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annual report and accounts for the year ended 31 december 2012 premier foods plc 
delivering
on our promises
premier foods plc  annual report and accounts 31 december 2012  
wwwpremierfoodscouk
stock code pfd
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overview premier foods plc  annual report and accounts 2012  
the best in british foods
as one of britain’s largest food producers premier 
foods is committed to being ‘the best in british 
food’  delivering the taste the british love with food 
that’s made in britain by people who understand 
british consumers 
we supply a range of retail wholesale foodservice and other 
customers with some of britain’s best loved brands including 
ambrosia batchelors bisto hovis loyd grossman mr kipling 
oxo and sharwood’s the company employs around 9000 people 
operating from over 40 sites right across the country
website 
keep up to date with all the latest 
information about premier foods online 
including share price data press 
releases and results 
mobile 
you can now keep up to date with 
premier foods wherever you are with 
our new mobile friendly website
click on the qr code or visit our 
website
sustainability in everything we do 
if you want to know more about our 
commitment to sustainability and 
achievements in the year why not read 
our 2012 sustainability report available 
on our website
brands 
all of our power brands have their 
own dedicated websites which contain 
the latest band news and product 
information
in recognition of the progress we have made in sustainability we are now listed 
by ftse4good and the european ethibel sustainability excellence register
visit us online to find further information 
wwwpremierfoodscouk
premier foods annual report 2012frontindd   4 15032013   150138 overview 
 highlights for 2012 04
 group at a glance 06
 overview of the year 08
 chairman’ s statement 10
 chief executive’s review 12
the strategic review sets out a detailed 
review of the key elements of our strategy— 
brands partners focus and sustainability 
— and how we have performed against  
our kpis
detailed analysis of our business 
performance as reported in our preliminary 
results announcement in february 2013 
this section includes the operating reviews 
for the grocery and bread business and the 
financial review
this section contains a high level summary 
of premier foods our financial highlights 
and our key achievements over the course 
of the year
as a company we are committed to the 
highest standards of corporate governance 
this section sets out a summary of the 
key issues we have discussed during the 
year and our approach to governance risk 
management and executive remuneration
this section contains the independent 
auditors’ report to shareholders the financial 
statements and related notes and also 
supplementary information for shareholders
strategic review 
 market insight 14
our strategy 16
  brands 18
  partners 20
  focus 22
  sustainability 24
 key performance indicators 26
governance
 chairman’ s introduction 38
 board and group executive 40
 corporate governance 43
 risk management 48
 committees 53
 remuneration report 56
 other statutory information 66
financial statements
 independent auditors’ report 70
 consolidated financial statements 72
 notes to the financial statements 75
 company financial statements 121
 notes to the company financial statements 122
 supplementary information 
   shar eholder information 125
   glossary 127
business performance
 operating review 30
 financial review 35
contents
gavin darby
chief executive officer
“i am delighted to have joined premier foods 
as we move to the next phase of our strategy 
building momentum behind our power brands”
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premier foods annual report 2012frontindd   1 15032013   150147 the new range of individual stock 
melts launched by bisto in 2012
photograph
did you 
know
in 2012 we have made 
changes to 30 of our  
existing product range 
which have resulted in  
nutritional improvements   
30
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for more information about 
diet  health see page
24
premier foods annual report 2012frontindd   2 15032013   150150 this section contains a 
high level summary of 
premier foods our financial 
highlights and our key 
achievements over the course 
of the year
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overview
highlights for 2012 04
group at a glance 06
overview of the year 08
chairman’s statement 10
chief executive’s review 12
contents
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04
focus investment behind our power brands
commitment delivery
for further information 
brands
18
increase marketing spend behind our  
power brands
marketing spend up yoy
59
grow power brand sales power brand sales up yoy
21
dispose of noncore businesses to sharpen focus
commitment delivery
for further information 
operating review
34
achieve disposal proceeds of £330m  
by march 2014
disposals of noncore businesses announced  
in 2012 ahead of plan
£3695m
simplify the business to reduce costs
commitment delivery
for further information 
focus
22
cost reduction programme to reduce  
overheads by £40m by 2013
overhead cost savings achieved in 2012 ahead 
of plan and a further £20m targeted for 2013
£48m
strengthen capabilities
commitment delivery
for further information 
partners
20
strengthen management in key areas new management in place commercial team 
restructured focus on execution and delivery
agree refinancing package
commitment delivery
for further information 
operating review
33
agree a refinancing with the banks in march 2012 bank facilities were extended to 
june 2016 with covenants reset to support the 
strategic plan
in 2012 we set out a number of strategic priorities to 
stabilise the business here’s how we have delivered against 
these promises
highlights for 2012
delivering on our strategic priorities
scan the qr code 
to take you directly to 
more information on our 
business performance
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sales
£13538m 32
underlying business
trading profit
£1234m 106
underlying business
opera ting profit
£963m
2011 £1763m
net debt
£9507m 
new produc ts with  
“better f or you” choices  
70
produc ts testing superior  
or a t par with competit ors  
94
blind testing with consumers
reduc tion in c o
2
  
equiv alent emissions  
28
265000 tonnes of co
2
e at the end of 2012
reduc tion in lost  
time accidents  
46
020 per 100000 hours at the end of 2012
non financial kpis
notes 
on pages 1 to 67 of this report the company’s results for the year ended 31 december 2012 are presented on an ‘underlying business’ basis 
unless otherwise stated ‘underlying business’ excludes the results of previously announced business disposals milling sales only and noncore 
discrete contract losses milling is excluded due to the cost plus pricing nature of the business that has a direct impact on sales but not trading profit 
a reconciliation to statutory numbers can be found on page 34
the purpose of using the ‘underlying business’ basis for measuring performance is to reflect the performance of the core business of the company 
with the company having undergone a year of restructuring in 2012 this basis better reflects underlying business performance
trading profit is defined as operating profit before refinancing costs restructuring costs profits and losses associated with divestment activity 
amortisation and impairment of intangible assets the revaluation of foreign exchange and other derivative contracts under ias 39 and pension credits 
or charges in relation to the difference between expected return on pension assets administration costs and interest costs on pension liabilities 
ebitda is trading profit excluding depreciation
financial headlines
for information on kpis see page 
26
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1
2
4
5
6
7
8
1
3
2
4
3
group at a glance
one of britain’s biggest food producers
during 2012 the group was organised into two divisions 
grocery and bread
grocery
the grocery division encompasses a wide variety of affordable and convenient meal 
solutions including cooking sauces asian meal solutions stocks gravies soups home 
baking cake and ambient desserts
power brands
ambrosia batchelors bisto loyd grossman mr kipling oxo and sharwood’s
support brands
homepride mcdougalls paxo cadbury cakes lyons cakes bird’s and angel delight 
highlights for 2012
•	 launch of bisto stock melts sharwood’s wrap kits and batchelor’s deli box
•	 grocery power brand sales up 40
•	 renewal of cadbury cake licence
in 2012 we produced around    
240m sachets of batchelor’s cup a soup
15m oxo cubes per week
420m mr kipling slices
96m sharwood’s noodle blocks
250m servings of paxo stuffing
 5 lifton
 6 moreton
 7 stoke
 8 worksop
 1 ashford
 2 bury
 3 carlton
 4 knighton
 manufacturing sites
 distributionlogistics centres
 1 corby
 2 knowsley
 3 rugby
 4 skelmersdale
revenue
underlying
£8567m
divisional c ontribution 
underlying
£1955m
premier foods is one of britain’s biggest 
branded food producers with revenue of 
£14bn we manufacture distribute and sell a 
wide range of branded and nonbranded foods 
the business employs over 9000 people and 
operates from over 40 sites across the uk 
our sites are dedicated to manufacturing high 
quality great tasting food products which 
consumers know and love we have a wide 
portfolio of great british brands many of which 
are market leaders and household favourites 
our business is focused behind eight power 
brands ambrosia batchelors bisto hovis 
loyd grossman mr kipling oxo and 
sharwood’s in addition we have a portfolio of 
many other iconic british food brands and also 
an extensive nonbranded food business which 
manufactures food in partnership with many of 
the uk’s leading food retailers 
branded revenue
87
nonbranded revenue
13
branded
mix
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bread
the bread division operates principally in the wrapped bread market and in 
addition manufactures nonbranded bread and morning goods the bread division 
is also the largest vertically integrated baker and flour miller in the uk and produces 
a wide range of bulk flours and branded and nonbranded bagged flours
power brand
hovis
support brands
granary mother’s pride and ormo
highlights for 2012
•	 launch of new hovis farmers loaf 
•	 major restructuring of bread business announced in november 2012 
•	 impact of uk wheat harvest
in 2012 we produced around    
600m loaves and 600m other bakery units distributed daily to around 8000 
delivery drops
1m tonnes of flour — 23 of total uk flour production
 1 erith
 2 forest gate
 3 glasgow
 bakery only sites
 integrated bakery sites  logistics
 1 avonmouth
 2 belfast
 3 birmingham
 1 andover
 2 barry
 3  gainsbor ough 
wheat maltings
 4 leicester
 5 leicester — charnwood
 6 mitcham — sebon
 1 dagenham
 2 mendelsham
 3 mossend
 4  newbridge 
fleming howden
 5 plymouth
 depotsrdc
 flour mills
 4 bradford
 5 greenford
 6 nottingham
 4 glasgow
 5 manchester
 6 selby
 7 wigan
 7 southampton
 8 wellingborough
group revenue
underlying
£13538m
grocery
£8567m 63
bread
£4971m 37
group branded mix
824
branded
£11164m 82
non branded
£2374m 18
group employees
31 dec 2012
9288
grocery
4209 45
bread
5079 55
revenue
underlying
1
£4971m
1 
excludes milling sales of £1914m
divisional c ontribution
£269m
2
3
4
6
1
2
1
3
4
5
5
4
6
7
1
2
3
4
5
6
7
8
2
3
5
1
branded revenue
75
nonbranded revenue
25
branded
mix
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overview premier foods plc  annual report and accounts 2012  
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overview of the year
2012 has been a year of significant achievement as we have delivered against our strategic 
priorities this summary provides a flavour of some of the key highlights split into 4 categories 
brands sustainability corporate activity and governance
sustainability
brands
corporate activity
governance
key
‘green matters’ 
employee 
environmental 
awareness 
initiative 
launched
silver quality 
mark award 
at the 2012 
charities trust 
payroll giving 
awards
‘top marks’ in the 
world wildlife 
fund wwf 
‘palm oil buyers 
scorecard’
industry sector 
award and the 
road risk award 
at rospa
green supply 
chain award at 
supply chain 
distinction 
awards
new bisto 
‘aah night’ tv 
campaign
new ambrosia tv 
ad campaign
launch of new 
sharwood’s wrap 
kits
new oxo tv ad 
campaign
launch of 
batchelors 
“fuelling britain” 
campaign
new mr  kipling 
tv ad campaign
new sharwood’s 
“great british 
curry” campaign
launch of new 
hovis farmers 
loaf
launch of new 
‘loyd for one’ 
bolognese sauce
completion of 
£347m irish 
brands disposal
update on 
growth plan 
and increased 
cost reduction 
programme 
announced
refinancing and 
full year results 
announced
annual general 
meeting
sale of vinegar 
and sour pickles 
business for 
£41m announced
ims for 3 months 
to 31 march 2012
finance 
committee 
review  
refinancing
board approve 
refinancing and 
full year results
presentations 
to investors and 
analysts
update on 
progress of 2011 
board evaluation 
action plan
appointment of 
david beever as 
chairman
january february march april may june
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board review of 
brands strategy 
and key risks
we have achieved a huge amount in  
2012 across all areas of the business
half year results
sale of sweet 
spreads  
jellies business 
for £202m 
announced
sale of sweet 
pickles and 
table sauces 
for £925m 
announced
announcement 
of bread 
restructuring
disposal target of 
£330m exceeded 
ahead of plan
board review of 
2013 business 
plan
completion of 
£340m elephant 
atta disposal
approval of half 
year results
presentations 
to investors and 
analysts
shareholder 
meeting to 
approve sweet 
spreads  jellies 
disposal 
appointment of 
jennifer laing as 
ned
board approval 
of 2013 business 
plan
appointment of 
ian krieger as 
ned
shareholder
engagement 
exercise 
undertaken
shareholder 
meeting to 
approve sweet 
pickles and table 
sauces disposal
rspo supply 
chain certification 
for 27 sites — 
more than any 
other company 
worldwide
good egg award 
from compassion 
in world farming 
for commitment 
to use free range 
or barn eggs
mr  kipling snack 
pack win the 
grocer new 
product awards
providing work 
experience as 
part of industry 
“feeding 
britain’s future” 
campaign
ambrosia  
national sampling 
campaign
loyd grossman 
visits food 
festivals
launch of new 
bisto stock melts
launch of new 
batchelors deli 
box
european 
strategic 
manufacturing 
award
mr  kipling wins 
at the grocer 
marketing 
advertising and 
pr awards 2012 
for jubilee poster 
campaign
john sainsbury 
award for 
learning and 
development
launch of hovis 
seven seeds 
campaign
mr  kipling new 
halloween 
varieties
£260k raised by 
staff over two 
years for corporate 
charity partner 
“help for heroes”
july august september october november december
new loyd 
grossman 
website launched
cadbury cake 
contract renewed
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chairman’s statement
delivering on our promises
“over the year management has clearly 
demonstrated their commitment to deliver 
on the key strategic priorities to turnaround 
the business whilst at the same time 
generating growth momentum”
overview of the year
2012 has been a year of very significant 
transformation for premier foods the 
management team has done an exceptional 
job to deliver underlying trading profit growth 
in challenging market conditions complete 
the disposal programme ahead of schedule 
and establish a platform for growth as we look 
forward to 2013 in 2012 management set out 
a number priorities to stabilise the business 
and i am delighted that they have delivered on 
these the ability to deliver often ahead of time 
is an important step in rebuilding trust with key 
stakeholders – our customers shareholders 
banks pension schemes and employees it’s 
also the key reason why the company has 
been able to report an increase in sales of its 
power brands and in underlying trading profit 
despite the difficult economic environment  
in 2012
in march we announced the successful 
completion of a refinancing package with our 
banking syndicate the new facility extended 
to 2016 allows the space for the business 
to execute its turnaround strategy as part of 
this strategy the company agreed to dispose 
of noncore businesses to raise £330m of 
proceeds a target it exceeded by £40m and 
over a year and a half early in turn reducing 
net debt levels significantly in addition a major 
cost reduction programme was implemented 
to help adapt the company’s cost base to the 
more focused portfolio delivering £48m of 
savings by the end of 2012 with a further £20m 
of savings promised in 2013 importantly the 
company has generated growth momentum 
behind its power brands by stepping up 
marketing investment and through initiating 
more collaborative partnerships with its key 
retail customers as a result underlying sales 
increased 32 to £13538m with grocery 
power brands up 40
leadership
in february gavin darby was appointed as 
chief executive officer following michael 
clarke’s decision to resign from the company 
michael had previously indicated to the board 
that having delivered the initial stages of the 
turnaround and set a course for sustainable 
profitable growth he was considering moving 
on to pursue other opportunities to help plan 
for a potential succession the board initiated a 
contingency process which eventually led to the 
appointment of gavin darby 
i am delighted that we have been able to find 
a successor of gavin’s quality his strong 
consumer goods background and senior 
executive experience make him the ideal 
candidate to lead the company and the 
board looks forward to working with him as 
premier foods moves to the next phase of its 
transformation i would also like to take this 
opportunity to thank michael for his significant 
contribution to the company 
employees
during the year we have continued to 
strengthen the capabilities of the company 
particularly within sales and marketing in the 
grocery division we realigned our commercial 
team bringing together our sales and marketing 
teams under one roof along with our innovation 
technical insight and grocery supply chain 
teams this will ensure greater alignment with 
the delivery of our growth plans a dedicated 
management team has also been put in place 
to focus on addressing the challenges faced by 
the bread business 
david beever
nonexecutive chairman
in october 2012 we won the john sainsbury award for 
learning and development a prestigious national food 
industry award for our breakthrough leadership programme
underlying trading profit
£1234m 
106
net debt
£9507m 
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during the year a large number of ambitious 
change programmes have been undertaken 
simultaneously in order to increase focus and 
efficiency including the disposal of noncore 
businesses a major cost reduction programme 
and the recently announced restructuring of 
the bread business management has moved 
quickly to communicate these changes and 
provide clarity to employees however i fully 
recognise this has been a challenging time for  
those concerned and i would like to thank all 
staff at premier foods for their hard work and 
commitment in delivering the 2012 results 
as has been the case in past years the health 
and safety of employees remains an area of 
key focus and i am delighted that yet again the 
operational team have delivered improvements 
with reportable accidents down 42 in 2012 
this outstanding health and safety record puts 
premier foods at the forefront of the british 
manufacturing industry
sustainability
ultimately the company endeavours to deliver 
sustainability in everything it does whether that 
applies to financial results or in the way it uses 
natural resources wider sustainability issues 
are becoming more and more important with 
our consumers and customers most of our 
major customers have significant sustainability 
programmes and this is another way we are 
working in partnership with them to help 
support their strategic priorities in 2012 the 
company delivered further improvements 
across all of its environmental kpis including 
co
2
 equivalent emissions reduced by 28 and 
waste to landfill down by 53 
our approach to sustainability also extends to 
how we source our raw materials and ensure 
the highest levels of quality and food safety 
i’m pleased to say that we continue to have 
an excellent track record in this respect which 
is important given recent public concerns over 
the authenticity of meat products we are 
also addressing consumer concerns about 
health issues such as the amount of salt fat 
and sugar in their diet as well as portion size 
we continue to offer a wide range of ‘better 
for you’ choices and informative labelling and 
other communication we also continued to 
deliver against our commitments under the 
public health responsibility deal to reduce 
salt levels in a range of products and reduce 
calories across a significant part of our portfolio 
further information about our approach to 
sustainability is set out on page 24
governance
as a board we are committed to good 
governance and have kept up to date with 
changes in the year including the new 
corporate governance code that was issued 
in september and the proposed changes 
to remuneration disclosures outlined by the 
government in june 2012 a detailed update 
on our governance process changes to the 
board and dialogue with shareholders over the 
course of the year are set out in my introduction 
to the governance section of this annual report 
on page 38 
looking forward
it’s clear the economic climate will remain 
very challenging in 2013 however following 
the achievements of 2012 i believe we have 
a strong platform from which to drive growth 
we have the right focus strategies and 
management team in place and in gavin darby 
we have a ceo with a proven track record to 
deliver further progress in 2013 and improve 
shareholder value over the medium term i 
look forward to working with gavin darby the 
management team and the rest of the board 
to deliver the next stages of premier foods’ 
transformation  
david beever
nonexecutive chairman
sustainability in everything we do   
reduc tion in  
reportable  
accident rates  
in 2012
workpla ce health  safety
since 2007 our health  safety team have led a step
change in health  safety management which has 
resulted in significant and sustained improvements in 
health and safety performance across the group
our industry leading performance has received a 
number of external awards in 2012 42
for information about 
sustainability see page
24
new range of ambrosia rice pot sizes 
launched in 2012
photograph
quick links
scan the qr code  
to take you directly  
to more information  
on sustainability
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12
chief executive’s review
delivering sustainable growth
“i am looking forward to working with the 
management team to deliver sustainable 
growth for the business”
q what attracted you to joining 
premier foods
a i am excited to have joined premier foods 
at this important stage in its transformation 
premier foods has a great portfolio of 
brands that consumers know and love and 
a great depth of talent and expertise i am 
confident that there is real potential to grow 
the company given my track record and 
experience i believe i have a big opportunity 
to make a difference at premier foods by 
working with the management team to deliver 
sustainable growth
q what is your background
a much of my management experience has 
been spent in the consumer goods sector 
building brands i spent 15 years at coca
cola one of the world’s best known brands 
before moving into the telecoms industry 
where i was one of the pioneers that helped 
develop the vodafone brand to be amongst 
the top ten global brands in value i led the 
team that introduced the vodafone brand into 
india earlier in my career i worked in the food 
and homecare sectors in fact i started out 
at spillers foods working on the homepride 
brand which of course is now owned by 
premier foods
q you’ve only been at premier 
foods a short time but what are 
your initial views on the group
a i am impressed with the job that 
management did last year to stabilise the 
business particularly given the difficult 
economic environment the results for the 
year are encouraging with much of the initial 
restructuring now complete or in motion we 
now need to turn our focus to growth to drive 
the next stage of the turnaround i believe we 
have a clear strategy and a strong team in 
place to deliver future growth
q are you planning to change 
the group’s strategy
a i am a great believer in ‘focus’ and in 
strategies that require focus the existing 
strategy of investing behind a small number 
of power brands is exactly in line with my 
approach furthermore the company has 
demonstrated that this strategy is beginning 
to deliver results i therefore see no need 
for any significant change of course it’s 
important to ensure continuity for the 
business and for our customers and other 
stakeholders the important point for me is 
to drive the execution of our strategies and 
ensure we continue to deliver our results 
q why have you chosen to 
invest such a significant sum in 
premier foods shares
a i believe a ceo should be personally 
aligned with the interests of shareholders 
from the start i have confidence in the future 
of premier foods and our ability to deliver 
improved shareholder value over the medium 
term 
q how do you see the 
economic outlook for 2013
a markets look just as difficult in 2013 
as they did in 2012 consumers have less 
disposable incomes and are shopping 
differently it is very important that we give 
consumers a clear reason to buy our brands 
versus the competition and also build 
mutually beneficial relationships with our 
key customers i believe we have the right 
strategies in place to deliver further progress 
in 2013
q what are the strategic 
priorities for 2013
a there is a strong business plan for 2013 
which builds on the foundations laid down 
in 2012 our strategic priorities for this year 
are to 
•	 build on the momentum we have in 
grocery particularly through continuing 
to invest behind the power brands and 
exploit growth opportunities across 
different channels
•	 rebuild value in the bread business 
through implementing restructuring plans 
and selective investment in the hovis 
brand and 
•	 continue the simplification and cost 
reduction process including the delivery 
of a further £20m of overhead cost 
savings
my priority will be to ensure we execute these 
strategies with energy and pace to deliver 
further progress in 2013 i’m looking forward 
to it
gavin darby
chief executive officer
we won the green and sustainable manufacturing award in october 2012 
recognising the leadership we have shown in reducing waste energy and water 
consumption at our sites and thereby lowering our overall carbon footprint 
premier foods annual report 2012frontindd   12 15032013   150224 market insight 14
our strategy 16
 brands 18
 partners 20
 focus 22
 sustainability 24
key performance indicators 26
contents
batchelor’s deli box range with innovative 
new packaging launched in 2012
photograph
the strategic r eview sets  
out a detailed review of the 
key elements of our strategy  
— brands partners focus 
and sustainability — and 
how we have performed 
against our key performance 
indicators
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strategic review
strategic review
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strategic review
united kingdom gdp annual growth rate
united kingdom consumer confidence
january 2008 january 2010 january 2012
6
4
2
0
2
4
6
8
30
20
10
0
10
40
market insight
deep market insight is important to help 
us understand what is happening to our 
consumers and what is shaping their 
shopping behaviour
insight team
we have a dedicated insight team at premier 
foods focused on helping us to understand 
consumer and shopper trends and identify 
growth opportunities
we undertake research to understand the 
impact of macro trends on purchasing and 
consumption within our categories and 
use insights to develop and measure the 
impact on our brand and sales activities this 
research also helps us to understand our 
retail customers’ strategies and how they are 
reacting to changes in the market
what are some of the key factors that 
are affecting our markets consumers 
and customers
1 macro economic impact
during 2012 the uk entered a “double dip” 
recession the graph above tells the story 
and is something that we all as consumers 
have experienced over the last year uk gross 
domestic product gdp fell back into negative 
territory after a brief rally in 20102011 whilst 
the dip in 2012 was not nearly as severe as 
that experienced in 2009 its impact on the 
continuing low level of consumer confidence 
can clearly be seen 
spending power has been affected by grocery 
inflation currently around 4 and also the 
sustained impact of domestic fuel costs such 
as gas electricity and in particular petrol at the 
same time salaries have remained flat 
as a result people are spending more on food 
as a proportion of their income as prices rise 
but overall are buying less in volume terms of 
the food they do buy people are increasingly 
looking for greater value 
how are we responding
we will continue to improve and emphasise the 
quality taste and more convenient packaging 
that our products have to offer versus the 
competition with our consumer quality 
benchmarking we undertake blind testing with 
consumers to test our major products with their 
main competitors
2  low market growth driving high 
promotional activity 
with little market growth competition is 
intensifying driving high levels of promotional 
activity since 2011 there has been a change 
in the promotional metrics observed within 
grocery with a significant increase in the use of 
a single price point particularly £1 as opposed 
to multiple purchase deals this is in part a 
response to the growth in discounters and has 
been popular with consumers looking for value 
and spending on a fixed budget
how are we responding
we will continue to invest behind our brands 
to compete with rival products we must 
ensure our marketing is effective and engages 
with consumers we also need to work with 
customers to ensure our promotional activity is 
effective whilst maintaining margin  
source uk office for national statistics and gfk nop 
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strategic review
market insight
3  more people eating in but they have 
less time to cook
there has been significant shift in consumption 
behaviour following the onset of recession in 
2007 with people eating out less and preferring 
to eat at home  
whilst more meals are now being prepared 
at home preparation times are continuing 
to decline highlighting the importance of 
convenience
consumers are also less willing to experiment 
and instead focus on ‘family favourites’ which 
they know will be well appreciated 
how are we responding
our portfolio of affordable convenient meal 
solutions is well placed to take advantage of 
this trend providing high quality great tasting 
food that can be prepared easily by following a 
few simple steps 
new packaging formats also help provide 
greater convenience for people eating on the 
go using lunch boxes or snacking 
4 health and food quality concerns
long terms trends show that health 
considerations have almost doubled in 
importance in the last 17 years this can be 
seen in the increasing interest in ingredients 
such as salt and fat increased disclosure 
through labelling and guideline daily amounts 
gdas and the focus on the benefits of eating 
‘5 a day’ 
allied to health is an increased interest in food 
quality and provenance people are looking for 
reliable brands they can trust this means an 
increased focus on the sourcing of products 
and the traceability of ingredients
how are we reacting
we have committed to a target that at least 
50 of our new products have a claimable 
health or nutritional benefit this might be by 
reducing salt portion size or the inclusion of 
one of your ‘5 a day’ 
in addition we continue to ensure that our 
products are produced to the highest quality 
where possible we source our ingredients in 
the uk and have an integrated traceability and 
testing system throughout the supply chain 
5 seasonal events
the importance of seasonal events has 
steadily increased over recent years with both 
traditional events such as easter as well as 
halloween and chinese new year in addition 
specific events such as the olympics and 
royal wedding can have a significant although 
temporary impact on consumption
how are we responding
we identify seasonal events and introduce 
products with seasonal relevance and work 
with customers to ensure prominent instore 
execution
6 changing shopping habits
in 2012 people were shopping more often 
with increased trips to small stores to ‘top up’ 
to best manage household budgets there 
has been a fall in the main weekly shop at 
larger format supermarkets more people 
are purchasing daily on a fixed budget and 
often buying from more than one shop to get 
best value there has been an increase in the 
discounter channel although this remains a 
relatively small share of the overall market we 
have also seen continued growth of online 
shopping which enables consumers to plan 
and scrutinise their purchasing in more detail 
“whilst my wife and i are sitting together 
watching telly she will open two windows on 
the computer and go through comparing the 
total shop at two supermarkets it’s actually 
quite satisfying” 
quote from a consumer in research this year 
how are we responding
in 2012 we realigned our grocery commercial 
team to help exploit growth opportunities 
across all channels 
case study  — sharwood’s wrap kits
consumers are eating more at home they are looking for the high 
quality great tasting food but it must also be affordable people 
have less and less time to cook so a quick and simple step by step 
approach can help whilst still being something that involves the 
whole family 
meal kits is a fast growing sector in the cooking sauces and 
accompaniments category and has historically been dominated by 
mexican flavours
meal kits are a great way to give the family a home cooked meal 
whilst they all can share the meal experience
this gave sharwood’s the opportunity to introduce asian cuisines 
to the sector in addition indian and chinese wrap kits fit perfectly 
with sharwood’s plans to move into new categories producing meal 
solutions which will in turn drive brand growth and sales the kits 
performed exceptionally well in consumer tests
each wrap kit is made up of three components – eight wraps a dry 
spice mix and a wet sauce and serves a whole family of four
in september 2012 mr kipling angel slices won the grocer new product 
awards sweet snack category for its innovative snack pack format the novel 
snack pack design makes the individual cakes an ideal lunch box cake that 
exceeded expectations on appearance taste and texture
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strategic review
our strategy
strategy
our strategy is based around brands partners and focus underpinned by a 
commitment to sustainability in everything we do progress against our strategy and 
each of our four strategic priorities is set out in this section of the report we have also 
highlighted 10 key performance indicators which we use to track our progress against 
our strategy these are set out on page 26
sustainability
ultimately we aim to deliver sustainability in everything we do whether that applies to financial results or in the way we use natural 
resources wider sustainability issues are becoming more and more important with our customers and consumers 
deliver yoy financial results
we believe our strategy will build a platform for a more stable sustainable business which will deliver profitable results and 
shareholder value
meet economic social and environmental kpis
our approach to sustainability extends across the whole business from our commitment to reduce our impact on the environment 
to how we source our raw materials and ensure the highest levels of quality and food safety it also addresses consumer concerns 
about health issues in respect of certain ingredients over raw material sourcing as well as portion size 
strive for sustainability in everything we do   
brands
we have a great portfolio of brands 
that operate in a number of large 
categories our strategy is to focus 
on our power brands which we 
believe have the best potential for 
growth either through new product 
development or through category 
growth
connect with consumers
we connect with consumers by using 
our market insight to understand 
consumer trends and shopping habits 
and communicating how our products 
fit with their lifestyles
investing and growing  
power brands 
developing innovative products that 
taste great are relevant to today’s 
eating habits are convenient and have 
innovative packaging we invest in 
our power brands with engaging and 
effective marketing 
exploit all marketchannel 
opportunities
exploit growth opportunities by 
adapting our approach to each 
specific channel and customer
partners
for our business to be successful 
in the longterm we must continue 
to develop strong relationships with 
all our partners our customers 
suppliers employees and other 
stakeholders
win with customers
developing joint business plans 
with our key customers to deliver 
category growth investing in our 
capabilities to ensure excellent 
instore execution developing 
price and pack options appropriate 
to each customer channel and 
delivering great customer service
partner with suppliers
working in close partnership with 
our key suppliers to develop long 
term relationships whilst leveraging 
our scale with suppliers to facilitate 
value creation
engage employees
providing career opportunities and 
high standards of learning and 
development to attract retain and 
develop our employees
collaborate with stakeholders
we will continue to collaborate and 
develop strong relationships with a 
wide range of other stakeholders 
including our shareholders 
focus
we are focused on driving 
simplification and efficiency to 
remove complexity from the 
business and reduce our costs 
at the same time we will not 
compromise on our commitment 
to food quality food safety and the 
health  safety of our employees
simplify processes  
and structures
we continue to target simplification 
across the business
improve efficiency and 
effectiveness
we generate cost savings through 
manufacturing controllable costs 
and procurement which can be 
invested to support growth
commitment to food safety 
and quality
as we target cost savings it is vital 
that we remain totally focused and 
committed to the highest standards 
of food quality and food safety
maintain leading health  
safety record
a sustainable business is also a 
safe one in collaboration with all 
our employees we continue to drive 
health  safety improvements
premier foods annual report 2012frontindd   16 15032013   150231 connecting with consumers with a range of 
products relevant to today’s eating habits
photograph
did you 
know
across 2012 we have  
reduced salt in more  
than 600 individual products 
across 53 branded  
categories   
600
for further information about  
diet and health see page
24
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strategic review
premier foods annual report 2012frontindd   17 15032013   150234 did you 
know
27 premier foods’ 
manufacturing sites 
have been accredited 
with roundtable for 
sustainable palm 
oil rspo chain of 
custody certification 
more than any other 
company worldwide
27
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strategic review
brands
investing in and growing our power brands  
is at the heart of our strategy
our strategy is to focus on our power brands 
power brands operate in large categories and 
hold no1 or no2 positions in their respective 
categories we believe they have the best 
potential for growth either through new product 
development or through category growth
investing in growth
in order to deliver sustainable growth we are 
focusing our investment behind our power 
brands this means investment in innovation to 
ensure we have a steady flow of new products 
investing in quality to ensure our products taste 
great and appeal to consumers and investing 
in marketing and promotions to support our 
brands and help them compete in the market  
marketing
during the year we have significantly increased 
investment in our power brands with a 59 
increase in marketing spend following the 
disposal of certain noncore businesses power 
brand revenue now makes up 80 of our total 
branded revenue 7 of the 8 power brands 
were on tv in 2012 a major increase in activity 
compared to 2011 supporting a range of new 
product launches
consumer quality benchmarking
we are also investing in our brands to become 
leaders in food quality to ensure consumers 
think our products taste great and better than 
the leading competitor we know that product 
quality is a key driver for repeat consumption 
and that improving quality has a significant 
impact on consumption with consumers we 
have a two fold approach
•	 we use consumer insight to assess our 
product quality and where necessary 
redesign recipes and 
•	 we ensure we have the correct production 
techniques to ensure that finished products 
are produced to the right level of quality
during 2012 we have undertaken a significant 
project to review the performance of our 
main products against their biggest market 
competitors whether branded or own label 
the process involves external blind testing with 
consumers unless our product achieves a 
rating of ‘significantly superior’ to its competitor 
improvement opportunities are investigated and 
we work with our brand teams to reformulate 
recipes that win with consumers a good 
example of this is batchelors super noodles 
reduced salt prior to reformulation our product 
tested at parity with the key competitor 
through the reformulation process our focused 
product understanding enabled us to design a 
better product that now tests as superior
 
focused innovation
in order to achieve our growth objectives it is 
important that we can generate a range of new 
products that respond to consumer trends and 
changes in eating habits the starting point 
for this is our insight into british consumers 
which is driven by a clear understanding of the 
values attitudes and needs of our consumers 
premier foods has a history of creating new 
and unique products and we continue to invest 
in our innovation process during the year we 
launched a number of new products including 
sharwood’s wrap kits batchelor’s deli boxes 
bisto stock melts and also hovis british 
farmers loaf which was one of the top 10 uk 
grocery brand launches in 2012
innovation falls into 3 main categories
•	 products
•	 packaging and
•	 promotion
branded mix
824 
po wer brand sales gro wth
21 
we have a great portfolio of brands that operate in a 
number of categories many of our brands have strong 
market positions and high brand awareness 
mr kipling’s successful jubilee campaign was awarded the 
best consumer press campaign at the grocer marketing 
advertising and pr awards in november 2012
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strategic review
products
the most important area is obviously new 
products this can be a completely new product 
or a new variety of an existing product 
bisto stock melts
bisto stock melts are a range of new individual 
concentrated stock pots the innovative 
new product format was launched in 2012 
responding to the increased popularity of wet 
stock stock melts offer consumers a high 
quality and easytouse stock product which 
represents a credible short cut for home 
cooking it is also relevant to a wide range of 
meal occasions such as casseroles stews 
pies spaghetti bolognese soups and curries 
stock melts performed well in consumer 
research in terms of ease of use and taste with 
over 88 of consumers rating the product as 
goodvery good  
packaging
packaging innovation is also important and can 
help our products be used in different ways and 
in different meal occasions 
mr kipling snack packs
mr kipling have launched a new snack pack 
range of individually wrapped cakes this 
new and innovative packaging is designed to 
provide convenient cakes to eat when you’re 
out and about snack packs are perfect for 
younger families and packed lunches the 
new pack design has proved popular with 
consumers and also helps our product stand 
out from its competitors instore over 2012 we 
have increased the range of varieties available 
in the snack pack range and also launched 
the ‘cake to go’ campaign using innovative 
dispensing posters outside 20 locations where 
passersby could get their own free sample at 
the touch of a button in september 2012 the 
novel packaging won the grocer new product 
awards in the sweet snack category
promotion
finally we also focus on innovation in 
promotion to ensure we engage with 
consumers and customers to help raise 
awareness for our products and drive sales
batchelors ‘fuelling britain’
in 2012 batchelors launched its biggest 
ever onpack promotion ‘fuelling britain’ in 
response to the continued rise in fuel prices 
and household bills we introduced an innovative 
promotion aimed at helping hard working british 
families the promotion offered shoppers the 
chance to win free fuel for a year during every 
week of the promotion the promotion proved 
very popular in the first half of the year and was 
repeated in the run up to christmas
case study  — innovation kitchen
generating 10 of turnover 
from npd 
the ability to bring to market a steady 
stream of new products is key to our 
longterm success we introduced a 
new innovation platform in 2011 to focus 
innovation on fewer bigger and better 
concepts in order accelerate branded 
growth plans via organic growth
the programme starts by using our 
consumer insight to identify trends and 
opportunities for growth the process 
is designed to ensure greater alignment 
between our functions and is based 
around a set of standard processes and 
systems 
     so ho w does the innovation kit chen w ork
preparation
preparation
strategic framework
ingredients
bigger and better ideas
cooking
flawless execution
 set vision
develop strategic 
platform
create 3 year 
pipeline
ingredients
 opportunity scoped
cross functional 
team formed
5 step process
winning ideas 
identiﬁed
cooking
 solutions scoped
feasability tested
business case 
developed
launch preparation
launch and review
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strategic review
whilst we recognise this is an ongoing process 
and there is still more to do we have made 
significant progress over the year 
customers
we have a broad customer base that operates 
across a number of channels including multiple 
retail wholesale cash  carry impulse retail 
discounter foodservice and international each 
of these channels and each of our customers 
are different so we need to have an approach 
for each customer which is aligned with their 
priorities
building capability
within grocery we have now combined the 
sales and marketing functions into a single 
commercial group including our technical and 
innovation functions furthermore this aligned 
commercial function is now much closer 
aligned with the manufacturing and logistics 
operations within the grocery business at the 
same time we have built internal resources 
and made a number of senior appointments to 
strengthen and develop the commercial group 
within bread we have put in place a dedicated 
management team to drive the turnaround of 
the division 
multiple retail
our focus has been to move from a 
transactional approach to develop longterm 
sustainable relationships over the year we 
have agreed joint business plans with each 
of our major customers this process has 
involved
•	 working with our customers to understand 
their categories and their strategy
•	 developing ways that we can align to their 
strategic objectives
•	 collaborating with customers to maximise 
the opportunities for category growth 
•	 using our innovation and consumer insight
•	 focusing on multiformat instore 
execution and 
•	 resourcing and delivering plans with 
excellence
cash  carry wholesale and impulse 
over 2012 we implemented standard pricing 
and promotional architecture across this 
channel this has reduced complexity and 
helped provide clarity in how we deal with 
customers additionally in 2012 we have 
created a range of price marked packs across 
our top 20 products price marked packs 
provide confidence to the consumer in the 
value being offered a key focus in 2013 will be 
to gain wide distribution of this pricemarked 
range
discounters 
whilst still a relatively small channel in terms 
of the overall market the discounter channel 
has been growing over the last few years as 
consumers react to the challenging economic 
environment this channel therefore represents 
a growth opportunity for the group in 2012 
we have put in place a discreet team whose 
role it is to grow our business in this sector by 
establishing strong relationships with each of 
the major customers
online
building strong relationships with our key 
retail customers is underpinned by our 
understanding of different retail formats and 
how the importance of formats is changing for 
each retailer for example online
uk online grocery sales in 2012 were £53bn 
representing 50 of the total grocery market 
and grew 18 in 2012 internet usage is 
increasing in importance with 29m people 
in the uk now viewing the internet daily and 
offers growth opportunities for premier foods 
however the channel has different dynamics to 
the traditional shopping trip which need to be 
understood and addressed 
partners
developing longterm relationships with all our partners
for our business to be successful in the longterm 
we need to develop strong relationships with all our 
partners improving our relationships with customers and 
strengthening our capabilities within the commercial team 
were both strategic priorities in 2012 
working with our customers
celebrating chinese 
new year with 
sharwood’s
seasonal events are a significant opportunity 
for both premier foods and our customers 
to grow sales christmas and easter are two 
established opportunities however chinese 
new year is another event which is growing 
in popularity in early 2013 we partnered 
with number of large customers to capitalise 
jointly on this growing event with our 
sharwood’s brand throughout 2013 we will 
investigate opportunities to collaborate with 
our customers around seasonal events
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strategic review
for 2013 our focus will be
•	 improving the shopper experience making 
sure our products receive prominence in 
online searches and that they are correctly 
described with up to date product images
•	 maximising the potential for cross selling 
opportunities and
•	 linking with key seasonal events to capture 
peak trading opportunities
diagnostic capability
we have been investing in our systems to 
improve our decision making process the 
commercial team is developing an integrated 
plan to improve
•	 forecasting – to simplify processes and 
improve accuracy
•	 retailer profitability modelling – to support 
joint business plans jbps with customers 
and
•	 promotional evaluation and modelling – to 
understand the impact of promotions on 
category brand and customer
working with suppliers on 
sustainability
in recent years sustainability has become a 
much bigger part of our relationship with all of 
our retail customers an increasing number of 
retail customers are now working to embed 
sustainability into their businesses they are 
setting ambitious targets in areas as diverse 
as sustainable and ethical sourcing health 
and nutrition packaging energy use waste 
reduction and greenhouse gas emissions
premier foods’ produces both branded and 
retail customer own label food products and we 
have found many opportunities both through 
direct collaboration and industry programmes 
to engage with our customers and improve the 
sustainability of our businesses
engaging our employees
we provide employment for around 9000 
employees at over 40 sites across the uk 
including production sites bakeries mills and 
offices
we are committed to providing high standards 
of learning and development to deliver 
excellence in all our business activities while 
equipping our employees with the right skills 
they need to progress we continually assess 
the learning  development requirements of 
our employees and our challenge is to deliver 
high quality training 
we strive to attract and retain talented 
committed employees and actively encourage 
development from within we have developed 
a talent identification and succession planning 
programme which has now been rolled out 
across the business to help build our internal 
pool of talent so we can resource roles 
internally wherever possible 
we also run a successful student workplace 
placement programme within our technical 
function which gives us a talent pool for future 
recruitment and support site based learning 
such as nvq and ilm training through our 
learning resource centres 
leadership
over the year we have made significant 
progress in strengthening capabilities 
particularly within the commercial team with a 
number of senior appointments we now have 
in place a strong team with significant brand 
experience and a focus on execution and 
delivery
breakthrough leadership programme
the breakthrough leadership programme is 
one of our main management learning and 
development activities giving key managers 
training and experience on being a senior 
manager and giving them the confidence and 
skills to develop their own leadership style 
the programme is designed to work with our 
business strategy and develop our leadership 
behaviours we believe that the programme is 
fundamental to the success of the business as 
it equips colleagues to support change though 
increased confidence and knowledge the 
programme also prepares leaders for bigger 
roles to build effective crossfunctional teams 
in 2012 the breakthrough programme won 
the john sainsbury award for learning and 
development this award is a national food 
industry accolade and is given at the igd 
food industry awards which recognise 
the achievements of companies in food 
manufacturing farming retail distribution 
wholesaling and foodservice as well as best
inclass programmes that demonstrate exciting 
new thinking in the sector 
suppliers
we are committed to working in close 
partnership with our key suppliers to facilitate 
value creation and enhance long term 
sustainable relationships as one of the uk’s 
largest food producers our preference is to 
source ingredients products and services from 
uk producers and suppliers last year we 
spent around £13bn with suppliers and of this 
82 was with uk producers and suppliers
during 2012 our team of category procurement 
experts continued to consolidate our supply 
base manage key supply chain risks through 
effective risk management and ensure that we 
have fully leveraged our scale across all areas 
of the business
as part of our efforts to simplify the business 
and increase leverage we have actively reduced 
our supply base and increased spend with 
our leading strategic and preferred suppliers 
over the past five years we have reduced the 
number of our suppliers by 65 from 9472 in 
2008 to 3299 last year and we are targeting 
a further reduction of 5 during 2013 during 
this period the total spend with our top 250 
suppliers has increased reaching over 82 in 
2012
raw materials
£589m
packaging
£164m
indirect
£369m
bought in
£78m
energy
£82m
supplier
spend
partners
developing longterm relationships with all our partners
sustainability in everything we do   
employee rec ognition aw ards
the premier food’s “best in british foods awards” recognises the outstanding achievements of employees working 
at locations across the country in 2012 we had a record number of nominations under the four headings that are 
aligned to our strategy – building our brands collaborative working focus and sustainability
the winner of the collaborative working award was the mr kipling team who worked with carleton community high 
school as part of an initiative to engage children in the manufacturing industry the school children came up with 
the idea of the british summer mini batts a twist on the traditional battenberg range the school children wanted 
a product that portrayed britain and out of this came the rhubarb and apple mini batt a product with truly british 
flavours packaging was also conceptualised and the team assisted by the school children settled on pink and 
green union jack inspired packaging to give real stand out on shelf finally a listing with a major retailer was secured 
this was a major collaborative project building relationships both within the local community and also with a key 
customer 
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at the same time we will not compromise on 
our commitment to food quality food safety 
and health  safety ensuring it remains at the 
forefront of everyone’s mind – we call this 
operational excellence
business simplification  
efficiency and effectiveness
disposal of noncore businesses
during 2012 we completed a major disposal 
programme exceeding our lender agreed 
disposal target of £330m by £40m the 
proceeds of £3695m have been used to 
reduce net debt and further details on the 
disposals is set out on page 92 the disposals 
allow the business to focus on its power 
brands helping to simplify the business and our 
overhead costs the disposals require careful 
management of complex transitional services 
between the company and purchaser to 
provide an orderly separation of the business 
this ensures that orders production and 
delivery standards are maintained for our 
customers further information of how we 
have managed separation risk over the year is 
provided on page 49 
cost savings initiative
in january we announced an initiative to deliver 
£40m in overhead cost savings by 2013 and 
have been able to significantly exceed this 
target by delivering savings of £48m in 2012
the project is part of our ongoing simplification 
exercise across the business reflecting the 
company’s scale following the disposal 
activity outlined above this has focused on 
the optimisation of structures particularly 
within central functions simplifying reporting 
structures the introduction of new it systems 
and reviewing ways of working to focus on key 
requirements
we have committed to deliver a further £20m of 
overhead cost savings in 2013 and the majority 
of these savings have now been identified  
consolidation of grocery logistics
the disposal programme has been 
concentrated on brands within the grocery 
business and has provided the opportunity to 
significantly reduce the complexity and size of 
our logistics footprint  
our grocery distribution footprint is being 
restructured as our centre of gravity moves 
away from east anglia we have now reduced 
our original seven distribution centres to three 
including a new outsourced distribution centre 
at corby operated on our behalf by wincanton 
our ambient logistics are now fully outsourced 
this removes disynergies of more than £4m a 
year again it’s a highly complex project with 
27 separate work streams to ensure customer 
service levels are maintained throughout the 
process  
progress in 2012 saw our new distribution 
centre in corby go live – the 252000ft site 
has a capacity to hold 35000 pallets and has 
facilitated the closure of several smaller sites
focus
simplification efficiency and effectiveness
sustainability in everything we do
tra ceability
we have put in place 
integrated traceability and 
monitoring systems from 
animal and crop husbandry 
via delivery of these raw 
materials to our factories 
through the manufacturing 
process and distribution 
system to our products being 
consumed within the home 
this traceability system is 
tested during all factory 
audits and annually as part 
of the quality management 
system
the following table highlights 
some elements of testing and 
control throughout our supply 
chain 
we continue to focus on ways to simplify the business 
improve efficiency and reduce our costs in 2012 we 
divested a number of noncore businesses significantly 
reduced our overhead costs progressed the consolidation 
of our grocery logistics and began a broader restructuring 
of our bread supply chain
from 
the ﬁeld 
•
•
•
 inspection of 
crops throughout 
the growing 
season
inspection and 
checking ﬁeld
pesticide records
harvest risk 
assessments
 to delivery 
to factory
•
•
 incoming testing
of raw materials
against agreed
speciﬁcations
screening tests 
to ensure 
compliance to 
eu regulations
 through the 
manufacturing 
process
•
•
 process control 
checks for taste
appearance and 
other parameters
random 
screening tests 
of products 
based on risk 
assessments
 and distribution
to customers
•
 full traceability
of all ﬁnished 
products
through the
distribution 
chain
to retail 
customer
 all the 
way to the 
consumers table
•
•
 quality 
benchmarking 
to ensure 
consumer 
satisfaction
consumer 
helpline for 
comments 
and queries
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strategic review
ongoing cost reduction exercise 
underlining our commitment to efficiency and 
effectiveness there have been a number of cost 
reduction initiatives running across our sites in 
2012 within grocery there have been projects 
to reformulate recipes and reduce packaging 
from our products indirect procurement have 
addressed all areas of indirect spend including 
energy saving initiatives reduced costs of 
engineering spares and agency labour the 
sites have also been successful in flexing labour 
costs to respond more efficiently to changes in 
production volumes
within bread cost saving initiatives focused on 
wastage labour flexibility recipe reformulations 
reliability indirect procurement and capex 
investment logistics savings in bread were 
generated through a variety of projects 
including driver management software and 
working practice improvements
investing for growth
the savings generated from improved efficiency 
are being used to fuel investment behind 
our power brands we are also increasingly 
targeting more of our capex spend into growth 
projects rather than repairs in 2011 growth 
capex accounted for 46 of the total capex 
spend this increased to 52 in 2012 and for 
2013 we are targeting 64 
food quality and safety
as one of the uk’s leading food producers we 
are committed to producing high quality safe 
and wholesome food products food safety 
and quality are of paramount importance to 
premier foods and are a core requirement 
throughout our organisation premier foods 
has had no public food safety recalls during 
2012 demonstrating the effectiveness of 
the investment and improvements made in 
supply chain management factory facilities 
manufacturing controls risk mitigation and 
horizon scanning for emerging issues 
resource and capability
premier foods has a high calibre technical team 
who support the operational and innovation 
programmes within the business this includes 
research facilities chefs pilot plant facilities and 
an analytical testing facility premier analytical 
services which carries out work for premier 
foods other food manufacturers government 
agencies and research institutes
product quality 
in 2012 we have put in place a finished 
product evaluation programme at each site to 
ensure that product quality and consistency is 
maintained we have made in excess of 11000 
assessments and the results have been used 
to focus quality improvement programmes at 
manufacturing sites the programme has been 
augmented by an independent consumer 
quality benchmarking programme where 
we have carried out blind evaluations with 
consumers to test our product against the key 
competitor product 
for information about consumer quality 
benchmarking go to page 18 
quality audits 
premier foods has carried out an extensive 
review of supply chain food safety and 
quality controls including the combining of 
comanufacturing and premier foods factory 
compliance controls and audits in 2012 a 
total of 142 audits were conducted globally 
these audits are carried out to the british 
retail consortium “brc” global standard for 
food safety version 6  andor our bespoke 
corporate technical standard to guarantee the 
quality and consistency of the ingredients we 
use 
premier foods maintains a comprehensive 
raw materials risk assessment covering all 
food ingredients a risk based due diligence 
contaminant testing programme is in place 
with 561 tests carried out to verify regulatory 
compliance of the ingredients we use and 
the finished products we sell with both food 
regulation and our own stringent policies in 
addition a range of audits assessments and 
visits were carried out on our raw material 
suppliers in the uk europe and other regions 
industry leading workplace health  
 safety
providing a safe workplace for our staff and 
others who work within our business remains a 
key priority for the group 
since 2007 in collaboration with employees 
we have led a stepchange in health  safety 
management which has resulted in significant 
and sustained improvements in health  safety 
performance across the group our health  
safety corporate plan setting out our strategy 
and the bespoke initiatives which deliver it has 
been fully adopted and embedded across our 
sites
at the end of 2012 our riddor frequency 
rate of 007 reportable accidents per 100000 
hours worked represented a year on year 
improvement of 42 and is the lowest 
achieved to date since 2007 this rate has been 
reduced by 87 delivering what we believe to 
be an industry leading performance 
during 2012 we adopted a lost time accident 
lta frequency rate as a key performance 
indicator signalling our determination to apply 
a preventative focus on all accidents which 
caused absence from work not only those 
which were reportable under riddor 
at the end of 2012 the group lta frequency 
rate was 020 lta’s per 100000 hours worked 
representing a 46 reduction over 2011
2012 a safe workplace for all
throughout 2012 we continued to drive our 
health  safety strategy a strategy which 
defines premier foods’ pioneering approach 
to safety leadership at all levels in our 
workplaces 
through the commitment and dedication of our 
site managers and their teams critical 
components of our strategy were further 
advanced
total observation process “tops”
our unique inclusive approach to hazard 
identification and control continued to identify 
and address work place hazards 
since its launch in 2008
128580 tops hazards have been identified
124292 tops hazards have been closedout
in this way 124292 potential accidents have 
been prevented and injuries to our employees 
and others avoided enabling them to return 
safely to their homes at the end of their shift
bs ohsas 180012007
through a site audit programme undertaken by 
an independent 3rd party auditor the health 
 safety management system across all our 
sites continues to be certificated to bs ohsas 
180012007
and our passion for the health safety and 
wellbeing of our employees and others was 
externally recognised
seqohs accreditation the royal college of 
physicians commissioned by the faculty of 
occupational medicine awarded seqohs 
safe effective quality occupational health 
service accreditation to premier foods’ 
occupational health and wellbeing service 
in october 2012 premier foods became one 
of only 63 uk organisations and the first within 
the uk food manufacturing sector to receive 
seqohs accreditation
in addition our performance was recognised 
by the royal society for the prevention of 
accidents rospa winning the rospa uk 
food and drink sector award 36 rospa gold 
achievement awards were also received by our 
individual sites
premier foods annual report 2012frontindd   23 15032013   150240 2200204 — proof 15 — 12032013
premier foods plc  annual report and accounts 2012  
24
strategic review
sustainability in everything we do
happy hens lay g ood eggs
at the prestigious good farm animal welfare awards last year we were awarded a good egg award by compassion in 
world farming in recognition of our commitment to improving animal welfare
we are the first food producer in the uk to commit to using free range or barn eggs across our entire brand portfolio 
which is the equivalent to over 70 million eggs this pioneering work forms part of our broader commitment to 
guarantee full traceability and high safety quality and animal welfare for all the eggs that we use
hosted by top cook food writer and broadcaster valentine warner the good farm animal welfare awards recognises 
and awards food companies that are committed to implementing substantial policy changes that result in positive 
impacts for farm animals
including animal welfare as part of our sustainable procurement programme not only improves the lives of thousands 
of laying hens it also meets the growing expectations of our customers and consumers that food systems are kind to 
animals and care for the environment we’re proud to be leading the way on this important animal welfare issue
sustainability
we strive for sustainability in everything we do
we have many stakeholders for whom 
sustainability has become more and more 
important including our consumers customers 
employees and stakeholders in general 
we have embedded sustainability within 
our core business strategy by promoting 
‘sustainability in everything we do’ we believe 
we will build a foundation for a more stable 
sustainable business which will deliver longterm 
profitable results and shareholder value
our integrated approach to managing our key 
environmental impacts has delivered continual 
improvement and commercial benefits we 
have set ourselves targets relating to wider 
sustainability challenges including how we 
source our raw materials and ensure the highest 
levels of quality and food safety whilst also 
addressing consumer concerns on health issues 
in respect of certain ingredients calorie control 
and portion size 
you can read more about our performance in 
these areas within the sustainability section of 
our company web site but we have included 
some of the highlights within this summary
buying responsibly 
we procure the best quality raw materials 
that meet our current and future needs we 
try to deliver longterm value maximise social 
and economic benefits as well as minimise 
associated environmental impact when buying 
our goods and services for example we 
are committed to sourcing 100 sustainable 
palm oil by 2015 playing our part in helping to 
prevent damaging deforestation in south east 
asia 
we place a high value on the integrity 
provenance and traceability of all the 
ingredients we buy wherever possible we 
actively look to support uk agriculture as 
this gives us greater confidence control 
and influence over our supply chain it also 
gives confidence to our customers and 
consumers who are increasingly interested in 
the provenance of the food they buy in 2012 
we spent 82 of our £13 billion procurement 
budget with uk producers and suppliers
sustainable manufacturing 
making more from less makes good business 
sense using fewer natural resources and 
generating less waste not only lowers our 
costs but also reduces our environmental 
footprint by creating a culture of environmental 
improvement across the business we are able 
to encourage new ideas to continue improving 
our efficiency year on year we continue to build 
on our strong track record of environmental 
progress and in 2012 we made good progress 
against our targets our performance has been 
tracked over the past five years in the table 
opposite 
particular highlights include a 418 reduction 
in our waste to landfill against a 20 target 
reduction bringing us closer to reaching our 
ambition of sending zero waste to landfill 
by 2015 and we reduced actual road miles 
travelled by 16 against a 5 target 
our achievements in using less natural 
resources contributed to us being awarded the 
‘green and sustainable manufacturing award’ 
at the 2012 european strategic manufacturing 
awards for demonstrating unparalleled 
performance in environmental manufacturing 
 performance in ‘relative’ terms to tonnes of product 
manufactured excluding divested manufacturing 
sites
diet  health 
we aim to offer a wide choice of products 
to help our consumers manage their busy 
lifestyles for each of our power brands and 
our portfolio as a whole we’ve developed 
health and nutrition action plans setting out 
we have developed an end to end approach to 
sustainability encompassing all areas of our business 
and addressing a broad range of social economic and 
environmental issues
if you would like to read more  
about our approach to sustainability  
our key targets and highlights please  
go to the sustainability section of our  
company website 
premier foods annual report 2012frontindd   24 15032013   150240 2200204 — proof 15 — 12032013
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25
strategic review
targets for the number of products that will 
have an improved nutritional value whether 
through the addition of ‘positive’ ingredients 
such as wholegrains cereals oats fruits or 
vegetables or the reduction in ingredients of 
concern including salt saturated fat or trans 
fats more than half of all our new product 
innovations must be for products that have a 
claimable health or nutrition benefit or otherwise 
offer portion sizes that discourage excessive 
consumption we’ve also made a number of 
public commitments to improve the nutritional 
value of our products within the framework of 
the public health responsibility deal 
to help consumers understand the nutritional 
impact of our products we are committed to 
labelling all key nutrients on pack wherever 
possible per 100g and per serving for many 
years we have also included information on 
energy fat saturated fat sugars and salt 
content in the form of guideline daily amounts 
gdas on both the front and back of pack 
whenever possible we highlight the nutritional 
benefit of our brands in our communications 
and marketing and we provide balanced 
recipe suggestions via our ‘great little ideas’ 
programme both on pack and via a dedicated 
website 
quality  food safety 
the quality of our products is a key priority 
for us we are committed to ensuring that 
all factors relating to the quality and safe 
production of our food consistently meets the 
highest of standards we maintain far reaching 
and stringent quality standards within our 
supply chain which exceed legal requirements 
this includes rigorous systems of supplier 
approvals and auditing traceability and testing 
to ensure our raw materials ingredients and 
production processes conform to our specific 
specifications 
quality for us also includes our dedicated 
programme to ensure that we are constantly 
improving our ingredients and recipes to deliver 
great tasting food as well as bring new high 
quality products to the market each year we 
launched a number of new products to the 
market in 2012 including our sharwood’s wrap 
kits and bisto stock melts ambrosia rice 
pots mr kipling snack packs and hovis british 
farmers loaf nearly 18 of premier foods 
branded portfolio by sales value over the last  
2 years are new products 
our people 
we provide employment for around 9000 
employees at over 40 sites across the uk 
including production grocery sites bakeries 
mills and offices 
as well as putting the safety of our people first 
we offer excellent learning and development 
opportunities and recognise people who go the 
extra mile through our annual best in british 
food awards bibfa 
the winners of our 2012 bibfa sustainability 
award which goes to the person or team who 
has strengthened the sustainability of our brand 
portfolio or our environmental programme 
was presented to the site service team at our 
carlton site for reducing waste consumption by 
25 in the period 201112 
more detailed information on our approach to 
training and development can be found on the 
sustainability section of our company website 
community involvement 
we strive to make a difference to the local 
communities in which we operate and our 
people are extremely passionate about 
charitable giving we support community 
development projects and local charities 
across our sites and have a corporate charity 
partnership that unites our business in their 
fundraising activities our collective employee 
fundraising for help for heroes raised over 
£260000 over a twoyear partnership this 
has enabled us to leave a lasting legacy with 
the charity which amongst other initiatives 
supported the creation of a new dining room 
at their state of the art recovery centre for 
the wounded tedworth house in tidworth 
wiltshire this year employees have chosen 
macmillan cancer support as our new partner 
and we are committed to funding 10000 vital 
nursing hours over the next two years
88 
200812 
45 
200812 
73 
200812 
48 
200812 
34 
we have historically reported performance against our environmental kpis in ‘absolute’ terms as a year on year comparison  in 2012  we divested a number of our businesses and to ensure transparency and 
take into account the impact of these disposals we are reporting our performance in both ‘absolute’ and ‘relative’ terms  the divested businesses included our histon and middleton manufacturing sites 
performance in absolute terms includes divested manufacturing sites and performance in relative terms to tonnes of product manufactured excluding divested manufacturing sites  
historical environmental performance 200812 environmental performance 201112 
absolute terms including divested manufacturing sites 
relative terms to tonnes of product manufactured excluding divested manufacturing sites  
2012 target 2012 
performance 
2013 
target 
reduce waste sent to landfill by 20 
 
418 100 
reduce energy consumption by 3 20 250 
reduce water usage by 5 
 
42 30 
reduce carbon equivalent co
2
e emissions by 4 
 
32 25 
reduce actual road miles travelled by 5 
 
280 30 
historical environmental performance 200812 environmental performance 2012
2012 performance     
2013
target
2012 target
absolute relative
reduce waste sent to landfill by 20 526 418 100
reduce energy consumption by 3 284 20 250
reduce water usage by 5 560 42 30
reduce carbon equivalent co
2
e 
emissions by 4 282 32 25
reduce actual road miles travelled  
by 5 160 280 30
we have historically reported performance against our environmental 
kpis in ‘absolute’ terms as a year on year comparison in 2012 we 
divested a number of our businesses and to ensure transparency 
and take into account the impact of these disposals we are reporting 
our performance in both ‘absolute’ and ‘relative’ terms the divested 
businesses included our histon and middleton manufacturing sites 
performance in absolute terms includes divested manufacturing sites and 
performance in relative terms relates to tonnes of product manufactured 
excluding divested manufacturing sites
premier foods annual report 2012frontindd   25 15032013   150240 2200204 — proof 15 — 12032013
premier foods plc  annual report and accounts 2012  
26
strategic review
key performance indicators
we use key performance indicators kpis to help drive focus and measure performance across  
a number of areas which are aligned to the strategic priorities of the group
power brand 
sales growth value
deliver £40m of 
overhead cost 
savings 
by 2013
increase in trading 
profit underlying
r ecurring 
cash flow
r eduction  
in net debt 
10 of sales from 
new products
 of products 
testing superior 
or at par with 
competitors
at least 50 of npd 
to be “better for 
you” choices
achieve a lost time 
accident l ta rate 
of 029 per 100000 
hours
4 reduction 
in carbon co
2
 
equivalent 
emissions
21
£8892m
£48m 106
£1234m
£500m
versus £1220m  
in 2011
243
£9507m
138 94 70 46
020 per 100000 hours
28
265000 tonnes of  
co
2
e at the end of 2012
measurement
yoy growth in sales from 
power brands
measurement
yoy overhead savings 
identified as part of our 
previously announced 
cost saving programme
measurement
underlying profit 
excludes the results of 
disposals and noncore 
discrete contract losses 
as this better illustrates 
the performance of the 
core business
measurement
cash flow attributable 
to the ongoing 
business this is before 
nonrecurring items 
such as the proceeds 
from disposals and 
associated restructuring 
costs and financing fees
measurement
reduction in net debt 
versus pro forma net 
debt which includes the 
additional term loan and 
the securitised debtor 
programme following 
the refinancing in march 
2012 see page 33
measurement
sales of new products 
as a  of our branded 
sales within power 
brand categories
measurement
consumer panel blind 
testing of our major 
branded products 
against their main 
competitor whether 
branded or own label
measurement
sales value of npd with 
a claimable health and 
nutritional benefit
measurement
lost time accident lta 
rate per 100000 hours 
worked
measurement
yoy reduction in 
reduction in carbon 
co
2
 emissions in 
absolute terms
link to strategy
investing behind our 
power brands to 
maximise future growth 
is one of our strategic 
priorities
focusing on branded 
products improves 
margin potential and 
therefore increases 
profitability
link to strategy
driving business 
simplification and 
efficiency is one of our 
strategic priorities
link to strategy
supports focus on 
overall growth agenda
link to strategy
cash flow is a good 
indicator of the 
underlying quality of 
earnings and the overall 
health of the business
it also identifies cash 
available to repay debt
link to strategy
given the group’s high 
gearing reduction of 
debt is a key focus area
link to strategy
in order to generate 
long term power brand 
growth we must focus 
on innovation and 
npd this measure is 
an important indicator 
of whether we are 
responding to consumer 
trends
link to strategy
important measure 
of the quality of our 
product portfolio
drives recipe 
improvements and 
ensures focus on 
consistent production 
quality highlights areas 
where action required
link to strategy
aligns with consumer 
focus for wider product 
choice and better for you 
options
link to strategy
the lta frequency rate 
signals our determination 
to apply a preventative 
focus on all accidents 
which caused absence 
from work
link to strategy
we report on a range of 
environmental targets 
— co
2
e  emissions are 
seen as a measure of 
our overall commitment 
to responsible 
manufacturing and 
reducing our impact on 
the environment
performance
we have successfully 
demonstrated growth 
with power brand sales 
up 21 and grocery 
power brands up 
40 yoy in addition 
marketing investment 
increased by 59 in the 
year
performance
in 2012 we exceeded 
target by delivering 
£48m of overhead cost 
savings ahead of the 
£40m target
performance
the increase in trading 
profit was helped by the 
successful overhead 
cost reduction exercise 
undertaken in 2012 and 
increased power brand 
sales
performance
positive cash flow 
generated from strong 
trading profit control 
on capex reduction in 
cash interest following 
the refinancing and tight 
management of working 
capital
performance
there was a significant 
reduction in net debt 
over the course of 
the year following the 
successful completion of 
our disposal programme
performance
the  of sales from 
npd increased from 
71 in 2011 to 138 
in 2012
performance
over the course of 
the year we extended 
the product testing to 
cover 66 of the power 
brands portfolio up from 
53 in 2011
performance
at the end of 2012 
70 of new products 
we developed delivered 
‘better for you’ choices
performance
at the end of 2012 the 
group lta frequency 
rate was 020 ltas per 
100000 hours worked 
representing a 46 
improvement over 2011
performance
we disposed of a 
number of manufacturing 
sites in 2012 taking 
into account the 
performance of sites 
for the period they 
were held by the group 
we achieved an 32 
reduction in co
2
e 
emissions relative to 
tonnes of product 
manufactured
focus for 2013
power brand growth 
remains a strategic 
priority for 2013
focus for 2013
cost savings will remain 
an area of focus as we 
complete the turnaround 
of the business we 
have committed to 
deliver a further £20m of 
overhead cost savings 
by the end of 2013
focus for 2013
trading profit growth 
remains a strategic 
priority for 2013
focus for 2013
cashflow remains a 
strategic priority for 
2013
focus for 2013
reduction in debt 
remains a strategic 
priority for 2013
focus for 2013
the ability to launch new 
products is essential to 
the sustainable growth 
of the business and we 
will continue to target 
10 of sales for 2013
focus for 2013
we will continue to focus 
on consumer quality 
benchmarking and 
reformulate any products 
testing below par
focus for 2013
health remains a major 
area of interest for 
consumers and for 2013 
we will continue to target 
for at least 50 of npd 
to be made up of “better 
for you” choices
focus for 2013
as a major employer 
ensuring a safe work 
place for all employees 
remains a key area of 
focus
target for 2013 is to 
achieve an lta rate of 
018 per 100000 hours 
worked representing a 
10 yoy improvement
focus for 2013
no further disposals are 
planned for 2013 and 
our target for 2013 is to 
reduce co
2
e emissions 
by 25 in relative 
terms
premier foods annual report 2012frontindd   26 15032013   150241 2200204 — proof 15 — 12032013
wwwpremierfoodscouk stock code pfd
27
strategic review
key performance indicators
we use key performance indicators kpis to help drive focus and measure performance across  
a number of areas which are aligned to the strategic priorities of the group
power brand 
sales growth value
deliver £40m of 
overhead cost 
savings 
by 2013
increase in trading 
profit underlying
r ecurring 
cash flow
r eduction  
in net debt 
10 of sales from 
new products
 of products 
testing superior 
or at par with 
competitors
at least 50 of npd 
to be “better for 
you” choices
achieve a lost time 
accident l ta rate 
of 029 per 100000 
hours
4 reduction 
in carbon co
2
 
equivalent 
emissions
21
£8892m
£48m 106
£1234m
£500m
versus £1220m  
in 2011
243
£9507m
138 94 70 46
020 per 100000 hours
28
265000 tonnes of  
co
2
e at the end of 2012
measurement
yoy growth in sales from 
power brands
measurement
yoy overhead savings 
identified as part of our 
previously announced 
cost saving programme
measurement
underlying profit 
excludes the results of 
disposals and noncore 
discrete contract losses 
as this better illustrates 
the performance of the 
core business
measurement
cash flow attributable 
to the ongoing 
business this is before 
nonrecurring items 
such as the proceeds 
from disposals and 
associated restructuring 
costs and financing fees
measurement
reduction in net debt 
versus pro forma net 
debt which includes the 
additional term loan and 
the securitised debtor 
programme following 
the refinancing in march 
2012 see page 33
measurement
sales of new products 
as a  of our branded 
sales within power 
brand categories
measurement
consumer panel blind 
testing of our major 
branded products 
against their main 
competitor whether 
branded or own label
measurement
sales value of npd with 
a claimable health and 
nutritional benefit
measurement
lost time accident lta 
rate per 100000 hours 
worked
measurement
yoy reduction in 
reduction in carbon 
co
2
 emissions in 
absolute terms
link to strategy
investing behind our 
power brands to 
maximise future growth 
is one of our strategic 
priorities
focusing on branded 
products improves 
margin potential and 
therefore increases 
profitability
link to strategy
driving business 
simplification and 
efficiency is one of our 
strategic priorities
link to strategy
supports focus on 
overall growth agenda
link to strategy
cash flow is a good 
indicator of the 
underlying quality of 
earnings and the overall 
health of the business
it also identifies cash 
available to repay debt
link to strategy
given the group’s high 
gearing reduction of 
debt is a key focus area
link to strategy
in order to generate 
long term power brand 
growth we must focus 
on innovation and 
npd this measure is 
an important indicator 
of whether we are 
responding to consumer 
trends
link to strategy
important measure 
of the quality of our 
product portfolio
drives recipe 
improvements and 
ensures focus on 
consistent production 
quality highlights areas 
where action required
link to strategy
aligns with consumer 
focus for wider product 
choice and better for you 
options
link to strategy
the lta frequency rate 
signals our determination 
to apply a preventative 
focus on all accidents 
which caused absence 
from work
link to strategy
we report on a range of 
environmental targets 
— co
2
e  emissions are 
seen as a measure of 
our overall commitment 
to responsible 
manufacturing and 
reducing our impact on 
the environment
performance
we have successfully 
demonstrated growth 
with power brand sales 
up 21 and grocery 
power brands up 
40 yoy in addition 
marketing investment 
increased by 59 in the 
year
performance
in 2012 we exceeded 
target by delivering 
£48m of overhead cost 
savings ahead of the 
£40m target
performance
the increase in trading 
profit was helped by the 
successful overhead 
cost reduction exercise 
undertaken in 2012 and 
increased power brand 
sales
performance
positive cash flow 
generated from strong 
trading profit control 
on capex reduction in 
cash interest following 
the refinancing and tight 
management of working 
capital
performance
there was a significant 
reduction in net debt 
over the course of 
the year following the 
successful completion of 
our disposal programme
performance
the  of sales from 
npd increased from 
71 in 2011 to 138 
in 2012
performance
over the course of 
the year we extended 
the product testing to 
cover 66 of the power 
brands portfolio up from 
53 in 2011
performance
at the end of 2012 
70 of new products 
we developed delivered 
‘better for you’ choices
performance
at the end of 2012 the 
group lta frequency 
rate was 020 ltas per 
100000 hours worked 
representing a 46 
improvement over 2011
performance
we disposed of a 
number of manufacturing 
sites in 2012 taking 
into account the 
performance of sites 
for the period they 
were held by the group 
we achieved an 32 
reduction in co
2
e 
emissions relative to 
tonnes of product 
manufactured
focus for 2013
power brand growth 
remains a strategic 
priority for 2013
focus for 2013
cost savings will remain 
an area of focus as we 
complete the turnaround 
of the business we 
have committed to 
deliver a further £20m of 
overhead cost savings 
by the end of 2013
focus for 2013
trading profit growth 
remains a strategic 
priority for 2013
focus for 2013
cashflow remains a 
strategic priority for 
2013
focus for 2013
reduction in debt 
remains a strategic 
priority for 2013
focus for 2013
the ability to launch new 
products is essential to 
the sustainable growth 
of the business and we 
will continue to target 
10 of sales for 2013
focus for 2013
we will continue to focus 
on consumer quality 
benchmarking and 
reformulate any products 
testing below par
focus for 2013
health remains a major 
area of interest for 
consumers and for 2013 
we will continue to target 
for at least 50 of npd 
to be made up of “better 
for you” choices
focus for 2013
as a major employer 
ensuring a safe work 
place for all employees 
remains a key area of 
focus
target for 2013 is to 
achieve an lta rate of 
018 per 100000 hours 
worked representing a 
10 yoy improvement
focus for 2013
no further disposals are 
planned for 2013 and 
our target for 2013 is to 
reduce co
2
e emissions 
by 25 in relative 
terms
premier foods annual report 2012frontindd   27 15032013   150241 new sharwood’s wrap kits  
launched in 2012
photograph
did you 
know
over the last 2 years  
employees raised over 
£260000 for our corporate 
charity partner “help for 
heroes”   
£260000
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premier foods plc  annual report and accounts 2012  
28
business performance
premier foods annual report 2012frontindd   28 15032013   150243 business performance
operating review 30
financial review 35
contents
detailed analysis of our 
business performance as 
reported in our preliminary 
results announcement in 
february 2013 this section 
covers the operating reviews 
for the grocery and bread 
business and the financial 
review
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29
business performance
premier foods annual report 2012frontindd   29 15032013   150245 gavin darby
chief executive officer
“the management team did a great job in 2012 
to lay the foundations for future growth”
did you 
know
we spend over £13 billion 
annually with suppliers  
82 of which is with uk  
producers and suppliers
82
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premier foods plc  annual report and accounts 2012  
30
business performance
operating review
underlying business
underlying business excludes all disposals announced in 2011 and 
2012 noncore discrete contract losses and milling sales the following 
commentary is based on underlying business unless otherwise stated a 
reconciliation from statutory to underlying performance measures is set 
out in the tables on page 34
£m 2012 2011 change
sales
grocery 8567 8112 56
bread 4971 5005 07
total 13538 13117 32
grocery divisional contribution 1955 2069 55
bread divisional contribution 269 517 480
sga 990 1470 327
total trading profit 1234 1116 106
introduction
underlying business sales increased by 32 to £13538m in the year 
an increase of £421m compared to the prior year underlying business 
trading profit increased by £118m to £1234m in the year 
grocery divisional contribution decreased by £114m to £1955m during 
the year reflecting increased consumer marketing investment partly offset 
by growth in power brand sales
bread divisional contribution declined by £248m to £269m due to 
adverse customer mix wheat quality affecting manufacturing efficiencies 
and higher costs to serve
divisional contribution is the measure which the company uses for 
managing and reporting divisional performance and excludes all selling 
general and administrative sga costs
the company exceeded its target to reduce sga costs by £40m in 
2012 achieving total cost reductions of £48m by the end of the year 
contributing to the increase in underlying trading profit as previously 
announced a further £20m of overhead cost savings are expected to be 
delivered in 2013
in the year the company benefitted from pension credits of 
approximately £32m additionally the company increased certain 
balance sheet provisions on onerous lease provisions relating to vacant 
properties held by the company and cleaned up certain legacy fixed 
assets these items offset the pension credits recognised in the year and 
therefore the impact on underlying business trading profit in the year is 
neutral
sales
£m 2012 2011 change
power brands 8892 8712 21
support brands 2272 2339 29
total branded 11164 11051 10
nonbranded 2374 2066 149
group sales 13538 13117 32
total underlying business sales increased by 32 to £13538m 
compared to 2011 sales of the company’s power brands grew by 
21 in line with the trend seen in the first three quarters of the year
in the support brand portfolio sales declined by 29 reflecting declines 
in homebaking owing to a highly competitive business to business 
channel and lower promotional activity
consumer marketing
£m 2012 2011 change
consumer marketing 394 247 595
total consumer marketing investment increased by nearly £15m in 
2012 compared to the prior year principally due to new tv advertising 
campaigns for seven of the company’s power brands investment in the 
grocery power brands nearly doubled compared to the prior year and 
included new campaigns for sharwood’s great british curry ambrosia 
picnic and bisto pledge
the company expects to continue to benefit from the significant stepup 
in investment in 2012 with consumer marketing expenditure expecting 
to remain at similar levels in 2013 but with greater emphasis on grocery 
marketing investment
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business performance
operating review
grocery division
£m 2012 2011 change
branded sales 7420 7242 25
nonbranded sales 1147 870 318
total sales 8567 8112 56
power brands sales 5331 5126 40
divisional contribution 1955 2069 55
sales in the grocery division increased by 56 to £8567m compared 
to £8112m in 2011 following recent disposals this business has 
increased its proportion of branded sales by over five percentage points 
to 866 and retains strong ebitda margins which the company 
believes it can build on
grocery power brand sales in particular continued to gather momentum 
during the year increasing by 40 demonstrating  four successive 
quarters of growth this growth was driven by improved customer 
collaboration and increased levels of consumer marketing investment
marketing investment in the grocery division increased by 96 
compared to the prior year as consumer marketing spend rose by 
around £16m reflecting higher spend across all the grocery power 
brands
during the year sharwood’s benefitted from the launch of wrap kits 
batchelors growth was well supported by the new deli box range and 
ambrosia rice pots performed well
consequently divisional contribution was £1955m a 55 decrease on 
the previous year 
in the fourth quarter the company confirmed it has agreed an extension 
to the licence it holds to produce cadbury branded cakes and ambient 
desserts until june 2017 the brand is the fastest growing in the ambient 
cake category and the company plans to work closely with cadbury 
to leverage the potential of other cadbury trademarks over time where 
appropriate
nonbranded sales in the grocery division increased by 318 in the 
year due to contract gains in cake and additional copack arrangements 
following recent disposals 
savings in manufacturing controllable costs are expected to continue 
to deliver gross savings in 2013 through process improvements at our 
manufacturing sites
bread division
£m 2012 2011 change
branded bread sales 3744 3809 17
nonbranded bread sales 1227 1196 26
total bread sales 4971 5005 07
milling sales 1914 1930 08
total sales 6885 6935 07
divisional contribution 269 517 480
sales for the bread division excluding milling declined 07 to £4971m 
in the year while total sales for the division decreased by 07 to 
£6885m divisional contribution declined by £248m to £269m in the 
year  
during the year hovis maintained its value market share in a highly 
competitive market where promotional activity levels remain high 
however changes in the customer and product mix during the course 
of the year as a result of a number of contract gains and losses have 
adversely impacted divisional contribution additionally some of the 
contract gains require higher costs to serve continued collaboration 
with our retail customers in 2013 is expected to result in an improved mix 
impact year on year
adverse wheat quality following the worst harvest for 35 years also 
affected manufacturing efficiencies and negatively impacted divisional 
contribution in the second half of the year price increases were achieved 
in the baking and milling businesses in the third quarter of 2012 to offset 
wheat price inflation following the lower quality harvest seen during 
the year and while the company has taken the decision to diversify its 
sources of wheat in the shortterm it remains committed to supporting 
british farming
as previously announced the company will lose a branded and non
branded bread contract with a retail customer in the second quarter 
of 2013 equivalent to approximately £750m of annual sales the 
lost volume and margin from this contract is expected to be offset 
by manufacturing and distribution cost savings from the previously 
announced closures of the birmingham greenford and eastleigh 
bakeries and distribution centres at mendlesham and plymouth 
additionally the company recently announced the proposed closure 
of its glasgow mill to optimise capacity in its milling business in light of 
reduced volumes as previously announced the cash costs associated 
with this restructuring are expected to be approximately £28m in 2013
milling sales were £1914m in 2012 down 09 compared to the prior 
year while margins were also affected by the lower wheat quality from 
the 2012 harvest
in 2013 the company plans to rebuild value in its bread division through 
focusing on reducing costs to serve improving profitability and targeting 
capital investment to enhance flexibility efficiency and customer service
in september 2012 we received a good egg award by compassion in world farming 
in recognition of our commitment to farm animal welfare by becoming the first uk food 
producer to source free range or barn eggs across our entire brand range
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business performance
operating review
cost savings programme and sga costs
£m 2012 2011 change
total sga 990 1470 327
the restructuring of the sga cost base announced at the beginning 
of 2012 has delivered savings of £48m ahead of plan this has been 
achieved through rightsizing both the commercial and support functions 
to ensure the overhead cost base better reflects the company’s scale 
following disposal activity 
as previously announced a further £20m cost savings are expected to 
be delivered in this area during 2013 the expected costs to achieve 
the delivery of the total savings programme are £32m of which 
approximately £24m were taken in 2012 and a further £8m are expected 
to be charged in 2013 the cash impact of this programme is expected 
to be approximately £12m in 2013
the company will continue to explore further cost opportunities to fuel 
branded growth
net regular interest
£m 2012 2011 change
term debt interest 360 401 102
swap contract interest 173 597 710
securitisation interest 31 25 240
564 1023 449
amortisation and deferred fees 131 134 22
net regular interest 695 1157 399
net regular interest charge was £695m in the year 399 lower than the 
prior year and compares to guidance of £70£75m this lower charge 
was principally due to the conversion of the higher rate interest rate 
swaps into additional term loan at the end of march at a significantly 
lower interest rate and following completion of the previously announced 
refinancing agreement term debt interest was lower reflecting reduced 
levels of net debt following the disposal of businesses during the course 
of the year
the company expects net regular interest for 2013 to be in the range 
of £6065 million of which amortisation of deferred financing fees are 
expected to be approximately £22 million
cash flow
£m 2012 2011
underlying business trading profit 1234 1116
depreciation 375 390
other noncash items 88 441
interest 525 1083
taxation 03 24
pension contributions 177 560
regular capital expenditure 564 617
working capital 66 01
recurring cash inflowoutflow 500 1220
group recurring cash inflow before nonrecurring items such as 
restructuring activity financing fees and the impact of disposals was 
£500m in the year
underlying business trading profit was ahead of last year while 
depreciation was £15m lower other noncash items in 2012 largely 
reflect the addback of share based payments
cash interest was significantly lower in the year owing to the close out of 
the higher rate interest rate swaps following the refinancing agreement 
announced in march 2012 a tax credit in the year of £03m reflected tax 
relief from allowances on capital expenditure pension contributions and 
brought forward losses cash tax in 2013 is expected to be minimal
pension deficit contribution payments to the company schemes in the 
year including administrative costs were £177m compared to £560m 
last year owing to reduced pension deficit contribution payments as 
agreed with the trustees as part of the refinancing agreement concluded 
earlier this year
regular capital expenditure was £564m in line with guidance of 
approximately 3 of sales capital expenditure for 2013 is expected to 
be in the range 335 of sales
£m 2012  2011
recurring cash inflowoutflow 500 1220
trading profit  other cash flows from disposed 
businesses
58 140
restructuring activity 216 —
operating cash flow from total company 342 1080
disposal proceeds 3122 4002
financing fees  finance leases 240 73
free cash flow 3224 2849
free cash flow before repayment of borrowings was £3224m in the 
year compared to £2849m in 2011 restructuring activity relating 
to disposed businesses including costs related to the cost savings 
programme resulted in a cash outflow of £216m in the year
disposal proceeds of £3122m are from the sale of the irish brands 
vinegar  sour pickles elephant atta ethnic flour and sweet spreads 
 jellies businesses cash paid due to fees directly relating to the re
financing agreement concluded in march 2012 accounted for outflows of 
£240m
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business performance
operating review
net debt
  £m
reported net debt at 31 december 2011 9951
additional term loan 1881
securitised debtors programme 738
pro forma net debt at 31 december 2011 12570
movement in cash 2012 3224
other noncash items 161
reported net debt at 31 december 2012 9507
group net debt at 31 december 2012 was £9507m 
following the refinancing agreement announced in march 2012 both 
the mark to market of interest rate swap liabilities and the securitised 
debtors programme the company participates in are now included 
in the definition of net debt the interest rate swap liabilities have 
been restructured into an additional term loan as part of the banking 
agreements the securitised debtors programme is excluded from the 
definition of net debt for covenant purposes
disposal proceeds received during the year amounted to £3122m 
additionally proceeds from the sweet pickles and table sauces disposal 
of £925m were received in february 2013
pensions
cash paid to pension schemes in the year was £391m this comprised 
£214m regular contributions and £177m for deficit contributions 
administrative expenses and government levies the net ias 19 deficit at 
31 december 2012 was £4668m equivalent to £3524m net of deferred 
tax the next triennial valuation date of the company pension schemes is 
on 5 april 2013 the outcome of which is expected in early 2014
pensions £m 31 dec 2012 31 dec 2011
assets
equities 4113 4251
government  corporate bonds 11977 10774
property 1053 921
absolutetarget returns 7121 7909
swaps 1690 2316
cash 4944 2391
other 4575 2998
total assets 32093 31560
liabilities
discount rate 445 480
inflation rate rpicpi 295215 315195
total liabilities 36761 34384
gross deficit ias 19 4668 2824
deferred tax 245 2012 1144 700
net deficit ias 19 3524 2124
in the classification disclosed in the table above ‘other’ includes 
investments in infrastructure assets and private equity funds the 
negative swaps valuation is due to these assets having been re
couponed to release cash in 2012 this is reflected in the higher cash 
asset balance compared to the prior year
the group acknowledges the significance of the current pension deficit 
in determining a fair reflection of the group’s enterprise value the 
group’s preferred approach is to discount the post tax future cash flows 
of the agreed pension deficit contribution schedule which amount to 
approximately £275 million
sustainability in everything we do…
green and sustainable manufacturing award
this 6th annual strategic manufacturing awards took place in düsseldorf in 2012 as part of the european 
manufacturing strategies summit this is one europe’ s leading events for the manufacturing industry and 
promotes both learning about and applying manufacturing best practice and innovative solutions to boost 
overall production excellence
over 200 industry leaders were present and during the summit we were presented with the highly 
acclaimed ‘green and sustainable manufacturing award’ for demonstrating significant reductions in 
energy water waste and overall carbon footprint 
the core of our submission was based on our green matters employee engagement programme so 
this achievement belongs to all of the site teams who put so much passion and effort into driving our 
manufacturing excellence and environmental performance 
the range of criteria was extensive and included manufacturing excellence innovation and quality 
of implementation the judging panel felt that we had demonstrated unparalleled performance in 
environmental manufacturing including maximising energy efficiency levels addressing water use and 
treatment compliance with environmental regulations and minimising waste from their production 
process 
premier foods annual report 2012frontindd   33 15032013   150246 £m
continuing 
operations
less 2011 
disposals subtotal
less 2012 
disposals subtotal
less 
milling sales
less  
contract loss
underlying 
business
2012
sales 17562 09 17553 2101 15452 1914 – 13538
trading profit 1547 03 1544 310 1234 na – 1234
ebitda 1943 03 1940 354 1586 na – 1586
2011
sales 19995 1885 18110 2829 15281 1930 234 13117
trading profit 1883 146 1737 565 1172 na 56 1116
ebitda 2301 146 2155 626 1529 na 56 1473
£m
disposed businesses
total
announced in 2011 announced in 2012
canned 
grocery irish brands subtotal
vinegar  
pickles
ethnic
flour
sweet 
spreads
sweet 
pickles subtotal
2012
sales 09 – 09 148 88 1283 582 2101 2110
trading profit 03 – 03 05 33 231 41 310 313
ebitda 03 – 03 09 33 248 64 354 357
months owned 7 7 10 12
2011
sales 1667 218 1885 340 178 1651 660 2829 4714
trading profit 54 92 146 55 64 361 85 565 711
ebitda 54 92 146 62 64 382 117 626 772
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business performance
operating review
business disposals
during the course of the year the company was successful in exceeding 
its planned disposals proceeds target by nearly £40 million and 20 
months early achieving total proceeds of £3695 million this has 
resulted in lower net debt allowing the company to focus on investing 
behind its power brands the average ebitda multiple for the four 
transactions announced in 2012 based on expected 2012 results and 
including additional £20m sga cost savings recently announced was 
89x ebitda
proceeds from vinegar  sour pickles ethnic flour and sweet 
spreads  jellies businesses are reflected in reported net debt as at 
31 december 2012 the sweet pickles and table sauces divestiture 
completed on 2 february 2013 therefore gross proceeds of £925m will 
be included in reported net debt in 2013
outlook
in 2012 the company delivered its strategic priorities to stabilise the 
business refocus the portfolio and invest in its future growth growth 
momentum was generated behind the company’s grocery power 
brands and strategic decisions were taken to rebuild value in bread 
while markets are expected to remain challenging in 2013 the company 
believes the right strategies and plans are in place including the delivery 
of further cost savings to make progress in 2013
reconciliation from statutory to underlying performance
reconciliations from trading to operating profit and the calculation of adjusted earnings per share are set out in the notes 4 and 9 of the financial 
statements respectively
vinegar  sour pickles
elephant atta 
ethnic flour sweet spreads  jellies
sweet pickles  
table sauces
announcement 15 june 2012 6 july 2012 23 august 2012 30 october 2012
completion 28 july 2012 6 july 2012 27 october 2012 2 february 2013
gross proceeds £410m £340m £2020m £925m
vinegar   
sour pickles
elephant atta 
ethnic flour
sweet  
spreads  
jellies
sweet  
pickles  
table sauces
announcement 15 jun 2012 6 jul 2012 23 aug 2012 30 oct 2012
completion 28 jul 2012 6 jul 2012 27 oct 2012 2 feb 2013
gross proceeds £410m £340m £2020m £925m
premier foods annual report 2012frontindd   34 15032013   150247 mark moran
chief financial officer
“while it is clear that markets will remain 
challenging we believe we have the right strategies 
in place to make further progress in 2013”
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business performance
operating review
the company presents its financial results for the year ended  
31 december 2012 with comparative information for the year ended  
31 december 2011 
company structure
the company completed the disposals of the following businesses 
during the year irish brands vinegar and sour pickles elephant atta 
ethnic flour and sweet spreads and jellies additionally the company 
announced the disposal of the sweet pickles and table sauces  
business on 30 october 2012 and completed this transaction on  
2 february 2013
the canned grocery operations business is treated as a continuing 
operation in the financial statements and reported separately as an 
operating segment ‘disposed of canning operations’
all commentary on the performance of the company included below 
refers to continuing operations unless otherwise stated and therefore 
reflects the respective periods that the company maintained ownership 
of the businesses disposed during the year for example the vinegar 
and sour pickles business disposal completed on 28 july therefore the 
results of the continuing operations include seven months’ results of the 
vinegar and sour pickles business
income statement
revenue from continuing operations was £17562m a decrease of 
£2433m compared to the prior year the major driver of the decline 
is attributed to the disposals of the canned grocery operations irish 
brands vinegar and sour pickles elephant atta ethnic flour and sweet 
spreads and jellies businesses partly offset by power brands sales 
growth 
operating profit
operating profit for continuing operations was £963m compared to a 
prior year loss of £1763m 
trading profit was £1547m in the year a decline of £336m principally 
reflecting the impact of the businesses disposed during 2011 and 2012  
during the year significant savings in the overhead cost base were partly 
offset by increased consumer marketing investment 
restructuring costs and losses associated with disposal activity were 
£461m in the year these charges relate to access costs associated 
with the company’s cost savings programme and restructuring activity 
associated with the previously announced closure of three bakeries and 
two distribution sites in the bread division
amortisation of intangible assets was £533m in year a reduction of 
£187m from the prior year this reflects the impairment of goodwill and 
the hovis brand in 2011 and also the impact of disposals made during 
2012 impairment charges in 2012 were £362m which relate to the write 
down of part of the carrying value of the bread business following the 
decision to restructure the supply chain this compares to a charge in 
2011 of £2820m
the pension financing credit was £125m in 2012 £45m lower than the 
prior year primarily due to lower expected asset returns
finance expense
net finance expense in the year to 31 december 2012 was £919m 
compared to £828m in the prior year net regular interest reduced from 
£1157m to £695m due to the conversion of higher rate interest rate 
swaps into additional term loan at a significantly lower interest rate in 
addition to lower levels of net debt following the disposal of businesses 
during the course of the year partly offsetting this reduction in net finance 
expense is the year on year net movement of interest rate instruments 
in the prior year there was a positive movement in the fair valuation of 
interest rate derivatives of £369m compared to an adverse movement 
of £97m in the year to 31 december 2012 additionally an exceptional 
write off of financing costs amounting to £108m was recognised in 
the year relating to debt issuance costs associated with the previous 
financing agreement this compares to a £16m charge in the prior year 
profit before taxation
the company made a profit before tax of £44m compared to a prior 
year loss of £2591m operating profit in the year was £963m due to 
the reasons outline above and net finance expense was £919m the 
prior year loss of £2591m was principally due to impairment charges 
associated with goodwill in the bread division and the hovis brand
taxation
the taxation credit for the year was £219m 31 december 2011 
£291m the rate of corporation tax for the year was 245 the 
taxation credit during the year is principally a result of recognising a 
deferred tax asset for prior year tax losses
the corporation tax rate for 2013 is expected to be 2325 the 
deferred tax rate is expected to be 210 for the tax year ending 5 april 
2014
earnings per share
basic earnings per share of 110 pence for the year on continuing 
operations is calculated by dividing the profit attributed to ordinary 
shareholders of £263m 31 december 2011 £2300m loss by the 
weighted number of shares in issue during the year this compares to a 
loss per share of 959p for the prior year
adjusted earnings per share for continuing operations was 268 pence 
31 december 2011 223 pence adjusted earnings per share on 
continuing operations has been calculated by dividing the adjusted 
earnings defined as trading profit less net regular interest payable and 
notional taxation attributed to ordinary shareholders of £852m 31 
december 2011 £726m by the weighted number of ordinary shares 
in issue during each period these earnings have been calculated by 
reflecting tax at a notional rate of 245 31 december 2011 265
at the annual general meeting held on 3 may 2012 a resolution was 
passed for a 101 share consolidation of the issued share capital of the 
company accordingly the weighted number of shares in issue for the 
period reduced from 23980 million to 2398 million the latter being 
used for earnings per share calculations
financial review
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business performance
financial review
cash flow and borrowings
company net borrowings as at 31 december 2012 were £9507m a 
decrease of £444m since 31 december 2011 of the movement since 
31 december 2011 the cash and noncash elements were £2500m 
inflow and £2056m outflow respectively the noncash movement 
principally reflects the conversion of the previous mark to market swap 
liabilities to additional term loan which amounted to £1881m
the cash inflow from operating activities to 31 december 2012 was 
£42m 31 december 2011 outflow of £291m this included cash 
inflow from continuing operations of £548m 31 december 2011 
£1346m and cash inflow from discontinued operations of £16m 31 
december 2011 £479m outflow additionally net cash interest paid 
was £525m 31 december 2011 £1134m due to lower bank margins 
following the refinancing agreement concluded in march 2012 tax 
received in the year was £03m 31 december 2011 £24m paid
sale of subsidiaries and property plant and equipment in the year 
amounted to £3122m following the completed disposals outlined above 
net capital expenditure on tangible and intangible assets in the year 
was £664m 31 december 2011 £735m of which £564m relates to 
underlying business
net proceeds from borrowings and the debtors securitisation programme 
were £15m and £724m respectively reflecting the conversion of the 
debtors securitisation programme to net debt financing fees associated 
with the refinancing agreement in march 2012 were £240m
pension schemes
at 31 december 2012 the company’s pension schemes under the ias 
19 accounting valuation showed a gross deficit of £4668m compared 
to £2824m at 31 december 2011 the valuation at 31 december 2012 
comprised a £1316m deficit in respect of the rhm schemes and a 
deficit of £3352m in relation to the premier foods schemes 
the deficit increase reflects an increase in the scheme liabilities of 
£2377m to £36761m partly offset by an increase in the valuation of 
assets of £533m to £32093m the adverse movement in liabilities is 
predominantly due a reduction in the discount rate from 480 at  
31 december 2011 to 445 at 31 december 2012 the increase in the 
valuation of the scheme assets is due to investment performance
in 2012 the group and trustees of the rhm pension scheme agreed 
to change the inflation assumption used in calculating certain scheme 
liabilities for the majority of scheme members from an rpi to cpi basis 
following a similar move by the premier foods schemes in 2011 the 
impact of this change was to reflect a credit of £440m and is partially 
offset by an equalisation charge of £123m resulting in a net credit of 
£317m
following the refinancing package concluded with the banking 
syndicate swap counterparties and pension schemes in march 2012 
pension deficit contribution payments were suspended from march 2012 
to december 2013 deficit contribution payments resume from january 
2014
the next triennial actuarial valuation date of the pension schemes is on  
5 april 2013 the outcome of which is expected in early 2014
mark moran
chief financial officer
our commitment to health  safety was recognised by the royal society for 
the prevention of accidents rospa in 2012 we were uk food and drink 
sector award winner and also received a gold achievement award for the 
management of occupational road risk
premier foods annual report 2012frontindd   36 15032013   150247 governance
contents
chairman’s introduction 38
board and group executive 40
corporate governance 43
risk management 48
committees 53
remuneration report 56
other statutory information 66
as a company we are 
committed to the highest 
standards of corporate 
governance this section sets 
out a summary of the key 
issues we have discussed 
during the year and our 
approach to governance risk 
management and executive 
remuneration
‘loyd for one’ pouches range  a 
new bolognese sauce variety was 
launched in 2012
photograph
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governance
premier foods annual report 2012frontindd   37 15032013   150248 chairman’s introduction
as highlighted earlier in this report a lot has happened in 2012 as we have moved to stabilise and turnaround the business at the same 
time it is also important to ensure that sound governance principles underpin the way we operate both at board level and throughout the 
organisation this section of the annual report sets out our governance framework the work of our committees and our risk management 
framework we believe in transparency in governance and in maintaining the highest ethical standards in all our business dealings as 
corporate governance continues to evolve we will continue to monitor our procedures to respond to new issues and strive for best practice 
board changes
in addition to gavin darby’s appointment as chief executive in february 2013 there have been a number of changes to the board over the 
course of 2012 following ronnie bell’s retirement from the board it was agreed that i would become chairman to ensure continuity during the 
period of rapid change that the business is going through ian mchoul who has served on the board for 8 years took over from me as senior 
independent director in addition louise makin advised that she would be stepping down as a director at the end of her second 3 year term in 
september i would like to thank both ronnie and louise for their contribution to the company
following these changes the composition of the board was carefully reviewed and it was agreed that it would be appropriate to appoint two new non
executive directors jennifer laing who has extensive brand building and communications experience joined the board in october and ian krieger who 
has considerable business and financial expertise having worked with a wide variety of companies throughout his finance career was appointed as a 
director in november
geoff eaton was appointed as chief operating officer in october 2012 however following the appointment of gavin darby a flatter executive 
management structure has been implemented that will enable commercial and functional management to report directly to the ceo as a 
consequence geoff left the company in february 2013
following these changes we now have in place a strong and effective board the board is fully engaged and there is lively debate and where 
necessary robust challenge to management and the group’s business plans there is open and transparent dialogue between executive 
management and nonexecutive directors producing strong alignment on delivering the strategy and driving long term sustainable growth 
there is now an appropriate combination of executive and nonexecutive directors on the board with at least half the board excluding 
myself comprising nonexecutive directors the independence external experience and challenge nonexecutive directors bring to the board 
is essential to its effective operation the current nonexecutive directors bring an extensive and broad ranging mix of experience which is 
highlighted in the biographies on pages 40 to 41 the board considers that all the nonexecutive directors with the exception of charles miller 
smith are independent in character and judgement charles miller smith whilst fully independent of management is a shareholder appointed 
director representing our largest shareholder warburg pincus
during october 2012 the number of nonexecutive directors temporarily fell below the required number in addition the number of independent 
members of the audit and remuneration committee fell from three members to two for a short period of time both were essentially timing 
issues during a period when the membership of the board was being refreshed and were remedied with the appointment of ian krieger in 
november details of the executive directornonexecutive director split can be found on page 44 
board effectiveness
the board believes that keeping uptodate with developments in corporate governance is important and therefore it is a regular item on the 
board agenda the general counsel  company secretary prepares a regular board paper and present updates on recent legal regulatory 
and governance issues including relevant case law during the year this has included updates on the government’s draft remuneration 
reporting regulations and the frc’s 2012 revisions to the uk cororate governance code “the code” 
the board has a policy to conduct performance reviews on its own performance and that of its committees alongside this review each 
director receives an appraisal appraisals are conducted by the chairman for the ceo and by the senior independent director following 
discussions with the other nonexecutive directors for the chairman
in december 2011 onetoone interviews were undertaken by the general counsel  company secretary and a written report was presented 
to the board during the year the board has received updates on the progress made on the action plan for 2012 and is satisfied with the 
progress which has been made
changes to the board process during the year have included strengthening communication and alignment between the board and senior 
management with greater attendance of group executive members at board meetings the board and group executive have also met a 
number of times over dinner to allow a more informal opportunity for discussion there has also been an increased focus on brand strategy 
and i expect this to continue as priorities move from restructuring to growth for 2013 a number of two day meetings have been introduced to 
allow more time to review the business in depth
david beever
nonexecutive  
chairman
“good corporate governance is essential for building a 
successful and sustainable business this report sets 
out our approach to corporate governance and our 
commitment to work towards best practice recognising 
our position as one of the largest manufacturers in the 
uk food industry”
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governance
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governance
compliance with the uk corporate governance code 2010 “the code”
during 2012 except as highlighted above with regard to the temporary fall in the number of independent directors and the deferral of our 
external board evaluation the company complied with all of the provisions of the code 
in september 2012 the frc published changes to the code which will apply to the company for the financial year ending 31 december 
2013 and companies are encouraged to consider early adoption of the new requirements the board is committed to good governance and 
we believe we are compliant with a number of the new requirements namely effectiveness of the external audit process length of tenure of 
auditors and boardroom diversity
governance focus code of conduct
q what has the company done to improve its 
governance structure during the year
a during 2012 we launched the company’s first code of conduct 
code of conduct with the aim of communicating expected standards 
of behaviour building a common sense of ethics and integrity providing 
some practical guidance to all premier foods’ employees in the event 
of uncertainty highlighting additional responsibilities of managers to 
uphold the code of conduct and helping to protect the company’s 
external reputation and provide assurance to stakeholders
we communicated the code of conduct via our internal intranet 
site premiernet and management grades were asked to confirm 
their acceptance of the policy when logging onto their computers 
additionally printed copies were distributed to all staff and copies of 
the code of conduct are now included in induction materials for new 
staff a copy of the code of conduct can be found on our website 
wwwpremierfoodscoukaboutuscorporategovernancecode
ofconductcfm
2012 review
in line with the recommendations of the code we conduct an annual effectiveness review and every three years this is conducted by an 
external firm the last external review was undertaken in 2009 by boardroom review and we are therefore due to undertake another external 
review in respect of 2012 however given the changes in board membership over the last few months the board agreed to defer the 
evaluation exercise until the first half of 2013 this evaluation will be undertaken by an external facilitator
remuneration strategy
there was a significant vote against the remuneration report at the agm in 2012 over the course of the year david wild chairman of the 
remuneration committee and myself have met with a number of major shareholders and investor representative bodies to listen to their views 
and explain the reasons behind the remuneration decisions we made in 2011 and 2012 these meetings were very constructive and we have 
continued to engage with stakeholders in 2013 a full review of our remuneration strategy is set out in the remuneration report on page 56
audit independence and nonaudit fees
the independence of the external audit is an essential element of our overall governance framework and allows shareholders to gain comfort 
that the financial statements give a fair and understandable view of the group’s affairs and have been prepared in accordance with applicable 
standards the board is sensitive to investor body guidelines on nonaudit fees however nonaudit fees for 2012 have again been significant 
and have exceeded the audit fee 
we believe it is important to recognise that premier foods is not a “steady state” company but is in the process of a significant transformation in 
2011 and 2012 this resulted in significant work being undertaken by pwc in respect of the group’s refinancing and over the course of the year 
pwc have also been engaged to undertake working capital reports in connection with two class 1 disposals which required shareholder approval
the audit committee monitors nonaudit spend closely in accordance with the group’s internal policy and procedures the committee also 
received updates from the external audit’s lead partner on pwc’s internal controls to safeguard their independence on this basis we remain 
satisfied that pwc were best placed to undertake the work given the time constraints and the likely cost of the work and that the engagement 
of pwc for the nonaudit work was in the best interests of shareholders additional safeguards to the independence of the auditors are given 
by the fact that in 2012 a new lead audit partner was appointed as part of pwc’s normal rotation process and that since 2011 there has been 
a complete change in the executive management team at the company further disclosure on auditor independence and nonaudit fees is set 
out on page 54 we believe that with the stabilisation of the business the level of non audit fees will reduce significantly going forward
david beever
nonexecutive chairman
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governance
board of directors
david beever
nonexecutive  
chairman
mark moran
chief financial  
officer
david wild
nonexecutive director
1
 david beever
nonexecutive chairman
appointed to the board january 2008 and 
appointed chairman in june 2012
skills and experience after qualifying as a 
chartered engineer david has spent most of 
his career in the financial sector he was a vice
chairman of s g warburg where he handled 
many corporate finance transactions for major 
uk and international companies he was later 
a board member of kpmg and chairman 
of corporate finance and was previously 
chairman of several major companies including 
london  continental railways limited and 
volex plc he has also been a nonexecutive 
director of a large number of companies 
including stobart group ltd servomex 
limited tls plc and paragon group of 
companies plc
board contribution david was appointed 
chairman in june 2012 having previously been 
the senior independent director as chairman 
he is responsible for leading the board and 
ensuring it operates in an effective manner 
setting board agendas and ensuring sufficient 
time is available for discussing key strategic 
issues he is also responsible for promoting 
constructive relations between the executive 
and nonexecutive directors and ensuring 
effective communication with shareholders 
during 2012 david introduced two new non
executive directors ian krieger and jennifer 
laing david also managed the orderly ceo 
succession process with the appointment of 
gavin darby in 2013
other appointments david is a member 
of the board of trustees at the university of 
london
committee membership david is a 
member of the remuneration and nomination 
committees and attends the audit committee 
by invitation
2
 gavin darby
chief executive officer
appointed to the board february 2013
skills and experience gavin has a strong 
consumer goods pedigree and extensive senior 
leadership experience he spent fifteen years 
at the cocacola company in various senior 
positions including division president roles for 
north west europe and central europe prior 
to joining premier foods gavin served as ceo 
of cable  wireless worldwide plc leading a 
successful turnaround of the business before 
negotiating its eventual sale to vodafone plc 
previously he worked at vodafone plc for nine 
years during which time he served as uk 
ceo and ceo of americas africa india and 
china earlier in his career gavin held various 
sales and marketing roles in sc johnson and 
spillers foods he graduated with a degree in 
management science from the university of 
manchester gavin served as a nonexecutive 
director of intertek plc between 2009 and 2011
board contribution gavin is responsible for 
the executive management of the group and 
ensuring the overall implementation of the 
strategic plan within approved budgets and 
timescales
committee membership gavin regularly 
attends meetings of board committees by 
invitation
jennifer laing
nonexecutive director
gavin darby
chief executive officer
charles miller smith
nonexecutive director
ian mchoul
senior independent  
director
ian krieger
nonexecutive director
1
4
7 8
5 6
2 3
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governance
3
 mark moran
chief financial officer
appointed to the board december 2011
skills and experience prior to joining the 
group mark served as chief financial officer of 
ssl international plc where he gained extensive 
experience of working with global brands 
during his six years including strategic and day
today financial management executive board 
responsibilities and investor relations prior to 
this he was group finance director of porvair 
plc and also held senior roles at caradon plc 
mark served as a nonexecutive director of 
brixton plc between 2008 and 2009 mark 
trained as a chartered accountant with arthur 
andersen 
board contribution mark is responsible for 
overseeing the financial operations of the group 
and setting its financial strategy in conjunction 
with the board he also oversees the overall 
framework for financial forecasting planning 
analysis and reporting during 2012 mark has 
been responsible for the financial aspects of the 
disposal programme
committee membership mark regularly 
attends meetings of board committees by 
invitation
4
 ian krieger
nonexecutive director
appointed to the board november 2012
skills and experience ian has a wealth of 
business accounting and finance experience 
gained during a 40 year career first with arthur 
andersen and from 2002 with deloitte he 
was a senior partner and vicechairman at 
deloitte until his retirement in 2012 previous 
management responsibilities included heading 
the corporate finance practice the london 
corporate audit division and the private 
equity practice ian has significant boardroom 
experience and has worked with a wide variety 
of companies throughout his career including 
many in the consumer goods sector ian 
qualified as a chartered accountant with arthur 
andersen
board contribution ian has extensive financial 
experience and expertise which is utilised by 
the board on the audit committee 
other appointments ian is a director of 
anthony nolan where he is chairman of the 
audit committee
committee membership ian is a member 
of the audit remuneration and nomination 
committees
5
 jennifer laing
nonexecutive director
appointed to the board october 2012
skills and experience jennifer has over 
30 years experience in brand building and 
communications including 16 years with 
saatchi  saatchi twice as chairman of the 
london office and culminating in her role as 
chairman and ceo of saatchi  saatchi north 
america in the early 1990s she led her own 
advertising agency laing henry which was 
subsequently sold to saatchi  saatchi from 
2002 to 2007 jennifer was associate dean 
external relations at london business school
board contribution jennifer has extensive 
brand building experience which is utilised by 
the board
other appointments jennifer is currently 
a nonexecutive director of intercontinental 
hotels group plc where she chairs the 
corporate responsibility committee and 
of hudson global inc a global recruitment 
company where she is chairman of the 
compensation committee
committee membership jennifer is a 
member of the audit remuneration and 
nomination committees
6
 charles miller smith
nonexecutive director
appointed to the board june 2009
skills and experience charles is a senior 
adviser at warburg pincus llc and prior to this 
was an international adviser at goldman sachs 
international from 2001 until 2005 charles 
worked with unilever plc for over 30 years the 
last five of which he served as a director of 
finance and then foods he held a wide range 
of financial and general management positions 
in the uk the netherlands and india charles 
was chief executive officer and then chairman 
at ici plc from 1994 to 2001 he has served as 
a nonexecutive director of midland bank and 
hsbc holdings plc and served as chairman 
of scottish power plc between 2000 and 2007 
board contribution charles has extensive 
commercial experience both as an executive 
director of a number of multinational companies 
and also in advising a range of financial 
organisations
other appointments charles is a member of 
the international advisory council for principal 
financial in the usa and also chairman of 
firstsource solutions uk ltd  and is a director 
of firstsource solutions ltd 
committee membership charles is a 
member of the nomination committee
7
 ian mchoul
nonexecutive director
appointed to the board july 2004
skills and experience ian’s earlier career 
was spent in the brewing industry where he 
spent ten years with courage ltd and its 
parent company foster’s brewing group 
in a variety of roles and served as general 
manager of strategy of foster’s brewing 
group and executive director of strategy and 
planning of courage ltd from 1992 to 1995 
he was finance and strategy director of the 
inntrepreneur pub company ltd from 1995 to 
1998 ian then served at scottish  newcastle 
plc between 1998 and 2008 holding the 
position of finance director from 2001 ian 
qualified as a chartered accountant with kpmg 
in 1985
board contribution ian is the chief financial 
officer of a ftse 100 company amec plc 
ian has extensive financial experience and 
expertise which is utilised by the board in his 
capacity as chairman of the audit committee 
the audit committee has responsibility for 
monitoring the integrity of the group’s financial 
reporting systems financial controls and the 
effectiveness of the internal audit function 
as senior independent director he has 
responsibility for meeting with the other non
executive directors to review the chairman’s 
performance and is available to shareholders to 
discuss their concerns
other appointments ian is currently chief 
financial officer of amec plc
committee membership ian is chairman of 
the audit committee and also a member of the 
nomination committee
8
 david wild
nonexecutive director
appointed to the board march 2011
skills and experience david was chief 
executive officer of halfords group plc until 
july 2012 and was previously with walmart 
where he was senior vicepresident of us 
new business development and president of 
walmart germany earlier in his career he was 
with tesco plc 1985 to 2003 where he held 
a variety of roles including 10 years in buying 
and 6 years as chief executive of tesco central 
europe
board contribution david brings over 25 
years’ retailing experience gained at two world
leading businesses and the skills and ability to 
develop growth strategies
committee membership david is the 
chairman of the remuneration committee and 
is also a member of the audit and nomination 
committees
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42
governance
group executive
the group executive is appointed by the chief executive officer the group executive is responsible for the daytoday management of the business and 
implementing the group’s strategy details of the group executive are set out below
1
 brian carlton
group hr director
skills and experience brian joined the 
business in 1994 as head of personnel for the 
canned foods division his responsibilities 
have since been extended to embrace all hr 
activities across the group he was appointed 
to the group executive in october 2006 prior 
to joining premier foods brian held hr and 
operational roles in chrysler uk k shoes 
metal box and smurfit packaging
key responsibilities these include 
leadership development talent management 
remuneration resourcing and employee 
relations management across the business
2
 ian deste
commercial director grocery
skills and experience ian joined premier 
foods in september 2011 as group sales 
director and was appointed as commercial 
director grocery in november 2012 he 
previously spent 20 years with cocacola 
enterprises ltd cce including nine years as 
a member of the gb board most recently ian 
held the position of vicepresident sales and 
customer development prior to which he held 
other senior positions in sales marketing and 
communications at cce in his early career he 
worked in the beer and tobacco industries
key responsibilities ian is responsible for 
marketing innovation and sales within our 
ambient grocery and cake portfolio this 
includes all aspects of commercial strategy 
and customer management and the delivery of 
revenue profitability and marketshare metrics 
for the grocery brands
3
 mark hughes
group procurement director
skills and experience mark joined premier 
foods and the group executive in 2007 
following the acquisition of rhm mark joined 
rhm in 2003 as divisional services director 
bread bakeries and became a member of the 
bread bakeries division executive in 2004 and 
was group procurement and logistics director 
and a member of the group executive of rhm 
in 2006 mark was previously director at archer 
daniels midland milling uk and has held a 
number of senior positions with associated 
british foods plc
key responsibilities control and risk 
management of c £13bn of spend on 
ingredients packaging energy machinery 
facilities engineering marketing and all 
corporate spend responsibilities include 
ensuring the group remains competitive and 
well placed within a changing market through 
the provision of innovative procurement 
processes policies stakeholder engagement 
and external supplier relationship management
4
 richard johnson
group corporate affairs director
skills and experience richard joined premier 
foods in october 2011 as group corporate 
affairs director previously richard spent a total 
of 18 years with kraft foods now mondele

z 
international during which time he held senior 
corporate affairs roles across a number of 
businesses and geographies including the 
uk belgium and the us most recently he 
was corporate affairs director for kraft foods’ 
european business based at the company’s 
headquarters in switzerland he was also 
vicepresident corporate affairs for mcdonald’s 
europe and earlier in his career he worked for 
the food and drink federation
key responsibilities these include 
leading the group’s internal and external 
communications media relations public affairs 
sustainability and community relations activities
5
 andrew mcdonald
general counsel  company secretary
skills and experience andrew joined the 
company in november 2011 as general 
counsel  company secretary prior to this he 
held the same position at uniq plc before its 
acquisition by the greencore group andrew is 
a qualified solicitor and worked as a corporate 
lawyer at freshfields bruckhaus deringer before 
moving into industry he is a law graduate of 
manchester university 
key responsibilities andrew has 
responsibility for the legal company secretarial 
and internal audit functions and is actively 
involved in business development and key  
operational issues facing the business he is on 
the steering group of all corporate and strategic 
projects pursued by the group he also 
supports the chairman with the management 
of the board to ensure it fulfils its corporate 
governance obligations
6
 bob spooner
group supply chain director and managing 
director bread
skills and experience bob joined premier 
foods as group operations director in april 
2007 in october 2011 bob was appointed 
group supply chain director with responsibility 
for the group’s combined operations technical 
and procurement functions and in october 
2012 took on additional responsibility as 
managing director of the bread division where 
he is responsible for all aspects of the bread 
business including full pl responsibility 
before joining the group bob was group 
supply director for northern foods plc and 
managing director of northern foods’ pastry 
products business and prior to that held senior 
operational and supply chain roles with ici 
paints and sara lee 
key responsibilities these include leading 
and implementing the group’s manufacturing 
logistics procurement technical and innovation 
strategy across the businesses and full 
responsibility for the bread division’s pl
7
 mark vickery
group information solutions  change director
skills and experience mark joined the group 
in early 2005 as director of is  change 
management following the acquisition of rhm 
he assumed the role of group is  change 
director mark started his career at unilever plc 
where he spent 17 years working in a number 
of businesses and geographies he then moved 
to united biscuits as is director prior to joining 
premier foods
key responsibilities these include managing 
the information services function and delivering 
major system and change programmes into the 
business
andrew mcdonald
general counsel  
company secretary
brian carlton
group hr director
1
5
mark hughes
group procurement director
mark vickery
group information  
solutions   
change director
7
3
richard johnson
group corporate  
affairs director
4
bob spooner
group supply chain director 
and 
managing director bread
ian deste
commercial director  
grocery
2
6
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governance
the group executive is appointed by the chief executive officer the group executive is responsible for the daytoday management of the business and 
implementing the group’s strategy details of the group executive are set out below
leadership
our board structure
audit
committee
nomination
committee
remuneration
committee
group executive
plc board
internal control framework
treasury risk
       management 
         committee
sustainability
           steering               group
board members during 2012
number of
possible
meetings
attended
actual
meetings
attended
nonexecutive directors
david beever 8 8
ian krieger 1 1
ian mchoul
1
8 7
jennifer laing 2 2
charles miller smith 8 8
david wild 8 8
executive directors
michael clarke 8 8
geoff eaton 2 2
mark moran 8 8
former nonexecutive directors
louise makin
2
6 5
ronnie bell 3 3
1 
ian mchoul missed the december 2012 board meeting due to a business 
commitment with amec plc
2 
louise makin missed the september 2012 board meeting due to a business 
commitment with btg plc
the following board changes took place 
•	 david beever was appointed as chairman on 1 june 2012 following 
ronnie bell’s resignation and ian mchoul replaced david beever as 
senior independent director
•	 david wild was appointed as chairman of the remuneration 
committee on 1 august 2012
•	 louise makin resigned as a nonexecutive director on  
30 september 2012
•	 jennifer laing was appointed as a nonexecutive director on  
1 october 2012
•	 geoff eaton was appointed chief operating officer and executive 
director on 3 october 2012 and resigned as an executive director  
on 4 february 2013
•	 charles miller smith’s appointment as deputy chairman on an interim 
basis came to an end on 1 october 2012
•	 ian krieger was appointed as a nonexecutive director on  
1 november 2012 
•	 michael clarke resigned as ceo and an executive director on  
28 january 2013 and was replaced by gavin darby who was 
appointed on the 4 february 2013
biographies for directors can be found on pages 40 and 41 of this 
annual report
q how frequently did the board meet in 2012
a the board held eight scheduled meetings in the year and in 
addition a number of other meetings and conference calls were 
convened for specific business all directors are expected to attend the 
agm scheduled board meetings and relevant committee meetings 
unless they are prevented from doing so by prior work or personal 
commitments where a director is unable to attend a meeting they 
have the opportunity to review relevant board papers and discuss any 
issues with the chairman in advance of the meeting following the 
board meeting the chairman also briefs any director not present to 
update them on the key discussions and decisions taken details of the 
attendance at scheduled board meetings are set out in the table on the 
right
corporate governance
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governance
q is the board able to appoint additional directors
a the board has the power to appoint one or more directors under 
the articles any such director shall hold office until the next agm when 
they shall be eligible for election with the exception of charles miller  
smith as noted below in conflicts of interest an ordinary resolution of 
the shareholders is sufficient to appoint or remove a director
q do any of the directors have conflicts  
of interest
a the company has procedures for managing conflicts of interest in 
place and directors have continuing obligations to update the board 
on any changes to these conflicts this process includes relevant 
disclosure at the beginning of each board meeting and also the 
company’s annual formal review of potential conflict situations which 
includes the use of a questionnaire
under the terms of the relationship agreement between the company 
and warburg pincus charles miller smith a senior adviser to warburg 
pincus was appointed to the board under the agreement warburg 
pincus with the agreement of the company may appoint to the board a 
director so long as they retain a minimum interest of 23980215 shares 
in the company 
during the year no other director had a material interest at any time in any 
contract of significance with the company or group other than hisher 
service contract
for further details of the role  
of the committees see pages
5365
corporate governance
governance focus director induction programme
q does the company have a director  
induction programme
a yes all directors receive a tailored induction on joining the board covering 
their duties and responsibilities as directors nonexecutive directors also 
receive a full briefing document on all key areas of the group’ s business and 
they may request further information as they consider necessary a typical 
nonexecutive director induction would include
stage one matters covered
provision of documents duties of a director board procedures corporate governance including provision 
of an icsa compliant governance manual
stage two matters covered
meeting with ceo  cfo business overview current trading key commercial issues
meetings with nonexecutive directors open discussion forums
meeting with general counsel  company secretary board process and governance issuesupdates key legal risk and internal audit 
matters
meetings with each of the group executive commercial issues and projects as applicable for operations sales supply chain 
corporate affairs hr procurement marketing t echnology and innovation and isc
meeting with investor relations investor relations matters and any updates
meeting with treasury treasury and insurance matters and any updates
stage three matters covered
site visits understanding of the business and operations
executive
25
chairman
13
nonexecutive directors
62
executive
nonexecutive 
director split
1
male
87
female
13
boardroom
gender
diversity
1
0–3 years
62
7–9 years
13
4–6 years
25
length of 
board tenure
1
 
including executive 
directors
branded retail industry
375
marketing  sales
175
finance
33
retail sector
17
board skills
and 
experience
1
1
  as at 31 december 2012
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governance
q what are the roles and responsibilities of the board and its key members
the board the chairman
the board has an agreed schedule of matters reserved which include
•	 setting longterm strategic and commercial objectives
•	 approving annual operating and capital budgets
•	 reviewing business performance
•	 overseeing the group’s internal control systems and 
•	 ensuring appropriate resources are in place to enable the group to 
meet its objectives
the board delegates to the group executive responsibility for overseeing 
the implementation of the group’s policies and strategy 
leadership of the board and ensuring its effectiveness
•	 chairing board meetings setting the agendas in consultation 
with the ceo and general counsel  company secretary and 
encouraging directors’ active participation in board discussions
•	 leading the performance evaluation of the board its committees  
and individual directors
•	 promoting the highest standards of corporate governance including 
compliance with the code wherever possible
•	 ensuring timely and accurate distribution of information to the 
directors and effective communication with shareholders
•	 establishing an effective working relationship with the ceo 
by providing support and advice whilst respecting executive 
responsibility and
•	 periodically holding meetings with the nonexecutive directors 
without the executive directors present
the chief executive officer the senior independent director
•	 the executive management of the group and 
•	 ensuring the implementation of board strategy and policy  
within the approved budgets and timescales 
the ceo is assisted in meeting his responsibilities by the cfo and the 
group executive who head up the group’s principal operations and 
functions 
•	 supporting the chairman and leading the nonexecutive directors in 
the oversight of the chairman and ceo 
the sid’s specific responsibility is to be available to shareholders if they 
have concerns which the normal channels have failed to resolve or where 
such contact is inappropriate
q what are the directors paid
a details of the directors’ service contracts letters of appointment 
emoluments personal interests and beneficial interests in company 
shares and share options are found in the remuneration report on 
pages 56 to 65
q how does the board allocate its time
a below is a chart which summarises the approximate time the board 
has spent discussing agenda items at scheduled board meetings 
during the year to 31 december 2012
strategy
32
operations
21
finance  risk
26
governance
15
succession
6
board 
time 
allocation
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governance
q what is the company’s approach to diversity
a the board aims to have at least two female board directors by 2015 
the board believes in the importance of diversity in its widest sense and 
the benefits that it can bring to the operation of an effective board this 
is taken into account whenever a new appointment is undertaken with 
the aim to have individuals with a broad range of skills backgrounds and 
experience reflecting both the type of industry and the geographical locations 
in which we operate since adopting this policy four additional appointments 
have been made to the board three male and one female following the 
departure of geoff eaton female representation on the board is currently 
13
we are also focusing on opportunities to drive gender diversity at 
levels below the board both within the organisation as a whole and 
particularly within senior management during the year a number of 
appointments have been made to strengthen the group’s capabilities 
particularly within the commercial team this has resulted in an increase 
in female representation at the senior management level
 female workforce as at 31 december 2012  
at premier foods
2012  
2011 
plc 
board
senior
management 
central
functions
 all 
employees
13
11
16
24
45 45
23 23
effectiveness
q does the chairman meet with the nonexecutive 
directors in the absence of the executive directors
a yes this is one of the chairman’s responsibilities and is essential 
to maintain transparency and independence in the governance 
process over the course of the year the nonexecutive directors met 
independently on a regular basis both after board meetings and also 
over dinner topics discussed included key strategic issues succession 
planning a review of key risks facing the business board effectiveness 
and a review of the external auditor’s performance 
q what is the average length of time directors are 
appointed to the board
a the board believes it is important to maintain an appropriate 
balance between length of service to ensure independent judgement 
and an appropriate level of experience and skill the board regularly 
undertakes a review of succession plans for both executive and non
executive directors with consideration of the need to refresh board 
and committee membership and the board’s gender diversity targets 
a succession plan is under consideration for ian mchoul whose third 
term of appointment automatically expires in july 2013 as at year end 
the length of service of the current nonexecutive directors is shown in 
the graph below against the average length of service which currently 
stands at  
three years
ian kreiger
jennifer laing
david wild
david beever
charles miller smith
ian mchoul
10
9
8
7
6
5
4
3
2
1
0
number of years service
details of all directors’ appointment terms are set out on  
pages 62 to 63
corporate governance
premier foods annual report 2012frontindd   46 15032013   150259 did you 
know
we have reduced our 
riddor reportable accident 
frequency rate by 83 since 
2007
83
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47
governance
q does the company offer the directors access 
to independent professional advice
a yes procedures are in place which allow directors to take 
independent professional advice in the course of their duties in 
addition all directors have access to the advice and services of the 
general counsel  company secretary if any director were to have 
a concern over any unresolved business issue following professional 
advice they are entitled to require the general counsel  company 
secretary to minute that concern should they later resign over a 
concern nonexecutive directors are asked to provide a written 
statement to the chairman for circulation to the board
q how does the board keep uptodate with  
business developments
a the main source of information is via the board pack provided to 
directors these cover the following standing items which are designed 
to keep directors up to date with all material business developments
•	 ceo introduction 
•	 commercial review of brand and sales 
•	 customer service levels 
•	 hs and employee issues 
•	 restructuring projects 
•	 capital expenditure and 
•	 cfo report
a detailed strategy review took place over a two day meeting in june 
and there was a comprehensive review of 2013 brand sales and 
supply chain plans as part of the approval of the 2013 business plan in 
october and november 2012
q what committees does the board have
a the board has three committees which assist in the discharge of its 
responsibilities 
•	 audit committee
•	 nomination committee and
•	 remuneration committee
a finance committee was established in 2011 to provide additional 
board oversight of the group’s financing arrangements the finance 
committee met twice in 2012 and following the successful completion 
of the group’s refinancing in march 2012 the finance committee was 
disbanded in april 2012
in addition executive management are assisted by the work of the 
group executive and its subcommittees together these form part of 
the company’s corporate governance framework but are not formally 
appointed committees of the board
group executive committee— responsible under the leadership 
of gavin darby for the daytoday management of the business 
setting performance targets and implementing the group’s strategy 
and direction as determined by the board the committee is also 
responsible for the effective implementation of policies taking into 
account changes in regulations and other business risks the 
committee drives effective risk management throughout the business 
and makes recommendations to the audit committee as appropriate 
monitoring and reporting on all material business risks which might 
impact the delivery of the group’s strategic goals and objectives and 
agreeing with management appropriate mitigating actions
members of the committee include gavin darby mark moran and 
members of the group executive
sustainability steering group — responsible for providing direction 
to and oversight of the implementation of the group’s sustainability 
programme which is built around the five core themes these being 
buying responsibly sustainable manufacturing nutrition  quality 
our people and giving its objective is to identify and mitigate both 
environmental and social risks in order to protect and enhance the 
group’s reputation and build trust amongst its many stakeholders the 
sustainability steering group is made up of members from the group 
executive and senior operational management
treasury risk management committee — responsible for the 
oversight of designated material foreign currency and commodity 
exposures and agreeing with senior management appropriate mitigating 
actions members of the committee include members of the group 
executive and senior operational management
for further details of the role  
of the committees see pages
5365
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governance
accountability
managing our risks to achieve our strategic objectives
our risk control framework operates as follows
group governance framework
board review
1st line of defence
organisation 
management
control processes
2nd line of defence
policies
procedures
risk management
3rd line of defence
internal audit
other third party 
audit
q what are the board’s responsibilities for  
risk management
a effective risk management is integral to the achievement of 
the group’s strategic objectives the group has a well established 
governance structure which was operated throughout 2012 that 
identifies and monitors the key risks puts in place mitigating activities 
and reports on their effectiveness
the board has ultimate responsibility for ensuring that business risks 
are effectively managed the board has considered and approved 
the risk management policy the risk appetite of the group and has 
delegated the review of the risk management process to the audit 
committee the audit committee receives regular reports from 
management internal and external auditors detailing the effectiveness 
of our internal controls applied to the relevant risk and any required 
remedial actions along with an update on their implementation
the day to day risk management is the responsibility of senior 
management as part of their everyday business processes and is 
underpinned by the group’s policies and procedures to ensure this is 
fully embedded there is a structured business review process that 
operates across all business areas which ultimately reports to the 
board and this along with the corporate governance framework further 
underpins the ongoing management of risk
q what are the aims of the internal  
control system
a the internal control system provides senior management with an 
ongoing process for the identification evaluation and management of 
the risks that could impact on the fulfilment of the group’s business 
objectives the system is designed to manage rather than eliminate risk 
and provides reasonable but not absolute assurance against material 
misstatement or loss the system also supports senior management’s 
decision making processes improving the reliability of business 
performance
q how is the group’s internal audit  
programme decided
a the audit committee meets annually to review and approve the 
internal audit programme for the year the committee reviews progress 
against the plan on a quarterly basis considering the adequacy of audit 
resource the results of audit findings and any changes in business 
circumstances which may require additional audits
q how are internal controls monitored
a annually comprehensive internal control assessment questionnaires 
are submitted by senior management from all areas of the group 
these give an assessment of the effectiveness of controls to mitigate 
key risks to an acceptable level the results of these assessments  
are reviewed by executive management and presented to the  
audit committee 
the results of internal audits are reported to the group executive and 
senior management and where required corrective actions are agreed 
the results of all audits are summarised for the audit committee 
meetings along with progress against agreed actions
q does the board conduct an annual review of 
internal controls
a in accordance with the turnbull guidance an annual review of 
internal controls is conducted the board has delegated authority to 
the audit committee to regularly monitor internal controls and conduct 
the full annual review this review covers all material controls such as 
financial operational and compliance and also the risk management 
system in place throughout the year under review up to the date of the 
annual report the committee reports the results of this review to the 
board for discussion and agreement on the actions required to address 
any material control weaknesses 
q what financial reporting controls are in place
a the group maintains a strong system of accounting and financial 
management controls
our accounting controls ensure data in the group’s financial statements 
is reconciled to the underlying financial systems a review of the data 
is undertaken to ensure that the true position of the group is reflected 
through compliance with approved accounting practices
the group has a dedicated team of finance managers aligned to 
business areas supported by systems to provide the best available 
decision making information to management on an ongoing basis 
this is reflected in an annual budgeting process monthly management 
reporting and ongoing investment appraisal
risk management
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governance
q does the group have a formal risk  
management process
a the group operates a formal risk management process designed 
to provide assurance to the board and support the executive and 
senior management in identifying and mitigating the key risks facing the 
business on an ongoing basis
there are four key elements to the process 
1 the executive’s collective top down review of risks facilitated by the 
director of internal audit and risk creating the corporate risk register 
2  the bottom up view of risk is determined by management for each 
key business area supported by a member of the group executive
both elements above are captured in risk registers and for each risk 
identified an owner assigned mitigating actions are developed and 
monitored on an ongoing basis
3  appropriate operational procedures and controls have been put in 
place to mitigate these risks and all employees are provided with 
appropriate information training and supervision and
4  our control environment is regularly audited by internal audit third 
parties with specific experience in systems eg health  safety food 
hygiene requirements and by our external auditors  
the group executive provide the link between the corporate and 
individual risk registers ensuring that a consistent view is maintained 
and major risks to the business are appropriately identified this is 
reviewed as a standing item in the monthly group executive meetings
the corporate risk register is presented to the audit committee for 
consideration on behalf of the board twice per annum included within 
this review is a session of the nonexecutive directors without the 
presence of management but including both the director of internal 
audit and risk and the external audit partner the purpose of this 
session is to provide additional challenge to the internal risk process 
the audit committee also review the effectiveness of the controls 
designed to mitigate the risks identified through the activities of the 
various audit functions
q what are the current principal risks facing  
the group and what actions have been taken to 
manage them
a the business monitors and manages the principal high gross 
risks facing the business over the page we highlight these risks what 
activity we have in place to mitigate them as well as those activities 
that we have completed in order to reduce the risk to an acceptable 
level
risk management
case study  — managing business separation risk
we have undertaken a significant number of business disposals amounting to £3695m in value in 2012 this will allow the business to focus 
on its core power brands and also aids business simplification and drives the reduction in overhead costs the disposals involve complex 
transitional services between the company and buyer to ensure an orderly separation of the business to manage this effectively we have 
established a dedicated project team involving sales finance technical logistics procurement isc and hr this ensures that orders 
production and delivery standards are maintained for our customers transitional arrangement typically involve 3 phases
scoping – pre signing
initial process to understand potential 
separation complexities with the disposal 
and agreeing the approach with the 
business working with the purchaser to 
establish likely requirements for assistance 
during the transitional service and 
designing detailed service scope duration 
and costs which complement their existing 
infrastructure
pro cess design – post signing
establishing a joint steering team to manage 
the process for both parties and jointly agree 
and design operational processes to support 
the transitional services this is the critical 
phase and a single disposal can involve over 
120 specific process designs service users 
are provided with comprehensive training 
to ensure seamless business as usual 
operation from day 1 
transitional services –  
post c ompletion
operation of transitional services begins 
on a business as usual basis we jointly 
execute plans with the buyer and monitor 
progress against plan we work with the 
buyer to agree the approach and timing 
of the final separation and ensure this 
is communicated and coordinated with 
customers and suppliers
2012 2013
business disposal q1 q2 q3 q4 q1 q2 q3 q4
canning
irish brands
elephant atta
vinegar and pickles
jellies and spreads
sweet pickles
 
key  scoping   process design   transitional services and final separation 
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governance
risk management
business strategy and reliance on business recovery
1 power brands and restructuring
risk
the group has strategically focused on its eight power brands which 
management believes has the strongest potential for long term sustainable 
growth this strategy relies on simplification and cost saving initiatives to improve 
the underlying performance of the business all or any of these initiatives may 
fail to improve performance and consequently have an adverse impact on the 
group’s financial position
mitigation 
the strategy is clear and a strong management team is in place to execute it 
there is continuous review of progress against key milestones and regular 
engagement with all stakeholders
trading
2 market place risks 3 changes in the cost and availability of raw materials
risk
the group operates in a highly competitive environment exacerbated by 
continued difficult general economic conditions and in fast moving sectors of the 
food industry 
if we are unable to respond to consequent changes in consumer requirements 
on price or quality the demands of our customers in supporting our products 
with sales and marketing spend and the reactions of our competitors on 
innovation and profitability this could adversely impact the group’s performance 
risk 
the group purchases its raw materials many of which are commodities from 
numerous suppliers and many of these raw materials are subject to potentially 
significant price fluctuations if the costs of raw materials were to rise and 
the group was unable to absorbmitigate or pass such increases on to its 
customers in full or in a timely manner then its operating profits and cash flow 
would be adversely affected if the supply of any of the group’s raw materials 
is constrained for any reason this could also have an adverse impact on the 
business
mitigation
for the consumer the group will focus on brand differentiation demonstrating 
quality taste and more convenient packaging we will drive investment in new 
product development where we have a good track record anticipating 10 
of sales in fy13 from this activity we regularly monitor consumer trends and 
consumption habits to inform this activity we will focus our marketing activity in 
support of our core brands 
with our customers we will use our new organisation structures in sales and 
marketing to continue to work collaboratively with appropriate strategies for each 
channel with the major retailers we develop joint business plans aligning our 
pricing and promotional activities
we will maintain our competitiveness through our restructuring of the group in 
fy12 we announced ongoing annual costs savings exceeding £40m in fy13 we 
will focus on the supply chain within the bread division and continue to challenge 
costs throughout the business 
mitigation
we have experienced continued inflation in raw materials throughout fy12 
however our targeted forward buying of products through the centralised 
procurement function has effectively managed our exposure to these increases 
we have also used our supplier relationships to manage our raw materials supply 
protecting quality whilst effectively managing cost we will continue with this 
effective approach through fy13 
financing
4 banking covenants 5 pensions liability
risk
the group continues to operate with a high level of debt £09bn and is subject 
to operating within banking covenants set out in its refinancing agreement 
agreed with its bank syndicate in march 2012 this includes net debtebitda 
and ebitdainterest covenant tests in the event these covenants are not met 
then the group would be in breach of its financing agreement and as would be 
the case in any covenant breach the banking syndicate could withdraw their 
funding to the group
in addition to covenant compliance the group must ensure that it manages its 
liquidity such that it has sufficient funds to meet its obligations as they fall due
the company does not pay dividends and this is a restriction under the terms of 
its financing arrangements the group is also restricted from raising additional 
forms of debt finance other than a basket of c£20m and is not able to use free 
cash flow for acquisitions
risk 
the group supports three defined benefit pension schemes in the uk all three 
schemes have significant technical funding deficits which could have an adverse 
impact on the financial condition of the group the level of deficit fluctuates 
with changes to the underlying assumptions in calculating both the assets and 
the liabilities of the schemes adverse movements in these assumptions could 
impact on the level of deficit
mitigation
the group successfully finalised financing arrangements in march 2012 which 
will provide funding until june 2016 the group achieved its trading expectations 
for fy12 its lender agreed divestment programme and successfully implemented 
a debtor securitisation program to provide additional funding and liquidity 
the group reviews it’s performance on an ongoing basis and formally tests and 
reports on covenant compliance to the group’s banking syndicate every six 
months as well as providing forecast covenant compliance tests twice a year 
in the event of a forecast covenant breach the group would seek a covenant 
waiver or amendment from its banking syndicate which it could obtain with a 
twothirds majority vote
the group manages liquidity risk through both the treasury and finance 
functions cash flow forecasts are prepared and reviewed on a weekly basis 
normally covering a period of three months in addition cash flow forecasts are 
prepared as part of the group’s overall budgeting and forecasting processes and 
performance is monitored against this each month
mitigation
funding agreements have been reached with the trustees of the pension 
schemes which coupled with the changes to the schemes in the prior year 
mitigate our exposure in fy13 the group continues to monitor the pension risks 
closely working with the trustees to ensure a collaborative approach
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governance
risk management
industry risks
6 health  safety 7 food regulation
risk
by the nature of production and warehouse environments the group carries 
a level of intrinsic risk from these activities the group is subject to legislation 
and regulations in the uk with respect to the health  safety of its employees 
permanent contractors and visitors violations of such laws could lead to 
significant fines and imprisonment of its directors
risk 
as a food manufacturer the group is subject to legislation and regulations in 
relation to food and its production violations of any laws could result in fines and 
sanctions as well as reputational risk with consumers and customers should 
any product contamination occur it could lead to product recalls or liabilities to 
customers or consumers health scares can significantly impact demand for 
certain foods
mitigation
the group maintains an excellent health  safety record by constantly re
enforcing high standards of protection and creating a culture that ensures all 
personnel on site are made acutely aware of risks and procedures designed 
to mitigate them each site retains responsibility for its own health  safety 
supported by central coordination of monitoring and reporting and a training 
and education program through our total observation process tops we make 
health  safety an inherent part of each employee’s day to day responsibility
mitigation
the group has developed and implemented a policy to ensure that its entire 
business understand and comply with relevant laws and regulations the group 
has an excellent food safety record and continues to focus on high levels of 
operational control and continued improvement in all related areas we have a 
leading technical function which sets high standards for hygiene and product 
quality and these processes are subject to internal review and frequent external 
monitoring
employee motivation and retention business separation
8 management and employee motivation and retention 9 business disposals
risk
the level of restructuring experienced by the group has been significant 
over the past two years poor management of this restructuring and lack 
of effective succession plans could lead to a loss of critical knowledge and 
a lack of continuity damaging our operating performance in addition poor 
employee engagement could adversely impact our ongoing change programme 
degradation of our control processes due to a lapse in management controls 
could lead to reputational damage to the business as well as financial loss 
suffered through areas such as breaches bribery and corruption or unfair 
competition regulations
risk 
our business disposals have involved complex transitional service arrangements 
between the company and respective buyers to ensure an orderly separation 
over a 6 to 12 month period these arrangements include us providing 
indemnities and warranties in favour of the purchasers which if breached 
may result in financial claims against the group and continuing to service 
customer needs in various product categories for the period of transition poor 
management of these activities could result in financial loss and reputational 
damage with our customers
mitigation
we have put in place a program of communication covering our vision values 
and behaviours as well as clearly reenforcing our strategy to our employees 
our restructuring has been managed in a manner which treats those impacted 
with respect has ensured appropriate compensation and support in areas 
such as outplacement advice whilst also ensuring that those individuals who 
we wish to retain in the business to drive and deliver our strategy understand 
and are enthused about their new or ongoing roles we continue to provide all 
our employees with learning and development opportunities supported with an 
ongoing personal performance management process we have implemented 
a policy and relevant procedures to deal with the requirements of the bribery 
act 2010 these are regularly communicated and in fy13 we will conduct a full 
review of the effectiveness of this process
mitigation
we have established dedicated project teams drawn from various functions 
of the business to manage these transitional arrangements to ensure that 
orders production and delivery standards are maintained to our customers we 
have placed a significant emphasis on ensuring the arrangements have been 
properly scoped and designed working with the buyer in joint steering teams 
we have developed joint operating plans with the buyers and ensured these are 
communicated and coordinated with customers and suppliers 
our legal team have a good record of transactional management and in each 
sale have undertaken an appropriately thorough disclosure process and 
negotiated robust legal documentation to mitigate the risks of claims from the 
purchasers
systems infrastructure communication
10 systems infrastructure 11 external communications
risk
disruption to systems as a result of new implementations natural disasters 
systems failures or breaches in systems security may result in a significant loss of 
operation or of competitive advantage breaches in systems security could also 
result in breaches of data protection regulation
risk
if the group does not effectively communicate with its external audiences 
shareholders analysts our financing partners customers suppliers and the 
media it may impact on our share price or result in reputational damage 
mitigation
during the course of our core systems implementation the majority of which is 
now complete we have developed a well established and tested implementation 
process which will be applied to the few remaining areas of the business we 
have in place a robust disaster recovery process which is regularly tested 
and the lessons learnt incorporated into our procedures the group operates 
an it governance framework including relevant policies has put in place 
a management structure to effectively monitor systems performance with 
structured change management systems lifecycle and capacity planning we 
also have a dedicated systems access process which is managed within our it 
function but also works in conjunction with the business to ensure appropriate 
controls are maintained to minimise the risks of unauthorised access
mitigation
the group has a dedicated inhouse corporate affairs department and a 
professional pr agency who work with management and the group executive 
to ensure all external communications are appropriately addressed all significant 
corporate communications are reviewed by the group executive and where 
appropriate by the board prior to release 
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governance
corporate governance
relations with shareholders
q how does the company engage with  
shareholders
a an important role of the board is to represent and promote the 
interests of its shareholders as well as being accountable to them for 
the performance and activities of the group
the board believes it is very important to engage with its shareholders 
and does this in a number of ways through presentations conference 
calls investor roadshows facetoface meetings and the agm 
following the announcement of the group’s half year and year
end results presentations are made to analysts banks and major 
shareholders to update them on the progress the group has made 
towards its goals and invite them to ask questions 
currently around eight sellside research analysts publish research on 
the group full details on results presentations rns releases interim 
management statements and conference calls are available on the 
group’s website
wwwpremierfoodscoukinvestorrelations
the company chairman and senior independent director speak 
with major shareholders on a regular basis and brief the board to 
ensure that they are aware of the views of shareholders in addition 
meetings were held over the year with many of the company’s largest 
shareholders as part of a review of remuneration arrangements see 
page 56 for further information
the main channel of communication to institutional investors is through 
the ceo cfo and head of investor relations the ceo and cfo are 
available to meet with shareholders during the year the chairman and 
senior independent director are also available to discuss any issues 
and concerns of shareholders and welcome questions posed to the 
board and committees 
q how does the company engage with other 
stakeholders
a the company holds meetings throughout the year with key 
stakeholders
pensions
the group has established a pensions liaison forum which meets 
quarterly this is attended by the cfo general counsel  company 
secretary group pension manager and chairmen of the group’s 
pension schemes the ceo attends the forum twice yearly the forum 
discusses and develops funding and investment strategies for the 
group’s pension schemes and any other pension issues that might 
impact the schemes andor the group
banks
members of the group executive hold regular meetings with the 
company’s banking syndicate to update them on the group’s financial 
performance and management were able to confirm the completion of 
the planned divestiture programme at the end of 2012 well in advance 
of the june 2014 timetable
suppliers
the group holds a conference with the group’s leading suppliers on an 
annual basis which is attended by executive directors and members of 
the group executive this is an opportunity to update suppliers on the 
group’s strategy and growth plans due to the focus on the group’s 
restructuring during 2012 no supplier conference was held however a 
conference is being planned for 2013
sustainability
we work with a number of government departments nonministerial 
government departments such as the food standards agency and 
other regulatory agencies as well as trade associations such as the 
food and drink federation we engage with these bodies in order to 
identify and understand key issues facing the food industry and listen to 
their opinions and guidance — all of which helps to inform our internal 
policy making
q how is the board updated on the latest  
shareholder information
a the board receive a detailed investor relations update at each 
board meeting which covers amongst other things share price 
movements shareholder register movements analyst reports a 
summary of investor meetings and other recent activity the board 
also receives comprehensive feedback from the company’s brokers 
following investor roadshows after half year and yearend results
did you 
know
in 2012 we bought 70 million 
litres of milk from our british 
farm assured milk suppliers 
for our ambrosia creamery 
in lifton devon
70m
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governance
corporate governance committees
over the course of the year there have been a number of significant 
one off items which have required careful consideration by the 
committee to ensure that the appropriate accounting treatment 
has been adopted and that clear disclosure has been given in the 
financial statements
audit committee
ian mchoul
senior independent directorchairman  
of the audit committee
the committee’ s terms of reference are available on the group’ s website 
wwwpremierfoodscoukaboutuscorporategovernance
the committee has responsibility on behalf of the board for reviewing 
the effectiveness of the group’s financial reporting systems and the 
internal control policies and procedures for the identification assessment 
and reporting of risk the committee also keeps under review the 
relationship with the external auditors including the terms of their 
engagement and fees their independence and expertise resources and 
qualification and the effectiveness of the audit process
q who is on the audit committee and how  
frequently did they meet in 2012
a the committee held four scheduled meetings in the year and an 
additional meeting was convened for specific business the committee 
met with the internal and external auditors on two occasions in the year 
without the presence of management the committee members are set 
out in the table below together with detail of their meeting attendance 
during the year
audit committee membership 
and attendance
number of
possible
meetings
attended
actual 
meetings
attended
members
ian mchoul chairman 4 4
ian krieger 1 1
jennifer laing 1 1
david wild 4 4
former members
david beever 2 2
ian mchoul and ian krieger both have recent and relevant financial 
experience mr mchoul as the chief financial officer of amec plc 
and mr krieger as vicechairman of deloitte until his retirement in 
2012 david beever was also a member of the committee until june 
2012 however following his appointment as chairman it is no longer 
considered appropriate for him to be a member although he will still 
attend meetings by invitation
in addition to the committee members the following individuals are 
regularly invited to the committee’s meetings the cfo director of 
internal audit and risk external audit lead partner and ceo the 
general counsel  company secretary attends in his capacity as 
secretary of the committee
q what is the role of the committee
a the committee has been delegated authority by the board to
•	 monitor financial reporting including the annual and interim reports 
preliminary results announcements and formal announcements 
relating to financial performance and reporting
•	 ensure the effectiveness of the group’s internal controls and risk 
management systems
•	 review and update the whistleblowing arrangements
•	 monitor and review the effectiveness of the group’s internal audit 
function including the approval of any appointment or removal of 
the head of the internal audit and risk function
•	 consider and make recommendations to the board on the 
appointment reappointment and removal of external auditors 
including the setting of their remuneration 
•	 review the external auditors’ independence and objectivity and the 
effectiveness of the audit processes 
q who are the group’s auditors and how long 
have they held office
a since the company was listed on the london stock exchange 
in july 2004 pricewaterhousecoopers llp “pwc” have been the 
group’s auditors following revisions to the code in 2012 going 
forward large listed companies will be required to put an external audit 
contract out to tender every ten years or explain why it has not 
the external auditors are required to rotate the audit partner 
responsible for the group and subsidiary audits every five years and a 
new lead audit partner was appointed in 2012 the frc’s transitional 
arrangements guidance suggest that if an audit partner rotation has 
recently occurred it may be appropriate for a listed company to 
conduct its next audit tender towards the end of the current audit 
partner rotation ie in 2017 there are no contractual obligations 
restricting the group’s choice of external auditors 
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governance
committees
q how does the committee monitor the  
effectiveness of the external auditor
a annually the committee reviews the relationship the group has 
with pwc the review is conducted by a questionnaire addressed 
to key management following the year end audit the responses are 
collated and reviewed by the company secretariat and the results are 
categorised prioritised and presented to the committee for their review 
while there were no significant failings or weaknesses identified in the 
external audit process for 2012 there were areas where improvement 
could be made and these recommendations were included in the 2012 
external audit plan the committee conducted a follow up review and 
was satisfied that the recommendations had been addressed following 
the half year audit process
for the year ended 31 december 2012 the committee was satisfied 
with the effectiveness of the external auditor at the 2013 agm 
the reelection of pwc as the group’s auditors will be proposed to 
shareholders
q what nonaudit services were provided by the 
group’s auditors during the year
a there is an established policy governing the engagement of 
pwc for nonaudit services designed to ensure that any nonaudit 
services provided do not impair the independence and objectivity of 
the external auditors the policy includes a fee limit for the provision 
of nonaudit services above which a formal tender process must 
normally be undertaken during the year pwc was engaged to provide 
advice on the refinancing agreement and working capital statements 
in connection with two disposals the committee regularly reviews 
the level of nonaudit fees throughout the year the committee also 
received an update from the external auditors lead partner on their 
internal controls to safeguard their independence
before commissioning pwc to undertake this work the committee 
reviewed the proposal in detail with both management and pwc to 
assess any potential threat to their independence the committee is 
aware of and sensitive to investor body guidelines on nonaudit fees 
however given the nature of work required in connection with the 
refinancing of the group in 20112012 and subsequent disposals it 
was assessed that pwc were best placed to perform these additional 
services in view of their knowledge of the business the time constraints 
in completing the work and the likely cost 
following the signing of the refinancing package in march 2012 
and early completion of the planned disposals programme the 
committee believe the level of nonaudit fees will be significantly lower 
in the current financial year and within a level acceptable to investor 
guidelines as at the date of this report pwc have not been engaged to 
undertake any further nonaudit work 
q what significant issues did the committee  
discuss during the year
a during the year the committee
•	 considered a number of key accounting matters including matters 
relating to pensions accounting for disposals and impairment
•	 received regular reports from the internal audit function 
ensured it was adequately resourced monitored its activities and 
effectiveness and agreed the annual internal audit plan 
•	 conducted a review of the effectiveness of the internal control 
system including internal control self assessments
•	 agreed the appointment of a new director of internal audit  
and risk
•	 reviewed operational accounting issues including the shared 
service centre in manchester the processes for reviewing and 
recovering commercial debtors and the control and accounting for 
inventory
•	 received updates on the group’s whistleblowing arrangements
•	 reviewed the nonaudit services spend and approved the 
engagement of pwc as an adviser in relation to disposal projects
•	 conducted an internal review of the group’s external auditors 
which included a review of the auditors’ independence objectivity 
and the effectiveness of the audit process and
•	 considered the external auditors’ report for the year ended  
31 december 2011 and recommended the reappointment of the 
external auditors
going concern
the group entered into a revised facility agreement in march 2012 which 
provides financing to 2016 there are a number of covenants to which 
the group must adhere including financial measures and an undertaking 
to generate disposal proceeds of £330m by 30 june 2014 which has 
been met the committee regularly monitors covenant and liquidity 
headroom in light of trading performance and the potential impact of a 
range of downside scenarios the assessment of going concern also 
takes into account the work undertaken by pwc as part of the working 
capital exercise for the disposal circulars that were sent to shareholders 
in 2012 the group’s auditors are also required to form their own 
assessment of going concern as part of their ongoing audit work 
following review the committee is satisfied with the going concern basis 
of preparation
ian mchoul
chairman of the audit committee
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55
governance
committees
there have been a number of changes in the board’s composition 
in 2012 and i am delighted that jennifer laing and ian krieger have 
joined the board as nonexecutive directors to ensure we maintain 
an appropriate balance of skills experience and independence on 
the board
nomination committee
david beever
nonexecutive chairmanchairman  
of the nomination committee
the committee’ s terms of reference are available on the group’ s website 
wwwpremierfoodscoukaboutuscorporategovernance
the committee is responsible for considering the size structure and 
composition of the board retirement and appointment of additional 
directors and making appropriate recommendations so as to maintain 
an appropriate balance of skills and experience on the board the 
committee reviews the succession requirements of the board and senior 
management including the need for diversity on an annual basis and 
makes recommendations to the board as appropriate
q who is on the nomination committee and how 
frequently did they meet in 2012
a the committee held six scheduled meetings during the year the 
committee members are set out in the below table together with detail 
of their meeting attendance during the year
nomination committee membership  
and attendance
number of
possible
meetings
attended
actual 
meetings
attended
members
david beever chairman 6 6
ian krieger 3 3
jennifer laing 3 3
ian mchoul
1
6 5
charles miller smith 6 6
david wild 3 3
former members
louise makin 3 3
ronnie bell 3 3
1
  ian mchoul missed the november 2012 committee meeting due to a business 
commitment with amec plc
q what is the role of the committee
a the committee has been delegated authority by the board to
•	 lead the formal rigorous and transparent process for board 
appointments including a review of the skills experience and 
knowledge of the existing directors to ensure any potential 
shortlisted candidates will benefit the balance of the board
•	 give full consideration to succession planning taking into account 
the challenges and opportunities facing the group and what skills 
and expertise would benefit the board in the future 
•	 regularly review the structure size and composition including 
independence knowledge diversity of the board and make 
recommendations to the board regarding changes and
•	 agree the job specification for the chairman including an 
assessment of the time commitment expected recognising the 
need for availability in the event of a crisis
q what key issues did the committee discuss 
during the year
a as highlighted on page 38 there have been a number of changes 
to the board in 2012 and most significantly the appointment of a new 
ceo in january 2013 following ronnie bell’s decision to step down 
as chairman in june 2012 the composition of the board was reviewed 
and a number of appointments made to ensure orderly succession 
planning and that the balance of skills on the board was refreshed as 
required by good governance ronnie bell did not participate in the 
process to appoint his successor
changes in the year included the appointment of myself as chairman 
the appointment of jennifer laing and ian krieger as nonexecutive 
directors the committee also reviewed the appointment of geoff 
eaton as chief operating officer and in 2013 the appointment of gavin 
darby as chief executive officer external search agencies were used 
for all appointments to ensure that a rigorous and transparent process 
was undertaken these agencies were independent of the company 
and their engagement was conducted on an arms length basis
in addition the committee reviewed the talent management process 
and succession plans for each member of the group executive
as noted earlier a succession plan is under consideration for ian 
mchoul whose third term of appointment automatically expires in july 
2013
david beever
chairman of the nomination committee
premier foods annual report 2012frontindd   55 15032013   150301 david wild
chairman of the  
remuneration  
committee
“over the last few months we have met with our 
key shareholders to listen to their views explain the 
remuneration decisions we made in 2012 and outline 
our proposals for 2013”
dear shareholder
this is my first report as chair of the remuneration committee having served as a member since march 2011 we have made a number of 
significant decisions as a result of recent board changes and an overview of these are set out below the committee’s overall remuneration 
strategy remains broadly unchanged and recognises the complexity of the business the challenges it faces and the need for executive 
directors with significant experience to continue the business turnaround our focus is on rewarding performance – the majority of executive 
remuneration approximately 70 is variable and only payable if demanding performance targets are met these performance targets are 
firmly linked to our strategy and ultimately aligned with shareholders’ interests in delivering earnings growth and improved shareholder value in 
the medium term 
ceo change and implications for remuneration
as indicated in the chairman’s statement on page 10 on 28 january 2013 we announced a change of chief executive officer ceo michael 
clarke having delivered the initial turnaround of the company and positioned the company for future sustainable growth indicated to the 
board that he wished to pursue other business opportunities 
the board was pleased to announce the appointment of gavin darby in succession to michael clarke he has a strong background in 
consumer goods and an exceptional management track record the remuneration package that we have agreed reflects his experience and 
was necessary to secure an individual with his talent
michael clarke’s arrangements
•	 he will be employed by the company to ensure a smooth transition until 30 june 2013 during this time he will receive his salary benefits 
and a cash allowance in lieu of pension no payment will be made in respect of the unexpired portion of his notice period
•	 no bonus will be payable in respect of the period of 2013 that he works his 2012 award under the premier foods longterm incentive 
plan ltip of 1304347 shares issued in march 2012 will lapse on 30 june 2013
•	 he was given two deferred awards in 2012 in recognition of bonusesincentives forfeited from his previous employer the first of these 
awards comprising 500000 shares and a cash payment of £241500 has vested and will remain exercisable for 12 months the second of 
these awards comprising 375000 shares and a cash payment of £181125 will lapse
•	 he earned a bonus equivalent to 100 of salary for 2012 out of a maximum bonus opportunity of 150 of salary this amounts to 
£750000 the performance targets for 2012 contained two elements specific to him to reflect the challenges facing the business firstly 
50 relating to the refinancing of the company and secondly 50 relating to various financial targets and other strategic measures  
the committee considered that the completion of the refinancing in march 2012 was of critical importance to the business protecting  
the interests of all stakeholders and providing the necessary space for the business to execute its turnaround plans it was agreed that  
this element had been fully achieved in addition it was agreed that he had successfully delivered on a range of key strategic priorities in  
the year and therefore one third of the second element of the performance condition had been met 
•	 no other payments will be made
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remuneration report
part 1 unaudited information
the directors’ remuneration report provides information on the group’s overall remuneration strategy as well as detailed disclosure of directors’ 
remuneration and longterm incentive arrangements a resolution will be put to shareholders at the company’s 2013 agm inviting them to approve 
this report
premier foods annual report 2012frontindd   56 15032013   150301 gavin darby’s arrangements
gavin darby’s remuneration reflects the calibre of the individual the board has recruited
•	 annual base salary of £700000 to be reviewed in april 2015 has been set at a level below that of his predecessor
•	 cash allowance in lieu of pension due to the restrictions of the lifetime allowance of 20 of base salary
•	 annual bonus opportunity of 150 of salary 75 payable in cash and 25 in shares  payment of the bonus will be dependent on the 
following conditions
 — half of the bonus will be dependent on performance against turnover gross profit trading profit and cashflow targets subject to 
achievement of a threshold level of trading profit  
 — one third will be dependent on the achievement of short and medium term strategic objectives which are specific to his role as 
ceo subject to achievement of a threshold level of trading profit for 2013 the remuneration committee has determined that these 
objectives include power brand development defining a strategic plan for bread and delivery of cost reduction plans
 — the remaining one sixth will be dependent on personal performance focused on the creation of a cohesive high performing leadership 
team and the development of effective relationships with key stakeholders
•	 annual grant of shares with a face value of 200 of salary under the premier foods longterm incentive plan subject to the same 
conditions as for the other executive director for 2013 the award will be dependent on the company’s average total shareholder return 
over the three months following the announcement of the 2015 results and the adjusted eps achieved for the 2015 financial year these 
measures were used for 2012 however the remuneration committee has decided that for 2013 as it is critical that executives should be 
focused on improving the company’s share price the weighting applied to each measure should be altered so that twothirds of the award 
will be dependent on absolute tsr performance and onethird on adjusted eps performance the precise targets are set out on page 62 
adjusted eps and absolute share price performance are considered the most appropriate measures of the company’s performance by 
reflecting profitability as well as measuring the recovery in the company’s share price
•	 it was agreed that on appointment gavin darby would acquire shares in the company worth 100 of his salary and on 21 february 2013 
he acquired 750268 shares in return it was agreed that the company would make a matching award of shares to him worth 200 of his 
salary the coinvestment award this enables gavin to satisfy the company’s share ownership guidelines at the start of his appointment 
and aligns his personal interests with shareholders’ interest from early in his tenure to focus on delivering share price growth a third of these 
matching shares will vest on each of the first second and third anniversaries subject to a bonus having been paid for the relevant financial 
year and continued employment these shares will vest in specified circumstances or on a change of control further details of the co
investment award are set out on page 62
david beever
mr beever was appointed as chairman in june 2012 having served as a nonexecutive director since 2008 and as senior independent 
director from april 2011 his fee has been agreed as £265000 which reflects the significant time commitment required to fulfil the role
engagement with shareholders
there was a significant vote against the remuneration report at the agm in 2012 and it was therefore important for me to meet with our key 
shareholders to listen to their concerns and also explain the reasons behind the remuneration decisions we made in 2011 and 2012 as a result 
i held a number of meetings with both shareholders and investor representative bodies over the course of 2012 which were very constructive 
we have continued this dialogue with shareholders in 2013 to discuss remuneration arrangements for gavin darby and also our plans for the 
coming year 
remuneration strategy and proposals for 2013
the strategy and structure of remuneration is broadly in line with that used for 2012 with the exception that as noted above the weighting of 
the performance conditions for the ltip have been amended the performance conditions are linked to strategy and the targets are considered 
to be stretching full details are set out under their specific headings
david wild
chairman of the remuneration committee
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premier foods annual report 2012frontindd   57 15032013   150301 summary of 2013 remuneration 
element of pay purpose and link to strategy quantum changes for 2013
salary •	 provides an appropriate level of fixed income 
•	 set at levels to attract and retain talented 
individuals with reference to market rates 
•	 assessment by the committee of the specific 
experience and responsibilities of the individual
•	 annual increases may exceptionally result 
from significant changes to an individual’s 
responsibilities 
•	 consideration of pay conditions for all 
employees within the group
•	 reviewed annually effective 1 april in 
conjunction with those of the wider workforce 
gavin darby 
£700000
mark moran 
£425000
there were no changes to 
executive directors salary in 
2012 
gavin darby’s salary will not 
be subject for review until april 
2015 and any change for mark 
moran will be considered in line 
with increases for the rest of 
the group
annual bonus •	 designed to incentivise delivery of annual 
financial and operational goals and directly 
linked to delivery of the group strategy
•	 bonus payments are not pensionable
gavin darby 
maximum award — 150 of salary
25 of any bonus payment to be made 
in the form of shares
mark moran
maximum award — 75 of salary
no change in quantum of 
award in 2013
specific performance targets 
set for 2013 aligned with 
delivery of business plan 
and short and medium term 
strategic objectives
deferred share 
bonus plan
•	 performance conditions based on branded 
sales turnover and trading profit
•	 clear link to the strategy of continuous 
improvement in the sale of branded products 
emphasising the importance of profitability 
through the use of sales value and the inclusion 
of trading profit
•	 two year share retention aligns with 
shareholders interests
•	 underpin delivery of threshold level of trading 
profit
•	 clawback provisions apply
gavin darby
ceo does not participate in the dsb
mark moran
maximum award  30 of salary
no change in quantum 
of award or performance 
conditions for 2013
longterm 
incentive plan
•	 performance conditions based on absolute  
tsr 23rds  and adjusted eps 13rd
•	 the targets are aligned with shareholder return 
and also capture improvements in trading profit 
the ltip provides a clear link to our strategic 
goal of returning to profitable growth with 
sustainable share price growth over the long 
term
•	 annual grant of awards three year performance 
period
•	 clawback provisions apply
maximum individual limit under the plan 
of 200 of salary normal award levels
gavin darby
up to 200 of salary
mark moran 
up to 150 of salary
no change in quantum  
of award
weighting of specific 
performance measures 
amended to increase focus on 
shareholder return
pension •	 provides retirement benefits
•	 opportunity for executive directors to contribute 
to their own retirement plan
•	 together with salary represents the only fixed 
elements of remuneration
gavin darby
receives an allowance of 20 of salary 
in lieu of pension provision
mark moran
receives an allowance equal to 9 
of the earnings cap £137400 and a 
supplement of £20960 in respect of 
tax year 201213
no change in arrangements 
for 2013
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remuneration report
premier foods annual report 2012frontindd   58 15032013   150301 element of pay purpose and link to strategy quantum changes for 2013
other benefits each executive director is entitled to
•	 car allowance and fuel cost 
•	 private health insurance
•	 life insurance
•	 telecommunication services
•	 allowance for personal tax and financial 
planning and
•	 benefits generally in line with those granted to 
management grade across the group
•	 in addition gavin darby has the use of a 
chauffeured car exclusively for business 
purposes
company car used within terms of 
corporate car use policy
no changes are planned for 
2013
share ownership 
guidelines
•	 provides an effective means of aligning 
directors’ interests with those of our 
shareholders
•	 executive directors are expected to build 
a holding of shares within three years of 
appointment at least equal to their annual salary 
valued at the time of purchase
•	 shareholding at least equal to their 
annual salary within three years of 
appointment
•	 gavin darby and mark moran met 
this requirement on or soon after 
appointment
no changes are planned for 
2013
the committee
q  who is on the committee and how frequently 
did they meet in 2012 
a the table below identifies the committee members and attendees 
in accordance with the committee’s terms of reference no one 
attending a committee meeting may participate in discussions relating 
to hisher own terms and conditions of service or remuneration only 
independent nonexecutive directors may become members of the 
committee in addition the ceo group hr director and new bridge 
street remuneration advisors to the committee regularly attend 
by invitation over the course of the year the committee held five 
scheduled meetings and details of attendance at the meetings are 
shown below 
members
number of 
possible 
meetings 
attended
actual 
meetings 
attended
david wild 5 5
ian krieger 1 1
jennifer laing 1 1
david beever 5 5
former members
louise makin 3 3
ronnie bell 3 3
david wild was appointed chairman to the committee in august 2012 
ronnie bell and louise makin resigned as nonexecutive directors 
on 1 june and 30 september 2012 respectively jennifer laing and 
ian krieger were appointed to the committee on 1 october and 1 
november 2012 respectively following his appointment as company 
chairman in june 2012 david beever will remain as a member of the 
remuneration committee but is no longer considered independent 
under the terms of the uk corporate governance code
q who advises the committee
a new bridge street nbs a trading name of aon hewitt ltd 
have been appointed as advisers to the committee during the year 
nbs provided advice in connection with executive remuneration 
arrangements nbs are signatories of the remuneration consultants 
group code of conduct the trustees of the group’s pension schemes 
have appointed the pension advisory team of aon hewitt ltd  to act 
as administrator of the schemes and have also appointed individuals 
within aon hewitt ltd to act as actuary to the schemes nbs operates 
independently of the pension teams and the committee is satisfied 
there is no conflict of interest
q what is the role of the committee
a the committee has delegated authority from the board to 
•	 determine and agree the overall remuneration strategy for executive 
directors and senior management
•	 review and approve the remuneration packages for the chairman 
executive directors general counsel  company secretary and 
senior management
•	 agree the terms of employment including recruitment and 
termination terms of executive directors ensuring any payments on 
departure are fair to the individual and the company whilst avoiding 
payment for failure and recognising the departing individual’s duty 
to mitigate loss 
•	 approve the design of all share incentive plans including all
employee share schemes and where appropriate oversee any 
subsequent changes and
•	 recommend appropriate performance conditions and targets for 
the variable element of remuneration packages and determine the 
extent to which performance targets have been achieved
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premier foods annual report 2012frontindd   59 15032013   150302 q  what other issues did the committee discuss 
during 2012
a in addition to the issues discussed in the letter from the 
remuneration committee chairman on pages 56 and 57 the 
committee also 
•	 performed an annual review of executive directors’ and senior 
managers’ base salaries in june 2012
•	 reviewed and recommended executive directors’ and senior 
managers’ annual bonuses in respect of 2011 and set the targets 
for the annual bonus in respect of 2012 in accordance with the 
strategic objectives of the group
•	 granted 2012 awards under the ltip
•	 granted 2012 awards under the save as you earn saye scheme 
for all eligible employees in the uk
•	 approved awards to senior executives below board level under the 
restricted stock plan and
•	 discussed best practice in remuneration policy and disclosure in 
light of the department of business innovation and skills bis 
proposals in this area
remuneration policy
q  what is the group’s remuneration strategy 
a the committee adheres to principles of accountability and 
transparency to ensure that remuneration arrangements demonstrate a 
clear link between reward and performance in its work the committee 
considers fully the relevant legal and regulatory requirements provisions 
and recommendations of the uk corporate governance code the 
“code” and associated guidance 
the remuneration committee formulates remuneration strategy in line 
with the strategic objectives of the group and ensures that performance 
targets both at a personal level and a group level are sufficiently 
challenging remuneration for executive directors is intended to reward 
against criteria that are relevant and realistic but also stretching so that 
superior performance is encouraged and the realisation of strategic 
targets is rewarded
executive directors should have sufficient focus on the longterm 
performance of the group and be aligned with the interests of 
shareholders we are therefore committed to the use of equitybased 
performancerelated schemes and encourage executives to build up 
meaningful shareholdings in the company a significant proportion of 
remuneration is performance linked 
during 2012 the remuneration committee reviewed the policy to 
ensure performancerelated incentives as well as annual salary are 
supportive of strategic objectives and conducive to the delivery of 
shareholder value it is considered that the policy continues to remain 
appropriate 
each year the committee reviews the remuneration of senior 
management to ensure it remains competitive and challenging and 
satisfies the requirement to incentivise managers to deliver our 
challenging strategic objectives

q  what does the remuneration committee plan 
to review in 2013
a the committee believes that the current remuneration structure will 
continue to support the group however we will continue to monitor 
developments to ensure our policy is aligned to our strategy and also 
ensure best practice in reporting to our shareholders including the new 
reporting requirements introduced by bis
the committee will ensure that the remuneration arrangements for 
2013 are affordable without excessive share dilution and that the 
performance conditions used in our plans are consistent with delivering 
strong returns to shareholders the committee has also committed to 
undertake a formal review of remuneration advisers in 2013
the table on pages 58 and 59 provides an overview of all the elements 
of our remuneration policy for 2013 outlining how it links to strategy 
performance conditions and changes from the prior year

q  what is the balance between the fixed and 
variable elements of executive remuneration
a executive directors are remunerated through a combination of 
base salary annual bonus pension supplements and sharebased 
performancerelated awards the committee believes that it is 
important for a significant proportion of their remuneration package to 
be performancerelated at maximum award levels excluding share 
price movements approximately 75 of the remuneration package for 
gavin darby and 70 of the remuneration packages for mark moran 
are based on variable elements
director remuneration fixed pay

q  what salaries do the executive directors 
receive
a the committee continues to test review and set salaries at levels 
not normally exceeding market rates against relevant comparator 
companies this takes into account factors such as the group’s 
revenue market share and total enterprise value rather than just market 
capitalisation it also recognises the complexity of the business taking 
into account the group’s supply chain logistics pension schemes and 
business restructuring programme 
however in certain circumstances the committee recognises that it 
may be appropriate to set salaries outside of the stated policy given 
the challenges facing the business in early 2013 the board felt it was 
necessary to appoint a very experienced executive in gavin darby as 
ceo in order to lead the company in the next phase of its strategy and 
therefore it was necessary to provide a salary commensurate with this 
experience albeit at a lower level than his predecessor  
no increases in salary were made in 2012 and the ceo’s salary will not 
be reviewed until april 2015
q  does the committee consider pay conditions 
for all employees within the group when 
agreeing arrangements for executive directors
a in determining the remuneration arrangements for executive 
directors the committee is sensitive to the pay and employment 
conditions elsewhere in the group especially when determining base 
salary increases and reviews the proposed pay awards for the group at 
large with the ceo and group hr director 
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premier foods annual report 2012frontindd   60 15032013   150302 director remuneration variable pay
q  how is executive variable remuneration 
structured and how does it align with the 
group’s strategy
a the structure of incentives for the executive directors comprise of 
three elements which includes an annual cash bonus deferred share 
bonus plan dsb and ltip performance shares 
when determining the structure of variable pay the committee is 
mindful of the need to maintain a good line of sight so that executive 
directors can clearly see how their actions lead to their reward and to 
have incentives that have specific and clear goals which are clearly 
linked to business strategy and the key priorities that have been 
outlined 
short and mediumterm incentives

q  what annual cash bonuses do the executive 
directors receive
a each year the committee sets individual performance targets 
and bonus potentials for each of the executive directors annually the 
committee reviews the level of achievement against the performance 
targets set and based on the committee’s judgement approves the 
bonus of each executive director annual bonus payments are not 
pensionable 
annual bonus award and performance conditions for 2013
for 2013 the maximum bonus opportunities for executive directors 
remain unchanged 
gavin darby 150
mark moran 75 
details of the specific arrangements for gavin darby are set out in the 
chairman’s introduction on pages 56 and 57
mark moran’s bonus will be dependant on performance against 
turnover gross profit trading profit and cash flow targets
performance will be assessed on the financial achievement across 
all four elements each of which carries a 25 weighting personal 
performance against individual objectives is also factored into any 
year end bonus these include a range of priorities directly linked to 
the group’s strategy including delivery of cost savings and cash flow 
management any bonus payment is also subject to the delivery of a 
threshold level of trading profit
annual bonus award and performance outcome for 2012
annual bonus for mark moran
the company made significant progress in delivering a number of 
financial and strategic objectives in the year including improvements 
in the key measures of turnover branded sales value growth trading 
profit and cash flow however overall the performance was below the 
stretching targets set for 2012 and as a result no awards will be made 
under the annual bonus plan in respect of 2012

q what awards will be made under the deferred 
share bonus plan
a the deferred share bonus plan dsb operates alongside the 
annual cash bonus awards are based on the achievement of a group
wide strategic target which will be set at the start of each financial year 
if the objective is met the bonus will be paid at the end of the financial 
year in shares deferred for a period of two years these shares will 
be subject to forfeiture over the period of deferral all shares for these 
awards will be sourced in the market 
dsb award and performance conditions for 2013
the maximum award payable under the dsb remains unchanged at 
30 of salary the ceo does not participate in the dsb 
the targets that apply for the 2013 performance period remain 
unchanged from 2012 and are as follows
50 branded turnover
50 trading profit
these conditions are fully aligned with the group’s strategy to increase 
branded sales by focusing on and growing our power brands whilst 
emphasising the importance of profitability and margin performance 
the performance conditions are subject to the delivery of a threshold 
level of trading profit
dsb award and performance outcome for 2012
the committee assessed performance against the targets for 2012 
the company made significant progress in delivering a number of 
strategic objectives in the year including branded turnover and trading 
profit however overall the performance was below the stretching 
targets set for 2012 and as a result no awards will be made under the 
dsb in respect of 2012 
longterm incentives

q how are the longterm incentives structured
a the awards under the ltip approved by shareholders in 2011 has 
two elements 
•	 performance shares
•	 matching shares not used in 2012 or 2013
the matching shares require participants to make an investment into 
company shares in order to receive a match of up to 21 on shares 
invested into the scheme the maximum grant of performance shares 
and matching shares is 200 of salary the committee determined 
in 2012 that whilst the business is in turnaround and the share price 
continues to be volatile awards under the ltip will take the form of 
performance shares only 
ltip award and performance conditions for 2013
for 2013 the value of ltip awards made to executive directors remains 
unchanged from 2012 and is capped at 200 of salary for the ceo 
and 150 of salary for the cfo again in 2013 awards will only be 
made in the form of performance shares
the performance conditions attached to the 2013 ltip awards are 
aligned with the strategy of the group the company faces a number 
of challenges including delivering branded sales growth improving 
relations with customers reducing debt and pension liabilities 
however the committee believes that successful delivery against 
all these strategic priorities will ultimately be reflected through share 
price performance and bottom line profit the performance targets 
are therefore based on absolute share price and adjusted eps 
performance which the committee believes are fully aligned with the 
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premier foods annual report 2012frontindd   61 15032013   150302 interests of shareholders at this stage in the company’s turnaround 
these measures are unchanged from 2012 however in view of the 
focus on improving shareholder return the committee has determined 
that the weighting across each measure should be altered in favour of 
absolute share price awards will only vest following the achievement of 
stretching performance targets 
the 2013 award will be subject to an absolute tsr condition 23rds of 
the award and an adjusted eps condition 13rd of the award based 
on the following targets
 of relevant portion 
of award vesting
1
adjusted eps for 
the year ended 
31 december 2015
absolute 
tsr
0 below 329p below 230p
20 329p 230p
50 365p 255p
100 402p or greater 281p or greater
1
 straight line vesting between these points

q  are clawback provisions in place for the dsb 
and ltip awards 
a yes in relation to awards granted under the ltip the committee 
may reduce unvested awards and seek repayment of vested awards 
if by the second anniversary of vesting the committee forms the view 
that the vesting was determined based on materially misstated financial 
results or in the event of misconduct
in relation to dsb awards the committee may reduce unvested awards 
if prior to vesting the committee forms the view that the number of 
shares over which awards were granted was higher than the number 
that should have been granted because of materially misstated 
financial results for the relevant bonus year or the committee relied on 
inaccurate or misleading information

q  what were the details of gavin darby’s  
coinvestment award 
a in accordance with listing rule 943 a summary of the principal 
terms of the coinvestment award are set out below
•	 the coinvestment award shall be satisfied using shares purchased in 
the market by the trustees of the company’s employee benefit trust
•	 the coinvestment award is structured as a nilcost option and no 
consideration is payable by gavin darby for the grant
•	 the coinvestment award is nontransferable and shall not be 
pensionable
•	 a third of the coinvestment award will vest on each of the first 
second and third anniversaries of the date of grant subject to a bonus 
having been paid for the relevant financial year and subject to gavin 
darby’s continued employment
•	 once vested the coinvestment award will remain exercisable until 30 
june 2017
•	 if he ceases employment before the relevant vesting dates by 
reason of death injury disability redundancy or any other reason 
the committee may in its discretion permit some or all of the 
coinvestment award to vest and become payable early subject to 
the satisfaction of the performance conditions and a time pro rata 
adjustment unless the committee determines otherwise if he ceases 
employment for any other reason before the relevant vesting dates 
then the coinvestment award will lapse
•	 in the event of a change of control of the company excluding certain 
internal reorganisations or restructurings whether by way of a general 
offer or scheme of arrangement the coinvestment award will become 
exercisable in full and remain exercisable for a period of six months 
from the date of the change of control 
•	 the company may change the terms of the coinvestment award to 
get or keep favourable tax exchange control or regulatory treatment 
for gavin darby or the company and may make minor changes to 
ease its administration except for such changes no change can 
be made to gavin darby’s advantage without the prior approval of 
shareholders and
•	 the deed of grant is available for inspection at the company’s 
registered office
•	 
q  what is the policy on dilution of share capital 
by employee share plans 
a awards under all group share plans may be satisfied using either 
newly issued shares or shares purchased in the market and held in the 
company’s employee benefit trust the group’s policy is to comply 
with the association of british insurers “abi” guidelines in respect of 
newly issued shares
q what are the terms of the executive directors’ 
service agreements
a details of the service agreements of the executive directors appear 
below
provision detailed terms
date of contract gavin darby – 1 march 2013
mark moran – 8 december 2011
michael clarke – 13 july 2011 
geoff eaton – 2 october 2012
notice period 12 months rolling contract
termination 
payment other 
than summary 
termination
base salary benefits and pension contributions 
for the notice period of 12 months or until such 
earlier date alternative employment is secured 
subject to mitigation
bonus 
entitlement
in line with market practice there is no entitlement 
to a bonus payment in lieu of notice 
change of 
control
the service agreements do not provide for any 
enhanced payments in the event of a change  
of control of the company
gavin darby has a provision in his service 
agreement which provides for immediate  
payment of the termination payment in the  
event of a change of control

q  what is the group’s policy on executive 
directors holding external appointments 
a the group is supportive of executive directors who wish to take on 
a nonexecutive directorship with a publicly quoted company in order 
to broaden their experience and they are entitled to retain any fees they 
may receive michael clarke received fees of £63000 pa in 2012 in 
respect of his role as a nonexecutive director of wolseley plc  
the current executive directors do not have external appointments
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premier foods annual report 2012frontindd   62 15032013   150302 nonexecutive directors
q  what are the appointment terms and notice 
periods for nonexecutive directors 
a all nonexecutive directors have entered into letters of appointment 
as detailed in the table below the appointments are subject to the 
provisions of the companies act 2006 and the company’s articles 
terms of appointment are for three years or the date of the agm 
immediately preceding the third anniversary of appointment
nonexecutive 
director
date of 
original 
appointment
date of 
current 
appointment 
letter notice period
david beever 22 january 
2008
21 january 
2011
3 months
ian krieger 1 november 
2012
1 november 
2012
3 months
jennifer laing 1 october 2012 1 october 2012 3 months
ian mchoul 19 july 2004 19 july 2010 3 months
charles miller 
smith
16 june 2009 16 november 
2010
1 month
1
david wild 7 march 2011 7 march 2011 3 months
1
  the appointment of charles miller smith is governed by the relationship 
agreement between the company and warburg pincus llc under which he 
may terminate his appointment as a director by giving one month’s notice in 
writing see page 44 for further information
nonexecutive directors’ continued appointments are evaluated annually 
based on their contributions and satisfactory performance there are no 
provisions for compensation being payable upon early termination of an 
appointment of a nonexecutive director
q  what is the policy on nonexecutive directors’ 
fees 
a the remuneration of the nonexecutive directors is determined 
by the chairman and executive directors the remuneration of the 
chairman is determined by the committee other changes to non
executive directors’ fees are outlined in the notes to the emoluments 
table on page 64
non executive directors’ fees
chairman fee £265000
basic nonexecutive ned fee £57000
additional remuneration
audit committee chairman £13000
remuneration committee chairman £10500
senior independent director £5000
to maintain independence and comply with the code the chairman 
and the other nonexecutive directors are not eligible to participate in 
the group’s bonus arrangements share option schemes long term 
incentive plans or pension arrangements
shareholdings
q what interests did the directors have in the company’s shares on 31 december 2012
a the beneficial interest in shares of the board and connected persons as at 31 december 2012 are presented below
director
ordinary shares
 owned as at
 31 dec 
2012
ordinary shares
 owned as at 
31 dec 
2011
percentage
 of salary
 held under 
share 
holding 
guidelines 
value at
 purchase
1
company 
shareholding
 guideline
 met as at 
31 december
 2012
michael clarke 374078 374078 c120 yes
mark moran 1754000 1754000 c166 yes
david beever 31900 31900
ian krieger
2
0 na
jennifer laing
3
0 na
ian mchoul 10000 10000
charles miller smith
4
268027 68027
david wild 5000 5000
1 
executive directors are expected to build a holding of shares within three years of appointment at least equal to their annual salary valued at the time of purchase
2 
appointed ned on 1 november 2012
3 
appointed ned on 1 october 2012
4 
interests held in the form of contracts for difference 
5 
geoff eaton did not own any shares in the company prior to his resignation as an executive director
on 21 february 2013 following the release of the company’s preliminary results for 2012 directors purchased the following shares in the company 
gavin darby purchased 750268 shares ian krieger purchased 20000 shares jennifer laing purchased 16078 shares and charles miller smith 
purchased 57000 shares in the form of contracts for difference following the purchase gavin darby has now satisfied the company’s shareholding 
guideline for executive directors
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premier foods annual report 2012frontindd   63 15032013   150302 total shareholder return graph
the graph illustrates the performance of the company against the ftse 250 index and the ftse food producers and processors index over the past 
five years as the committee consider these to be the most appropriate 
1400
1600
1200
1000
800
600
400
200
31 dec 07 31 dec 08 31 dec 09 31 dec 10 31 dec 11 31 dec 12
00
premier foods plc
ftse 250 ex inv trusts
ftse food producers index
the market price of a share in the company on the 31 december 2012 was 113 pence the range during the 2012 financial year was 5450 pence to 180 pence
part 2 audited information
directors’ emoluments
the remuneration of each director is shown below the total for the year also equates to the single figure for total remuneration as there was no 
vesting in the year under any long term incentive arrangements 
directors’ emoluments
salaryfee
£
taxable 
benefits
2
£
payments in 
lieu of pension 
contribution
£
annual bonus
£
total 
2012
£
total
2011 
£
executive directors
1
michael clarke 750000 49575 150000
3
750000 1699575 2277070
geoff eaton
4
109239 5604 8090
5
– 122932 –
mark moran 425000 17965 32910
5
– 475875 34110
nonexecutive directors
1
david beever
6
174373 – – – 174373 73480
charles miller smith
7
 81750 – – – 81750 90000
ian mchoul
8
72917 – – – 72917 70000
jennifer laing 14250 – – – 14250 –
david wild 61375 – – – 61375 46700
ian krieger 9500 – – – 9500 –
louise makin 48875 – – – 48875 67500
ronnie bell 216667 – – – 216667 325580
payments to former director
robert schofield
9
208369 2675 12960 – 224004 671481
1 
in 2012 the following board changes took place geoff eaton was appointed as an executive director on 3 october 2012 jennifer laing and ian 
krieger were appointed as nonexecutive directors on 1 october 2012 and 1 november 2012 respectively ronnie bell and louise makin resigned 
as nonexecutive directors on 1 june 2012 and 30 september 2012 respectively 
2 
benefits include payments made in relation to car and fuel cost private health insurance and professional body membership fees michael clarke 
had the use of a chauffeured car for business travel
3 
michael clarke received a salary supplement in lieu of pension of 20 of basic salary a portion of which he voluntarily salary sacrificed into the 
group’s defined contribution pension scheme the company did not make any contribution to this pension scheme on michael clarke’s behalf
4 
geoff eaton was appointed as chief operating officer in october 2012 on a salary of £450000 however following the appointment of gavin darby 
a flatter executive management structure has been implemented that will enable commercial and functional management to report directly to the 
ceo and as a consequence geoff left the company in february 2013 all payments are in accordance with his contract ie payment in lieu of 
notice equivalent to 12 months base salary benefits and pension these payments will be made on a monthly basis and are subject to mitigation 
no annual bonus payment will be made in respect of 2012 or 2013 and there are no rights to any share based awards
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mark moran received an annualised salary supplement in lieu of pension of 9 of the earnings cap £135450 which equates to £12190 per 
annum together with an additional pensions supplement of £20720 geoff eaton also received a salary supplement in lieu of pension of 9 of the 
earnings cap £137400 for the 20122013 tax year and an additional pension supplement of £20960
6 
david beever received the standard ned fee together with additional fees for his chairmanship of the finance committee and for acting as the 
senior independent director following his appointment as chairman he receives a single chairman’s fee of £265000
7 
charles miller smith received a pro rata fee of £90000 per annum until 1 october 2012 when his interim role as deputy chairman came to an end 
he then reverted to the standard ned fee
8 
in addition to ian mchoul’s standard ned fee and additional fee for acting as audit committee chairman ian was appointed as the senior 
independent director during the year
9 
full details of robert schofield’s retirement payments were made in the 2011 annual report being £895485 this figure contained all payments 
to april 2012 for comparative purposes his total figure for 2011 has been reduced by salary and pension supplements paid to robert schofield in 
2012 
executive directors who served during the year did not participate in allemployee saye schemes nor did they participate in the 2004 executive 
share option scheme the coinvestment plan or the company’s defined benefit pension schemes accordingly tables in respect of these items have 
not been included in the remuneration report
directors’ interests in long term incentive plans
long term incentive plan
date of grant
as at 
1 jan 
2012
performance 
shares
 granted 
in the year
1
shares 
lapsed 
during the 
year
as at
31 dec
2012
opening 
share price
at date of
award
exercise
period
michael clarke 20 march 2012 – 1304347 – 1304347 115p
march to june 
20152017
mark moran 20 march 2012 – 554347 – 554347 115p
march to june 
20152017
1
  twothirds of the total number of shares under the award are subject to growth in eps the awards vest on a sliding scale based on eps in a range from 45 pence 
20 to 51 pence 50 to 65 pence 100 no awards vest for eps growth of less than 45 pence onethird of the total number of shares under the award are 
subject to achievement of net return index measured over the three months following the announcement of the 2014 preliminary results based on average tsr in a range 
from 300 pence 20 to 350 pence 50 to 500 pence 100 per share no award will vest for an average tsr of less than 300 pence
michael clarke’s recruitment awards
date of grant
as at 
1 jan
 2012 
shares 
granted in 
the year
market 
value at 
1225p £
cash 
balance 
£
total 
value of 
award£
shares 
lapsed 
during the 
year
as at 
31 dec 
2012 vesting period
march 2013 award 22 march 2012 – 500000    612500  241500   854000 – 500000 
on or around 
march 2013
march 2014 award 22 march 2012 – 375000   459375  181125   640500 – 375000 
on or around 
march 2014
total 875000  422625   1494500  875000 
awards made following the appointment of michael clarke to compensate him for forfeited equity awards from his previous employer the awards 
comprise of a share element and a cash element and are subject to continued employment and the committee’s assessment of both personal and 
group performance at the relevant vesting dates the march 2013 award vested on 21 february 2013 and will remain exercisable for 12 months the 
march 2014 award will lapse in june 2013 on cessation of employment 
david wild
remuneration committee chairman
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governance
other statutory information
pages 1 to 67 and 125 together with the sections of the annual report 
incorporated by reference constitute the directors’ report the financial 
statements are presented on pages 70 to 124
principal activities
premier foods plc the “company” is the holding company of 
the premier foods group of companies the “group” the group 
manufactures processes and distributes some of britain’s favourite food 
brands we employ around 9000 people and operate from over 40 sites 
in the uk
general
articles of association
the company’s articles may only be amended by a special resolution at 
a general meeting the articles are available on the group’s website
wwwpremierfoodscoukaboutuscorporategovernancearticles
ofassociationcfm
profit and dividends
the profit on continuing operations before tax for the financial year was 
£44m 2011 £2591m loss the directors do not recommend the 
payment of a dividend for 2012 2011 £nil
research and development
applied research and development work continues to be directed 
towards the introduction of new and improved products the application 
of new technology to reduce unit and operating costs and to improve 
service to customers research and development costs of £7m 2011 
£84m were incurred in continuing operations during the year
directors’ and officers’ liability insurance
this insurance covers the directors and officers against the costs of 
defending themselves in civil proceedings taken against them in their 
capacity as a director or officer of the company and in respect of 
damages resulting from the unsuccessful defence of any proceedings 
employment of disabled persons
it is our policy to give full and fair consideration to applications for 
employment received from disabled persons having regard to their 
particular aptitudes and abilities and wherever possible to continue the 
employment of and to arrange appropriate training for employees who 
have become disabled persons during the period of their employment 
premier foods provides the same opportunities for training career 
development and promotion for disabled people as for other employees
employee communication
we recognise the value of good communication in engaging our 
employees in order to achieve common goals and we have a number of 
established employee communication mechanisms in place to achieve 
this goal including regular communication meetings the group’s 
intranet site the quarterly group magazine and specific consultation and 
involvement regarding major changes to the business
significant agreements
the following significant agreements contain provisions that take effect 
alter or terminate upon a change of control of the company following a 
takeover bid
the group has a term and revolving facilities agreement originally for 
£21bn entered into in 2006 and a receivables purchase agreement and 
guarantee dated 30 december 2007 in 2012 unanimous consent from 
the company’s banking syndicate swap counterparties and pension 
schemes led to a restated refinancing package the current and new 
facilities agreements contain customary change of control provisions 
which allow the lenders or an individual lender to demand repayment of 
the facilities in full on a change of control the new receivables purchase 
agreement contains change of control provisions which allow the provider 
of the funding to terminate or suspend the operation of the agreement 
and demand payment of all amounts outstanding under the agreement 
on a change of control 
the group entered into a relationship agreement with warburg pincus llc 
in march 2009 setting out the terms and conditions under which warburg 
pincus have the right to appoint a director to the board and also governing 
the retention of its shareholding in the company and the purchase of 
further shares under the relationship agreement charles miller smith was 
appointed to the board on 16 june 2009 in the event of a change of control 
or if the shareholding of warburg pincus falls below 23980215 shares the 
company may give notice to terminate the appointment of charles miller 
smith
the company’ s share schemes may cause options and awards granted under 
such schemes to vest as a result of a successful takeover bid
substantial shareholdings
details of substantial shareholdings are set out on page 125
financial
charitable and political donations
during the year the group made charitable donations to the following 
charities help for heroes £32106 carnwath community school £5000 
and stourscombe residents association total charitable donations 
during the year amounted to £60022 2011 £85097 in line with group 
policy no political donations were made during the year 2011 £nil
financial instruments
the financial risk management objectives and policies of the group and 
its exposure to price credit liquidity and cash flow risk are set out in note 
21 to the group financial statements
going concern
the group has obtained consent from its banking syndicate swap 
counterparties and pension schemes on a refinancing package in march 
2012
the directors are confident that the group has adequate resources to 
operate in the ordinary course of business and to meet its obligations 
as they fall due thus the financial statements have been prepared on a 
going concern basis
supplier payment policy
the company had no amounts owing to trade creditors at 31 december 
2012 2011 £nil the group’s creditor days outstanding at 31 december 
2012 were 745 days 2011 727 days of purchases based on the 
ratio of average group trade creditors in the current financial year to the 
amounts invoiced during the year the group has standard payment 
terms of end of the month plus 60 days our terms and conditions are 
available on the group’s website
wwwpremierfoodscoukaboutusoursupplychainoursuppliers
homecfm
payment terms for purchases under major contracts are agreed as part 
of the contract negotiations
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67
governance
other statutory information
statement of directors’ responsibilities for the annual 
report
the directors are responsible for preparing the annual report the 
directors’ remuneration report and the group and company financial 
statements in accordance with applicable law and regulations
company law requires the directors to prepare financial statements 
for each financial year under that law the directors have prepared the 
group financial statements in accordance with international financial 
reporting standards “ifrss” as adopted by the eu and the parent 
company financial statements in accordance with uk generally accepted 
accounting practice uk accounting standards and applicable law 
under company law the directors must not approve the group or 
company financial statements unless they are satisfied that they give a 
true and fair view of the state of affairs of the group and the company 
and of the profit or loss for that period in preparing these financial 
statements the directors are required to
•	 select suitable accounting policies and then apply them consistently
•	 make judgements and accounting estimates that are reasonable and 
prudent
•	 state whether ifrss as adopted by the eu and applicable uk 
accounting standards have been followed subject to any material 
departures disclosed and explained in the group and parent 
company financial statements respectively and
•	 prepare the group and company financial statements on the going 
concern basis unless it is inappropriate to presume that the group 
will continue in business
the directors are responsible for keeping adequate accounting records 
that are sufficient to show and explain the group’s transactions and 
disclose with reasonable accuracy at any time the financial position of 
the company and the group and enable them to ensure that the financial 
statements and the directors’ remuneration report comply with the 
companies act 2006 and as regards the group financial statements 
article 4 of the ias regulation they are also responsible for safeguarding 
the assets of the company and the group and hence for taking 
reasonable steps for the prevention and detection of fraud and other 
irregularities
the directors are responsible for the maintenance and integrity of 
the group’s website wwwpremierfoodscouk legislation in the uk 
governing the preparation and dissemination of financial statements may 
differ from legislation in other jurisdictions 
information made available on the website does not constitute part of 
this annual report the information has been prepared under the relevant 
accounting standards and legislation
each of the directors whose names and functions are listed on pages 40 
to 41 confirms that to the best of their knowledge
the group financial statements which have been prepared in 
accordance with ifrss as adopted by the eu give a true and fair view of 
the assets liabilities financial position and loss of the group and
the directors’ report contained on pages 1 to 67  125 includes a fair 
review of the development and performance of the business and the 
position of the group together with a description of the principal risks 
and uncertainties that it faces
subsequent events
since the balance sheet date the group has continued to progress its 
strategy in line with this details of postbalance sheet events are set out 
in note 30 of the group financial statements
auditors
independent auditors
the audit committee has recommended pricewaterhousecoopers 
llp’s “pwc” reappointment and pwc has indicated its willingness to 
continue as auditors the reappointment of pwc and the setting of their 
remuneration will be proposed at the 2013 agm
auditors and the disclosure of information to auditors
the companies act requires directors to provide the group’s auditors 
with every opportunity to take whatever steps and undertake whatever 
inspections they consider to be appropriate for the purpose of enabling 
them to give their audit report the directors having made appropriate 
enquiries confirm that
•	 so far as each director is aware there is no relevant audit information 
of which the group’s auditors are unaware and 
•	 each director has taken all the steps that they ought to have taken 
as a director to make themselves aware of any relevant audit 
information and to establish that the group’s auditors are aware of 
that information
by order of the board
andrew mcdonald
general counsel and company secretary
1 march 2013
premier foods annual report 2012frontindd   67 15032013   150303 new hovis british farmers loaf 
made from 100 british wheat
photograph
did you 
know
our new hovis british 
farmers loaf was one of 
the top 10 grocery product 
launches in 2012
top 10
for information about business 
performance see page
31
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financials
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contents
this section contains the 
independent auditors’ report 
to shareholders the financial 
statements and related notes 
and also supplementary 
information for shareholders
independent auditors’ report
independent auditors’ report — group 70
independent auditors’ report — company 71
consolidated financial 
statements
consolidated income statement 72
consolidated statement of  
comprehensive income 72
consolidated balance sheet 73
consolidated statement of cash flows 74
consolidated statement of changes in equity 74
notes to the financial 
statements 
general information 75
accounting policies 75
critical accounting policies estimates  
and judgements 81
segmental analysis 81
operating profitloss for  
continuing operations 84
employees 85
finance income and costs 86
taxation 87
earningsloss per share 90
discontinued operations 92
disposal of businesses 92
assets and liabilities held for sale 93
property plant and equipment 94
goodwill 95
other intangible assets 96
investments 97
inventories 98
trade and other receivables 98
trade and other payables 98
bank and other borrowings 98
financial instruments 99
provisions for liabilities and charges 108
retirement benefit schemes 109
reserves and share capital 114
notes to the cash flow statement 118
operating lease commitments 119
capital commitments 119
contingencies 119
related party transactions 120
subsequent events 120
company financial 
statements 
company financial statements  121
notes to the company  
financial statements
accounting policies 122
operating profit 122
investments 123
debtors 123
creditors amounts falling due  
within one year 123
deferred tax 123
share capital and other reserves 124
operating lease commitments 124
contingencies and guarantees 124
subsequent events 124 
supplementary information
shareholder information 125
glossary 127
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financials
independent auditors’ report to the  
members of premier foods plc
we have audited the group financial statements of premier foods plc 
for the year ended 31 december 2012 which comprise the consolidated 
income statement consolidated statement of comprehensive income 
consolidated balance sheet consolidated statement of cash flows 
consolidated statement of changes in equity and the related notes the 
financial reporting framework that has been applied in their preparation is 
applicable law and international financial reporting standards ifrss as 
adopted by the european union 
respective responsibilities of directors and auditors 
as explained more fully in the directors’ responsibilities statement set 
out on page 67 the directors are responsible for the preparation of the 
group financial statements and for being satisfied that they give a true 
and fair view our responsibility is to audit and express an opinion on 
the group financial statements in accordance with applicable law and 
international standards on auditing uk and ireland those standards 
require us to comply with the auditing practices board’s ethical 
standards for auditors 
this report including the opinions has been prepared for and only for 
the company’s members as a body in accordance with chapter 3 of 
part 16 of the companies act 2006 and for no other purpose  we do 
not in giving these opinions accept or assume responsibility for any 
other purpose or to any other person to whom this report is shown or 
into whose hands it may come save where expressly agreed by our prior 
consent in writing
scope of the audit of the financial statements 
an audit involves obtaining evidence about the amounts and disclosures 
in the financial statements sufficient to give reasonable assurance that the 
financial statements are free from material misstatement whether caused 
by fraud or error this includes an assessment of whether the accounting 
policies are appropriate to the group’s circumstances and have been 
consistently applied and adequately disclosed the reasonableness of 
significant accounting estimates made by the directors and the overall 
presentation of the financial statements
in addition we read all the financial and nonfinancial information in the 
annual report to identify material inconsistencies with the audited financial 
statements if we become aware of any apparent material misstatements 
or inconsistencies we consider the implications for our report
opinion on financial statements 
in our opinion the group financial statements 
•	 give a true and fair view of the state of the group’s affairs as at  
31 december 2012 and of its profit and cash flows for the year then 
ended 
•	 have been properly prepared in accordance with ifrss as adopted 
by the european union and 
•	 have been prepared in accordance with the requirements of the 
companies act 2006 and article 4 of the las regulation 
opinion on other matters prescribed by the companies  
act 2006
in our opinion
•	 the information given in the directors’ report for the financial year for 
which the group financial statements are prepared is consistent with 
the group financial statements
•	 the information given in the corporate governance statements 
set out on pages 38 to 67 with respect to internal control and 
risk management systems and about share capital structures is 
consistent with the financial statements
matters on which we are required to report by exception 
we have nothing to report in respect of the following 
under the companies act 2006 we are required to report to you if in  
our opinion 
•	 certain disclosures of directors’ remuneration specified by law are not 
made or 
•	 we have not received all the information and explanations we require 
for our audit
under the listing rules we are required to review 
•	 the directors’ statement set out on page 66 in relation to going 
concern 
•	 the part of the corporate governance statement relating to the 
company’s compliance with the nine provisions of the uk corporate 
governance code specified for our review and
•	 certain elements of the report to shareholders by the board on 
directors’ remuneration
other matter 
we have reported separately on the parent company financial 
statements of premier foods plc for the year ended 31 december 2012 
and on the information in the directors’ remuneration report that is 
described as having been audited
pauline campbell 
senior statutory auditor 
for and on behalf of pricewaterhousecoopers llp 
chartered accountants and statutory auditors 
london
1 march 2013
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financials
independent auditors’ report to the  
members of premier foods plc
we have audited the parent company financial statements of premier 
foods plc for the year ended 31 december 2012 which comprise the 
parent company balance sheet the accounting policies and the related 
notes the financial reporting framework that has been applied in their 
preparation is applicable law and united kingdom accounting standards 
united kingdom generally accepted accounting practice
respective responsibilities of directors and auditors 
as explained more fully in the directors’ responsibilities statement set 
out on pages 67 the directors are responsible for the preparation of the 
parent company financial statements and for being satisfied that they 
give a true and fair view our responsibility is to audit and express an 
opinion on the parent company financial statements in accordance with 
applicable law and international standards on auditing uk and ireland 
those standards require us to comply with the auditing practices board’s 
ethical standards for auditors 
this report including the opinions has been prepared for and only for 
the company’s members as a body in accordance with chapter 3 of 
part 16 of the companies act 2006 and for no other purpose  we do 
not in giving these opinions accept or assume responsibility for any 
other purpose or to any other person to whom this report is shown or 
into whose hands it may come save where expressly agreed by our prior 
consent in writing
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts and disclosures 
in the financial statements sufficient to give reasonable assurance that the 
financial statements are free from material misstatement whether caused 
by fraud or error this includes an assessment of whether the accounting 
policies are appropriate to the parent company’s circumstances and have 
been consistently applied and adequately disclosed the reasonableness 
of significant accounting estimates made by the directors and the overall 
presentation of the financial statements
in addition we read all the financial and nonfinancial information in the 
annual report to identify material inconsistencies with the audited financial 
statements if we become aware of any apparent material misstatements 
or inconsistencies we consider the implications for our report
opinion on financial statements 
in our opinion the parent company financial statements 
•	 give a true and fair view of the state of the company’s affairs as at  
31 december 2012
•	 have been properly prepared in accordance with united kingdom 
generally accepted accounting practice and 
•	 have been prepared in accordance with the requirements of the 
companies act 2006 
opinion on other matters prescribed by the companies  
act 2006 
in our opinion 
•	 the part of the directors’ remuneration report to be audited has 
been properly prepared in accordance with the companies act 
2006 and 
•	 the information given in the directors’ report for the financial year 
for which the parent company financial statements are prepared is 
consistent with the parent company financial statements 
matters on which we are required to report by exception 
we have nothing to report in respect of the following matters where the 
companies act 2006 requires us to report to you if in our opinion 
•	 adequate accounting records have not been kept by the parent 
company or returns adequate for our audit have not been received 
from branches not visited by us or 
•	 the parent company financial statements and the part of the 
directors’ remuneration report to be audited are not in agreement 
with the accounting records and returns or 
•	 certain disclosures of directors’ remuneration specified by law are not 
made or 
•	 we have not received all the information and explanations we require 
for our audit 
other matter 
we have reported separately on the group financial statements of 
premier foods plc for the year ended 31 december 2012
pauline campbell 
senior statutory auditor 
for and on behalf of pricewaterhousecoopers llp 
chartered accountants and statutory auditors 
london
1 march 2013
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72
financials
consolidated income statement
 
 
note
year ended
31 dec 2012
  
£m
year ended
31 dec 2011
restated
1
  
£m
continuing operations
revenue 4 17562 19995 
cost of sales 12612 14450
gross profit 4950 5545 
selling marketing and distribution costs 2625 2633
administrative costs 1322 4668
net other operating expense 40 07
operating profitloss 5 963 1763
before impairment and profitloss on disposal of operations 688 1169 
impairment of intangible and tangible assets 14 362 2820
profitloss on disposal of operations 11 637 112
finance cost 7 863 1269
finance income 7 41 72 
net movement on fair valuation of interest rate financial instruments 7 97 369 
profitloss before taxation from continuing operations 44 2591
taxation credit 8 219 291 
profitloss after taxation from continuing operations 263 2300
loss from discontinued operations 10 135 1090
profitloss for the year attributable to owners of the parent 128 3390
       
basic and diluted earningsloss per share pence
3
9 53 1414
basic and diluted earningsloss per share pence — continuing
3
9 110 959
basic and diluted loss per share pence — discontinued
3
9 56 455
adjusted basic and diluted earnings per share pence — continuing
23
9 268 223 
1 
comparatives have been restated following an £89m reclassification of certain costs to align categorisation across the group
2  
adjusted earnings per share is defined as trading profit less net regular interest payable less a notional tax charge at 245 2011 265 divided by the weighted average 
numbers of ordinary shares of the company
3 
2011 comparatives have been restated following the 101 share consolidation effected during 2012
consolidated statement of comprehensive income
 
 
note
year ended
31 dec 2012
£m
year ended
31 dec 2011
£m
profitloss for the year   128 3390
other comprehensive losses
actuarial losses on pensions 23 2316 793
deferred tax creditcharge 8 467 41
exchange differences on translation   – 04 
total other comprehensive losses for the year net of tax 1849 830
total comprehensive losses attributable to owners of the company   1721 4220
the notes on pages 75 to 120 form an integral part of the consolidated financial statements
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financials
consolidated balance sheet
 
 
note
year ended
31 dec 2012
  
£m
year ended
31 dec 2011
restated
1
  
£m
continuing operations
revenue 4 17562 19995 
cost of sales 12612 14450
gross profit 4950 5545 
selling marketing and distribution costs 2625 2633
administrative costs 1322 4668
net other operating expense 40 07
operating profitloss 5 963 1763
before impairment and profitloss on disposal of operations 688 1169 
impairment of intangible and tangible assets 14 362 2820
profitloss on disposal of operations 11 637 112
finance cost 7 863 1269
finance income 7 41 72 
net movement on fair valuation of interest rate financial instruments 7 97 369 
profitloss before taxation from continuing operations 44 2591
taxation credit 8 219 291 
profitloss after taxation from continuing operations 263 2300
loss from discontinued operations 10 135 1090
profitloss for the year attributable to owners of the parent 128 3390
       
basic and diluted earningsloss per share pence
3
9 53 1414
basic and diluted earningsloss per share pence — continuing
3
9 110 959
basic and diluted loss per share pence — discontinued
3
9 56 455
adjusted basic and diluted earnings per share pence — continuing
23
9 268 223 
1 
comparatives have been restated following an £89m reclassification of certain costs to align categorisation across the group
2  
adjusted earnings per share is defined as trading profit less net regular interest payable less a notional tax charge at 245 2011 265 divided by the weighted average 
numbers of ordinary shares of the company
3 
2011 comparatives have been restated following the 101 share consolidation effected during 2012
consolidated statement of comprehensive income
 
 
note
year ended
31 dec 2012
£m
year ended
31 dec 2011
£m
profitloss for the year   128 3390
other comprehensive losses
actuarial losses on pensions 23 2316 793
deferred tax creditcharge 8 467 41
exchange differences on translation   – 04 
total other comprehensive losses for the year net of tax 1849 830
total comprehensive losses attributable to owners of the company   1721 4220
the notes on pages 75 to 120 form an integral part of the consolidated financial statements
 
 
 
note
as at
31 dec 2012
£m
as at
31 dec 2011
£m
assets
noncurrent assets
property plant and equipment 13 3742 4173 
goodwill 14 7139 8562 
other intangible assets 15 6770 8227
deferred tax assets 8 719 –
    18370 20962 
current assets
assets held for sale 12 810 338 
inventories 17 1162 1368 
trade and other receivables 18 2986 2974 
financial assets — derivative financial instruments 21 10 05 
current income tax assets – 05
cash and bank deposits 25 532 458 
    5500 5148
total assets   23870 26110 
liabilities
current liabilities 
liabilities held for sale 12 34 –
trade and other payables 19 4068 4348
financial liabilities 
— shortterm borrowings 20 2298 1136
— derivative financial instruments 21 196 126
— other financial liabilities at fair value through profit or loss 21 – 1870
accrued interest payable 56 09
provisions 22 256 83
current income tax liabilities 08  –  
    6916 7572
noncurrent liabilities
financial liabilities 
— longterm borrowings 20 7741 9273
retirement benefit obligations 23 4668 2824
provisions 22 483 386
other liabilities 13 219
deferred tax liabilities 8 – 109
    12905 12811
total liabilities   19821 20383
net assets   4049 5727 
equity
capital and reserves
share capital 24 240 240 
share premium 24 11247 11247 
merger reserve 24 5875 6060 
other reserves 24 93 93 
profit and loss reserve 24 13221 11728
capital and reserves attributable to owners of the parent   4048 5726
noncontrolling interest 24 01 01 
total equity   4049 5727 
the notes on pages 75 to 120 form an integral part of the consolidated financial statements
the financial statements on pages 72 to 120 were approved by the board of directors on 1 march 2013 and signed on its behalf by
 
 
gavin darby  mark moran
chief executive officer chief financial officer
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financials
consolidated statement of cash flows
note
year ended
31 dec 2012
£m
year ended
31 dec 2011
£m
cash generated from operating activities 25 564 867
interest paid 568 1209
interest received 43 75
taxation receivedpaid 03 24
cash inflowoutflow from operating activities 42 291
sale of subsidiariesbusinesses 3122 3948
purchase of property plant and equipment 494 580
purchase of intangible assets 172 209
sale of property plant and equipment 02 54
cash inflow from investing activities 2458 3213 
repayment of borrowings 3122 3636
proceeds from borrowings 15 1241
proceeds from securitisation programme 724 –
financing fees and other costs of finance 240 16
cash outflow from financing activities 2623 2411 
net outflowinflow of cash and cash equivalents 123 511
cash and cash equivalents at beginning of year 221 287
effect of movement in foreign exchange 01 03
cash and cash equivalents at end of year 25 97 221
the notes on pages 75 to 120 form an integral part of the consolidated financial statements
consolidated statement of changes in equity
note
share 
capital
£m
share 
premium
£m
merger 
reserve
£m
other 
reserves
£m
profit 
and loss 
reserve 
£m
non
controlling 
interest
£m
total
£m
at 1 january 2012 240 11247 6060 93 11728 01 5727
profit for the year – – – – 128 – 128
actuarial losses on pensions 23 – – – – 2316 – 2316
deferred tax credit 8 – – – – 467 – 467
other comprehensive losses – – – – 1849 – 1849
total comprehensive losses – – – – 1721 – 1721
sharebased payments 24 – – – – 43 – 43
realisation of merger reserve – – 185 – 185 – –
at 31 december 2012 240 11247 5875 93 13221 01 4049
at 1 january 2011 240 11247 8907 93 10407 01 9895
loss for the year – – – – 3390 – 3390
actuarial losses on pensions 23 – – – – 793 – 793
deferred tax charge 8 – – – – 41 – 41
exchange differences on translation – – – – 04 – 04
other comprehensive losses – – – – 830 – 830
total comprehensive losses – – – – 4220 – 4220
sharebased payments 24 – – – – 52 – 52
realisation of merger reserve – – 2847 – 2847 – –
at 31 december 2011 240 11247 6060 93 11728 01 5727
the notes on pages 75 to 120 form an integral part of the consolidated financial statements
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financials
notes to the financial statements
1 general information
premier foods plc the “company” is a public limited company incorporated and domiciled in england and wales registered number 5160050 
with its registered office at premier house centrium business park griffiths way st albans hertfordshire al1 2re the principal activities of the 
company and its subsidiaries the “group” are food manufacturing processing and distribution further information about the group’s activities can 
be found in the group at a glance section of this annual report on pages 6 to 7 copies of the annual report and accounts are available from this 
address
these group consolidated financial statements were authorised for issue by the board of directors on 1 march 2013
2 accounting policies
the principal accounting policies applied in the preparation of these consolidated financial statements are set out below these policies have been 
consistently applied to all the years presented unless otherwise stated
21 basis of preparation 
the consolidated financial statements of premier foods plc have been prepared in accordance with international financial reporting standards 
“ifrs” as adopted by the european union eu “adopted ifrs” in response to ias regulation ec16062002 related interpretations and the 
companies act 2006 applicable to companies reporting under ifrs and on the historical cost basis with the exception of derivative financial 
instruments which are incorporated using fair value amounts are presented to the nearest £01m
the preparation of financial statements in conformity with adopted ifrs requires the use of certain critical accounting estimates it also requires 
management to exercise its judgement in the process of applying the group’s accounting policies the areas involving a higher degree of 
judgement or complexity or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 
3
the following accounting standards and interpretations issued by the international accounting standards board “iasb” or ifric as endorsed by 
the eu are effective for the first time in the current financial year and have been adopted by the group
international financial reporting standards
ifrs 7 amendment ‘financial instruments disclosures’ on transfers of financial assets
 
the application of these standards and interpretations has not had a material effect on the net assets results and disclosures of the group 
new standards and interpretations not applied
the following standards have been endorsed by the eu but have not been applied 
international financial reporting standards
ias 1 ‘financial statement presentation’
ias 19 revised ‘employee benefits’
ifrs 10 ‘consolidated financial statements’
ifrs 11 ‘joint arrangements’
ifrs 12 ‘disclosures of interest in other entities’
ifrs 13 ‘fair value measurement’
effective for periods on or after 1 january 2013 
the following standards and amendments to published standards have not been endorsed by the eu 
ias 27 ‘separate financial statements’
ias 32 amendment ‘financial instruments disclosures and presentation’ – offsetting financial assets and liabilities
ifrs 9 ‘financial instruments’
with the exception of ias 19 revised it is not expected that any of the new standards will have a material impact on the results or net assets of 
the group application of ias 19 revised in 2012 would have increased the operating profit charge in relation to pensions by £40m
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financials
notes to the financial statements
2 accounting policies continued
basis for preparation of financial statements on a going concern basis
in march 2012 the group signed a refinancing package with its banking syndicate swap counterparties and pension schemes whereby the term 
loan and revolving credit facility were extended from 31 december 2013 to 30 june 2016 the current margin of 225 will increase to 325 on  
1 january 2014
this facility includes net debtebitda and ebitdainterest covenant tests and a requirement to realise disposal proceeds of £330m by 30 june 
2014 in the event these covenants are not met then the group would be in breach of its financing agreement and as would be the case in any 
covenant breach the banking syndicate could withdraw their funding to the group  
following the completion of the disposal of the sweet pickles and table sauces business on 2 february 2013 the group has successfully met the 
disposal proceeds target it is also in compliance with covenant tests at 31 december 2012 the group’s forecasts taking account of reasonably 
possible changes in trading performance show that the group should be able to operate within the level of its current facilities including covenant 
tests
the group meets its daytoday working capital requirements through its bank facilities the current economic conditions continue to create 
uncertainty particularly over a the level of demand for the group’s products and b the availability of bank finance for the foreseeable future 
after making enquiries the directors have a reasonable expectation that the group has adequate resources to continue in operational existence 
for the foreseeable future the group therefore continues to adopt the going concern basis in preparing its consolidated financial statements
22 basis of consolidation
the consolidated financial statements include the financial statements of premier foods plc and entities controlled by the company its 
subsidiaries up to 31 december each year control is achieved where the company has the power to govern the financial and operating policies 
of an investee entity so as to obtain benefits from its activities
the results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date 
of acquisition or up to the effective date of disposal as appropriate in addition comparatives are also restated to reclassify material disposed 
businesses into discontinued operations and to align logistics cost classification across the group
accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group
all intragroup transactions balances income and expenses are eliminated on consolidation
23 revenue
revenue comprises the invoiced value for the sale of goods net of sales rebates discounts value added tax and other taxes directly attributable 
to revenue and after eliminating sales within the group revenue is recognised when the outcome of a transaction can be measured reliably and 
when it is probable that the economic benefits associated with the transaction will flow to the group revenue is recognised on the following 
basis
i sale of goods
sales of goods are recognised as revenue on transfer of the risks and rewards of ownership which typically coincides with the time when the 
merchandise is delivered to customers and title passes
ii sales rebates and discounts
sales rebates and discount reserves are established at the time of sale based on management’s best estimate of the amounts necessary to meet 
claims by the group’s customers in respect of these rebates and discounts these estimates are based on experience and history a provision is 
made at the time of sale and released if unutilised after assessment that the likelihood of such a claim being made has become remote
24 segmental reporting
operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker the chief 
operating decision maker is responsible for allocating resources and assessing performance of the operating segments see note 4 for further details 
25 sharebased payments
the company operates a number of equitysettled sharebased compensation plans the fair value of the employee services received in 
exchange for the grant of the options is recognised as an expense over the vesting period the total amount to be expensed over the vesting 
period is determined by reference to the fair value of the options granted excluding the impact of any nonmarket vesting conditions for example 
profitability and sales growth targets nonmarket vesting conditions are included in assumptions about the number of options that are expected 
to vest at each balance sheet date the group revises its estimates of the number of options that are expected to vest and recognises the impact 
of the revision to original estimates if any in the income statement with a corresponding adjustment to equity
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financials
2 accounting policies continued
26 foreign currency translation
transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction monetary assets and liabilities denominated 
in foreign currencies are translated into sterling the group’s presentation currency at rates of exchange ruling at the end of the financial year 
the results of overseas subsidiaries with functional currencies other than in sterling are translated into sterling at the average rate of exchange 
ruling in the year the balance sheets of overseas subsidiaries are translated into sterling at the closing rate exchange differences arising from 
retranslation at year end exchange rates of the net investment in foreign subsidiaries are recorded as a separate component of equity in other 
reserves when a foreign operation is sold exchange differences previously taken to equity are recognised in the income statement as part of the 
gain or loss on sale 
goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and 
translated at the closing rate
all other exchange gains or losses are recorded in the income statement
27 property plant and equipment “ppe”
property plant and equipment is initially recorded at cost cost includes the original purchase price of the asset and the costs attributable to 
bringing the asset to its working condition for its intended use subsequent expenditure is added to the carrying value of the asset when it is 
probable that incremental future economic benefits will transfer to the group all other subsequent expenditure is expensed in the period it is 
incurred
differences between the cost of each item of ppe and its residual value are written off over the estimated useful life of the asset using the straight
line method reviews of the estimated remaining useful lives and residual values of individual productive assets are performed annually taking 
account of commercial and technological obsolescence as well as normal wear and tear freehold land is not depreciated the useful economic 
lives of owned assets range from 20 to 50 years for buildings and 3 to 35 years for vehicles plant and equipment
all items of ppe are reviewed for impairment when there are indications that the carrying value may not be fully recoverable 
assets under construction represent the amount of expenditure recognised in the carrying amount of an item of ppe in the course of its 
construction when the item of property plant and equipment is brought into use it is depreciated
the cost and depreciation relating to disposed assets is written off on disposal
28 business combinations and goodwill 
business combinations are accounted for using the acquisition method the consideration for each acquisition is measured at the aggregate of 
the acquisition date fair values of assets given liabilities incurred or assumed and equity instruments issued by the group in exchange for control 
of the acquiree acquisition related costs are recognised in profit or loss as incurred
on the acquisition of a business fair values are attributed to the identifiable assets liabilities and contingent liabilities acquired goodwill arises 
when the fair value of the consideration for a business exceeds the fair value of the net assets acquired goodwill arising on acquisitions is 
capitalised and subject to impairment review both annually and when there are indications that the carrying value may not be recoverable 
for the purpose of impairment testing goodwill acquired in a business combination is allocated to each of the cgus or groups of cgus that 
is expected to benefit from the synergies of the combination each unit or group of units to which the goodwill is allocated represents the lowest 
level within the entity at which the goodwill is monitored for internal management purposes goodwill is monitored at the operating segment level
the group has applied ifrs 3 revised ‘business combinations’ to business combinations after 1 july 2009 the accounting for business 
combinations transacted prior to this date have not been restated 
29 intangible assets
in addition to goodwill the group recognises the following intangible assets 
acquired intangible assets
acquired trademarks brands customer relationships licences recipes and similar assets that are controlled through custody or legal rights 
and that could be sold separately from the rest of the business are capitalised where fair value can be reliably measured all of these assets are 
considered to have finite lives and are amortised on a straightline basis over their estimated useful economic lives that range from 7 to 40 years
research and development
research expenditure is charged to the income statement in the year in which it is incurred
costs incurred in developing a product typically its recipe or packaging are charged to income in the year in which they are incurred unless the 
product or process is technically and commercially feasible in which case they are capitalised and amortised over the useful economic lives in 
accordance with ias 38 ‘intangible assets’
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financials
notes to the financial statements
2 accounting policies continued
software development costs
development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the group are 
recognised as intangible assets when the project or process is technically and commercially feasible directly attributable costs that are capitalised 
as part of the software product include the software development employee costs and an appropriate portion of relevant overheads
software development costs are amortised over their estimated useful lives on a straightline basis over a range of 3 to 10 years 
the useful economic lives of intangible assets are determined based on a review of a combination of factors including the asset ownership rights 
acquired and the nature of the overall product life cycle
210 impairment 
the carrying value of nonfinancial assets other than goodwill and inventories are reviewed at least annually to determine whether there is an 
indication of impairment where such indication exists the recoverable amount is estimated based on the greater of its value in use and its fair 
value less costs to sell in assessing value in use the estimated future cash flows adjusted for the risks specific to each asset are discounted to 
their present value using a discount rate that reflects current market assessment of the time value of money and the general risks affecting the 
food manufacturing industry
impairment losses are recognised in the income statement in the year in which they occur
for the purpose of impairment testing assets are grouped together into the smallest group of assets that generates cash inflows from continuing 
use that are largely independent of the cash flows of other assets 
211 financing cost
i finance cost
borrowing costs are accounted for on an accruals basis in the income statement using the effective interest method
ii finance income
finance income is recognised on a time proportion basis taking into account the principal amounts outstanding and the interest rates applicable 
taking into consideration the interest element of derivatives
212 leases
assets held under finance leases where substantially all the risks and rewards of ownership are transferred to the group are capitalised and 
included in property plant and equipment at the lower of the present value of future minimum lease payments or fair value each asset is 
depreciated over the shorter of the lease term or its estimated useful life on a straightline basis obligations relating to finance leases net of 
finance charges in respect of future periods are included under borrowings the interest element of the rental obligation is allocated to accounting 
periods during the lease term to reflect a constant rate of interest on the remaining balance of the obligation for each accounting period 
leases in which a significant portion of risks and rewards of ownership are retained by the lessor are classified as operating leases rental costs 
under operating leases net of any incentives received from the lessor are charged to the income statement on a straightline basis over the lease 
period
213 inventories
inventory is valued at the lower of cost and net realisable value where appropriate cost includes production and other attributable overhead 
expenses as described in ias 2 ‘inventories’ cost is calculated on a firstin firstout basis by reference to the invoiced value of supplies and 
attributable costs of bringing the inventory to its present location and condition net realisable value is the estimated selling price in the ordinary 
course of business less estimated costs of completion and the estimated costs necessary to make the sale
all inventories are reduced to net realisable value where the estimated selling price is lower than cost
provision is made for slow moving obsolete and defective inventory where appropriate
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2 accounting policies continued
214 taxation
income tax on the profit or loss for the year comprises current and deferred tax
current tax
income tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity in which case it is 
recognised in equity current tax is the expected tax payable on the taxable income for the year using tax rates enacted or substantively enacted 
at the reporting date and any adjustment to tax payable in respect of previous years
deferred tax
deferred taxation is accounted for in respect of temporary differences between the carrying amount of assets and liabilities in the financial statements 
and the corresponding tax bases used in computation of taxable profit deferred taxation is not provided on the initial recognition of an asset or liability 
in a transaction other than in a business combination if at the time of the transaction there is no effect on either accounting or taxable profit or loss
deferred tax is measured at the tax rates that are expected to apply in the periods in which the asset or liability is settled based on tax rates and 
tax laws that have been enacted or substantively enacted at the balance sheet date it is recognised in the income statement except when it 
relates to items credited or charged directly to equity in which case the deferred tax is also recognised in equity
deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary difference 
can be utilised their carrying amount is reviewed at each balance sheet date on the same basis
deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and when the group intends to 
settle its current tax assets and liabilities on a net basis
215 employee benefits
group companies provide a number of longterm employee benefit arrangements primarily through pension schemes the schemes are generally 
funded through payments to insurance companies or trusteeadministered funds determined by periodic independent actuarial calculations the 
group has both defined benefit and defined contribution plans 
defined benefit plans
a defined benefit plan is a pension plan that defines the amount of pension benefit that an employee will receive on retirement usually dependent 
on factors such as age years of service and compensation 
the liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the 
balance sheet date less the fair value of plan assets together with adjustments for actuarial gains or losses and past service costs defined benefit 
obligations are calculated using assumptions determined by the group with the assistance of independent actuaries using the projected unit credit 
method the present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using yields of 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
actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to the statement of 
comprehensive income in the year in which they arise
current service costs past service costs administration costs expected return on assets and interest costs are recognised immediately in the 
income statement unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time the 
vesting period in this case the pastservice costs are amortised on a straightline basis over the vesting period
curtailments are recognised when the group is demonstrably committed to make a significant reduction in the number of employees covered 
by a plan or amends the terms of a defined benefit plan so that a significant element of future service by current employees no longer qualifies or 
qualify for reduced benefits
defined contribution plans
a defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity which then invests 
the contributions to buy annuities for the pension liabilities as they become due based on the value of the fund the group has no legal or 
constructive obligations to pay further contributions
obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement as they fall due 
differences between contributions payable in the year and contributions actually paid are recognised as either accruals or prepayments in the 
balance sheet
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2 accounting policies continued
216 provisions
provisions for restructuring and property exit costs are recognised when the group has present legal or constructive obligations as a result of past 
events it is probable that an outflow of resources will be required to settle the obligations and a reliable estimate of the amount can be made where 
the group expects a provision to be reimbursed for example under an insurance contract the reimbursement is recognised as a separate asset 
when the reimbursement is virtually certain where material the group discounts its provisions using a pretax rate that reflects current market 
assessments of the time value of money and the risks specific to the liability where discounting is used the increase in the provision due to the 
passage of time is recognised as a finance expense
217 contingent liabilities and contingent assets
a contingent liability is a possible obligation that arises from past events and the existence of which will only be confirmed by the occurrence or 
nonoccurrence of one or more uncertain future events not wholly within the control of the group or the amount of obligation cannot be measured 
reliably a contingent liability is not recognised but is disclosed in the notes to the financial statements when an outflow becomes probable it is 
recognised as a provision 
a contingent asset is a possible asset that arises from past events and the existence of which will be confirmed only by the occurrence or non
occurrence of one or more uncertain events not wholly within the control of the group contingent assets are not recognised but are disclosed in 
the notes to the financial statements when an inflow of economic benefits is probable when inflow is virtually certain an asset is recognised
218 financial instruments
financial assets and financial liabilities are recognised on the group’s balance sheet when the group becomes a party to the contractual 
provisions of the instrument
trade and other receivables
trade and other receivables are initially measured at fair value and subsequently measured at amortised cost less any provision for impairment a 
provision is made for impairment when there is objective evidence that the group will not be able to collect all amounts due according to the terms 
of the receivables trade and other receivables are discounted when the time value of money is considered material 
the rights and obligations relating to those trade receivables that have been sold to third parties are derecognised from the balance sheet where 
the risks and rewards of ownership are considered to have transferred cash received from third parties in exchange for the transfer of ownership 
is recorded within cash and cash equivalents with the cost of financing prior to settlement by the customer recorded as interest on an accruals 
basis
cash and cash equivalents
cash and cash equivalents with original maturities at inception of less than 90 days comprise cash on hand and demand deposits and other 
shortterm highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in 
value
for the purpose of the statement of cash flows cash and cash equivalents comprise cash at bank cash in hand shortterm deposits with an 
original maturity of three months or less held for the purpose of meeting shortterm cash commitments and bank overdrafts
financial liabilities and equity
financial liabilities and equity instruments issued by the group are classified according to the substance of the contractual arrangements entered into 
and the definitions of a financial liability and an equity instrument an equity instrument is any contract that evidences a residual interest in the assets 
of the group after deducting all of its liabilities the accounting policies adopted for specific financial liabilities and equity instruments are set out 
below
bank borrowings
interestbearing bank loans and overdrafts are measured initially at fair value and subsequently at amortised cost using the effective interest rate 
method any difference between the proceeds net of transaction costs and inclusive of debt issuance costs and the settlement or redemption of 
borrowings is recognised over the term of the borrowings in accordance with the group’s accounting policy for borrowing costs
trade and other payables 
trade and other payables are initially measured at fair value and subsequently measured at amortised cost trade payables and other liabilities are 
discounted when the time value of money is considered material
equity instruments
equity instruments issued by the company are recorded at the proceeds received net of directly attributable issue costs
derivative financial instruments 
derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risk and characteristics 
are not closely related to those of the host contracts and the host contracts are not carried at fair value with unrealised gains or losses reported 
in the income statement derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently 
remeasured at their fair value movements in fair value of foreign exchange derivatives are recognised within other operating income and expense 
and those relating to interest rate swaps are recorded within the net movement on fair valuation of interest rate financial instruments
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2 accounting policies continued
other items at fair value through profit or loss
other items at fair value through profit or loss are initially recognised at fair value on the date the contract is entered into and are subsequently 
remeasured at their fair value movements in fair value are recorded within the net movement on fair valuation of interest rate financial instruments 
see notes 7 and 21 for further details
219 noncurrent assets held for sale
noncurrent assets and associated liabilities that are expected to be recovered primarily through sale rather than continuing use are classified as 
held for sale immediately before classification as held for sale the assets and associated liabilities are remeasured in accordance with the group’s 
accounting policies thereafter the assets are measured at the lower of their carrying amount and fair value less costs to sell impairment losses 
on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in profit or loss gains are not recognised 
in excess of any cumulative impairment loss 
3 critical accounting policies estimates and judgements
the following are areas of particular significance to the group’s financial statements and include the use of estimates and the application of 
judgement which is fundamental to the compilation of a set of financial statements
31 employee benefits
the present value of the group’s defined benefit pension obligations depends on a number of actuarial assumptions the primary assumptions 
used include the discount rate applicable to scheme liabilities the longterm rate of inflation and estimates of the mortality applicable to scheme 
members
at each reporting date and on a continuous basis the group reviews the macroeconomic company and scheme specific factors influencing 
each of these assumptions using professional advice in order to record the group’s ongoing commitment and obligation to defined benefit 
schemes in accordance with ias 19 key assumptions used are mortality rates discount rates and inflation set with reference to bond yields if 
the group’s assumption on the mortality of its members was amended to assume an increase of a further one year improvement in mortality total 
liabilities would increase by approximately 31 each 01 decreaseincrease in bond yields would increasedecrease the deficit by a further 
£62m£60m each 01 increasedecrease in the assumed inflation rate would increasedecrease the deficit by a further £27m£26m each of 
the underlying assumptions is set out in more detail in note 23
 
32 goodwill and other intangible assets
impairment reviews in respect of goodwill are performed annually unless an event indicates that an impairment review is necessary impairment 
reviews in respect of intangible assets are performed when an event indicates that an impairment review is necessary examples of such triggering 
events include a significant planned restructuring a major change in market conditions or technology expectations of future operating losses or a 
significant reduction in cash flows the recoverable amounts of cashgenerating units “cgu’s” are determined based on the higher of realisable 
value and value in use calculations these calculations require the use of estimates
the group has considered the impact of the assumptions used on the calculations and has conducted sensitivity analysis on the impairment tests 
of the cgu’s carrying values see note 14 for further details
acquired trademarks brands customer relationships recipes and similar assets are considered to have finite lives that range from 7 to 40 years 
the determination of the useful lives takes into account certain quantitative factors such as sales expectations and growth prospects and also 
many qualitative factors such as history and heritage and market positioning hence the determination of useful lives are subject to estimates and 
judgement for further details see note 15
33 advertising and promotion costs
trade spend and promotional activity is dependent on market conditions and negotiations with customers trade spend is charged to the income 
statement according to the substance of the agreements with customers and the terms of any contractual relationship promotional support is 
generally charged to the income statement at the time of the relevant promotion these costs are accrued on best estimates the actual costs 
may not be known until subsequent years when negotiations with customers are concluded such adjustments are recognised in the year when 
final agreement is reached
expenditure on advertising is charged to the income statement when incurred except in the case of airtime costs when a particular campaign is 
used more than once in this case they are charged in line with the airtime profile
4 segmental analysis
ifrs 8 requires operating segments to be determined based on the group’s internal reporting to the chief operating decision maker “codm” 
the codm has been determined to be the chief executive officer and chief financial officer as they are primarily responsible for the allocation of 
resources to segments and the assessment of performance of the segments
the codm has changed the measure used to assess segment performance in 2012 divisional contribution is defined as gross profit after 
marketing and distribution costs and is a consistent measure within the group and reflects the segments’ underlying trading performance for the 
period under evaluation the reporting of this measure at the monthly business review meetings which are organised according to product types 
has been used to identify and determine the group’s operating segments 2011 comparatives have been restated using the new measure
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notes to the financial statements
4 segmental analysis continued
the group continues to use trading profit to review overall group profitability trading profit is defined as operating profit before refinancing costs 
restructuring costs profits and losses associated with divestment activity amortisation and impairment of intangible assets the revaluation of 
foreign exchange and other derivative contracts under ias 39 and pension credits or charges in relation to the difference between the expected 
return on pension assets administration costs and interest costs on pension liabilities
the group’s operating segments are “grocery” “bread” and “disposed of canning operations” in 2011 the group completed its disposal of the 
meatfree business and the retailer branded chilled business which had previously been aggregated into an “other” segment as they did not 
meet the relevant quantitative thresholds and did not have similar economic characteristics and therefore could not be aggregated into their own 
separate reporting segment under ifrs 8 in 2011 these were presented as discontinued operations
during 2012 the group completed the disposal of the four irish brands chivers gateaux mcdonnells and the erin licence the elephant atta 
ethnic flour business the vinegar and sour pickles business and the sweet spreads and jellies business the results of these businesses have 
not been reported separately as they were fully integrated within the grocery and bread segments 
the grocery segment sells ambient food products the bread segment sells bread morning goods flour products and frozen pizza bases and the 
disposed of canning operations segment sold canned goods 
the segment results for the year ended 31 december 2012 and for the year ended 31 december 2011 and the reconciliation of the segment 
measures to the respective statutory items included in the consolidated financial statements are as follows
year ended 31 dec 2012
grocery
£m
bread
£m
disposed 
of canning 
operations
£m
total for 
group
£m
revenue from continuing operations
external 10580 6973 09 17562
intersegment 05 212 – 217
result
divisional contribution 2237 302 02 2541
total sga costs 994
trading profit 1547
amortisation of intangible assets 533
fair value movements on foreign exchange and 
other derivative contracts 21
restructuring costs associated with divestment activity 461
refinancing costs 11
pension financing credit 125
operating profit before impairment and profit on disposal  
of operations 688
impairment of property plant and equipment and intangible assets 362
profit on disposal of operations 637
operating profit 963
finance cost 863
finance income 41
net movement on fair valuation of interest rate financial instruments 97
profit before taxation for continuing operations 44
depreciation 216 180 – 396
amortisation 505 28 – 533
impairment of property plant and equipment and intangible assets – 362 – 362
balance sheet
segment assets 17500 3803 – 21303
unallocated assets  2567
consolidated total assets 23870
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4 segmental analysis continued
year ended 31 dec 2011
restated
1
grocery
£m
bread
£m
disposed 
of canning 
operations
£m
total for 
group
£m
revenue from continuing operations
external 11215 7113 1667 19995
intersegment 25 266 – 291
result
divisional contribution 2532 581 57 3170
total sga costs 1287
trading profit 1883
amortisation of intangible assets 720
fair value movements on foreign exchange and other  
derivative contracts 17
restructuring costs associated with divestment activity 105
refinancing costs 42
pension financing credit 170
operating profit before impairment and loss on disposal of operations 1169
impairment of goodwill and intangible assets 2820
loss on disposal of operations 112
operating loss 1763
finance cost 1269
finance income 72
net movement on fair valuation of interest rate financial instruments 369
loss before taxation from continuing operations 2591
depreciation 242 176 – 418
amortisation 539 181 – 720
impairment of property plant and equipment goodwill and intangible assets – 2820 – 2820
balance sheet
segment assets 20422 4122 – 24544
unallocated assets 1566
consolidated total assets 26110
1
 comparatives have been restated to reflect a change in the measure used to asses segment performance
revenues on a continuing basis of approximately £3291m and £2131m 2011 £3335m and £2749m are derived from two external 
customers these revenues are attributable across the grocery and bread segments
intersegment transfers or transactions are entered into under the same terms and conditions that would be available to unrelated third parties 
segment assets comprise property plant and equipment goodwill and intangible assets inventories and receivables and exclude cash and cash 
equivalents derivative assets and certain corporate assets that are not able to be allocated to the group’s reporting segments 
unallocated assets comprise cash and cash equivalents taxation balances derivative financial assets groupwide software and hardware and 
head office assets 
the group primarily supplies the uk market although it also supplies certain products to other european countries and a number of other 
countries the following table provides an analysis of the group’s revenue which is allocated on the basis of geographical market destination and 
an analysis of the group’s noncurrent assets by geographical location 
continuing operations — revenue
year ended
31 dec 2012
£m
year ended
31 dec 2011
£m
united kingdom 16974 18808
other europe 365 874
rest of world 223 313
total 17562 19995
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notes to the financial statements
4 segmental analysis continued
noncurrent assets
as at
31 dec 2012
£m
as at
31 dec 2011
£m
united kingdom 18370 20661
other europe – 301
total for group 18370 20962
5 operating profitloss for continuing operations
5a analysis of costs by nature
year ended
31 dec 2012
£m
year ended
31 dec 2011
£m
employee benefits expense note 6 3698 4025
depreciation of property plant and equipment 396 418
amortisation of intangible assets
— software and licences 189 174
— brands and trademarks 274 330
— customer relationships 70 216
impairment of property plant and equipment note 13 125  – 
impairment of goodwill note 14 – 1854 
impairment of intangible assets note 14 237 966 
operating lease rental payments
— plant and machinery 86 84
— land and buildings 122 112
repairs and maintenance expenditure 561 520
research and development costs 70 84
lossgain on disposal of noncurrent assets 75 09
net foreign exchange loss 02 04
past service credits relating to defined benefit schemes 440 413
past service charge relating to defined benefit schemes 123 –
impact of oneoff aged receivable and commercial provision review – 374
charge relating to restructuring and onerous lease provisions relating to vacant properties 372 87
refinancing costs 11 42
auditor remuneration 22 14
operating lease obligations are further disclosed in note 26
5b auditor remuneration
year ended
31 dec 2012
£m
year ended
31 dec 2011
£m
fees payable to the company’s auditor for the audit of the parent company and consolidated  
financial statements 04 04
fees payable to the company’s auditor and its associates for other services
— the audit of the company’s subsidiaries pursuant to legislation 04 04
— other services relating to taxation 01 –
— services relating to corporate finance transactions 23 21
— other services – 01
total auditor remuneration 32 30
included within total fees paid to the auditors of £32m 2011 £30m were £23m of costs directly attributable to coordination support and 
advice related to the group’s refinancing and support with the necessary circulars in connection with the disposal programme 2011 £21m 
in 2012 £10m 2011 £16m of the £23m 2011 £21m was capitalised resulting in a total of £28m of fees held on the balance sheet at 31 
december 2012 the remaining £13m 2011 £05m was charged to operating profit the total operating profit charge for auditors’ remuneration 
was £22m 2011 £14m
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financials
6 employees 
year ended
31 dec 2012
£m
year ended
31 dec 2011
£m
staff costs for the group during the year — continuing operations
wages and salaries 3330 3801
social security costs 326 315
termination benefits 121 112
share options granted to directors and employees 47 39
contributions to defined contribution schemes note 23 08 01
credit for defined benefit schemes note 23 134 243
total 3698 4025
staff costs for the group during the year — discontinued operations
wages and salaries – 459
social security costs – 41
termination benefits – 25
share options granted to directors and employees – 09
contributions to defined contribution schemes note 23 – 02
charge for defined benefit schemes note 23 177 21
total 177 557
total — continuing and discontinued 3875 4582
average monthly number of people employed including executive and nonexecutive directors
 2012 
 number 
 2011 
 number 
management 1417 1769
administration 894 1116
production distribution and other 7476 10916
total 9787 13801 
within the employee numbers above nil 2011 2081 relate to discontinued operations 
directors’ remuneration including retirement benefits accruing to the directors under defined benefit schemes is disclosed in the audited sections 
of the directors’ remuneration report on pages 56 to 65 which form part of these financial statements
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financials
notes to the financial statements
7 finance income and costs
year ended
31 dec 2012
£m
year ended
31 dec 2011
£m
interest payable on bank loans and overdrafts 103 136
interest payable on term facility 246 286
interest payable on revolving facility 94 76
interest payable on interest rate derivatives 58 191
interest payable on interest rate financial liabilities designated as other financial liabilities at  
fair value through profit or loss 115 406
unwind of discount on provisions 08 24
amortisation of debt issuance costs and deferred fees 131 134
755 1253
writeoff of financing costs
1 
108 16
total finance cost 863 1269
interest receivable on bank deposits 41 72
total finance income 41 72 
movement on fair valuation of interest rate derivatives 148 176
movement on fair valuation of interest rate financial liabilities designated as other financial liabilities  
at fair value through profit or loss 51 193
net movement on fair valuation of interest rate financial instruments 97 369 
net finance cost 919 828
1
 for 2012 this relates to the writeoff of debt issuance costs relating to the group’s previous financing agreement
2012
the net movement on fair valuation of interest rate financial instruments relates to £95m favourable movement on swaps held before refinancing 
in march 2012 offset by adverse movement of £192m on swaps entered into as part of the refinancing package
2011
the fair value of interest rate swaps and other financial liabilities at fair value through profit or loss has decreased from a £2345m liability at  
31 december 2010 to a £1976m liability at 31 december 2011 resulting in a net movement of £369m for the year the change in fair value in the 
year is due to a change in the yield curve offset by amortisation refer to note 21 the liability at 31 december 2011 represents the net present 
value of the interest cash flows calculated using the contracted fixed rates compared to the net present value of interest cash flows that would 
arise if the interest was calculated on a floating basis 
the total facility as at 31 december 2012 was £11424m 2011 £1233m
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8 taxation
current tax
analysis of the credit for the year
continuing 
operations
£m
discontinued 
operations
£m
total
£m
2012
current tax
— current year – – – 
— prior years 01 – 01
overseas current tax
— current year 11 – 11
 — prior years – – – 
deferred tax
— current year 314 40 354
— prior years 139 – 139
— adjustment to restate opening deferred tax at 230 54 – 54
income tax credit for the year 219 40 259
2011
current tax
— current year – – – 
— prior years 15 – 15
overseas current tax 
— current year 12 – 12
— prior years – – – 
deferred tax
— current year 206 115 321
— prior years 03 – 03
— adjustment to restate opening deferred tax at 250 79 07 86
income tax credit for the year 291 122 413
tax relating to items recorded in equity for continuing operations was
 year ended 
31 dec 2012
£m
 year ended 
31 dec 2011
£m
deferred tax charge on reduction of corporate tax rate 45 45
deferred tax credit on pension movements 436 04
deferred tax credit on losses 76 –
  467 41
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financials
notes to the financial statements
8 taxation continued
the tax credit for the year differs from the standard rate of corporation tax in the united kingdom of 245 2011 265 the reasons for this are 
explained below
 year ended 
31 dec 2012
£m 
 year  ended 
31 dec 2011
£m 
profitloss before taxation for continuing operations 44 2591
tax chargecredit at the domestic income tax rate of 245 2011 265 11 687
tax effect of
nondeductible items
2
194 478
other disallowable items 02 05
adjustment for overseas results taxed at different rate 11 14
adjustment for sharebased payments 11 13
previously unrecognised losses utilised 116 163
capital gain on disposal of business 130 163
adjustment due to current year deferred tax being provided at 230 2011 250 10 11
previously unrecognised losses recognised 168 –
adjustment to restate opening deferred tax at 230 2011 250 54 79
adjustments to prior years
1
138 18
income tax credit 219 291
1
 in 2012 this largely relates to a disclaim of capital allowances in 2011 group accounts not repeated in the tax returns   
2
  nondeductible items relates primarily to profits made on the disposal of businesses during the year
the finance act 2012 enacted on 3 july 2012 reduces the main rate of corporation tax from 26 to 24 from 1 april 2012 this gives rise to an 
effective rate of corporation tax for the year of 245
deferred tax balances at 31 december 2011 were calculated at 25 the rate applicable at that time the finance act 2012 also reduces the 
main rate of corporation tax to 23 from 1 april 2013 this 2 reduction for the 2012 financial year has been reflected in the financial statements 
by restating the deferred tax liability at 31 december 2011 giving a credit of £54m to continuing operations offset by a charge to equity of £45m 
to reflect where the charges and credits were originally made in addition the deferred tax movements in the period have been reflected at 23 
being the rate at which the liabilities are expected to reverse which has resulted in a £10m decrease to the income tax credit
a further 2 reduction to the main rate of corporation tax is proposed to reduce the rate to 21 from 1 april 2014 however as this further 
reduction in the main rate of corporation tax was not substantively enacted at the balance sheet date it is not reflected in the deferred tax 
recognised on the balance sheet
deferred tax
deferred tax is calculated in full on temporary differences using the tax rate appropriate to the jurisdiction in which the assetliability arises and the 
tax rates that are expected to apply in the periods in which the asset or liability is settled in all cases this is 230 2011 250 except for an 
asset of £17m 2011 £07m relating to irish retirement benefit obligations where the local rate of 125 has been used
2012
£m
2011
£m
at 1 january 109 561 
credited to the income statement 269 410
creditedcharged to equity 467 41
transferred to held for sale 34 –
disposal of subsidiariesbusinesses 58 83
at 31 december 719 109
the increase in the deferred tax asset in the year is driven by a credit to equity relating to the actuarial loss in the year and credit to income 
statement as a result of the recognition of an asset for a portion of tax losses
due to the level of taxable profits anticipated the group has not recognised deferred tax assets of £205m 2011 £276m relating to capital 
losses £339m 2011 £234m relating to uk corporation tax losses and £286m 2011 £311m relating to act under current legislation these 
losses can generally be carried forward indefinitely
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8 taxation continued
deferred tax liabilities
accelerated 
tax 
depreciation
£m
intangibles
£m
other
£m
total
£m
at 1 january 2011 104 1906 46 2056
prior year restatement of opening balances 07 142 03 152
deferred tax credit on discontinued activities 115 – – 115
disposal of subsidiariesbusinesses 13 70 – 83
current year credit 32 365 – 397
at 31 december 2011 63 1329 43 1309
prior year restatement of opening balances 05 106 03 104
disposal of subsidiariesbusinesses – 58 – 58
current year chargecredit 04 149 – 145
prior year charge 126 07 06 139
transfer to held for sale 11 23 – 34
at 31 december 2012 61 1000 46 1107
deferred tax assets
retirement 
benefit 
obligation
£m
sharebased 
payments
£m
financial
instruments
£m
losses
£m
total
£m
at 1 january 2011 858 03 637 03 1495
prior year restatement of opening balances
— to income statement 18 01 47 – 66
— to equity 45 – – – 45
current year charge 99 03 89 – 191
prior year credit
— to income statement – – – 03 03
— to equity 04 – – – 04
at 31 december 2011 700 01 501 – 1200
prior year restatement of opening balances
— to income statement 10 – 40 – 50
— to equity 45 – – – 45
current year chargecredit 62 04 18 209 169
credited to equity 436 – – 76 512
deferred tax credit on discontinued activities 40 – – – 40
at 31 december 2012 1059 03 479 285 1826
net deferred tax assetliability         £m
at 31 december 2012 719
at 31 december 2011         109
where there is a legal right of offset and an intention to settle as such deferred tax assets and liabilities may be presented on a net basis this 
is the case for most of the group’s deferred tax balances and therefore they have been offset in the tables above substantial elements of the 
group’s deferred tax assets and liabilities primarily relating to the defined benefit pension obligation are greater than one year in nature
deferred tax assets in respect of losses are only recognised to the extent that it is anticipated they will be utilised in the foreseeable future during 
the year an asset was recognised for losses forecast to be utilised by taxable profits
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financials
notes to the financial statements
9 earningsloss per share
basic earnings per share has been calculated by dividing the profit attributable to ordinary shareholders of £128m 2011 £3390m loss by the 
weighted average number of ordinary shares of the company  
 
year ended 31 dec 2012 year ended 31 dec 2011
restated
1
  basic
dilutive 
effect 
of share 
options diluted basic
dilutive 
effect 
of share 
options diluted
continuing operations
profitloss after tax £m 263 – 263 2300 – 2300
weighted average number of shares m 2398 – 2398 2398  –  2398 
earningsloss per share pence 110 – 110 959 – 959
discontinued operations
loss after tax £m 135 – 135 1090 – 1090
weighted average number of shares m 2398 – 2398 2398 – 2398
loss per share pence 56 – 56 455 – 455
total 
profitloss after tax £m 128 – 128 3390 – 3390
weighted average number of shares m 2398 – 2398 2398 – 2398
earningsloss per share pence 53 – 53 1414 – 1414
1
 comparatives have been restated following the 101 share consolidation effected during 2012
dilutive effect of share options
the dilutive effect of share options is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion 
of all dilutive potential ordinary shares the only dilutive potential ordinary shares of the company are share options a calculation is performed 
to determine the number of shares that could have been acquired at fair value determined as the average annual market share price of the 
company’s shares based on the monetary value of the subscription rights attached to the outstanding share options 
for the years ended 31 december 2012 and 31 december 2011 there is no dilutive effect as the outstanding share options that could have been 
acquired at fair value is less than the monetary value of the subscription rights attached to these options 
no adjustment is made to the profit or loss in calculating basic and diluted earningsloss per share
2012
 number 
2011
 number 
restated
1
weighted average number of ordinary shares for the purpose of basic earningsloss per share 239806206 239805802
effect of dilutive potential ordinary shares
— share options – –
weighted average number of ordinary shares for the purpose of diluted earningsloss per share 239806206 239805802
1
 comparatives have been restated following the 101 share consolidation effected during 2012
adjusted earnings per share “adjusted eps”
adjusted earnings per share is defined as trading profit less net regular interest payable less a notional tax charge at 245 2011 265 divided 
by the weighted average number of ordinary shares of the company there is no difference between basic and diluted adjusted eps
trading profit is defined as operating profit before refinancing costs restructuring costs profits and losses associated with divestment activity 
amortisation and impairment of intangible assets the revaluation of foreign exchange and other derivative contracts under ias 39 and pension 
credits or charges in relation to the difference between the expected return on pension assets administration costs and interest costs on pension 
liabilities 
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financials
9 earningsloss per share continued
net regular interest payable is defined as net interest after excluding noncash items namely writeoff of financing costs accelerated amortisation 
of debt issuance costs fair value adjustments on interest rate financial instruments and the unwind of the discount on provisions
trading profit and adjusted eps have been reported as the directors believe these provide an alternative measure by which the shareholders can 
assess the group’s underlying trading performance
year ended 31 dec 2012
continuing
£m
discontinued
£m
total
£m
operating profitloss 963 175 788
impairment of property plant and equipment and intangible assets 362 – 362
profit on disposal of operations 637 – 637
operating profitloss before impairment and profit on disposal of operations 688 175 513
pension financing credit 125 – 125
fair value movements on foreign exchange and other derivative contracts 21 – 21
amortisation of intangible assets 533 – 533
restructuring costs associated with divestment activity 461 – 461
refinancing costs 11 – 11
trading profitloss 1547 175 1372
less net regular interest payable 695 – 695
adjusted profitloss before tax 852 175 677
notional tax at 245 209 43 166
adjusted profitloss after tax 643 132 511
average shares in issue m 2398 2398 2398
adjusted eps pence 268 55 213
net regular interest payable
net interest payable 919 – 919
exclude writeoff of financing costs and other 119 – 119
exclude fair value adjustments on interest rate financial instruments 97 – 97
exclude unwind of discount on provisions 08 – 08
net regular interest payable 695 – 695
year ended 31 dec 2011
restated
1
continuing
£m
discontinued
£m
total
£m
operating loss 1763 1065 2828
impairment of goodwill and intangible assets 2820 804 3624
loss on disposal of operations 112 — 112
operating profitloss before impairment and loss on disposal of operations 1169 261 908
pension financing credit 170 — 170
fair value movements on foreign exchange and other derivative contracts 17 — 17
amortisation of intangible assets 720 119 839
restructuring costs associated with divestment activity 105 — 105
refinancing costs 42 — 42
trading profitloss 1883 142 1741
less net regular interest payable 1157 01 1158
adjusted profitloss before tax 726 143 583
notional tax at 265 192 38 154
adjusted profitloss after tax 534 105 429
average shares in issue m 2398 2398 2398
adjusted eps pence 223 44 179
net regular interest payable
net interest payable 828 01 829
exclude writeoff of financing costs 16 — 16
exclude fair value adjustments on interest rate financial instruments 369 — 369
exclude unwind of discount on provisions 24 — 24
net regular interest payable 1157 01 1158
1
 comparatives have been restated folllowing the 101 share consolidation effected during 2012
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financials
notes to the financial statements
10 discontinued operations
discontinued operations in 2011 comprise the meatfree business and the retailer branded chilled business which were sold in 2011 income 
and expenditure incurred in discontinued operations throughout the year relates to operations that were disposed of in previous years and 
predominantly comprises of past service costs in relation to the premier foods pension scheme there are no new discontinued operations in 
2012
year ended
31 dec 2012
£m
year ended
31 dec 2011
£m
revenue – 2186
operating expenses 175 3251
operating loss before loss on disposal 175 1065
interest payable – 01
loss before taxation 175 1066
taxation credit 40 122
loss after taxation on discontinued operations for the year 135 944
loss on disposal –  146
total loss arising from discontinued operations 135 1090
included in the operating expenses for the year end 31 december 2011 above is an impairment charge of £804m recognised against the assets 
allocated to the retailer branded chilled cgu
during the year discontinued operations contributed to a net inflow of £16m 2011 £479m outflow to the group’s net operating cash flows and 
nil to investing activities 2011 £69m outflow
11 disposal of businesses
irish brands
on 23 january 2012 the group completed its sale of the four irish brands chivers gateaux mcdonnells and the erin licence to the boyne 
valley group for £347m €414m before disposal costs 
elephant atta ethnic flours
on 6 july 2012 the group completed its sale of the elephant atta ethnic flour business to westmill foods a subsidiary of associated british 
foods for £340m before disposal costs 
vinegar and sour pickles
on 28 july 2012 the group completed its sale of its vinegar and sour pickles business to the mizkan group for £41m before disposal costs 
sweet spreads and jellies
on 27 october 2012 the group completed its sale of its sweet spreads and jellies business to the hain celestial group for £202m before  
disposal costs 
 
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11 disposal of businesses continued
the results of all the businesses above are included within continuing operations as they were integrated and reported as part of the grocery and 
bread businesses
irish brands
£m
elephant 
atta
£m
vinegar and 
sour pickles
£m
sweet 
spreads and 
jellies
£m
total
£m
net cash inflow arising on disposal
initial consideration 347 340 410 2020 3116
working capital adjustments and disposal costs 13 12 19 68 111
net cash inflow for the year 334 328 391 1952 3005
property plant and equipment – – 78 335 413
intangible assets and goodwill 321 29 237 1184 1771
inventories 14 – 56 174 244
provisions and lease obligations – 07 13 40 60
net assets disposed 335 22 358 1653 2368
lossprofit on disposal 01 306 33 299 637
12 assets and liabilities held for sale
2012
£m
2011
£m
noncurrent assets
 property plant and equipment 376  – 
 goodwill 311 312
 other intangible assets 31 09
current assets
 inventories 92  17 
total assets held for sale 810 338 
noncurrent liabilities
 deferred tax liabilities 34  – 
total liabilities held for sale 34  – 
net assets and liabilities held for sale 776 338 
as at 31 december 2012 the assets and associated liabilities relating to the sweet pickles and table sauces business were held for sale in light 
of the announcement of the conditional sale of this business on 30 october 2012 the disposal completed on 2 february 2013 for consideration 
of £925m
as at 31 december 2011 the assets and associated liabilities relating to certain irish brands were held for sale in light of the decision to sell this 
business the disposal completed on 23 january 2012 
both businesses are part of the grocery segment
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notes to the financial statements
13 property plant and equipment
freehold 
land and 
buildings
£m
long 
leasehold 
land and 
buildings
£m
short 
leasehold 
land and 
buildings
£m
vehicles 
plant and 
equipment
£m
assets 
under 
construction
£m
total
£m
cost
at 1 january 2011 1334 111 283 4443 448 6619
additions 05 – – 61 475 541
disposals 364 – – 664 – 1028
reclassifications – – – 02 – 02
transferred into use 38 – – 201 239 –
transferred to held for sale – – 25 – – 25
at 31 december 2011 1013 111 308 4043 684 6159
additions – –  – – 434 434
disposals 165 – – 737 45 947
reclassifications – – 14 14 – –
transferred from intangible assets
2
– – – 448 – 448
transferred into use 15 – – 782 797 –
reversal of fair value adjustment
1
889 46 140 79 – 874
transferred to held for sale 120 – – 514 08 642
at 31 december 2012 1632 157 154 4115 268 6326
aggregate depreciation and impairment
at 1 january 2011 120 41 40 1567 – 1768
depreciation charge for the year 50 05 07 401 – 463
disposals 73 – – 451 – 524
impairment charge –  –  – 272 – 272
reclassifications – – – 02  – 02
transferred to held for sale – – 05 – – 05
at 31 december 2011 97 46 52 1791 – 1986
depreciation charge for the year 37 03 08 348 – 396
disposals 54 – – 399 – 453
impairment charge 56 – – 41 28 125
reclassifications – – 04 04 – –
reversal of fair value adjustment 266 04 26 560 – 796
transferred to held for sale 29 – – 237 – 266
at 31 december 2012 373 45 38 2100 28 2584
net book value
at 31 december 2011 916 65 256 2252 684 4173
at 31 december 2012 1259 112 116 2015 240 3742
1
  following an exercise to verify property plant and equipment in the year fair value adjustments that arose on the acquisition of rhm in 2007 have been corrected
2
  £448m of assets were classified as intangible assets at 31 december 2011 these have been reclassified as property plant and equipment during 2012
the net book value of the group’s vehicles plant and equipment includes an amount of £07m 2011 £04m in respect of assets held under 
finance leases none of the additions of £434m for the year related to assets held under finance leases the increase in the year is due to a 
reclassification between categories
the group’s borrowings are secured on the assets of the group including property plant and equipment
impairment
an impairment charge of £125m was recognised in the year due to planned site closures and restructuring from the group’s decision to exit a 
branded and own label contract in the bread division
an impairment charge of £272m was recognised in 2011 against assets relating to the retailer branded chilled business as a result of an 
impairment review carried out in light of the decision to sell this business refer to note 14
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financials
14 goodwill 
2012
£m
2011
£m
carrying value
at 1 january 8562 10961 
impairment — continuing – 1854
impairment — discontinued – 233
disposals 1112 –
transferred to held for sale 311 312
at 31 december 7139 8562 
goodwill attached to each of the group’s cgus is as follows
2012
 £m 
2011
 £m 
grocery 7139 8562
net carrying value of goodwill 7139 8562 
impairment tests for goodwill
goodwill is tested annually for impairment or more frequently if there are indications that goodwill may be impaired the recoverable amount of 
a cgu is determined based on value in use calculations or fair value less costs to sell depending on the way in which the value of the cgu is 
expected to be recovered
key assumptions
the key assumptions for calculating value in use are those relating to the cash flows longterm growth rate and discount rate
cash flow assumptions
the cash flows used in the value in use calculation are pretax cash flows based on the latest approved management forecasts in respect of the 
following four years these are calculated as trading profit before depreciation assumptions regarding these future cash flows are based upon actual 
results in prior periods adjusted for expected developments in the following years with reference to market conditions and reasonable management 
expectations for the businesses including shortterm growth projections where appropriate all income and costs are taken into account 
an estimate of capital expenditure required to maintain these cash flows is also made 
longterm growth rate assumptions
the four year management forecasts are extrapolated in perpetuity using growth assumptions relevant for the business sector the growth rate 
applied is 225 2011 225 and is not considered to be higher than the average longterm industry growth rate
discount rate
the discount rate applied to the cash flows is calculated using a pretax rate based on the weighted average cost of capital “wacc” which 
would be anticipated for a market participant investing in the group the directors believe it is appropriate to use a single common discount rate 
for all impairment testing as each cgu shares similar risk profiles
the group has considered the impact of the current economic climate in determining the appropriate discount rate to use in impairment testing 
at 31 december 2012 the pretax rate used to discount the forecasted cash flows has been determined to be 112 2011 121
changing the assumptions selected by management in particular the discount rate and growth rate assumptions used in the cash flow 
projections could significantly affect the group’s impairment evaluation and hence results
impairment
a total impairment charge of £237m was recognised in the year against intangible assets allocated to the bread cgu 
the impairment has arisen as a result of adverse trading conditions experienced during the year further impairment would be required in the 
future if performance fell below that which was used in the value in use calculation or the discount rate were to increase a increase of 05 in 
the pretax discount rate would decrease the recoverable amount by £13m a reduction of 1 in the perpetual growth rate would decrease the 
recoverable amount by £20m lastly a 5 decrease in cash flows after the fifth year would decrease the recoverable amount by £17m current 
forecasts project revenue growth in the bread business of 8 over the next four years taking into account a reasonable possible change in 
circumstances for example a loss of a major contract in 2014 revenue could fall by 5 resulting in a further impairment of £15m
a total impairment charge of £3624m was recognised in 2011 against goodwill other intangible assets and tangible fixed assets £2820m was 
recognised against the goodwill and intangible assets allocated to the bread cgu
with regards to the grocery cgu the directors believe no reasonable change in circumstances that would impact the key assumptions used in 
the impairment testing would cause the carrying value to exceed its recoverable amount
also included within this charge was £804m recognised against the assets allocated to the retailer branded chilled cgu which was recorded within 
discontinued operations this reduced the goodwill and intangible assets to £nil and also reduced the value of tangible fixed assets to their recoverable 
amount the remaining assets and associated liabilities attributable to the retailer branded chilled business were sold on the 30 december 2011
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notes to the financial statements
14 goodwill continued
 impairment charge
2012
goodwill
£m
other 
intangibles
£m
property 
plant and 
equipment
£m
total
£m
bread – 237 125 362
  – 237 125                362
2011
bread 1854 966 – 2820
retailer branded chilled 233 299 272 804
  2087 1265 272 3624
15 other intangible assets
software 
licences
£m
brands 
trademarks
£m
customer 
relationships
£m
assets under 
construction
£m
total 
£m
cost
at 1 january 2011 1604 8932 2430 232 13198
additions   – –  – 168 168
disposals – –  915 – 915
reclassifications – –  – – –
transferred into use 27 –  – 27 – 
transferred to held for sale – – 24 – 24
at 31 december 2011 1631 8932 1491 373 12427
additions –  – – 127 127
disposals 12  449 143 – 604
transfer to property plant and equipment
1
448 – – – 448
transferred into use 329 – – 329 –
transferred to held for sale – 71 – – 71
at 31 december 2012 1500 8412 1348 171 11431
amortisation
at 1 january 2011 378 1332 1316 – 3026
disposals – – 915 – 915
charge for the year 173 330 336 – 839
impairment – 679  586 – 1265
transferred to held for sale – – 15 – 15
at 31 december 2011 551 2341 1308 – 4200
disposals 10  148 111 – 269
charge for the year 189 274 70 – 533
impairment – 237 – – 237
transferred to held for sale –  40 – – 40
at 31 december 2012 730 2664 1267 – 4661
net book value 31 december 2011 1080 6591 183 373 8227
net book value 31 december 2012 770 5748 81 171 6770
1
 £448m of assets were classified as intangible assets at 31 december 2011 these have been reclassified as property plant and equipment during 2012
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15 other intangible assets continued
brands and trademarks are considered to have finite useful lives and are amortised on a straightline basis over their estimated useful lives of 20 
to 40 years software is amortised on a straightline basis over its estimated useful life of 3 to 10 years customer relationships are amortised on a 
straightline basis over their estimated useful lives of 7 years all amortisation is recognised within administrative costs for 2012 and 2011
included in the assets under construction additions for the year above are £61m of internal costs 2011 £56m
as at 31 december 2012 the group’s borrowings are secured on the assets of the group including other intangible fixed assets
impairment
an impairment charge of £237m was recognised in the year against other intangible assets 2011 £1265m refer to note 14
 
the material brands held on the balance sheet are as follows
brandtrademark 
carrying value at
31 dec 2012
£m
estimated useful 
life remaining
years
bisto 1453 24
oxo 924 34
batchelors 763 24
hovis 546 34
sharwood’s 687 24
mr kipling 564 24
16 investments
principal subsidiaries
name of subsidiary
country of 
incorporation or 
registration and 
principal operations principal activity
effective interest in ordinary 
share capital at 
31 december
2012 2011
operating subsidiaries
premier foods group limited united kingdom manufacture and distribution of 
ambient food products cakes 
bread own label and other food 
products
100 100
premier foods group services limited united kingdom head office company 100 100
other subsidiaries
premier foods investments limited united kingdom financing company 100 100
each of the principal subsidiary undertakings has the same yearend as premier foods plc the companies listed above are those that materially 
affect the results and the assets of the group the company has taken advantage of s410 2 of the companies act 2006 and in accordance a 
full list of subsidiary undertakings will be annexed to the company’s next annual return 
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financials
notes to the financial statements
17 inventories
2012
£m
2011
£m
raw materials 457 504
work in progress 26 36
finished goods and goods for resale 679 828
inventories 1162 1368
inventory writeoffs in the year amounted to £157m 2011 £164m the borrowings of the group are secured against all the assets of the group 
including inventory 
18 trade and other receivables
2012
£m
2011
£m
trade receivables 2795 2749
trade receivables impaired 163 275
net trade receivables 2632 2474
prepayments 272 325
interest receivable 01 04
other tax and social security receivable 72 153
other receivables 09 18
trade and other receivables 2986 2974
the borrowings of the group are secured against all the assets of the group including trade and other receivables the group has benefited from 
a £100m securitisation programme to allow it to borrow against trade receivable balances from a group of four of the group’s primary banks
19 trade and other payables
2012
£m
2011
£m
trade payables 3164 3270
other tax and social security payable 131 146
other payables and accruals 773 932
trade and other payables 4068 4348
20 bank and other borrowings
2012
£m
2011
£m
due within one year    
secured senior credit facility — revolving note a 150 –
debt issuance costs 03 –
147  – 
secured senior credit facility — term note a 774 673
debt issuance costs 15 08 
759 665
bank overdrafts 435 237
total bank borrowings due within one year 1341 902
finance lease obligations note 21 01 02
other unsecured loans note b 956 232
total borrowings due within one year 2298 1136
due after more than one year
secured senior credit facility — revolving note a 1167 2761
debt issuance costs 77 65 
1090 2696
secured senior credit facility – term note a 6778 6658
debt issuance costs 131 87 
6647 6571
finance lease obligations note 21 03 05
other unsecured loans note b 01 01
total other 04 06
total borrowings due after one year 7741 9273
total bank and other borrowings 10039 10409
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20 bank and other borrowings continued
the borrowings are secured by a floating charge over all assets of the group
cash and bank deposits and shortterm borrowings have been offset to the extent possible in accordance with the group’s banking agreements
a senior term credit facility and revolving credit facility arrangement — 2012
in march 2012 the group signed a refinancing package with its banking syndicate swap counterparties and pension schemes this amended 
certain terms of its senior term credit facility and revolving credit facility arrangement of 16 march 2007
the existing term loan and revolving credit facility previously due to mature on 31 december 2013 have been extended to a new maturity date of  
30 june 2016 the current applicable bank margin of 225 will increase to 325 with effect from 1 january 2014
additionally the current amortisation payment schedule has been amended with amortisations to occur semiannually from 30 june 2014 
banking covenants of net debtebitda and ebitdainterest remain in place they will continue to be tested biannually and have been reset to 
reflect the group’s strategic plan 
the total interest rate swap portfolio including previously restructured swaps was restructured into additional term loan totalling £188m of this 
additional term loan £106m of the previously restructured swaps will be interest bearing with immediate effect the remaining £82m of previously 
restructured swaps will attract interest from 1 january 2014 these new tranches of additional term loan will attract the same interest margin as 
the main term loan the previously arranged agreed swap settlements of £35m in 2012 and £82m in 2013 are no longer applicable a new floating 
to fixed amortising swap commencing in july 2012 with an initial nominal value of £745m is in place attracting a swap rate of 159
all term loan and securitised debt attract interest charges based on libor
a sliding scale of new deferred fees at market rates will be applicable from 2014 through to 2016 which are payable on a subsequent re
financing planned disposal proceeds are shared between the banks in the banking syndicate including those swap counterparties whose swaps 
have been restructured into additional term loans as described above
b other loans
other loans falling due within one year includes amounts drawn under the debtors securitisation facility which in 2012 is secured against the 
group’s trade receivables
21 financial instruments
the group’s activities expose it to a variety of financial risks market risk arising from adverse movements in interest rates commodity prices and 
foreign currency credit risk and liquidity risk the group uses a variety of derivative financial instruments to manage certain of these risks the 
management of these risks along with the daytoday management of treasury activities is performed by the group treasury function the policy 
framework governing the management of these risks is defined by the board the framework for management of these risks is incorporated into a 
policies and procedures manual
the group also enters into contracts with suppliers for its principal raw material requirements some of which are considered commodities and 
also diesel and energy these commodity and energy contracts are part of the group’s normal purchasing activities some of the risk relating to 
diesel is mitigated with the use of derivative financial instruments the treasury risk management committee monitors and reviews the group’s 
foreign currency exchange commodity price and energy price exposures and recommends appropriate hedging strategies for each
a market risk
i foreign exchange risk
the group’s main operating entities’ functional currency and the group’s presentational currency is sterling although some transactions are 
executed in nonsterling currencies including euros us dollars canadian dollars australian dollars and japanese yen the transactional 
amounts realised or settled are therefore subject to the effect of movements in these currencies against sterling management of these exposures 
is centralised and managed by the group’s treasury function it is the group’s policy to manage the exposures arising using forward foreign 
currency exchange contracts and currency options hedge accounting is not sought for these transactions 
the group generates some of its profits in nonsterling currencies and has assets in nonsterling jurisdictions principally the euro 
the principal foreign currency affecting the translation of subsidiary undertakings within the group financial statements is the euro the rates 
applicable are as follows
principal rate of exchange eur£ 
year ended 
31 dec 2012
year ended 
31 dec 2011
year end 12257 11917
average 12317 11508
the majority of the group’s assets and liabilities are denominated in the functional currency of the relevant division or subsidiary
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notes to the financial statements
21 financial instruments continued
the table below shows the group’s currency exposures as at 31 december 2012 and 2011 that gave rise to net currency gains and losses 
recognised in the consolidated income statement as a result of monetary assets and liabilities that are not denominated in the functional currency 
of the subsidiaries involved
functional currency of subsidiaries
sterling
£m
euro
£m
total
£m
at 31 december 2012
net foreign currency monetary assets
euro 05 – 05
us dollar 08 – 08
total 13 – 13
at 31 december 2011
net foreign currency monetary assets
sterling – 05 05
euro 55 – 55
us dollar 04 – 04
other currencies 60 – 60
total 01 05 06
in addition the group also has forward foreign currency exchange contracts outstanding at the year end in order to manage the exposures above 
but also to hedge future transactions in foreign currencies the sterling nominal amounts outstanding are as follows
2012
payable
receivable
£m
2011
payable
receivable
£m
euro 486 543
us dollar 152  78 
total 638 621
sensitivities are disclosed below using the following reasonably possible scenarios
if the us dollar were to weaken against sterling by 20 us dollar cents with all other variables held constant posttax profit would decrease by 
£13m 2011 £07m decrease
if the us dollar were to strengthen against sterling by 20 us dollar cents with all other variables held constant posttax profit would increase by 
£16m 2011 £09m increase
if the euro were to weaken against sterling by 10 euro cents with all other variables held constant posttax profit would decrease by £29m 
2011 £27m decrease
if the euro were to strengthen against sterling by 10 euro cents with all other variables held constant posttax profit would increase by £34m 
2011 £32m increase
this is primarily driven by the effect on the mark to market valuation of the foreign exchange derivatives of the group where the hedged rates differ 
from the spot rate 
ii commodity price risk
the group purchases a variety of commodities for use in production and distribution which can experience significant price volatility which 
include interalia wheat cocoa edible oils diesel and energy the price risk on these commodities is managed by the group through the 
treasury risk management committee it is the group’s policy to minimise its exposure to this volatility by adopting an appropriate forward 
purchase strategy or by the use of derivative instruments where they are available 
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21 financial instruments continued
iii interest rate risk
the group’s borrowing facilities comprise term debt and a revolving facility principally in sterling interest is charged at floating rates plus a margin on 
the amounts drawn down and at half the margin for the nonutilised portion of the facility hence the borrowings are sensitive to changes in interest 
rates
the group then seeks to mitigate the effect of adverse movements in interest rates by entering into derivative financial instruments that reduce the 
level of exposure to floating rates the target of fixedcapped debt is defined in the group treasury policy and procedures however the amount 
hedged can be amended subject to agreement by the board hedge accounting is not sought for these transactions
the gross cash flows on the interest rate derivatives are sensitive to changes in interest rates as they are driven by three month libor which is 
reset on a quarterly basis as at 31 december 2012 the reset rate was 0515 2011 108006
the weighted average interest rate for these derivative financial instruments is as follows
weighted 
average 
interest rate 

currency sterling
at 31 december 2012 16
at 31 december 2011 57
the following table reflects the likely contractual maturity date of the interest rate derivative contracts taking into account zero cost call features 
where market rates at the balance sheet date indicate they will be triggered by the banks as part of the revised refinancing package the maturity 
profile and structure of interest rate derivative contracts has been revised
within 1 
year
£m
1 and 2 
years
£m
2 and 3 
years
£m
3 and 4 
years
£m
4 and 5
 years
£m
over 5 
years
£m
total
£m
2012
derivative financial liabilities
fixed rate 800 250 850  5100  —  — 7000
  800 250 850 5100 — — 7000
2011
derivative financial liabilities
fixed rate —  500 — —  —  — 500
cap and floor structure 3500 — —  —  —  — 3500
other financial liabilities at fair value 
through profit or loss
fixed rate —  6750 — —  —  — 6750
other callable swaps 1500 — — — —  — 1500
  5000 7250 — — —  — 12250
2012
fixed rate derivative financial liabilities constitute one swap with a nominal value of £700m which is an amortising floating to fixed interest rate 
swap maturing in 2016
2011
fixed rate derivative financial liabilities constitute one swap with a nominal value of £50m which is a conventional interest rate swap maturing in 
2013 it has a callable option whereby the counterparty bank can cancel the swap at nil cost at certain specified dates from june 2011 onwards
the cap and floor structures have a nominal value of £350m with caps set at 615 to 625 and floor rates between 431 and 455 in 
addition when libor rates are beneath the floor strike price a digital option is triggered which results in the group paying interest at 575 on all 
of these instruments for three months
in 2011 the fixed rate ‘other financial liabilities through profit or loss’ comprised six fixed rate swaps with a nominal value totalling £675m all due to 
mature in 2013 and other callable swaps comprising a single swap with an optional break at august 2012 and a mandatory break at june 2013 
these were restructured into additional term loan as part of the march 2012 refinancing
cash and deposits earn interest at floating rates based on banks shortterm treasury deposit rates shortterm trade and other receivables are 
interestfree 
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notes to the financial statements
21 financial instruments continued
the group’s provisions of £739m as at 31 december 2012 2011 £469m include £187m relating to onerous leases 2011 £117m which are 
considered to be floating rate financial liabilities these cash flows are discounted where the effect is material 
at 31 december 2012 for every 50 basis points reduction in rates below the last floating reset rate of 0515 based on three month libor 
with all other variables held constant annualised net interest expense would decrease by £11m 2011 £04m increase 
at 31 december 2012 if interest rates were 200 basis points higher than the last floating reset rate of 0515 based on three month libor 
with all other variables held constant annualised net interest expense would increase by £45m 2011 £16m decrease 
the group’s other financial assets and liabilities are not exposed to material interest rate risk
b credit risk
the group’s principal financial assets are cash and cash deposits and trade and other receivables
the group has no significant concentrations of credit risk cash and cash equivalents are deposited with highcredit quality financial institutions 
and trade receivables are due principally from major grocery retailers though it is the group’s policy to insure trade debt
at 31 december 2012 trade and other receivables of £779m 2011 £858m were past due but not impaired these relate to customers with 
whom there is no history of default
the ageing of trade and other receivables was as follows
past due
fully 
performing
£m
1–30 days
£m
31–60 days
£m
61–90 days
£m
91–120 days
£m
120 days
£m
total
£m
trade and other receivables
2012 1863 348 78 60 53 240 2642
2011 1638 426 11 23 77 321 2496
at 31 december 2012 trade and other receivables of £163m 2011 £275m were determined to be specifically impaired and provided for the 
total includes receivables from customers which are considered to be experiencing difficult economic situations
the group does not hold any collateral as security against its financial assets
movements in the provision for impairment of trade receivables are as follows
2012
£m
2011
£m
at 1 january 275 91
receivables writtenoff during the year as uncollectable 259 50
provision for receivables released — 30
provision for receivables impairment raised 147 264
at 31 december 163 275
the group has benefited from a £100m securitisation programme to allow it to borrow against trade receivable balances from a group of four of 
the group’s primary banks
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notes to the financial statements
21 financial instruments continued
c liquidity risk
the group manages liquidity risk through both the treasury and finance functions cash flow forecasts are prepared and reviewed on a weekly 
basis normally covering a period of three months
in addition cash flow forecasts are prepared as part of the group’s overall budgeting and forecasting processes and performance is monitored 
against this each month this is intended to give the board sufficient forward visibility of debt levels
the group’s net debt level can vary significantly from month to month and there is some volatility within months this reflects trading patterns 
timing of receipts from customers and payments to suppliers patterns of inventory holdings and the timing of the spend on major capital and 
restructuring projects for these reasons the debt levels at the year end date may not be indicative of debt levels at other points throughout the 
year
the following table analyses the group’s financial liabilities into relevant maturity groupings based on the contractual undiscounted cash flows
 
 
within 1 
year
£m
1 and 2 
years
£m
2 and 3 
years
£m
3 and 4 
years
£m
4 and 5 
years
£m
over 5 
years
£m
total
£m
at 31 december 2012
trade and other payables 3937 —  —  — — — 3937
bank overdraft 435 — — — — — 435
bank term loan 774 500 600 5678 — — 7552
bank revolver facility drawn down 150 — — 1167 — — 1317
finance leases 01 03 01 — — — 05
other loans — 957 — — — — 957
at 31 december 2011
trade and other payables 4202 — — — — — 4202
bank overdraft 237 — — — — — 237
bank term loan 673 6658 — — — — 7331
bank revolver facility drawn down — 2761 — — — — 2761
finance leases 02 06 — — — — 08
other loans 232 01 — — — — 233
the bank term loan and bank revolver facility are repriced quarterly to libor and other liabilities are not repriced before the maturity date
the group has £1956m 2011 £1783m of facilities available and not drawn as at 31 december 2012 expiring between 3 and 4 years
the borrowings are secured by a fixed and floating charge over all the assets of the group
the following table analyses the contractual undiscounted cash flows of interest on the floating rate debt to maturity based on the last fixed rate 
refix of 0515 2011 108006 plus applicable margin
within 1 
year
£m
1 and 2 
years
£m
2 and 3 
years
£m
3 and 4 
years
£m
4 and 5 
years
£m
over 5 
years
£m
total
£m
interest       
2012 257 327 303 140 – – 1027
2011 380 363 – – – – 743
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financials
notes to the financial statements
21 financial instruments continued
the following table analyses the group’s derivative financial instruments including “other financial liabilities at fair value through profit or loss” into 
relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date the amounts disclosed are 
the undiscounted cash flows except in the case of one of the 2011 swaps within “other financial liabilities at fair value through profit or loss” with 
a nominal value of £150m where the outflows include the expected mark to market value at the call date 
within 1 
year
£m
1 and 2 
years
£m
2 and 3 
years
£m
3 and 4 
years
£m
4 and 5 
years
£m
over 5 
years
£m
total
£m
at 31 december 2012
forward foreign exchange contracts
outflow 638 –  –  –  – – 638
inflow 644 – – – – – 644
commodities
outflow 64 – – – – – 64
interest rate swaps
outflow 106 101 88 39 – – 334
inflow 34 33 29 13 – – 109
 130 68 59 26 – – 283
at 31 december 2011
forward foreign exchange contracts
outflow 621 — — — — — 621
inflow 608 — — — — — 608
commodities
outflow 63 — — — — — 63
interest rate swaps
outflow 124 10 — — — — 134
inflow 24 02 — — — — 26
other financial liabilities at fair value 
through profit or loss
outflow 794 1240 — — — — 2034
inflow 73 68 — — — — 141
 897 1180 — — — — 2077
the above table incorporates the contractual cash flows of the interest rate derivatives with floating rates of interest calculated based on libor of 
0515 2011 108006 at the balance sheet date 
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financials
21 financial instruments continued
d fair value
the following table shows the carrying amounts which approximate to fair value except as noted below of the group’s financial assets and 
financial liabilities fair value is the amount at which a financial instrument could be exchanged in an arm’s length transaction between informed 
and willing parties other than a forced or liquidation sale and excludes accrued interest set out below is a summary of methods and assumptions 
used to value each category of financial instrument
 
2012
book  
market value
£m
2011
book  
market value
£m
loans and receivables  
cash and bank deposits 532 458
trade and other receivables 2642 2496
financial assets at fair value through profit or loss
derivative financial instruments
— forward foreign currency exchange contractscurrency options 07 03
— commodity and energy derivatives 03 02
financial liabilities at fair value through profit or loss
derivative financial instruments
— forward foreign currency exchange contractscurrency options 03 19
— commodity and energy derivatives 01 01
— interest rate swaps 192 106
other financial liabilities at fair value through profit or loss
— interest rate swaps – 1870
financial liabilities at amortised cost
trade and other payables 3937 4202
bank term loan 7552 7331
bank revolver facility drawn down 1317 2761
bank overdraft 435 237
finance leases 04 07
other 957 233
interest payable 56 09
the following table presents the group’s assets and liabilities that are measured at fair value at 31 december 2012 using the following fair value 
measurement hierarchy
 • quoted prices unadjusted in active markets for identical assets or liabilities level 1
 • inputs other than quoted prices included within level 1 that are observable for the asset or liability either directly that is as prices or indirectly 
that is derived from prices level 2
 • inputs for the asset or liability that are not based on observable market data that is unobservable inputs level 3
the following table presents the group’s assets and liabilities that are measured at fair value at 31 december
 
2012
level 2
2011
level 2
financial assets at fair value through profit or loss
derivative financial instruments
— forward foreign currency exchange contractscurrency options 07 03
— commodity and energy derivatives 03 02
financial liabilities at fair value through profit or loss
derivative financial instruments
— forward foreign currency exchange contractscurrency options 03 19
— commodity derivatives 01 01
— interest rate swaps 192 106
other financial liabilities at fair value through profit or loss
— interest rate swaps – 1870
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financials
notes to the financial statements
21 financial instruments continued
fair value estimation
derivatives
forward exchange contracts are marked to market using prevailing market prices hedge accounting has not been applied to forward contracts 
and as a result the movement in the fair value of £19m has been credited to the income statement in the year 2011 £09m charge 
commodity derivatives are marked to market using prevailing prices and are also not designated for hedge accounting as a result the fair value 
movement of £02m 2011 £08m charge has been credited to the income statement 
interest rate swaps are marked to market using prevailing market prices interest rate swaps are also not designated for hedge accounting as a 
result the movement in the fair value of £148m has been charged to the income statement in the year 2011 £176m credit 
interest rate swaps classed as “other financial liabilities at fair value through profit or loss” are also marked to market using prevailing market 
prices these are also not designated for hedge accounting as a result the movement in the fair value of £51m has been credited to the income 
statement in the year 2011 £193m credit 
short and longterm borrowings loan notes and interest payable
fair value is calculated based on discounted expected future principal and interest rate cash flows the fair value of the floating rate debt 
approximates the carrying value above 
finance lease liabilities
the fair value of finance lease liabilities approximates book value
trade and other receivablespayables
the carrying value of receivablespayables with a remaining life of less than one year is deemed to reflect the fair value given their short maturity the 
fair values of noncurrent receivablespayables are also considered to be the same as the carrying value due to the size and nature of the balances 
involved 
e obligations under finance leases
minimum lease 
payments
present value of 
minimum lease 
payments
 
2012
£m
2011
£m
2012
£m
2011
£m
not later than one year 01 02 01 02
later than one year but not later than five years 03 06 02 05
later than five years 01 – 01 –
  05 08 04 07
less future finance charges 01 01 na na
present value of lease obligations 04 07 04 07
less amounts due for settlement within 12 months 01 02
amounts due for settlement after 12 months 03 05
it is the group’s policy to lease certain items of plant and equipment under finance leases the average lease term is 3 years the longest being  
6 years 
for the year ended 31 december 2012 the average effective borrowing rate was 38 2011 39
interest rates are fixed at the contract date and thus expose the group to fair value interest rate risk all leases are on a fixed repayment basis and 
no arrangements have been entered into for contingent rental payments 
the fair value of the group’s lease obligations approximates their carrying value the group’s obligations under finance leases are secured by the 
lessor’s title to the leased assets
f capital risk management
the group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide returns for 
shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital
in order to maintain or adjust the capital structure the group may return capital to shareholders issue new shares or sell assets to reduce debt 
in order to bring gearing down the group is in the process of an asset reduction programme aimed at reducing debt during the year the group 
has used disposal proceeds of £3122m to repay borrowings
as part of the renegotiated banking facilities the group was required to repay £330m of disposal proceeds by 30 june 2014 to the banking 
syndicate as at the date of this report this has been exceeded and completed ahead of schedule proceeds of £925m from the sale of the 
sweet pickles and table sauces business was received on 4 february 2013 
the directors do not recommend the payment of a dividend for the year then ended 31 december 2012 2011 nil
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financials
21 financial instruments continued
consistent with others in the industry the group monitors capital on the basis of the gearing ratio this ratio is calculated as net debt divided by 
total capital net debt is calculated as total borrowings less cash and cash equivalents total capital is calculated as equity plus net debt
the gearing ratios at 31 december 2012 and 31 december 2011 were as follows
2012
£m
2011
£m
total borrowings 10039 10409
less cash and bank deposits 532 458
net borrowings 9507 9951
total equity 4049 5727
total capital 13556 15678
gearing ratio 70 63
under the group’s financing arrangement the group is required to meet two covenant tests which are calculated and tested on a 12 month rolling 
basis at the half year and full year each year the group has complied with these tests at june and december 2012 
g financial compliance risk
risk
the group continues to operate with a high level of debt £09bn and is subject to operating within banking covenants set out in its refinancing 
agreement agreed with its bank syndicate in march 2012 this includes net debtebitda and ebitdainterest covenant tests and a requirement 
to realise disposal proceeds of £330m by 30 june 2014 in the event these covenants are not met then the group would be in breach of its 
financing agreement and as would be the case in any covenant breach the banking syndicate could withdraw their funding to the group  
in addition to covenant compliance the group must ensure that it manages its liquidity such that it has sufficient funds to meet its obligations as 
they fall due
it also supports three defined benefit pension schemes in the uk all three schemes have significant technical funding deficits which could have an 
adverse impact on the financial condition of the group the company does not pay dividends and is restricted from paying dividends under the 
terms of its financing arrangements the group is also restricted from raising additional forms of debt finance other than a basket of c£20m and 
is not able to use free cash flow for acquisitions
mitigation
the group successfully finalised financing arrangements in march 2012 which will provide funding until june 2016  following the completion of 
the disposal of the sweet pickles and table sauces business on 2 february 2013 the group has successfully met and indeed exceeded the 
disposal proceeds target  in addition the group achieved its trading expectations for 2012 and successfully implemented a debtor securitisation 
programme to provide additional funding and liquidity the group reviews its performance on an ongoing basis and formally tests and reports on 
covenant compliance to the group’s banking syndicate every six months as well as providing forecast covenant compliance tests twice a year in 
the event of a forecast covenant breach the group would seek a covenant waiver or amendment from its banking syndicate that it could obtain 
with a twothirds majority vote
the group manages liquidity risk through both the treasury and finance functions cash flow forecasts are prepared and reviewed on a weekly 
basis normally covering a period of three months in addition cash flow forecasts are prepared as part of the group’s overall budgeting and 
forecasting processes and performance is monitored against this each month
funding agreements have been reached with the trustees of the pension schemes which coupled with the changes to the schemes in the prior 
year mitigate our exposure in 2013 the group continues to monitor the pension risks closely working with the trustees to ensure a collaborative 
approach
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financials
notes to the financial statements
22 provisions for liabilities and charges
restructuring 
£m
other
£m
total
£m
at 1 january 2011 216 173 389
utilised during the year 63 35 98
additional charge in the year 87 99 186
unwind of provision 12 12 24
released during the year 26 06 32
reclassifications 03 03 –
at 31 december 2011 229 240 469
utilised during the year 140 42 182
additional charge in the year 372 114 486
unwind of provision 03 05 08
released during the year 34 08 42
reclassifications 11 11 –
at 31 december 2012 441 298 739
analysis of total provisions
2012
£m
current 250 06 256
noncurrent 191 292 483
  441 298 739
analysis of total provisions
2011
£m
current  81 02 83
noncurrent  148 238 386
  229 240 469
restructuring provisions at 31 december 2012 primarily represent provisions in respect of the restructuring of the bread business and programmes 
aimed at reducing the group’ s overhead cost base including the closure of the irish office
at 31 december 2011 restructuring and redundancy provisions have been raised mainly in respect of various programmes aimed at reducing the 
group’s cost base in line with the group’s strategy the charge in the year relates to the closure of the group’s windsor office and reduction of 
headcount in overhead functions it is expected that the majority of these provisions will be utilised in 2012 the remaining provisions largely relate 
to onerous leases that have arisen due to exiting certain of the group’s premises which range from 2 to 21 years
other provisions at 31 december 2012 and 2011 primarily relate to insurance claims and dilapidations against leasehold properties the costs 
relating to dilapidation provisions will be incurred over a number of years in accordance with the length of the leases these provisions have been 
discounted at rates between 054 and 282 the unwinding of the discount is charged to the income statement under interest payable
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109
financials
23 retirement benefit schemes
defined benefit schemes
the group operates a number of defined benefit schemes under which employees are entitled to retirement benefits which are based on career 
average salary on retirement these are as follows
a premier schemes
the premier foods pension scheme “pfps” was the principal funded defined benefit scheme within the old premier group which also operated 
a smaller funded defined benefit scheme the premier ambient products pension scheme “papps” for employees acquired with the ambrosia 
business in 2001 as a result of the acquisition of campbell’s in 2006 the group inherited the premier grocery products pension scheme 
“pgpps” covering the employees of campbell’s uk business and the premier grocery products ireland pension scheme “pgpips” covering 
the employees of campbell’s ireland the group also acquired two further schemes with the acquisition of chivers ireland in january 2007 the 
chivers 1987 pension scheme and the chivers 1987 supplementary pension scheme these schemes are presented together below as the 
premier schemes
b rhm schemes
as a result of the acquisition of rhm plc the group also acquired the rhm pension scheme the premier foods ireland pension scheme 1994 
the premier foods ireland van sales scheme and the french termination indemnity arrangements these schemes are presented together below 
as the rhm schemes with the exception of the french termination indemnity arrangements which were disposed of with the speciality bakery 
businesses in 2009 and the premier foods ireland van sales scheme which was wound up in 2010 
the most recent full actuarial valuation of both the pfps and rhm pension schemes was carried out on 5 april 2010
the exchange rates used to translate the overseas euro based schemes are £100  12317 euros for the average rate during the year and  
£100  12257 euros for the closing position at 31 december 2012
until 30 june 2011 the employees of the above schemes accrued retirement benefits which varied as a percentage of final salary on retirement 
on 30 june 2011 the link to final salary was closed to future accrual for uk schemes and members’ retirement benefits will now be linked to their 
salary on that date index linked at retail price index subject to a 5 cap until retirement date from 1 july 2011 employees accrued career 
average benefits or chose to transfer to the new defined contribution scheme those contributing members of the papps and pgpps choosing 
career average benefits joined the pfps on 1 july 2011 and transferred their past service entitlements to the scheme membership of the group’s 
defined benefit pension schemes is now closed to new employees who are entitled to join the group’s main defined contribution scheme the 
group personal pension plan the closure of the final salary schemes resulted in a past service credit of £121m in 2011 
in july 2010 the uk government announced changes to the inflation index used for statutory pension increases both for pensions in payment 
and pensions in deferment to apply to private sector pension schemes this resulted in a credit to past service costs of £464m in respect of the 
rhm pension scheme during the year in 2011 a credit of £299m in respect of the premier pension schemes was recognised 
in march 2012 as part of the group’s refinancing package trustees of the group’s uk pension schemes agreed to defer deficit contribution 
payments until 1 january 2014
the assets of all defined benefit schemes are held by the trustees of the respective schemes and are independent of the group’s finances
the schemes invest through investment managers appointed by the trustees in uk and european equities and in investment products made up 
of a broader range of assets the plan assets do not include any of the group’s own financial instruments nor any property occupied by or other 
assets used by the group the pension schemes hold a charge over the assets of the group
at the balance sheet date the combined principal actuarial assumptions used for all the schemes were as follows
premier 
schemes
2012
rhm 
schemes
2012
discount rate 445 445
inflation — rpi 295 295
inflation — cpi 215 215
expected salary increases 395 395
future pension increases 205 205
2011 2011
discount rate 480 480
inflation — rpi 315 315
inflation — cpi 195 na
expected salary increases 415 415
future pension increases 210 210
for the smaller overseas schemes the discount rate used was 340 2011 545 expected salary increases of 300 2011 300 and 
future pension increases of 175 2011 175
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110
financials
notes to the financial statements
 23 retirement benefit schemes continued
the mortality assumptions are based on standard mortality tables which allow for future mortality improvements the assumptions are  
as follows
2012 life expectancy
premier 
schemes
rhm 
schemes total
male pensioner currently aged 65 881 861 866
female pensioner currently aged 65 902 885 889
male nonpensioner currently aged 45 894 874 879
female nonpensioner currently aged 45 918 900 905
2011 life expectancy
premier 
schemes
rhm 
schemes total
male pensioner currently aged 65 879 860 865
female pensioner currently aged 65 901 884 888
male nonpensioner currently aged 45 893 873 878
female nonpensioner currently aged 45 917 900 904
the fair values of plan assets split by type of asset are as follows
pension scheme assets
premier 
schemes
£m
 of total
expected 
return on 
assets

rhm
schemes
£m
 of total
expected 
return on 
assets

total
£m
 of total
assets at 31 december 
2012
equities 167 31 77 3946 148 77 4113 128
corporate and government 
bonds 1020 190 42 10957 409 42 11977 373
property 10 02 73 1043 39 73 1053 33
absolutetarget return 
products 2717 507 56 4404 165 59 7121 222
interest rate and inflation 
swaps 256 48 47 1946 73 31 1690 53
cash 26 05 28 4918 184 28 4944 154
other 1163 217 90 3412 128 77 4575 143
fair value of scheme 
assets 5359 100 61 26734 100 55 32093 100
assets at 31 december 
2011
equities 274 53 68 3977 151 78 4251 135
corporate and government 
bonds
1103 214 47 9671 366 47 10774 342
property 10 02 73 911 34 73 921 30
absolutetarget return 
products 3388 659 76 4521 171 58 7909 250
interest rate and inflation 
swaps
255 50 52 2061 78 31 2316 73
cash 19 04 28 2372 90 28 2391 76
other 93 18 61 2905 110 78 2998 94
fair value of scheme 
assets 5142 100 66 26418 100 58 31560 100
the schemes invest in interest rate and inflation swaps to protect from fluctuations in interest and inflation
the expected return on pension scheme assets is based on the longterm investment strategy set out in the schemes’ statement of investment 
principles at the start of the year
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111
financials
23 retirement benefit schemes continued
the amounts recognised in the balance sheet arising from the group’s obligations in respect of its defined benefit schemes is as follows
premier 
schemes
£m
rhm 
schemes
£m
total
£m
2012
present value of funded obligations 8711 28050 36761
fair value of plan assets 5359 26734 32093
deficit in scheme 3352 1316 4668
2011
present value of funded obligations 7819 26565 34384
fair value of plan assets 5142 26418 31560
deficit in scheme 2677 147 2824
2010
present value of funded obligations 7480 23723 31203
fair value of plan assets 5128 22866 27994
deficit in scheme 2352 857 3209
2009
present value of funded obligations 6855 22730 29585
fair value of plan assets 4771 20529 25300
deficit in scheme 2084 2201 4285
2008
present value of funded obligations 5877 19521 25398
fair value of plan assets 4154 21129 25283
deficitsurplus in scheme 1723 1608 115
the aggregate deficit has increased by £1844m during the year primarily due to a fall in discount rate assumption used which is based on the aa 
bond yield from 480 to 445 partly offset by the reduction in rpi inflation assumption from 315 to 295 
experience gainslosses on the two schemes are as follows
premier schemes
£m
rhm schemes
£m
total
£m
assets liabilities assets liabilities assets liabilities
2012 78 90 211 246 133 336
2011 355 33 2619 02 2264 35
2010 28 10 1532 358 1560 368
2009 425 64 1350 24 925 88
2008 1316 64 503 22 1819 86
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112
financials
notes to the financial statements
23 retirement benefit schemes continued
changes in the present value of the defined benefit obligation were as follows 
premier 
schemes
£m
rhm 
schemes
£m
total
£m
2012
opening defined benefit obligation 7819 26565 34384
current service cost 61 112 173
past service costcredit 194 334 140
interest cost 375 1243 1618
actuarial loss 581 1602 2183
exchange differences 10 04 14
curtailmentssettlements 08 18 10
contributions by plan participants 38 68 106
benefits paid 339 1220 1559
closing defined benefit obligation 8711 28050 36761
2011
opening defined benefit obligation 7480 23723 31203
current service cost 88 96 184
past service creditcost 468 48 420
interest cost 401 1269 1670
actuarial loss 588 2469 3057
exchange differences 09 05 14
curtailmentssettlements 03 17 14
contributions by plan participants 52 132 184
benefits paid 310 1184 1494
closing defined benefit obligation 7819 26565 34384
changes in the fair value of plan assets were as follows
premier 
schemes
£m
rhm 
schemes
£m
total
£m
2012    
opening fair value of plan assets 5142 26418 31560
expected return 322 1501 1823
administrative and life insurance costs 33 47 80
actuarial gainloss 78 211 133
contributions by employer 161 230 391
contributions by plan participants 38 68 106
exchange differences 10 05 15
benefits paid 339 1220 1559
closing fair value of plan assets 5359 26734 32093
2011    
opening fair value of plan assets 5128 22866 27994
expected return 395 1516 1911
administrative and life insurance costs 36 35 71
actuarial lossgain 355 2619 2264
contributions by employer 275 508 783
contributions by plan participants 52 132 184
exchange differences 07 04 11
benefits paid 310 1184 1494
closing fair value of plan assets 5142 26418 31560
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financials
23 retirement benefit schemes continued
actuarial gains and losses are as follows
premier
schemes
£m
rhm
schemes
£m
total
£m
2012
actuarial loss on plan liabilities 581 1602 2183
actuarial gainloss on plan assets 78 211 133
net actuarial loss for the year 503 1813 2316
cumulative actuarial loss 4096 1980 6076
2011
actuarial loss on plan liabilities 588 2469 3057
actuarial lossgain on plan assets 355 2619 2264
net actuarial lossgain for the year 943 150 793
cumulative actuarial loss 3593 167 3760
the actual return on plan assets was a £1690m loss 2011 £4175m gain which is £133m less 2011 £2264m more than the expected return 
on plan assets of £1823m 2011 £1911m at the start of the relevant periods 
the actuarial loss on liabilities of £2183m 2011 £3057m loss comprises a loss on member experience of £336m 2011 £35m gain and an 
actuarial loss due to changes in assumptions of £1847m 2011 £3092m loss
the net actuarial loss taken to the statement of comprehensive income was £2316m 2011 £793m loss these were £1925m 2011 £834m 
net of taxation with tax at 240 for uk schemes and 125 for irish schemes
the group expects to contribute approximately £256m 2012 £319m to its defined benefit plans in 2013 £236m 2012 £264m of regular 
contributions and expenses and £20m 2012 £55m of additional contributions to fund the scheme deficits the decrease in future deficit 
funding is a result of the revised refinancing package whereby the trustees of the group’s uk pension schemes have agreed to the suspension of 
deficit contribution payments until 1 january 2014
the total amounts recognised in the group’s income statement are as follows
premier 
schemes
£m
rhm 
schemes
£m
total
£m
2012
operating profit
current service cost 61 112 173
past service costcredit 194 334 140
gainloss on curtailment 08 18 10
interest cost 375 1243 1618
expected return on plan assets 322 1501 1823
administrative and life insurance costs 33 47 80
total 333 415 82
2011
operating profit
current service cost 88 96 184
past service creditcost 468 48 420
gainloss on curtailment 03 17 14
interest cost 401 1269 1670
expected return on plan assets 395 1516 1911
administrative and life insurance costs 36 35 71
total 341 51 392
defined contribution schemes
a number of companies in the group operate defined contribution schemes predominantly stakeholder arrangements in addition a number 
of schemes providing life assurance benefits only are operated the total expense recognised in the income statement of £08m 2011 £03m 
represents contributions payable to the plans by the group at rates specified in the rules of the plans 
other post retirement benefits
the group does not provide any other post retirement benefits
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114
financials
notes to the financial statements
24  reserves and share capital
share premium reserve
the share premium reserve comprises the premium paid over the nominal value of shares for shares issued
merger reserve
the merger reserve comprises the nonstatutory premium arising on shares issued as consideration for acquisition of subsidiaries where merger 
relief under section 612 of the companies act 2006 applies less subsequent realised losses relating to those acquisitions
other reserves
other reserves comprise the hedging reserve which represents the effective portion of the gains or losses on derivative financial instruments that 
have been designated as hedges
profit and loss reserve
the profit and loss reserve represents the cumulative surplus or deficit and the own shares reserve which represents the cost of shares in premier 
foods plc purchased in the market and held by the company on behalf of the employee benefit trust in order to satisfy options and awards 
under the company’s incentive schemes
noncontrolling interest reserve
the noncontrolling interest reserve represents the reserves attributable to noncontrolling interests
share capital
2012
£m
2011
£m
authorised
350000000 2011 350000000 ordinary shares of 10 pence each
1
350 350
issued and fully paid    
239806206 2011 239805802 ordinary shares of 10 pence each
1
240 240
1
 2011 comparatives have been restated following the 101 share consolidation effected during 2012
during 2012 404 ordinary shares of 10p each were issued to certain employees at a price of 955p per ordinary share pursuant to exercise of 
share options
share option schemes
the company has share option schemes for certain senior executives and key individuals the employees involved in the schemes hold options to 
subscribe for up to 116m ordinary shares of 10 pence each between 2010 and 2015 granted at prices ranging between 10 pence per ordinary 
share and 1860 pence per ordinary share the number of shares subject to options the periods in which they were granted and the periods in 
which they may be exercised are given below for 2012 a summary of the company’s schemes is as follows
1  the company adopted an executive share option scheme “esos” at the time of admission for executive directors a portion of the options 
granted under the esos have now vested and are exercisable between three and ten years after grant as certain performance criteria have 
been met these options are equitysettled and the number of shares subject to options the periods in which they were granted and the 
periods in which they may be exercised are given below no further awards are anticipated under this scheme
2  a savings related share option scheme for employees the employees involved in the scheme have the right to subscribe for up to 60m 
ordinary shares the number of shares subject to options the periods in which they were granted and the periods in which they may be 
exercised are given below these options are equitysettled have a maximum term of 35 years and generally vest only if employees remain in 
employment to the vesting date
3  a longterm incentive plan “ltip” for senior managers the individuals involved in the scheme have the right to subscribe for up to 02m 
ordinary shares at 10 pence per ordinary share the number of shares subject to awards the periods in which they were granted and the 
periods in which they may be awarded are given below these awards are equitysettled and have a maximum term of three years no further 
awards are anticipated under this plan
the performance and vesting conditions of the scheme have been aligned with those of the coinvestment plan below since the company 
was positioned below the median tsr performance target the required performance conditions were not met and the 2009 award lapsed in 
full 
4  a coinvestment plan “cip” for directors and senior managers the scheme is structured as a share matching plan and the individuals 
involved in the scheme are required to commit and retain a significant amount of capital in the form of premier foods’ shares the number 
of shares subject to awards the periods in which they were granted and the periods in which they may be awarded are given below these 
awards are equitysettled and have a maximum term of three years no further awards are anticipated under this plan
the vesting of matching awards is conditional on achievement against a combination of eps and tsr performance targets during the year 
performance conditions were not met and so the 2009 cip award lapsed in full 
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wwwpremierfoodscouk stock code pfd
115
financials
24  reserves and share capital continued
5    a longterm incentive plan performance share award for directors and senior managers the individuals in this scheme have the right to 
subscribe to ordinary shares at nil cost the number of shares subject to awards the periods in which they were granted and the periods in 
which they may be awarded are given below these awards are equitysettled and have a maximum term of three years 
 
the vesting of the 2011 award is conditional on achievement of an eps performance target
6    a longterm incentive plan matching share award for directors and senior managers the scheme is structured as a share matching plan 
and the individuals involved in the scheme are required to commit and retain a significant amount of capital in the form of premier foods’ 
shares the number of shares subject to awards the periods in which they were granted and the periods in which they may be awarded are 
given below these awards are equitysettled and have a maximum term of three years  
 
the vesting of the 2011 award is conditional on achievement of an absolute share price target
7  deferred share bonus plan for directors this will operate alongside the cash annual bonus growth of branded market share must be 
achieved for the bonus to become payable and the group trading profit target must be met 
 
in 2012 two new schemes were introduced 
8  a longterm incentive plan for directors and senior managers there are two performance conditions applying to the award two thirds of 
the award is subject to a performance condition based on absolute adjusted earnings per share targets the remaining third of the award is 
subject to a performance condition based on the achievement of an average share price target the number of shares subject to awards the 
periods in which they were granted and the periods in which they may be awarded are given below these awards are equitysettled and have 
a maximum term of three years 
9  an executive scheme share option plan members of the executive scheme are awarded share options subject to varying performance 
conditions including continued employment over a certain time period 
details of the share options of the premier foods esos are as follows
premier foods plc executive share option scheme
2012 2011 restated
1
year of 
expiry options
weighted 
average 
exercise 
price p options
weighted 
average 
exercise 
price p
outstanding at beginning of year 131885 1620 156012 1620
forfeited during the year – – 24127 1620
outstanding at the end of the year 2014 131885 1620 131885 1620
exercisable at the end of the year 131885 1620 131885 1620
1
 2011 comparatives have been restated following the 101 share consolidation effected during 2012
the options outstanding at 31 december 2012 had a weighted average exercise price of 1620 pence 2011 1620 pence and a weighted 
average remaining contractual life of 16 years 2011 26 years
details of the share options of the premier foods savings related share option schemes are as follows
premier foods plc savings related share option scheme
2012 2011 restated
1
options
weighted 
average 
exercise 
price p options
weighted 
average 
exercise 
price p
outstanding at beginning of year 6191072 170 6346592 240
exercised during the year 592 96 3644 150
granted during the year 2367721 51 2398161 100
forfeited during the year 2598868 228 2550037 270
outstanding at the end of the year 5959333 114 6191072 170
exercisable at the end of the year 462306 360 205220 680
1
 2011 comparatives have been restated following the 101 share consolidation effected during 2012
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premier foods plc  annual report and accounts 2012  
116
financials
notes to the financial statements
24  reserves and share capital continued
during the year 24m 2011 24m options were granted under the savings related share option schemes with a weighted average exercise 
price at the date of exercise of 51 pence per ordinary share 
the options outstanding at 31 december 2012 had a weighted average exercise price of 114 pence 2011 170 pence and a weighted average 
remaining contractual life of 19 years 2011 21 years
details of the share awards of the premier foods ltip are as follows
premier foods plc longterm incentive plan
2012 2011 restated
1
awards
weighted 
average 
exercise 
price p awards
weighted 
average 
exercise 
price p
outstanding at beginning of year 509167 10 850342 10
forfeited during the year 312837 10 341175 10
outstanding at the end of the year 196330 10 509167 10
exercisable at the end of the year –  – – –
1
 2011 comparatives have been restated following the 101 share consolidation effected during 2012
during the year no awards were granted under the ltip 2011 nil the weighted average share price at the date of exercise was 10 pence the 
awards outstanding at 31 december 2012 had a weighted average remaining contractual life of 04 year 2011 10 year 
details of the share awards of the premier foods cip are as follows
premier foods plc coinvestment plan
2012 2011 restated
1
awards
weighted 
average 
exercise 
price p awards
weighted 
average 
exercise 
price p
outstanding at beginning of year 833428 10 1089824 10
forfeited during the year 525014 10 256396 10
outstanding at the end of the year 308414 10 833428 10
exercisable at the end of the year –  – – –
1
 2011 comparatives have been restated following the 101 share consolidation effected during 2012
the awards outstanding at 31 december 2012 had a weighted average remaining contractual life of 09 years 2011 14 years 
details of the share awards of the premier foods longterm incentive plan — eps target are as follows
premier foods plc longterm incentive plan — performance share award
2012 2011 restated
1
awards
weighted 
average 
exercise 
price p awards
weighted 
average 
exercise 
price p
outstanding at beginning of year 564653 10 – –
granted during the year – – 874125 10
forfeited during the year 29288 10 309472 10
outstanding at the end of the year 535365 10 564653 10
exercisable at the end of the year – – – –
1
 2011 comparatives have been restated following the 101 share consolidation effected during 2012
the awards outstanding at 31 december 2012 had a weighted average remaining contractual life of 14 years the weighted average fair value of 
awards granted during the year was nil pence per award 
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wwwpremierfoodscouk stock code pfd
117
financials
24  reserves and share capital continued
details of the share awards of the premier foods longterm incentive plan — average share price target are as follows
premier foods plc longterm incentive plan — matching share award
2012 2011 restated
1
awards
weighted 
average 
exercise 
price p awards
weighted 
average 
exercise 
price p
outstanding at beginning of year 267376 10 – –
granted during the year – – 534404 10
forfeited during the year – – 267028 10
outstanding at the end of the year 267376 10 267376 10
exercisable at the end of the year – – – –
1
 2011 comparatives have been restated following the 101 share consolidation effected during 2012
the awards outstanding at 31 december 2012 had a weighted average remaining contractual life of 14 years 2011 24 years the weighted 
average fair value of awards granted during the year was nil pence per award 
details of the share awards of the premier foods longterm incentive plan — 2012 award are as follows
2012 longterm incentive plan
2012
awards
weighted 
average 
exercise 
price p
outstanding at beginning of year – –
granted during the year 3608689 10
forfeited during the year 260689 10
outstanding at the end of the year 3348000 10
the awards outstanding at 31 december 2012 had a weighted average remaining contractual life of 24 years the weighted average fair value of 
awards granted during the year was nil pence per award
details of the share awards of the executive scheme share option plan are as follows
executive scheme share option plan
2012
awards
weighted 
average 
exercise 
price p
outstanding at beginning of year –  – 
granted during the year 875000 10
forfeited during the year – –
outstanding at the end of the year 875000 10
exercisable at the end of the year – –
the awards outstanding at 31 december 2012 had a weighted average remaining contractual life of 06 years the weighted average fair value of 
awards granted during the year was nil pence per award
in 2012 the group’s continuing operations recognised an expense of £47m 2011 £39m related to all equitysettled sharebased payment 
transactions in 2011 a further £09m was recognised in relation to discontinued operations
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premier foods plc  annual report and accounts 2012  
118
financials
notes to the financial statements
24  reserves and share capital continued
a summary of the range of exercise price and weighted average remaining contractual life is shown below 
weighted average remaining life and exercise prices
31 dec 2012 31 dec 2011
number 
outstanding 
at end of the 
year
weighted 
average 
remaining 
contractual 
life years
weighted 
average 
exercise 
price p
number 
outstanding 
at end of the 
year
weighted 
average 
remaining 
contractual 
life years
weighted 
average 
exercise 
price p
at 10 pence 5530485 18 10 2174624 17 10
£010 to £990 5959333 19 114 6191072 21 170
£1000 to £2000 131885 16 1620 131885 26 1620
total 11621703 19 81 8497581 20 150
25  notes to the cash flow statement
reconciliation of profit before tax to cash flows from operating activities
year ended
31 dec 2012
£m
year ended
31 dec 2011
£m
continuing operations
profitloss before taxation 44 2591
net finance cost 919 828
operating profitloss 963 1763
depreciation of property plant and equipment 396 418
amortisation of intangible assets 533 720
profitloss on the sale of businesses 637 112
lossgain on disposal of property plant and equipment 71 09
impairment of property plant and equipment 125 –
loss on disposal of intangible assets 04 –
impairment of intangible assets 237 2820
revaluation gainslosses on financial instruments 21 17
sharebased payments 47 39
net cash inflow from operating activities before interest and tax and movements  
in working capital 1718 2354
increase in inventories 113 263
increasedecrease in trade and other receivables 115 538
decrease in trade and other payables and provisions 302 109
movement in retirement benefit obligations 640 1174
cash generated from continuing operations 548 1346
discontinued operations 16 479
cash generated from operating activities 564 867
reconciliation of cash and cash equivalents to net borrowings
year ended
31 dec 2012
£m
year ended
31 dec 2011
£m
net outflowinflow of cash and cash equivalents 123 511
decrease in finance leases 03 184 
decrease in borrowings 2620 2213
other noncash movements 2056 59
decrease in borrowings net of cash 444 2849
total net borrowings at beginning of year 9951 12800
total net borrowings at end of year 9507 9951
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119
financials
25  notes to the cash flow statement continued
analysis of movement in borrowings 
as at 
1 jan 2012
£m
cash flow
£m
other 
noncash  
movements
£m
as at 
31 dec 2012
£m
bank overdrafts 237 198 – 435
cash and bank deposits 458 75 01 532
net cash and cash equivalents 221 123 01 97
borrowings — term facilities
2
7331 1660 1881 7552
borrowings — revolving credit facilities 2761 1444 – 1317
finance leases 07 03 – 04
other 233 724 – 957
gross borrowings net of cash
1
10111 2260 1882 9733
debt issuance costs 160 240 174 226
total net borrowings
1
9951 2500 2056 9507
1
  borrowings excludes derivative financial instruments and other financial liabilities fair valued through profit or loss
2 
other noncash movement relates to the restructuring of existing swaps into additional term loan on refinancing in march 2012
26  operating lease commitments
the group has lease agreements in respect of property plant and equipment for which future minimum payments extend over a number of years
 2012 2011
property
£m
plant and
 equipment
£m
property
£m
plant and
 equipment
£m
within one year 120 55 113 80
between two and five years 440 44 387 110
after five years 668 01 662 02 
total operating lease commitments 1228 100 1162 192
leases primarily relate to the group’s properties which principally comprise offices and factories lease payments are typically subject to market 
review every five years to reflect market rentals but because of the uncertainty over the amount of any future changes such changes have not 
been reflected in the table above within our leasing arrangements there are no significant contingent rentals renewal purchase or escalation 
clauses
the group sublets various properties under noncancellable lease arrangements sublease receipts of £12m 2011 £14m were recognised in 
the income statement during the year the total future minimum sublease payments at the year end is £34m 2011 £45m
27  capital commitments
2012
£m
2011
£m
contracts placed for future capital expenditure not provided in the financial statements
intangible assets 04 20
tangible assets 85 160
total 89 180
28  contingencies
there were no material contingent liabilities at 31 december 2012 other contingencies and guarantees in respect of the parent company are 
described in note 9 of the parent company financial statements
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premier foods plc  annual report and accounts 2012  
120
financials
notes to the financial statements
29  related party transactions
key management personnel of the group are considered to be the executive and nonexecutive directors and the group executive 
details of their remuneration are set out below in aggregate for each of the categories specified in ias 24 “related party disclosures” further 
information about the remuneration of individual directors is provided in the audited part of the directors’ remuneration report on pages 56 to 65
year ended
31 dec 2012
£m
year ended
31 dec 2011
£m
salaries and other shortterm employee benefits 56 73 
post employment benefits 02 03 
termination benefits 02 20 
sharebased payments 13 12 
total 73 108 
wp x investments limited “warburg pincus” is considered to be a related part of the group by virtue of its 173 2011 158 equity 
shareholding in premier foods plc and of its power to appoint a member to the board of directors which has been exercised there have been no 
transactions during the year
apart from the information above there were no other related party transactions
30  subsequent events
disposal of the sweet pickles and tables sauces business
the disposal of the sweet pickles and table sauces business completed on 2 february 2013 for proceeds of £925m
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121
financials
the following statements reflect the financial position of the company premier foods plc as at 31 december 2012 and 2011 these financial 
statements have been prepared in accordance with generally accepted accounting practice in the united kingdom “uk gaap” the directors have 
taken advantage of the exemption available under section 408 of the companies act 2006 and not presented a company profit and loss account
balance sheet
note
as at
31 dec 2012
£m
as at
31 dec 2011
£m
assets
fixed assets 
shares in group undertakings 3 4791 7297 
current assets 
debtors 4 6604 6477 
deferred tax assets 6 09 08 
cash at bank and in hand 03 03 
total assets 11407 13785 
liabilities 
current liabilities  
creditors amounts falling due within one year 5 597 554
total liabilities 597 554
total assets less total liabilities 10810 13231 
equity 
capital and reserves 
share capital 7 240 240 
share premium 7 11247 11247 
merger reserve 7 297 2280 
profit and loss reserve 7 974 536 
total shareholders’ funds 10810 13231 
the notes on pages 122 to 124 form an integral part of the financial statements
the financial statements on pages 121 to 124 were approved by the board of directors on 1 march 2013 and signed on its behalf by
gavin darby  mark moran
chief executive officer chief financial officer
premier foods plc — company financial statements
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premier foods plc  annual report and accounts 2012  
122
financials
1  accounting policies
basis of preparation 
the financial statements have been prepared on the going concern basis and in accordance with the companies act 2006 and applicable 
accounting standards in the united kingdom “uk gaap” under the historical cost convention the loss for the year of £2464m 2011 
£10175m is recorded in the accounts of premier foods plc the directors have taken advantage of the exemption available under section 408 of 
the companies act 2006 and not presented a profit and loss account for the company
the directors consider that the accounting policies set out below are the most appropriate and have been consistently applied
the company has taken advantage of the exemption from preparing a cash flow statement under the terms of frs revised 1996 on the grounds 
that the group includes the company in its consolidated financial statements that are publically available
the company is exempt under the terms of financial reporting standard 8 “related party transactions” “frs 8” from disclosing related party 
transactions with entities that are wholly owned subsidiaries of the premier foods plc group or investees of the premier foods plc group
fixed asset investments
investments held as fixed assets are stated at cost less any provision for impairment in their value
taxation
the charge for taxation is based on the profit for the year and takes into account deferred taxation the company provides in full for deferred tax 
arising from timing differences between the recognition of gains and losses in the financial statements and their inclusion in tax computations to 
the extent that a liability or an asset is expected to be payable or recoverable in the foreseeable future the company discounts its deferred tax 
liability as appropriate
deferred tax assets are only recognised to the extent that it is probable that future taxable profit will be available against which the temporary 
difference can be utilised their carrying amount is reviewed at each balance sheet date on the same basis
cash and liquid resources
shortterm cash deposits which can be called on demand without any material penalty are included within cash balances in the balance sheet
sharebased payments
the fair value of employee share option plans is calculated using an optionpricing model in accordance with financial reporting standard 20 
sharebased payment “frs 20” the resulting cost is charged to the profit and loss account over the vesting period of the options for employees 
employed by the parent company or treated as an investment in subsidiaries in respect of employees employed by the subsidiaries where the 
cost is recharged the value of the charge is adjusted to reflect expected and actual levels of options vesting
dividends
dividend distribution to the company shareholders is recognised as a liability in the company’s financial statements in the period in which the 
dividends are approved by the company’s shareholders and for interim dividends in the period in which they are paid
operating lease agreements
leases in which a significant portion of risks and rewards of ownership are retained by the lessor are classified as operating leases rental costs 
under operating leases net of any incentives received from the lessor are charged to the income statement on a straightline basis over the lease 
period
2 operating profit
audit fees in respect of the company are £nil 2011 £nil note 5b of the group consolidated financial statements provides details of the 
remuneration of the company’s auditors on a group basis
at 31 december 2012 the company had three employees 2011 two and their remuneration totalled £23m 2011 £23m this excludes the 
company’s eight 2011 six non executive directors whose remuneration totalled £07m 2011 £07m directors’ emolument disclosures are 
provided in the directors’ remuneration report on pages 56 to 65 of this annual report
notes to the company financial statements
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wwwpremierfoodscouk stock code pfd
123
financials
3 investments
2012
£m
2011
£m
shares in subsidiary undertakings  
cost
at 1 january 17539 17497
additions 34 42 
at 31 december 17573 17539
impairment
at 1 january 10242 –
impairment 2540 10242
at 31 december 12782 10242
nbv at 31 december 4791 7297
the directors believe that the carrying value of the investments is supported by their underlying net assets
impairment
an impairment charge of £2540m 2011  £10242m was recognised in the year against the value of the company’s investment in subsidiaries
during 2012 a capital contribution of £34m 2011 £42m was given in the form of share incentive awards to employees of subsidiary companies 
which were reflected as an increase in investments see note 16 in the group financial statements for a list of the principal subsidiary undertakings 
the companies listed in note 16 in the group financial statements are those that principally affect the results and assets of the company the 
directors consider that to give full particulars of subsidiary undertakings would lead to a statement of excessive length a full list of subsidiary 
undertakings is available from the company secretary 
4 debtors
 
2012
£m
2011
£m
amounts falling due within one year  
amounts owed by group undertakings 6604 6477
the above balances are unsecured and are not subject to interest rate risk as they are interest free with the exception of £3197m 2011 
£3070m which attracted interest at a rate of libor plus 30 2011 libor plus 30 carrying value approximates fair value
5 creditors amounts falling due within one year
 
2012
£m
2011
£m
amounts falling due within one year  
amounts owed to group undertakings 452 435 
current tax 145 119 
total creditors falling due within one year 597 554
the above balances are unsecured and are not subject to interest rate risk as they are interest free with the exception of £387m 2011 £372m 
which attracted interest at a rate of libor plus 30 2011 libor plus 30 carrying value approximates fair value
6  deferred tax
2012
£m
2011
£m
at 1 january 08 06 
charged to the profit and loss account 01 02 
at 31 december 09 08 
the deferred tax asset relates to sharebased payments
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premier foods plc  annual report and accounts 2012  
124
financials
notes to the company financial statements
7 share capital and other reserves
 
share 
capital
£m
share
 premium
£m
merger 
reserve
£m
profit and 
loss reserve 
£m
total
£m
at 1 january 2011 240 11247 10275 1592 23354
loss for the year – – – 10175 10175
realisation of merger reserve b – – 7995 7995 –
sharebased payments a – – – 52 52
at 31 december 2011 240 11247 2280 536 13231
loss for the year –  – – 2464 2464
realisation of merger reserve b – – 1983 1983 –
sharebased payments a –  –  – 43 43
at 31 december 2012 240 11247 297 974 10810
share capital
2012
£m
2011
£m
authorised
350000000 2011 350000000 ordinary shares of 10 pence each
1
350 350
issued and fully paid
239806206 2011 239805802 ordinary shares of 10 pence each
1
240 240
1
 comparatives have been restated following the 101 share consolidation effected during 2012
a sharebased payments
2012 and 2011
the costs reflect the company’s share option schemes in operation further details are available in note 24 of the group’s consolidated financial 
statements
the charge relating to employees of the company amounted to £10m 2011 £10m further details of these schemes can be found in the 
directors’ remuneration report on page 65
b realisation of merger reserve
the company transferred to the profit and loss reserve an amount that became realised on the disposal and write down of the related investment
8 operating lease commitments
at 31 december 2012 the company had annual commitments under noncancellable operating leases in respect of land and buildings as follows
 
2012
£m
2011
£m
after five years 03 03 
the lease expense has been borne by a subsidiary company
9 contingencies and guarantees
premier foods plc has provided guarantees to third parties in respect of borrowings of certain subsidiary undertakings the maximum amount 
guaranteed at 31 december 2012 is £12bn 2011 £12bn
10 subsequent events
there were no subsequent events
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wwwpremierfoodscouk stock code pfd
125
financials
share capital information  frequently asked questions “faq’s”
the company’s issued share capital at 31 december 2012 comprised 239806206 ordinary 10p shares during the period 404 ordinary shares were 
issued details of the movements can be found in note 24 all of the ordinary shares rank equally with respect to voting rights the rights to receive 
dividends and distributions on a winding up
an ordinary resolution was passed at the 2012 agm to consolidate every 10 existing ordinary shares of 1 penny for 1 new ordinary share of 10 pence
analysis of share register
as at 31 december 2012 there were 7787 registered holders of the 239806206 ordinary 10p shares in issue the company’s shareholdings are 
analysed below
number of shares
number of
holdings
 of total
shareholders
number of
ordinary 
shares
 of 
ordinary
shares
1–500 4815 6183 921427 038
501–1000 1044 1341 806768 034
1001–2000 670 860 1008491 042
2001–5000 636 817 2115390 088
5001–10000 218 280 1659149 069
10001–100000 268 344 8230162 343
100001–highest 136 175 225064819 9385
total 7787 100 239806206 100
holders
number of 
holdings
 of total 
shareholders
number of 
ordinary 
shares
 of 
ordinary 
shares
private 6023 7735 6920390 289
institutional and corporate 1764 2265 232885816 9711
total 7787 100 239806206 100
substantial shareholdings
information provided to the company pursuant to the financial services authority’s “fsa” disclosure and transparency rules “dtrs” is published 
on a regulatory information service and on the group’s website as at 1 march 2013 the company is aware of the following interests of 3 or more 
in the company
shareholder
ordinary
shares
 of 
 capital
nature
 of holding
warburg pincus llc 41573972 1734 direct
paulson  co inc 26407742 1101 direct
franklin resources inc 16751198 699 direct 
standard life investments ltd 14548569 601 direct 
cazenove capital management limited 11150022 465 direct 
td waterhouse europe ltd 7723180 322 indirect 
legal  general group plc 7343496 306 direct
barclays plc 7247386 302 indirect
restrictions on transfer of securities
in accordance with the articles there are no restrictions on share transfers limitations on the holding of any class of shares or any requirement for prior 
approval of any transfer other than as disclosed in significant agreements on page 66
shareholder information
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premier foods plc  annual report and accounts 2012  
126
financials
shareholder information
shareholder faq’s
many of the information requests received by our shareholder helpline 
can be found in the investor section of our website shareholders can 
also sign up for regulatory news alerts to receive an email when news on 
the group is released these include additional financial news releases 
throughout the year which are not mailed to shareholders
wwwpremierfoodscoukinvestors
managing your shares
the company’s register of members is maintained by our registrar 
equiniti shareholders with queries relating to their shareholding should 
contact equiniti directly using the details given in key contacts below
duplicate documents
many shareholders still receive duplicate documentation from having 
more than one account on the share register if you think you fall into 
this category and would like to combine your accounts please contact 
equiniti
notifying the company of a change of address
shareholders should notify equiniti in writing of any change if shares are 
held in joint names the notification must be signed by the first named 
shareholder
notifying the company of a change of name
to notify the company of a change of name please inform equiniti in 
writing a copy of any marriage certificate or change of name deed 
should be provided as evidence of the name change
transferring premier foods plc shares
transferring shares to someone else requires the completion of a stock 
transfer form these forms are available by calling equiniti 
lost premier foods plc share certificates
shareholders who have lost their share certificates or have had their 
certificates stolen should inform equiniti immediately by phone 
found an old share certificate for premier foods plc
shareholders who find they have an old share certificate and wish to find 
out its value should contact equiniti directly using the details below 
sharegift
shareholders with a small number of shares the value of which makes 
it uneconomic to sell them may wish to consider donating them to 
charity through sharegift a registered charity administered by the orr 
mackintosh foundation find out more at wwwsharegiftorg or call 44 
020 7930 3737
viewing the articles of the company
the articles and other documents referred to in this annual report are 
available for inspection at the registered office the articles are available 
on the group’s website
wwwpremierfoodscoukaboutuscorporategovernancearticles
ofassociationcfm
shareholder security
shareholders are reminded to remain vigilant against the threat of share 
scams and fraud in particular be wary of any unsolicited mail or phone 
calls offering to buy or sell shares or offers of free reports about the 
company for further information and guidance please refer to the fsa’s 
website wwwfsagovukscams
annual general meeting agm
the agm usually takes place in london and is an opportunity for all 
shareholders to ask questions and vote on the resolutions put forward by 
the board at least 20 working days before the agm the notice of agm 
a copy of this annual report if they request a copy in writing and a form 
of proxy are issued to shareholders all documents relating to the agm 
are available on the group’s website
the notice of agm sets out the proposed resolutions and a brief 
synopsis of each of them shareholders are invited to either attend the 
agm in person or appoint a proxy to vote on their behalf voting at the 
agm is by poll as this gives a more democratic outcome given that 
the proxy votes are added to the votes cast in person details of the 
proxy votes for against and withheld are made available on the group’s 
website after the agm
the chairmen of the audit nomination and remuneration committees 
are normally available at the agm to take any relevant questions and all 
other directors are expected to attend all directors attended the 2012 
agm
2013 agm — thursday 25 april 2013 at 1000 am
the 2013 agm will be held at the holiday inn — bloomsbury coram 
street london wc1n 1ht 
key contacts
registered office and head office
premier foods plc premier house centrium business park griffiths 
way st albans hertfordshire al1 2re  
registered in england and wales 5160050 
tel 44 01727 815850
general counsel  company secretary
andrew mcdonald 
email companysecretarypremierfoodscouk 
tel 44 01727 815850
investor relations
richard godden 
email investorrelationspremierfoodscouk 
tel 44 01727 815850
registrar 
equiniti aspect house spencer road lancing west sussex bn99 
6da 
tel 0871 384 2030 or 44 0121 415 7047  
textelminicom 0871 384 2255 or 44 0121 415 7028 
calls to 0871 numbers cost 8p per minute plus network extras lines 
are open 830am to 530pm monday to friday

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127
financials
shareholder information glossary
adjusted earnings per share
adjusted earnings per share is defined as 
adjusted profit before tax less a notional tax 
rate for the group divided by the weighted 
average number of shares in issue during the 
period
adjusted profit before tax
trading profit less net regular interest payable
amortisation
an annual charge made in a company’s profit 
and loss account to reduce the value of an 
intangible asset to its residual value over its 
useful economic life
articles
articles of association — the constitution of the 
company
bis
uk government department for business 
innovation and skills
calledup share capital
ordinary shares issued and fully paid 
capex
capital expenditure
ceo
chief executive officer
cfo
chief financial officer
cgu
cashgenerating unit — the smallest identifiable 
group of assets that generate cash inflows that 
are largely independent of the cash inflows from 
other assets or groups of assets
code
the uk corporate governance code 2010
companies act
the companies act 2006
company the
premier foods plc
csr
corporate social responsibility
dsb
deferred share bonus plan
divisional contribution
trading profit before all sga costs
ebitda
earnings before interest tax depreciation and 
amortisation
eps
earnings per share — calculated as total 
earnings divided by the weighted average 
number of shares in issue during the period
fair value
the amount for which an asset could be 
exchanged or a liability settled between 
knowledgeable willing parties in an arm’s 
length transaction
finance lease
a lease that transfers substantially all the risks 
and rewards incidental to ownership of an asset
fmcg
fast moving consumer goods
frc
financial reporting council
free cash flow
the amount of money that a business has 
at its disposal at any given time after paying 
out operating costs interest payments on 
bank loans and bonds salaries research and 
development and other fixed costs
fsa
depending on the context either the food 
standards agency or the financial services 
authority
ftse 250350 index
index comprising the 250  350 largest 
companies listed on the london stock 
exchange in terms of their market capitalisation
fy
full year  financial year
gdas
guidance daily amounts
group the
the company and its subsidiaries
group executive
the group executive support the ceo in 
carrying out the duties delegated to him by the 
board
hmrc
her majesty’s revenue and customs
ias
international accounting standards
ifric
international financial reporting interpretations 
committee
ifrs
international financial reporting standards
ims
interim management statement
intangible assets
an identifiable nonmonetary asset without 
physical substance eg patents goodwill 
trademarks and copyrights
interest rate hedging 
entering into a financial derivative to protect 
against unfavourable changes in interest rates 
interest rate swaps
an agreement between two parties that allows 
either party to modify the interest cost without 
changing the characteristics of the underlying 
debt
kpi
key performance indicator
libor
the london interbank offered rate
mark to market
the recording of a financial asset or liability to 
reflect its fair value rather than its book value
ned
nonexecutive director
net regular interest payable
the net interest after excluding noncash items 
namely exceptional writeoff of financing costs 
accelerated amortisation of debt issuance 
costs fair value adjustments on interest rate 
financial instruments and the unwind of the 
discount on provisions
nonbranded
nonbranded products comprise retailer brand 
and business to business sales
operating lease
a lease that is not a finance lease
operating profit
a company’s profit after deducting its operating 
costs from gross profit
ordinary share
an ordinary share of 10 pence in the share 
capital of the company
pro forma
pro forma comparisons are calculated as 
follows current year actual results which 
include acquisitions andor disposals from the 
relevant date of completion are compared with 
prior year actual results adjusted to include the 
results of acquisitions andor disposals for the 
commensurate period in the prior year
riddor
reporting of injuries diseases and dangerous 
occurrences regulations 
rpi
retail price index
saye
save as you earn scheme
sga
selling general and administrative costs
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premier foods plc  annual report and accounts 2012  
128
financials
sid
senior independent director
trading profit
operating profit before refinancing costs 
restructuring costs profits and losses 
associated with divestment activity amortisation 
and impairment of intangible assets the 
revaluation of foreign exchange and other 
derivative contracts under ias39 and pension 
credits or charges in relation to the difference 
between the expected return on pension assets 
administration costs and interest costs on 
pension liabilities
tsr
total shareholder return — the growth in 
value of a shareholding over a specified period 
assuming that dividends are reinvested to 
purchase additional shares
wacc
weighted average cost of capital
yoy
year on year 
ytd
year to date
glossary
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cautionary statement
the purpose of this annual report is to provide information to shareholders of premier foods plc “the company” the company its directors employees and advisers do 
not accept or assume responsibility to any other person to whom this document is shown or into whose hands it may come and any such responsibility or liability is expressly 
disclaimed it contains certain forwardlooking statements with respect to the financial condition results operations and businesses of the company these statements and 
forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future there are a number of factors that could 
cause actual results or developments to differ materially from those expressed or implied by these forwardlooking statements and forecasts nothing in this annual report 
should be construed as a profit forecast
trademarks
the group’s trademarks are shown in italics the group has an exclusive worldwide licence to use the lloyd grossman name on certain products cadbury is a trademark of 
mondele

z international group used under licence
in this annual report we make references to various data on market size share and growth retail sales and household penetration which are sourced from independent market 
research and consumer data providers such as kantar and iri
visit us online to find further information 
wwwpremierfoodscouk
this annual report is printed by an fsc
®
 forest stewardship 
council certified printer using vegetable based inks 
this report has been printed on novatech matt a white coated paper 
and board using 100 efc pulp
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overview
premier house
centrium business park
griffiths way
st albans
hertfordshire
al1 2re
t 01727 815850
f 01727 815982
registered in england and wales no 5160050
wwwpremierfoodscouk
visit us online
sustainability in everything we do…
annual report and accounts for the year ended 31 december 2012 premier foods plc 
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Summary:
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overview premier foods plc  annual report and accounts 2012  
04
focus investment behind our power brands
commitment delivery
for further information 
brands
18
increase marketing spend behind our  
power brands
marketing spend up yoy
59
grow power brand sales power brand sales up yoy
21
dispose of noncore businesses to sharpen focus
commitment delivery
for further information 
operating review
34
achieve disposal proceeds of £330m  
by march 2014
disposals of noncore businesses announced  
in 2012 ahead of plan
£3695m
simplify the business to reduce costs
commitment delivery
for further information 
focus
22
cost reduction programme to reduce  
overheads by £40m by 2013
overhead cost savings achieved in 2012 ahead 
of plan and a further £20m targeted for 2013
£48m
strengthen capabilities
commitment delivery
for further information 
partners
20
strengthen management in key areas new management in place commercial team 
restructured focus on execution and delivery
agree refinancing package
commitment delivery
for further information 
operating review
33
agree a refinancing with the banks in march 2012 bank facilities were extended to 
june 2016 with covenants reset to support the 
strategic plan
in 2012 we set out a number of strategic priorities to 
stabilise the business here’s how we have delivered against 
these promises
highlights for 2012
delivering on our strategic priorities
scan the qr code 
to take you directly to 
more information on our 
business performance
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overview wwwpremierfoodscouk stock code pfd
05
sales
£13538m 32
underlying business
trading profit
£1234m 106
underlying business
opera ting profit
£963m
2011 £1763m
net debt
£9507m 
new produc ts with  
“better f or you” choices  
70
produc ts testing superior  
or a t par with competit ors  
94
blind testing with consumers
reduc tion in c o
2
  
equiv alent emissions  
28
265000 tonnes of co
2
e at the end of 2012
reduc tion in lost  
time accidents  
46
020 per 100000 hours at the end of 2012
non financial kpis
notes 
on pages 1 to 67 of this report the company’s results for the year ended 31 december 2012 are presented on an ‘underlying business’ basis 
unless otherwise stated ‘underlying business’ excludes the results of previously announced business disposals milling sales only and noncore 
discrete contract losses milling is excluded due to the cost plus pricing nature of the business that has a direct impact on sales but not trading profit 
a reconciliation to statutory numbers can be found on page 34
the purpose of using the ‘underlying business’ basis for measuring performance is to reflect the performance of the core business of the company 
with the company having undergone a year of restructuring in 2012 this basis better reflects underlying business performance
trading profit is defined as operating profit before refinancing costs restructuring costs profits and losses associated with divestment activity 
amortisation and impairment of intangible assets the revaluation of foreign exchange and other derivative contracts under ias 39 and pension credits 
or charges in relation to the difference between expected return on pension assets administration costs and interest costs on pension liabilities 
ebitda is trading profit excluding depreciation
financial headlines
for information on kpis see page 
26
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