thorntons plc
thornton park
somercotes
alfreton
derbyshire de55 4xj
tel 0845 075 7565
wwwthorntonscouk
thorntons direct
tel 0845 121 1911
wwwthorntonscouk
for information on investor relations visit
wwwthorntonscouk
strengthening our foundations
thorntons plc 
•
 annual report and accounts 2010
thorntons plc  annual report and accounts 2010
coverindd   1 21092010   125615 thorntons’ commitment to environmental issues is reflected in this annual report 
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“ t ho r n t on s i s t he uk’ s l a r g e s t 
inde p enden t c ho c o lat e b ra nd”
o ur delicious treats have been delighting customers for 99 years 
today thorntons is a £210m turnover company and our products 
can be found across a multichannel network that includes 377 
shops and cafés and 222 franchises
sales  operations 
commercial sales
purchasing
manufacturing and distribution
 
 
 
 
revenue
£63m
our business consists of
retail 
377 own stores and cafés across 
the uk and ireland
a franchise estate of 222 stores
thorntons direct – our online 
corporate and consumer delivery 
service
 
 
revenue
£152m
coverindd   2 21092010   125616 thorn tons plc  annu al repor t and a ccoun t s 2010 1
revenues remained flat at £2146 million 2009 £2148 million
profit before tax decreased by 24 to £61 million 
2009 before exceptionals £63 million
underlying profit before tax improved by 142 to £75 million 
2009 £66 million
basic earnings per share increased by 204 to 65p 2009 54p
net debt down £07 million to £260 million 2009 £267 million
the board recommends a final dividend of 410p 2009 485p 
making the total dividend for the year 605p 2009 605p
highlights
revenue £m
fullyear dividend p
 1 highlights
 2 executive chairman’s statement
 4 at a glance strategy priorities  
  and values
 6 chief executive’s report
 10 finance director’s report
 12 corporate social responsibility
 15 board of directors
 16  corporate information 
and financial calendar
 17 report of the directors
 21 corporate governance
 25  report on the directors’ 
remuneration
 31 independent auditors’ report 
 33 consolidated income statement
 34  statements of comprehensive 
income
 35 statements of changes in  
  shareholders’ equity
 37 balance sheets
 38 cash flow statements
 39  statement of accounting 
policies
 45  notes to the financial 
statements
 71 five year summary
 72 shareholder analysis
profit before tax and exceptionals £m
earnings per share p
in this report
2006
2007
2008
2009
2010
5165
7081
8470
6288
6137
2006
2007
2008
2009
2010
176626
185989
208122
214805
214553
2006
2007
2008
2009
2010
64
80
91
54
65
2006
2007
2008
2009
2010
680
680
680
605
605
1thtar10frontindd   1 21092010   130501 thorn tons plc  annu al repor t and a ccoun t s 2010 2
t horntons has 
entered the 
new financial 
year in a stronger 
position to face the 
challenges ahead
our strategy remains to
u improve retail performance across all  
 three channels own stores franchise  
 and thorntons direct
u continue developing innovative   
 new products
u further expand commercial sales
u improve productivity in operations and
u continue selective development of   
 export sales
the trading issues in the own store estate 
are a key focus area for the board and are 
being addressed  we have strengthened 
the retail management team and have 
also begun implementing a number of new 
initiatives to drive sales both of which we 
believe will have a positive impact on 
trading in the lead up to christmas these 
initiatives include our continued focus on 
developing innovative new products 
changes to promotions and local marketing 
and improving store standards
during the year we incurred £06 million 
in restructuring and redundancy costs with 
annualised benefits of £1 million and 
i am confident that as we slowly emerge 
from these difficult economic times we 
will return to growth as a leaner stronger 
business we also continued to innovate 
our product range and to invest in 
refreshing our stores and in factory 
automation over the period
the board has recommended a final dividend 
of 410p per share making the total dividend 
for year 605p the same as last year which 
subject to shareholder approval will be paid 
on 26 november 2010
f ocusing 
on sus tainable profitable gro wth
executive chairman’s statement
the past year has been a challenging 
one while the sales  operations unit 
including the commercial sales channel 
has continued to deliver strong results 
retail as already indicated in earlier 
trading statements with the exception 
of thorntons direct failed to meet 
management expectations 
overall sales for the year were flat at 
£2150 million however with the 
reduction in own label sales being 
replaced by sales of thorntons branded 
product the brand continued to gain 
market share in the uk chocolate market 
and the business remained strongly 
cash generative turnover in the 
sales  operations unit grew 98 
to approximately £630 million 
2009 £570 million which helped 
to offset the 37 decline in retail sales 
the decline was a combination of 
a reduction in the number of customer 
transactions in addition to significant 
levels of discounting of stocks particularly 
during the latter part of the second half 
of the year
reported pretax profit before exceptionals 
was £61 million 2009 £63 million 
whilst debt was down £07 million at  
£260 million 2009 £267 million 
underlying pretax profit before exceptionals 
was £75 million 2009 £66 million
we have not been immune to the slowdown 
in economic activity and progress has been 
slowed by such an environment however 
we still continue to pursue our strategy and 
remain focused on providing sustainable 
growth in earnings per share supported by 
a strong balance sheet 
1thtar10frontindd   2 21092010   130501 thorn tons plc  annu al repor t and a ccoun t s 2010 3
management and employees
once again our achievements over the 
last year would not have been possible 
without the hard work and commitment 
of our dedicated workforce i would like 
to say a big personal thank you to all 
of them
earlier this year mike davies our chief 
executive informed me of his decision to 
retire from thorntons and he will be leaving 
the company on 30 september 2010 
on behalf of the board i would like to thank 
mike for his valuable contribution to the 
business over the past four years and for 
his commitment to ensuring an orderly 
transition prior to his departure mike has 
led thorntons’ restructuring significantly 
improving the manufacturing operations 
the product offering and performance 
of the commercial channel 
the selection process for a new chief 
executive is well advanced in the interim 
mark robson finance director will be 
acting chief executive with myself 
remaining as executive chairman
john von spreckelsen
executive chairman
7 september 2010
outlook
as set out in our trading statements 
over the last year thorntons has been 
successful in product innovation growing 
commercial sales and expanding 
thorntons direct further manufacturing 
productivity has improved
the key challenge for the business 
continues to be trading in the own stores 
channel which experienced a decline in 
sales particularly in the second half of the 
financial year since the year end trading 
in what is traditionally a quieter period 
has been in line with our expectations 
we have strengthened our senior retail 
management team and we believe that 
this together with extensive product 
innovation and changes to the promotional 
and marketing programmes should have 
a positive impact on trading in the lead 
up to christmas
at the same time we have also introduced 
a number of sustainable cost saving 
initiatives into the business including 
savings through capital investment in 
manufacturing procurement activity 
and headcount reductions
looking ahead we expect market 
conditions to remain tough thorntons has 
entered the new financial year as a leaner 
business but also with a good indicative 
order level from our commercial customers 
and various initiatives to recover own 
store trading and this puts the company 
in a stronger position to face the 
challenges ahead
view our web site wwwthorntonscouk
 
 
 
both our consumer 
and corporate sales grew 
during the year driven by  
the new web site and a 
transactional site for 
corporate customers
1thtar10frontindd   3 21092010   130506 thorn tons plc  annu al repor t and a ccoun t s 2010 4
str ategic 
priorities
improve retail performance 
continue developing 
innovative new products
 further expand 
commercial sales
improve productivity 
in operations
selective development 
of export sales
o ur values underpin t horntons’ strategy of putting the customer 
at the forefront of our thinking while strengthening the foundations 
of the business in line with longterm goals
at a glance 
strategy priorities and values
our progress and strategic priorities
what we’ ve 
achieved
thorntons’ brand continues 
to strengthen with sales of 
branded product up 47
metropolitan melts and 
new impulse range launched 
classics and continental 
refreshed
thorntons direct sales 
increased by 151
41 new franchises opened 
during the year
commercial sales continued 
a strong growth trend with 
sales up 98
new moulding line installed
targeted export opportunities 
increased sales from 
£20 million to £27 million
1thtar10frontindd   4 21092010   130512 thorn tons plc  annu al repor t and a ccoun t s 2010 5
revenue by business  
segment £m
retail £1519m
sales  
operations £626m
operating profit by business 
segment £m
retail £93m
sales  
operations £140m
for an extended discussion of our 
business segments turn to p78
imagination
togetherness
our values
excellence
1thtar10frontindd   5 21092010   130514 thorn tons plc  annu al repor t and a ccoun t s 2010 6
the focus for 2009 was on guiding the 
business through the recession without 
losing sight of the longterm strategy 
although retail with the exception of 
thorntons direct underperformed growth 
in the sales  operations channel was 
particularly strong overall sales remained 
flat at £2150 million during the year this 
figure includes 47 growth in thorntons’ 
branded products to £2120 million and 
a planned reduction in private label sales 
the thorntons brand continued to gain 
market share in the uk chocolate market 
over the period and now has circa 7 
of the market reported pretax profit 
before exceptionals was £61 million 
2009 £63 million whilst debt was 
down £07 million at £260 million 
2009 £267 million
we continued to face challenging 
market conditions over the period and 
in response to this managed our costs 
prudently the decision to restructure the 
cost base in operations the call centre 
and head office had a positive impact 
and the board expects to see the full 
benefit of these actions coming through 
in the next 18 months investment 
in retail continued with 15 stores 
refurbished during the year additionally 
in manufacturing nearly £16 million 
was invested in a new moulding line 
which will increase productivity in the 
factory and even more importantly has 
improved the quality and appearance 
of our products
product innovation
innovation continues to be a key element 
of the company’s strategy and over the 
period within retail two new product lines 
were launched – metropolitan a more 
modern gift box of ganaches pralines 
devel oping
br and equity  inno vative produc t s
chief executive’s report
1thtar10frontindd   6 21092010   130515 thorn tons plc  annu al repor t and a ccoun t s 2010 7
going forward in commercial a refreshed 
classic collection is being launched 
which includes two new flavours 
additionally the range of hanging 
bags delicious chocolate 
smothered confectionery has 
been refreshed and later in 
the year a new ‘love milk’ 
box a selection of our 
favourite milk chocolates 
which is aimed at the 
younger market is being 
launched a number of 
seasonal specialities are 
also being added for next 
christmas and easter
later this year a new biscuit and 
chilled dessert range is being launched 
the biscuits will be sold into both the 
retail and commercial channels whilst 
the chilled desserts will be sold through 
the commercial channel only
retail
overall retail sales including own 
stores franchise and thorntons direct 
declined 37 to £1520 million 
2009 £1578 million
own stores
sales in own stores fell 36 to 
£1298 million over the period 2009 
£1345 million the larger part of this 
decline was experienced in the second half 
with sales decreasing 53 against the 
comparative period last year like for like 
sales declined by 35 for the whole 
year the decline was a combination 
of a reduction in the number of customer 
transactions in addition to significant levels 
of discounting of stocks particularly during 
the latter part of the second half of the year
and meltaways and melts a single 
variant chocolate with a praline centre 
in addition the paris and milan lines 
were extended to the continental range 
our christmas valentine’s mothering 
sunday and easter ranges were all 
refreshed and our seasonal exclusives 
sold particularly well 
moments continued to perform strongly 
during 2010 and the coming few weeks 
will see the addition of a new strawberry 
flavoured chocolate similarly in january 
a caramel variant will be added to the 
melts range 
we added coffee which became the new 
number one best seller and our award 
winning pistachio flavour to our chocolate 
block range and more recently added the 
new white chocolate block with coconut 
and lime a haiti charity chocolate block 
will be introduced in early 2011 
our newly refreshed classics range arrived 
in stores in july and the newly refreshed 
continental range will be available in 
october as part of this refresh a new 
milk box and a limited edition box are 
also being introduced 
in august we launched a new range of 
indulgent bars and a new impulse range 
which contain mini blocks and little treat 
packs our refreshed sharing range has 
also very recently hit the shelves
ahead of christmas packaging of our 
all time favourite products has been 
refreshed and new seasonal lines have 
been added in order to keep broadening 
the company’s appeal to new customers 
additionally thorntons direct will see 
a refresh of all its hampers
the thorntons brand 
continued to gain 
market share in the 
uk chocolate market 
over the period and 
now has circa 7 
of the market
 
 
in july our newly refreshed 
classics range hit stores and 
in october the newly refreshed 
continental range will 
be available
1thtar10frontindd   7 21092010   130518 thorn tons plc  annu al repor t and a ccoun t s 2010 8
in particular the “design your own box” 
with a personal photo printed on the lid 
all contributed to this strong growth 
sales  operations
commercial sales
commercial sales once again delivered 
good growth of 98 to £626 million 
2009 £570 million sales of thorntons’ 
branded product which excludes private 
label sales grew by 343 this increase 
was driven by the boxed chocolate ranges 
which grew by more than 48 over the 
period these ranges were developed 
exclusively for each of our major customers 
thorntons’ moments also continued to 
build on the success of last year with 
sales growing over 89 in its second year 
of trading and scrumptious and melts 
two new products were launched during 
the year
thorntons now has more than 30 
2009 25 of the inlaid box chocolate 
market in the uk ac nielsen july 2010 
excluding sales in thorntons retail
manufacturing operations
raw material prices have dramatically 
increased during the year with cocoa 
prices rising 25 and reaching levels 
not seen for well over 30 years this has 
been the subject of wide coverage in the 
press recently butter has increased even 
more by more than 66 since july 2009 
management has continued to seek 
to mitigate these price increases through 
a mixture of hedging via forward cover 
purchasing and product and 
ingredient reengineering
retail continued
own stores continued
during the course of the year our own store 
estate remained relatively stable with four 
closures and one new opening and one 
resite ending the year with 377 stores 
2009 379 
franchise
franchise sales for the period declined 
147 to £130 million 2009 £153 million 
as they continued to be affected by the 
collapse of birthdays limited birthdays 
limited went into administration in 
may 2009 during which time we lost 94 
franchise stores however over the year 
we continued to rebuild the estate and it is 
now at 222 stores only 32 short of the 
number of franchisees in april 2009 
as a special mention i would like to thank 
the franchise team for their continued 
hard work in opening so many stores in 
one year and our independent franchisees 
many of whom have opened stores in 
addition to the ones they already operate
thorntons direct
overall thorntons direct sales grew by 
an impressive 151 to £92 million 
2009 £80 million during the period 
and showed an improving trend with 
growth of 221 in h2 after 115 
in h1 corporate sales are back to levels 
seen prior to the recession as a result 
of our sales efforts in the leisure and 
hospitality sectors sales from the web 
site grew by 12 improvements to the 
functionality of the web site increased 
marketing activity and further 
developments in personalisation 
impro ving
our retail perf orm ance  produc tivity
chief executive’s report continued
thorntons branded product 
up 47
continued investment in stores 
and manufacturing operations
41 franchise openings in 
the year
commercial thorntons branded 
product sales up 343
online sales grew by 12
1thtar10frontindd   8 21092010   130522 thorn tons plc  annu al repor t and a ccoun t s 2010 9
as a result of value engineering activities 
benefits coming through from the 
investment in the robotic packing line 
and packaging price improvements 
productivity in operations improved 
significantly over the period further 
improvements are expected when the 
new moulding line is fully commissioned 
in the next few weeks
distribution costs also declined during 
the year as we benefited from the decision 
to outsource distribution in the south east 
of england at the beginning of the 
financial year
service levels to own stores and 
commercial customers continued to 
improve and consistently exceeded 
96 during the year 2009 96
export sales
in september last year we announced 
our intention to dedicate more resources 
to exploring the export opportunity 
good progress has been made in building 
routes to new markets particularly 
in central europe duty free and in 
further developing the business in 
the republic of ireland whilst still 
small these opportunities are 
providing us with the necessary 
commercial experience to 
accelerate growth in the future 
for the period under review 
export sales achieved £27 million 
2009 £20 million
mike davies
chief executive
7 september 2010
 
 
thorntons’ moments also 
continued to build on the 
success of last year  with 
commercial sales growing 
over 89 in its second year 
of trading
1thtar10frontindd   9 21092010   130532 thorn tons plc  annu al repor t and a ccoun t s 2010 10
delivering
multichannel profit impro vemen t finance director’s report key performance indicators
sales
the board uses five key performance indicators to measure progress in 
building shareholder value these are shown below for the last two years
  2010 2009
net sales movement  01 32
own stores like for like sales growth  35 20
profit before tax and exceptional items  £61m £63m
gross margin return on sales  497 489
cashflow from operating activities  £146m £192m
thorntons’ sales are made through a number of channels whose 
performance is summarised below
 2010 2009  increase 
 £m £m decrease
own stores 1298 1345 36
franchise 130 153 147
thorntons direct 92 80 151
total retail sales 1520 1578 37
commercial sales 626 570 98
total sales 2146 2148 01
a detailed review of the sales performance by channel is set out in the 
chief executive’s report
 2010 2009 
  £m £m £m £m
profit before taxation  
and exceptionals  61  63
redundancy charges 06  —
impairment and  
onerous lease charges 08  03
total oneoff charges  14  03
underlying profit before  
taxation and exceptionals  75  66
exceptional items are set out in note 2 on page 45
profit before taxation
reported profit before taxation and exceptionals fell 24 to £61 million 
2009 £63 million however in both 2009 and 2010 there were 
a number of oneoff items charged to the accounts as shown below 
which in line with group policy have not been classed as exceptional 
items excluding these items underlying profit before taxation and 
exceptionals improved 142 to £75 million 2009 £66 million
with group sales flat year on year the 
improvement in underlying profit before tax 
was achieved through a higher gross margin 
a continued focus on controlling operating 
expenses and lower interest costs 
the second half of the year is traditionally 
the quieter half of thorntons’ financial year 
and historically has generated a loss for 
the company in the second half of 2010 
although sales increased by £07 million to 
£871 million 2009 £864 million like 
for like sales in own stores declined 52 
this included the impact of higher levels of 
discounting to clear stock particularly after 
easter as a result the loss before taxation 
and exceptionals in the second half was 
£30 million 2009 £10 million 
gross margin return on sales
gross profit margin percentage increased 
08 for the year to 497 2009 489 
although overall progress was hampered by 
the higher level of discounting in the second 
half despite this gross margin increased 
by £16 million for the year 
operating expenses
operating expenses increased 23 
to £1007 million 2009 £984 million 
after adjusting for the oneoff charges 
highlighted above this increase was 
reduced to 12 operating expenses 
as a percentage of sales increased from 
458 in 2009 to 469 in 2010
a number of oneoff cost management measures 
were taken in 2009 for instance staff taking 
unpaid leave but the focus in 2010 was on 
implementing sustainable costsaving initiatives 
for both current and future years this included 
headcount reductions with 54 roles taken 
out of both manufacturing and head office 
during 2010 cost savings have also been 
secured in it telecoms point of sale and 
marketing materials as well as other areas 
1thtar10frontindd   10 22092010   094413 thorn tons plc  annu al repor t and a ccoun t s 2010 11
of the year and the uncertain economic 
outlook it is the intention of the board 
to recommend at the annual general 
meeting that a final dividend of 410p be 
paid to shareholders in november 2010 
thus making a total dividend in respect of 
the year’s earnings of 605p 2009 605p
cash and debt
cash generated from operating activities before 
taxation declined from £192 million to 
£146 million the growth in commercial 
sales and their phasing for the first half 
of the june 2011 year end contributed 
to higher stock levels which increased 
by £50 million to £304 million 2009 
£254 million stock levels also increased 
in the lead up to the yearend to manage 
the lost production time ahead of new 
machinery being commissioned in the 
new financial year
the increased investment in stock was 
partially funded through improved payment 
terms from suppliers which reduced 
working capital outflows by £28 million
net debt was £260 million at the yearend 
2009 £267 million the group has 
committed banking facilities with hsbc 
lloyds tsb bank and santanderalliance  
leicester totalling £550 million through to 
august 2012 and the covenant requirements 
under these agreements have been met
capital expenditure
investment in fixed assets totalled 
£61 million 2009 £100 million 
of which £15 million 2009 £30 million 
was funded through finance leases the 
2009 investment in fixed assets included 
£30 million of expenditure on the new 
epos systems in 2010 £12 million 
was spent on 15 store refits seven café 
refurbishments one store opening and one 
store resite £16 million was spent on a 
new moulding manufacturing line that will 
of discretionary spend in addition 
efficiency cost savings are being achieved 
in manufacturing following capital 
investment on the packaging and 
moulding lines
other operating income
other operating income remained flat at 
£14 million 2009 £14 million within 
other operating income licensing income 
increased from £09 million in 2009 to 
£10 million in 2010 towards the end 
of 2010 new licences were put in place 
for thorntons branded biscuits and chilled 
desserts the increase in licence income 
was offset by small declines in franchise 
income and rent receivable
taxation
the £18 million tax charge for the year 
represents 291 of pbt 2009 554 
the main reason for the high charge in 2009 
was the phasing out of industrial buildings 
allowances “ibas” which previously had 
been tax deductible and resulted in a deferred 
tax charge of £20 million 
after taking account of prior period 
adjustments the 2010 effective rate 
equates to 322 2009 310 
this as in previous years is higher than 
the effective statutory rate of 28 and 
is due to the effect for tax purposes of 
permanently disallowable items and a 
historic element of capital investment for 
which no tax allowances are available
shareholders’ returns and dividends
basic earnings per share increased 204 
from 540p to 650p dividends paid in 
the year amounted to 680p per share 
which following a reasonable period of 
trading in the first half of the year included 
an interim dividend of 195p per share 
2009 120p per share with the trading 
pressures experienced in the second half 
soon be fully commissioned the balance 
was invested in new product tooling other 
supply chain and it improvements including 
a £02 million spend on improvements to the 
thorntons direct web site
pensions
the ias 19 pension scheme deficit 
increased from £213 million in 2009 
to £242 million at the 2010 year end 
the increase in the value of the equity 
markets over the twelve months to 
june 2010 contributed to a £67 million 
increase in the valuation of the pension 
scheme assets this increase was however 
offset by the basis on which the present 
value of the scheme’s obligations is 
measured a 09 decrease in the 
discount rate to 55 2009 64 
determined by reference to market yields 
on corporate bonds at the balance sheet 
date has contributed to actuarial losses 
of £88 million
information systems
the key activity during the year has been 
the negotiation of the renewal of the it 
outsourcing contract which was due to expire 
in september 2011 a new contract was 
agreed with the existing provider hewlett 
packard soon after the yearend and will 
deliver savings over the term of the contract 
which includes the current financial year
we have also continued with system 
developments to ensure that the business 
remains fully compliant with the credit 
card industry’s pcidss standard which 
sets the security standards for handling 
credit card transactions
mark robson
finance director
7 september 2010
 
 
commercial sales continue 
to be a strong focus for the 
company with sales up 98 
during the year boxed 
chocolates in particular 
are growing across all 
major customers
1thtar10frontindd   11 21092010   130537 thorn tons plc  annu al repor t and a ccoun t s 2010 12
to improve livelihoods of cocoa farm 
families and promote responsible labour 
practices this ensures the ethical 
sourcing of our cocoa and in particular 
minimises the risk of purchasing cocoa 
from sources which illegally use abusive 
or enforced child labour thorntons is also 
itself a member of the wcf which 
encourages responsible sustainable cocoa 
farming amongst small familyrun farms 
thorntons has registered as a member 
of greenpalm which was incorporated 
in november 2006 with the aims of 
promoting certified sustainable palm oil 
preventing the destruction of the rainforests 
and supporting the roundtable on 
sustainable palm oil “rspo”
greenpalm is a certificate trading 
programme exclusively endorsed by 
the rspo whereby manufacturers can 
offset their use of palm products by paying 
a producer for an equivalent amount 
produced sustainably this gives producers 
an incentive to work sustainably and allows 
people whose livelihoods depend on palm 
oil production to continue making a living 
customers
we believe in offering customers choices 
about what they purchase and our product 
ranges include organic fairtrade no added 
sugar and dairyfree products as our 
products are luxury gift items they are not 
viewed as part of a balanced diet but we 
do provide advice on consumption and 
feature detailed nutritional advice on pack 
labelling where size permits so that 
customers can make an informed choice 
thorntons also provides information 
on specific ingredients on request for 
example whether products are gluten 
free or contain alcohol
thorntons plc recognises it has social 
ethical and environmental responsibilities 
arising from its operations and is committed 
to the welfare of its colleagues customers 
suppliers and the communities in which 
it operates 
marketplace
manufacturing our products
food safety is paramount to our 
manufacturing processes and our single 
site production facilities at thornton park 
are regularly independently audited against 
the exacting requirements of the british retail 
consortium’s global standard for food safety 
and was reaccredited in june 2010 with its 
highest grade a status additionally our 
commercial and remaining retailer brand 
customers regularly audit and monitor our 
performance against their own high standards
sourcing our materials
our products use over 300 different raw 
materials which are sourced by our suppliers 
from all around the world the majority of 
our product range is made with natural 
colouring and flavours and our entire 
children’s range contains no artificial 
colours or added preservatives 
we ensure ethical social and environmental 
standards are maintained through the supply 
chain by auditing and visiting over 95 of 
our suppliers on a regular basis our main 
concern is food safety but our audits also 
review ethics health and safety employee 
pay employment conditions use of child 
labour and environmental policies 
and practices 
thorntons buys all of its cocoa from 
suppliers which actively support the 
international cocoa initiative and world 
cocoa foundation “wcf” programmes 
committed
to our responsibilities
corporate social responsibility
thorntons plc recognises 
it has social ethical and 
environmental responsibilities 
arising from its operations 
and is committed to the 
welfare of its colleagues 
customers suppliers and 
the communities in which 
it operates
our csr commitments 
can be summarised in the 
following categories
q marketplace
q  workplace
q  environment
q  community
1thtar10frontindd   12 21092010   130538 thorn tons plc  annu al repor t and a ccoun t s 2010 13
the company has a formal process for 
succession planning to ensure we develop 
the capability to grow the business in line 
with our longterm goals management 
performance and development reviews 
are conducted annually we also regularly 
monitor our staff turnover rates and use 
exit interviews to understand reasons why 
staff leave and ensure improvements are 
made where appropriate
training is available to all staff and we aim 
to develop both individuals and teams in 
line with our business needs such that we 
grow our organisational capability
health and safety 
in order to ensure continual improvement 
in health and safety thorntons has a 
threeyear safety improvement programme 
and central to this programme is regular 
health and safety risk assessments 
manual handling and slips trips and 
falls are our major causes of losttime 
accidents the introduction of control 
measures resulted in the reduction of 
manual handling by as much as 75 
on some of our main production lines 
incidents and accidents are monitored 
and reviewed in the workplace so that 
we can take appropriate action to improve 
working conditions and we remain focused 
on reducing both the absolute number of 
accidents and reportable accidents
a health and safety site committee meets 
regularly to discuss unresolved health and 
safety matters and reviews statistics on 
accidents and lost time accidents 
independent external health and safety 
audits are conducted at least once every 
two years and improvements are made 
in line with any recommendations
we undertake regular consumer surveys 
which include questions about ethics and 
respond to the results of these surveys 
when developing our products in addition 
we obtain feedback from staff serving 
customers in our stores of their perception 
of issues that affect customer satisfaction 
and build them into our plans
customer complaints and compliments are 
handled centrally and we are proud of the 
process we have established all complaint 
investigations are started within 24 hours 
of receipt and we attempt to resolve each 
one to the satisfaction of our customers our 
policy is to communicate with our customers 
in ‘plain english’ all complaints are recorded 
so that we can undertake a detailed 
analysis monitor trends and identify key 
issues to further improve our performance
workplace
our employees
in addition to providing core remuneration 
benefits including annual incentive schemes 
holidays sick pay life assurance and 
pension provision thorntons offers a 
flexible benefits programme training and 
development programmes discounts and 
participation in company share scheme 
offers employees and their immediate 
families also have access to a confidential 
counselling and legal assistance helpline 
which operates 24 hours a day 365 days 
a year and the company has a published 
procedure for employees to report 
any concerns confidentially 
“whistle blowing policy” 
each year we survey all of our employees 
covering a wide range of issues including 
company benefits working conditions and 
working relationships with the results of the 
survey fed back to all employees and used 
to identify and implement improvements 
occupational health
whilst always aiming to minimise 
accidents occurring in the workplace 
we also work with our insurers and have 
improved our occupational health service 
to employees by providing post accident 
access to private medical services which 
will assist with the rehabilitation process 
we also use an external occupational 
health company and a doctor to provide 
us with health management services 
free eye tests and spectacles where 
required are provided for all vdu 
operatives we also have a wellbeing 
policy to help deal with stress at work 
environment 
energy and waste
our major impact on the environment 
is waste management and energy use 
and our priorities lie in improving our 
environmental performance in these areas 
our usage of gas electricity and water 
is regularly monitored as is our waste 
recycling and landfill performance 
submeters for all utilities have been 
installed throughout our manufacturing 
facility which improves our monitoring 
and aids us in targeting specific areas 
for improvements 
a number of initiatives help reduce energy 
consumption at our production site such 
as reducing compressed air and steam 
leaks and high frequency battery chargers 
where possible when replacing or 
purchasing new equipment energy 
efficient equipment is selected 
1thtar10frontindd   13 21092010   130541 thorn tons plc  annu al repor t and a ccoun t s 2010 14
we continue to find ways to further reduce 
packaging following a significant 22 
reduction as measured by the percentage 
of cardboard packaging to product on 
last year’s easter eggs and products
transport
initiatives to reduce the impact of 
our products on the environment are 
principally designed to reduce fuel 
consumption through improved efficiency 
of vehicles or their movements as vehicles 
are replaced we purchase more fuel 
efficient and lower emission vehicles 
which exceed current european emission 
requirements the vehicle manufacturer 
also provides training to drivers on more 
efficient driving methods
with regard to lorry movements we back 
haul raw materials and packaging from 
suppliers as well as cardboard for recycling 
from our retail stores in empty vehicles 
returning to our production site and also 
make use of ‘thermal containers’ in our 
trailers these containers are frozen at our 
production site and loaded onto vehicles 
at the last possible moment as chiller units 
are not required fuel efficiency increases 
and there is more efficient utilisation of 
space within the trailer
community 
the seasonal nature of our business means 
that we employ a large number of temporary 
staff from the local community at both our 
production site and nationally in our own 
stores and indeed we have a policy to recruit 
staff locally in order to provide a benefit to 
the local community and as a consequence 
we have been able to offer a number 
of temporary staff permanent positions 
c om m itted
to our s taff cus tomers suppliers 
and communities
corporate social responsibility continued
environment continued
energy and waste continued
a programme to replace the lighting with 
energy efficient fittings and lamps in our 
own stores was completed last year and 
we also embarked on a rolling programme 
to replace our air conditioning with energy 
efficient mitsubishi equipment free from 
ozone depleting refrigerants and delivering 
energy savings of around 20 per site 
around twothirds of the planned 
programme is completed and the balance 
due to be finished this financial year 
with regard to waste management 
an integrated waste management contract 
with our contractor seeks to improve both 
the segregation and the proportion of 
waste recycled including plastic wrapping 
sheets and moulds metal straps and 
cardboard despite a significant increase 
in volumes produced we have maintained 
the proportion of recycled waste compared 
to the previous year cardboard generated 
in our retail outlets is returned to our 
production site at thornton park in the 
returning lorries all staff are encouraged 
to recycle general office consumables 
including paper and printer cartridges
packaging
we continue to monitor the overall 
environmental impact of using more recycled 
materials in all components packaging is 
also a key issue for the company and we 
have developed environmental policies for 
the procurement of packaging and continue 
to progress towards sourcing forest 
stewardship council approved materials 
for our cartons 
many of our ingredients are sourced from 
local uk based suppliers and this factor is 
considered in our purchasing decisions for 
both ingredients and packaging of goods 
thorntons retains links with its former staff 
through annual outings and dinners and 
builds new relationships through local school 
activities and work placement schemes
a staff charity committee is actively 
involved in raising money for children’s 
charities last year staff raised in the 
region of £50000 for nspcc with the 
charity committee coordinating a range 
of initiatives including sponsorship from 
suppliers and staff for runners in the 
london marathon arranging collection 
points in stores and running a charity 
football day for the company’s suppliers 
at derby county’s football ground our 
retail stores are also actively encouraged 
to support local charitable activities 
it is the policy of the board not to make 
any political donations
further information on thorntons’ approach 
to corporate social responsibility can be 
found on the company’s web site  
wwwthorntonscouk 
1thtar10frontindd   14 21092010   130541 thorn tons plc  annu al repor t and a ccoun t s 2010 15
board of directors
executive chairman
john von spreckelsen 
chairman n
joined thorntons in june 2006 
he was previously chief executive 
officer of budgens plc and chairman 
of somerfield plc currently his other 
appointments include those of an operating 
partner of merchant equity partners llp 
in the uk and chairman of but sas in 
france and he is a nonexecutive director 
of imo carwash he is chairman of the 
nomination committee
executive directors
mike davies
chief executive
joined thorntons in october 2006 
previously held a number of senior 
positions in mars inc including managing 
director of the uk and ireland european 
vicepresident sales and latterly as 
president of latin america sitting on 
mars inc’s worldwide operating board 
prior to joining mars mr davies spent 
three years with procter  gamble
barry bloomer
managing director sales  operations
joined thorntons in july 2005 and was 
appointed to the board in july 2006 
he previously spent ten years at black 
 decker latterly as european operations 
director and prior to that eight years in 
various positions including manufacturing 
and quality director for philips 
components limited
mark robson
finance director
joined thorntons in november 2009 and 
appointed to the board in december 2009 
a qualified chartered accountant with 
extensive experience in the retail and 
consumer goods sectors most recently 
with somerfield limited now part of the 
cooperative group where he was finance 
director previously finance director of sfi 
holdings limited the pub and bar chain 
claire’s accessories uk limited and 
alldays the convenience store group
peter wright
marketing director
joined thorntons in august 2007 
previously held a number of senior 
marketing positions in tesco plc including 
uk director for brand marketing uk 
director for stores and nonfood marketing 
and latterly as marketing director for 
tesco ireland prior to joining tesco 
he held a number of senior marketing 
positions both in the uk and 
internationally with diageo
key 
a audit committee 
n nomination committee 
r remuneration committee
nonexecutive directors
diana houghton
nonexecutive director a r n
joined thorntons in december 2008 
a corporate development and strategy 
specialist with broad experience of the 
consumer goods and leisure retail sectors 
and extensive corporate finance expertise 
she spent six years as corporate 
development director of allied domecq 
before working as a consultant to a 
number of companies investment 
banks and private equity houses other 
appointments include a senior advisery 
role with the national audit office 
she is chair of the audit committee
paul wilkinson 
nonexecutive director a r n
joined thorntons in august 2006 
he holds a portfolio of executive 
nonexecutive and advisery roles in 
the food consumer and retail sectors 
as well as the public sector previous 
appointments include chairman of 
rank hovis mcdougall and prior to that 
he held management roles at unilever and 
grand metropolitan he was previously an 
independent director of aryzta ag a major 
international food group based in zurich 
other appointments include produce 
world big bear group and fuerst day 
lawson he also chairs the national skills 
academy he is chairman of the 
remuneration committee and the 
senior independent director
1thtar10frontindd   15 21092010   130541 thorn tons plc  annu al repor t and a ccoun t s 2010 16
corporate information
financial calendar
for 52 weeks ended 26 june 2010
8 september 2010  results and final dividend announced
september 2010  annual report circulated
21 october 2010  agm
26 november 2010  final dividend payable
for 52 weeks ending 25 june 2011
8 january 2011 interim accounting period end 28 weeks
february 2011 interim results and dividend announced
april 2011  interim dividend payable
25 june 2011 accounting period end 52 weeks
september 2011 results and final dividend announced
september 2011 annual report circulated
october 2011 agm
company secretary and registered office
mark r henson fcis 
thornton park 
somercotes 
alfreton 
derbyshire de55 4xj 
tel 0845 075 7565 
wwwthorntonscouk 
registered in the united kingdom  
no 174706 
independent auditors
pricewaterhousecoopers llp
chartered accountants  
and statutory auditors 
benson house 
33 wellington street 
leeds ls1 4jp
registrars
capita registrars 
northern house 
woodsome park  
fenay bridge 
huddersfield hd8 0ga 
tel 0871 664 0300  
fax 01484 600911  
wwwcapitaregistrarscom
principal bankers
hsbc plc
lloyds tsb bank plc
santander groupalliance  leicester plc
financial advisers and corporate brokers
investec investment banking 
financial pr advisers
cardew group limited
risk and insurance advisers
marsh limited
share dealing service
if you want to buy or sell shares capita 
share dealing service offers an easytouse 
competitive executiononly service this 
means that they will only buy and sell 
shares and will not offer any other service 
for example financial advice if you want 
to use this service phone 0871 664 0364 
or visit wwwcapitadealcom capita share 
dealing services is a trading name of 
capita irg trustees limited which is 
authorised and regulated by the financial 
services authority wwwfsagovukregister 
184113 and is also authorised to conduct 
business in ireland under the provisions of 
the eu markets in financial instruments 
directive and is part of the capita group plc 
t erms and conditions apply 
1thtar10frontindd   16 21092010   130541 thorn tons plc  annu al repor t and a ccoun t s 2010 17
report of the directors
the directors of thorntons plc together with its subsidiaries “the group” have pleasure in presenting their annual report and the audited 
financial statements of the company and group for the 52 weeks ended 26 june 2010
principal activities and business review
the principal activities of the group during the period were the manufacturing retailing and distribution of high quality confectionery and other 
sweet foods a review of the group’s performance during the period with commentary on the financial results future development and principal 
risks and uncertainties facing the company is contained in the chairman’s statement pages 2 and 3 the chief executive’s report pages 6 to 9 
the finance director’s report pages 10 and 11 the corporate responsibility report pages 12 to 14 and the corporate governance statement 
pages 21 to 24 which are incorporated into this report by reference
results and dividends
the profit for the financial year before tax was £61 million 2009 £81 million after exceptionals an interim dividend of 195p per share was 
paid on 31 march 2010 2009 120p the directors recommend a final dividend of 410p per share 2009 485p which is not reflected in 
the attached accounts representing a total for the period of 605p 2009 605p subject to shareholder approval the final dividend will be paid 
on 26 november 2010 to shareholders on the register at the close of business on 29 october 2010
financial risk management
details of the group’s financial risk management policies are set out in note 18 on pages 55 to 58
directors
the current directors of the company together with their biographical details are shown on page 15 the directors during the year who served 
for the whole of the period and up to the date of signing these financial statements except where stated were
chairman
j a von spreckelsen 
nonexecutive directors
d j houghton  
p n wilkinson 
executive directors
b bloomer  
m r davies  
w h m robson appointed 4 december 2009 
j r wall resigned 4 december 2009 
p d j wright
the directors retiring by rotation at the annual general meeting “agm” are b bloomer and p n wilkinson who being eligible offer themselves 
for reappointment w h m robson having been appointed by the board since the last agm also offers himself for reappointment in accordance 
with the company’s articles of association the interests of the directors and their immediate families in the shares of the company and in options 
over such shares granted under the company’s share option schemes are shown in the report on the directors’ remuneration on pages 25 to 30 
no director held a material interest either during or at the end of the period in any contract of significance in relation to the business of the 
company or its subsidiaries
1thtar10backindd   1 21092010   125647 thorn tons plc  annu al repor t and a ccoun t s 2010 18
report of the directors continued
share capital
details of the company’s voting and share capital structure and any changes during the year under review are shown in note 23 to the accounts 
on pages 64 and 65 no person has any special rights of control over the company’s share capital and all issued shares are fully paid
the directors were granted a general authority at the 2009 agm to allot relevant securities up to a nominal amount of £1665016 and the 
authority applies until the conclusion of this year’s agm when shareholders will be asked to grant a similar authority in line with current investor 
guidelines separate authorities will also be proposed to renew the directors’ limited authority to disapply shareholders’ preemption rights and 
to purchase a proportion of the company’s share capital in the market again in line with investor guidelines
significant agreements
there are no agreements that the company considers significant and to which the company is a party that would take effect alter or terminate 
upon change of control of the company following a takeover bid with the exception of a number of banking agreements which upon a change 
of control of the company are terminable at the banks’ discretion
there are no agreements between any group company and any of its employees or any director of the company which provide for compensation 
to be paid to the employee or director for termination of employment or for loss of office as a consequence of a takeover of the company other 
than provisions that would apply on any termination of employment 
interests in voting rights
the company has been notified of the following significant interests in voting rights of the company’s issued share capital as at 7 september 2010
        ordinary  
        shares 
oppenheimer funds       6974640 102
svg capital plc incl strategic equity capital plc below      6271975 92
joseph rowntree charitable trust       4000000 58
ameriprise financial inc threadneedle asset management     3430955 50
ms p a thornton       3177611 48
mrs j s harcus       2806186 42
fidelity international limited       2794616 41
strategic equity capital plc       2790618 41
legal  general group plc       2723427 39
  these include joint holdings as trustees and consequently certain shares are allocated against more than one name
employee share schemes
the company operates a number of share option schemes for the benefit of employees information regarding the schemes and the number 
of options outstanding is given in note 23 on pages 64 and 65
employee involvement
it is the group’s policy to keep employees fully informed of matters affecting them as employees and to make them aware of the financial and 
economic factors influencing group performance the views of employees are taken into account in making decisions affecting their interests and 
information of relevance to all employees is communicated through a council system of employee representation and regular business updates 
encouragement is given to colleagues to contribute towards the group’s financial performance by annual bonus schemes and participation in the 
company’s share schemes
1thtar10backindd   2 21092010   125647 thorn tons plc  annu al repor t and a ccoun t s 2010 19
equal opportunities and employment of disabled persons
employment policies are designed to provide equal opportunity irrespective of age gender sexual orientation disability religion race or marital 
status applications for employment by disabled persons are given full and fair consideration and whenever practicable provision is made for 
their special needs the group applies the same criteria to disabled employees for training career development and promotion as to any other 
employee if existing employees become disabled every effort is made to ensure their continued employment
research and development
the group continues an active programme of research and development in all areas of its activities with the constant review of existing products 
and development of new products being an integral part of this programme
charitable and political contributions
during the period the group made charitable contributions of £2000 2009 £1000 and gave £500 2009 £8000 to local causes it is the 
policy of the board not to make political donations and accordingly none were made in the period 2009 £nil
payment of suppliers
the group does not follow any specific external code or standard on payment practice its policy is to
u agree the terms of payment with suppliers when agreeing the terms of each transaction
u ensure that those suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts and
u pay in accordance with its contractual and other legal obligations
the payment policy applies to all creditors for revenue and capital supplies of goods and services without exception the group and company’s 
average creditor payment period at 26 june 2010 was 39 days 2009 31 days
independent auditors
following a recommendation of the audit committee to the board a resolution to reappoint pricewaterhousecoopers llp as auditors to the 
company will be proposed at the agm
disclosure of information to auditors
in the case of each of the persons who were directors at the date this report was approved
u  so far as each of the directors is aware there is no relevant audit information as defined in the companies act 2006 of which the company’s 
auditors are unaware and
u  each of the directors has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any 
relevant audit information and to establish that the company’s auditors are aware of that information
1thtar10backindd   3 21092010   125647 thorn tons plc  annu al repor t and a ccoun t s 2010 20
report of the directors continued
statement of directors’ responsibilities 
the directors are responsible for preparing the annual report the report on the directors’ remuneration and the financial statements in 
accordance with applicable law and regulations
company law requires the directors to prepare financial statements for each financial year under that law the directors have prepared the group 
and parent company financial statements in accordance with international financial reporting standards “ifrs” as adopted by the european 
union “eu” under company law the directors must not approve the financial statements unless they are satisfied that they give a true and 
fair view of the state of affairs of the group and the company and of the profit or loss of the group for that period in preparing these financial 
statements the directors are required to
u select suitable accounting policies and then apply them consistently
u make judgements and accounting estimates that are reasonable and prudent
u  state whether applicable ifrs as adopted by the eu have been followed subject to any material departures disclosed and explained in the 
financial statements and
u prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business
the directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and 
disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial 
statements and the report on the directors’ remuneration comply with the companies act 2006 and as regards the group financial statements 
article 4 of the ias regulation they are also responsible for safeguarding the assets of the company and the group and hence for taking 
reasonable steps for the prevention and detection of fraud and other irregularities
the directors are responsible for the maintenance and integrity of the company’s web site legislation in the united kingdom “uk” governing 
the preparation and dissemination of financial statements may differ from legislation in other jurisdictions 
each of the directors whose names and functions are listed on page 15 confirm that to the best of their knowledge
u  the group financial statements which have been prepared in accordance with ifrs as adopted by the eu give a true and fair view of the 
assets liabilities financial position and profit of the group and
u  the report of the directors on pages 17 to 20 includes a fair review of the development and performance of the business and the position 
of the group together with a description of the principal risks and uncertainties that it faces
articles of association
the company’s articles of association may only be amended by a special resolution at a general meeting of shareholders
annual general meeting
the notice convening the company’s agm on 21 october 2010 can be found in the separate notice of agm accompanying this annual report 
and includes full details of the business to be transacted
approved by the board on 7 september 2010 and signed on its behalf by
mark r henson 
company secretary
1thtar10backindd   4 21092010   125648 thorn tons plc  annu al repor t and a ccoun t s 2010 21
corporate governance
statement on compliance
the company recognises the importance of and is committed to high standards of corporate governance the board is accountable to the 
shareholders for good corporate governance this report describes how the board applies the principles of good governance and best practice 
as set out in the combined code on corporate governance issued by the financial reporting council in june 2008 “the combined code”
throughout the year under review the board considers that the company has complied fully with all provisions recommended in section 1 of the 
combined code 
the information required under rule 726 of the disclosure and transparency rules of the financial services authority is included in the 
report of the directors on pages 17 to 20
the board
the company is headed by a board of directors collectively responsible for the success of the company the board provides leadership within a 
framework of prudent and effective controls designed to enable risk to be assessed and managed it sets the company’s strategy and is responsible 
for reviewing management performance and for ensuring the necessary financial and human resources are in place in order to meet the company’s 
objectives the board also sets the company’s values and standards mindful of its obligations to shareholders and other stakeholders
the board currently comprises the chairman four executive directors and two nonexecutive directors the board regards p n wilkinson and 
d j houghton as being independent the chairman and chief executive both have clearly defined roles and responsibilities which are set out in 
writing and approved by the board the chairman has responsibility for the leadership and the running of the board including but not limited to 
ensuring that a fixed schedule of matters is exclusively retained for the board’s review and approval and that a framework exists to allow the clear 
dissemination of relevant and timely information to all directors for such discussion to occur he is also responsible for communications with 
shareholders and for ensuring effective contributions from the nonexecutive directors the chairman has commitments outside of the company 
as detailed in his biography on page 15 all directors are subject to reappointment by shareholders at the first agm following their appointment 
and thereafter at intervals of no more than three years
the board meets regularly normally nine times per financial year and during the period under review there was full attendance at the nine 
board meetings that took place by directors eligible to attend except for apologies received from m r davies in respect of one meeting the board 
regularly reviews the operational performance and plans of the company and as necessary determines the company’s current and proposed 
strategy the executive directors also meet under the chairmanship of the chief executive on a weekly basis to discuss operational matters all 
board members receive agendas and comprehensive papers prior to each board meeting all directors have access to the services of the company 
secretary who is responsible to the board for ensuring that board procedures are followed and that applicable rules and regulations are adhered to 
the board maintains a register of potential conflicts of interest with its directors and confirms no such conflicts exist the register is reviewed and 
updated as necessary throughout the year directors may also obtain further information from any manager or employee of the company and there 
is a procedure for directors to obtain independent advice from external advisers consultants or any such further professional individual or entity at 
the company’s expense the company maintains appropriate liability insurance for the benefit of its directors 
the chairman meets at least annually with the nonexecutive directors without executive directors present and the nonexecutive directors 
led by the senior independent director p n wilkinson meet annually to consider the chairman’s performance taking into account the executive 
directors’ views the senior independent director is also available to shareholders if they have any concerns which contact through the normal 
channels of the chairman chief executive or finance director has failed to resolve or for which such contact is inappropriate
the terms and conditions of appointment of the nonexecutive directors are available during normal business hours at the company’s registered 
office and will be available for inspection at the agm
new appointments to the board receive an appropriate induction to gain an understanding of the company’s business which includes meetings 
with senior management
given the skills and experience of the nonexecutive directors their general training requirements are left to their own discretion the company makes 
the necessary resources available to meet any identified requirements the chairman conducts a formal annual appraisal process for the board its 
committees and individual directors including those directors due to offer themselves for reappointment at the agm through use of a questionnaire 
and onetoone meetings which facilitates a board discussion and where appropriate agreed actions for improvements the executive directors are also 
included in the company’s annual performance appraisal arrangements which include development and training requirements
the board delegates its authority for certain matters to its audit remuneration and nomination committees the board approves the terms 
of reference of each of the committees and they are available on the company’s web site wwwthorntonscouk and upon request from the 
company secretary during the period under review there were three meetings of the audit committee and two formal meetings of the 
remuneration and nomination committees with full attendance of all eligible directors in addition to formal committee meetings ad hoc 
decisions of the committees are taken after discussion throughout the year as necessary through the form of written resolutions
1thtar10backindd   5 21092010   125648 thorn tons plc  annu al repor t and a ccoun t s 2010 22
corporate governance continued
nomination committee
the nomination committee is composed of the two independent directors and the chairman of the board j a von spreckelsen the committee 
is chaired by j a von spreckelsen and is responsible for reviewing the credentials of each and every potential director before such nominee is 
proposed to the board in considering potential appointments to the board the committee evaluates the balance of skills knowledge and 
experience on the board when considering the role and capabilities required for a particular appointment when appointments are being 
considered the committee uses professional external recruitment specialists as and when appropriate as well as contacts of its directors and 
the company’s advisers the committee also reviews the contribution of directors offering themselves for reappointment by shareholders
remuneration committee
the remuneration committee is composed of the two independent directors and is chaired by p n wilkinson the board has delegated authority 
to the committee for setting the chairman’s the executive directors’ and the company secretary’s remuneration and performancerelated awards 
further details of the committee and directors’ remuneration are set out in the report on the directors’ remuneration on pages 25 to 30
audit committee
the audit committee throughout the year comprised of the two independent directors and is chaired by d j houghton it meets three times a 
year with the external auditors and considers any issues which are identified during the course of their audit work the board is satisfied that both 
committee members have recent and relevant financial experience meetings are also attended by invitation by the chairman chief executive 
finance director and financial controller the committee meets at least annually with the external auditors without the executive directors present 
the audit committee is responsible for monitoring the integrity of the company’s financial statements reviewing the company’s internal financial 
controls and internal control and risk management systems monitoring and reviewing the effectiveness of the internal audit function making 
recommendations to the board regarding the appointment reappointment or removal of the external auditors and approving their remuneration 
and terms of engagement reviewing and monitoring the external auditors’ independence and objectivity and the effectiveness of the audit process 
and developing and implementing a policy on the engagement of the external auditors to supply nonaudit services
in respect of safeguarding the objectivity and independence of the external auditors the committee has a formal policy regarding the provision 
of nonaudit services by the external auditors including certain services which they cannot provide so as not to compromise their independence 
for example bookkeeping or other internal accounting services internal audit management roles or legal services the policy also provides for 
tendering for services where appropriate and has specific preapproved categories of work subject to the level of fees involved a formal rotation 
policy of the audit partner also exists which limits tenure to a maximum of five years 
the committee also specifically reviews the levels of all fees paid to the auditors for audit and nonaudit services annually the external auditors 
report to the audit committee each year on the actions they have taken to comply with professional and regulatory requirements and best practice 
designed to ensure their independence the committee reviews whether the auditors believe there are any relationships that may affect their 
independence and additionally the auditors formally confirm their independence in writing to the board in respect of the period covered by these 
financial statements
the committee also receives regular detailed reports from the internal audit function and to ensure its activities are appropriate reviews its 
proposed work plan for future periods
internal controls
the company’s control environment is the responsibility of the company’s directors and managers at all levels the board is therefore responsible 
for establishing and maintaining the company’s system of internal control and for reviewing its effectiveness no control system can provide 
absolute protection against material misstatement or loss but it is designed to manage rather than eliminate the risk of failure to achieve business 
objectives and to provide the directors with reasonable assurance that problems should be identified on a timely basis and dealt with appropriately
the board has delegated responsibility for reviewing the company’s system of internal control and its effectiveness to the audit committee due to 
the size of the company the executive directors are able to monitor performance and evaluate and manage on a continual basis the risks faced by 
the company the key procedures that have been established to provide effective internal control and to comply with the financial reporting council’s 
guidance on internal control revised guidance for directors on the combined code october 2005 include
u  a formalised reporting structure which includes the setting of detailed annual budgets and key performance indicators which are updated on 
a regular basis to form forecasts which are reviewed at both management and board meetings
u  regular board meetings are held at which all key aspects of the business are discussed including comparison of actual performance with budgets
u monthly reports are made to the board by the chief executive finance director and other executive directors
1thtar10backindd   6 21092010   125648 thorn tons plc  annu al repor t and a ccoun t s 2010 23
internal controls continued
u there is a weekly review of operational performance and operational matters by the executive directors
u  meetings are held by each executive director on a weekly and monthly basis to review the progress of specific financial and nonfinancial 
responsibilities within their functions
u  the control review and monitoring of key business projects by specific steering committees each headed by an executive director who 
sponsors the project
u there are defined authorisation levels for capital expenditure
u there are defined authorisation levels for the placing of orders and contracts
u there are clear authorisation levels and segregation of accounting duties to control major financial risks
u  daily cash movements are reconciled and monitored by the treasury department and the company’s cash flow is monitored monthly 
in comparison to budget and forecast
u the company’s reporting systems provide weekly updates on key statistics including sales production and gross margin analysis
u the preparation of consolidated financial statements
u  a committee including executive directors meets to identify and review key operational and compliance risks and then implement appropriate 
procedures to address those risks a review of the committee’s work is included in the board’s agenda
u  major commercial technological and financial risks are assessed by the board throughout each financial year the conclusions are then 
incorporated in the company’s business strategy and adopted by the board and
u there is a formal arrangement for staff to raise any concerns over financial reporting or other matters in confidence
the board and audit committee review management reports prepared by the external and internal auditors and consider the suitability 
of suggested improvements to the system of internal controls
the board and audit committee have reviewed the effectiveness of the internal control system including financial operational and compliance 
controls and risk management in accordance with the code on an ongoing basis for the period from 28 june 2009 to the date of this report and 
have determined that they were not aware of any significant failings or weaknesses in the system of internal control
principal risks and uncertainties
as described above in the internal control procedures key risks are reviewed by the executive committee the assessment of risks on the basis 
of likelihood and potential impact together with the controls and actions to manage or mitigate them are passed to the full board for approval 
the key risks and uncertainties facing the business are considered to be as follows
a very competitive market
the uk confectionery market has many strong players and maintaining our competitive position depends on our continued ability to offer products 
that have a strong appeal to consumers consumer preferences may shift due to a variety of factors including changes in demographic and social 
trends any significant shift in consumer preferences coupled with our failure to anticipate and react to such changes could reduce the demand 
for certain products in our portfolio resulting in reduced sales or harm to the image of our brand product innovation is critical to maintaining 
consumer relevance and hence demand the company has a rigorous process for identifying researching and developing new product ideas 
which is regularly reviewed and improved the company’s multichannel strategy is also a means by which it can satisfy consumers’ needs better 
than its competitors
sales may be disproportionately affected by an economic downturn or recession
we believe that during times of economic uncertainty or hardship consumers may choose to purchase lower value consumer goods as opposed to 
higher value consumer goods which include our premium branded chocolates the economic climate may also result in the failure of commercial 
or franchise businesses and customers defaulting on supply payments reduced sales as a result of an economic downturn or recession in the uk 
may have an adverse effect on the results of operations of our business 
the company’s products are prominent in the national debate on health
thorntons has always sought to make products with wholesome recipes for example only using cocoa butter in its chocolate in line with other 
premium confectionery developments in food science are monitored directly and via industry associations production changes arising from these 
types of concerns have included the phased removal of hydrogenated vegetable oil and artificial colours thorntons seeks to inform consumers 
about the strong provenance of its ingredients and beneficial effects of cocoa consumption
1thtar10backindd   7 21092010   125648 thorn tons plc  annu al repor t and a ccoun t s 2010 24
corporate governance continued
principal risks and uncertainties continued
food products must have the highest integrity
product contamination accidental or malicious is a risk faced by all food producers thorntons has extremely rigorous policies and security 
systems for guarding against accidental or malicious contamination of ingredients or finished products in the unlikely event that these policies 
and systems fail a robust process for product recall and consumer communication in addition to comprehensive insurance cover is in place
a substantial decrease in our ability to supply our customers with our products could adversely affect the results of our operations
an interruption or substantial decrease in our ability to supply customers of our brands could damage our sales and image as well as 
our relationships with customers and consumers the majority of the company’s products for sale are produced at thornton park in alfreton 
derbyshire the remainder is bought in from suppliers who have a particular expertise or cost advantage over the company’s own facility 
the operating site has been built up over the last 20 years with varying standards of fire protection recognising this vulnerability the company 
invested over £2 million in firewalls and a sprinkler system to improve the protection of the site contingency and recovery plans for it and utilities are 
also regularly reviewed
input prices are driven by commodity markets
the company buys key inputs forward and works with suppliers to choose the optimal time and quantity for purchases whilst this policy may 
sometimes prevent the company taking advantage of shortterm dips in prices it provides a stable cost base for the company to make its 
trading decisions
the business is dependent upon the skills enthusiasm and wellbeing of its people
management evaluates the balance of skills knowledge and experience within the team when considering the role and capabilities required for 
a particular senior appointment the company uses professional external recruitment specialists as and when appropriate as well as contacts of 
its directors and the company’s advisers management aspires to keep colleagues informed of internal and external developments and regularly 
reviews how they are feeling through surveys and communication sessions a channel outside the normal line structures for communication and 
resolution of issues exists through the joint industrial council for thornton park and the retail council for storebased colleagues 
relations with shareholders
communications with shareholders are given high priority following the announcement of the company’s interim and final results the directors 
normally represented by at least the chairman chief executive and finance director make detailed business presentations to institutional 
shareholders the senior independent director is also available to all shareholders feedback directly from shareholders and via the company’s 
brokers after these regular analyst and shareholder meetings ensures the board understands shareholder views and messages finally the 
company’s web site wwwthorntonscoukinvestor allows shareholders to view company results and announcements and other relevant 
information and also raise questions to put back to the board
the board uses the agm to communicate with private and institutional investors and welcomes their participation each year the board reviews 
the governance and voting guidelines issued by the principle representative bodies of its shareholders the directors present at each agm a 
business review to all attending shareholders who may ask any questions they wish it is not a requirement that these be previously submitted 
to the company in writing furthermore at each agm the chairman aims to ensure that the chair persons of the board committees are available 
all code provisions regarding constructive use of the agm are complied with
going concern
the directors are satisfied on the basis of current financial projections and facilities available that the company and the group have adequate 
financial resources to continue to operate for the foreseeable future for this reason the directors continue to adopt the going concern basis in 
preparing the financial statements 
approved by the board on 7 september 2010 and signed on its behalf by
mark r henson
company secretary
1thtar10backindd   8 21092010   125650 thorn tons plc  annu al repor t and a ccoun t s 2010 25
report on the directors’ remuneration
information not subject to audit
remuneration committee
the remuneration committee is composed of the company’s two independent nonexecutive directors p n wilkinson chairman and 
d j houghton j a von spreckelsen was also a member of the committee until 13 july 2009
the committee is responsible for setting the chairman’s executive directors’ and company secretary’s remuneration and performancerelated 
awards it also monitors the remuneration of the company’s senior managers during the period the chief executive attended committee 
meetings by invitation and provided advice on issues other than those relating to his remuneration the company secretary attends the meetings 
as secretary to the committee during the year the committee received independent general remuneration and share scheme advice from deloitte llp 
who were appointed by the committee and also advised the company on tax matters the committee also had access to professional market 
surveys on boardroom pay no director is involved in any decision relating to his own remuneration the terms of reference of the committee are 
available on the company’s web site wwwthorntonscouk and upon request from the company secretary
remuneration policy
the policy for the current and future periods for the remuneration and incentivisation of the executive directors is as follows
u to ensure that individual rewards and incentives are aligned with the performance of the company and the interests of shareholders
u to ensure that performancerelated elements of remuneration constitute a significant proportion of an executive’s remuneration package and
u to maintain a competitive remuneration package which enables the company to attract retain and motivate high calibre executives
the committee reviews the company’s executive remuneration arrangements and implements incentive arrangements to support the objective 
of rewarding those individuals who deliver real and genuine shareholder value in developing the arrangements the committee and its advisers 
carefully consider the best practice provisions in the combined code and current market practice
salaries
salaries for the executive directors are targeted at remaining competitive for the market size of the business and unless they fall below what the 
committee considers to be competitive will not normally be changed beyond a cost of living increase outside of this target the level of salary 
of the executive directors is reviewed each year by the remuneration committee and takes into account a range of issues including primarily 
underlying group performance and comparative salary levels both within the company and externally given the continuing uncertainty over the 
economic outlook and taking into account the awards under discussion for the general workforce no increase in annual salary is being awarded 
to the executive directors other than b bloomer for the new financial year an increase has been approved for b bloomer with effect from 
1 july 2010 in recognition of his performance and increased responsibility for the commercial channel since july 2009
taxable benefits comprise principally healthcare insurance policies a fully expensed company car or car allowance and a fuel allowance
annual incentive plan
the remuneration committee reviews and approves the annual bonus scheme targets each year for the 2011 financial year the bonus potential 
for executive directors is 20 of base salary for ontarget profit performance and 100 of base salary for exceptional outperformance there are 
clear financial targets based on the achievement of group profit and the committee is satisfied that these are challenging and in order for the 
maximum bonus to be earned will demonstrate significant improvement in the profit performance of the business 
no bonus was payable to the executive directors in respect of the 2010 year
longterm incentive plan “ltip”
the committee introduced longterm incentive arrangements approved by shareholders in october 2007 which deliver genuine performancerelated 
pay with a clear line of sight for executives and a direct alignment with shareholders’ interests
under the ltip  annual awards of share options may be granted with an exercise price equal to the market value of the shares at the date of grant 
executive directors may receive an award under the ltip in any financial year over shares worth 150 of their basic annual salary excluding 
bonuses commissions and benefits in kind provided that to the extent that an award exceeds 100 of their basic annual salary the vesting 
of such excess will be dependent on the achievement of a significantly more stretching performance target
the participants will not be entitled to exercise their options for a period determined by the committee which is generally no earlier than three years 
from the date of award the vesting of awards at the end of the performance period will be subject to the relevant participant remaining 
in employment and the achievement of specified stretching performance conditions
1thtar10backindd   9 21092010   125650 thorn tons plc  annu al repor t and a ccoun t s 2010 26
report on the directors’ remuneration continued
information not subject to audit continued
longterm incentive plan “ltip” continued
there are currently three grants of awards in respect of the periods 2007 to 2010 2008 to 2011 and 2009 to 2012 under the ltip with a 
performance target based on the company’s total shareholder return “tsr” tsr will normally be averaged across a period of three months 
before the start of the performance period and three months before the date on which the performance period ends this is in keeping with normal 
market practice and is a practical adjustment to smooth the impact of shortterm market influences and to provide a more robust measure of the 
company’s performance awards vest on a sliding scale between each step as follows
          compound 
         equivalent 
       annual tsr  over three year 
 of total award vesting      growth required  vesting period
150      20  73
100      15  52
25      8  26
in order to reassure shareholders that executives will not benefit simply from an upward turn in the market the committee will require underlying 
real eps performance to increase by at least retail prices index “rpi” 10 per annum before any awards vest even if the tsr targets are 
achieved in addition for any award above 100 to vest the underlying annual growth in real eps must be at least rpi 12
absolute tsr was chosen as the measure for awards under the ltip because it requires executives to increase shareholder value against the 
company’s prevailing business position the remuneration committee monitors the performance of existing awards against the above targets 
on an annual basis and reviews the performance conditions for future awards to ensure that the conditions continue to be appropriate for the 
company and the prevailing market based on the company’s tsr performance to date since the introduction of the ltip  no options awarded 
would vest the actual percentage of the award vesting will be determined by the remuneration committee at the end of each three year 
performance period the committee does not propose to make a grant of options under the ltip in october 2010 as it intends to review the ltip 
arrangements during the course of the new financial year
share option scheme
prior to the introduction of the ltip in october 2007 some of the directors had previously been granted share options under the thorntons plc 
2001 executive share option scheme subject to the achievement of performance targets these options may be exercised between three and 
ten years after the date of grant following the introduction of the ltip in 2007 no further awards under this scheme to directors are anticipated
executive directors with twelve months’ service along with all eligible employees are also entitled to participate in the company’s all employee 
sharesave scheme
supplementary notes regarding existing share scheme options and awards
the thorntons plc 2001 executive share option scheme “the scheme”
options granted under the scheme can be exercised at any time between three and ten years after the grant date subject to the fulfilment 
of certain performance criteria 
options granted in 2006 and 2007 were split into three equal tranches with a requirement that a share price of 160p 2006 and 200p 2007 
be achieved within a minimum of three and a maximum of six years from the date of grant before the first tranche could be exercised with regard 
to the second and third tranches the share price is required to reach 185p 2006 and 225p 2007 and 210p 2006 and 250p 2007 
respectively in addition before any tranche may be exercised growth in eps must exceed the rpi by at least 3 per annum cumulatively over at 
least a three year and a maximum six year period the share price must have reached the relevant targets on the day prior to the exercise and the 
remuneration committee must be satisfied that there has been an improvement in the underlying performance of the company in line with these 
requirements the first two tranches of options granted on 5 june 11 july and 2 october 2006 are now exercisable subject to the company’s 
share price reaching the required target prices on the day prior to any exercise
under the scheme rules in the event of a change of control of the company options may be exercised within one month or such longer period 
as the remuneration committee determines and provided that such options have met their attaching performance criteria the remuneration 
committee also has discretion but always acting fairly reasonably and objectively to determine whether and if so to what extent beyond that 
indicated by the performance condition options shall be exercisable having regard to all the circumstances
1thtar10backindd   10 21092010   125650 thorn tons plc  annu al repor t and a ccoun t s 2010 27
information not subject to audit continued
supplementary notes regarding existing share scheme options and awards continued
all employees sharesave scheme
options granted under the hm revenue  customs approved sharesave scheme can be exercised at any time during the six month period 
commencing three or five years from the start of the savings contract options may be granted under the sharesave scheme at a discount of up 
to 20 of the market value of a share in the company on the date immediately preceding the date on which employees are invited to participate 
in the scheme there are no performance criteria under the sharesave scheme
share price
the midmarket price of the ordinary shares at 26 june 2009 the last dealing day prior to 27 june 2009 was 74p and at 25 june 2010 
the last dealing day prior to 26 june 2010 was 82p and the range for the period was from 73p to 136p
the company’s register of directors’ interests which is open to inspection contains full details of directors’ shareholdings and options to subscribe 
during the period from 27 june 2010 to 7 september 2010 the interests of the directors named in the table on page 29 in the shares of the 
company were unchanged
performance graph
the graph below shows the tsr performance for the company’s shares in comparison to the ftse small cap index for the five years to 26 june 2010 
for the purposes of the graph tsr has been calculated as the percentage change during the five year period in the market price of the shares 
assuming that dividends are reinvested
this graph shows the value by the end of the 2010 financial year of £100 invested in thorntons over the last five financial years compared with 
£100 invested in the ftse small cap index which given the company forms a constituent part the directors believe is the most appropriate 
comparative index
pensions
the executive directors with the exception of m r davies who does not participate in any company pension arrangement have private pensions 
to which the company contributes a fixed percentage 14 of basic salary due to restrictions on the amount of contributions that can be paid 
annually into his personal pension w h m robson receives a reduced contribution from the company into his pension and a nonpensionable 
nonbonusable “pension salary supplement” of £6600 per annum which together equate to 14 of his basic salary
a table identifying the contributions made on behalf of directors to defined contribution arrangements are identified in the directors’ pension 
benefits table on page 29
pensionable salary is based on basic salary only and excludes any other form of remuneration including bonus payments or benefits in kind
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1thtar10backindd   11 21092010   125652 thorn tons plc  annu al repor t and a ccoun t s 2010 28
report on the directors’ remuneration continued
information not subject to audit continued
contracts of service and early termination
all of the executive directors have service contracts with the company currently these contracts may be terminated by the company or director 
by giving one year’s notice the notice period of all executive directors’ service contracts is kept under review by the remuneration committee 
it is the remuneration committee’s view that the notice period for the executive directors is appropriate and consistent with current market practice 
it is the practice of the committee that if the employment of an executive director is terminated any compensation payment is calculated in 
accordance with normal legal principles including the application of mitigation to the extent appropriate to the circumstances of the termination 
there are no specific contractual obligations in the event of a change of control of the company
all nonexecutive directors have initial fixedterm agreements with the company of no more than three years there is no entitlement to any 
compensation in the event of such agreement not being renewed or the agreement terminating earlier save for a one year notice period required 
from either party in the case of the chairman j a von spreckelsen
details of the directors’ service contracts notice periods and where applicable expiry dates are set out below
name commencement expiry notice period
b bloomer 18 july 2006 — 1 year
m r davies 2 october 2006 — 1 year
d j houghton 5 december 2008 5 december 2011 3 months
w h m robson 2 november 2009 — 1 year
j a von spreckelsen 5 june 2006 — 1 year
p n wilkinson 15 august 2006 15 august 2012 na
p d j wright 13 august 2007 — 1 year
nonexecutive directors’ fees
the fees paid to nonexecutive directors for their services are approved by the board these fees are paid on a pro rata basis if they hold office for 
part of the year in recognition of increased legislative and corporate governance responsibilities a supplement of £5000 per annum is paid to the 
senior independent director and nonexecutives who chair one or more board committees
information subject to audit
the following table shows an analysis of the various elements of remuneration receivable by those directors who served during the 52 weeks 
ended 26 june 2010
     compensation performance   basic annual 
   salary  taxable for loss related   salaryfees 
   and fees benefits of office payments total total july 
   2010 2010 2010 2010 2010 2009 2010 
   £’000 £’000 £’000 £’000 £’000 £’000  £’000
chairman       
j a von spreckelsen  150 — — — 150 147 150
executive directors       
b bloomer  164 20 — — 184 178 180
m r davies  339 19 — — 358 353 339
w h m robson appointed 4 december 2009 124 18 — — 142 — 190
j r wall resigned 4 december 2009  118 11 — — 129 204 na
p d j wright  171 18 — — 189 185 171
d prendergast resigned 1 august 2008  — — — — — 187 —
nonexecutive directors       
d j houghton   38 — — — 38 20 38
p n wilkinson
§
  43 — — — 43 40 43
m t p davey resigned 5 december 2008 — — — — — 19 —
   1147 86 — — 1233 1333 1111
 § £40000 2009 £40000 of the fees in respect of the services provided by p n wilkinson were paid to parkside capital limited
   the annual salariesfees for 2010 received no increase over 2009 but reflected a reversion to full annual salariesfees following a temporary voluntary reduction of 5 during 
the second half of 2009 
1thtar10backindd   12 21092010   125652 thorn tons plc  annu al repor t and a ccoun t s 2010 29
information subject to audit continued
directors’ pension benefits
        pension  pension 
        contributions contributions 
        2010 2009 
        £’000 £’000
executive directors  
b bloomer       23 23
m r davies       — —
w h m robson appointed 4 december 2009      7 —
j r wall resigned 4 december 2009       16 26
p d j wright       24 24
directors’ interests
the interests of the directors and their immediate families in the company’s ordinary shares as at 27 june 2009 or date of appointment if later 
and 26 june 2010 were as follows
ordinary shares
the directors’ holdings in ordinary shares were
        26 june  27 june 
        2010 2009 
        number number
chairman  
j a von spreckelsen       1090000 1000000
executive directors  
b bloomer       5512 5512
m r davies       200400 190000
j r wall resigned 4 december 2009       — 6000
w h m robson appointed 4 december 2009      10000 —
p d j wright       30000 30000
nonexecutive directors  
d j houghton       100000 100000
p n wilkinson       25000 25000
all the above are beneficial interests
it is a policy of the board that all directors must hold a minimum of 1000 shares such shares must be purchased as soon as practicable 
following the director’s appointment subject to the restrictions imposed by the model code on directors’ dealings
1thtar10backindd   13 21092010   125652 thorn tons plc  annu al repor t and a ccoun t s 2010 30
report on the directors’ remuneration continued
information subject to audit continued
share options and awards
the interests of the executive directors in share options held under the executive share option schemes and the sharesave scheme were as follows
     awards and      
     options held at awards and    last date 
     27 june 2009 options options  awards and awards and 
    subscription or date of granted in exercised options options held at  options can 
director scheme date of grant price pence appointment period  shares sold lapsed 26 june 2010 be exercised
j a von spreckelsen 2001 executive 5 jun 2006 116 1200000 — — — 1200000 5 jun 2016
b bloomer 2001 executive 11 jul 2006 1285 500000 — — — 500000 11 jul 2016
  ltip 2007 23 nov 2007 192 123904 — — — 123904 23 nov 2017
  ltip 2007 16 oct 2008 113 218038 — — — 218038 16 oct 2018
  ltip 2007 20 oct 2009 13225 — 186301 — — 186301 20 oct 2019
  sharesave 9 oct 2006 113 5151 — — — 5151 31 may 2010
  sharesave 10 oct 2007 148 4358 — — — 4358 31 may 2013
m r davies 2001 executive 2 oct 2006 153 1200000 — — — 1200000 2 oct 2016
  ltip 2007 23 nov 2007 192 255849 — — — 255849 23 nov 2017
  ltip 2007 16 oct 2008 113 450226 — — — 450226 16 oct 2018
  ltip 2007 20 oct 2009 13225 — 384692 — — 384692 20 oct 2019
  sharesave 18 nov 2009 108 — 8402 — — 8402 30 jun 2013
w h m robson ltip 2007 9 nov 2009 11725 — 243070 — — 243070 9 nov 2019
  restricted share award 9 nov 2009 11725 — 76759 32609 — 44150 9 nov 2012
p d j wright 2001 executive 13 sep 2007 170 500000 — — — 500000 13 sep 2017
  ltip 2007 16 oct 2008 113 226692 — — — 226692 16 oct 2018
  ltip 2007 20 oct 2009 13225 — 193696 — — 193696 20 oct 2019
j r wall 2001 executive 3 apr 2006 119 500000 — — — 500000 31 jan 2011
  ltip 2007 23 nov 2007 192 140455 — — 140455 — not applicable
  ltip 2007 16 oct 2008 113 247164 — — 247164 — not applicable
  sharesave 9 oct 2006 113 5151 — — 5151 — not applicable
  sharesave 10 oct 2007 148 2490 — — 2490 — not applicable
   to facilitate the recruitment of w h m robson as finance director he was granted a oneoff restricted share award over 76759 ordinary shares in the company in lieu of 
entitlements foregone from his previous employer this award was made pursuant to listing rule 942 2 32609 shares were sold immediately on receiving the award 
solely to meet the income tax and national insurance liability arising when the award was made the award which includes the right to receive the equivalent of any 
dividends paid during the intervening period vests on 9 november 2012 subject to w h m robson continuing to be employed by the company at that time the award will 
be satisfied by the transfer of existing shares held by the company’s employee benefit trust 
there is no requirement for the directors to pay any contributions on the granting of any options under any of the company’s share schemes
the earliest dates of exercise for the options set out in the table above are shown in note 24 on page 65
approved by the board on 7 september 2010 and signed on its behalf by
paul wilkinson
chairman of the remuneration committee
1thtar10backindd   14 21092010   125653 thorn tons plc  annu al repor t and a ccoun t s 2010 31
independent auditors’ report to the members of thorntons plc we have audited the financial statements of thorntons plc for the 52 weeks ended 26 june 2010 which comprise the consolidated income 
statement the statements of comprehensive income the statements of changes in shareholders’ equity the balance sheets the cash flow 
statements the statement of accounting policies and related notes the financial reporting framework that has been applied in their preparation 
is applicable law and international financial reporting standards “ifrs” as adopted by the eu and as regards the parent company financial 
statements as applied in accordance with the provisions of the companies act 2006
respective responsibilities of directors and auditors 
as explained more fully in the statement of directors’ responsibilities the directors are responsible for the preparation of the financial statements 
and for being satisfied that they give a true and fair view our responsibility is to audit the financial statements in accordance with applicable law 
and international standards on auditing uk and ireland those standards require us to comply with the auditing practices board’s ethical 
standards for auditors 
this report including the opinions has been prepared for and only for the company’s members as a body in accordance with chapter 3 of 
part 16 of the companies act 2006 and for no other purpose we do not in giving these opinions accept or assume responsibility for any other 
purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent 
in writing
scope of the audit of the financial statements 
an audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that 
the financial statements are free from material misstatement whether caused by fraud or error this includes an assessment of whether the 
accounting policies are appropriate to the group’s and the parent company’s circumstances and have been consistently applied and adequately 
disclosed the reasonableness of significant accounting estimates made by the directors and the overall presentation of the financial statements
opinion on financial statements 
in our opinion 
u  the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 26 june 2010 and 
of the group’s profit and group’s and parent company’s cash flows for the year then ended
u the group financial statements have been properly prepared in accordance with ifrs as adopted by the eu 
u  the parent company financial statements have been properly prepared in accordance with ifrs as adopted by the eu and as applied 
in accordance with the provisions of the companies act 2006 and
u  the financial statements have been prepared in accordance with the requirements of the companies act 2006 and as regards the group 
financial statements article 4 of the las regulation 
opinion on other matters prescribed by the companies act 2006 
in our opinion 
u the part of the report on the directors’ remuneration to be audited has been properly prepared in accordance with the companies act 2006 and
u  the information given in the report of the directors for the financial year for which the financial statements are prepared is consistent with the 
financial statements
1thtar10backindd   15 21092010   125653 thorn tons plc  annu al repor t and a ccoun t s 2010 32
independent auditors’ report continued
to the members of thorntons plc matters on which we are required to report by exception 
we have nothing to report in respect of the following 
under the companies act 2006 we are required to report to you if in our opinion 
u  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 
u  the parent company financial statements and the part of the report on the directors’ remuneration to be audited are not in agreement with 
the accounting records and returns or 
u certain disclosures of directors’ remuneration specified by law are not made or 
u we have not received all the information and explanations we require for our audit or
u a corporate governance statement has not been prepared by the parent company 
under the listing rules we are required to review 
u the statement of directors’ responsibilities in relation to going concern and
u  the parts of the corporate governance statement relating to the company’s compliance with the nine provisions of the june 2008 
combined code specified for our review
randal casson senior statutory auditor
for and on behalf of pricewaterhousecoopers llp
chartered accountants and statutory auditors
leeds
7 september 2010 
1thtar10backindd   16 21092010   125653 thorn tons plc  annu al repor t and a ccoun t s 2010 33
consolidated income statement 52 weeks ended 26 june 2010
  52 weeks ended 26 june 2010  52 weeks ended 27 june 2009 
   before    before   
   exceptionals exceptionals total exceptionals exceptionals total 
  note £’000 £’000 £’000 £’000 £’000 £’000
revenue 1 214553 — 214553 214805 — 214805
cost of sales  108009 — 108009 109836 — 109836
gross profit  106544 — 106544 104969 — 104969
operating expenses 2 100676 — 100676 98439 1800 96639
other operating income 3 1386 — 1386 1410 — 1410
operating profit  7254 — 7254 7940 1800 9740
finance income 4 212 — 212 38 — 38
finance costs 5 1329 — 1329 1690 — 1690
profit before taxation 6 6137 — 6137 6288 1800 8088
taxation 7 1783 — 1783 1946 2537 4483
profit attributable to owners of the parent  4354 — 4354 4342 737 3605
earnings per share 9      
basic    65p   54p
diluted    65p   54p
all activities in both the current and previous year relate to continuing operations 
the accounting policies and notes on pages 39 to 70 are an integral part of these consolidated financial statements
1thtar10backindd   17 21092010   125653 thorn tons plc  annu al repor t and a ccoun t s 2010 34
s tatements of comprehensive income
52 weeks ended 26 june 2010
   group company 
     52 weeks  52 weeks 52 weeks 52 weeks 
     ended  ended ended ended 
     26 june 2010 27 june 2009 26 june 2010 27 june 2009 
    note £’000 £’000 £’000 £’000
profit for the period    4354 3605 3200 9418
other comprehensive expenseincome     
– actuarial loss recognised in the defined benefit pension scheme  21 4040 8629 4040 8629
– movement of deferred tax on pension liability   20 1131 2416 1131 2416
total other comprehensive expense    2909 6213 2909 6213
total comprehensive incomeexpense for the financial  
period attributable to owners of the parent    1445 2608 291 3205
the accounting policies and notes on pages 39 to 70 are an integral part of these consolidated financial statements 
1thtar10backindd   18 21092010   125654 thorn tons plc  annu al repor t and a ccoun t s 2010 35
s tatements of changes in shareholders’ equity
52 weeks ended 26 june 2010
     share share retained  
     capital premium earnings total 
group   note £’000 £’000 £’000 £’000
at 28 june 2008     6835 13750 14450 35035
profit for the period    — — 3605 3605
other comprehensive expense    — — 6213 6213
total comprehensive income for the period ended 27 june 2009   — — 2608 2608
transactions with owners     
– new share capital issued   23 — 2 — 2
– sharebased payment charge   24 — — 520 520
– effect of tax on share option movement   20 — — 171 171
– dividends   10 — — 4040 4040
at 27 june 2009    6835 13752 8151 28738
profit for the period    — — 4354 4354
other comprehensive expense    — — 2909 2909
total comprehensive income for the period ended 26 june 2010   — — 1445 1445
transactions with owners     
– new share capital issued   23 2 16 — 18
– sharebased payment charge   24 — — 379 379
– effect of tax on share option movement   20 — — 59 59
– dividends   10 — — 4553 4553
at 26 june 2010    6837 13768 5363 25968
1thtar10backindd   19 21092010   125654 thorn tons plc  annu al repor t and a ccoun t s 2010 36
s tatements of changes in shareholders’ equity continued
52 weeks ended 26 june 2010
     share share retained  
     capital premium  earnings total 
company   note £’000 £’000 £’000 £’000
at 28 june 2008    6835 13750 12003 32588
profit for the period    — — 9418 9418
other comprehensive expense    — — 6213 6213
total comprehensive income for the period ended 27 june 2009   — — 3205 3205
transactions with owners     
– new share capital issued   23 — 2 — 2
– sharebased payment charge   24 — — 520 520
– effect of tax on share option movement   20 — — 171 171
– dividends   10 — — 4040 4040
at 27 june 2009    6835 13752 11517 32104
profit for the period    — — 3200 3200
other comprehensive expense    — — 2909 2909
total comprehensive income for the period ended 26 june 2010   — — 291 291
transactions with owners     
– new share capital issued   23 2 16 — 18
– sharebased payment charge   24 — — 379 379
– effect of tax on share option movement   20 — — 59 59
– dividends   10 — — 4553 4553
at 26 june 2010    6837 13768 7575 28180
retained earnings are net of investments in own shares of £2163000 2009 £2163000 being held by trusts operating the following plans
u 2007 ltip with 504610 shares 2009 504610 at an original cost of £1035000 2009 £1035000 and
u 2001 executive share option scheme with 905070 shares 2009 905070 at an original cost of £1128000 2009 £1128000
1thtar10backindd   20 21092010   125654 thorn tons plc  annu al repor t and a ccoun t s 2010 37
b alance sheets as at 26 june 2010
   group company 
     2010 2009 2010 2009 
    note £’000 £’000 £’000 £’000
assets     
noncurrent assets     
intangible assets   11 3451 4850 3451 4850
property plant and equipment   12 58533 62759 31769 35174
investment in subsidiaries   13 — — 27368 27368
deferred tax assets   20 — — 4085 2991
     61984 67609 66673 70383
current assets     
inventories   14 30393 25370 30382 25363
trade and other receivables   15 15977 14056 15987 14156
cash and cash equivalents   25b 1626 588 1553 680
     47996 40014 47922 40199
total assets    109980 107623 114595 110582
equity and liabilities     
shareholders’ equity attributable to owners of the parent     
ordinary shares   23 6837 6835 6837 6835
share premium    13768 13752 13768 13752
retained earnings    5363 8151 7575 11517
total equity     25968 28738 28180 32104
liabilities     
current liabilities     
trade and other payables   16 25390 22628 29965 25038
borrowings   17 24090 22625 24090 22769
current tax liabilities    614 1043 242 1000
provisions for liabilities   19 297 254 297 253
     50391 46550 54594 49060
noncurrent liabilities     
borrowings   17 3557 4637 3557 4637
deferred tax liabilities   20 1800 2917 — —
retirement benefit obligations   21 24219 21313 24219 21313
other noncurrent liabilities   22 2827 2816 2827 2816
provisions for liabilities   19 1218 652 1218 652
     33621 32335 31821 29418
total liabilities    84012 78885 86415 78478
total equity and liabilities    109980 107623 114595 110582
the accounting policies and notes on pages 39 to 70 are an integral part of these consolidated financial statements
the financial statements on pages 33 to 70 were approved by the board of directors on 7 september 2010 and were signed on its behalf by
mike davies  mark robson
chief executive  finance director
 
1thtar10backindd   21 21092010   125655 thorn tons plc  annu al repor t and a ccoun t s 2010 38
c ash flow statements 52 weeks ended 26 june 2010
   group company 
     52 weeks  52 weeks 52 weeks 52 weeks 
     ended  ended ended ended 
     26 june 2010 27 june 2009 26 june 2010 27 june 2009 
    note £’000 £’000 £’000 £’000
cash generated from operations   25a 14579 19151 14508 19223
corporate taxation    2255 2013 2251 1990
interest received    177 27 177 27
cash flows from operating activities    12501 17165 12434 17260
cash flows from investing activities     
proceeds from sale of property plant and equipment    136 51 136 27401
purchase of investments    — — — 27350
purchase of property plant and equipment    4605 7112 4559 7008
net cash used in investing activities    4469 7061 4423 6957
cash flows from financing activities     
net proceeds from issue of ordinary shares    18 2 18 2
interest paid    1346 1469 1346 1470
capital element of finance lease rental payments    3613 3297 3613 3297
borrowings advancedrepaid    2500 1800 2500 1800
dividends paid   10 4553 4040 4553 4040
net cash used in financing activities    6994 10604 6994 10605
net increasedecrease in cash and cash equivalents and bank overdrafts  1038 500 1017 302
cash and cash equivalents at beginning of period   25b 588 1088 536 838
cash and cash equivalents at end of period   25b 1626 588 1553 536
1thtar10backindd   22 21092010   125656 thorn tons plc  annu al repor t and a ccoun t s 2010 39
s tatement of accounting policies
basis of preparation
thorntons plc “the company” is a company incorporated and domiciled in the uk and is listed on the london stock exchange the address 
of the company’s registered office is thornton park somercotes derbyshire de55 4xj 
these consolidated financial statements have been prepared in accordance with international financial reporting standards “ifrs” and 
international financial reporting interpretations committee “ifric” interpretations as adopted by the eu and with those parts of the companies act 2006 
applicable to companies reporting under ifrs these consolidated financial statements have been prepared under the historical cost convention 
with the exception of derivative financial instruments and sharebased payments which are recognised at fair value a summary of the more 
important group accounting policies adopted in the preparation of the consolidated financial statements is set out below together with an 
explanation of where changes have been made to previous policies on the adoption of new accounting standards in the financial year these 
policies have been consistently applied to all the years presented unless otherwise stated
the preparation of financial statements in conformity with ifrs requires the use of estimates and assumptions that affect the reported amounts 
of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period 
although these estimates are based on management’s best knowledge actual results may ultimately differ a summary of critical accounting 
estimates used in the preparation of the financial statements is set out on page 44
standards amendments and interpretations effective in the period ended 26 june 2010
the following interpretations to existing standards are mandatory for the accounting period ended 26 june 2010 
u  ias 1 revised ‘presentation of financial statements’ the revised standard brings new disclosure requirements regarding ‘nonowner changes 
in equity’ and ‘owner changes in equity’ which are now required to be shown separately under this revised guidance the group has elected to 
continue to present two performance statements a consolidated income statement and a statement of comprehensive income previously the 
‘statement of recognised income and expense’ in addition the consolidated statement of changes in shareholders’ equity has been presented 
as a primary statement these financial statements have been prepared under the revised disclosure requirements the requirements under the 
revised standard have not had a significant impact on the group’s financial statements comparatives in the 2009 consolidated statement of 
comprehensive income have been represented to include movements in the fair value of cash flow hedges which had been previously shown 
separately as a change in equity 
u  ifrs 8 ‘operating segments’ replacing ias 14 ‘segment reporting’ ifrs 8 requires a management approach under which segment 
information is presented on the same basis as that used for internal reporting purposes
interpretations effective in the period ended 26 june 2010 but which had no significant impact
the following interpretations to existing standards are mandatory for the accounting period ended 26 june 2010 but they have not had 
a significant impact on the group or company 
u ifric 13 ‘customer loyalty programmes’
u ifric 14 ‘the limit on a defined benefit asset minimum funding requirements and their interaction’
u ifric 15 ‘agreements for the construction of real estate’
u ifric 16 ‘ hedges of a net investment in a foreign operation’
u ifric 17 ‘distribution of noncash assets to owners’
u ias 23 revised ‘borrowing costs’
u ias 27 revised ‘consolidated and separate financial statements’
u ias 32 amendment ‘financial instruments presentation’ and ias 1 amendment ‘presentation of financial statements’
u ias 39 amendment ‘financial instruments recognition and measurement’
u ifrs 2 amendment ‘sharebased payments’ 
u ifrs 3 revised ‘business combinations’ and
u ifrs 7 ‘financial instruments’
1thtar10backindd   23 21092010   125656 thorn tons plc  annu al repor t and a ccoun t s 2010 40
s tatement of accounting policies continued
basis of preparation continued
amendments and interpretations that are not yet effective and have not been early adopted which are not expected to have a significant impact
the following standards and interpretations have been published and are mandatory for accounting periods beginning on or after 26 june 2010 
or later periods but which the group and the company have not early adopted and are not expected to have a significant impact on the group 
or company
u ias 38 amendment ‘intangible assets’
u ifrs 5 amendment ‘noncurrent assets held for sale and discontinued operations’
u ias 1 amendment ‘presentation of financial statements’
u ifrs 2 amendments ‘group cashsettled sharebased payment transactions’ and
u ifrs 9 ‘financial instruments’
basis of consolidation
the consolidated financial statements incorporate the results of the company and each of its subsidiaries for the financial year ended 26 june 2010 
subsidiaries are entities controlled by the group where control is deemed to exist when the group has the power directly or indirectly to govern 
the financial and operating policies of an entity so as to obtain benefits from its activities the results of subsidiaries are included in the 
consolidated financial statements from the date the control commences until the date that control ceases
the purchase method of accounting is used to account for the acquisition of subsidiaries by the group the cost of an acquisition is measured 
as the fair value of the assets given equity instruments issued and liabilities incurred or assumed at the date of exchange plus costs directly 
attributable to the acquisition identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are 
measured initially at their fair values at the acquisition date irrespective of the extent of any minority interest the excess of the cost of acquisition 
over the fair value of the group’s share of the identifiable net assets acquired is recorded as goodwill if the cost of acquisition is less than the fair 
value of the net assets of the subsidiary acquired the difference is recognised directly in the income statement
intercompany transactions balances and unrealised gains on transactions between group companies are eliminated unrealised losses are 
also eliminated but considered an impairment indicator of the asset transferred accounting policies of subsidiaries have been changed where 
necessary to ensure consistency with the policies adopted by the group
property plant and equipment
property plant and equipment are stated at cost less accumulated depreciation cost comprises the purchase price of property plant and 
equipment together with any incidental costs of acquisition
subsequent costs are included in the asset’s carrying value or recognised as a separate asset as appropriate only when it is probable that 
future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably all other repairs 
and maintenance expenditure is charged to the income statement as incurred
all property plant and equipment other than land and assets in the course of construction are depreciated to write their cost down to residual 
value over their remaining useful lives by equal annual instalments as follows
long leasehold and freehold premises 50 years
short leasehold land and buildings  period of the lease
other plant vehicles and equipment 3–15 years
retail fittings and equipment up to 10 years
the assets’ residual values and useful lives are reviewed and adjusted if appropriate at each balance sheet date the need for an impairment 
writedown is assessed by comparison of the carrying value of the asset against the higher of its net realisable value or value in use
gains and losses on disposals are determined by comparing the proceeds net of disposal costs with the carrying amount and are recognised 
within operating expenses in the income statement
1thtar10backindd   24 21092010   125656 thorn tons plc  annu al repor t and a ccoun t s 2010 41
intangible assets
acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring into use the specific software 
these costs are amortised over their estimated useful lives three to five years
costs associated with maintaining computer software programmes are recognised as an expense as incurred costs that are directly associated 
with the production of identifiable and unique software products controlled by the group and that will probably generate economic benefits 
exceeding costs beyond one year are recognised as intangible assets
computer software development costs are recognised as assets and are amortised over their estimated useful lives not exceeding five years
employee share option schemes
where share options are granted to employees as part of their remuneration the fair value of options granted is recognised as an employee 
expense in the income statement with a corresponding increase in equity the fair value is measured at the grant date and expensed through 
the income statement over the period during which the employees become unconditionally entitled to the options the amount recognised in 
the income statement is adjusted at each balance sheet date for the expected and actual number of options vesting with a corresponding 
entry in equity
the fair value of the options is measured using a blackscholes option valuation model for options with nonmarket performance conditions 
and a monte carlo model for options with market performance conditions
the proceeds received net of any directly attributable transaction costs are credited to share capital and share premium when the options 
are exercised exercised options are equity settled
own shares held by the employee share ownership plan “esop” trusts are carried at cost and disclosed within note 24
investments in subsidiaries
investments in subsidiaries are stated at cost provision being made where appropriate for impairment assessed by comparing the carrying value 
to the higher of net realisable value or value in use
inventories
inventories are stated at the lower of cost and net realisable value cost includes materials direct labour and an attributable proportion of 
manufacturing overheads based on normal operating capacity according to the stage of production reached and valued on a fifo basis 
net realisable value is the estimated value which would be realised after deducting all costs of completion marketing and selling provision 
is made to reduce the cost to net realisable value having regard to the age and condition of inventory as well as its anticipated saleability
trade receivables
trade receivables are recognised initially at fair value and subsequently carried net of provisions for impairment a provision for impairment is 
established where there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the 
receivables significant financial difficulties of the debtor probability that the debtor will enter bankruptcy or financial reorganisation and default or 
delinquency in payments more than 60 days overdue are considered indicators that the trade receivable is impaired the amount of the provision 
is the difference between the asset’s carrying amount and the present value of estimated future cash flows the carrying amount of the asset is 
reduced through the use of an allowance account and the amount of the loss is recognised in the income statement within operating expenses 
when a trade receivable is uncollectible it is written off against the allowance account for trade receivables subsequent recoveries of amounts 
previously written off are credited against operating expenses in the income statement 
cash and equivalents
cash and cash equivalents include cash in hand deposits on call with banks other shortterm liquid investments with maturities of three months 
or less and bank overdrafts bank overdrafts are shown within borrowings in current liabilities on the balance sheet
trade and other payables
trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method
1thtar10backindd   25 21092010   125656 thorn tons plc  annu al repor t and a ccoun t s 2010 42
s tatement of accounting policies continued
borrowings
borrowings are recognised initially at fair value net of transaction costs subsequent measurement is based on amortised cost and any difference 
between the proceeds net of transaction costs and the redemption value is recognised in the income statement over the period of the borrowings 
using the effective interest rate method
borrowing facilities are provided by a number of different banks and are subject to continued covenant compliance these covenants being 
measured half yearly in line with the annual and interim reporting cycles use of these facilities is generally short term in nature with loan 
maturity dates ranging from less than one week to several months borrowings are actively monitored in order to manage their cost and level 
of exposure to each individual bank which in the normal course of business results in the settlement of these liabilities and the separate 
drawdown of new loans within twelve months of the balance sheet date in light of this these borrowings are classified as current
current taxation
the charge for current tax is based on the results for the period after making allowance for nonassessable or disallowable items it is calculated 
using rates of tax that have been enacted at the balance sheet date
deferred taxation
deferred taxation is recognised using the liability method on temporary differences arising between the tax bases of assets and liabilities and their 
carrying amounts in the consolidated financial statements
deferred tax liabilities are recognised in full for all taxable temporary differences and deferred tax assets are recognised to the extent that it is 
probable that taxable profits will be available against which deductible temporary differences can be utilised however if the deferred tax arises 
from the initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects 
neither accounting nor taxable profit it is not accounted for deferred taxation is measured based on tax rates and laws enacted or substantively 
enacted at the balance sheet date and are expected to apply when the related deferred income tax asset is realised or deferred income tax liability 
is settled
deferred tax assets and liabilities are offset when there is a legal enforceable right to set off current tax assets against current tax liabilities and 
when they relate to income taxes levied by the same taxation authority and the group intends to settle its current tax assets and liabilities on a 
net basis
provisions
a provision is recognised in the balance sheet when the group has a legal or constructive obligation whereby as a result of a past event it is 
probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the 
obligation if the effect is material provisions are determined by discounting the expected future cash flows at a pretax rate that reflects current 
market assessments of the time value of money and where appropriate the risks specific to the liability
share capital
ordinary shares are classified as equity
incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction net of tax from the proceeds 
when applicable
revenue
revenue comprises the amounts receivable for goods and services provided outside the group in the normal course of business net of trade 
discounts and value added tax
retail sales and allowances are recognised at the date of the transaction with consumers in addition provisions are made for expected returns 
as necessary for sales promotion purposes thorntons plc operates a variety of schemes that give rise to goods being sold at a discount to the 
standard retail price these include staff discounts and the redemption of promotional vouchers revenue is adjusted to show sales net of all 
related discounts
wholesale sales including sales to franchise outlets are recognised either when goods are dispatched to customers or the customer has accepted 
the products depending on the sales channel provision is made for expected returns and allowances as necessary
1thtar10backindd   26 21092010   125656 thorn tons plc  annu al repor t and a ccoun t s 2010 43
segmental reporting
following the adoption of ifrs 8 ‘operating segments’ segments are reported in a manner consistent with the internal reporting provided to the 
chief operating decision maker “codm” which has been identified as the executive committee “executive” which comprises the executive 
directors and the directors of retail and human resources the codm is responsible for allocating resources and assessing performance of the 
operating segments
other operating income
other operating income comprises amounts receivable in respect of licensing income franchise fees and rental income net of value added tax 
where applicable licence income and rental income are recognised on an accruals basis in accordance with the risks and rewards of the relevant 
agreements franchise fees are nonrefundable and are charged in return for the initial grant of a five year franchise and the income is therefore 
released to the income statement on a straightline basis over this five year period fees in respect of subsequent renewals are likewise amortised 
over the renewal period
postretirement benefits
defined benefit pension scheme
the retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation and unfunded 
liabilities as reduced by the fair value of defined benefit scheme assets this scheme was closed to new entrants with effect from august 2002
the defined benefit obligation is calculated annually by independent actuaries using the projected unit method the present value of the defined 
benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high quality corporate bonds that are 
denominated in the currency in which the benefits will be paid and that have terms to maturity approximating to the terms of the related 
pension liability
with effect from 6 april 2009 benefits under the scheme for active members were amended for service from that date from the previous basis 
of final salary accrual to a career average revalued earnings “care” basis
actuarial gains and losses are recognised in full in the period in which they occur they are recognised directly in equity and are presented in 
the statement of comprehensive income other income and administrative expenses associated with the defined benefit scheme are recognised 
in the income statement
the contributions made by the employees and the group are held in a trust fund separate from the group’s finances
defined contribution pension scheme
the group also operates a defined contribution pension scheme which requires contributions to be made to a separately administered fund 
contributions to the fund are determined as a percentage of employees’ earnings and are charged to the income statement as incurred 
foreign currencies
transactions in foreign currencies are translated in sterling at the exchange rate ruling at the date of transaction monetary assets and liabilities 
denominated in foreign currencies are retranslated to sterling at the exchange rates ruling at the balance sheet date and any exchange differences 
arising are taken to the income statement
finance leases
leases are classified as finance leases where the terms of the lease transfer substantially all the risks and rewards of ownership to the group 
all other leases are classified as operating leases
property plant and equipment held under finance leases are capitalised in the balance sheet at fair value of leased assets or if lower the present 
value of the minimum lease payments assets are depreciated over the shorter of their lease term and their expected useful lives the interest 
element of leasing payments represents a constant proportion of the capital balance outstanding and is charged to the income statement over 
the period of the lease
operating leases
the costs of all operating leases are charged against operating profit on a straightline basis at existing rental levels incentives to sign leases 
including reverse premiums and rentfree periods are treated as deferred income and are credited to the income statement in equal instalments 
over the term of the lease
rental income from operating leases is recognised on a straightline basis over the period of the lease at current rental levels
1thtar10backindd   27 21092010   125656 thorn tons plc  annu al repor t and a ccoun t s 2010 44
s tatement of accounting policies continued
new store expenditure
pretrading expenditure on new stores is charged to the income statement as incurred
derivatives and other financial instruments
derivatives are initially recognised at fair value on the date the contract is entered into and are subsequently remeasured at fair value where 
appropriate the group enters into derivatives in order to minimise relevant currency and interest rate exposure these are designated as hedges 
of the cost of a highly probable forecast transaction or commitment “cash flow hedging instrument”
to qualify for hedge accounting the group is required at inception to document in advance the relationship between the item being hedged and 
the hedging instrument and to document and reassess at each reporting date whether the hedge will be highly effective in offsetting changes in 
cash flows of the hedged item on an ongoing basis
the effective portion of changes in the fair value of cash flow hedging derivatives is recognised in equity within the hedging reserve the change 
in fair value relating to the ineffective portion of the hedge is recognised in the income statement immediately within finance costs amounts 
accumulated within equity are recycled to the income statement in the periods when the hedged item will affect profit
when a hedging instrument expires or is sold or no longer meets the criteria for hedge accounting any cumulative gain or loss on the hedging 
instrument previously recognised in equity is retained in equity and is recognised when the forecast transaction is ultimately recognised in the 
income statement if the hedged transaction is no longer expected to occur the cumulative gain or loss that was recognised in equity is 
immediately transferred to the income statement
grants
grants and other contributions towards the cost of property plant and equipment are included in payables as deferred income and credited to the 
income statement over the life of the asset and recognised at fair value where there is a reasonable assurance the grant will be received and that 
the group will comply with conditions of the grant 
exceptional items
exceptional items are material items which derive from events or transactions which individually or if of a similar type in aggregate need to be 
disclosed by virtue of their size or incidence if the financial statements are to give a true and fair view
dividends
final dividends are recognised as a liability in the period in which they are approved by the company’s shareholders interim dividends are 
recognised when they are paid
net debt
net debt is cash and cash equivalents bank and other loans and finance leases
research and development
expenditure in respect of research and development is written off against profits in the period in which it is incurred unless the development costs 
meet the criteria for capitalisation under ias 38 ‘intangible assets’
critical accounting estimates and judgements
provisions
the group makes judgements to determine whether there is objective evidence which indicates that inventory is not held at greater than net 
realisable cost store dilapidation provision is estimated based on past experience of cash outflows the group provides against onerous leases 
where there is doubt over future trading cash flows
retirement benefit obligation
the valuation of the retirement benefit obligation is dependent upon a series of assumptions the key ones being discount rates mortality rates 
investment returns salary inflation and the rate of pension increases these judgements and estimates are determined after taking into account 
the requirements of ias 19 ‘retirement benefit obligations’ and after taking expert advice from the group actuaries these are set out in note 21 
to the financial statements
1thtar10backindd   28 21092010   125656 thorn tons plc  annu al repor t and a ccoun t s 2010 45
notes to the financial statements 1 segmental reporting
the executive reviews the group’s internal reporting in order to assess performance and allocate resources the operating segments of the group 
have been determined on this basis
all revenue arises from uk operations to external customers and therefore the executive does not consider the business from a geographic perspective 
only an operational one two reportable segments ‘retail’ which incorporates own stores franchise and thorntons direct and ‘sales  operations’ 
“so” encompassing the commercial trading channel and manufacturing operations have been identified no one customer accounts for more than 
10 of revenue
the executive assesses the performance of the operating segments based on a measure of operating profit costs specific to head office and 
finance costs are not included in the result for each operating segment as these costs are not managed on a segmented basis
total segment assets exclude it assets nontrade receivables and cash and cash equivalents as these are managed centrally assets are 
substantially located in the uk
 52 weeks ended 26 june 2010  52 weeks ended 27 june 2009 
  retail so central total retail so central total 
  £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
total revenue 151947 62606 — 214553 157772 57033 — 214805
depreciation and amortisation 3994 5239 2032 11265 3809 5470 2293 11572
segment operating profit 9340 13994 — 23334 13359 9747 — 23106
head office costs    16080    15166
exceptional items note 2    —    1800
operating profit    7254    9740
net finance costs    1117    1652
profit before taxation    6137    8088
additions to noncurrent assets  
other than deferred tax assets 2626 2639 435 5700 5968 3487 890 10345
total assets 16888 79363 13729 109980 18040 78006 11577 107623
2 exceptional items 
exceptional items comprise
        52 weeks  52 weeks 
        ended  ended 
        26 june 2010 27 june 2009 
        £’000 £’000
pension curtailment gain       — 2300
franchisee bad debt       — 500
        — 1800
tax charge attributable to exceptional items      — 504
net tax impact of withdrawal of ibas       — 2033
        — 2537
pension curtailment gain
in 2009 the group implemented a change to the defined benefit pension scheme from a final salary to a care basis under the care scheme 
pension benefits are built up each year linked to the members’ pensionable salaries in that year this reduction in pension benefits resulted in a 
curtailment gain which in line with ias 19 was valued at £2300000
franchisee bad debt
the 2009 charge related to the creation of a provision against an unusually large bad debt following the insolvency of a major franchisee
tax charge attributable to exceptional items
this was the tax charge arising in relation to the exceptional profit and loss items calculated at the standard rate of 28
1thtar10backindd   29 21092010   125656 thorn tons plc  annu al repor t and a ccoun t s 2010 46
notes to the financial statements continued
2 exceptional items continued
net tax impact of withdrawal of industrial buildings allowances
this related to a oneoff charge of £3053000 arising from the withdrawal of ibas this was offset by a £1020000 tax credit arising from 
a revision of capital allowance claims made in respect of plant and machinery
3 other operating income
        52 weeks  52 weeks 
        ended  ended 
        26 june 2010 27 june 2009 
        £’000 £’000
franchise fee income       158 197
licensing income       973 938
rent receivable       255 275
        1386 1410
4 finance income
        52 weeks  52 weeks 
        ended  ended 
        26 june 2010 27 june 2009 
        £’000 £’000
interest on bank deposits       1 9
net exchange differences on foreign currency payments      35 —
other finance income       176 29
        212 38
5 finance costs
        52 weeks  52 weeks 
        ended  ended 
        26 june 2010 27 june 2009 
        £’000 £’000
interest payable on bank borrowings       328 1118
net exchange differences on foreign currency payments      — 74
interest payable on finance leases       448 498
other finance costs       553 —
        1329 1690
1thtar10backindd   30 21092010   125656 thorn tons plc  annu al repor t and a ccoun t s 2010 47
6 profit before taxation
        52 weeks  52 weeks 
        ended  ended 
        26 june 2010 27 june 2009 
       note £’000 £’000
the following items have been included in arriving at profit before taxation   
employee benefits expense      27 66583 64607
exceptional curtailment gain      2 — 2300
oneoff restructuring costs       639 37
cost of inventories recognised as an expense      63137 64845
onerous lease charges       606 194
property plant and equipment impairment charges      170 92
depreciation of property plant and equipment     12  
– owned assets excluding impairment charges      6863 6861
– assets held under finance leases       2093 2356
amortisation of intangible assets      11 2139 2263
profit on disposal of property plant and equipment      76 16
operating lease rentals payable   
– land and buildings       21447 21255
– other       958 844
repairs and maintenance expenditure on property plant and equipment     4942 5031
trade receivables impairment      18 12 223
exceptional trade receivables impairment      2 — 500
government grant income       21 21
product research and development       453 535
services provided by the group’s auditors
during the period the group obtained the following services from the group’s auditors as detailed below
        52 weeks  52 weeks 
        ended  ended 
        26 june 2010 27 june 2009 
        £’000 £’000
audit services  
– audit of the parent and consolidated accounts      93 93
– audit of thorntons plc subsidiaries pursuant to legislation     5 4
– other services supplied pursuant to legislation      28 28
advice in respect of the company’s pension scheme      15 44
        141 169
1thtar10backindd   31 21092010   125657 thorn tons plc  annu al repor t and a ccoun t s 2010 48
notes to the financial statements continued
7 taxation
analysis of charge in period
        52 weeks  52 weeks 
        ended  ended 
        26 june 2010 27 june 2009 
        £’000 £’000
current tax  
– current period       2107 2246
– adjustment in respect of prior period       280 175
        1827 2071
deferred tax note 20  
– current period       133 261
– adjustment in respect of prior period       89 106
– effect of change in law concerning ibas       — 3053
– effect of revision of capital allowances claimed in respect of plant and machinery    — 1020
– effect of change in tax rate       — 12
        1783 4483
tax on items charged to equity
        52 weeks  52 weeks 
        ended  ended 
        26 june 2010 27 june 2009 
        £’000 £’000
deferred tax charge on sharebased payments      59 171
deferred tax credit on actuarial loss       1131 2416
        1072 2245
the legislation removing ibas from 1 april 2011 resulted in a deferred tax charge in 2009 of £3053000 steps were taken by the group to 
reclassify assets previously classified as industrial buildings as plant and machinery for which capital allowances are available this resulted in 
a credit in 2009 of £1020000 the net impact on the 2009 deferred tax charge was therefore £2033000
tax reconciliation
the tax for the period is higher 2009 higher than the standard rate of corporation tax in the uk 28 2009 28 the differences are 
explained below
        52 weeks  52 weeks 
        ended  ended 
        26 june 2010 27 june 2009 
        £’000 £’000
profit on ordinary activities before tax       6137 8088
profit on ordinary activities multiplied by rate of corporation tax in the uk of 28 2009 28   1718 2265
effects of  
– adjustments to tax provision in respect of prior periods      191 69
– expenses not deductible for tax purposes       257 242
– effect of other timing differences       1 —
– effect of reduction in tax rate       — 12
– effect of change in law concerning ibas       — 2033
total taxation       1783 4483
a number of changes to the uk corporation tax system were announced in the june 2010 budget statement the finance act no2 2010 
includes legislation to reduce the main rate of corporation tax from 28 to 27 from 1 april 2011 further reductions to the main rate are 
proposed to reduce the rate by 1 per annum to 24 by 1 april 2014 these rate changes had not been substantively enacted at the balance 
sheet date and therefore are not included in these financial statements
1thtar10backindd   32 21092010   125657 thorn tons plc  annu al repor t and a ccoun t s 2010 49
8 profit for the financial period
the parent company has not prepared its own profit and loss account as permitted by section 408 of the companies act 2006 of the group 
profit attributable to shareholders a profit after tax of £3200000 2009 £9418000 has been dealt with in the accounts of the company
9 earnings per share
basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary 
shares outstanding during the period excluding those held in the esop trusts which are treated as cancelled
for diluted earnings per share the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential 
ordinary shares dilutive potential ordinary shares are those share options granted to employees where the exercise price is less than the average 
market price of the company’s ordinary shares during the period
reconciliations of the earnings and weighted average number of shares used in the calculations are set out below
 52 weeks ended 26 june 2010  52 weeks ended 27 june 2009 
    earnings basic earnings diluted earnings earnings basic earnings diluted earnings 
    £’000 per share per share £’000 per share per share
profit before exceptional items   4354 65p 65p 4342 65p 65p
effect of exceptional items   — — — 737 11p 11p
profit attributable to owners of the parent  4354 65p 65p 3605 54p 54p
      2010   2009
weighted average number of ordinary shares    66948474   66939333
dilutive effect of shares from share options     7440   824
fully diluted weighted average number of ordinary shares   66955914   66940157
10 ordinary dividends
        2010 2009 
group and company       £’000 £’000
final dividend paid for the 52 weeks ended 27 june 2009 of 485p 52 weeks ended 28 june 2008 485p  3247 3237
interim dividend paid in respect of the 52 weeks ended 26 june 2010 of 195p 52 weeks ended 27 june 2009 120p 1306 803
amounts recognised as distributions to owners of the parent     4553 4040
in addition the directors are proposing a final dividend in respect of the year ended 26 june 2010 of 41p per share which will absorb an estimated 
£2700000 of shareholders’ funds it will be paid on 26 november 2010 to shareholders who are on the register of members on 29 october 2010
the trusts operating the longterm incentive plan scheme “ltip 2007” have fully waived dividends on the 504610 2009 504610 shares 
held at 26 june 2010 and all but 001p per share on the 905070 2009 905070 shares held in respect of the 2001 executive share 
option scheme
1thtar10backindd   33 21092010   125657 thorn tons plc  annu al repor t and a ccoun t s 2010 50
notes to the financial statements continued
11 intangible assets
         computer 
         software 
group and company        £’000
cost 
at 28 june 2009        25797
additions – externally acquired        763
disposals        232
at 26 june 2010        26328
aggregate amortisation 
at 28 june 2009        20947
charge for the year        2139
disposals        209
at 26 june 2010        22877
net book amount at 26 june 2010        3451
         computer 
         software 
group and company        £’000
cost 
at 29 june 2008        23570 
additions – externally acquired        2320
additions – internally generated        7
disposals        100
at 27 june 2009        25797
aggregate amortisation 
at 29 june 2008        18784
charge for the year        2263
disposals        100
at 27 june 2009        20947
net book amount at 27 june 2009        4850
net book amount at 28 june 2008        4786
intangible assets held under finance leases were valued at £857000 2009 £1901000
amortisation costs for intangible assets directly involved in production are recognised in cost of sales within the income statement totalling 
£858000 2009 £983000 all other amortisation costs are recognised within operating expenses
1thtar10backindd   34 21092010   125657 thorn tons plc  annu al repor t and a ccoun t s 2010 51
12 property plant and equipment
   land and buildings  
     long   other plant   
     leasehold short vehicles and  retail fittings  
     and freehold leasehold equipment and equipment total 
group    £’000 £’000 £’000 £’000 £’000
cost     
at 28 june 2009    38845 8044 82237 52334 181460
additions at cost    61 217 2812 1847 4937
disposals    — 61 828 874 1763
at 26 june 2010    38906 8200 84221 53307 184634
accumulated depreciation     
at 28 june 2009    10576 5262 58509 44354 118701
charge for the year    883 567 4939 2737 9126
disposals    — 52 817 857 1726
at 26 june 2010    11459 5777 62631 46234 126101
net book amount at 26 june 2010    27447 2423 21590 7073 58533
   land and buildings  
     long   other plant   
     leasehold short vehicles and  retail fittings  
     and freehold leasehold equipment and equipment total 
group    £’000 £’000 £’000 £’000 £’000
cost     
at 29 june 2008    38691 7647 79000 53002 178340
additions at cost    154 448 3672 3744 8018
disposals    — 51 435 4412 4898
at 27 june 2009    38845 8044 82237 52334 181460
accumulated depreciation     
at 29 june 2008    9744 4780 53746 45986 114256
charge for the year    832 531 5197 2749 9309
disposals    — 49 434 4381 4864
at 27 june 2009    10576 5262 58509 44354 118701
net book amount at 27 june 2009    28269 2782 23728 7980 62759
net book amount at 28 june 2008    28947 2867 25254 7016 64084
1thtar10backindd   35 21092010   125657 thorn tons plc  annu al repor t and a ccoun t s 2010 52
notes to the financial statements continued
12 property plant and equipment continued
   land and buildings  
     long   other plant   
     leasehold short vehicles and  retail fittings  
     and freehold leasehold equipment and equipment total 
company    £’000 £’000 £’000 £’000 £’000
cost     
at 28 june 2009    868 8005 82237 52189 143299
additions at cost    16 217 2812 1847 4892
disposals    — 61 828 874 1763
at 26 june 2010    884 8161 84221 53162 146428
accumulated depreciation     
at 28 june 2009    171 5233 58509 44212 108125
charge for the year    21 565 4939 2735 8260
disposals    — 52 817 857 1726
at 26 june 2010    192 5746 62631 46090 114659
net book amount at 26 june 2010    692 2415 21590 7072 31769
   land and buildings  
     long   other plant   
     leasehold short vehicles and  retail fittings  
     and freehold leasehold equipment and equipment total 
company    £’000 £’000 £’000 £’000 £’000
cost     
at 29 june 2008    38482 7608 79000 52858 177948
additions at cost    44 448 3672 3743 7907
disposals    — 51 435 4412 4898
intragroup transfers    37658 — — — 37658
at 27 june 2009    868 8005 82237 52189 143299
accumulated depreciation     
at 29 june 2008    9710 4754 53746 45845 114055
charge for the year    828 528 5197 2748 9301
disposals    — 49 434 4381 4864
intragroup transfers    10367 — — — 10367
at 27 june 2009    171 5233 58509 44212 108125
net book amount at 27 june 2009    697 2772 23728 7977 35174
net book amount at 28 june 2008    28722 2854 25254 7013 63893
depreciation costs for property plant and equipment directly involved in production are recognised within cost of sales within the income 
statement totalling £4619000 2009 £4766000 all other depreciation costs are recognised within operating expenses
tangible assets held under finance leases have the following net book amount
    land and    land and   
    buildings –  other plant  buildings – other plant  
    long leasehold  vehicles and retail fittings long leasehold vehicles and retail fittings 
    and freehold equipment and equipment and freehold equipment and equipment 
    2010 2010 2010 2009 2009 2009 
group and company   £’000 £’000 £’000 £’000 £’000 £’000
cost    784 10741 13879 784 9608 13570
aggregate depreciation   237 7746 11153 185 6880 10045
net book amount   547 2995 2726 599 2728 3525
1thtar10backindd   36 21092010   125657 thorn tons plc  annu al repor t and a ccoun t s 2010 53
13 investment in subsidiaries
        2010 2009 
company       £’000 £’000
cost  
opening cost       27369 19
additions at cost       — 27350
closing cost       27369 27369
provisions for impairment  
charge for the period       1 1
net book value       27368 27368
the company owns the whole of the issued ordinary share capital of the following principal operating subsidiaries to avoid a statement of 
excessive length details of investments in dormant companies included in the consolidated accounts have been omitted a full list of subsidiaries 
can be obtained upon request from the company’s registered office
subsidiary country of incorporation principal activity country of operation
strand court properties limited england property investment united kingdom
thorntons jersey limited jersey retail trading company jersey
the directors believe that the carrying value of the investments is supported by their underlying net assets
14 inventories
   group company 
      2010 2009 2010 2009 
      £’000 £’000 £’000 £’000
raw materials     3216 3101 3216 3101
work in progress     3193 2715 3193 2715
finished goods and goods for resale     23984 19554 23973 19547
      30393 25370 30382 25363
during the year £159000 2009 £415000 relating to the writedown of inventory to net realisable value in prior years was released and 
reflected in cost of sales 
15 trade and other receivables
   group company 
      2010 2009 2010 2009 
      £’000 £’000 £’000 £’000
trade receivables     7660 8079 7660 8079
less provision for impairment     829 855 829 855
net trade receivables     6831 7224 6831 7224
amounts owed by group undertakings     — — 25 112
other receivables     593 724 593 724
prepayments and accrued income     8553 6108 8538 6096
      15977 14056 15987 14156
the group’s exposure to credit risk and impairment losses related to trade receivables is disclosed in note 18
amounts owed by other group companies are unsecured interest free and have no fixed repayment terms
prepayments and accrued income include £5300000 2009 £4800000 of property related rent rates insurances and surcharge prepayments
1thtar10backindd   37 21092010   125658 thorn tons plc  annu al repor t and a ccoun t s 2010 54
notes to the financial statements continued
16 trade and other payables 
   group company 
      2010 2009 2010 2009 
      £’000 £’000 £’000 £’000
trade payables     14169 11206 14169 11206
other taxation and social security payable     2639 2927 2636 2925
amounts owed to other group companies     — — 4594 2426
other payables     109 84 109 84
accruals and deferred income     8473 8411 8457 8397
      25390 22628 29965 25038
amounts owed to other group companies are unsecured interest free and have no fixed repayment terms
within accruals and deferred income is a balance in respect of government grants within the group and company of £21035 2009 £21035 
primarily relating to a grant received in the year ending june 2004 in respect of the relocation of toffee manufacturing operations from the original 
belper site to thornton park this government grant totalling £400000 is being released to the income statement on a straightline basis over 
20 years
17 borrowings
   group company 
      2010 2009 2010 2009 
current     £’000 £’000 £’000 £’000
bank loans and overdrafts due within one year or on demand    
– unsecured bank loans and overdrafts     21700 19200 21700 19344
– finance lease obligations     2390 3425 2390 3425
      24090 22625 24090 22769
   group company 
      2010 2009 2010 2009 
noncurrent     £’000 £’000 £’000 £’000
finance lease obligations     3557 4637 3557 4637
bank loans and overdrafts are denominated in sterling and incur interest based on libor or uk base rates 
the effective interest rates at the balance sheet dates were as follows
        2010 2009 
         
bank borrowings       125 263
finance leases       324 390
the group’s borrowings are all denominated in sterling
maturity of financial liabilities
the table below analyses the group’s financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date 
to the contractual maturity date the amounts disclosed in the table below are the contractual undiscounted cash flows
  2010  2009 
     finance   finance  
    debt leases total debt leases total 
    £’000 £’000 £’000 £’000 £’000 £’000
less than one year   21704 2651 24355 19425 3776 23201
between one and two years   — 3098 3098 — 3815 3815
between two and five years   — 711 711 — 1199 1199
    21704 6460 28164 19425 8790 28215
1thtar10backindd   38 21092010   125658 thorn tons plc  annu al repor t and a ccoun t s 2010 55
17 borrowings continued
maturity of financial liabilities continued
debt due in less than one year reflects the ongoing utilisation on a shortterm basis of three year revolving facilities described in the following 
borrowing facilities note and in line with group accounting policy all loans in place at 26 june 2010 are classified as current on the basis that 
they will be settled within twelve months
borrowing facilities
the group has the following undrawn committed floating rate borrowing facilities available at 26 june 2010 the group must comply with the 
principal lending covenants in respect of interest cover the net debt to earnings before interest tax depreciation and amortisation “ebitda” 
ratio and earnings before interest tax depreciation amortisation and rent “ebitdar” to fixed costs ratio at 26 june 2010 none of these 
covenants had been breached
        2010 2009 
        £’000 £’000
expiring within one year       13300 5000
expiring between two and five years       52500 30800
        65800 35800
the facilities in place at 26 june 2010 that expire within one year include an overdraft facility which is renewable annually and £22500000 loan 
facilities which expired on 31 july 2010 those expiring between two and five years are part of three year revolving facilities due for renewal prior to 
august 2012 their utilisation being managed via regular review during their term all these facilities incur commitment fees at market rates 
the minimum lease payments under finance leases fall due as follows
  2010  2009 
    minimum  future present value of minimum future present value 
    lease finance finance lease  lease finance of finance lease 
    payments charges liabilities payments  charges liabilities 
    £’000 £’000 £’000 £’000 £’000 £’000
less than one year   2651 261 2390 3776 351 3425
between one and two years   3098 226 2872 3815 322 3493
between two and five years   711 26 685 1199 55 1144
    6460 513 5947 8790 728 8062
the fair value of obligations under finance leases equates to their carrying value as the interest rates being paid on these are substantially those 
prevailing in the open market 
the fair values of other financial instruments are not materially different to their carrying value due to their relatively short maturity or small size 
the group does not have any financial instruments that are measured in the balance sheet at fair value
18 financial instruments
the group’s financial instruments comprise cash and cash equivalents bank loans liquid resources finance leases onerous lease and 
dilapidation provisions and other items such as trade payables and trade receivables that arise from its operations the principal function of these 
financial instruments is to raise finance for the group’s operations the main risks arising from the group’s financial instruments can be analysed 
as follows
interest rate risk 
funding received from banks is at floating rates fixed in the short term for the duration of each loan floating rate borrowings are exposed to 
the risk of rising interest rates borrowings of a longerterm nature such as those required to fund fixed asset acquisitions are funded through 
finance leases such that the total finance lease exposure remains broadly constant from year to year and to this extent provides an element of fixed 
interest borrowing
liquidity risk 
the group uses banking facilities and finance leases as its primary sources of funding the group has historically been very cash generative 
the bank position and headroom of the group is monitored daily and capital expenditure has to be approved in accordance with its policy which 
defines the level of authorisation required since the end of the financial year the group has negotiated a shortterm committed overdraft facility 
of £5 million
1thtar10backindd   39 21092010   125658 thorn tons plc  annu al repor t and a ccoun t s 2010 56
notes to the financial statements continued
18 financial instruments continued
capital risk
the group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide returns 
for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital
in order to maintain or adjust the capital structure the group may adjust the amount of dividends paid to shareholders return capital to 
shareholders issue new shares or sell assets to reduce debt further details on the group’s borrowings and the dividends proposed by the 
group are outlined in the finance director’s report on page 11 and the chairman’s statement on pages 2 and 3
consistent with others in the industry the group monitors capital on the basis of gearing ratio this ratio is calculated as net debt divided by total 
equity net debt is calculated as total borrowings including current and noncurrent borrowings as shown in the balance sheet less cash and 
cash equivalents 
the group’s aim is to seek to maintain or reduce the level of net debt and improve operating cash flow the gearing ratios at 26 june 2010 and 
27 june 2009 were as follows
        2010 2009 
        £’000 £’000
total borrowings       27647 27262
less cash and cash equivalents       1626 588
net debt       26021 26674
equity       25968 28738
gearing ratio       1002 928
price risk 
the group seeks to limit its exposure to volatility in raw material and energy costs by buying these forward where possible for a period of up 
to a year
foreign currency risk 
the group’s exposure to foreign currency risk on trading transactions is not significant however hedging arrangements are made in respect of 
the largest purchase contracts when placed it is the group’s policy to hedge significant fixed asset or capital transactions where appropriate
credit risk 
retail sales represent a large proportion of the group’s sales and present no credit risk as they are made for cash where credit sales are 
concerned the group operates effective credit control procedures in order to minimise exposure to overdue debts and where possible also 
carries insurance against the cost of significant bad debts the insurance counterparties involved in transactions are limited to high quality 
financial institutions
at 26 june 2010 there were no significant concentrations of credit risk the maximum exposure to credit risk is represented by the carrying 
amount of each financial asset included in the balance sheet 
the carrying amount of financial assets representing the maximum credit exposure at the reporting date was
        2010 2009 
        £’000 £’000
trade receivables       6831 7224
the carrying amounts of the group’s trade and other receivables are denominated in sterling 
the maximum exposure to credit risk for trade receivables at the reporting date by geographic region was
        2010 2009 
        £’000 £’000
uk        6729 7135
europe       56 58
rest of world       46 31
        6831 7224
1thtar10backindd   40 21092010   125658 thorn tons plc  annu al repor t and a ccoun t s 2010 57
18 financial instruments continued
credit risk continued
the maximum exposure to credit risk for trade receivables at the reporting date by sales channel was
        2010 2009 
        £’000 £’000
franchise       1415 1245
commercial       4412 5589
thorntons direct       102 107
international       591 164
central       311 119
        6831 7224
the ageing of gross trade receivables at the reporting date was
   2010 2009 
      gross impaired gross impaired 
      £’000 £’000 £’000 £’000
current     6149 — 5905 2
30 days past due     366 — 1095 82
60 days past due     57 — 390 277
more than 60 days past due     1088 829 689 494
      7660 829 8079 855
a significant proportion of the receivables less than 60 days past due relate to large corporate customers for which there is no objective evidence 
that the group will not be able to recover amounts owing and therefore no impairment has been made 
the movement in impairment in respect of trade receivables during the year was as follows
         £’000
at 27 june 2009        855
charged to income statement        12
utilised in period        38
at 26 june 2010        829
the impairment charge recognised in the income statement net of amounts recovered previously written off amounted to £12000 2009 £723000
the other classes within trade and other receivables do not contain impaired assets
currency exposure
net monetary assets and liabilities of the group that are not denominated in the local functional currency were as follows
   euro usd 
      2010 2009 2010 2009 
      £’000 £’000 £’000 £’000
net foreign currency monetary assetsliabilities    
cash and cash overdraft     96 60 21 —
trade and other payables     1143 825 61 27
      1047 765 40 27
the following significant exchange rates applied during the year
   average rate reporting date spot rate 
      2010 2009 2010 2009
euro     11376 11744 12143 11736
usd     15837 16182 14963 16464
1thtar10backindd   41 21092010   125658 thorn tons plc  annu al repor t and a ccoun t s 2010 58
notes to the financial statements continued
18 financial instruments continued
sensitivity analysis
the group has used a sensitivity analysis technique that calculates the estimated change to the income statement and equity had a 10 
weakening in sterling occurred against all other currencies from the rates applicable at 26 june 2010 this analysis assumes that all other 
variables in particular interest rates remain constant the analysis has been prepared on the same basis for 2009
the amounts generated from the sensitivity analysis are estimates of the impact of market risk assuming that specified changes occur
a 10 weakening of sterling against the following currencies at 26 june 2010 would have decreased profit and loss by the following amounts
    profit and loss 
        2010 2009 
        £’000 £’000
euro       116 85
usd       3 3
a 10 strengthening of sterling against the above currency would have had an equal and opposite effect to the amounts shown
interest rate risk
the financial assets of the group that were exposed to interest rate risk at 26 june 2010 consisted of cash and shortterm deposits and financial 
liabilities consisted of shortterm bank borrowings and finance leases these are detailed along with their effective interest rates in note 17 
sensitivity analysis
a 05 adverse movement in the effective interest rates applicable to these financial liabilities at 26 june 2010 would have decreased profit by 
the amounts shown below
    profit and loss 
        2010 2009 
        £’000 £’000
bank borrowings       2 38
finance leases       78 93
        80 131
19 provisions for liabilities
        group onerous  company onerous 
        leases and  leases and 
        dilapidations dilapidations 
        £’000 £’000
at 28 june 2009       906 905
charged to income statement       687 687
utilised in period       20 19
released in period       58 58
at 26 june 2010       1515 1515
provisions are analysed between current and noncurrent as follows
   group company 
      2010 2009 2010 2009 
      £’000 £’000 £’000 £’000
current     297 254 297 253
noncurrent     1218 652 1218 652
      1515 906 1515 905
1thtar10backindd   42 21092010   125659 thorn tons plc  annu al repor t and a ccoun t s 2010 59
19 provisions for liabilities continued
the provision for onerous leases is held in respect of leasehold properties for which the group is liable to fulfil rent and other property 
commitments for stores from which either the group no longer trades or for which future trading cash flows are projected to be insufficient 
to cover these costs amounts have been provided for the shortfall between projected cash flows and the property costs up to the lease expiry 
date on a discounted basis future rent reviews could require additional provisions to be made
obligations are payable within a range of one to 17 years 2009 one to eight years the weighted average being seven years 2009 three years 
the group provides for property dilapidations where appropriate based on estimated undiscounted costs of the dilapidation repairs spread over 
the period of the tenancy
20 deferred tax
deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 28 2009 28
the movement on the deferred tax account is shown below
deferred tax liabilitiesassets
   group company 
      2010 2009 2010 2009 
      £’000 £’000 £’000 £’000
at beginning of period     2917 2750 2991 2714
income statement charge     44 379 22 125
taken to equity employee benefits     59 171 59 171
actuarial loss     1131 2416 1131 2416
effect of other timing differences     1 — — —
effect of change in law concerning ibas     — 2033 — 3585
at end of period     1800 2917 4085 2991
of the total group and company deferred tax balance at 26 june 2010 £242000 2009 £571000 is expected to be released within one year
the movements in deferred tax assets and liabilities prior to the offsetting of balances within the same jurisdiction as permitted by ias 12 during 
the period are as follows
deferred tax liabilities
       accelerated   
       capital   
       allowances other total 
group      £’000 £’000 £’000
at 28 june 2009      8835 48 8883
charged to income statement      301 — 301
at 26 june 2010      8534 48 8582
deferred tax assets
       retirement   
       benefit   
      provisions obligations other total 
group     £’000 £’000 £’000 £’000
at 28 june 2009     1 5966 1 5966
chargedcredited to income statement     1 257 1 257
effect of other timing differences     — 1 — 1
deferred tax on actuarial loss credited to equity    — 1131 — 1131
deferred tax on sharebased payments charged to equity    — 59 — 59
at 26 june 2010     — 6782 — 6782
1thtar10backindd   43 21092010   125659 thorn tons plc  annu al repor t and a ccoun t s 2010 60
notes to the financial statements continued
20 deferred tax continued 
deferred tax liabilities
       accelerated   
       capital   
       allowances other total 
company      £’000 £’000 £’000
at 28 june 2009      2975 — 2975
credited to income statement      279 — 279
at 26 june 2010      2696 — 2696
deferred tax assets
       retirement   
       benefit   
      provisions obligations other total 
company     £’000 £’000 £’000 £’000
at 28 june 2009     1 5966 1 5966
chargedcredited to income statement     1 257 1 257
deferred tax on actuarial loss credited to equity    — 1131 — 1131
deferred tax on sharebased payments charged to equity    — 59 — 59
at 26 june 2010     — 6781 — 6781
deferred tax liabilities
       accelerated   
       capital   
       allowances other total 
group      £’000 £’000 £’000
at 29 june 2008      7215 36 7251
charged to income statement      1620 12 1632
at 27 june 2009      8835 48 8883
deferred tax assets
       retirement   
       benefit   
      provisions obligations other total 
group     £’000 £’000 £’000 £’000
at 29 june 2008     8 4470 23 4501
chargedcredited to income statement     7 920 147 780
deferred tax on actuarial loss credited to equity    — 2416 — 2416
deferred tax on sharebased payments charged to equity    — — 171 171
at 27 june 2009     1 5966 1 5966
deferred tax liabilities
       accelerated   
       capital   
       allowances other total 
company      £’000 £’000 £’000
at 29 june 2008      7215 — 7215
credited to income statement      4240 — 4240
at 27 june 2009      2975 — 2975
1thtar10backindd   44 21092010   125659 thorn tons plc  annu al repor t and a ccoun t s 2010 61
20 deferred tax continued 
deferred tax assets
       retirement   
       benefit   
      provisions obligations other total 
company     £’000 £’000 £’000 £’000
at 29 june 2008     8 4470 23 4501
chargedcredited to income statement     7 920 147 780
deferred tax on actuarial loss credited to equity    — 2416 — 2416
deferred tax on sharebased payments charged to equity    — — 171 171
at 27 june 2009     1 5966 1 5966
deferred income tax assets are recognised for tax loss carry forwards to the extent that the realisation of the related tax benefit through future 
taxable profits is probable
21 retirement benefit obligations
pension arrangements are operated through a defined contribution scheme and a defined benefit scheme for both the group and the company
defined contribution scheme
pension costs for defined contribution scheme are as follows
        2010 2009 
        £’000 £’000
defined contribution scheme       274 219
defined benefit scheme
the company operates a defined benefit pension scheme with effect from 6 april 2009 the benefit structure changed from a final salary basis 
to a care basis pension benefits are built up each year linked to the members’ pensionable salaries in that year the benefits are then increased 
each year in line with inflation the scheme has been closed to new entrants since 31 july 2002
the company has opted to recognise all actuarial gains and losses immediately via the statement of comprehensive income
a formal actuarial valuation was carried out with an effective date of 31 may 2008 the results of this valuation have been updated to 26 june 2010 
by a qualified independent actuary
the thorntons’ pension scheme was actuarially valued by an independent professionally qualified actuary as at 26 june 2010 under ias 19 
the principal actuarial assumptions at the balance sheet date were
       2010 2009 2008 
         
rate of increase in pensionable salaries      na na 495
rate of increase to care benefits before retirement     330 350 —
rate of increase in pensions   
– in deferment      330 350 380
– postapril 1997      315 340 360
discount rate      550 640 630
inflation assumption      330 350 380
expected return on plan assets      570 610 700
the assumption as to how many members will take up the maximum taxfree commutation on retirement is based on the scheme’s own 
experience of commutation levels
1thtar10backindd   45 21092010   125659 thorn tons plc  annu al repor t and a ccoun t s 2010 62
notes to the financial statements continued
21 retirement benefit obligations continued 
defined benefit scheme continued
the sensitivities regarding the principal assumptions used to measure the scheme liabilities are set out below
  change in impact on 
  assumption scheme liabilities
rate of increase in pensions postapril 1997 increase by 01 increase by £04m
discount rate increase by 01 decrease by £13m
inflation assumption increase by 01 increase by £12m
the mortality rates used are as follows
    life expectancy at age 65 years
       mortality table male female
current pensioners    pa92mc yob  1935 3 191 221
future pensioners    pa92mc yob  1965 3 213 244
the expected return on plan assets is a blended average of projected longterm returns for the various asset classes equity returns are based on a 
selection of an equity risk premium above the riskfree rate which is measured in accordance with the yields on government bonds bond returns 
are selected by reference to yields on government and corporate debt as appropriate to the scheme’s holdings of these instruments returns are 
projected over the entire life of the benefit obligation
the assets of the scheme were invested as follows
 26 june 2010 27 june 2009 28 june 2008 30 june 2007 24 june 2006 
  £’000  £’000  £’000  £’000  £’000 
equities 25274 59 20977 60 24338 64 27164 69 21831 65
bonds 11106 26 8481 25 6845 18 5905 15 10076 30
gilts 5645 13 5211 15 6845 18 5905 15 — —
other 1060 2 81 — — — 394 1 1679 5
  43085 100 34750 100 38028 100 39368 100 33586 100
actual return on plan assets 6723  4466  2975   4284  2907 
history of assets liabilities experienced gains and losses
     26 june 2010 27 june 2009 28 june 2008 30 june 2007 24 june 2006 
     £’000 £’000 £’000 £’000 £’000
gainslosses arising on scheme liabilities     
due to experience    — 4695 — — 2003
percentage of defined benefit obligation    0 8 0 0 4
due to change of basis    8751 3067 3489 472 2081
percentage of defined benefit obligation    13 5 6 1 4
experience adjustments     
gainslosses arising on scheme assets    4711 7001 5637 1982 1141
percentage of assets    11 20 15 5 3
pensions and other postretirement obligations
the amounts recognised in the balance sheet are determined as follows
     2010 2009 2008 2007 2006 
     £’000 £’000 £’000 £’000 £’000
present value of funded obligations    67304 56063 53993 54785 51527
fair value of plan assets    43085 34750 38028 39368 33586
net deficit    24219 21313 15965 15417 17941
1thtar10backindd   46 21092010   125659 thorn tons plc  annu al repor t and a ccoun t s 2010 63
21 retirement benefit obligations continued 
pensions and other postretirement obligations continued
the amounts recognised in the income statement are as follows
        2010 2009 
        £’000 £’000
current service cost       460 676
interest cost       3554 3381
expected return on plan assets       2012 2535
past service cost       — 32
curtailment gain       — 2300
total included within staff employment benefits expense note 27     2002 746
of the total charge £14 million 2009 £11 million and £06 million 2009 £18 million credit were included in cost of sales and 
administrative expenses respectively
changes in the present value of the defined benefit obligations are as follows
        2010 2009 
        £’000 £’000
present value of obligation at beginning of period      56063 53993
current service cost       460 676
interest cost       3554 3381
employee contributions       798 880
past service cost       — 32
curtailment gain       — 2300
benefit payments       2322 2227
actuarial losses       8751 1628
present value of obligation at end of period      67304 56063
in october 2009 and as part of the schedule of contributions agreed with the trustees to thorntons’ pension scheme it was further agreed that in 
addition to an annual contribution of £2200000 the company would make an additional contribution over each of the next three financial years 
equivalent to the higher of either
u a third of any reduction in the net debt reported in the statutory accounts for the years ending june 2010 2011 and 2012 or
u the ongoing annual contribution of £2200000 multiplied by the percentage increase in the annual dividend above a minimum of £4000000
changes in the fair value of plan assets are as follows
        2010 2009 
        £’000 £’000
fair value of plan assets at beginning of period      34750 38028
employer contributions       3136 2535
employee contributions       798 880
benefits paid       2322 2227
expected return on scheme assets       2012 2535
actuarial gainloss       4711 7001
closing fair value of plan assets at end of period      43085 34750
analysis of the movement in the balance sheet deficit
        2010 2009 
        £’000 £’000
at beginning of period       21313 15965
employer pension cost       2002 746
employer contributions       3136 2535
net actuarial losses recognised in the period      4040 8629
at end of period       24219 21313
1thtar10backindd   47 21092010   125659 thorn tons plc  annu al repor t and a ccoun t s 2010 64
notes to the financial statements continued
21 retirement benefit obligations continued 
cumulative actuarial gains and losses recognised in equity
        2010 2009 
        £’000 £’000
at beginning of period       12001 3372
net actuarial losses recognised in the period      4040 8629
cumulative loss       16041 12001
the pension contributions to be paid by the group during the financial period ending 25 june 2011 are expected to be in the region of £3000000
22 other noncurrent liabilities
        2010 2009 
group and company       £’000 £’000
accruals and deferred income       2827 2816
included in the above are amounts totalling £250967 2009 £272002 held in respect of government grants
23 ordinary shares
        2010 2009 
group and company       £’000 £’000
authorised  
ordinary shares of 10p each 85000000 2009 85000000     8500 8500
issued and fully paid  
ordinary shares of 10p each 68365518 2009 68349837     6837 6835
allotments during the year
during the year no shares 2009 nil were issued under the provision of the company’s executive share option schemes and 15681 shares 
2009 1603 were issued under the sharesave scheme representing a total nominal value of £1568 2009 £160
the average price of shares issued under the sharesave scheme in the year was £113 2009 £100 and the aggregate consideration received 
under this scheme was £17720 2009 £1603
since the end of the year no shares have been issued under the provisions of the executive share option schemes 2009 nil and no shares 
2009 nil have been issued under the sharesave scheme
rights and restrictions attaching to shares
holders of the company’s ordinary shares of 10p each are entitled to participate in the payments of dividends pro rata to their holdings 
the directors may propose and pay interim dividends and recommend a final dividend for shareholders’ approval for any accounting period 
out of the profits available for distribution under english law
the rights attached to the company’s ordinary shares in addition to those conferred on their holders by law are set out in the company’s articles 
of association “the articles” a copy of which can be obtained on request from the company secretary 
the articles contain certain restrictions on the transfer of ordinary shares and on the exercise of voting rights attached to them including where the 
company has exercised its right to prohibit transfer following the omission of their holder or any person interested in them to provide the company 
with information requested by it in accordance with part 22 of the companies act 2006 
rules about the appointment and replacement of directors are set out in the articles changes to the articles must be approved by shareholders 
passing a special resolution the directors’ powers are conferred on them by uk legislation and by the articles 
at any general meeting a resolution put to the vote of the meeting is decided on a show of hands unless before or on the declaration of the 
result of a show of hands a poll is properly demanded on a show of hands every member who is present in person at a general meeting of the 
company has one vote proxies may not vote on a show of hands on a poll every member who is present in person or by proxy has one vote for 
every share of which heshe is the holder
1thtar10backindd   48 21092010   125700 thorn tons plc  annu al repor t and a ccoun t s 2010 65
23 ordinary shares continued
share options
options outstanding including those held by directors are listed below
executive schemes
 number of options during the   
 52 weeks ended 26 june 2010 exercisable 
  at 27 june granted or    at 26 june exercise   
date of grant 2009 reinstated forfeited exercised lapsed 2010 price from to
22 nov 2001 166666 — — — 166666 — 90p 22 nov 2004 22 nov 2011
12 mar 2002 16516 — — — — 16516 111p 12 mar 2005 12 mar 2012
2 oct 2002 16516 — — — — 16516 111p 2 oct 2005 2 oct 2012
3 oct 2003 44000 — — — 44000 — 125p 3 oct 2006 3 oct 2013
3 apr 2006 544000 — — — — 544000 119p 3 apr 2009 3 apr 2016
5 jun 2006 1200000 — — — — 1200000 116p 5 jun 2009 5 jun 2016
11 jul 2006 500000 — — — — 500000 129p 11 jul 2009 11 jul 2016
2 oct 2006 1200000 — — — — 1200000 153p 2 oct 2009 2 oct 2016
13 sep 2007 500000 — — — — 500000 170p 13 sep 2010 13 sep 2017
23 nov 2007 520208 — — — 140455 379753 192p 23 nov 2010 23 nov 2017
16 oct 2008 1142120 — — — 247164 894956 113p 16 oct 2011 16 oct 2018
20 oct 2009 — 842969 — — 24953 818016 132p 20 oct 2012 20 oct 2019
9 nov 2009 — 243070 — — — 243070 117p 9 nov 2012 9 nov 2019
  5850026 1086039 — — 623238 6312827   
sharesave scheme
 number of options during the   
 52 weeks ended 26 june 2010 exercisable 
  at 27 june granted or    at 26 june exercise   
date of grant 2009 reinstated forfeited exercised lapsed 2010 price from to
16 oct 2003 262923 — — — 262923 — 100p 1 jan 2009 30 jun 2009
12 oct 2004 179088 — — — 12117 166971 150p 1 jan 2010 30 jun 2010
9 oct 2006 154619 — — 15681 136831 2107 113p 1 jan 2010 30 jun 2010
9 oct 2006 186940 — — — 20918 166022 113p 1 jan 2012 30 jun 2012
10 oct 2007 170965 — — — 36719 134246 148p 1 jan 2011 30 jun 2011
10 oct 2007 222321 — — — 26422 195899 148p 1 jan 2013 30 jun 2013
18 nov 2009 — 450666 — — 11929 438737 108p 1 jan 2013 30 jun 2013
18 nov 2009 — 455304 — — 20902 434402 108p 1 jan 2015 30 jun 2015
  1176856 905970 — 15681 528761 1538384   
24 sharebased payments
under the company’s executive share option schemes the remuneration committee can grant options over shares in the company to directors 
and employees of the company options are granted with a fixed exercise price equal to the market price of the shares under option at the date 
of grant the contractual life of an option is ten years awards of options under the scheme are generally reserved for employees at senior 
management level and above details of the performance conditions attaching to awards of options are described in the report on the directors’ 
remuneration on pages 25 to 30 fair value is measured by the use of the blackscholes model for options with internal performance criteria and 
the monte carlo model for options with external performance conditions
the thorntons sharesave scheme enables eligible employees to acquire options over ordinary shares of the company at a discount of up to 20 
to the market price in conjunction with a save as you earn contract the options are exercisable within a period of six months commencing three 
or five years from the date of the savings contract
1thtar10backindd   49 21092010   125700 thorn tons plc  annu al repor t and a ccoun t s 2010 66
notes to the financial statements continued
24 sharebased payments continued 
the fair value per option granted during the year and the assumptions used in their calculation are as follows
   2010  2009
     executive executive sharesave sharesave executive 
     1 2 1 2 1
grant date    20 oct 09 9 nov 09 18 nov 09 18 nov 09 16 oct 08
share price at grant date    134p 116p 120p 120p 110p
exercise price    132p 117p 108p 108p 113p
number of employees    6 1 240 133 4
shares under option    842969 243070 450666 455304 1142120
vesting period years    3 3 3 5 3
expected volatility    4642 4695 4699 4699 3371
option life years    10 10 3 5 10
expected life years    3 3 3 5 3
riskfree rate    190 203 189 273 410
expected dividends expressed as a dividend yield   451 522 820 820 618
possibility of ceasing employment before vesting    na na 4571 4723 na
fair value per option    37p 59p 27p 28p 41p
the expected volatility is based on historical volatility over the last three years the expected life is the average expected period to exercise 
the riskfree rate of return is the yield on zerocoupon uk government bonds of a term consistent with the assumed option life 
a reconciliation of executive share option movements over the period to 26 june 2010 is shown below
   2010 2009 
       weighted  weighted 
       average  average 
executive share options     number exercise price number exercise price
outstanding at start of period     5850026 135p 4908844 125p
granted     1086039 129p 1142120 113p
forfeited     — — — —
exercised     — — — —
lapsed     623238 126p 200938 164p
outstanding at end of period     6312827 135p 5850026 135p
exercisable at end of period     33032 111p 243698 99p
for share options outstanding at the end of the period the range of exercise prices and weighted average contractual life is disclosed below
  2010  2009 
      contracted   contracted 
     weighted weighted  weighted weighted 
     average average  average average 
     exercise remaining life  exercise remaining life 
range of exercise prices   number price  years number price years
90p–111p   33032 111p 20 199698 93p 25
116p–153p   5400042 128p 71 4630120 127p 76
170p–192p   879753 180p 73 1020208 181p 170
the weighted average share price during the period for options exercised over the period was £nil 2009 £nil the total charge for the period relating 
to employee sharebased payment plans was £304000 2009 £440000 after deferred tax the total charge was £219000 2009 £269000
1thtar10backindd   50 21092010   125700 thorn tons plc  annu al repor t and a ccoun t s 2010 67
24 sharebased payments continued 
a reconciliation of sharesave scheme option movements over the period to 26 june 2010 is shown below
   2010 2009 
       weighted  weighted 
       average  average 
sharesave scheme options     number exercise price number exercise price
outstanding at start of period     1176856 127p 1467928 128p
granted     905970 108p — —
forfeited     — — 37903 138p
exercised     15681 113p 1603 100p
lapsed     528761 111p 251566 129p
outstanding at end of period     1538384 122p 1176856 127p
exercisable at end of period     169078 150p 262923 100p
for share options outstanding at the end of the period the range of exercise prices and weighted average contractual life is disclosed below
  2010  2009 
      contractual   contractual 
     weighted weighted  weighted weighted 
     average average  average average 
     exercise remaining life  exercise remaining life 
sharesave scheme   number price  years number price years
oct 2003   — — — 262923 100p —
oct 2004   166971 150p 00 179028 150p 10
oct 2006   2107 113p 00 154619 113p 10
oct 2006   166022 113p 20 186940 113p 30
oct 2007   134246 148p 10 170965 148p 20
oct 2007   195899 148p 30 222321 148p 40
oct 2009   438737 108p 30 — — —
oct 2009   434402 108p 50 — — —
the weighted average share price during the period for options exercised over the period was 113p 2009 100p the total charge for the period relating 
to employee sharebased payment plans was £75000 2009 £80000 after deferred tax the total charge was £54000 2009 £58000
25 cash flow from operating activities
a cash generated from operations
   group company 
      2010 2009 2010 2009 
      £’000 £’000 £’000 £’000
continuing operations    
operating profit     7254 9740 5789 9657
adjustments for    
depreciation and amortisation     11265 11572 10399 11564
amortisation of government grants received    21 21 21 21
profit on disposal of property plant and equipment    76 16 76 69
sharebased payment charge     379 520 379 520
operating cash flow before working capital movements    18801 21795 16470 21651
changes in working capital    
increase in inventories     5023 1063 5019 1064
increasedecrease in trade and other receivables    1939 1072 1851 1318
increase in payables     3265 430 5432 714
increasedecrease in provisions     609 198 610 115
increase in postemployment benefit obligations    1134 3281 1134 3281
cash generated from operations     14579 19151 14508 19223
1thtar10backindd   51 21092010   125700 thorn tons plc  annu al repor t and a ccoun t s 2010 68
notes to the financial statements continued
25 cash flow from operating activities continued
b cash and cash equivalents for the cash flow statement
   group company 
      2010 2009 2010 2009 
      £’000 £’000 £’000 £’000
cash and cash equivalents     1626 588 1553 680
bank overdraft     — — — 144
net position     1626 588 1553 536
26 reconciliation of movement in net debt
   group company 
      2010 2009 2010 2009 
     note £’000 £’000 £’000 £’000
increasedecrease in cash and cash equivalents    1038 500 1017 302
cash flows from decrease in debt     1113 5097 1113 5097
change in net debt resulting from cash flow    2151 4597 2130 4795
inception of new finance leases    30 1498 3007 1498 3007
movement in net debt in the period     653 1590 632 1788
net debt at beginning of period     26674 28264 26726 28514
net debt at end of period    18 26021 26674 26094 26726
net debt comprises
   group company 
      2010 2009 2010 2009 
      £’000 £’000 £’000 £’000
cash      1626 588 1553 680
overdraft     — — — 144
unsecured bank loans     21700 19200 21700 19200
finance leases     5947 8062 5947 8062
      26021 26674 26094 26726
27 employees and directors
   group company 
      2010 2009 2010 2009 
employee benefit expense during the period    note £’000 £’000 £’000 £’000
wages and salaries     58271 57074 58216 57019
social security costs     5259 4881 5256 4878
health cover medical and life assurance     294 226 294 226
staff incentives and relocation costs     104 133 104 133
sharebased payments     379 520 379 520
pension costs    21 2276 1773 2276 1773
      66583 64607 66525 64549
exceptional curtailment gain    2 — 2300 — 2300
      66583 62307 66525 62249
1thtar10backindd   52 21092010   125701 thorn tons plc  annu al repor t and a ccoun t s 2010 69
27 employees and directors continued
   group company 
      2010 2009 2010 2009 
average monthly number of people including executive directors employed   number number number number
management and administration     270 254 269 253
selling and distribution     2592 2693 2588 2688
manufacturing     1520 1537 1520 1537
      4382 4484 4377 4478
group and company
        2010 2009 
key management compensation       £’000 £’000
salaries and shortterm employee benefits       1757 1751
postemployment benefits       70 78
termination benefits       — 160
sharebased payments       305 440
        2132 2429
the key management figures given above include directors and all other members of the executive committee
        2010 2009 
directors       £’000 £’000
aggregate emoluments       1233 1154
aggregate gains made on the exercise of share options      — —
company contributions to money purchase pension schemes     70 73
        1303 1227
pension scheme contributions above represent the total contributions made by the company on behalf of all directors in respect of approved 
pension arrangements retirement benefits are no longer accruing to directors 2009 nil under defined benefit schemes
further detail in respect of directors’ remuneration can be found in the report on the directors’ remuneration on pages 25 to 30
28 operating lease commitments – minimum lease payments
   2010 2009 
      land and   land and  
      buildings other buildings other 
group     £’000 £’000 £’000 £’000
commitments under noncancellable operating leases    
within one year     20592 831 19556 709
later than one year and less than five years    52762 1651 59122 1692
after five years     30865 16 37501 18
      104219 2498 116179 2419
1thtar10backindd   53 21092010   125701 thorn tons plc  annu al repor t and a ccoun t s 2010 70
notes to the financial statements continued
28 operating lease commitments – minimum lease payments continued
   2010 2009 
      land and   land and  
      buildings other buildings other 
company     £’000 £’000 £’000 £’000
commitments under noncancellable operating leases    
within one year     20532 831 19496 709
later than one year and less than five years    52522 1651 58882 1692
after five years     30707 16 37285 18
      103761 2498 115663 2419
the group has entered into operating leases in respect of retail stores vehicles fork lift trucks and equipment retail store leases have remaining 
terms of between three months and 21 years with renewal by mutual agreement at the expiry of the lease term and commonly with five year 
upwards only rent review periods contingent rentals are payable on approximately 15 of retail stores where leases contain a store revenue 
based component standard institutional restrictions common to those in place with other high street retailers are applicable to the group’s retail 
leases nonstore leases have remaining lease terms of between three months and six years
29 contingent liabilities
as at 26 june 2010 the group had provided guarantees in respect of customs and excise duty deferment of £100000 2009 £100000
30 capital and other financial commitments
   group company 
      2010 2009 2010 2009 
      £’000 £’000 £’000 £’000
contracts placed for future fixed asset capital expenditure not provided  
in the financial statements     — 362 — 362
bulk supplies of raw ingredients     20635 10132 20635 10132
      20635 10494 20635 10494
the majority of bulk raw material supply contracts are denominated in sterling and therefore carry no foreign currency exposure
the volatility of raw material prices has prompted the need for increased forward contracts
major noncash transactions
during the period the group and company entered into finance lease agreements in respect of various shop fitting costs and plant and equipment 
with capital values at the inception of the leases of £1498000 2009 £3007000
31 related party transactions
group
there are no related party transactions requiring disclosure in the financial statements 2009 £nil
company
funds are transferred within the group dependent on the operational needs of individual companies the directors do not consider it meaningful 
to set out the gross amounts of transfers between individual companies balances owed by and to other group undertakings are shown in notes 15 and 16 
to the financial statements
1thtar10backindd   54 21092010   125701 thorn tons plc  annu al repor t and a ccoun t s 2010 71
five year summary the figures below are extracted from this annual report and are prepared under ifrs
     2010 2009 2008 2007 2006 
     £’000 £’000 £’000 £’000 £’000
consolidated income statement     
revenue    214553 214805 208122 185989 176626
operating profit    7254 9740 10326 8852 7307
net finance costs    1117 1652 1856 1771 2142
profit before taxation    6137 8088 8470 7081 5165
taxation    1783 4483 2402 1785 1517
profit attributable to equity shareholders    4354 3605 6068 5296 3648
balance sheet     
net assets    25968 28738 35035 34886 31954
net borrowings    20662 18612 19912 16142 15998
net debt    26021 26674 28264 26411 27571
gearing ratio    1002 928 807 757 863
additions to intangible assets and property plant and equipment  5700 10345 7905 7938 7513
other financial data     
basic earnings per share    65p 54p 91p 80p 64p
dividends per share    61p 61p 68p 68p 68p
number of outlets – continuing operations     
own stores    377 379 379 368 367
franchises    222 197 250 218 212
stock market ratios     
year end share price    82p 74p 114p 175p 131p
shares in issue    683m 683m 683m 681m 672m
market capitalisation    £557m £505m £779m £1192m £878m
dividend yield    74   82 60 39 52
  53 week period
1thtar10backindd   55 21092010   125701 thorn tons plc  annu al repor t and a ccoun t s 2010 72
shareholder analysis
shareholder ownership analysis at 26 june 2010
      shareholders shareholders shares shares 
shareholding range     number  number 
up to 500     5511 579 1436805 21
501–1000     1589 167 1312691 19
1001–10000     2170 228 6582646 96
10001–100000     182 19 5682525 83
100000     67 07 53350851 781
      9519 1000 68365518 1000
      shareholders shareholders shares shares 
category of shareholding     number  number 
corporate bodies and nominees     522 55 50164931 734
private shareholders     8997 945 18200587 266
      9519 1000 68365518 1000
1thtar10backindd   56 21092010   125701 thorntons’ commitment to environmental issues is reflected in this annual report 
which has been printed on revive 5050 silk and revive 5050 offset both recycled 
paper stocks containing 50 recovered waste and 50 virgin fibre
this document was printed by beacon press using  their environmental 
print technology which minimises the impact of printing on the environment all energy 
used comes from renewable sources vegetable based inks have been used and 98 
of all dry waste associated with this production is diverted from landfill
beacon press is a carbonneutral
®
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21092010   125616 thorntons plc
thornton park
somercotes
alfreton
derbyshire de55 4xj
tel 0845 075 7565
wwwthorntonscouk
thorntons direct
tel 0845 121 1911
wwwthorntonscouk
for information on investor relations visit
wwwthorntonscouk
strengthening our foundations
thorntons plc 
•
 annual report and accounts 2010
thorntons plc  annual report and accounts 2010
coverindd   1 21092010   125615


Summary:
 thorn tons plc  annu al repor t and a ccoun t s 2010 6
the focus for 2009 was on guiding the 
business through the recession without 
losing sight of the longterm strategy 
although retail with the exception of 
thorntons direct underperformed growth 
in the sales  operations channel was 
particularly strong overall sales remained 
flat at £2150 million during the year this 
figure includes 47 growth in thorntons’ 
branded products to £2120 million and 
a planned reduction in private label sales 
the thorntons brand continued to gain 
market share in the uk chocolate market 
over the period and now has circa 7 
of the market reported pretax profit 
before exceptionals was £61 million 
2009 £63 million whilst debt was 
down £07 million at £260 million 
2009 £267 million
we continued to face challenging 
market conditions over the period and 
in response to this managed our costs 
prudently the decision to restructure the 
cost base in operations the call centre 
and head office had a positive impact 
and the board expects to see the full 
benefit of these actions coming through 
in the next 18 months investment 
in retail continued with 15 stores 
refurbished during the year additionally 
in manufacturing nearly £16 million 
was invested in a new moulding line 
which will increase productivity in the 
factory and even more importantly has 
improved the quality and appearance 
of our products
product innovation
innovation continues to be a key element 
of the company’s strategy and over the 
period within retail two new product lines 
were launched – metropolitan a more 
modern gift box of ganaches pralines 
devel oping
br and equity  inno vative produc t s
chief executive’s report
1thtar10frontindd   6 21092010   130515 thorn tons plc  annu al repor t and a ccoun t s 2010 7
going forward in commercial a refreshed 
classic collection is being launched 
which includes two new flavours 
additionally the range of hanging 
bags delicious chocolate 
smothered confectionery has 
been refreshed and later in 
the year a new ‘love milk’ 
box a selection of our 
favourite milk chocolates 
which is aimed at the 
younger market is being 
launched a number of 
seasonal specialities are 
also being added for next 
christmas and easter
later this year a new biscuit and 
chilled dessert range is being launched 
the biscuits will be sold into both the 
retail and commercial channels whilst 
the chilled desserts will be sold through 
the commercial channel only
retail
overall retail sales including own 
stores franchise and thorntons direct 
declined 37 to £1520 million 
2009 £1578 million
own stores
sales in own stores fell 36 to 
£1298 million over the period 2009 
£1345 million the larger part of this 
decline was experienced in the second half 
with sales decreasing 53 against the 
comparative period last year like for like 
sales declined by 35 for the whole 
year the decline was a combination 
of a reduction in the number of customer 
transactions in addition to significant levels 
of discounting of stocks particularly during 
the latter part of the second half of the year
and meltaways and melts a single 
variant chocolate with a praline centre 
in addition the paris and milan lines 
were extended to the continental range 
our christmas valentine’s mothering 
sunday and easter ranges were all 
refreshed and our seasonal exclusives 
sold particularly well 
moments continued to perform strongly 
during 2010 and the coming few weeks 
will see the addition of a new strawberry 
flavoured chocolate similarly in january 
a caramel variant will be added to the 
melts range 
we added coffee which became the new 
number one best seller and our award 
winning pistachio flavour to our chocolate 
block range and more recently added the 
new white chocolate block with coconut 
and lime a haiti charity chocolate block 
will be introduced in early 2011 
our newly refreshed classics range arrived 
in stores in july and the newly refreshed 
continental range will be available in 
october as part of this refresh a new 
milk box and a limited edition box are 
also being introduced 
in august we launched a new range of 
indulgent bars and a new impulse range 
which contain mini blocks and little treat 
packs our refreshed sharing range has 
also very recently hit the shelves
ahead of christmas packaging of our 
all time favourite products has been 
refreshed and new seasonal lines have 
been added in order to keep broadening 
the company’s appeal to new customers 
additionally thorntons direct will see 
a refresh of all its hampers
the thorntons brand 
continued to gain 
market share in the 
uk chocolate market 
over the period and 
now has circa 7 
of the market
 
 
in july our newly refreshed 
classics range hit stores and 
in october the newly refreshed 
continental range will 
be available
1thtar10frontindd   7 21092010   130518 thorn tons plc  annu al repor t and a ccoun t s 2010 8
in particular the “design your own box” 
with a personal photo printed on the lid 
all contributed to this strong growth 
sales  operations
commercial sales
commercial sales once again delivered 
good growth of 98 to £626 million 
2009 £570 million sales of thorntons’ 
branded product which excludes private 
label sales grew by 343 this increase 
was driven by the boxed chocolate ranges 
which grew by more than 48 over the 
period these ranges were developed 
exclusively for each of our major customers 
thorntons’ moments also continued to 
build on the success of last year with 
sales growing over 89 in its second year 
of trading and scrumptious and melts 
two new products were launched during 
the year
thorntons now has more than 30 
2009 25 of the inlaid box chocolate 
market in the uk ac nielsen july 2010 
excluding sales in thorntons retail
manufacturing operations
raw material prices have dramatically 
increased during the year with cocoa 
prices rising 25 and reaching levels 
not seen for well over 30 years this has 
been the subject of wide coverage in the 
press recently butter has increased even 
more by more than 66 since july 2009 
management has continued to seek 
to mitigate these price increases through 
a mixture of hedging via forward cover 
purchasing and product and 
ingredient reengineering
retail continued
own stores continued
during the course of the year our own store 
estate remained relatively stable with four 
closures and one new opening and one 
resite ending the year with 377 stores 
2009 379 
franchise
franchise sales for the period declined 
147 to £130 million 2009 £153 million 
as they continued to be affected by the 
collapse of birthdays limited birthdays 
limited went into administration in 
may 2009 during which time we lost 94 
franchise stores however over the year 
we continued to rebuild the estate and it is 
now at 222 stores only 32 short of the 
number of franchisees in april 2009 
as a special mention i would like to thank 
the franchise team for their continued 
hard work in opening so many stores in 
one year and our independent franchisees 
many of whom have opened stores in 
addition to the ones they already operate
thorntons direct
overall thorntons direct sales grew by 
an impressive 151 to £92 million 
2009 £80 million during the period 
and showed an improving trend with 
growth of 221 in h2 after 115 
in h1 corporate sales are back to levels 
seen prior to the recession as a result 
of our sales efforts in the leisure and 
hospitality sectors sales from the web 
site grew by 12 improvements to the 
functionality of the web site increased 
marketing activity and further 
developments in personalisation 
impro ving
our retail perf orm ance  produc tivity
chief executive’s report continued
thorntons branded product 
up 47
continued investment in stores 
and manufacturing operations
41 franchise openings in 
the year
commercial thorntons branded 
product sales up 343
online sales grew by 12
1thtar10frontindd   8 21092010   130522 thorn tons plc  annu al repor t and a ccoun t s 2010 9
as a result of value engineering activities 
benefits coming through from the 
investment in the robotic packing line 
and packaging price improvements 
productivity in operations improved 
significantly over the period further 
improvements are expected when the 
new moulding line is fully commissioned 
in the next few weeks
distribution costs also declined during 
the year as we benefited from the decision 
to outsource distribution in the south east 
of england at the beginning of the 
financial year
service levels to own stores and 
commercial customers continued to 
improve and consistently exceeded 
96 during the year 2009 96
export sales
in september last year we announced 
our intention to dedicate more resources 
to exploring the export opportunity 
good progress has been made in building 
routes to new markets particularly 
in central europe duty free and in 
further developing the business in 
the republic of ireland whilst still 
small these opportunities are 
providing us with the necessary 
commercial experience to 
accelerate growth in the future 
for the period under review 
export sales achieved £27 million 
2009 £20 million
mike davies
chief executive
7 september 2010
 
 
thorntons’ moments also 
continued to build on the 
success of last year  with 
commercial sales growing 
over 89 in its second year 
of trading
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