncer tainty	in	the	
ivor y	coast	this	is	one	of	a	number	of	
strategies 	 that 	 we 	 have 	 deployed 	 to 	 mitigate	
these	price	increases	improvements	in	
our	procurement	approach	combined	with	
product 	 and 	 ingredient 	 reengineering 	 have	
also 	 continued 	 to 	 help 	 reduce 	 some 	 though	
not	all	of	these	effects
export sales
although	star ting	from	a	low	base	
expor t	sales	increased	strongly	by	333	
to £36 million 2010 £27 million 
there	was	strong	growth	in	duty	free	sales	
and 	 in 	 the 	 development 	 of 	 sales 	 to 	 a 	 number	
of 	 territories 	 including 	 south 	 africa	
singapore 	 cyprus 	 and 	 p oland 	 our 	 business	
in 	 the 	 r epublic 	 of 	 ireland 	 also 	 grew 	 despite	
the	challenging	economic	conditions	
notwithstanding 	 these 	 encouraging 	 results	
we	will	shor tly	be	commencing	a	strategic	
review	of	international	oppor tunities	and	
will	repor t	the	results	in	approximately	
twelve	months’	time
future plans
at	the	end	of	the	period	i	presented	
our	plans 	 for 	 the 	 future 	 of 	 thorntons	
this 	 followed 	 a 	 strategic 	 review 	 that	
f o u n d 	 significant 	 underlying 	 strength 	 in 	 our 	
b r a n d 	our	multichannel	distribution	
model	our	marketleading	manufacturing	
capability	and	our	great	people	the	most	
significant	issues	were	identified	in	our	
own	stores	and	addressing	these	
challenges	is	at	the	hear t	of	our	plan 
our	plan	sets	out	to	achieve	three	
key	objectives
•	 	 a 	 profitable 	 and 	 rebalanced 	 organisation 	
a	smaller	r etail	estate	with	a	clear	
proposition	and	offer 	growth	in	sales	
and	earnings	from	our	commercial	and	
f ranchise	channels	which	will	more	
than	offset	the	reduction	in	own	store	
sales	and	earnings
•	 	 a	customer focused	business	ser ving	
our 	 customers 	 where 	 they 	 choose 	 to 	 buy	
from	us	with	increased	frequency	of	
purchase	and	improved	advocacy 	and
•	 	 a	revitalised	brand	brought	to	life	
instore and online
a profitable and 
rebalanced organisation
our	own	stores	have	been	affected	
in	three	ways	over	the	past	decade
•	 	 there	have	been	significant	changes	in	
consumer	shopping	habits	notably	the	
growth 	 of 	 out 	 of 	 town 	 centres 	 and 	 malls	
supermarkets	and	online	shopping
•	 	 our	commercial	sales	growth	has	
also	impacted	sales	in	our	own	stores	
to	some	extent	despite	this	growth	
however 	it	is	impor tant	to	note	that	the	
growth	in	our	commercial	channel	has	
outweighed	any	possible	loss	to	our	
own	stores	many	times	over 	and
•	 	 the	current	downturn	has	exacerbated	
the	weakness	in	many	smaller	towns	
and	shopping	centres
achieving this 
transformation over 
the next three years 
will deliver a stronger 
derisked business in 
a position of strength 
for sustainable and 
profitable growth 
in the future wwwthorntonscouk
thorntons plc 
annual report and accounts 2011 9
as 	 a 	 result 	 of 	 the 	 above 	 a 	 significant 	
number 	 of 	 our 	 own 	 stores 	 now 	 find 	
themselves 	 poorly 	 located 	 with 	 low	
o r 	 declining	profitability 
our 	 own 	 stores 	 can  	 and 	 will 	 be 	 key 	 to	
the 	 future 	 success 	 of 	 thorntons 	 driving	
profitable 	 and 	 sustainable 	 sales 	 and 	
showcasing 	 our 	 brand 	 w e 	 believe 	 that	
this 	 can 	 be 	 achieved 	 with 	 an 	 estate 	 of	
between 	 180 	 and 	 200 	 stores 	 located	
primarily 	 in 	 the 	 top 	 150 	 retail 	 locations	
t aking	advantage	of	the	179	lease	expiries	
over	the	next	three	years	we	plan	to	close	
around 	 120 	 stores 	 and 	 explore 	 oppor tunities	
to 	 close 	 a 	 fur ther 	 60 	 stores 	 in 	 weak 	 locations	
in	the	same	time	frame
this	will	have	significant	implications	
for	our	other	channels
•	 	 our 	 f ranchise 	 estate 	 will 	 grow 	 rapidly	
as 	 we 	 open 	 franchises 	 in 	 the 	 majority 	 of	
locations 	 where 	 we 	 close 	 our 	 own 	 stores
•	 	 our	commercial	channel	will	become	
the	main	sales	channel	over	the	next	
three	years	as	we	see	fur ther	growth	
in	supermarket	sales	driven	by	more	
stores 	 and 	 greater 	 demand 	 from	
customers	and
•	 	 our	thorntons	direct	channel	will	
continue	to	grow	in	line	with	the	online	
gif ting	market	w e	will	invest	fur ther	
in	our	website	and	in	new	customer	
relationship	management	systems	as	
we	star t	to	align	the	direct	consumer	
element	of	this	channel	with	our	
own	stores	channel
r ebalancing	our	business	across	our	
channels	in	this	way	will	ensure	that	we	
protect	the	capacity	utilisation	levels	in	our	
factor y	by	maintaining	modest	growth	in	
overall	production	levels
a customerfocused business
w e 	 know 	 and 	 understand 	 our 	 core	
customers	well	since	many	purchase	
thorntons 	 across 	 a 	 number 	 of 	 our 	 channels	
they	tell	us	that	they	want	us	to	improve	
their	experience	in	our	own	stores	and	
we	have	committed	to	investing	in	our	
stores	in	our	products	and	in	delivering	
a	truly	engaging	experience	through	our	
store teams 
on 	 average 	 our 	 customers 	 visit 	 and 	 purchase	
from	us	five	times	a	year 	just	under	half	
of	our	customers	visit	us	only	once	or	
twice	a	year 	our	key	customer	o b j e c t i v e	
is 	 to 	 encourage 	 existing 	 customers 	t o	
visit 	 and 	 purchase 	 more 	 frequently 	
achieving 	 just 	 one 	 extra 	 visit 	 and	
purchase 	 per 	 year 	 would 	 transform	
o u r 	 o w n 	 stores	business
a revitalised brand
w e	will	revitalise	our	brand	by	bringing	
it 	 to 	 life 	 in 	 our 	 own 	 stores 	 creating 	 a	
“theatre 	 of 	 the 	 senses” 	 that 	 puts 	 the 	 special	
touch	back	into	the	customer	experience	
k ey 	 to 	 delivering 	 this 	 is 	 the 	 creation 	 of	
a 	 differentiated 	 and 	 less 	 seasonal 	 offer 	
whilst	the	brand	will	always	be	famous	
for	the	key	seasonal	events	we	will	grow	
the	relevance	for	other	gif ting	occasions	
in 	 our 	 customers’ 	 lives 	 for 	 example	
b i r t h d a y s 	anniversaries	congratulations	
or	simple	“i	love	you”	“thank	you”	and	
“just	because”	moments
w e 	 will 	 deliver 	 this 	 by 	 developing 	 and	
introducing 	 new 	 products 	 including 	 a	
new 	 range 	 of 	 delightful 	 innovative 	 and	
affordable 	 gif ts 	 as 	 well 	 as 	 introducing 	 a	
new 	 flagship 	 range 	 of 	 boxed 	 chocolates 	
w e 	 will 	 significantly 	 increase 	 the 	 number 	 of 	
oppor tunities	to	personalise	and	customise	
gif ts	building	on	our	heritage	for	the	icing	
of	names	and	messages	w e	will	introduce	
some	of	the	successful	lines	from	our	
thorntons	direct	channel	into	our	stores	
including	hampers	and	alphabet	t ruffles	
all	of	this	will	be	implemented	in	stores	
that 	 are 	 easier 	 to 	 shop 	 in 	 and 	 that 	 highlight	
the	quality	of	our	product	suppor ted	by	
engaging 	 and 	 friendly 	 store 	 teams 	 our 	 own	
stores 	 will 	 be 	 the 	 place 	 to 	 come 	 for 	 the 	 “full”	
thorntons	brand	experience
i	am	pleased	to	repor t	that	we	are	already	
making 	 progress 	 in 	 delivering 	 these	
improvements 	 in 	 may 	 of 	 this 	 year 	 we	
successfully	introduced	a	number	of	new	
initiatives	in	two	of	our	stores	these	new	
initiatives	included	new	fixtures	and	visual	
merchandising 	 approaches 	 many 	 of 	 which	
will 	 be 	 rolled 	 out 	 across 	 the 	 estate	
this 	 autumn
achieving	this	transformation	over	the	next	
three 	 years 	 will 	 deliver 	 a 	 stronger  	 derisked	
business 	 in 	 a 	 position 	 of 	 strength 	 for	
sustainable	and	profitable	growth	in	the	
future	there	is	no	doubt	that	we	will	be	
under taking	this	transformation	in	the	face	
of 	 considerable 	 and 	 unprecedented 	 adverse	
economic	headwinds	these	headwinds	
never theless 	 reinforce 	 our 	 need 	 for 	 change
this	transformation	will	not	be	possible	
without	the	continued	suppor t	from	the	
passionate	and	committed	people	across	
thorntons	including	our	loyal	franchisees	
our	colleagues’	response	to	our	plan	has	
been	positive	and	enthusiastic	i	would	
like	to	express	my	thanks	for	all	their	hard	
work	and	effor ts	over	the	past	year	and	for	
their	continued	suppor t	during	the	exciting	
and	challenging	period	ahead	of	us	
jonathan hart
chief executive
6	september	2011