2294104 24 march 2014 1120 am    proof 3
premier foods plc  
annual report and accounts for the 
year ended 31 december 2013
stock code pfd
brands
consumers
driving 
category 
growth
 premier foods plc  annual report and accounts for the year ended 31 december 2013
costs
people
customers 2294104 24 march 2014 1120 am    proof 3
“we create the next generation of 
food our nation loves for modern 
family life”
premier foods makes a wide choice of great quality tasty affordable 
everyday and inspiring food for families juggling the demands of 
modern life who care about what they eat we aim to bring fresh new 
food ideas to our consumers that make it easy for modern families to 
create and enjoy the meals and treats they love
as one of britain’s biggest food producers we supply a range of retail 
wholesale foodservice and other customers with some of the nation’s 
best loved brands including ambrosia batchelors bisto hovis  
loyd grossman mr kipling oxo and sharwood’s we employ around 
8000 people operating from over 35 sites right across the country
visit us online to find further information
wwwpremierfoodscouk
website 
keep up to date with all the latest 
information about premier foods online 
including share price data press releases 
and results 
mobile 
you can now keep up to date with premier 
foods wherever you are with our new mobile 
friendly website
sustainability in everything we do 
if you want to know more about our 
commitment to sustainability and 
achievements in the year why not read our 
2013 sustainability report available on 
our website
brands 
all of our power brands have their own 
dedicated websites which contain the latest 
brand news and product information
business overview
premier foods plc annual report and accounts 2013 2294104 24 march 2014 1120 am    proof 3
highlights for 2013 0405
 group at a glance 0607
 overview of the year 0809
 chairman’ s statement 1011
 chief executive’s review 1213
strategy and business model 1617
consumers and brands 1819
customers 2021
people 2223
costs 2425
sustainability 2627
risk management 2831
key performance indicators 3233
 operating review 3639
 financial review 4043
business overview
strategic review
performance review
 chairman’ s introduction 4647
 board of directors and group executive 4851
 corporate governance 5258
 audit committee report 5961
nomination committee report 62
 remuneration committee chairman’s letter 63
 directors’ remuneration policy 6469
 annual report on remuneration  7075
 directors’ report 7677
governance
 audit opinion 8083
 consolidated financial statements 8488
 notes to the financial statements 89131
 company financial statements 132
 notes to the company
 financial statements 133135
financial statements
contents
06 08
chairman’s 
statement
chief 
executive’s 
review
10 12
our strategy 
driving 
category 
growth
financial 
review
16 40
overview of the 
year
group at a 
glance
for more information on the  
business overview see pages
0413
for more information on the  
strategic review see pages
1633
for more information on the  
performance review see pages
3643
for more information on  
governance see pages
4677
for more information on the  
financial statements see pages
80135
quick find
look out for these icons in this
annual report
strategic report
supplementary information
 shareholder information 136137
 glossary 138
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01 2294104 24 march 2014 1120 am    proof 3
did you know
over the year our 
employees raised 
£195000 helping 
to fund over 7500 
nursing hours for 
our corporate 
charity partner 
macmillan cancer 
support
new oxo shake 
 flavour
in 2013 we launched oxo shake  flavour supported by a new 
tv campaign this builds on the success of the ‘oxo magic 
cube’ ad and shows inanimate objects transforming into a 
delicious meal through the addition of oxo this creative style 
highlights the flavour transformation properties of the product 
oxo shake  flavour is a versatile and convenient seasoning and 
available in three exciting flavours it can be used before during or 
after the cooking process to add flavour to ordinary everyday meals 
and is aimed at bringing new consumers to the category helping drive 
overall brand and category penetration
for more information on consumers 
and brands see pages
1819 2294104 24 march 2014 1120 am    proof 3
business
overview
contents
this section contains a high level summary 
of the group our financial highlights and our 
key achievements over the course of the year
highlights for 2013 0405
group at a glance 0607
overview of the year 0809
chairman’s statement 1011
chief executive’s review 1213 2294104 24 march 2014 1120 am    proof 3
highlights for 2013
a transformational 12 months for the group
new management team in place
•	 gavin darby appointed as ceo in february and alastair murray appointed as 
cfo in september 2013
•	 strong experienced team in place to complete the transformation of the group
delivered against market expectation for 2013
•	 good results for 2013 in a difficult market
•	 grocery power brands sales up 20
•	 underlying trading profit up 177
delivery of cost savings 
•	 £161m of sga savings delivered in 2013
•	 further savings opportunities through reduction in complexity
•	 significant consolidation of supplier base
conditional agreement with the gores group to create a standalone hovis joint venture 
announced in january 2014
•	 unlocks significant investment programme in both infrastructure and the  
hovis brand
•	 premier foods retains 49 stake ensuring participation in future value 
generation
•	 allows for focus on a high quality branded ambient grocery business
capital refinancing plan announced on 4 march 2014 to strengthen capital structure 
this consists of three elements
•	 the raising of approximately £350m by way of a placing and rights issue
•	 the raising of approximately £475m in senior secured loan notes and
•	 a new £300m revolving credit facility
•	 in addition the group has also reached a new framework agreement with the 
group’s pension scheme trustees
new category focused strategy
•	 robust strategy to drive growth in a highly competitive market
•	 focused grocery business with strong competitive positions in growing 
categories
•	 focus on marketing and innovation to grow branded revenue
see further information online at
wwwpremierfoodscouk
for more information on the business 
performance see pages 3639
for more information on 
cost savings see pages
2425
for more information on 
the hovis jv see pages
37
for more information on the capital 
refinancing plan see pages
4041
for more information on  
our strategy see pages
1617
business overview
premier foods plc  annual report and accounts 2013
04 2294104 24 march 2014 1120 am    proof 3
financial headlines 2013
grocery power brand sales
£5435m 20
2012 £5331m
trading profit underlying business
£1452m 177
2012 £1234m
adjusted eps
277p 637
2012 170p
net debt
£8308m 126
2012 £9507m
non financial kpis 2013
sales from new products
129
as a percentage of our branded sales within  
power brand categories
products testing superior or 
at par with competitors
96
blind testing with consumers
reduction in co
2
 equivalent 
emissions
20
224110 tonnes of co
2
e
reduction in lost time 
accidents lta rate per 100000 hours worked
200
016 per 100000 hours
notes
on pages 04 to 77 of this report the group’s results for the year ended 31 december 2013 are presented on an ‘underlying business’ basis unless otherwise stated 
this includes the performance of the bread division which was held as ‘assets for sale’ at the year end and excludes the impact of disposals and milling sales as this 
basis better reflects the performance of the core business of the group and aids comparison with last year’s results a reconciliation to the statutory numbers can be 
found on page 43
for more information on key 
performance indicators see pages
3233
underlying 
basis 
2013
less bread 
business
add 
disposals
add milling 
sales
statutory basis 
continuing 
operations 2013
sales £12825m £6546m £64m £2219m £8562m
trading profit £1452m £63m £06m — £1395m
ebitda £1781m £219m £06m — £1568m
operating profit £526m
profit before taxation from continuing 
operations £44m
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group at a glance
one of britain’s biggest food producers
premier foods is one of the largest 
ambient food suppliers in the uk 
manufacturing distributing and 
selling a wide range of branded 
and nonbranded foods 
in 2013 premier foods 
generated revenues of £13bn 
employing around 8000 people 
operating from over 35 sites 
across the uk
our sites are dedicated to 
manufacturing high quality great 
tasting everyday food products 
which consumers know and love 
we have a broad stable of leading 
british brands many of which 
are household favourites these 
include our eight power brands 
of ambrosia batchelors bisto 
hovis loyd grossman  
mr kipling oxo and sharwood’s 
as well as many other iconic 
british food brands
the business is organised into 
two divisions grocery and bread 
the bread division includes 
our baking and flour milling 
operations and is managed by 
a dedicated team during the 
course of 2013 the business was 
restructured to remove excess 
capacity and improve efficiency 
and effectiveness in january 
2014 we announced a conditional 
agreement to establish a joint 
venture with the gores group 
this will help secure significant 
new investment for the hovis 
business whilst allowing premier
foods to share in the expected 
future benefits of this investment 
through retaining a 49 stake 
in the business approval of the 
hovis joint venture is subject 
to shareholder approval and is 
expected to be completed by the 
end of april 2014
a summary of the grocery and 
bread divisions is shown on 
the opposite page the entire 
bread division will transfer to 
the hovis joint venture with the 
exception of the andover mill and 
the charnwood foods business 
which will remain with the group
within the business overview 
strategic review and 
performance review sections 
we are reporting results on an 
underlying basis including the 
results of the bread business 
to enable comparison with 
the results of 2012 within the 
financial statements we report 
results on the basis of continuing 
operations and this excludes the 
bread business as it was held as 
‘assets held for sale’ as at the 
year end
group revenue underlying
£12825m
2012 £12974m
 grocery
£8374m 653
 bread
£4451m 347
group divisional contribution
£2281m
2012 £2224m
 grocery
£1967m 862
 bread
£314m 138
group employees
1
8379
2012 9787
 grocery
4283 511
 bread
4096 489
photograph
a broad range of food products 
that consumers know and love
1 average monthly number of people employed
business overview
premier foods plc  annual report and accounts 2013
06 2294104 24 march 2014 1120 am    proof 3
bread underlying
 branded 
revenue
£3466m 779
 nonbranded 
revenue
985m 221
revenue divisional contribution
£4451m
1
£314m
2012 £4433m 2012 £269m
1 excludes milling sales of £2219m 2012 £1914m
the bread division operates principally in the wrapped bread market 
and in addition manufactures nonbranded bread and morning goods 
the bread division also incorporates the group’s milling business 
rank hovis which is one of the uk’s leading millers and produces 
a wide range of bulk flours and branded and nonbranded bagged 
flours milling comprises a vertically integrated milling operation which 
supports the baking and grocery businesses and a separate stand 
alone free trade business to business milling operation 
power brand
hovis
support brands
granary mother’s pride 
and ormo 
highlights for 2013
•	 major restructuring of the bread and milling businesses 
implemented to drive sustainable growth
•	 best of both relaunch
•	 licensing agreement for hovis breakfast bakes
in 2013 we produced around    
11 million loaves and 18 million packs other bakery products each 
week 25000 orders received each week with daily distribution to 
around 4000 stores and depots 
800000 tonnes of flour
locations proposed hovis joint venture
 bakeries
1 erith
2 forest gate
3 glasgow
4 leicester
5 mitcham — sebon
 mills
1 gainsborough 
wheat maltings
2 manchester
3  newbridge 
fleming howden
4 selby
5 southampton
6 wellingborough
 integrated bakery 
 sites  logistics
1 avonmouth
2 belfast
3 bradford
4 nottingham
5 wigan
grocery underlying
 branded 
revenue
£7397m 883
 nonbranded 
revenue
£977m 117
revenue divisional contribution
£8374m £1967m
2012 £8541m 2012 £1955m
the grocery division produces a wide variety of branded and non
branded products in the ambient grocery sector including cakes soups 
stocks gravies ambient desserts home baking cooking sauces and 
asian meal solutions power brands in the grocery division include 
ambrosia custard and rice pudding batchelors soups pasta rice and 
noodles bisto gravies and stocks loyd grossman cooking sauces  
mr kipling cakes oxo stocks and sharwood’s cooking sauces and 
asian foods 
power brands
ambrosia batchelors bisto 
loyd grossman mr kipling 
oxo and sharwood’s
support brands
angel delight bird’s cadbury cakes 
homepride lyons mcdougalls paxo 
and smash
highlights for 2013
•	 launch of ambrosia devon dream
•	 launch of oxo shake  flavour 
•	 grocery power brand sales up 20
in 2013 we produced around    
390000 tonnes of finished products 
420 million mr kipling slices 
240 million servings of paxo stuffing 
210 million sachets of batchelor’s cup a soup 
14 million oxo cubes per week
locations retained business
 manufacturing sites
1 andover mill
2 ashford
3 carlton
4 knighton
5 leicester — 
charnwood foods
6 lifton
7 moreton
8 stoke
9 worksop
  central functions and  
business services
1 eastleigh — information services
2 high wycombe — 
premier analytical services
3 manchester — 
premier business services
4 st albans — head office
2
1
4
6
7
8
5
9
1
3
2
4
3
1
2
3
4
1 corby third party
2 knowsley 
third party
3 rugby
4 skelmersdale 
third party
  distribution 
logistics centres
 depotsrdc
1 dagenham
2 eastleigh
3 glasgow
 central functions
1 high wycombe – 
head office
2
3
4
5
1
1
2
1
2
3
3
4
5
1
1
3
2
4
5
6
1
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business overview
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brands
overview of the year
2013 was a year of significant success for the group 
set out below are some of the key achievements covering 
our brands sustainability and corporate activity
january
new tv campaign 
launch for bisto stock 
melts – a range of 
individual concentrated 
stock pots stock melts 
offer consumers a high 
quality easytouse 
product responding to 
the growing popularity of 
wet stocks
sustainability
corporate
key
macmillan cancer support 
selected as our new corporate 
charity partners and we have 
made a commitment to raise 
10000 nursing hours over a 2 
year period
new sharwood’s tv 
campaign launched 
to celebrate chinese 
new year combined 
with strong customer 
promotional activity both 
instore and online
completion of £925m 
sale of sweet pickles 
and table sauces to the 
mizkan group
april
launch of a new 
range of tasty and 
filling lunchtime snacks 
with the expansion of 
batchelors ‘cup a’ range 
to include individual 
noodle pasta and 
rice sachets ideal for 
today’s busy and health 
conscious consumers 
as the new products are 
all ready in less than 5 
minutes and contain less 
than 2 fat
may
launch of new oxo shake 
 flavour – a versatile 
and convenient product 
available in three exciting 
flavours it can be used 
before during or after 
the cooking process to 
add flavour to ordinary 
everyday meals ambrosia 
tv campaign launched 
to support launch of new 
devon dream
march
significant media 
focus behind key power 
brands with ambrosia on 
air with “this is pudding” 
campaign and also new 
tv campaigns for bisto 
and loyd grossman
premier foods receives 
the prestigious astor 
trophy in recognition 
of our achievements 
in the management of 
occupational health at 
the rospa awards
in addition rospa gold 
and silver health and 
safety awards were 
awarded to 25 of our 
sites
restructuring of 
our milling business 
announced to split 
the business into 
two distinct parts to 
strengthen focus and 
increase profitability
premier foods 
announces it will become 
an early adopter of the 
government’s newly 
launched front of 
pack nutrition labelling 
scheme designed to 
give consumers more 
consistent information to 
help manage their diets
february
june
business overview
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08 2294104 24 march 2014 1120 am    proof 3
july
hovis launch a new 
packaging range with 
a transparent design to 
showcase quality and 
freshness 
bisto launch a new 
premium range called 
chef’s specials targeting 
the dineinfortwo sector
premier foods presented 
with the ‘efficiency initiative 
of the year’ award at the 
prestigious uk national 
recycling awards
further £10m costs 
savings announced as 
part of decomplexity 
programme involving a 
review of lower margin 
products and halving the 
number of suppliers by the 
end of 2014
august
cadbury mini rolls 
launch new campaign 
to promote our new ice 
cream flavours range
in addition sharwood’s 
launch a pack redesign 
across the entire range
premier foods to 
support ‘feeding britain’s 
future’ an initiative to 
provide free skills training 
for young unemployed 
people across the uk 
we are hosting events 
at over 20 of our sites 
nationwide providing 
around 300 training 
opportunities
september
october
premier foods named 
“supplier of the year” 
by 3663 a leading 
foodservice wholesale 
distributor and one of 
our key supply chain 
partners
ten year partnership 
agreement signed 
with swire foods to 
distribute ambrosia rice 
pudding pots in china 
as part of our strategy 
to expand the customer 
base beyond our existing 
channels
batchelors to add three 
new flavours to its deli 
box lineup sweet  sour 
noodles bolognese pasta 
and tomato  chilli pasta
premier foods wins two 
coveted awards – food 
manufacturing company 
of the year at the food 
manufacturing excellence 
awards and grocery business 
partner of the year retail 
at the landmark wholesale 
awards
november
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at the time we report our results 
for the year ending 31 december 
2013 we are also announcing a 
major capital restructuring
this includes proposals for a new revolving credit facility with a 
streamlined bank syndicate a revised schedule of deficit contributions 
with our pension schemes and a proposal to raise approximately 
£350m in new equity and approximately £475m in high yield bonds 
once completed this capital restructuring will significantly transform 
the capital base of the group reducing our leverage
hovis joint venture
in addition over the course of 2013 management successfully 
implemented a major restructuring of the bread division to reduce 
excess capacity and improve the efficiency of the business this 
involved the closure of three bakery sites two flour mills and a major 
reconfiguration of the logistics network in november we confirmed 
that we were looking at options to secure new investment in the 
business and i am delighted to report that in january 2014 we 
announced a conditional agreement to establish a joint venture with 
the gores group this is great news for the hovis business as it will 
unlock a significant fiveyear investment programme to improve its 
operational infrastructure and reinvigorate the hovis brand premier 
foods will also retain a 49 stake in the business allowing the group 
to share in the expected future gains of this investment further details 
of the joint venture can be found in the operating review
i believe that both these announcements are significant milestones 
in the group’s turnaround strategy and will result in the creation of 
a strong and focused grocery business going forward your board 
are fully supportive of these proposals and have committed to 
participate fully in the proposed rights issue in respect of their personal 
shareholdings
shareholders should be aware that both the capital restructuring and 
hovis joint venture are dependent on shareholder approval at a general 
meeting to be held on 20 march 2014 and therefore subject to risk and 
uncertainty details of the risks and uncertainties are set out in detail on 
page 29
performance for the year
i am pleased to report that gavin and the management team have also 
clearly demonstrated their commitment and ability to deliver trading 
results for 2013 in line with market expectations this is particularly 
impressive given the challenging customer and consumer environment 
facing our industry grocery power brands sales grew 20 in the 
year benefiting from sustained investment in marketing and we also 
regained some momentum on support brands in the final quarter 
in line with our strategy to focus on branded sales we also exited a 
number of nonprofitable own label contracts which meant that 
chairman’s statement
a transformational year for premier foods
david beever
chairman
underlying trading profit
£1452m 177
2012 £1234m
net debt
£8308m
126
2012 £9507m
“the announcements to create 
a new joint venture for hovis 
and a new capital structure 
are significant milestones in the 
group’s turnaround strategy 
and will result in the creation of 
a strong and focused grocery 
business going forward”
business overview
premier foods plc  annual report and accounts 2013
10 2294104 24 march 2014 1120 am    proof 3
overall underlying sales were marginally down by 11 year on year in 
addition we made further progress in reducing the group’s overhead 
cost base and in reducing complexity through streamlining our supplier 
base and eliminating low margin products together this performance 
helped support a 177 increase in underlying trading profit for the 
year to £1452m with adjusted earnings per share up 637 to 277p
this demonstrates the group’s categoryfocused growth strategy is 
starting to bear fruit further information on our strategy is set out in the 
chief executive’s review on pages 12 and 13 
leadership
in september 2013 we announced the appointment of alastair murray 
as cfo in place of mark moran alastair has extensive strategic 
commercial financial pensions and consumer brand experience built 
up over many years with a number of leading food and consumer 
goods companies this is a key appointment and i’m sure alastair 
will make a major contribution as we complete the transformation of 
the business in may we welcomed pam powell as a nonexecutive 
director pam has more than 20 years marketing experience developing 
some of the world’s leading consumer brands and her appointment 
will be a tremendous benefit as we look to continue the growth of our 
power brands 
ian mchoul who was reaching the end of his third term in office this 
year retired as a director at the agm on 25 april 2013 on behalf of 
the board i would like to thank both mark and ian for their significant 
contribution to the group over a number of years full details of all 
the board changes in 2013 are set out in my introduction to the 
governance section on pages 46 and 47 this also includes a detailed 
update on our governance process board evaluation exercise and 
dialogue with shareholders over the course of the year 
employees
i would like to thank all staff at premier foods for their continued hard 
work and commitment in delivering the 2013 results during the year 
we undertook a number of change programmes as we continued to 
adapt the organisation’s structure to a more focused portfolio and 
completed the planned restructuring of the bread business regrettably 
many of our colleagues left the business as a result management 
moved quickly to communicate changes and provide clarity for those 
affected however i fully recognise this has been a challenging time for 
all concerned 
in september 2013 we experienced industrial action at our wigan 
bread bakery this was a local dispute related to the use of agency 
workers and i am pleased that an agreement was swiftly reached 
allowing us to move forward and rebuild strong relations at the site 
as part of our ongoing commitment to support the group’s category
focused growth strategy we have strengthened capabilities in a number 
of areas during 2013 doubling the number of apprenticeships at our 
sites restarting our graduate recruitment programme and building 
resource within our innovation teams
our employees up and down the country worked extremely hard to 
raise funds to support our chosen charity macmillan cancer support 
together with the generosity of our suppliers we raised nearly £200k 
for the charity helping support the invaluable work of macmillan nurses   
sustainability
a key part of our overall strategy is to drive sustainability in everything 
we do whether that applies to financial results or in the way we use 
natural resources 
in 2013 we continued to make good progress in reducing our 
environmental footprint for example all of our manufacturing sites are 
now officially accredited as ‘zero waste to landfill’ sites 
in product terms we continued to deliver nutritional improvements 
through reducing salt and calories and as part of a pioneering group 
of retailers and manufacturers committed to introduce colourcoded 
front of pack nutritional labelling across all our branded products to 
help consumers make more informed choices we also joined forces 
with others in industry to address a projected future shortage of food 
engineers by encouraging apprenticeships and becoming a founding 
supporter of the national centre of excellence in food engineering to 
be established at sheffield hallam university
i am delighted that our achievements in this area received external 
recognition with the group winning several different awards including 
‘manufacturing company of the year’ at the 2013 uk food 
manufacturing excellence awards and ‘efficiency initiative of the year’ 
at the 2013 uk national recycling awards further information about 
our approach to sustainability is set out on page 26
looking forward
whilst there are signs that the economic conditions in the uk are 
now starting to improve consumer spending remains subdued and 
competition on the high street continues to be intense the group 
has a clear strategy to deliver growth in a tough market i believe the 
successful completion of the proposed hovis joint venture and capital 
restructuring will transform premier foods into a focused highmargin 
grocery business with a stable capital structure which will further 
enable management to focus its full attention on delivering against our 
strategy to drive profitable category growth i very much look forward 
to making further progress in 2014
david beever 
chairman
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as part of our recently announced 
capital restructuring we set out a 
sevenpoint investment proposition 
that highlights the strengths and 
opportunities of the new premier 
foods see panel on page 16 i 
believe there are strong reasons to 
invest in the future of the company 
premier foods is a highquality branded grocery business with 
strong ebitda margins operating cash flows and growth prospects 
together with a new capital structure and pension deficit contribution 
arrangements we have a positive foundation to drive future growth
how have you found your first year at premier foods
it’s been an eventful yet hugely exciting year when i joined the 
company i had four key goals in mind firstly i wanted to maintain our 
trading momentum and deliver our results for 2013 in line with market 
expectations i’m delighted we’ve been able to do that despite a 
challenging consumer environment looking further ahead i was keen 
we find a sustainable solution for the hovis business and additionally 
address our capital structure and pension deficit in a way that would 
create greater certainty and confidence in the future of our business for 
all stakeholders finally i believed it was important to map out a clear 
strategy to continue to grow the premier foods business in the coming 
years i’m proud that we’ve been able to deliver on all of these goals
are you satisfied with how the business 
performed in 2013
broadly yes last year was difficult for the food industry generally 
as consumer disposable incomes remained under pressure driving 
a more intense promotional environment with little overall volume 
growth in the market the very hot summer also affected some of our 
categories with a consequent impact on our brands this meant we 
lost some of the momentum of the first half of the year although we 
did continue to grow market share in several of our categories grocery 
power brand sales grew 20  in the year and sales of our support 
brands grew 11 in the final quarter reversing previous declines 
we also made significant progress in reducing our overhead costs 
and kickstarted a new initiative to reduce complexity throughout the 
business the progress we made in 2013 gives us a good base on 
which to build in 2014 and the coming years
chief executive’s review
a new focused grocery business
gavin darby
chief executive 
officer
“our strategy to drive category 
growth is the best way to grow 
our brands simply put it’s 
about encouraging more people 
to use more of our brands in 
more ways more often”
business overview
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12 2294104 24 march 2014 1120 am    proof 3
what difference will the hovis joint venture make
after all the painful restructuring in 2013 to reduce excess capacity and 
improve the efficiency of both the baking and flour milling businesses 
it was essential we find a way to secure the investment necessary to 
implement our longerterm plan to grow the business the joint venture 
with the gores group does just that the agreement helps unlock a 
major investment plan to improve the operational infrastructure and re
invigorate the hovis brand and enables premier foods to share in the 
expected upside of this investment through a 49 stake in the venture 
with the hovis business as part of a joint venture we can now focus 
our full attention on growing our core grocery business
will the new capital structure be more sustainable than 
previous restructurings
the new capital structure significantly reduces our leverage diversifies 
our sources of funding and provides a longerterm arrangement 
that helps provide stability and certainty the planned raising of 
approximately £350m in new equity will reduce our adjusted net debt 
to 33x our 2013 grocery ebitda and significantly reduce our interest 
payments the constructive agreement we reached with our pension 
trustees on deficit contributions will also be a great help in allowing 
the company to continue its recovery as we’ll effectively reduce our 
contributions by £156m over the first three years of the agreement 
this is transformational for the group and important to all our 
stakeholders as it provides the means and focus to continue investing 
in growing our brands 
how do you plan to grow the business in the 
current trading environment 
at our half year results in 2013 i outlined our strategy to drive category 
growth as the best way to achieve growth of our brands this remains 
our focus growing the size of the market sectors we operate in 
as well as our share of those sectors is a more sustainable way to 
drive growth in partnership with our customers simply put it’s about 
encouraging more people to use more of our products in more ways 
more often innovation and marketing are critical to this approach and 
we’ll be further investing in both in support of our brands and funded 
by a tight control over costs more information on our category growth 
strategy is set out on page 16
how important is innovation for premier foods
innovation and marketing are central to our category growth strategy 
in addition to developing new products we look for new ways to 
improve our existing products encourage new uses and create 
innovative ways to communicate about our brands the launch of 
ambrosia devon dream last year is a good example of how we’ve 
stretched the ambrosia brand into the summer months with a lighter 
dessert topping oxo shake  flavour is another innovation that helps 
take the oxo brand from traditional stock cubes to a versatile range of 
seasonings over the past two years we’ve stepped up our marketing 
to support our innovation and remind consumers how great our 
products taste for example ambrosia custard was back on tv for the 
first time in a decade in 2013 and batchelors was advertised on tv for 
the first time in five years we’ve also been investing in other ways to 
advertise and promote our brands through digital channels and creative 
partnerships 
how are you addressing changing shopping patterns
the strength and breadth of our brand portfolio together with our 
manufacturing and supply chain capabilities gives us a big advantage 
in serving today’s multiformat retail environment most of our sales 
remain with the major supermarkets and we work hard to strengthen 
our partnership with these customers by developing joint business 
plans but we also have opportunities and plans to grow with other 
channels which although a smaller part of the market are becoming 
increasingly popular these include convenience outlets foodservice 
branded discounters and online our flexibility to produce different 
pack and case sizes and offer product formats under the banner of 
our support brands gives us a broad scope to meet the different 
requirements of these customers
given the competitive environment what scope do you 
have to reduce costs as a way to build profitability
it’s important to continue improving our efficiency and effectiveness 
to fund the investment needed in our innovation and marketing 
activities over the past few years we’ve been very good at reducing 
our overhead costs and maintaining a tight rein over manufacturing 
and logistics costs and we’ll continue with this level of control in 
2013 we initiated a further focus on reducing complexity throughout 
the business as a way to stepchange our thinking as a result we 
committed to cutting our supplier base in half by the end of 2014 
through developing fewer longerterm strategic partnerships we also 
looked at the profitability and strategic fit of every one of our products 
resulting in the elimination of more than 400 lowmargin products from 
the portfolio so far there are many other opportunities to go after 
what are you doing to motivate employees and build a 
winning team culture
it’s been a tough time for our people over the last few years given 
the degree of change many of our colleagues have left as part of 
businesses we’ve sold and our hovis colleagues will soon be part 
of the new joint venture we have also had to make some difficult 
decisions to slim down our overhead structures and improve our 
operational efficiency particularly in the bread business i believe 
we are substantially through that period now and we’re preparing 
for the future we’re taking a fresh look at our purpose vision 
values and behaviours and we have started to invest more in our 
people for example through reinitiating our graduate recruitment 
programme doubling the number of apprentices and strengthening our 
commercial skills whilst this remains a journey i’m encouraged by the 
determination of the premier foods team to deliver a bright future for 
our business 
gavin darby 
chief executive officer
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business overview
13 2294104 24 march 2014 1120 am    proof 3
did you know
since 2011 we 
have reduced 
salt levels
in our products 
by more than 
286 tonnes
sharwood’s packaging 
redesign
in 2013 we launched a packaging redesign across the entire 
sharwood’s range aimed at helping us to stand out from other 
brands and make it easier to shop for sharwood’s the new 
design reflects the positioning for the brand which is all about 
‘making meal times come alive’
the new packaging as pictured here is easier to read and more 
recognisable with a consistent logo across the whole range the 
improved pack hierarchy includes colour signposting to identify 
individual flavours as well as signage of heat levels on both the label 
and the shelf ready packaging accompaniments such as naan 
breads have also been colour coded to match the ranges they 
complement 
for more information on consumers
and brands see pages
1819 2294104 24 march 2014 1120 am    proof 3
strategic
review
contents
the strategic review sets out the key 
elements of our strategy our approach to 
sustainability risk management and how 
we have performed against our kpi’s
strategy and business model 1617
consumers and brands 1819
customers 2021
people 2223
costs 2425
sustainability 2627
risk management 2831
key performance indicators 3233 2294104 24 march 2014 306 pm    proof 3
driving
category
growth
consumers
 
brands
g 
costs
people
 
customers
 
driving
category
growth
drive sustainability in everything we do  
 
 
 
sustainability  
 
 
 
drive sustainability in everything we do
driving 
category 
growth
no1 position in 
each of our five 
categories 
investment proposition
focus on growth categories
we operate in two large and growing segments savoury meal 
making and sweet foods where we have a leading position in 
all our categories – flavourings  seasonings cooking sauces 
 accompaniments easy eating ambient desserts and 
ambient cake
broad stable of leading brands driving category 
growth through marketing and innovation 
we are using our leading power brands and support brands to 
drive category growth by invigorating the core offering driving 
new uses developing new products and finding innovative ways 
to communicate and market our brands
diverse manufacturing processes provide wide 
scope to innovate
we have largescale manufacturing scale in the uk with 
multiple technologies and capability to produce a wide variety of 
packaging formats
strong capabilities to serve today’s multiformat 
retail environment 
we have invested in building strong partnerships and put in place 
joint business plans with our major customers 
continued cost reduction to support 
brand investment
we are focused on delivering cost savings through management 
of controllable costs and a sustained reduction in complexity 
which is reinvested in consumer marketing
strong operational cash flows
the underlying business is resilient and cash generative creating 
cash flow to reinvest in the category growth strategy 
committed and experienced management team
we have a new dynamic management team with significant 
experience from across the food and consumer goods industry
strategy and business model
focused on driving category growth
the group’s strategy is to drive 
category growth 
in 2013 the group’s strategy evolved from a focus on growing its 
power brands to include a broader approach to growing the categories 
in which they operate this shift to driving category growth reflected 
three factors firstly our growth will be more sustainable if we compete 
not just for market share but for a greater share of a growing market 
secondly our retail customers are more interested in partnering with 
businesses that are aligned with their own interest in growing the 
broader category and finally our leading position in our five core 
categories and broad stable of power brands and support brands 
gives us a distinct advantage and opportunity to drive growth in the 
overall category
we saw some early benefits from this strategy last year all five of our 
categories grew by varying degrees with particularly strong growth 
in the ambient desserts and flavourings  seasonings categories in 
which premier foods’ value share growth outperformed the category
business model
we implement our strategy through our business model this is based 
around 5 elements
•	 consumers capitalising on our uk specific category insights to 
identify growth opportunities
•	 brands driving category building innovation with pace
•	 customers maximising mutual value from our customer 
partnerships
•	 people building structures capabilities and culture to support our 
category focus
•	 costs aggressively seeking out ways to improve efficiency and 
effectiveness to fund growth investment and
further information on each of these elements is set out in this section 
of the annual report
sustainability in everything we do   
ultimately we aim to deliver sustainability in everything we do whether that applies to financial results or in the way we use natural resources 
wider sustainability issues are becoming more and more important with our customers and consumers we believe our strategy will build a 
platform for a more stable sustainable business which will deliver profitable results and shareholder value
our approach to sustainability extends across the whole business from our commitment to reduce our impact on the environment to how we 
source our raw materials and ensure the highest levels of quality and food safety it also guides how we address consumer concerns about health 
issues in respect of certain nutrients and ingredients as well as labelling and portion size
premier foods plc  annual report and accounts 2013
16
strategic review 2294104 24 march 2014 306 pm    proof 3
driving
category
growth
consumers
 
brands
g 
costs
people
 
customers
 
driving
category
growth
drive sustainability in everything we do  
 
 
 
sustainability  
 
 
 
drive sustainability in everything we do
driving 
category 
growth
our categories
category
total market size 
and market growth
1
our  
market 
position
2
our brands segment
savoury  
meal making
cooking sauces  
accompaniments £1115m 16 no1
flavourings  
seasonings £407m 46 no1
easy eating £363m 56 no1
sweet foods
ambient cakes £954m 09 no1
ambient desserts £318m 31 no1
1 
source symphony iri value share 2 year growth rates 52 weeks ending 28 december 2013 and 52 weeks ending 29 december 2012
2
category positions refer to branded share
driving
category
growth
consumers
 
brands
g 
costs
people
 
customers
 
driving
category
growth
drive sustainability in everything we do  
 
 
 
sustainability  
 
 
 
drive sustainability in everything we do
driving 
category 
growth
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strategic review 2294104 24 march 2014 1120 am    proof 3
capitalising on our uk specific 
insights to identify growth 
opportunities and drive category 
building innovation
our brands continue to be firm family favourites and around 95 of 
uk households have at least one of our brands in their kitchens this 
gives us both a responsibility and an opportunity our consumers 
expect us to deliver great tasting high quality products every time 
they also expect us to take the time to understand their busy lives and 
bring them new products formats and ideas to make things easier in 
the kitchen and delight their families our strategy is to use our deep 
insights and understanding of uk consumers to continue improving our 
brands making them even more relevant and identify opportunities to 
innovate that will help us grow
consumer insights 
we have a lot of expertise and experience when it comes to 
understanding our consumers analysing research data is important 
but seeing and hearing first hand the challenges facing our consumers 
adds that extra dimension we spend time visiting consumer homes 
conducting focus groups and also asking our employees what they 
care about when it comes to food and how they shop building this 
broader understanding of consumer behaviour gives us an insight into 
what we can do to make our existing products better and develop new 
products that fulfil a need 
in today’s environment consumers are under pressure with many 
demands on the family budget households are having to spend more 
to feed their families which is driving a change in shopping behaviour 
in an attempt to seek out the best value consumers are prepared 
to shop more frequently at different outlets whilst the main shop is 
still with the supermarkets and increasingly through online channels 
more people are topping up with trips to discounters and convenience 
outlets this has an impact on our pack price and promotional strategy 
as well as how we serve different retail channels
one further consequence of this environment is that more consumers 
are choosing to eat more meals at home and prepare lunchboxes for 
school or work given our focus on savoury meal making and sweet 
foods this gives us a great opportunity roast dinner curry spaghetti 
bolognese and pasta and sauce remain amongst the top ten favourite 
meals in the uk which plays to our strengths indulgence is also an 
important trend as people find time for a pudding or a sweet treat to 
make life a little more bearable using our trusted brands to provide 
options solutions and ideas for family mealtimes that taste great and 
won’t let the cook of the house down therefore becomes an important 
driver of our brand strategy longerterm consumer trends in favour of 
health and nutrition and convenience also need to be reflected in our 
thinking
innovation 
innovation is a key part of our strategy  but this doesn’t always 
mean breakthrough ideas and products that have never been seen 
before often it’s about stretching our brands to provide just the right 
amount of adventure and inspiration that our consumers are looking 
for to make mealtimes enjoyable we also take care to ensure that 
any innovation we bring to the market is sustainable and wherever 
possible incremental so helping to expand the overall category as well 
as our share of the category
consumers brands
insights to 
identify growth 
opportunities
sustainability in everything we do
new frontofpack nutritional labelling
premier foods is doing its bit to help our customers take control of their diets 
by rolling out new frontofpack colour coded nutrition labelling across all of 
our brands in 2014 
along with the major retailers and a number of other manufacturers we made a public 
commitment last year to adopt the government’ s newly recommended labelling scheme 
the new labels will list the calorie content and the level of fat saturated fat sugars and 
salt per portion of the product in relation to the reference intake of the respective nutrient 
previously known as the guideline daily amount or gda the labelling icons will be 
colourcoded with red amber or green to indicate whether the product is high medium or 
low in a particular nutrient helping consumers make more informed choices the labelling 
will be rolledout to all of our brands during the course of the year and complements other 
pledges we’ve made within the context of the department of health sponsored ‘public 
health responsibility deal’ these include commitments to eliminate trans fats from our 
products lower salt levels and reduce calories
for more information on  
sustainability see page
26
premier foods plc  annual report and accounts 2013
18
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we have a tried and tested innovation process that starts with our 
consumer insights and overall category strategy we then explore 
concepts and ideas based on the input of our development kitchens 
and our technological and manufacturing capabilities finally we test 
new ideas with consumers and refine them based on feedback before 
prioritising and building the business case for launch
innovations in 2013 have helped reinvigorate our core products driven 
new uses for our products and extended new products beyond our 
core range for example we introduced ambrosia devon dream as a 
lighter dessert topping which helped extend the brand into the summer 
months from the traditional winter preference for custard we’ve also 
been expanding the range of pack and pot formats to make the brand 
accessible as an individual dessert or snack product
in the flavourings  seasonings category we launched oxo shake  
flavour as a new way to spice up a recipe or enhance a meal adding 
new sales to the brand and category we also continued the success 
of bisto stock melts encouraging new uses for the brand in the wet 
stock segment and developed premium flavoured gravy offerings in a 
sachet under the bisto chef’s specials banner  
in the easy eating category we have just launched new flavours of the 
popular batchelors delibox building on the success of an innovation 
introduced in 2012 which took the category into new territory and in 
cooking sauces  accompaniments we successfully partnered with 
our customers to take advantage of chinese new year to create some 
instore theatre to encourage consumers to celebrate with a range of 
sharwood’s sauces noodles and prawn crackers
finally in the ambient cake category we created a new summer idea 
for cadbury mini rolls by producing ice cream flavours that consumers 
could pop in the freezer for a frozen chocolate treat we also continued 
the success of the mr kipling snack pack format of individually 
wrapped slices with some new flavours including a festive christmas 
variety as a result of the snack pack success we are investing a 
further £20m in a new line at our carlton factory in barnsley which will 
effectively double our capacity in the future
marketing
investing in the marketing and communication of our brands is critical 
to our longer term growth whether it be in reminding consumers about 
our existing brands or communicating new innovations in 2013 we 
spent more than £30m in marketing our brands this was considerably 
more than we spent in 2011 but less than 2012 partly reflecting 
improved efficiency of our spend 
ambrosia custard was back on tv for the first time in ten years with a 
new campaign called ‘this is pudding’ reminding consumers how great 
custard tastes new advertising additionally helped launch ambrosia 
devon dream
batchelors also made a welcome return to tv for the first time in five 
years with a campaign showcasing the ‘super’ range of rice pasta and 
noodles we emphasised the importance of bisto in bringing the family 
together with our ‘bisto  now you’re talking’ advert and also supported 
our new bisto wet stock ‘bisto stock melts’ with tv copy new 
advertising supported the launch of oxo shake  flavour and helped 
generate excitement for loyd grossman and sharwood’s sauces
in addition to tv advertising we continued to reach our consumers 
through a wide range of other channels from magazines to web sites to 
other digital channels such as facebook and twitter  
highlights and key performance indicators
95 
of uk households have at least one of our brands in their kitchen
1
88 
grocery branded mix
129 
of sales from new products
96 
of products testing superior or at par with competitors
1 source kantar world panel purchase 52 we 8 december 2013
risks
competition
we operate in a highly competitive environment and must 
ensure that we continue to innovate with products that meet the 
expectations of our consumers if we are to continue to  
compete successfully 
food quality and safety
the safety quality and provenance of our products is essential to 
ensure the reputation of our brands and maintain the trust of our 
consumers and customers
for more information on 
risks see pages
2831
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over 2012 and 2013 we have 
focused on building relationships 
with all of our key customers
we have strong capabilities to serve today’s multiformat retail 
environment and have opportunities to grow in all our customer 
channels the largest retail channels within the uk grocery market 
are the major multiple retailers such as tesco asda sainsbury’s 
wm morrison and the waitrose partnership this also incorporates 
a significant proportion of online and convenience sales and the 
majority of the group’s sales come from these major retailers the 
group also sells to discounters including iceland and poundland 
wholesalers smaller convenience stores catering outlets through 
the group’s foodservice business food producers which use the 
group’s products such as flour in their manufacturing processes and 
other uk retailers our strategy is to develop longterm relationships 
with all our customers we work with each customer and channel to 
understand their strategic objectives leveraging our consumer insights 
and category management expertise to maximise the opportunities for 
category growth
multiple retail 
over 2012 and 2013 we have focused on building relationships with all 
of our key customers a key part of this process is the development of 
structured joint business plans jbps with key customers which ensure 
that promotional plans new product launches instore marketing 
and customer service targets are aligned between the group and its 
respective customer  
over the year we have made strong progress and have jbps in place 
with each of our major customers this process involves
•	 working with our customers to understand their categories and 
their strategy
•	 developing ways that we can align to their strategic objectives 
our focus on the entire category allows us the opportunity to take 
category leadership 
•	 collaborating with customers to maximise the opportunities for 
category growth 
•	 using our innovation and consumer insight
•	 focusing on multiformat instore execution 
•	 resourcing and delivering plans with excellence
•	 building collaborative initiatives to improve the efficiency and 
effectiveness of the supply chain
convenience and online
building strong relationships with our key retail customers is underpinned 
by our understanding of different retail formats and how the importance 
of formats is changing for each retailer two key areas of importance are 
convenience and online
whilst growth in the convenience channel as a whole was flat during 
2013 within the major multiple retailers it was in growth this channel 
offers us the ability to flex our product offering with different case and 
pack sizes uk online grocery sales grew 189 in 2013 and represents 
another important growth opportunity 
customers
maximising mutual
value from our
customer 
partnerships
sustainability in everything we do
supporting our customers
our focus on sustainability is another way in which we can work 
collaboratively with our customers all of our major retail customers 
have developed their own bespoke sustainability programmes objectives 
and targets 
as a supplier of both branded and non branded products wherever possible and 
relevant we have aligned our sustainability approach with that of our retail customers 
examples include joining forces on the launch of diet and health initiatives such as 
colour coded frontofpack nutrition and working together on ways to reduce waste 
as part of the waste resources action programme wrap courtauld commitment 
in addition we work closely with customers on ensuring the provenance and 
sustainability of ingredients used in our products such as palm oil and cocoa we 
continually share best practice on ways to reduce our environmental footprint right 
across the food supply chain from farm to fork
for more information on  
sustainability see page
26
premier foods plc  annual report and accounts 2013
20
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the online channel has different dynamics to the traditional shopping trip 
which need to be understood and addressed our focus is to improve 
the shopper experience making sure our products receive prominence 
in online searches and that they are correctly described with up to date 
product images in addition we aim to maximise the potential for cross 
selling opportunities within our portfolio and link with key seasonal events 
to capture peak trading opportunities
discounters 
whilst still a relatively small channel in terms of the overall market the 
discounter channel has been growing significantly over the last few years 
as consumers react to the challenging economic environment this 
channel therefore represents a growth opportunity for the group but has 
a different strategy and focus to multiple retailers 
wholesale 
foodservice represents a diverse group of customers over 2012 we 
implemented standard pricing and promotional architecture across 
this channel to reduce complexity and help provide clarity in how we 
deal with all our wholesale customers over 2013 we moved our focus 
from the end user to developing stronger direct relationships with 
wholesalers we also concentrated on fewer bigger promotions with 
major brand activations around key events eg bisto sausage week 
the success of this change in focus has been recognised through a 
number of awards received for 2013 including ‘foodservice brand of 
the year’ for bisto and 3663 ‘supplier of the year’ 
international opportunities
our principle focus is on the uk market but we believe there are also 
compelling growth opportunities for our products in international 
markets our international team has focused on forging key 
strategic alliances with distribution partners as we utilise existing 
infrastructure it means we can generate incremental sales without the 
need for increased capex investment we target markets with clear 
opportunities for uk brands in october 2013 we announced a ten year 
partnership agreement with swire foods to distribute ambrosia rice 
pudding pots in china the initial focus is on ambrosia rice products 
but if successful may extend to other brand such as sharwood’s and 
mr kipling
we believe there are also growth opportunities in the irish market 
we are building internal capability and plan to develop relations with 
key customers in the irish market whilst continuing to work with our 
appointed distributors
revenue growth management
recognising the competitive economic environment we aim to 
maximise value from our commercial activities through disciplined 
management of revenue growth opportunities this involves maximising 
packprice architecture to enhance margin and using our analytical 
systems to identify how to maximise value from promotional activity 
with customers
diagnostic capability
we continue to invest in our systems to improve our decision making 
process the commercial team is developing an integrated plan 
to improve
•	 forecasting – to simplify processes and improve accuracy
•	 retailer profitability modelling – to support jbps with customers 
and
•	 promotional evaluation and modelling – to understand the impact of 
promotions on category brand and customer
highlights and key performance indicators
20
power brand growth in 2013
jbps in place with major customers
strong customer recognition
•	 most improved supplier to uk multiple retailers 
2013 advantage group survey
•	 3663 ‘supplier of the year’
•	 most improved business partner of the year retail 
at the landmark wholesale awards
risks
delivery of commercial strategy
economic conditions have remained tough throughout 2013 
impacting both our consumers and customers we have a 
small number of large customers and have seen continued 
margin pressure through more aggressive trade promotions and 
consumer price switching and we expect market conditions to 
remain challenging in 2014
for more information on  
risks see pages
2831
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sustainability in everything we do
feeding britain’s future
in 2013 for the second year running we took part in ‘feeding britain’s future 
 skills for work week’ this involves a commitment from companies across 
the food and grocery industry to open their doors to young unemployed 
people to help provide skills training that will help them gain employment 
over 20 of our sites got involved providing around 300 training opportunities during 
their visit participants spent time with the local hr teams and employees to gain 
insights into some of the skills they need to help them get a job and took part in a 
series of workshops to open their eyes to the many career opportunities within the 
food industry the sessions included cv assessments and interview skills workshops 
participants also went on site tours to introduce them to how we make our products 
and what it’s like to work in the food industry the feeding britain’s future initiative 
forms just one part of our broader skills programme 
for more information on  
sustainability see page
26
the success of our business 
depends on the quality and 
commitment of our employees  
we strive to attract and retain 
talented committed employees 
and actively encourage 
development from within 
leadership 
we have a strong leadership team with experience drawn from a 
range of major multinational food and consumer goods companies 
during 2013 we refocused the leadership team to better support the 
business this began with the creation of a single commercial team 
within grocery and within bread a standalone management team has 
been put in place to lead the restructuring of the business in july 2013 
we announced the splitting of the milling business to focus on serving 
our own internal business requirements and providing a dedicated 
resource to our free trade customers 
learning and development
our breakthrough leadership programme gives key managers training 
and expertise preparing them for bigger roles and enabling them to 
build effective crossfunctional teams the programme is designed 
to work with and support our business turnaround strategy and also 
develop effective leadership behaviours in 2012 our programme won 
the john sainsbury award for learning and development a national 
food industry accolade given at the institute of grocery distributors 
igd food industry awards during 2013 we restarted our graduate 
recruitment programme we have also been active in a number of 
important programmes to develop skills in the uk including becoming 
a founding supporter of the recently announced national centre 
for excellence for food engineering and doubling the number of 
apprenticeships at our sites
we continue to encourage site based learning activity to ensure we are 
continually developing our employees to complement the job specific 
training provided to employees by our sites as part of our annual 
personal development review process we also actively encourage 
participation in national vocational qualifications nvqs and institute 
of leadership and management ilm courses so that our people can 
develop new skill sets and ways of working 
employee communication 
we recognise the value of good communication in engaging employees 
in order to achieve common goals and also recognising good practice 
and individual performance we have a number of established 
employee communication mechanisms in place including quarterly 
meetings of the group’s top 100 managers regular employee briefings 
with a further cascade of information across the group the group’s 
intranet site digital channels such as google the quarterly group 
magazine and specific consultation and involvement regarding major 
changes to the business our annual employee recognition awards 
recognises our employees who have performed exceptionally well in 
areas focused on delivering our strategic priorities
building structures
capabilities 
culture to 
support 
category focus
people
premier foods plc  annual report and accounts 2013
22
strategic review 2294104 24 march 2014 1120 am    proof 3
all employee survey 
since 2008 we have carried out annual surveys of our management 
population and in 2013 we undertook our first all employee survey 
coordinated with a leading external provider there was a very high 
level of engagement with a response rate of 78 this has been a 
valuable listening exercise and highlighted a number of areas for focus 
reflecting the turnaround process the group is currently undertaking 
the results were distilled into three core areas for focus leadership 
customer focus and operating efficiency this was initially presented 
to senior management and then cascaded to all employees on a 
functionalsite basis employees were asked to feedback on the results 
and to participate in drawing up a detailed action plan to address the 
three core themes identified for action these actions are now being 
implemented and we will continue to monitor progress over the course 
of 2014
workplace health  safety
providing a safe workplace for our staff and others who work within our 
business remains a key priority for the group 
since 2007 we have led a stepchange in health  safety management 
which has resulted in significant and sustained improvements in health 
 safety performance across the group our health  safety corporate 
plan setting out our strategy and the bespoke initiatives which deliver 
it has been fully adopted and embedded across our sites
at the end of 2013 we achieved a riddor frequency rate of 007 
reportable accidents per 100000 hours representing an overall 
reduction of 87 since 2007 maintaining what we believe to be an 
industry leading performance we also use lost time accident lta 
frequency rate as a key performance indicator as this emphasises a 
preventative focus on all accidents which cause absence from work 
at the end of 2013 the group lta frequency rate was 016 lta’s per 
100000 hours worked representing a 20 reduction over 2012
despite the progress we have made there was a major accident at one 
of our grocery sites in 2013 which resulted in the death of a contractor 
and our thoughts and condolences are with his family this accident is 
the first fatality at one of our sites since the group’s flotation in 2004 
this incident remains under investigation and we are cooperating fully 
with the authorities in conjunction with the employer of the deceased to 
establish the cause and any action necessary to prevent recurrance
throughout 2013 we have continued to drive our health  safety 
strategy through our unique inclusive approach to hazard identification 
and control total observation process “tops” as a result during 
2013 over 19000 tops hazards were identified and 84 of them 
were successfully closedout through our site audit programme 
undertaken by an independent 3rd party auditor the health  safety 
management system across all our sites continues to be certificated to 
bs ohsas 180012007
in october 2012 premier foods became the first company within the 
uk food manufacturing sector to receive seqohs safe effective 
quality occupational health service accreditation from the royal 
college of physicians in 2013 our performance was recognised by 
the royal society for the prevention of accidents rospa winning 
the astor trophy for the management of our occupational health and 
well being service for employees in addition rospa gold and silver 
achievement awards were received by 25 of our individual sites
highlights and key performance indicators
8000 78
employees response rate to all employee survey
riddor frequency rate of 007 reportable accidents 
per 100000 hours
gb
food
sector
premier
foods
070
007
08
06
04
02
0
reduction in l tas
2011
2012
2013
037
020
016
lta rate per 100000 hours worked
risks
hs
we believe we have in place best in class processes and 
procedures in health  safety supported by an ongoing programme 
of audits and internal inspections across all sites despite this 
as a large manufacturing business health  safety will remain an 
ongoing operational risk to the business
employee engagement
effective engagement of the leadership team and employees is key 
to the successful delivery of our strategy 
for more information on  
risks see pages
2831
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strategic review 2294104 24 march 2014 1120 am    proof 3
we continue to focus on efficiency 
and effectiveness to drive cost 
reduction which funds investment 
in branded growth
in 2013 we delivered a further £161m of savings from selling 
general and administrative expenses sga reflecting our more 
focused portfolio this has focused on the optimisation of structures 
particularly within central functions simplifying reporting structures 
the introduction of new it systems and reviewing ways of working 
to focus on key requirements since 2011 this has enabled us to 
reduce sga costs by 435 from £147m in 2011 to £83m in 2013 
total sga costs now represents 55 of sales down from 74 in 
2011 in addition we continue to target 2–3 yearonyear savings 
in manufacturing controllable costs mcc the savings generated 
are reinvested into targeted marketing initiatives to support branded 
growth 
reducing complexity 
during 2013 we also launched a major new initiative aimed at 
reducing complexity from all areas of the business this recognised 
that significant steps were required in order to materially simplify our 
business and improve efficiency and effectiveness the complexity 
review covers all areas of the group including products packaging 
suppliers legal entities systems and processes
sku consolidation
we have carried out a full review of our entire grocery portfolio which 
comprised over 1700 separate stock keeping units skus – a sku 
is a specific product item which is separate from any other due to 
brand size flavour etc each sku was reviewed and ranked by its 
divisional contribution and turnover this was used to identify which 
skus contribute most divisional contribution to the business and which 
produce the least of the total portfolio 600 were identified with having 
low turnover these were then reviewed further to understand whether 
there were opportunities to grow the sku and increase its contribution 
or if not it was proposed to withdraw the product as a result we 
have reduced the total number of grocery skus to 1250 in 2013 
representing a 263 reduction over the course of 2014 a further 
20 reduction is targeted 
supplier consolidation
we are committed to working in close partnership with our key 
suppliers to facilitate value creation and enhance long term sustainable 
relationships as one of the uk’s largest food producers our preference 
is to source ingredients products and services from uk producers and 
suppliers last year we spent around £13bn with suppliers and of 
this 80 was with uk producers and suppliers
the procurement team had led a step change to rationalise our supply 
base this generates savings through greater economies of scale 
leads to process improvements that reduce complexity across the 
group and also forges strategic relationships with key suppliers that 
supports innovation 
costs
aggressive focus 
on efficiency 
 effectiveness
sustainability in everything we do
“zero waste to landfill”
over the course of the year we significantly reduced the amount of waste we 
send to landfill from our sites by 67 to 1065 tonnes 
in fact by the end of 2013 we were delighted to announce that our target to achieve 
‘zero waste to landfill’ across all of our sites by 2015 has been achieved  two years 
early this ambitious target was set to help reduce the amount of waste sent to landfill 
sites which are due to reach capacity by 2018 and reduce our costs in the process 
our approach starts with trying to prevent or reduce the amount of waste generated in 
the first place and then ensuring that any waste that is created is recycled or sent for 
incineration with high energy recovery
this significant achievement is a result of the rigorous environmental improvement 
and compliance programme embraced by each of the site teams this includes our 5 
star environmental leadership programme data gathering benchmarking and also 
communication programmes such as ‘green matters’ which encourages employees to 
do what they can to save waste and resources
for more information on  
sustainability see page
26
premier foods plc  annual report and accounts 2013
24
strategic review 2294104 24 march 2014 1120 am    proof 3
as part of our efforts to simplify the business we have actively reduced 
our supply base and increased spend with our leading strategic and 
preferred suppliers for example within fixed mobile and network 
communication we have moved from seven suppliers to a single 
provider and within facilities management we are integrating over 200 
suppliers into two long term partners we have committed to halve the 
number of our suppliers by the end of 2014 and over the course of 
2013 we have successfully reduced our total supply base from 3300 
to 2460 and increased total spend with our top 250 suppliers to 84 
business disposals and transitional services
during 2012 we undertook a major £370m disposal programme 
allowing us to simplify the business and reduce our overhead costs 
the disposals required careful management of complex transitional 
services between the company and purchaser to provide an orderly 
separation of the business this ensured that orders production 
and delivery standards were maintained for our customers these 
transitional services were carefully managed over the course of the year 
and have now been successfully completed
consolidation of grocery logistics
the disposal and complexity reduction programmes also provided the 
opportunity to optimise the size of our logistics footprint within grocery 
the reduction in overall volume has allowed us to move to a regional 
distribution centre operating model under this model we have two 
depots each stocking the entire range of our products this will benefit 
customers by allowing them to make a single order per day for the 
company it increases vehicle load ensuring overhead efficiency and 
also allows us to move from three to two facilities 
bread and milling restructuring
over the course of the year we have implemented the initial phase of 
a major restructuring within our bread division to reduce our cost to 
serve and improve profitability a standalone management team has 
been put in place to manage the bread division in addition the milling 
business has been split into two parts one serving our internal bakery 
and grocery businesses and one focused on free trade third party 
customer base
a restructuring of the bakery and milling footprint has also been 
undertaken to optimise the division’s operating footprint following the 
exit of an unprofitable own label contract as previously announced 
this has resulted in the closure of three bakery sites three distribution 
centres and two mills we have also undertaken a major restructuring 
of bread logistics operations which has removed 130 distribution 
routes at the same time we are increasing capital investment in bakery 
to improve efficiency quality and service
in january 2014 we announced an agreement to establish a joint 
venture for our bread business with the gores group
risk
project execution
we are currently undertaking a significant number of internal 
cost saving and restructuring projects which cover products 
suppliers operations and logistics including the separation and 
transitional service arrangements in respect of the proposed hovis 
joint venture and there is a risk that these may not be executed 
effectively
we have a strong track record of project delivery see transitional 
services above and have identified resource and appointed 
experienced project management teams 
  
for more information on  
risks see pages
2831
highlights and key performance indicators
84
of spend with top 250 suppliers
sga costs £m
163
2011
2012
2013
£147m
£99m
£83m
reduction in sku complexity
265
2012
2013
1700
1250
reduction in supplier complexity
255
2012
2013
3300
2460
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strategic review 2294104 24 march 2014 1120 am    proof 3
at premier foods we’re 
serious about our approach 
to sustainability we know it’s 
important to the outside world 
and to our people
anyone with an interest in our products or our business wants to know 
we’re doing the right things to ensure the quality of our food to reduce 
our impact on the environment to help our consumers make healthier 
choices and are pulling our weight as an employer in one of the uk’s 
biggest industries 
quality and food safety
the source of ingredients in the food consumers buy has become ever 
more important to them as an assurance of quality and of knowing it 
comes from sustainable suppliers we hold our suppliers to account 
for the provenance and traceability of their ingredients and continue 
to buy around 80 of our goods services and ingredients from uk 
suppliers to give us even greater confidence and we make every effort 
to buy from suppliers who do the right thing – a good example is our 
commitment to sustainable palm oil buying practices for which we 
were listed as amongst the top 5 places in the world wide fund for 
nature’s global palm oil scorecard in 2013 putting sustainability central 
to the way we buy helps us ensure the future security and supply of 
ingredients so we can continue to make the great tasting food our 
consumers can trust 
sustainable manufacturing
when it comes to manufacturing our culture of sustainability has 
yet again helped us make good progress in 2013 against our key 
environmental targets see table our achievements in using less 
natural resources contributed to us winning the ‘manufacturing 
company of the year’ at the 2013 uk food manufacturing excellence 
awards and the ‘efficiency initiative of the year’ at the 2013 uk 
national recycling awards we also effectively achieved our target of 
‘zero waste to landfill’ by the end of 2015 two years early ‘zero waste 
to landfill’ is agreed to apply when 1 of waste goes to landfill a 
figure we achieved at all but one of our manufacturing sites by july  
of 2013 
diet and health
we work to help our consumers look after their health and that of their 
families by providing more ‘better for you’ product choices we have 
health and nutrition action plans for all our brands and set targets for 
improving nutritional value by adding ‘positive’ ingredients including 
wholegrains fruits or vegetables or by reducing salt calories and 
trans fats for instance we target 50 of our new products to have 
a claimable nutrition or health benefit or be available in smaller portion 
packs in addition as a signatory to the department of health public 
health responsibility deal we achieved our publicly committed target 
to remove 286 tonnes of salt from our products since 2011 we are 
also on track to achieve our further commitment to reduce calories 
across onethird of our portfolio by the end of 2014 
to help our consumers take control of their diets during 2013 we were 
among the first to commit to adopt the government’s new frontof
pack colourcoded nutrition labelling across all our brands we’ve had 
front of pack labelling for years but adopting the government scheme 
will make it easier for consumers to make the right choices and 
compare products from different manufacturers all of our brands will 
carry the labelling by the end of 2014
people
as a large employer we see it as part of our sustainability commitment 
to help our industry and country develop the skills to compete in 
the future our industry faces a future lack of food engineers and so 
we’ve committed to support the newly formed national centre of 
excellence for food engineering based at sheffield hallam university 
we’re helping encourage them to train their student engineers with 
the skills needed by industry to enable them to create the innovative 
food and sustainable packaging solutions of the future in 2013  we 
also signed up to support the department of business innovation 
and skills’ ‘apprenticeship trailblazer’ initiative through which we’re 
helping develop new standards and assessments for food and drink 
engineering apprenticeships helping ensure they develop the skills 
our modern industry needs we’ve also been helping address the 
general skills shortage by doubling our support during 2013 for the 
institute of grocery distribution’s ‘feeding britain’s future’ campaign 
aimed at improving the prospects of thousands of unemployed young 
people across the country in supporting the campaign we’ve provided 
more than 300 training opportunities for the youngsters including 
preemployment skills training and firsthand knowledge of the skills 
needed for a career in the food industry or elsewhere
where to find out more information
more and more sustainability is becoming one of the ways businesses 
are judged at premier foods we consider all aspects of what we do 
through the lens of sustainability all the way from the field to tasty 
products on a shelf 
sustainability
delivering sustainability in everything we do
find out more about our approach to 
sustainability on our website
wwwpremierfoodscouksustainability
premier foods plc  annual report and accounts 2013
26
strategic review 2294104 24 march 2014 1120 am    proof 3
our environmental performance 
2013 has been another successful year for premier foods and we have made progress against all of our key environmental kpis details of 
which are set out below in addition for the first time we are reporting our greenhouse gas emissions under the government’s new  
reporting requirements
environmental performance 2012 vs 2013
our five year trend shows environmental performance in absolute 
terms as a year on year comparison in 2013 we sold or closed 
a number of sites and therefore to ensure transparency we are 
reporting our performance in both absolute and relative terms by 
reference to tonnes of product manufactured
environmental performance
2013 
absolute
2013
relative
2014 
target
reduce waste sent to landfill by 10 67 671 20
reduce energy consumption by 25 17 12 25
reduce water usage by 3 15 03 5
reduce carbon equivalent co
2
e 
emissions by 25 15 20 3
reduce road delivery miles travelled by 3 11 1140 3
ghg emissions
global tonnes of co
2
e
2013 2012
2011  
base year 
scope 1 139438851 145635111 158164706
scope 2 115282195 113868548 133046624
total annual net 
emissions 254721046 259503659 291211330
intensity measurement
1
1464 1479 1433
1
 tonnes of co2e per tonne of output
the scope organisational boundaries and ghg inventory have been assessed using 
the widely recognised independent ‘greenhouse gas protocol a corporate accounting 
and reporting standard revised edition’ in addition we have used the ‘defra 2013 
government ghg conversion factors for company reporting methodology paper for 
emission factors’ to calculate our overall emissions
greenhouse gas ghg emissions reporting
the companies act 2006 strategic report and directors’ 
reports regulations 2013 requires quoted companies to report on 
greenhouse gas ghg emissions for which they are responsible 
companies are also required to report on environmental matters 
to the extent it is necessary for an understanding of the company’s 
business within their annual report including where appropriate the 
use of key performance indicators kpis
in the table below we have detailed our scope 1  2 ghg 
emissions for the period 1 january to 31 december 2013 from a 
2011 baseline year
sustainability in everything we do 
if you want to know more about our commitment to sustainability and 
achievements in the year why not read our 2013 sustainability report 
available on our website
 
 
2009
2010
2011
2012
2013
19784
10246
6877
3258
1065
67
2009–2013
waste
tonnes
2009
2010
2011
2012
2013
1654
1584
1322
946
784
17
2009–2013
88 
200812 
45 
200812 
73 
200812 
48 
200812 
34 
we have historically reported performance against our environmental kpis in ‘absolute’ terms as a year on year comparison  in 2012  we divested a number of our businesses and to ensure transparency and 
take into account the impact of these disposals we are reporting our performance in both ‘absolute’ and ‘relative’ terms  the divested businesses included our histon and middleton manufacturing sites 
performance in absolute terms includes divested manufacturing sites and performance in relative terms to tonnes of product manufactured excluding divested manufacturing sites  
historical environmental performance 200812 environmental performance 201112 
absolute terms including divested manufacturing sites 
relative terms to tonnes of product manufactured excluding divested manufacturing sites  
2012 target 2012 
performance 
2013 
target 
reduce waste sent to landfill by 20 
 
418 100 
reduce energy consumption by 3 20 250 
reduce water usage by 5 
 
42 30 
reduce carbon equivalent co
2
e emissions by 4 
 
32 25 
reduce actual road miles travelled by 5 
 
280 30 
energy
gigawatts
2009
2010
2011
2012
2013
5816
5320
3717
1632
1385
15
2009–2013
88 
200812 
45 
200812 
73 
200812 
48 
200812 
34 
we have historically reported performance against our environmental kpis in ‘absolute’ terms as a year on year comparison  in 2012  we divested a number of our businesses and to ensure transparency and 
take into account the impact of these disposals we are reporting our performance in both ‘absolute’ and ‘relative’ terms  the divested businesses included our histon and middleton manufacturing sites 
performance in absolute terms includes divested manufacturing sites and performance in relative terms to tonnes of product manufactured excluding divested manufacturing sites  
historical environmental performance 200812 environmental performance 201112 
absolute terms including divested manufacturing sites 
relative terms to tonnes of product manufactured excluding divested manufacturing sites  
2012 target 2012 
performance 
2013 
target 
reduce waste sent to landfill by 20 
 
418 100 
reduce energy consumption by 3 20 250 
reduce water usage by 5 
 
42 30 
reduce carbon equivalent co
2
e emissions by 4 
 
32 25 
reduce actual road miles travelled by 5 
 
280 30 
water
megalitres
2009
2010
2011
2012
2013
478114
448567
369536
265000
224110
15
2009–2013
88 
200812 
45 
200812 
73 
200812 
48 
200812 
34 
we have historically reported performance against our environmental kpis in ‘absolute’ terms as a year on year comparison  in 2012  we divested a number of our businesses and to ensure transparency and 
take into account the impact of these disposals we are reporting our performance in both ‘absolute’ and ‘relative’ terms  the divested businesses included our histon and middleton manufacturing sites 
performance in absolute terms includes divested manufacturing sites and performance in relative terms to tonnes of product manufactured excluding divested manufacturing sites  
historical environmental performance 200812 environmental performance 201112 
absolute terms including divested manufacturing sites 
relative terms to tonnes of product manufactured excluding divested manufacturing sites  
2012 target 2012 
performance 
2013 
target 
reduce waste sent to landfill by 20 
 
418 100 
reduce energy consumption by 3 20 250 
reduce water usage by 5 
 
42 30 
reduce carbon equivalent co
2
e emissions by 4 
 
32 25 
reduce actual road miles travelled by 5 
 
280 30 
co
2
e
tonnes
2009
2010
2011
2012
2013
74963
66784
58269
48923
43353
11
2009–2013
transport
million miles 
travelled
88 
200812 
45 
200812 
73 
200812 
48 
200812 
34 
we have historically reported performance against our environmental kpis in ‘absolute’ terms as a year on year comparison  in 2012  we divested a number of our businesses and to ensure transparency and 
take into account the impact of these disposals we are reporting our performance in both ‘absolute’ and ‘relative’ terms  the divested businesses included our histon and middleton manufacturing sites 
performance in absolute terms includes divested manufacturing sites and performance in relative terms to tonnes of product manufactured excluding divested manufacturing sites  
historical environmental performance 200812 environmental performance 201112 
absolute terms including divested manufacturing sites 
relative terms to tonnes of product manufactured excluding divested manufacturing sites  
2012 target 2012 
performance 
2013 
target 
reduce waste sent to landfill by 20 
 
418 100 
reduce energy consumption by 3 20 250 
reduce water usage by 5 
 
42 30 
reduce carbon equivalent co 2 e emissions by 4 
 
32 25 
reduce actual road miles travelled by 5 
 
280 30 
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strategic review 2294104 24 march 2014 1120 am    proof 3
risk management
board accountability
the board has ultimate responsibility for the effective risk 
management of the group’s strategic objectives the group has 
a well established process which has operated throughout 2013 
that identifies and monitors the key strategic and operational 
risks ensures appropriate mitigating activities and reports on their 
effectiveness
the board has considered and approved the risk management 
policy the risk appetite of the group and has delegated the review 
of the risk management process to the audit committee the audit 
committee receives regular reports from management internal and 
external auditors detailing the risks that are relevant to our business 
activity the effectiveness of our internal controls in dealing with 
these risks and any required remedial actions along with an update 
on their implementation
the audit committee reports to the board on the effectiveness of 
the risk management process the day to day risk management  
is the responsibility of senior management as part of their everyday 
business processes and is underpinned by the group’s policies and 
procedures to ensure this is fully embedded 
there is a structured business review process that operates across 
all business areas which management report to the board and this 
along with the corporate governance framework further underpins 
the ongoing management of risk
our risk control framework operates as follows
regulatory authorities
group governance framework
boardaudit committee
external audit
group executive 
operational reviews
internal control self 
assessments
documented policies
and procedures
risk registers
internal audit reports
quarterly reporting to 
audit committee
management controls risk management
financial controller
treasury committee
health  safety 
security
food safety
internal audit
1st line of defence 2nd line of defence 3rd line of defence
1st line of defence — management controls 
the internal control system provides senior management with an 
ongoing process for the management of the risks that could impact 
on the fulfilment of the group’s business objectives the system is 
designed to manage rather than eliminate risk and provides reasonable 
but not absolute assurance against material misstatement or loss 
our internal controls cover all areas of operations the system also 
supports senior management’s decision making processes improving 
the reliability of business performance
2nd line of defence — corporate oversight
risk management – the group operates a formal risk management 
process designed to provide assurance to the board and support the 
executive and senior management in identifying and mitigating the key 
risks facing the business on an ongoing basis collective top down 
executive reviews are conducted as a minimum twice per annum and 
detailed functional risk registers are maintained for each business area
financial control – the group maintains a strong system of accounting 
and financial management controls our accounting controls ensure  
data in the group’s financial statements on pages 80 to 135 is 
reconciled to the underlying financial systems a review of the data is 
undertaken to ensure that the true position of the group is reflected 
through compliance with approved accounting practices the group 
has a dedicated team of finance managers aligned to business areas 
supported by systems to provide the best available decision making 
information to management on an ongoing basis this is reflected in 
an annual budgeting process monthly management reporting and 
ongoing investment appraisal
treasury and risk committee – this committee focuses on the 
purchases of group commodities reviewing our policies and operational 
delivery with respect to forward trading and foreign exchange exposures 
health  safety – the group maintains an ongoing programme of health  
safety audits and has established internal health  safety compliance tours 
in all factory sites
food safety – the group has developed and implemented corporate 
technical standards and established an ongoing food quality and 
safety compliance programme which audits all factory sites and major 
suppliers this supplements internal testing facilities established as part 
of our internal control system which confirm food quality safety and 
authenticity
3rd line of defence — internal audit
the audit committee meets annually to review and approve the 
internal audit programme for the year the committee reviews progress 
against the plan on a quarterly basis considering the adequacy of audit 
resource the results of audit findings and any changes in business 
circumstances which may require additional audits
the results of internal audits are reported to the group executive and 
senior management and where required corrective actions are agreed 
the results of all audits are summarised for the audit committee 
meetings along with progress against agreed actions
premier foods plc  annual report and accounts 2013
28
strategic review 2294104 24 march 2014 1120 am    proof 3
our principal risks and 
uncertainties
the business monitors and manages the principal high gross 
risks facing the business risks are categorised as strategic 
those that could have a significant impact given our current 
strategic objectives and operational those that are inherent in our 
business activity but could have a material impact 
summary of major strategic and operational risks
major strategic risks
proﬁt impact
probability
low
£3m
medium
£3m – £15m
high
£15m
low medium high
   4  5  6
   1  2  3
7  8  9  10
1  achieving the 
    capital 
    reﬁnancing plan
2  implementing the
    hovis joint venture
3  delivering the 
    commercial 
    grocery strategy
4  concentrated 
    retail customer 
    base
5  products sold 
    under licence
6  removal of 
    complexity
7  employee 
    engagement
8  external 
    communication
9  retention of key 
    management
10 business 
    disposals
major operational risks
probability
low medium high
proﬁt impact
low
£3m
medium
£3m – £15m
high
£15m
2  6  1  3  4  5
1 systems 
failure
2 operational 
disruption
3 health  safety
4 food safety 
and regulation
5 security 
of supply 
materials and 
services
6 cash 
management
  
 
capital refinancing plan and hovis joint venture 
we have announced two significant milestones as part of the group’s 
turnaround strategy which we believe will strengthen the group’s capital 
structure and result in the creation of a focused grocery business going 
forward whilst at the same time providing the hovis business with 
the best possible opportunity for success however both the capital 
refinancing plan and the hovis joint venture are dependent upon 
shareholder approval at our general meeting to be held on 20 march 
2014 both transactions are therefore subject to risk and uncertainty
capital refinancing plan 
although the group’ s current financing arrangements do not expire within 
the next twelve months the group expects that it would be unable to 
comply with certain of its financial covenants on or after 31 december 
2014 in this scenario the group would need to obtain certain consents or 
waivers from its lenders if the group were unable to maintain compliance 
with such covenants or obtain such waivers this would lead to a default 
under the group’ s existing financing arrangements the capital refinancing 
plan if approved will remove the risk around expiry or breach of our current 
financing agreements and will also reach a new solution with the group’ s 
pension trustees the capital restructuring includes proposals for a new 
revolving credit facility with a streamlined bank syndicate a revised 
schedule of contributions with our pension schemes and a proposal to raise 
approximately £350m in new equity and approximately £475m in senior 
secured notes this will accelerate the deleveraging of the business and 
further strengthen the group’ s balance sheet and extend the maturity profile 
of the group’ s debt after the capital refinancing plan the group will be in 
a stronger position with greater flexibility to invest in and focus on its core 
grocery business and implement its category based growth strategy
hovis joint venture
we believe that the hovis joint venture will allow management to focus 
on our core grocery power brands however implementing the hovis 
joint venture and ensuring a smooth separation of the bread division will 
require a disciplined process and multifunctional expertise together with 
complex transitional services between the company and the hovis joint 
venture to manage this effectively we have established a specific project 
team involving experienced personnel from the key functions of sales 
finance technical logistics procurement isc hr and legal the 
project team reports to a steering team which oversees the process 
this will help to ensure that both our ongoing grocery business and the 
hovis business will continue to operate effectively without interruption 
during this separation period and ensures that order production and 
delivery standards to our customers are maintained 
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strategic review 2294104 24 march 2014 1120 am    proof 3
risk management continued
risk dimension mitigating activities
strategic risk
commercial grocery strategy 
economic conditions have remained tough 
throughout 2013 impacting both consumers 
and our customers we have seen continued 
margin pressures through more aggressive 
trade promotions and consumer price 
switching 
for 2014 our key focus is on delivering continued growth in both our power brands 
and support brands as part of our category growth strategy we will utilise the tools we 
developed during 2013 which enable us to have a better understanding of our brand and 
customer profitability this will help us focus our promotional and marketing spend we will 
also continue the development of other lower cost channels wholesalers discounters and 
the internet we are also increasing our focus on innovation with additional resource 
allocated to this area and developing our international partnerships
retail customer base 
the group relies on a few major uk retailers 
for a large part of its sales if any of these 
customers comes under severe commercial 
pressure or the group’s relationship with any 
one of these customers changes there could 
be a significant impact on volume or margin
we will continue to work closely with our major customers on driving growth through 
category plans to which we will align our brand plans which will cover both power brands 
and key support brands as noted above we will continue to look for opportunities to 
diversify our customer footprint
products sold under licence agreements 
certain of the group’s branded products are 
produced under licences which have volume 
related sales hurdles and performance 
conditions and which will expire and may not 
be renewable on terms acceptable to the 
group or at all
we have formal licence agreements with loyd grossman one of our power brands 
and cadbury one of our support brands both have a finite life expiring in 2026 and 
2017 respectively there are also volume related sales hurdles and conditions around 
performance which could trigger a termination however performance of these brands is 
monitored on an ongoing basis and our sales and marketing teams develop category brand 
and activity plans and invest in innovation and new products to drive sales
removal of complexity 
the business will carry excess cost if 
efficiency and effectiveness in the removal of 
complexity is not delivered cost savings also 
release funds both to invest in the delivery 
of our commercial strategy and support our 
ongoing financing requirements 
we have established a dedicated project team to focus on reducing complexity and 
identifying cost reduction opportunities within procurement we have delivered a significant 
reduction in our supply base to generate savings through greater economies of scale whilst 
building strategic relationships with key suppliers we are also undertaking a review of our 
entire grocery portfolio to reduce complexity and identify skus which are non profitable 
in addition we continue to target year on year cost savings through the effective 
management of manufacturing and logistics controllable costs 
hovis joint venture risk 
the group may not realise the anticipated 
benefits of the hovis joint venture ensuring 
that the group is properly structured post 
implementation of the hovis joint venture 
will be key to the successful delivery of our 
strategy
through the joint venture hovis will receive renewed investment and focus we therefore 
believe that the hovis joint venture offers hovis the best chance of success the group will 
share in any success through its shareholding in the hovis joint venture depending on the 
performance of the hovis joint venture premier may also be entitled to receive an element 
of deferred consideration there is however a risk that neither benefit materialises the 
group is focussing on ensuring that it is properly structured and has a robust operational 
framework to deliver its strategy once the separation of the bread division is achieved 
work is also ongoing to address dissynergies which could arise in the business post
separation
employee engagement 
effective engagement of the leadership team 
and employees is key to the successful 
delivery of our strategy the group has 
gone through a series of major restructuring 
programmes over the last few years set 
against a difficult economic backdrop
our focus has been to ensure regular communication about business performance priorities 
and expectations to encourage an understanding of the necessary actions to reengage 
with the senior management top 100 team gain buyin and support for key actions and 
to take creative steps to promote recognition and personal development eg recognition 
award schemes ‘breakthrough’ leadership training and non financial incentives we have 
completed an all employee survey which has provided a measure of the level of employee 
engagement informed areas for improvement and led to the setting of group and local 
priorities and action plans delivery is being managed locally through detailed action plans 
specific to the findings in each area but coordinated centrally within the hr function on  
behalf of the group executive 
external communication 
effective management of our external 
communication is important in managing 
our corporate reputation and stakeholder 
relations we currently have a number of 
major high profile projects under way
our focus will be to continue to utilise professional communications resource inhouse and 
agency to maintain high quality and effective communications and a proactive strategy to 
promote the company and its leadership this is aligned and integrated with our investor 
relations activity and is designed to ensure we comply with our legal and regulatory 
disclosure obligations this is supported by appropriate internal policies to control the  
flow of sensitive information and media response control of communications within  
major project activity is also ensured through appropriate policies and procedures 
premier foods plc  annual report and accounts 2013
30
strategic review 2294104 24 march 2014 1120 am    proof 3
risk dimension mitigating activities
strategic risk
retention of key management 
loss of key senior management could 
impact on the delivery of the business 
strategy 
the board and nomination committee maintain an ongoing dialogue with the group 
executive and regularly consider and review succession planning for key management 
through the remuneration committee the appropriateness of remuneration for senior 
management is regularly reviewed and appropriate risk and retention analysis is 
conducted to ensure that we have a highly motivated workforce
business disposals 
the group’s business disposals including 
establishing the hovis joint venture involve 
separation challenges and the risk of 
financial claims from purchasers for breach 
of warranties and indemnities 
we have established dedicated project teams drawn from key functions of the business to 
manage transitional arrangements to ensure that orders production and delivery standards 
are maintained to our customers careful planning and steering teams are also key to 
achieving smooth separation
our legal team have an excellent track record of transactional management and have 
undertaken thorough disclosure processes and robust negotiations resulting in 
appropriate legal documentation to mitigate the risks of claims from purchasers
operational risk
systems failure 
we have a high dependency on our core 
it systems which are outsourced to a third 
party provider
to mitigate potential risk of failure our service agreement has a high level of resilience built 
in with three distinct operating environments we do however have some legacy systems 
supporting our bread division which do not have the same levels of resilience we closely 
monitor systems availability and have robust systems disaster recovery policies and 
procedures in place which are tested on a regular basis
operational disruption 
a major disruption at one of our operating 
sites could have a significant impact on 
service levels 
we have developed appropriate business continuity plans for all sites in addition the 
move to a regional distribution model for grocery where a full product range is held at 
both warehouse locations has also increased our resilience we continue to review our 
arrangements as part of our regular disaster recovery planning
health  safety 
in addition to the obvious human cost a 
serious workplace injury or fatality could 
inevitably carry serious financial and 
reputational risk as well as possible legal 
consequences under applicable regulation
we believe we have in place best in class processes and procedures in health  safety 
supported by an ongoing programme of specialist health  safety audits an established 
programme of internal inspections across all sites we also have a culture of engagement 
throughout the business from the group executive through to the shop floor to ensure that 
we continue to implement best practice and do not become complacent
food safety and regulation 
three key areas of risk are food 
contamination with a hazardous product 
food authenticity which has gained 
focus with the ‘horsemeat’ scandal and 
ethical trading the first two could lead to 
regulatory sanctions and penalties and all 
three to reputational damage 
we have robust policies and procedures in place with supplier approval and verification 
through an ongoing programme of supplier and factory audits we conduct our own dna 
testing for any product identified as being at risk and our surveillance programme has been 
extended to include licensed products including audits of licensed manufacturers we are a 
member of sedex as part of our ethical assurance programme
security of supply 
fluctuations in commodity prices in 
particular wheat present a significant risk to 
margin if premier is unable to successfully 
recover through customer pricing
to manage our exposure we have well established processes which are reported as part 
of our business review meetings this includes where appropriate monthly monitoring 
on forecasts and equivalent market pricing during the course of 2013 we have further 
rationalised our supplier base and this will help us leverage scale and strengthen our 
supplier relationships thus giving mutual benefits for preferred suppliers we regularly 
monitorour level of dependency and risk on a supplier and category basis
cash management 
we have a securitised finance agreement 
in place supported by an operational 
process our current banking arrangements 
have and any new banking arrangements 
entered into in connection with the capital 
refinancing plan will have covenants which 
are tested six monthly and require the 
production of forecasts which themselves 
must show compliance with targets set
we have significantly strengthened our control processes in the core cash management 
areas within the last 12 to 18 months and are focused on maintaining these through close 
management review and the involvement of our internal audit programme the capital 
refinancing plan includes proposals for a new revolving credit facility with a streamlined 
bank syndicate a revised schedule of contributions with our pension schemes and a 
proposal to raise approximately £350m in new equity and approximately £475m in senior 
secured notes if approved the capital refinancing plan will reduce our overall cash 
management risk in addition we have closed our defined benefit pension schemes to 
future accrual to help control pension fund liabilities
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strategic review 2294104 24 march 2014 1120 am    proof 3
key performance indicators
measuring the delivery of our strategy
as a business we use 
a large number of 
performance indicators 
to monitor operational 
and financial 
performance
these are reviewed on a daily weekly 
or monthly basis and reported to senior 
management as part of our monthly 
management accounts these indicators 
are used to encourage focus and measure 
performance across a range of areas and to 
highlight areas for attention and corrective 
action we have selected 10 key performance 
indicators kpis which are aligned to the 
strategic priorities of the group
the completion of the capital refinancing 
plan and hovis joint venture will be 
transformational for the group and we will 
therefore review our kpis and targets over the 
course of 2014 to ensure they remain relevant 
to the focused grocery business and aligned 
with the delivery of our strategy
grocery power brand sales 
growth value
performance
£5126m
£5331m
£5435m
2011
2012
2013
we have successfully demonstrated 
another year of growth with grocery 
power brands up 20 yoy this is a 
result of increased marketing investment 
and closer relationships with customers
measurement
yoy growth in sales from grocery power 
brands
link to strategy
investing behind our power brands to 
maximise future growth is one of our 
strategic priorities focusing on branded 
products improves margin potential and 
therefore increases profitability
focus for 2014
grocery power brand growth remains 
a strategic priority and we are targeting 
2–3 growth in 2014
deliver £20m of additional 
overhead cost savings in 2013
performance
£161m
we delivered over £20m of people related 
sga cost savings in the year but this 
was partly offset by other charges resulting 
in a reduction of total sga costs of 
£161m for 2013
measurement
yoy overhead savings identified as part 
of our previously announced cost saving 
programme
link to strategy
business simplification and efficiency is 
one of our strategic priorities cost savings 
are reinvested behind our brands to drive 
further growth
focus for 2014
we expect our sga cost base to be in line 
with current levels over the medium term
increase in trading profit 
underlying
performance
2011
2012
2013
£1116m
£1234m
£1452m
the 177 increase in trading profit was 
helped by the successful overhead cost 
reduction exercise undertaken in 2013 and 
increased power brand sales
measurement
underlying profit includes the results of our 
bread business and excludes disposals 
and noncore discrete contract losses as 
this better illustrates the performance of 
the core business
link to strategy
supports focus on our overall growth 
agenda
focus for 2014
trading profit growth remains a strategic 
priority for 2014
recurring cash flow
performance
2011
2012
2013
£1220m
£500m
£868m 
positive cash flow up 736 was 
generated from strong trading profit 
control on capex and reduced cash 
interest following the 2012 refinancing
measurement
cash flow attributable to the ongoing 
business this is before nonrecurring 
items such as the proceeds from disposals 
and associated restructuring costs and 
financing fees
link to strategy
cash flow is a good indicator of the 
underlying quality of earnings and the 
overall health of the business it also 
identifies cash available to repay debt
focus for 2014
cash flow remains a strategic priority  
for 2014
reduction in net debt
performance
2011
2012
2013
£12570m
1
£9507m
£8308m
there was a 126 reduction in net debt 
over the course of the year as a result 
of the sweet pickles disposal proceeds 
lower financing costs and pension defecit 
contributions
measurement
reduction in net debt versus prior year
link to strategy
given the group’s relatively high gearing 
reduction of debt is a key focus area
focus for 2014
reduction in debt remains a strategic 
priority over the medium term
1 
proforma reflecting the effects of the march 2012 
refinancing
premier foods plc  annual report and accounts 2013
32
strategic review 2294104 24 march 2014 1120 am    proof 3
10 of sales from new 
products
performance
129
we achieved 129 of sales from npd 
in 2013 exceeding our target of 10 
with strong performances from hovis 
ambrosia mr kipling and batchelors
measurement
sales of new products as a  of our 
branded sales within power brand 
categories
link to strategy
in order to generate long term branded 
growth we must focus on innovation and 
npd this measure is an important indicator 
of whether we are responding to  
consumer trends
focus for 2014 
the ability to launch new products is 
consistent with our strategy and essential to 
the sustainable growth of the business and we 
will continue to focus on this in 2014
 of products testing superior 
or at par with competitors
performance
96
overall performance was up 2 yoy to 
96 the review covered 65 of our 
branded sales value as part of a two year 
rolling programme
measurement
consumer panel blind testing of our major 
branded products against their main 
competitor whether branded or own label
link to strategy
important measure of the quality of our 
product portfolio drives recipe improvements 
and ensures focus on consistent  
production quality
focus for 2014
we will continue to focus on consumer 
quality benchmarking and reformulate any 
products testing below par
at least 50 of npd to be 
“better for you” choices
performance
56
over the course of 2013 56 of new 
products delivered ‘better for you’ choices
measurement
sales value of npd with a claimable health 
and nutritional benefit
link to strategy
aligns with consumer focus for wider 
product choice and ‘better for you’ 
options
focus for 2014
health remains a major area of interest for 
consumers and over 2014 we will continue 
to identify opportunities to introduce npd 
with ‘better for you’ choices
achieve a 10 reduction  
in ltas
performance
2011
2012
2013
037
020
016
at the end of 2013 the group lta 
frequency rate was 016 ltas per 100000 
hours worked representing a 20 
improvement over 2012
measurement
lost time accident lta rate per 100000 
hours worked
link to strategy
the lta frequency rate signals our 
determination to apply a preventative focus 
on all accidents which caused absence  
from work
focus for 2014
as a major employer ensuring a safe work 
place for all employees remains a key area 
of focus our target for 2014 is to achieve 
a further 10 reduction in lta’s
25 reduction in carbon co2 
equivalent emissions tonnes
performance
2011
2012
2013
369536
265000
224110
including the impact of site disposals and 
closures in 2013 we achieved a 20 
reduction in co
2
e emissions relative to 
tonnes of product manufactured this 
equated to a 15 reduction in absolute terms
measurement
yoy reduction in reduction in carbon co
2
 
emissions in relative terms
link to strategy
reducing carbon emissions is a measure 
of our overall commitment to responsible 
manufacturing and reducing our impact on 
the environment
focus for 2014
as part of our ongoing commitment 
to sustainability across the business 
our target for 2014 is to reduce co
2
e 
emissions by 30 in relative terms
see further information online at
wwwpremierfoodscouk
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strategic review 2294104 24 march 2014 1120 am    proof 3
did you know
95 of british 
households 
have at least 
one of our 
products in 
their kitchen 
cupboard
new flavours for 
batchelors deli box 
we have added three new flavours to our batchelors deli box 
lineup sweet  sour noodles bolognese pasta and tomato 
 chilli pasta the new variants all contain less than 1 fat 
together with no artificial colours or preservatives
the current range of deli boxes come in a modern and appealing 
‘new york style’ cardboard takeaway box and have proved popular 
since launch in 2012 succeeding in attracting new customers to both 
the brand and the sector
for more information on consumers
and brands see pages
1819 2294104 24 march 2014 1120 am    proof 3
performance
review
contents
this section contains a detailed analysis 
of our business performance for the year 
as reported in our preliminary results 
announcement in march 2014
operating review 3639
financial review 4043 2294104 24 march 2014 1120 am    proof 3
underlying business
underlying business excludes all disposals announced in 2012 
strategic contract withdrawals and milling sales the following 
commentary is based on underlying business unless otherwise 
stated the 2013 performance of the bread business is included in the 
following review as the proposed joint venture with the gores group 
llc announced on 27 january 2014 has not yet completed
£m 2013 2012 change
sales
grocery 8374 8541 20
bread 4451 4433 04
total 12825 12974 11
grocery divisional contribution 1967 1955 06
bread divisional contribution 314 269 167
sga 829 990 163
total trading profit 1452 1234 177
introduction
underlying business sales decreased by 11 to £12825m in the year 
a decrease of £149m compared to the prior year underlying business 
trading profit increased by £218m or 177 to £1452m in the year 
grocery division
£m 2013 2012 change
power brands 5435 5331 20
support brands 1962 2063 49
total branded 7397 7394 01
nonbranded 977 1147 149
sales 8374 8541 20
divisional contribution 1967 1955 06
total sales in grocery were £8374m down 20 while divisional 
contribution increased £12m to £1967m this relatively low growth 
at divisional contribution was impacted by the hot summer of 2013 
and was offset by significant reductions in sga at the group 
level the group estimates that for the ongoing underlying grocery 
business trading profit increased from £131m to £139m between 
2012 and 2013 grocery power brands sales increased by 20 
in the year to £5435m while branded sales were up marginally to 
£7397m reflecting slower support brands sales in the second and 
third quarters the grocery proportion of branded sales increased by 
18ppts to 883 in the year as the group maintained a disciplined 
approached to nonbranded business which declined by 149
in the five main categories the business participates in particularly 
strong performances were seen in ambient desserts and flavourings 
 seasonings with the group outperforming the market in both 
categories in ambient desserts ambrosia benefited from a successful 
television advertising campaign ‘this is pudding’ and also the launch of 
devon dream bisto and oxo also delivered good performances in the 
year with oxo sales supported by the shake  flavour product while 
bisto benefitted from sales of stock melts and continues to consolidate 
its strong category position
gavin darby
chief executive 
officer
operating review
“i am very pleased to report a 
strong 18 growth in trading 
profit and significant underlying 
earnings progression in 2013 
through our category based 
strategy we have delivered 
grocery power brands sales 
growth of 20 some good 
market share performances and 
progressively stronger customer 
partnerships”
premier foods plc  annual report and accounts 2013
36
business performance 2294104 24 march 2014 1120 am    proof 3
the group’s market share of the cake category was over 25 for 
the 52 weeks ended 28 december 2013 and while overall mr kipling 
sales were down in the year the snack pack slices format continues to 
perform well with manufacturing utilisation very high in recognition of 
this the group is investing approximately £20m in a new snack pack 
line to significantly increase current capacity this new line is expected 
to deliver additional and different packaging sizes and provide the 
platform to extend into the wider sweet treats category
in the support brand portfolio sales declined by 49 during the 
year reflecting a strongly competitive promotional environment in the 
cooking sauces category which affected sales of homepride while 
mcdougall’s was also impacted by intense competition in the fourth 
quarter of 2013 grocery support brands grew by 11 supported by 
revenue growth of angel delight bird’s and mcdougall’s and reflecting 
early benefits of the group’s category based strategy nonbranded 
sales were impacted in the year by contract withdrawals in desserts 
and powdered beverages
while consumer marketing investment was slightly lower than the 
prior year the group had some successful advertising campaigns 
with improved buying efficiency over the medium term the group 
is committed to increasing both the quantum and efficiency of its 
consumer marketing expenditure to support growth of its branded 
portfolio
during the year manufacturing controllable costs were lower and 
savings were delivered through reducing business complexity over 
the medium term savings in manufacturing controllable costs are 
expected to continue with these savings partly reinvested in growing 
the group’s brands
bread division
£m 2013 2012 change
branded bread sales 3466 3401 19
non branded bread 
sales 985 1032 46
total bread sales 4451 4433 04
milling sales 2219 1914 159
total sales 6670 6347 51
divisional contribution 314 269 167
sales for the bread division excluding milling increased 04 to £4451m 
in the year while total sales for the division increased by 51 to £6670m 
divisional contribution rose by 167 or £45m to £314m in the year
power brands sales for 2013 increased by 21 to £3267m reflecting 
a good finish to the year through progressively stronger customer 
partnerships following a slower third quarter due to the hot weather hovis 
continues to deliver strong market share performances in most major 
retailers reflecting strengthening customer partnerships product quality 
and brand heritage
the divisional contribution increase of 167 was due to improved 
manufacturing efficiencies in the supply chain while the business also 
benefited from an improved second half performance particularly reflecting 
stronger customer partnerships 
this year the bread business has focused on a major restructuring 
programme involving the closure of three bakeries two mills and a 
significantly reconfigured logistics network the greenford bakery closed 
in the third quarter and production at the barry mill finished in october 
restructuring costs associated with this programme were £291m in the 
year cash proceeds from the disposal of these closed sites were received 
earlier than expected and realised £148m in the fourth quarter of the year
milling sales of £2219m were up 159 compared to the prior year 
reflecting higher pricing for the first three quarters of the year
on 27 january 2014 the group announced a proposed standalone joint 
venture for the bread business with the gores group this arrangement 
once the transaction has completed will facilitate a significant increase 
in investment in the bread business both to improve the efficiency of its 
infrastructure and to reinvigorate the hovis brand building on its strong 
heritage premier foods and the gores group will invest up to £450m 
cash to unlock a £200m five year investment programme for hovis
the group will retain a 49 interest in the joint venture and expects to 
receive £300m consideration £150m of which is due on completion of 
the transaction and £150m is deferred and contingent on future business 
performance a working capital benefit of £287m will be retained by the 
group following the completion of the transaction and of the £450m 
combined cash investment premier foods will contribute an initial £157m 
consequently the net shortterm cash benefit to the group is £280m
cost savings programme and sga costs
£m 2013 2012 change
total sga 829 990 163
the major restructuring of the sga cost base has delivered savings 
of over £64m since 2011 and this new level now better reflects the 
size of the group following the disposal of noncore businesses within 
the £161m savings delivered in 2013 peoplerelated costs reduced 
by over £20m partly offset by other nonpeople related charges in 
the sga cost base these sga savings has been a significant 
contributor to the trading profit performance in 2013 with sga at the 
end of 2013 reducing to 55 of underlying sales including milling
cash restructuring costs associated with the reduction in the sga 
cost base in 2013 were £109m over the medium term and subject 
to changes arising from the bread business joint venture transaction 
the sga cost base is expected to remain broadly in line with current 
levels although management incentives schemes to drive improved 
performance are to be reset at more realistic levels
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business performance 2294104 24 march 2014 1120 am    proof 3
net regular interest
£m 2013 2012 change
bank debt  securitisation 
interest 285 391 271
swap contract interest 72 173 584
357 564 367
amortisation and deferred fees 227 131 733
net regular interest 584 695 160
net regular interest charge was £584m in the year an £111m 
reduction from the previous year and ahead of management guidance 
of £60£65m this lower charge versus prior year reflects both lower 
average net debt in 2013 following the pay down of debt due to 
business disposals and the introduction of lower coupon interest rate 
swaps in the second quarter of 2012
amortisation and deferred fees of £227m were noncash items in 
2013 and in line with management expectations
cash flow
£m 2013 2012
underlying business trading profit 1452 1234
depreciation 329 375
other noncash items 50 88
interest 359 525
taxation — 03
pension contributions 114 177
capital expenditure 339 564
working capital 151 66
recurring cash inflow 868 500
group recurring cash inflow before nonrecurring items such as 
restructuring activity financing fees and the impact of disposals was 
£868m in the year
underlying business trading profit increased by £218m to £1452m in 
2013 for the reasons described above while depreciation was £46m 
lower reflecting a lower fixed cost base following business disposals in 
2012 other noncash items of £50m in 2013 principally include the 
addback of share based payments
cash interest was significantly lower in the year owing to the close 
out of the higher rate interest rate swaps due to the refinancing 
agreement of march 2012 and lower average net debt following 
noncore business disposals cash interest for 2014 is expected to 
be in the range of £45£50m but is dependent upon the pricing of 
the senior secured notes the group did not pay any corporation tax 
in the year as a result of utilising a proportion of the brought forward 
losses available to it and does not expect to pay corporation tax in the 
mediumterm
pension cash outflows in the year of £114m largely reflect payments 
associated with the administration of the schemes and standard 
government levies monthly pension deficit contributions resumed 
in january 2014 with payments being made under the schedule 
previously agreed until the new revised schedule is effective as outlined 
above
capital expenditure reduced to £339m in the year a little lower 
than management guidance of approximately 25 of sales capital 
expenditure for 2014 is expected to be in the range of £3540m 
approximately half of which is major investment in a new cake slices 
snackpack line at the group’s cake factory in carlton barnsley over 
the mediumterm ongoing capital expenditure is expected to be 
broadly in line with depreciation the group expects working capital to 
be a cash outflow of approximately £30m in 2014
£m 2013 2012
recurring cash inflow 868 500
cash flows from disposed businesses 00 58
restructuring activity 400 216
operating cash flow from  
total company 468 342
disposal proceeds 1056 3122
financing fees  finance leases 275 240
free cash flow 1249 3224
free cash flow before repayment of borrowings was £1249m in the year 
compared to £3224m in 2012 restructuring activity was an outflow of 
£400m comprising £291m of costs relating to the major bread 
restructuring programme and £109m from access costs associated with 
the sga savings delivered in the year
disposal proceeds of £1056m in the year include £908m of net proceeds 
£925m of gross proceeds from the sale of the sweet pickles and t able 
sauces business and £148m from the sale of five closed bread sites 
associated with the bread restructuring financing fees in 2013 were 
£275m slightly lower than management guidance and refer to deferred 
fees associated with the bank facility agreement prior to march 2012
net debt
£m
reported net debt at 31 december 2012 9507
movement in cash 2013 1249
other noncash items 50
reported net debt at 31 december 2013 8308
equity issue 3530
underwriting bank bond and advisory fees 413
deferred bank fees 220
bread disposal proceeds 280
adjusted net debt at 31 december 2013 5131
group net debt at 31 december 2013 was £8308m the group has 
announced a proposed gross equity issue of £3530m after total fees 
of £633m including equity fees of approximately £9m deferred bank 
fees arising from the 2012 refinancing of approximately £22m and other 
bank bond and advisory fees of approximately £32m and bread disposal 
proceeds of £280m adjusted net debt at 31 december 2013 was 
£5131m
operating review continued
premier foods plc  annual report and accounts 2013
38
business performance 2294104 24 march 2014 1120 am    proof 3
pensions
at 31 december 2013 the company’s pension schemes under the ias 
19 accounting valuation showed a gross deficit of £6033m compared 
to £4668m at 31 december 2012 the valuation at 31 december 
2013 comprised a £2178m deficit in respect of the rhm schemes and 
a deficit of £3855m in relation to the premier foods schemes
the deficit increase reflects an increase in the scheme liabilities of 
£1456m to £38217m slightly offset by an increase in the valuation of 
assets of £91m to £32184m the adverse movement in liabilities is 
partly due a reduction in the discount rate from 445 at 31 december 
2012 to 440 at 31 december 2013 but also reflects an increase in 
the inflation rate assumption from 295 to 335 the slight increase 
in the valuation of the scheme assets is due to underlying asset 
performance offset by benefits paid in the year
cash paid relating to pension schemes in the year was £229m 
the schemes were closed to future accrual on 30 september 2013 
the triennial actuarial valuation of the group’s pension schemes has 
now concluded and as at 5 april 2013 the deficit on this basis was 
£1062m it is important to note that at the valuation date discount 
rates were at a particular low point and have since increased which 
other assumptions remaining constant would have the effect of 
materially reducing this headline valuation
pensions £m 31 dec 2013 31 dec 2012
assets
equities 2997 4113
government bonds 5157 5884
corporate bonds 3841 6088
property 1817 1053
absolute return products 12682 7121
cash 1923 5030
infrastructure funds 1935 1532
swaps 1166 1946
private equity 1902 1859
other 1096 1359
total assets 32184 32093
liabilities
discount rate 440 445
inflation rate rpicpi 335235 295215
total liabilities 38217 36761
gross deficit ias 19 6033 4668
deferred tax 2325245 1403 1144
net deficit ias 19 4630 3524
following the 2012 refinancing agreement the group and the pension 
schemes trustees agreed that pension deficit contribution payments 
would be suspended from march 2012 to december 2013 these deficit 
contribution payments resumed in january 2014 a new pension deficit 
contribution schedule has been agreed with the pension schemes 
trustees which provides improved affordability for the group and certainty 
of cash flows for the next six years 
the group acknowledges the significance of the pension valuation in 
determining a fair reflection of the group’ s enterprise value while there are 
a number of different methodologies to value a pension scheme deficit 
the group notes that one approach is to discount the post tax future cash 
flows of the revised pension deficit contribution schedule on this basis 
the valuation of the pension schemes deficit is £405m this is based on 
the assumption that the group has a tax shield available to it in the early 
years of an agreed 19 year recovery period details of the revised pension 
deficit contribution schedule are outlined on page 41
outlook
the simplification of the group through the hovis joint venture and the 
capital structure represent significant steps forward for premier foods 
completion of these projects will allow management to focus its full 
attention on the grocery business which the board believes is well 
positioned to deal with the challenges of 2014
the group expects grocery power brand sales to be slightly negative 
in the first quarter reflecting the colder weather in the comparative 
period the move of easter from q1 to q2 and subdued consumer 
spending in the grocery market grocery power brand sales are 
expected to improve in q2 and into the second half reflecting planned 
new product introductions increased halfonhalf consumer marketing 
and assuming a return to more typical average summer temperatures 
for the full year the board is targeting grocery power brand growth 
in the range of 2–3 support brands are expected to grow modestly 
in 2014 as a result of targeted marketing activity while nonbranded 
sales will decline reflecting the group’s focus on higher margin branded 
sales the group continues to manage costs tightly and remains 
confident in its expectations for the full year
over the medium term the group is targeting grocery power brand 
revenue growth of between 2 and 3 per annum and total branded 
revenue growth of 1–2 the group continues to work on reducing 
complexity in the business through sku reductions and rationalising 
its supplier base and this together with mix benefits means it is 
targeting gross margins to grow faster than revenues it will continue to 
target manufacturing controllable cost reductions in manufacturing of 
between 2 and 3 per annum and to hold sga at broadly current 
levels it expects to increase consumer marketing spend by double
digit  increments over the medium term
gavin darby 
chief executive officer
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business performance 2294104 24 march 2014 1120 am    proof 3
financial review
alastair murray
chief financial 
officer
capital restructuring
the board has now completed its review of the group’s capital 
structure and is proposing to diversify its sources of finance to 
provide a solid foundation on which it can drive future growth 
through its category based strategy and leverage its strengths this 
transformational capital restructure includes a fully underwritten equity 
raise of approximately £353m gross of fees through a placing and 
rights issue the issue of £475m senior secured loan notes and a 
new £300m revolving credit facility with a smaller bank syndicate 
significantly the group has also reached a new pensions framework 
agreement with the pension scheme trustees following the triennial 
actuarial valuation which provides the platform for this new capital 
structure to be put in place
equity issue
the group has announced it is raising approximately £353m gross 
proceeds by way of a fully underwritten placing of approximately 77 
million shares at 130 pence per share to raise £100m and a fully 
underwritten 8 for 5 rights issue of approximately 507 million shares at 
50 pence per share to raise approximately £253m this issuance will 
reduce the indebtedness of the group and substantially strengthens 
the balance sheet
pensions agreement
the group has agreed what it considers to be a comprehensive 
and significant agreement with the pension scheme trustees the 
pension deficit contribution schedule will on completion of the capital 
restructuring be revised with the impact of reducing cash payments 
when compared to the previous schedule by £161m over the next six 
years committed deficit contributions are fixed until december 2019 
and set out in the table titled ‘capital refinancing terms’ under the 
new arrangements the pension schemes will be granted security up 
to £450m in aggregate and will have certain dividend matching rights 
for any dividends paid by the group up to 2019
revolving credit facility and securitisation facility
the group’s existing term loan and revolving credit facilities will be 
repaid to the respective lenders on completion of the recapitalisation 
these facilities will be replaced by senior secured notes and a 
revolving credit facility of £300m which is due to mature in march 
2019 and attracts an initial bank margin of 350 above libor the 
group has agreed with the lenders of the new revolving credit facility 
that dividends are permitted to be distributed to shareholders when 
the group’s net debtebitda ratio falls below a ratio of 30x this 
facility has been arranged with a significantly smaller group of lenders 
than was the case previously and includes an appropriate covenant 
package the details of which are set out in the table titled ‘capital 
refinancing terms’ 
following completion of the joint venture transaction the group’s ability 
to draw on its existing securitisation facility of £120m is expected to 
reduce to around £60m and attracts a margin of 275 above the cost 
of commercial paper
“following the announcement to 
simplify the group through the 
hovis joint venture we are now 
focused on growing a high quality 
branded grocery business with 
its strong underlying cash flows 
while consumer spending trends 
are currently subdued we are 
confident in our expectations 
for 2014”
premier foods plc  annual report and accounts 2013
40
business performance 2294104 24 march 2014 1120 am    proof 3
senior secured notes
to achieve its objective of diversifying its sources of finance the 
group has also announced its intention to raise £475m of senior 
secured notes this programme will extend the maturity of this tranche 
of the group’s debt by up to seven years and will bring in a new 
and diversified investor base the notes are likely to be issued as a 
combination of fixed and floating rates although in the case of floating 
rate notes the group intends to use plain vanilla interest rate swaps to 
eliminate the net interest rate exposure the group has also entered 
into a backstop arrangement on standard market terms under which 
issuance of these notes is effectively underwritten
capital refinancing terms
key terms and details
equity
firm placing £100m
rights issue circa £253m
gross issue proceeds circa £353m
net issue proceeds circa £344m
pension
contributions fixed until 2019 revised deficit contribution schedule as 
follows
new  
schedule
old  
schedule
reduction
increase
2014 £35m £83m £48m
2015 £9m £80m £71m
2016 £42m £79m £37m
2017 £50m £47m £3m
2018 £44m £47m £3m
2019 £42m £47m £5m
total £222m £383m £161m
recovery period extended to 2032
lending  
facilities
revolving credit facility rcf £300m
rcf maturity march 2019
rcf margin 350  libor
commitment fee on undrawn facilities 40 of applicable margin
securitisation facility  margin £120m at 275
covenants
net debt  ebitda ebitda  interest
june 2014 550x june 2014 225x
dec 2014 550x dec 2014 225x
june 2015 525x june 2015 245x
dec 2015 500x dec 2015 250x
june 2016 490x june 2016 255x
dec 2016 460x dec 2016 265x
june 2017 430x june 2017 270x
dec 2017 420x dec 2017 275x
june 2018 385x june 2018 280x
dec 2018 365x dec 2018 300x
senior secured 
notes
amount £475m
tenor 6 year floating  7 year fixed
couponmargin to be confirmed on pricing
financial review
the company presents its financial results for the year ended 31 
december 2013 with comparative information for the year ended 31 
december 2012 the bread business is treated as a discontinued 
operation in the 2013 financial statements reflecting its status as an 
asset held for sale at the balance sheet date and is therefore excluded 
from continuing operations comparatives have been restated to reflect 
the reclassification of the bread business as a discontinued operation
company structure
in 2012 the company completed the disposals of the following 
businesses irish brands vinegar and sour pickles elephant atta 
ethnic flour and sweet spreads and jellies on 2 february 2013 
the company completed the disposal of its sweet pickles and table 
sauces business
all commentary on the performance of the company included below 
refers to continuing operations unless otherwise stated and therefore 
reflects the respective periods that the company maintained ownership 
of the businesses disposed in 2012 and 2013 for example the 
vinegar and sour pickles business disposal completed on 28 july 
2013 therefore the results of the continuing operations include seven 
months results of the vinegar and sour pickles business in 2012
income statement
revenue from continuing operations was £8562m a decrease of 
£2147m compared to the prior year the major driver of the decline 
is attributed to the disposals of vinegar and sour pickles and sweet 
spreads and jellies businesses partly offset by growth of the group’s 
power brands gross profit was £3001m a reduction of £492m 
which principally reflects the effect of the business disposals made 
in 2012 partly offset by power brands growth and manufacturing 
efficiencies gross margin  grew from 326 in 2012 to 351 in 
2013 due to increased sales of higher margin power brands sales 
while sales of lower margin nonbranded products declined in the year 
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business performance 2294104 24 march 2014 1120 am    proof 3
financial review continued
operating profit
operating profit for continuing operations was £526m a reduction 
of £311m compared to 2012 this was mainly due to the profit on 
disposal of the sweet spreads and jellies business completed in 2012 
before impairment and profit on disposal of operations operating profit 
was £550m an increase of £44m on the prior year
trading profit was £1395m in the year a decline of £196m principally 
reflecting the impact of the businesses disposed during 2012 partly 
offset by significant savings in the sga overhead cost base in the 
underlying business the group considers underlying profit as set 
out in the operating review to be a more useful measure of assessing 
business performance trading profit  of revenue increased from 
149 in 2012 to 163 in 2013 largely as a result of sga cost 
savings in the year
restructuring costs and losses associated with disposal activity 
were £73m in the year significantly down on the £313m reported 
in the prior year and reflecting the completion of the disposal activity 
programme the charges in the year principally relate to redundancy 
costs associated with the group’s cost savings programme
amortisation of intangible assets was £438m in the year a reduction 
of £66m from the prior year this reflects the impact of disposals 
made during 2012 the financial statements reflect the updated 
ias19 accounting standard on pensions accounting which includes 
a restatement for 2012 in operating profit for 2013 the group reports 
a charge for net interest on pensions and administrative expenses of 
£313m and £277m for the prior year the net interest charge in 2013 
was £196m is noncash in nature and are not reported in trading 
profit
in discontinued operations an impairment of £2344m is recognised in 
the year to 31 december 2013 and reflects the write down of the bread 
business to its fair value following the announcement of the bread 
business joint venture on 27 january 2014
finance expense
net finance cost in the year to 31 december 2013 was £482m 
compared to £917m in the prior year net regular interest reduced 
from £695m to £584m partly due to the conversion of higher rate 
interest rate swaps into additional term loan at a significantly lower 
interest rate in addition to lower levels of net debt following the 
disposal of businesses during the prior year in the year there was a 
positive movement in the fair valuation of interest rate derivatives of 
£116m compared to an adverse movement of £97m in the prior year 
additionally there was a charge of £108m recognised in 2012 relating 
to the writeoff of debt issuance costs associated with the previous 
financing agreement 
profit before taxation
the company made a profit before tax of £44m compared to a prior 
year loss of £80m operating profit in the year was £526m due to 
the reasons outlined above and net finance expense was £482m the 
prior year loss of £80m was principally due to higher interest charges 
partly offset by profit on disposal of operations
taxation
the taxation charge for the year was £511m 31 december 2012 
£180m credit the applicable rate of corporation tax for the year 
was 2325 31 december 2012 245 at 31 december 2013 the 
bread business was treated as an asset held for sale while the ias 
19 valuation of the pension deficit was higher than the prior year both 
these items would otherwise have increased the deferred tax assets of 
the group by £522m the group has recognised a closing deferred 
tax asset value of £727m at 31 december 2013 and as a result a non
cash charge of £511m was recognised in the continuing operations for 
the year it is expected that the recognised deferred tax assets will be 
utilised against the future profits of the group
the corporation tax rate for 2014 is expected to be 215 the 
deferred tax rate is expected to be 200 for the tax year ended  
5 april 2014
earnings per share
basic loss per share of 195 pence for the year on continuing 
operations is calculated by dividing the loss attributed to ordinary 
shareholders of £467m 31 december 2012 £100m profit by the 
weighted number of shares in issue during the year this compares to 
earnings per share of 42p for the prior year
adjusted earnings per share for continuing operations was 259 pence 
31 december 2012 282 pence adjusted earnings per share on 
continuing operations has been calculated by dividing the adjusted 
earnings defined as trading profit less net regular interest payable and 
notional taxation attributed to ordinary shareholders of £622m  
31 december 2012 £676m by the weighted number of ordinary 
shares in issue during each period these earnings have been 
calculated by reflecting tax at a notional rate of 2325 31 december 
2012 245
at the annual general meeting held on 3 may 2012 a resolution was 
passed for a 101 share consolidation of the issued share capital of the 
company accordingly the weighted number of shares in issue for the 
period reduced from 23980 million to 2398 million the latter being 
used for earnings per share calculations
premier foods plc  annual report and accounts 2013
42
business performance 2294104 24 march 2014 1120 am    proof 3
cash flow and borrowings
company net borrowings as at 31 december 2013 were £8308m a 
decrease of £1199m since 31 december 2012 the cash inflow  
from operating activities to 31 december 2013 was £1234m  
31 december 2012 £564m this included cash inflow from 
continuing operations of £1087m 31 december 2012 £446m and 
cash inflow from discontinued operations of £147m 31 december 
2012 £118m additionally net cash interest paid was £359m 31 
december 2012 £525m due to lower bank margins following the 
refinancing agreement concluded in march 2012 and lower average 
net debt levels in the year there was no taxation paid in the year 31 
december 2012 £03m received
sale of subsidiaries and property plant and equipment in the year 
amounted to £1056m 31 december 2012 £3124m following the 
completion of the sweet pickles and table sauces disposal and sale of 
bread business sites disposed in the year net capital expenditure on 
tangible and intangible assets in the year was £404m 31 december 
2011 £666m of which £339m relates to underlying business
financing fees and other costs of finance were £275m 31 december 
2012 £240m reflect deferred financing fees associated with the 
previous banking facilities
retirement benefit schemes
at 31 december 2013 the company’s pension schemes under the ias 
19 accounting valuation showed a gross deficit of £6033m compared 
to £4668m at 31 december 2012 the valuation at 31 december 
2013 comprised a £2178m deficit in respect of the rhm schemes and 
a deficit of £3855m in relation to the premier foods schemes further 
detail on the pension schemes is provided in the operating review
financial year end date
the group intends to change its financial year end from 31 december 
to 31 march and therefore expects to prepare its next annual financial 
statements for the 15 months ended 31 march 2015 it plans to report 
on the group’s trading performance by way of an interim management 
statement for the 12 months ended 31 december 2014 in early 2015 
alastair murray 
chief financial officer
underlying business
the company’s results for the year ended 31 december 2013 are presented on an ‘underlying business’ basis unless otherwise stated ‘underlying business’ excludes the results of previously 
completed business disposals milling sales only and noncore discrete contract losses the tables below illustrate these items for 2013 and 2012 results
the purpose of using the ‘underlying business’ basis for measuring performance is to reflect the performance of the core business of the company with the company having undergone a year of 
restructuring in 2012 this basis better reflects underlying business performance
on 27 january 2013 the group announced a joint venture of its bread business with the gores group given its status as an asset held for sale at 31 december 2013 it is treated as a 
discontinued operation in the financial statements
‘continuing operations’ includes the results of disposed businesses for the respective periods until disposal was completed for example the vinegar and sour pickles business disposal 
completed on 28 july 2012 therefore the results of the continuing operations for 2012 include seven months results of the vinegar and sour pickles business
£m
continuing 
operations
add bread 
business
less  
disposals
less milling 
sales subtotal
less contract 
withdrawals
underlying 
business
2013
sales 8562 6546 64 2219 12825 — 12825
trading profit 1395 63 06 na 1452 — 1452
ebitda 1568 219 06 na 1781 — 1781
2012
sales 10709 6853 2110 1914 13538 564 12974
trading profit 1591 44 313 na 1234 00 1234
ebitda 1825 118 357 na 1586 00 1586
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business performance 2294104 13 march 2014 923 am turn 10
did you know
we have reduced 
reportable accidents  
by 87 since 2007
new bisto 
chef’s specials
in 2013 we launched a new premium range for bisto called 
chef’s special targeting the dineinfortwo sector
the sachets come in 4 flavours chicken with sage  onion lamb 
with mint caramelised onion gravy and beef with cracked 
black pepper
for more information on consumers  
and brands see pages
1819 2294104 13 march 2014 923 am turn 10
contents
this section sets out our approach to 
governance our board and group executive 
and our policy on executive remuneration
chairman’s introduction 4647
board of directors and group executive 4851
corporate governance 5258
audit committee report 5961
nomination committee report 62
remuneration committee chairman’s letter 63
directors’ remuneration policy 6469
annual report on remuneration 7075
directors’ report 7677
governance 2294104 13 march 2014 923 am turn 10
“i believe it is important to 
ensure that sound governance 
principles underpin the way we 
operate both at a board level and 
throughout the organisation” 
david beever 
chairman
good corporate governance is essential for building  
a successful and sustainable business
chairman’s introduction
transparency in governance
this section sets out our governance framework and the work 
of our committees as a group we believe in transparency in 
governance and in maintaining the highest ethical standards in all 
our business dealings recognising our position as one of the largest 
manufacturers in the uk food industry 
board effectiveness
in line with the recommendations of the code we usually conduct 
an external board evaluation every three years as explained in last 
year’s annual report the 2012 external evaluation was deferred to 
the summer of 2013 following a number of board changes which 
had occurred in 2012 and the appointment of gavin darby as ceo 
in february 2013 a detailed review was undertaken by springboard 
associates limited in june 2013 and the results confirmed that 
the atmosphere of board meetings was constructive and allowed 
openness of debate this was a very productive process which 
highlighted opportunities for improvement and a number of 
recommendations to further strengthen the way the board operates 
and our corporate governance processes further detail of the 
board review can be found on page 56
in addition the board keeps uptodate with developments in 
corporate governance which is a regular item on the board agenda 
the general counsel  company secretary presents updates on 
legal regulatory and governance issues including relevant case law 
during the year this has included updates on the government’s initial 
drafts of the remuneration reporting regulations the remuneration 
regulations and enhanced disclosure required in the annual report 
remuneration strategy
following on from the constructive meetings with shareholders 
in 2012 and early 2013 we were pleased with the high level of 
shareholder support for our 2012 remuneration report details of 
the 2013 agm vote on remuneration are set out on page 75 it has 
been a year of significant change in remuneration reporting following 
the publication of the remuneration regulations in the summer of 
2013 there will be a binding vote on our directors’ remuneration 
policy at this year’s agm and i look forward to maintaining the same 
level of shareholder support our directors’ remuneration policy is 
set out on pages 64 to 69
board changes
in addition to gavin darby’s appointment as chief executive officer 
in february 2013 there have been a number of changes to the board 
over the course of 2013 following the appointment of gavin darby 
a flatter executive management structure has been implemented 
that enables commercial and functional management to report 
directly to the ceo and as a consequence geoff eaton chief 
operating officer left the company in february 2013
premier foods plc  annual report and accounts 2013
46
governance 2294104 13 march 2014 923 am turn 10
ian mchoul who was reaching the end of his third three year 
term in office this year retired as a nonexecutive director at the 
agm on 25 april 2013 following this ian krieger was appointed 
as audit committee chairman and david wild was appointed as 
senior independent director in may we welcomed pam powell as 
a nonexecutive director pam has more than 20 years marketing 
experience developing some of the world’s leading consumer 
brands most recently as group strategy and innovation director for 
sab miller over the past year we have been actively strengthening 
the board to reflect a broad range of commercial financial 
communications and marketing experience pam’s appointment is 
part of this drive and her significant experience in marketing global 
consumer brands is a tremendous benefit as we look to accelerate 
the growth of our branded business 
finally in september we announced the appointment of alastair 
murray as cfo in place of mark moran alastair has extensive 
strategic commercial financial and consumer brand experience 
built up over 30 years with a range of leading food and consumer 
goods companies this also includes significant experience of 
restructuring and finding creative solutions to pension deficits this 
will be invaluable as we move forward with the next phase of the 
company’s transition
following these changes i believe we have in place a strong and 
effective board there is an appropriate combination of executive 
and nonexecutive directors on the board with at least half the board 
excluding myself comprising independent nonexecutive directors 
the independence external experience and challenge nonexecutive 
directors bring to the board is essential to its effective operation the 
current nonexecutive directors bring an extensive and broad ranging 
mix of experience which is highlighted in the biographies on page 
49 the board considers that all the nonexecutive directors with 
the exception of charles miller smith are independent in character 
and judgement charles miller smith whilst fully independent of 
management is a shareholder appointed director representing our 
largest shareholder warburg pincus as described in greater detail 
on page 53 following completion of the capital refinancing plan 
charles miller smith will cease to be a representative of warburg 
pincus but will remain as a nonexecutive director of the company 
audit independence and nonaudit fees
the independence of the external audit is an essential element 
of our overall governance framework and allows shareholders to 
gain comfort that the financial statements give a fair balanced and 
understandable view of the group’s affairs and have been prepared 
in accordance with applicable standards the board is sensitive to 
investor body guidelines on nonaudit fees and the level of fees is 
regularly reviewed by the audit committee the level of nonaudit 
fees for 2013 was below the audit fee and significantly below the 
level incurred in 2012 
the business has been going through a very significant 
transformation as management have implemented their turnaround 
strategy this included a major disposal programme over the course 
of 2012 the hovis joint venture announced in january 2014 and 
finally the capital refinancing plan with the turnaround nearing 
completion we are confident that going forward fees will reduce 
significantly further information is detailed in the report of the audit 
committee on pages 59 to 61 
board diversity
in 2011 we adopted a policy to have at least two female board 
directors by 2015 and i am pleased to report that following the 
recent changes in board membership highlighted above we have 
reached this target
compliance with the uk corporate 
governance code 2012
during 2013 the company complied with all of the provisions of  
the uk corporate governance code “the code” 
david beever 
chairman
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governance 2294104 13 march 2014 923 am turn 10
board of directors
01 02 03
04 05
07 08
06
01 david beever
02 gavin darby
03 alastair murray
04 ian krieger
05 jennifer laing
06 pam powell
07 charles miller smith
08 david wild
premier foods plc  annual report and accounts 2013
48
governance 2294104 13 march 2014 923 am turn 10
david beever 
chairman
appointed to the board january 2008 and appointed chairman 
in june 2012
skills and experience after qualifying as a chartered engineer david has 
spent most of his career in the financial sector he was a vicechairman of  
s g warburg where he handled many corporate finance transactions for major 
uk and international companies he was later a board member of kpmg and 
chairman of corporate finance and has been chairman and a nonexecutive 
director of a variety of major companies
committee membership david is a member of the remuneration 
committee chairman of the nomination committee and attends the audit 
committee by invitation
gavin darby 
chief executive officer
appointed to the board february 2013
skills and experience gavin has a strong consumer goods pedigree and 
extensive senior leadership experience he spent fifteen years at the cocacola 
company in various senior positions including division president roles for north 
west europe and central europe prior to joining premier foods gavin served 
as ceo of cable  wireless worldwide plc leading a successful turnaround of 
the business before negotiating its eventual sale to vodafone plc previously he 
worked at vodafone plc for nine years during which time he served as uk ceo 
and ceo of americas africa india and china
alastair murray 
nonexecutive director
appointed to the board september 2013
skills and experience prior to joining premier foods alastair spent ten 
years at dairy crest group plc as group finance director where he helped 
lead a significant restructuring to simplify the business creatively addressing 
its pension deficit and reinforcing its position as an industry leader previously 
he was the group finance director at the body shop international plc earlier 
in his career alastair was a divisional finance director at dalgety plc and spent 
13 years in various finance and operations roles at unilever plc he graduated 
from cambridge university with an ma in engineering and also holds an mba 
from cranfield institute of technology he is a fellow of the chartered institute of 
management accountants
ian krieger 
nonexecutive director
appointed to the board november 2012
skills and experience ian has a wealth of business accounting and finance 
experience gained during a 40 year career first with arthur andersen and from 
2002 with deloitte he was a senior partner of deloitte until his retirement in 
2012 previous management responsibilities included heading the corporate 
finance practice the london corporate audit division and the private equity 
practice ian has significant boardroom experience and has worked with a wide 
variety of companies throughout his career including many in the consumer 
goods sector ian qualified as a chartered accountant with arthur andersen 
ian is a nonexecutive director at safestore holdings plc a trustee at nuffield 
trust and is also a trustee of anthony nolan where he is chairman of the audit 
committee
committee membership ian is the chairman of the audit committee and a 
member of the remuneration and nomination committees
jennifer laing 
nonexecutive director
appointed to the board october 2012
skills and experience jennifer has over 30 years experience in brand 
building and communications including 16 years with saatchi  saatchi twice 
as chairman of the london office and culminating in her role as chairman and 
ceo of saatchi  saatchi north america in the early 1990s she led her own 
advertising agency laing henry which was subsequently sold to saatchi  
saatchi jennifer is currently a nonexecutive director of intercontinental hotels 
group plc where she chairs the corporate responsibility committee and of 
hudson global inc a global recruitment company where she is chairman of the 
compensation committee
committee membership jennifer is a member of the audit remuneration 
and nomination committees
pam powell 
nonexecutive director
appointed to the board may 2013
skills and experience pam has more than 20 years marketing experience 
developing some of the world’s leading consumer brands most recently she 
was the group strategy and innovation director for sab miller one of the world’s 
leading brewers pam spent nine years at sab miller in senior management 
roles during which time she helped transform the marketing performance of the 
company including the development and implementation of the first group
wide commercial strategy prior to that pam held numerous marketing roles 
in the home and personal care sector during a 13 year career at unilever plc 
culminating in her role as global vice president of the skin care category pam is 
also a nonexecutive director at ag barr plc
committee membership pam is a member of the audit remuneration 
and nomination committees
charles miller smith 
nonexecutive director
appointed to the board june 2009
skills and experience charles is currently a senior adviser at warburg 
pincus llc and prior to this was an international adviser at goldman sachs 
international from 2001 until 2005 charles worked with unilever plc for over 30 
years the last five of which he served as a director of finance and then foods 
charles was chief executive officer and then chairman at ici plc from 1994 to 
2001 he has served as a nonexecutive director of midland bank and hsbc 
holdings plc and served as chairman of scottish power plc between 2000 and 
2007 charles is also chairman of firstsource solutions uk ltd and is a director 
of firstsource solutions ltd 
committee membership charles is a member of the nomination 
committee and attends the audit and remuneration committees by invitation
david wild 
nonexecutive director
appointed to the board march 2011
skills and experience david was chief executive officer of halfords group 
plc until july 2012 and was previously with walmart where he was senior vice
president of us new business development and president of walmart germany 
earlier in his career he was with tesco plc 1985 to 2003 where he held a 
variety of roles including ten years in buying and six years as chief executive 
officer of tesco central europe david wild is currently interim chief executive 
officer at domino’s pizza group plc and a nonexecutive director at the bankers 
investment trust plc
committee membership david is the senior independent director chairman 
of the remuneration committee and is also a member of the audit and nomination 
committees 
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governance 2294104 13 march 2014 923 am turn 10
group executive
01 02 03
04 05
07
06
01 brian carlton
02 ian deste
03 mark hughes
04 richard johnson
05 andrew mcdonald
06 bob spooner
07 mark vickery
premier foods plc  annual report and accounts 2013
50
governance 2294104 13 march 2014 923 am turn 10
brian carlton 
group hr director
skills and experience brian joined the group in 1994 as head of personnel 
for the former canned foods division his responsibilities have since been 
extended to embrace all hr activities across the group he was appointed to the 
group executive in october 2006 prior to joining premier foods brian held hr 
and operational roles in chrysler uk k shoes metal box and smurfit packaging
key responsibilities these include leadership development talent 
management remuneration resourcing and employee relations management 
across the business
ian deste 
commercial director grocery
skills and experience ian joined the group in september 2011 as group 
sales director and was appointed as commercial director grocery in november 
2012 he previously spent 20 years with cocacola enterprises ltd cce 
including nine years as a member of the gb board most recently ian held the 
position of vicepresident sales and customer development prior to which he 
held other senior positions in sales marketing and communications at cce in his 
early career he worked in the beer and tobacco industries
key responsibilities ian is responsible for marketing innovation and sales 
within our ambient grocery and cake portfolio this includes all aspects of 
commercial strategy and customer management and the delivery of revenue 
profitability and marketshare metrics for the grocery brands
mark hughes 
group procurement director
skills and experience mark joined the group in 2007 following the 
acquisition of rhm mark joined rhm in 2003 as divisional services director 
bread bakeries and became a member of the bread bakeries division executive 
in 2004 and was appointed group procurement and logistics director and a 
member of the group executive of rhm in 2006 mark was previously director 
at archer daniels midland milling uk and has held a number of senior positions 
with associated british foods plc
key responsibilities control and risk management of c £13bn of spend on 
ingredients packaging energy machinery facilities engineering marketing and all 
corporate spend responsibilities include ensuring the group remains competitive 
and well placed within a changing market through the provision of innovative 
procurement processes policies stakeholder engagement and external supplier 
relationship management
richard johnson 
group corporate affairs director
skills and experience richard joined the group in october 2011 as group 
corporate affairs director previously richard spent a total of 18 years with kraft 
foods now mondele

z international during which time he held senior corporate 
affairs roles across a number of businesses and geographies including the uk 
belgium and the us most recently he was corporate affairs director for kraft 
foods’ european business based at the company’s headquarters in switzerland 
he was also vicepresident corporate affairs for mcdonald’s europe and earlier 
in his career he worked for the food and drink federation
key responsibilities these include leading the group’s internal and external 
communications media relations public affairs sustainability and community 
relations activities
andrew mcdonald 
general counsel  company secretary
skills and experience andrew joined the group in november 2011 as 
general counsel  company secretary prior to this he held the same position 
at uniq plc before its acquisition by the greencore group andrew is a qualified 
solicitor and worked as a corporate lawyer at freshfields bruckhaus deringer 
before moving into industry he is a law graduate of manchester university 
key responsibilities andrew has responsibility for the legal company 
secretarial and internal audit functions and is actively involved in business 
development and key operational issues facing the business he is on the 
steering group of all corporate and strategic projects pursued by the group he 
also supports the chairman with the management of the board to ensure it fulfils 
its corporate governance obligations
bob spooner 
group supply chain director and 
managing director bread
skills and experience in january 2014 the group announced the hovis 
joint venture for its bread business and bob will take up the position of ceo of the 
hovis joint venture on completion bob joined the group as group operations 
director in april 2007 in october 2011 bob was appointed group supply chain 
director with responsibility for the group’s combined operations technical and 
procurement functions and in october 2012 took on additional responsibility as 
managing director of the bread division where he is responsible for all aspects 
of the bread business including full pl responsibility before joining the group 
bob was group supply director for northern foods plc and managing director of 
northern foods’ pastry products business and prior to that held senior operational 
and supply chain roles with ici paints and sara lee 
key responsibilities these include leading and implementing the group’s 
manufacturing logistics procurement technical and innovation strategy across 
the businesses and full responsibility for the bread division’s pl
mark vickery 
group information systems  change director
skills and experience mark joined the group in early 2005 as director of 
information systems  change management isc following the acquisition 
of rhm he assumed the role of group isc director mark started his career at 
unilever plc where he spent 17 years working in a number of businesses and 
geographies he then moved to united biscuits as is director prior to joining 
premier foods
key responsibilities these include managing the information services 
function and delivering major system and change programmes into the business
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governance 2294104 13 march 2014 923 am turn 10
corporate governance
board meetings
the board held ten scheduled meetings in the year and in addition a number of other meetings and conference calls were convened for specific 
business all directors are expected to attend the agm scheduled board meetings and relevant committee meetings unless they are prevented 
from doing so by prior work or personal commitments where a director is unable to attend a meeting they have the opportunity to review relevant 
papers and discuss any issues with the chairman in advance of the meeting following the meeting the chairman or committee chairman as 
appropriate also briefs any director not present to update them on the key discussions and decisions taken 
details of board and committee membership and attendance at scheduled board and committee meetings are set out in the table below
board members 
during 2013
board audit committee remuneration committee nomination committee
number of
possible
meetings
attended
actual
meetings
attended
number of
possible
meetings
attended
actual
meetings
attended
number of
possible
meetings
attended
actual
meetings
attended
number of
possible
meetings
attended
actual
meetings
attended
nonexecutive directors
david beever 10 10 — — 3 3 2 2
ian krieger 10 10 4 4 3 3 2 2
jennifer laing 10 10 4 4 3 3 2 2
charles miller smith 10 10 — — — — 2 2
pam powell
1
6 5 3 3 2 2 1 1
david wild
2
10 9 4 4 3 3 2 2
executive directors
gavin darby 9 9 — — — — — —
alastair murray 3 3 — — — — — —
former directors
michael clarke
3
1 1 — — — — — —
mark moran 7 7 — — — — — —
geoff eaton
4
1 1 — — — — — —
ian mchoul
5
3 2 1 1 — — 1 1
footnotes
1 pam powell was appointed as a nonexecutive director on the 7 may 2013 and missed the october board meeting due to an overseas commitment agreed prior to her appointment
2 david wild missed a board meeting on 10 april 2013 due to a prior business commitment
3 michael clarke resigned as ceo and an executive director on 28 january 2013 and was replaced by gavin darby who was appointed on the 4 february 2013
4 geoff eaton was appointed chief operating officer and executive director on 3 october 2012 and resigned as an executive director on 4 february 2013
5 ian mchoul missed the january 2013 board meeting due to a business commitment with amec plc and resigned as a nonexecutive director at the agm on 25 april 2013 following  
the end of his third three year term
nonexecutive director meetings
the chairman is responsible for ensuring that nonexecutive directors 
have opportunities to meet without the presence of management over 
the course of the year the nonexecutive directors met independently 
on a regular basis both after board meetings and also over board 
dinners topics discussed included key strategic issues and 
succession planning 
board time allocation
below is a chart which summarises the approximate time the 
board has spent discussing agenda items at scheduled board 
meetings during the year to 31 december 2013
36
strategy
14
7
governance
succession
22
operations
21
finance  risk
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appointment of additional directors
the board has the power to appoint one or more additional directors 
under the articles any such director shall hold office until the next agm 
when they shall be eligible for election an ordinary resolution with 
special notice of the shareholders is sufficient to appoint or remove a 
director
conflicts of interest
the company has procedures in place for managing conflicts of 
interest and directors have continuing obligations to update the board 
on any changes to these conflicts this process includes relevant 
disclosure at the beginning of each board meeting and also the 
company’s annual formal review of potential conflict situations which 
includes the use of a questionnaire 
under the terms of the relationship agreement between the company 
and warburg pincus the relationship agreement charles miller 
smith a senior adviser to warburg pincus was appointed to the 
board under the agreement warburg pincus with the agreement 
of the company may nominate an individual for appointment to the 
board so long as they retain a minimum interest of 23980215 shares 
in the company 
warburg pincus and the company have agreed that the terms of their 
existing relationship agreement shall cease to have effect from the 
date of the announcement of the capital refinancing plan and shall 
terminate automatically upon completion of the capital refinancing 
plan warburg pincus and the company have also agreed that the 
relationship agreement shall continue to have full force and effect if the 
capital refinancing plan does not complete
on termination of the relationship agreement charles miller smith 
will cease to be a nominee of warburg pincus however the board 
has asked him to remain as an nonexecutive director independent 
of warburg pincus on account of his beneficial knowledge and 
experience
during the year no other director had a material interest at any time 
in any contract of significance with the company or group other than 
their service contract
director induction programme
all directors receive a tailored induction on joining the board covering 
their duties and responsibilities as directors nonexecutive directors 
also receive a full briefing document on all key areas of the group’s 
business and they may request further information as they consider 
necessary a typical nonexecutive director induction would include
stage one matters covered
provision of documents duties of a director board procedures and provision of an icsa 
compliant governance manual
stage two matters covered
meeting with ceo  cfo business overview current trading key commercial issues
meetings with non
executive directors
open discussion forums
meeting with general 
counsel  company 
secretary
board process and governance issuesupdates key legal risk 
and internal audit matters
meetings with each of the 
group executive
commercial issues and projects as applicable for operations 
sales supply chain corporate affairs hr procurement 
marketing technology and innovation and isc
meeting with investor 
relations
investor relations matters and any updates
meeting with treasury treasury and insurance matters and any updates
stage three matters covered
site visits understanding of the business and its operations
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governance 2294104 13 march 2014 923 am turn 10
corporate governance continued
division of governance responsibilities
the board the chairman
the board has an agreed schedule of matters reserved which include
•	 setting longterm strategic and commercial objectives
•	 approving annual operating and capital budgets
•	 reviewing business performance
•	 overseeing the group’s internal control systems and 
•	 ensuring appropriate resources are in place to enable the group to 
meet its objectives
the board delegates to the group executive responsibility for 
overseeing the implementation of the group’s policies and strategy 
leadership of the board and ensuring its effectiveness
•	 chairing board meetings setting the agendas in consultation 
with the ceo and general counsel  company secretary and 
encouraging directors’ active participation in board discussions
•	 leading the performance evaluation of the board its committees 
and individual directors
•	 promoting the highest standards of corporate governance including 
compliance with the code provisions wherever possible
•	 ensuring timely and accurate distribution of information to the 
directors and effective communication with shareholders
•	 establishing an effective working relationship with the ceo 
by providing support and advice whilst respecting executive 
responsibility and
•	 periodically holding meetings with the nonexecutive directors 
without the executive directors present
the chief executive officer the senior independent director
•	 the executive management of the group and 
•	 ensuring the implementation of board strategy and policy within the 
approved budgets and timescales 
the ceo is assisted in meeting his responsibilities by the cfo and the 
group executive who head up the group’s principal operations and 
functions
•	 supporting the chairman and leading the nonexecutive directors in 
the oversight of the chairman and ceo
the sid’s specific responsibility is to be available to shareholders if they 
have concerns which the normal channels have failed to resolve or 
where such contact is inappropriate
diversity
in 2011 the board agreed to adopt a policy to have at least two 
female board directors by 2015 we are pleased to report that 
following the appointment of pam powell in may 2013 this target 
has been achieved diversity will continue to be an important 
consideration whenever a new appointment is undertaken to ensure 
that the board comprises individuals with a broad range of skills 
backgrounds and experience reflecting both the type of industry and 
the geographical location in which we operate
the board believes in the importance of diversity in its widest sense 
and the benefits that it can bring to the operation of an effective 
business and is committed to increasing the participation of women 
across all levels of the organisation and particularly within senior 
management we are committed to equal opportunities in all areas 
of our business with people gaining promotion on merit we recruit 
train promote and retain skilled and motivated people irrespective 
of gender age marital status disability sexual orientation race 
religion ethnic or national origin in line with this commitment we also 
promote a culture of openness and responsibility within our business 
details of our gender diversity across the board of directors senior 
management central functions and across the whole group as at  
31 december 2013 are set out in the adjacent table
board of directors
2013 25
2012 11
2011 13
senior management
2013 19
2012 24
2011 16
central functions
2013 45
2012 45
2011 45
all employees
2013 23
2012 23
2011 23
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boardroom tenure
the board believes it is important to maintain an appropriate balance 
between length of service independent judgement and an appropriate 
level of experience and skill the board via the nomination committee 
regularly undertakes a review of succession plans for both executive 
and nonexecutive directors with consideration of the need to refresh 
board and committee membership with diversity in mind as at year 
end the length of service of the current nonexecutive directors is 
shown in the graph below against the average length of service blue 
line which currently stands at 27 years
details of all directors’ appointment terms are set out on page 71
david beever
ian krieger
jennifer laing
charles miller smith
pam powell
david wild
number of years’ service
at 31 december 2013
0 1 2 3 4 5 6 7
board support and information
directors are allowed to take independent professional advice in the 
course of their duties in addition all directors have access to the advice 
and services of the general counsel  company secretary if any 
director were to have a concern over any unresolved business issue 
following professional advice they are entitled to require the general 
counsel  company secretary to minute that concern should they later 
resign over a concern nonexecutive directors are asked to provide a 
written statement to the chairman for circulation to the board
the main source of information is via the board pack provided to 
directors in advance of board meetings these cover the following 
standing items which are designed to keep directors up to date with all 
material business developments
•	 ceo introduction 
•	 hs and employee issues
•	 commercial review of brands and sales 
•	 customer service levels 
•	 restructuring projects 
•	 capital expenditure 
•	 cfo report and
•	 investor relations
a detailed strategy review took place over a two day meeting and site 
visit in june and there was a comprehensive review of 2014 brand 
sales and supply chain plans as part of the approval of the 2014 
business plan in september and november 2013 nonexecutive 
directors also received tailored training sessions on the key pension 
and remuneration related matters for the group and were also invited 
to attend internal presentations on brand plans for 2014
the board receives a detailed investor relations update at each board 
meeting which covers amongst other things share price movements 
shareholder register movements analyst reports a summary of 
investor meetings and other recent activity the board also receives 
comprehensive feedback from the group’s brokers following investor 
roadshows after the half year and yearend results
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corporate governance continued
board evaluation
as reported last year given the change in board composition in 2012 and the appointment of gavin darby in february 2013 it was agreed to 
defer the external board evaluation until 2013 following a selection process springboard associates limited who have no other connection with 
the company were appointed to conduct the review this involved face to face meetings with all directors and a number of senior management 
and attendance at the remuneration audit and board meetings that took place in june a report was prepared and discussed with the chairman 
and was subsequently presented to the board for discussion there was strong consensus that the atmosphere of board meetings was 
constructive and allowed openness of debate and that no individuals or group of individuals dominated proceedings nonexecutive directors 
had sufficient access to the ceo and there was transparency and honesty a constructive working relationship had been established between 
the chairman and ceo the quality of board papers was good following recent appointments there was a robust balance of diversity skills and 
experience following the review an action plan was prepared highlighting areas for focus and progress against this plan will be reviewed over the 
course of the next 12 months 
action plan
opportunity action
vision and strategy
it was noted that the initial phase of the group’s turnaround strategy 
was nearing completion and that it was therefore appropriate to review 
the vision and values for the business 
a workstream has been established to review the group’s vision and 
values and this will be presented to the board in h1 2014
succession
the board noted the importance for continued focus on succession 
plans for ceo cfo and senior management
it was agreed that the chairman would prepare a proposal for ceo 
contingency planning management would prepare an update on 
succession planning for senior management and present this following 
the completion of the capital refinancing plan in the first half of 2014
remuneration retention and development
it was recommended that the board review the process for identifying 
high performers and managing their careers 
it was agreed that the process be presented to the board in the first 
half of 2014
training and development
there is a tailored induction process for all nonexecutive directors 
and further training is provided on an ad hoc basis it was agreed that 
this process should be formalised as an annual review for each non
executive directors to identify training and development needs
the evaluation highlighted the need for a training session on the 
group’s pension schemes and remuneration arrangements as a result 
training sessions were held in september and november 2013 to 
review pension investment strategy liability hedging deficit valuations 
and also the group’s remuneration strategy
director appraisals
following the recent changes in board composition the annual 
appraisal process for directors required review and formalisation
the process for the annual appraisal of noneexecutive directors and 
the review of the chairman led by the sid was strengthened for 2014
commercial
more emphasis to be given to external environment and competitors
 
more time to be set aside for directors to be updated on the group’s 
new product development npd
competitor and market updates were added as part of commercial 
update papers 
a comprehensive programme of product tasting review of npd 
and comparative testing against competitor products has now been 
introduced at board meetings
agenda and time management
it was recommended that agendas and time management be 
reviewed to ensure that neds had the opportunity to input into 
agendas and also to ensure that agendas were not over ambitious 
it was agreed to review agenda items for the next 12 months with 
nonexecutive directors where appropriate committee meetings 
would be held on separate days to the board meeting to ensure 
sufficient time to cover all agenda items
it was agreed that focus be given to ensure agendas were not 
over ambitious and timing was set to ensure all items could be fully 
reviewed
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our board structure
plc board
group executive
nomination committee audit committee
treasury risk management 
committee
sustainability steering  
group
committee
remuneration committee
committees
the board has three committees which assist in the discharge of its 
responsibilities
in addition executive directors are assisted by the work of the group 
executive and its subcommittees together these form part of the 
company’s corporate governance framework but are not formally 
appointed committees of the board
group executive committee — responsible under the leadership 
of gavin darby for the daytoday management of the business 
setting performance targets and implementing the group’s strategy 
and direction as determined by the board this committee is also 
responsible for the effective implementation of policies taking into 
account changes in regulations and other business risks the 
committee drives effective risk management throughout the business 
and makes recommendations to the audit committee as appropriate 
monitoring and reporting on all material business risks which might 
impact the delivery of the group’s strategic goals and objectives and 
agreeing with management appropriate mitigating actions
members of the committee include gavin darby alastair murray and 
members of the group executive
sustainability steering group — responsible for providing direction 
to and oversight of the implementation of the group’s sustainability 
programme which is built around the six core themes these being 
buying responsibly sustainable manufacturing diet  health 
quality our people and community involvement it’s objective is to 
identify and mitigate both environmental and social risks in order to 
protect and enhance the group’s reputation and build trust amongst 
its many stakeholders the sustainability steering group is made 
up of members from the group executive and senior operational 
management 
treasury risk management committee — responsible for the 
oversight of designated material foreign currency and commodity 
exposures and agreeing with senior management appropriate 
mitigating actions members of the committee include members of the 
group executive and senior operational management 
stakeholder relations
relations with shareholders
an important role of the board is to represent and promote the 
interests of its shareholders as well as being accountable to them for 
the performance and activities of the group
the board believes it is very important to engage with its shareholders 
and does this in a number of ways through presentations conference 
calls investor roadshows facetoface meetings and the agm 
following the announcement of the group’s half year and year
end results presentations are made to analysts banks and major 
shareholders to update them on the progress the group has made 
towards its goals and invite them to ask questions 
currently around nine sellside research analysts publish research on 
the group full details on results presentations rns releases interim 
management statements and conference calls are available on the 
group’s website 
wwwpremierfoodscoukinvestorrelations
the chairman and senior independent director also speak with 
major shareholders on a regular basis and brief the board to ensure 
that they are aware of the views of shareholders following on from 
2012 we continued to meet with our largest shareholders to discuss 
remuneration topics further details are set out in the letter from the 
remuneration committee chairman on page 63
the main channel of communication to institutional investors is through 
the ceo cfo and head of investor relations the ceo and cfo are 
available to meet with shareholders during the year 
relations with stakeholders
the company holds meetings throughout the year with key 
stakeholders
pensions
the group has established a pensions liaison forum which meets 
quarterly this is attended by the cfo general counsel  company 
secretary group pension manager and chairmen of the group’s 
pension schemes the ceo attends the forum twice yearly the forum 
discusses and develops funding and investment strategies for the 
group’s pension schemes and any other pension issues that might 
impact the schemes andor the group 
banks
members of the group executive and senior management hold regular 
meetings with the company’s banking syndicate to update them on the 
group’s financial performance 
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corporate governance continued
suppliers
the group holds a conference with the group’s leading suppliers on 
an annual basis which is attended by executive directors and members 
of the group executive this is an opportunity to update suppliers on 
the group’s strategy and growth plans the 2013 conference was 
attended by around 400 delegates representing approximately 200 
of our top suppliers a keynote address was given by gavin darby 
and presentations were given by group executive members a highly 
successful fundraising event was held after the conference and all 
funds raised went to our corporate charity partner macmillan cancer 
support
sustainability
we work with a number of government departments nonministerial 
government departments such as the food standards agency and 
other regulatory agencies as well as trade associations such as the 
food and drink federation we engage with these bodies in order 
to identify and understand key issues facing the food industry and 
listen to their opinions and guidance — all of which helps to inform our 
internal policy making
employees and our approach to business ethics
we are committed to ensuring that the people who work within our 
business are treated with respect and their health safety and basic 
human rights are protected and promoted 
we have a code of conduct which sets out the standards of behaviour 
all employees are expected to follow and provides useful guidance 
to help employees when it comes to making the right decision this 
code is made up of 10 key elements including acting honestly and 
complying with the law competing fairly food safety and treating 
people fairly we also have a confidential whistle blowing call line to 
enable all employees to raise any concerns they have that cannot be 
dealt with through the normal channels 
we believe that we have a responsibility to act and trade ethically in our 
dealings throughout the supply chain in order to identify and focus on 
the ethical issues that are material to our business we have established 
an ethical supply chain working group this group develops and 
implements a risk based ethical supply chain strategy which meets the 
needs of our business whilst ensuring that bought goods are produced 
under generally accepted and internationally recognised human rights 
law including the conventions of the international labour organisation
we set a target that all our direct suppliers must be registered with 
the supplier ethical data exchange sedex by 2014 and 60 are 
now registered sedex is a notforprofit organisation dedicated to 
driving improvements in ethical and responsible business practice 
in global supply chains through the sharing of ethical supply chain 
data in addition we have put in place an ethical trading policy and 
each supplier we work with must strive to comply with this and with 
all relevant local and national laws and regulations particularly with 
regard to minimum age of employment health  safety freedom of 
association discrimination working hours and rates of pay
employment of disabled persons
it is our policy to give full and fair consideration to applications for 
employment received from disabled persons having regard to their 
particular aptitudes and abilities and wherever possible to continue 
the employment of and to arrange appropriate training for employees 
who have become disabled persons during the period of their 
employment the group provides the same opportunities for training 
career development and promotion for disabled people as for other 
employees
employee communication
we recognise the value of good communication in engaging our 
employees in order to achieve common goals and we have a number 
of established employee communication mechanisms in place to 
achieve this goal including regular communication meetings the 
group’s intranet site the quarterly group magazine and specific 
consultation and involvement regarding major changes to the business 
in 2013 we conducted an all employee survey as discussed in greater 
detail on page 23
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“the committee has considered a 
number of key issues in respect of 
the financial statements and these 
are summarised on page 61” 
ian krieger 
chairman of the audit committee
audit committee report
the committee has responsibility on behalf of the board for 
reviewing the effectiveness of the group’s financial reporting 
systems and the internal control policies and procedures for the 
identification assessment and reporting of risk 
the committee also keeps under review the relationship with 
the external auditors including the terms of their engagement 
and fees their independence and expertise resources and 
qualification and the effectiveness of the audit process the 
committee met with the internal and external auditors on one 
occasion in the year without the presence of management the 
table on page 52 sets out committee membership and meeting 
attendance
ian krieger was appointed as audit committee chairman in april 
2013 and has recent and relevant financial experience from his 
role as a senior partner of deloitte until his retirement in 2012 
in addition to the committee members the following individuals 
are regularly invited to the committee’s meetings the ceo 
cfo director of internal audit and risk and external audit lead 
partner the general counsel  company secretary attends in 
his capacity as secretary of the committee
the committee has been delegated authority by the board to
•	 monitor financial reporting including the annual and interim 
reports preliminary results announcements and formal 
announcements relating to financial performance and 
reporting to ensure the annual report and accounts taken as 
a whole is fair balanced and understandable
•	 ensure the effectiveness of the group’s internal controls and 
risk management systems
•	 review and monitor the whistleblowing and bribery and fraud 
arrangements
•	 monitor and review the effectiveness of the group’s internal 
audit function including the approval of any appointment or 
removal of the director of internal audit  risk function
•	 consider and make recommendations to the board on the 
appointment reappointment and removal of external auditors 
in accordance with the company’s audit tender policy to 
include the setting of their remuneration 
•	 review the external auditors’ independence and objectivity 
and the effectiveness of the external audit processes 
•	 prepare this report to shareholders to include any significant 
issues in relation to the financial statements and how these 
were addressed
the committee’s terms of reference are available on the  
group’s website 
wwwpremierfoodscoukaboutuscorporategovernance
auditors
pricewaterhousecoopers llp pwc have been the group’s auditors 
since flotation in 2004 the external auditors are required to rotate the 
audit partner responsible for the group and subsidiary audits every 
five years and a new lead audit partner was appointed in 2012 the 
committee will continue to give consideration to the timing of the next 
formal tender in light of current regulatory requirements there are 
no contractual obligations restricting the group’s choice of external 
auditors 
external audit effectiveness
annually the committee reviews the relationship the group has with 
pwc the review is usually conducted by a questionnaire addressed 
to key management following the year end audit the responses are 
collated and reviewed by the company secretariat and the results 
are categorised prioritised and presented to the committee for their 
review in 2013 the review was carried out by pwc’s audit quality 
team by means of a questionnaire the results of the review were 
presented to the audit committee and recommendations coming 
out of the review were incorporated into the 2013 audit plan for 
the year ended 31 december 2013 the committee was satisfied 
with the effectiveness of the external auditor at the 2014 agm 
the reelection of pwc as the group’s auditors will be proposed to 
shareholders
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audit committee report continued
auditor independence and nonaudit services
there is an established policy governing auditor independence and the 
engagement of the external auditor for nonaudit services designed 
to maintain the independence and objectivity of the external auditors 
the policy was reviewed and updated in 2013 and key terms of the 
updated policy are listed below
•	 a tender of the external audit be considered every 10 years
•	 the lead partner rotate every 5 years
•	 the external auditors should not be engaged for nonaudit work 
however in certain circumstances it may be appropriate to appoint 
them 
•	 where fees were expected to be over £100k the approval of the 
audit committee chairman is required 
•	 if in exceptional circumstances the fee was expected to exceed 
the audit fee then the approval of the full committee would be 
required and 
•	 the appointment of senior personnel previously employed by the 
external auditor within the last 5 years requires approval of the audit 
committee chairman
the group has been going through a very significant transformation 
as management have implemented the turnaround of the business 
this included a major disposal programme over the course of 2012 
due diligence work in respect of the hovis joint venture and working 
capital report in respect of the capital refinancing plan in q1 2014 non 
audit fees for 2013 were £411000 2012 £2400000 representing 
approximately 71 2012 320 of the annual audit fee 
the committee regularly reviewed the level of nonaudit fees with 
management throughout the year the committee also received 
an update from the external auditors lead partner on their internal 
controls to safeguard their independence additional safeguards to 
the independence of the auditors are given by the fact that pwc’s 
lead audit partner was recently appointed in 2012 and both the audit 
committee chairman and cfo were appointed in 2013
the committee is aware of and sensitive to investor body guidelines 
on nonaudit fees however given the nature of work required in 
connection with the business turnaround it was assessed that pwc 
were best placed to perform these additional services in view of their 
knowledge of the business the time constraints in completing the work 
and the likely cost 
following the completion of the capital refinancing plan and the hovis 
joint venture the committee does not anticipate that nonaudit fees will 
remain at a significant level
what we did in 2013
during the year the committee discussed the following
•	 considered a number of key accounting matters as discussed 
below
•	 received regular reports from the internal audit function 
ensured it was adequately resourced monitored its activities and 
effectiveness and agreed the annual internal audit plan 
•	 conducted a review of the effectiveness of the internal control 
system as described below
•	 reviewed an update to the committee’s terms of reference which 
were subsequently approved by the board
•	 reviewed operational accounting issues including the shared service 
centre in manchester the processes for reviewing and recovering 
commercial debtors and the control and accounting for inventory
•	 received updates on the group’s whistleblowing and bribery and 
fraud arrangements
•	 reviewed the nonaudit services spend and approved the 
engagement of pwc as an adviser in relation to the capital 
refinancing plan and the hovis joint venture as discussed above
•	 received a review from the group’s external auditors which 
included a review of the external auditors’ independence objectivity 
and the effectiveness of the audit process and
•	 considered the external auditors’ report for the year ended  
31 december 2013 and recommended the reappointment of the 
external auditors
internal audit effectiveness
in accordance with the frc guidance on audit committees an annual 
review of internal controls is conducted the board has delegated 
authority to the audit committee to regularly monitor internal controls 
and conduct the full annual review this review covers all material 
controls such as financial operational and compliance and also the 
risk management system in place throughout the year under review 
up to the date of the annual report the committee reports the results 
of this review to the board for discussion and agreement on the 
actions required to address any material control weaknesses in 2013 
the director of internal audit  risk circulated post audit completion 
questionnaires to senior managers in the business the results of these 
questionnaires were reported to the audit committee on a regular 
basis as part of the annual review on the effectiveness of the group’s 
internal audit function the company secretarial department conducted 
an independent review of the feedback from these questionnaires in 
addition the company secretarial department circulated a separate 
questionnaire to committee members and the group executive to 
collate their views on the general effectiveness of the internal audit 
function
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significant issues in relation to the financial statements
in addition the committee has reviewed the 2013 half year and the full year results and recommended them for approval to the board this has 
involved the consideration of a number of significant issues in respect of the financial statements which are detailed in the following table 
area of focus how these issues were addressed
going concern •	 going concern was a significant area of discussion for the committee in respect of the 2013 annual 
report and accounts the directors statement on going concern is laid out on page 76
impairment •	 a review of the impairment model for the grocery business was conducted by factoring in the business 
projections as part of the capital refinancing plan and this indicated that sufficient headroom to the 
book value of the business remained and therefore no impairment was required this included a review 
of the key assumptions including discount and long term growth rates
•	 a review of the impairment model for the bread business includied the impact of the offer received for 
the hovis joint venture in establishing a fair value for the business following this review it was agreed 
that an impairment of £2344m be recognised
deferred taxation •	 a detailed analysis was performed at year end around the overall quantum of the deferred tax asset held 
with reference to forecast future taxable profits based on business projections 
pension deficit increase •	 the group’s pension deficit as calculated under ias 19 revised has increased from £4668 million to 
£603 million at 31 december 2013 largely as a result of an increase to the inflation assumptions 
accounting treatment for the 
bread business
•	 a formal tender process was conducted in 2013 with a number of parties in order to secure investment 
for the bread business as a result of the tender process the audit committee considered that the 
assets of the bread business should be treated as held for sale at the year end on 27 january 2014 the 
group announced an agreement to establish a standalone joint venture for the bread business
commercial accruals •	 the committee discussed the level of commercial accruals for promotional activity as it represents a 
significant estimate for the group the committee noted that improvements in the overall commercial 
accruals control environment have allowed management to improve the forecasting accuracy of accruals 
required
presentation of results •	 in line with prior year the results of business in 2013 and 2012 comparatives have been presented 
on an underlying basis this reflects the fact the group is undergoing a period of restructuring and 
stabilisation and it is felt that this better illustrates the performance of the core business this includes 
the results of the bread business but excludes the results of disposals and certain contract withdrawals 
a full reconciliation of the adjustments is set out on page 43
fair balanced and 
understandable
•	 as part of an update to the audit committee’s terms of reference the board requested that the 
audit committee confirm the annual report and accounts taken as a whole were fair balanced and 
understandable following a review of this document which included consideration of the balance of 
information the messaging use of kpis and the disclosure of risks the audit committee recommended 
that the board make this statement which is set out on page 77
the report of those matters that the external auditors considered to be significant issues in relation to the financial statements are set out on  
pages 81 to 82
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the committee is responsible for considering the size 
structure and composition of the board retirement and 
appointment of additional directors and making appropriate 
recommendations so as to maintain an appropriate balance of 
skills and experience on the board the committee reviews the 
succession requirements of the board and senior management 
including the need for diversity on an annual basis and makes 
recommendations to the board as appropriate the table 
on page 52 sets out committee membership and meeting 
attendance
role of the nomination committee
the committee has been delegated authority by the board to
•	 lead the formal rigorous and transparent process for board 
appointments including a review of the skills experience and 
knowledge of the existing directors to ensure any potential 
shortlisted candidates will benefit the balance of the board
•	 give full consideration to succession planning taking into 
account the challenges and opportunities facing the group 
and what skills and expertise would benefit the board in the 
future 
•	 regularly review the structure size and composition 
including independence experience and diversity of the 
board and make recommendations to the board regarding 
changes and
•	 agree the job specification for the chairman including an 
assessment of the time commitment expected recognising 
the need for availability in the event of a crisis
the committee’s terms of reference are available on the group’s 
website 
wwwpremierfoodscoukaboutuscorporategovernance
key nomination committee discussions
over the year the committee has engaged russell reynolds 
associates executive appointments and saxonbury limited non
executive appointment as an external search agents in respect of 
the below key appointments
•	 the appointment of gavin darby in february 2013 as ceo full 
details of the committee’s work in relation to gavin darby’s 
appointment was disclosed in the 2012 annual report  
and accounts
•	 at the 2013 agm ian mchoul retired following the end of his 
third term as a nonexecutive director in accordance with the 
code ian krieger replaced ian mchoul as chairman of the 
audit committee and david wild replaced ian mchoul as senior 
independent director the committee prepared a job description 
for the appointment of a new nonexecutive director following 
a review of the balance of skills knowledge and experience on 
the board members of the committee interviewed a shortlist 
of candidates produced by saxonbury limited and in early may 
pam powell was appointed to the board
•	 the committee recommended the appointment of alastair 
murray to the board in september 2013 following mark moran’s 
decision that he could not commit to the group for another three 
years 
neither russell reynolds associates nor saxonbury limited have 
any other connection with the group
additionally the nonexecutive directors led by the senior 
independent director recommended the reappointment of david 
beever for a third threeyear term as a nonexecutive director to 
continue to provide continuity of leadership as chairman
nomination committee report
“i am delighted that pam powell 
joined the board as an non
executive director in may 2013 
which adds further consumer 
brand building experience to our 
board”
david beever 
chairman
premier foods plc  annual report and accounts 2013
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remuneration report
committee
chairman’s letter
“the committee’s overall 
remuneration strategy remains 
broadly unchanged and recognises 
the business turnaround currently 
being undertaken”
david wild 
remuneration committee chairman
dear shareholder
on behalf of your board i am pleased to present the group’s 
remuneration report for 2013 our directors’ remuneration policy 
will be put forward for your consideration and approval at our agm 
on 29 april 2014 and will take effect from that date 
the committee’s overall remuneration strategy remains broadly 
unchanged and recognises the complexity of the business the 
challenges it faces and the need for executive directors with 
significant experience to continue the business turnaround our 
focus is on rewarding performance — the majority of executive 
remuneration approximately 70 at maximum is variable and 
only payable if demanding performance targets are met these 
performance targets are firmly linked to our strategy and ultimately 
aligned with shareholders’ interests in delivering earnings growth 
and improved shareholder value in the medium term 
what we did in 2013
the key challenge in 2013 was to put in place remuneration 
arrangements for gavin darby following his appointment as ceo in 
february 2013 given the significance of the change the chairman 
and i held a number of meetings with major shareholders to explain 
the background to gavin darby’s appointment and the rationale 
for the remuneration arrangements we put in place details of the 
arrangements were fully disclosed in last year’s annual report and 
at the agm in april 2013 the remuneration report received strong 
support from shareholders 98 of votes cast being in favour
in addition in september we announced the appointment of alastair 
murray as cfo in place of mark moran alastair has extensive 
strategic commercial financial and consumer brand experience 
built up over 30 years with a range of leading fmcg companies 
and also significant restructuring knowledge this will be invaluable 
as we move forward with the next phase of the group’s transition 
alastair’s annual base salary is £400000 and his other benefits 
and incentive arrangements are in line with those of the previous 
cfo following mark moran’s decision to leave the group it was 
agreed he would step down as a director on 30 september 2013 
and remain employed by the company until 31 october 2013 to 
ensure a smooth handover he received a payment of £201704 
representing 5 months salary benefits and pension allowance in lieu 
of the remaining 11 months of his contractual notice period he was 
not entitled to a bonus in respect of 2013 and his outstanding share 
awards lapsed on 31 october 2013
the committee reviewed the ceo’s performance over the year and 
assessed the extent to which his annual bonus targets had been 
achieved the committee concluded that gavin darby had made 
a highly significant contribution to the group since appointment 
and been pivotal in the delivery of a number of critical strategic 
objectives over the year in addition the group had made strong 
progress in 2013 delivering underlying trading profit of £1452m up 
177 on 2012 
gavin darby was a awarded a bonus of £175000 representing 
25 of his salary recognising the successful completion of his 
personal performance measures which were based on the creation 
of a cohesive and high performing leadership team and developing 
stakeholder relationships however despite the strong financial 
results in 2013 performance was below the stretching trading 
profit target set for the year and as a consequence the remaining 
performance conditions which were subject to a trading profit 
underpin were not met
as alastair murray was appointed in september 2013 he did not 
participate in the annual bonus plan for 2013
the first tranche of gavin darby’s coinvestment award will vest on  
1 may 2014 
what we’ve planned for 2014
remuneration arrangements for 2014 are in line with the director’s 
remuneration policy the performance conditions are linked to the 
group’s strategy and the targets are considered stretching full 
details are set out under the relevant headings 
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set out below is the directors’ remuneration policy if approved it will apply from the close of the agm on 29 april 2014 total remuneration is 
made up of fixed and performancelinked elements with each element supporting different strategic objectives 
element of pay link to strategy maximum opportunity performance conditions
base salary provides an appropriate level of fixed income 
set at levels to attract and retain talented individuals with reference to the committee’s assessment of
1 the specific needs of the group by reference to the size and complexity of the business acknowledging the group is 
currently in a turnaround situation and
2 the specific experience skills and responsibilities of the individual 
operation
normally reviewed annually effective 1 april in conjunction with those of the wider workforce
salaries for the relevant year are detailed in the annual report on 
remuneration
increases are normally expected to be in line with increases across the 
management grades subject to particular circumstances such as a 
significant change in role responsibilities or organisation an explanation 
of differences in remuneration policy for executive directors compared with 
other employees is set out later in this directors’ remuneration policy
none although group performance is taken into consideration 
when determining an appropriate level of base salary increase 
for management grades as a whole
performance period
none
annual bonus 
ab
designed to incentivise delivery of annual financial and operational goals and directly linked to delivery of the group 
strategy
operation
an annual bonus is earned based on performance against a number of performance measures which are linked to the 
group’s strategy bonuses are paid entirely in cash with the exception of the ceo where 25 is paid in shares
maximum as a percentage of salary
•	 ceo – 150
•	 cfo – 75
performance conditions are designed to promote the delivery 
of the group’s strategy and can be made up of a range of
•	 financial targets eg turnover trading profit and cash 
flow representing not less than 50 of the total bonus 
opportunity subject to the delivery of a threshold level of 
trading profit
•	 short to medium term strategic targets including financial 
and nonfinancial key performance indicators subject to 
the delivery of a threshold level of trading profit and
•	 personal performance representing not more than 20 of 
the total bonus opportunity
there is no preset minimum bonus that can be paid out at 
threshold however no more than 20 of the bonus will vest for 
threshold performance with full vesting taking place for equalling 
or exceeding the maximum target
specific details of the performance measures for the relevant 
year can be found in the annual report on remuneration to 
the extent that they are not commercially sensitive
performance period
one year
deferred share 
bonus plan 
dsbp
operates alongside the annual bonus but with a longer term focus awards are satisfied in the form of shares deferred for 
a period of up to two years to focus on medium term share price performance
operation
based on inyear group wide strategic performance targets with any award being made following the end of the financial 
year in the form of shares that are deferred for up to two years
the rules contain a dividend equivalent provision enabling dividends to be paid in cash or shares on shares at the time  
of vesting
clawback provisions apply
•	 cfo – 30 of the salary
•	 ceo – the current ceo does not participate in the dsbp 
performance conditions are designed to promote the delivery 
of the annual business plan and can be made up of a range of
•	 financial targets eg turnover trading profit and cash 
flow representing not less than 50 of the total bonus 
opportunity subject to delivery of a threshold level of 
trading profit and
•	 short to medium term strategic targets including financial 
and nonfinancial key performance indicators subject to 
the delivery of a threshold level of trading profit
there is no preset minimum bonus that can be paid out at 
threshold however no more than 20 of the bonus will vest for 
threshold performance with full vesting taking place for equalling 
or exceeding the maximum target
performance period
one year with a retention period of up to two years
longterm 
incentive plan 
ltip
the ltip provides a clear link to our strategic goal of returning to profitable growth with sustainable share price growth 
over the long term
operation
annual grant of awards
the ltip comprises two elements — performance shares and matching shares — and the aggregate maximum under 
both elements is 200 of base salary
performance shares are the conditional award of shares or nil cost options which normally vest after three years subject to 
performance conditions matching shares are similar to performance shares but require participants to invest in company 
shares any investment will receive a maximum match of up to 21 from the company subject to performance 
currently it is the remuneration committee’s policy for awards under the ltip to be made only in the form of performance 
shares whilst the remuneration committee does not expect to change this policy it wishes to retain the flexibility to do so
awards under the ltip  including the determination of any relevant performance conditions will be considered and 
determined on an annual basis at the discretion of the committee
the rules contain a dividend equivalent provision enabling dividends to be paid in cash or shares on shares at the time of 
vesting
clawback provisions apply
maximum individual limit of 200 of salary where matching shares are 
used no more than half of the award can be comprised of matching shares
normal award levels are as a percentage of salary
•	 ceo – 200
•	 cfo – 150
performance conditions are based on a range of targets 
focused on the delivery of increased shareholder value over 
the medium to long term these include a combination of total 
shareholder return and earnings per share 
20 of the bonus will vest for threshold performance with full 
vesting taking place for equalling or exceeding the maximum 
target
performance period
three years
directors’ remuneration policy
premier foods plc  annual report and accounts 2013
64
governance 2294104 13 march 2014 923 am turn 10
set out below is the directors’ remuneration policy if approved it will apply from the close of the agm on 29 april 2014 total remuneration is 
made up of fixed and performancelinked elements with each element supporting different strategic objectives 
element of pay link to strategy maximum opportunity performance conditions
base salary provides an appropriate level of fixed income 
set at levels to attract and retain talented individuals with reference to the committee’s assessment of
1 the specific needs of the group by reference to the size and complexity of the business acknowledging the group is 
currently in a turnaround situation and
2 the specific experience skills and responsibilities of the individual 
operation
normally reviewed annually effective 1 april in conjunction with those of the wider workforce
salaries for the relevant year are detailed in the annual report on 
remuneration
increases are normally expected to be in line with increases across the 
management grades subject to particular circumstances such as a 
significant change in role responsibilities or organisation an explanation 
of differences in remuneration policy for executive directors compared with 
other employees is set out later in this directors’ remuneration policy
none although group performance is taken into consideration 
when determining an appropriate level of base salary increase 
for management grades as a whole
performance period
none
annual bonus 
ab
designed to incentivise delivery of annual financial and operational goals and directly linked to delivery of the group 
strategy
operation
an annual bonus is earned based on performance against a number of performance measures which are linked to the 
group’s strategy bonuses are paid entirely in cash with the exception of the ceo where 25 is paid in shares
maximum as a percentage of salary
•	 ceo – 150
•	 cfo – 75
performance conditions are designed to promote the delivery 
of the group’s strategy and can be made up of a range of
•	 financial targets eg turnover trading profit and cash 
flow representing not less than 50 of the total bonus 
opportunity subject to the delivery of a threshold level of 
trading profit
•	 short to medium term strategic targets including financial 
and nonfinancial key performance indicators subject to 
the delivery of a threshold level of trading profit and
•	 personal performance representing not more than 20 of 
the total bonus opportunity
there is no preset minimum bonus that can be paid out at 
threshold however no more than 20 of the bonus will vest for 
threshold performance with full vesting taking place for equalling 
or exceeding the maximum target
specific details of the performance measures for the relevant 
year can be found in the annual report on remuneration to 
the extent that they are not commercially sensitive
performance period
one year
deferred share 
bonus plan 
dsbp
operates alongside the annual bonus but with a longer term focus awards are satisfied in the form of shares deferred for 
a period of up to two years to focus on medium term share price performance
operation
based on inyear group wide strategic performance targets with any award being made following the end of the financial 
year in the form of shares that are deferred for up to two years
the rules contain a dividend equivalent provision enabling dividends to be paid in cash or shares on shares at the time  
of vesting
clawback provisions apply
•	 cfo – 30 of the salary
•	 ceo – the current ceo does not participate in the dsbp 
performance conditions are designed to promote the delivery 
of the annual business plan and can be made up of a range of
•	 financial targets eg turnover trading profit and cash 
flow representing not less than 50 of the total bonus 
opportunity subject to delivery of a threshold level of 
trading profit and
•	 short to medium term strategic targets including financial 
and nonfinancial key performance indicators subject to 
the delivery of a threshold level of trading profit
there is no preset minimum bonus that can be paid out at 
threshold however no more than 20 of the bonus will vest for 
threshold performance with full vesting taking place for equalling 
or exceeding the maximum target
performance period
one year with a retention period of up to two years
longterm 
incentive plan 
ltip
the ltip provides a clear link to our strategic goal of returning to profitable growth with sustainable share price growth 
over the long term
operation
annual grant of awards
the ltip comprises two elements — performance shares and matching shares — and the aggregate maximum under 
both elements is 200 of base salary
performance shares are the conditional award of shares or nil cost options which normally vest after three years subject to 
performance conditions matching shares are similar to performance shares but require participants to invest in company 
shares any investment will receive a maximum match of up to 21 from the company subject to performance 
currently it is the remuneration committee’s policy for awards under the ltip to be made only in the form of performance 
shares whilst the remuneration committee does not expect to change this policy it wishes to retain the flexibility to do so
awards under the ltip  including the determination of any relevant performance conditions will be considered and 
determined on an annual basis at the discretion of the committee
the rules contain a dividend equivalent provision enabling dividends to be paid in cash or shares on shares at the time of 
vesting
clawback provisions apply
maximum individual limit of 200 of salary where matching shares are 
used no more than half of the award can be comprised of matching shares
normal award levels are as a percentage of salary
•	 ceo – 200
•	 cfo – 150
performance conditions are based on a range of targets 
focused on the delivery of increased shareholder value over 
the medium to long term these include a combination of total 
shareholder return and earnings per share 
20 of the bonus will vest for threshold performance with full 
vesting taking place for equalling or exceeding the maximum 
target
performance period
three years
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remuneration report continued
element of pay link to strategy maximum opportunity performance conditions
pension to offer market competitive levels of benefit and help to recruit and retain and to recognise longterm commitment to 
the group
operation
executive directors receive an allowance in lieu of pension provision which is subject to periodic review or may participate 
in the group’s defined contribution scheme on the same basis as all other new employees executive directors may also 
salary sacrifice additional amounts into this scheme but will not receive any additional contribution from the group only 
basic pay is pensionable
annual allowances of
•	 ceo — 20 of salary
•	 the cfo participates in the group’ s pension scheme and receives a 
contribution of 75 of the earnings cap set annually by the group on the 
basis of the calculation previously used by hmrc should the cfo decide 
not to participate in the company’ s pension scheme he would receive 
a cash allowance of this amount additionally the cfo receives a cash 
supplement currently £21610 which is reviewed annually by the group in 
line with the retail price index rpi 
na
performance period
na
sharesave 
plans
to offer all employees the opportunity to build a shareholding in a simple and taxefficient manner
operation
the company’s sharesave plan is a hmrc compliant scheme which is usually offered annually in september to all 
employees the key terms of the plan will only be changed to reflect hmrc changes at the 2014 agm shareholders will 
vote on a new plan which will run until 2024
participants may save up to the statutory limit over a 3 year period following 
which they have the opportunity to buy company shares at a price set at 
the beginning of the savings period
none other than continued employment
performance period
three years
coinvestment 
award oneoff 
award in 2013
to facilitate the recruitment of gavin darby as ceo in 2013 and immediately align the ceo with shareholders and the 
delivery of share price growth
operation
award specific to gavin darby on appointment gavin darby acquired shares worth 100 of annual base salary in the 
company the company made a matching award of shares worth 200 of salary which vest in three equal tranches on  
1 may 2014 2015 and 2016 subject to satisfaction of a performance condition requiring payment of a bonus 
200 of salary one off award specific to gavin darby subject to a bonus having been paid for the relevant financial 
year and continued employment the coinvestment award 
vests in specified circumstances including a change of control
performance period
one two and three years
other benefits help recruit and retain and to promote the efficient use of management time
operation
the company typically provides the following benefits
•	 company car or cash allowance the ceo has use of the group’s chauffeur driven car for group business which 
allows the ceo to work while commuting to appointments
•	 private health insurance
•	 life insurance
•	 telecommunication services
•	 professional memberships 
•	 allowance for personal tax and financial planning and
•	 other ancillary benefits including relocation expenses as required
the provision and level of allowances and benefits are considered 
appropriate and in line with market practice
na
performance period
na
nonexecutive 
director fees
provides an appropriate level of fixed fee to recruit and retain individuals with a broad range of experience and skill to 
support the board in the delivery of its duties
fees are reviewed annually
operation
the remuneration of nonexecutive directors is determined by the chairman and executive directors the remuneration of 
the chairman is determined by the remuneration committee
includes a chairman’s fee and standard non executive fee additional fees are payable to committee chairs and the 
senior independent director
increases are normally expected to be in line with the market taking into 
account increases across the group as a whole subject to particular 
circumstances such as a significant change in role responsibilities or 
organisation 
none
performance period
none
for the avoidance of doubt in approving this directors’ remuneration policy authority is given to the company to honour any commitments entered into with current or former directors that have 
been disclosed to shareholders in previous remuneration reports details of any payments to former directors will be set out in the annual report on remuneration as they arise as required under 
the remuneration regulations 
the committee operates the annual bonus plan dsbp  coinvestment award and ltip according to their respective rules which includes flexibility in a number of areas these include
•	 the timing of awards and payments
•	 the size of an award within the maximum limits
•	 the participants of the plan
•	 the performance measures targets and weightings to be used for the annual bonus plan dsbp and longterm incentive plans from year to year
•	 the assessment of whether performance conditions have been met
•	 the treatment to be applied for a change of control or significant restructuring of the group
•	 the determination of a goodbad leaver for incentive plan purposes and the treatment of awards thereof 
•	 the adjustments if any required in certain circumstances eg rights issues corporate restructuring corporate events and special dividends
choice of performance measures and approach to target setting
the committee reviews the performance measures used in the incentive arrangements on an annual basis to ensure that they remain appropriate and aligned to the delivery of the annual 
business plan and group strategy the majority of annual bonus and dsbp measures will be focused on financial performance with the remainder linked to individual performance andor strategic 
objectives this approach is adopted in order to link pay to the delivery of overall group performance measured across a balance of key strategic aims the targets will be set by reference to 
internal budgeting and strategic plans for the financial and strategic measures and key objectives identified by the committee for the personal performance measures
currently the ltip uses a combination of earnings per share and total shareholder return based measures to reflect both an internal measure of group performance as well as the delivery of 
shareholder value targets are set taking into account both internal and external assessments of future performance and what constitutes good and superior returns for shareholders
the committee also retains the discretion within the policy to adjust the targets andor set different measures and alter weightings for the annual bonus plan and dsbp and to adjust targets for 
the longterm incentive plans if events happen that cause it to determine that the conditions are unable to fulfil their original intended purpose
the committee will consider the bonus outcomes against all of the preset targets following their calculation and in exceptional circumstances may moderate up and down these outcomes to 
take account of a range of factors including the committee’s view of overall group performance for the year no upward moderation would be undertaken without first consulting with  
major shareholders
 
premier foods plc  annual report and accounts 2013
66
governance 2294104 13 march 2014 923 am turn 10
element of pay link to strategy maximum opportunity performance conditions
pension to offer market competitive levels of benefit and help to recruit and retain and to recognise longterm commitment to 
the group
operation
executive directors receive an allowance in lieu of pension provision which is subject to periodic review or may participate 
in the group’s defined contribution scheme on the same basis as all other new employees executive directors may also 
salary sacrifice additional amounts into this scheme but will not receive any additional contribution from the group only 
basic pay is pensionable
annual allowances of
•	 ceo — 20 of salary
•	 the cfo participates in the group’ s pension scheme and receives a 
contribution of 75 of the earnings cap set annually by the group on the 
basis of the calculation previously used by hmrc should the cfo decide 
not to participate in the company’ s pension scheme he would receive 
a cash allowance of this amount additionally the cfo receives a cash 
supplement currently £21610 which is reviewed annually by the group in 
line with the retail price index rpi 
na
performance period
na
sharesave 
plans
to offer all employees the opportunity to build a shareholding in a simple and taxefficient manner
operation
the company’s sharesave plan is a hmrc compliant scheme which is usually offered annually in september to all 
employees the key terms of the plan will only be changed to reflect hmrc changes at the 2014 agm shareholders will 
vote on a new plan which will run until 2024
participants may save up to the statutory limit over a 3 year period following 
which they have the opportunity to buy company shares at a price set at 
the beginning of the savings period
none other than continued employment
performance period
three years
coinvestment 
award oneoff 
award in 2013
to facilitate the recruitment of gavin darby as ceo in 2013 and immediately align the ceo with shareholders and the 
delivery of share price growth
operation
award specific to gavin darby on appointment gavin darby acquired shares worth 100 of annual base salary in the 
company the company made a matching award of shares worth 200 of salary which vest in three equal tranches on  
1 may 2014 2015 and 2016 subject to satisfaction of a performance condition requiring payment of a bonus 
200 of salary one off award specific to gavin darby subject to a bonus having been paid for the relevant financial 
year and continued employment the coinvestment award 
vests in specified circumstances including a change of control
performance period
one two and three years
other benefits help recruit and retain and to promote the efficient use of management time
operation
the company typically provides the following benefits
•	 company car or cash allowance the ceo has use of the group’s chauffeur driven car for group business which 
allows the ceo to work while commuting to appointments
•	 private health insurance
•	 life insurance
•	 telecommunication services
•	 professional memberships 
•	 allowance for personal tax and financial planning and
•	 other ancillary benefits including relocation expenses as required
the provision and level of allowances and benefits are considered 
appropriate and in line with market practice
na
performance period
na
nonexecutive 
director fees
provides an appropriate level of fixed fee to recruit and retain individuals with a broad range of experience and skill to 
support the board in the delivery of its duties
fees are reviewed annually
operation
the remuneration of nonexecutive directors is determined by the chairman and executive directors the remuneration of 
the chairman is determined by the remuneration committee
includes a chairman’s fee and standard non executive fee additional fees are payable to committee chairs and the 
senior independent director
increases are normally expected to be in line with the market taking into 
account increases across the group as a whole subject to particular 
circumstances such as a significant change in role responsibilities or 
organisation 
none
performance period
none
for the avoidance of doubt in approving this directors’ remuneration policy authority is given to the company to honour any commitments entered into with current or former directors that have 
been disclosed to shareholders in previous remuneration reports details of any payments to former directors will be set out in the annual report on remuneration as they arise as required under 
the remuneration regulations 
the committee operates the annual bonus plan dsbp  coinvestment award and ltip according to their respective rules which includes flexibility in a number of areas these include
•	 the timing of awards and payments
•	 the size of an award within the maximum limits
•	 the participants of the plan
•	 the performance measures targets and weightings to be used for the annual bonus plan dsbp and longterm incentive plans from year to year
•	 the assessment of whether performance conditions have been met
•	 the treatment to be applied for a change of control or significant restructuring of the group
•	 the determination of a goodbad leaver for incentive plan purposes and the treatment of awards thereof 
•	 the adjustments if any required in certain circumstances eg rights issues corporate restructuring corporate events and special dividends
choice of performance measures and approach to target setting
the committee reviews the performance measures used in the incentive arrangements on an annual basis to ensure that they remain appropriate and aligned to the delivery of the annual 
business plan and group strategy the majority of annual bonus and dsbp measures will be focused on financial performance with the remainder linked to individual performance andor strategic 
objectives this approach is adopted in order to link pay to the delivery of overall group performance measured across a balance of key strategic aims the targets will be set by reference to 
internal budgeting and strategic plans for the financial and strategic measures and key objectives identified by the committee for the personal performance measures
currently the ltip uses a combination of earnings per share and total shareholder return based measures to reflect both an internal measure of group performance as well as the delivery of 
shareholder value targets are set taking into account both internal and external assessments of future performance and what constitutes good and superior returns for shareholders
the committee also retains the discretion within the policy to adjust the targets andor set different measures and alter weightings for the annual bonus plan and dsbp and to adjust targets for 
the longterm incentive plans if events happen that cause it to determine that the conditions are unable to fulfil their original intended purpose
the committee will consider the bonus outcomes against all of the preset targets following their calculation and in exceptional circumstances may moderate up and down these outcomes to 
take account of a range of factors including the committee’s view of overall group performance for the year no upward moderation would be undertaken without first consulting with  
major shareholders
 
remuneration scenarios  weighting 
the chart below shows executive director remuneration at three different levels of performance minimum midpoint and maximum as set  
out above
minimum total
midpoint midpoint
total
maximum
minimum total total
maximum
ceo cfo
£3000
£2500
£2000
£1500
£1000
£500
£0
£3315
£2090
£865
£455
£965
£1475
  ltip
  annual bonus
fixed pay
£3500
100 42 26 100 47 31
22
31
28
41
25
33
32
42
footnotes 
1 excludes gavin darby’s coinvestment award as this does not form part of his ongoing 
remuneration
2 as the dsbp is based on annual performance it is included within annual bonus
3 the value of share awards does not include any assumptions on share price movements
4 the executive directors can participate in the sharesave plan on the same basis as 
other employees for simplicity the value that may be received from participating in the 
sharesave plan has been excluded from the scenario charts
5 assumptions when compiling the charts are 
minimum  fixed pay only base salary benefits and pension 
midpoint  fixed pay plus 50 of annual bonus and dsbp payable and 50 of ltip 
vesting 
maximum  fixed pay plus 100 of annual bonus and dsbp payable and 100 of ltip 
vesting
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remuneration report continued
service contracts
executive directors have rolling service contracts the current executive directors’ service contracts contain the key terms shown in the below 
table in the event that any additional executive directors are appointed it is likely that their service contracts will contain broadly similar terms
provision detailed terms
remuneration salary bonus share incentives expenses and pension entitlements in line with the above directors’ remuneration 
policy table 
change of control the service agreements do not provide for any enhanced payments in the event of a change of control of the company
notice period standard notice periods are set at 12 months
payment in lieu of 
notice
the company may at its discretion pay a sum equal to base salary benefits and pension contributions which would 
have been earned during the notice period as payment in lieu of notice this payment is payable in two six monthly 
instalments or until such earlier date alternative employment is secured subject to mitigation
in the event of the company serving notice within 12 months following a change of control then employment will 
terminate immediately and the company will make a payment in lieu of notice
there is no entitlement to a pro rata bonus payment in lieu of notice
the terms and conditions for nonexecutive directors are set out in their letters of appointment which are available for inspection at the 
company’s registered office and will be available at the agm as are executive service contracts the appointment of nonexecutive directors is 
for a fixed term of three years which may be terminated by three months notice from either party with the exception of charles miller smith where 
his appointment is governed by the relationship agreement with warburg pincus llc and a one month notice period applies the letters of 
appointment entitle the nonexecutive directors to receive fees but do not have provisions on payment for early termination
policy on payment for loss of office
the committee aims to deal fairly with cases of termination while 
attempting to limit compensation and honour contractual remuneration 
entitlements the principles that would be followed are
•	 the executive directors have rolling contracts with 12 months’ notice 
periods 
•	 the company may elect to terminate employment immediately in 
circumstances where it considers it to be appropriate by making a 
payment in lieu of notice equivalent to the executive director’s salary 
pension and benefits for the notice period in two equal instalments 
the first within 28 days of termination and the second six months 
following the date of termination these payments are subject to 
the executive director’s duty to mitigate his loss by finding alternative 
employment if the executive director finds an alternative position the 
payments will be reduced by the amount of remuneration received 
by the executive director pursuant to that alternative remunerated 
position 
•	 salary pensions and benefits will generally not be paid to a “bad 
leaver” in lieu of notice the company may terminate an executive 
director’s employment without notice or payment in lieu in certain 
circumstances including where he commits an act of dishonesty 
is guilty of gross misconduct or a serious breach of his service 
agreement
•	 a time prorated cash bonus and dsbp where relevant in respect 
of that bonus year may be payable and for the current ceo will be 
payable for the period of active service from the start of the bonus 
year to the date on which the director’s employment terminates for 
‘good leavers’ any unpaid bonus for the preceding completed bonus 
year may also be payable and for the current ceo will be payable to 
a ‘good leaver’ the amount of such bonus will be determined at the 
discretion of the committee taking into account performance bonus 
under the dsbp could be paid in cash there is no entitlement to any 
bonus in respect of that or any previous bonus year following notice 
of termination or cessation of employment for ‘bad leavers’ and they 
will not receive any bonus in such circumstances
•	 any sharebased entitlements granted to an executive director under 
the company’s share plans will be determined based on the relevant 
plan rules or award agreement the default treatment is that any 
outstanding awards lapse on cessation of employment however 
in certain prescribed circumstances such as death disability injury 
redundancy not in respect of the dsbp transfer of the employing 
company or business out of the group not in respect of the  
coinvestment award or other circumstances at the discretion of the 
committee taking into account the individual’s performance and the 
reasons for their departure ‘good leaver’ status can be applied  the 
‘good leaver’ treatment under the various plans is as follows
•	 dsbp awards will vest on the date of cessation of employment
•	 ltip awards will vest on the normal vesting date unless the 
remuneration committee decides that the ltip awards should 
vest on the date of cessation subject to performance conditions 
measured over the original time period or a shorter period where 
the ltip awards vest on cessation of employment and are 
reduced prorata to reflect the proportion of the performance 
period actually served the remuneration committee has the 
discretion to disapply time prorating if it considers it appropriate 
to do so however it is envisaged that this would only be applied 
in exceptional circumstances in determining whether an executive 
should be treated as a ‘good leaver’ or not the committee will 
take into account the performance of the individual and the 
reasons for their departure
•	 the remuneration committee may at its discretion determine 
that any unvested portion of the coinvestment award may vest 
on the date of cessation taking into account the extent to which 
the performance condition has been satisfied and reduced pro
rata to reflect the period actually served between 1 may 2013 
and the date of termination of employment the remuneration 
committee has the discretion to allow vesting to a greater extent if 
it considers it appropriate to do so
•	 the company may enable the provision of outplacement services to 
a departing executive director where appropriate
•	 where it is necessary to discharge an existing legal obligation or 
by way of damages for breach of such an obligation or by way of 
settlement or compromise of any claim arising in connection with the 
termination of a director’s office or employment the committee may 
make a payment to a departing executive director
•	 in the event of change of control of the company if the company 
gives notice to terminate or the executive director is constructively 
dismissed his employment shall terminate immediately and he will 
be entitled to a payment in lieu of notice equivalent to the executive 
director’s salary pension and benefits for the 12 month notice period 
the coinvestment award vests immediately and in full in the event of 
a change of control any share based entitlements will be dealt with in 
accordance with the rules of the relevant schemes
premier foods plc  annual report and accounts 2013
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governance 2294104 13 march 2014 923 am turn 10
recruitment policy
on the recruitment of an executive director the committee will aim to align the executive’s remuneration package with the approved directors’ 
remuneration policy in arriving at a remuneration package the committee will take into account the skills and experience of the individual and the 
market rate for a candidate the details of the recruitment policy are set out below
new appointments as an executive director
reward element detailed terms
base salary in line with the above directors’ remuneration policy table however includes discretion to pay lower base salary with 
incremental increases as new appointee becomes established in the role
pension and benefits in line with the above directors’ remuneration policy table
new executives are eligible to participate in the company’s defined contribution scheme on a similar basis as all other 
new employees executive directors who receive a salary supplement in lieu of pension may salary sacrifice into the 
scheme but will not receive any additional contribution from the company 
a small number of current senior management are participants in the company’s legacy defined benefit schemes and 
would continue to be participants should they be appointed as directors of the company in future
performance based 
pay
executive directors are entitled to participate in the company’s annual bonus dsbp and long term incentive plans in 
line with above directors’ remuneration policy table the maximum variable pay for the ceo will be 350 of the base 
salary and 255 of base salary for the cfo in its discretion the committee may set different performance measures 
to apply to awards made in year of appointment if it considers that to be appropriate
buy outs in order to facilitate external recruitment of executive directors it may be necessary for the committee to consider 
buying out existing incentive awards which would be forfeit on the individual leaving their current employment the 
committee would seek where possible to provide a buyout structure which was consistent with the forfeited awards 
in terms of quantum vesting period and performance conditions
the buy out award may necessitate the use of the flexibility in the listing rules to make such awards outside the 
existing ltip 
footnotes
1 should an executive appointment be made for an internal candidate such an individual would be allowed to retain any and all provisions of their current remuneration package
2 the committee has discretion to authorise the payment of reasonable relocation costs which may be necessary to secure the appointment of an executive director
consideration of employeeswider group
in line with current market practice the group does not actively consult with employees on executive remuneration however the committee is 
kept updated during the year on salary increases within the group and the level of annual bonus awards as well as overseeing participation in 
longterm incentives for below board level senior management as a result the committee is aware of how typical employee total remuneration 
compares to the potential total remuneration packages of executive directors the group hr director is a regular attendee at meetings of the 
remuneration committee and is able to brief the committee on meetings which have been held with employee representative bodies 
differences in remuneration policy for executive directors compared to other employees 
the executive directors’ remuneration policy is set within the wider context of the company’s remuneration policy for the wider workforce the 
key differences of quantum and structure in pay arrangements across the group reflect the different levels of responsibilities skill and experience 
required for the role executive directors have a much greater emphasis on performance based pay through the annual bonus dsbp and the ltip  
salaries for management grades are reviewed annually in april each year and take account of both business and personal performance specific 
arrangements are in place at each site and these may be annual arrangements or form part of a longer term arrangement linked to the delivery of 
efficiency targets 
all management grades participate in the annual bonus plan to ensure alignment with the group’s strategic priorities senior management 
participate in long term incentive arrangements reflecting their contribution to company performance and enhancing shareholder value all 
employees are encouraged to own shares in the company via the sharesave plan and executive directors through the share ownership guideline
consideration of shareholders’ views
the remuneration committee and the board considers shareholder feedback received in relation to the agm each year at a meeting immediately 
following the agm and any action required is incorporated into the remuneration committee’s business plan for the ensuing period this and 
any additional feedback received from shareholders from time to time is then considered by the committee and as part of the company’s annual 
review of remuneration arrangements
specific engagement with major shareholders may be undertaken when a significant change in remuneration policy is proposed or if a specific 
item of remuneration is considered to be potentially contentious as highlighted in the chairman’s letter on page 63 an extensive engagement 
exercise was undertaken following the appointment of gavin darby in february 2013 to explain the background to his appointment and the 
remuneration arrangements that had been put in place 
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remuneration report continued
nonexecutive directors’ emoluments
2013
fee
£
2012
fee
£
david beever 265000 174373
ian krieger
7
65864 9500
jennifer laing 57000 14250
charles miller smith 57000 81750
pam powell
8
37380 —
david wild
9
70909 61375
former nonexecutive directors 
ian mchoul
10
25000 72917
footnotes 
1   benefits include those mentioned in the summary table in the directors’ remuneration 
policy report on pages 64–69
2   gavin darby was appointed as ceo on 4 february 2013 his basic salary is £700000 pa 
and he receives a salary supplement in lieu of pension of 20 of base salary gavin darby 
was awarded a bonus of £175000 representing 25 of his salary in respect of 2013 in 
addition the first tranche of his coinvestment award which comprises of 492524 shares 
will vest on 1
 
may 2014 for the purposes of this table the award has been valued at 
£688492 based on the average share price for the last quarter of 2013
3   alastair murray was appointed as cfo on 30 september 2013 his basic salary is 
£400000 per annum and he receives an annualised salary supplement in lieu of pension of 
75 of the earnings cap £141000 for the 201314 tax year which equates to £10575 
per annum together with an additional rpi adjusted pensions supplement of £21610 in 
respect of 2013
4   michael clarke resigned as ceo on 28 january 2013 michael clarke remained as 
an employee of the company until 30 june 2013 his base salary at the time of his 
resignation as ceo was £750000 and he received a salary supplement in lieu of pension 
of 20 of base salary michael clarke’s benefits include those mentioned in the summary 
table to the director’s remuneration policy which included the use of the group’s 
chauffeur car for business travel up until his resignation as ceo on 28 january 2013 
following the announcement of the company’s 2012 annual results the first element 
of mr clarke’s recruitment award contained in the “other” column on the above table 
vested which included a cash payment of £241500 and an award of 500000 shares the 
value of these shares was £417500 based on the opening share price of 835p on the 
announcement of the 2012 results on the 22 march 2013
5   mark moran resigned as cfo on 30 september 2013 in april 2013 mark moran received 
a salary increase of 2 in line with all other management grades mark moran remained 
as an employee of the company until 31 october 2013 his base salary at the time of his 
resignation as cfo was £433250 and he received an annualised salary supplement in lieu 
of pension of 9 of the earnings cap £141000 for the 201314 tax year which equates 
to £12609 per annum together with an additional rpi adjusted pensions supplement 
of £21610 for 2013 following mr moran’s resignation in september 2013 he received a 
payment of £201704 representing 5 months salary benefits and pension allowance in lieu 
of the remaining 11 months of his contractual notice period 
6   geoff eaton resigned as an executive director on 4 february 2013 geoff eaton remained 
as an employee of the company until 3 february 2014 in line with his contractual notice 
period geoff eaton’s salary at the time of his resignation was £450000 and he received 
an annualised salary supplement in lieu of pension of 9 of the earnings cap £141000 
for the 201314 tax year which equates to £12609 per annum together with an additional 
rpi adjusted pensions supplement of £21610 for 2013
7   ian krieger received an additional annual pro rata fee of £13000 for acting as chairman of 
the audit committee
8  pam powell was appointed on 7 may 2013
9   david wild received the standard nonexecutive director fee of £57000 for 2013 and in 
addition he received a fee of £10500 for acting as the chairman of the remuneration 
committee on 25 april 2013 mr wild was appointed as senior independent director 
which has an annual pro rata fee of £5000 nonexecutive director fees are listed in the 
table on page 71
10  ian mchoul retired at the agm on 25 april 2013
annual report on remuneration
an advisory vote on this annual report on remuneration will be put to shareholders at the agm on 29 april 2014 
single figure table audited
base salary 
taxable 
benefits
 pension 
annual 
bonus
 dsbp  ltip  other 
total  
remuneration
the below table provides a breakdown of the various elements of executive director pay
executive 
directors’ 
emoluments
salary
£
taxable
benefits
1
£
pension
£
annual bonus
£
dsbp
£
ltip
£
other
£
total
£
2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012
gavin darby
2
 638480 — 17194 — 127750 — 175000 — — — — — 688492 — 1646916 —
alastair murray
3
101587 — 4705 — 8046 — — — — — — — — — 114338 —
payments for former executive directors
michael clarke
4
375000 750000 13795 49575 75000 150000 — 750000 — — — — 659000 — 1122795 1699575
mark moran
5
358834 425000 15217 17965 28340 32910 — — — — — — 201704 — 604095 475875
geoff eaton
6
450000 109239 22925 5604 34056 8090 — — — — — — — — 506981 122933
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governance 2294104 13 march 2014 923 am turn 10
the committee 
the table on page 52 identifies the committee members and meeting 
attendance in accordance with the committee’s terms of reference 
no one attending a committee meeting may participate in discussions 
relating to hisher own terms and conditions of service or remuneration 
only independent nonexecutive directors may become members 
of the committee in addition the ceo group hr director and new 
bridge street remuneration advisors to the committee regularly attend 
by invitation the general counsel  company secretary acts as 
secretary to the committee over the course of the year the committee 
held three scheduled meetings together with a number of ad hoc 
meetings for specific business
advisers
new bridge street nbs a trading name of aon hewitt limited 
have been appointed as advisers to the committee during the year 
nbs provided advice in connection with executive remuneration 
arrangements nbs are signatories of the remuneration consultants 
group code of conduct the trustees of the group’s pension schemes 
have appointed the pension advisory team of aon hewitt limited to act 
as administrator of the schemes and have also appointed individuals 
within aon hewitt limited to act as actuary to the schemes nbs 
operates independently of the pension teams and the committee is 
satisfied there is no conflict of interest nbs received fees of £80477 in 
respect of their advice to the committee in 2013
role of the remuneration committee
the committee has been delegated authority by the board to
•	 design the overall directors’ remuneration policy for executive 
directors and senior management and recommend to the board for 
submission to shareholders
•	 review and approve the remuneration packages for the chairman 
executive directors general counsel  company secretary and 
group executive
•	 agree the terms of employment including recruitment and 
termination terms of executive directors ensuring any payments on 
departure are in line with the directors’ remuneration policy
•	 approve the design of all share incentive plans including all
employee share schemes and where appropriate oversee any 
subsequent changes and
•	 recommend appropriate performance conditions and targets for 
the variable element of remuneration packages and determine the 
extent to which performance targets have been achieved
the committee’s terms of reference are available on the group’s 
website  
wwwpremierfoodscoukaboutuscorporategovernance
what we did in 2013
•	 discussed and approved the recruitment and exit packages for 
executive directors who were appointed or departed over the 
course of the year
•	 performed an annual review of executive directors’ and group 
executive base salaries
•	 reviewed and recommended executive directors’ and senior 
managers’ annual bonuses in respect of 2012 and set the targets 
for the annual bonus in respect of 2013 in accordance with the 
strategic objectives of the group
•	 granted 2013 awards under the equity schemes operated by the 
group
•	 discussed best practice in remuneration policy and disclosure in 
light of the remuneration regulations changes in this area and 
reviewed draft stages of this report
•	 reviewed retention risks for key senior management
•	 undertook a shareholder engagement exercise and reviewed the 
voting results for the 2012 remuneration report at the agm and
•	 conducted a review of the remuneration advisers and concluded 
that they continued to provide an effective service and accordingly a 
formal tender exercise was not required
salary  fees
what we did in 2013
alastair murray was appointed as cfo on 30 september 2013 with an 
annual salary of £400000 gavin darby’s salary of £700000 remained 
unchanged
what we plan to do in 2014
no increases are proposed to the ceo’s or cfo’s salary in 2014 the 
next salary review for both executive directors will be in april 2015
nonexecutive directors
the fees of our nonexecutive directors are laid out in the below table 
and remain unchanged during 2013
ned fees
chairman fee £265000
basic ned fee £57000
additional remuneration
audit committee chairman £13000
remuneration committee chairman £10500
senior independent director £5000
all nonexecutive directors have entered into letters of appointment 
amendment as detailed in the table below the appointments 
are subject to the provisions of the companies act 2006 and the 
company’s articles terms of appointment are for three years or 
the date of the agm immediately preceding the third anniversary of 
appointment
nonexecutive 
director
date of original 
appointment
expiry of current
appointment
amendment letter 
notice 
period
david beever 22 january 2008 agm 2017 3 months
ian krieger 1 november 2012 agm 2015 3 months
jennifer laing 1 october 2012 agm 2015 3 months
charles miller smith 16 june 2009 na 1 month
1
david wild 7 march 2011 agm 2014 3 months
pam powell 7 may 2013 agm 2016 3 months
footnote
1 upon completion of the capital refinancing plan the notice period for charles miller smith 
will be aligned with other nonexecutive directors
nonexecutive directors’ continued appointments are evaluated 
annually based on their contributions and satisfactory performance 
there are no provisions for compensation being payable upon early 
termination of an appointment of a nonexecutive director
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remuneration report continued
external appointments
the group is supportive of executive directors who wish to take on a 
nonexecutive directorship with a publicly quoted company in order 
to broaden their experience and they are entitled to retain any fees 
they may receive the current executive directors do not have external 
appointments with publicly quoted companies
annual bonus
each year the committee sets individual performance targets and 
bonus potentials for each of the executive directors annually the 
committee reviews the level of achievement against the performance 
targets set and based on the committee’s judgement approves the 
bonus of each executive director annual bonus payments are not 
pensionable
what we did in 2013
gavin darby
gavin darby was awarded a bonus of £175000 for 2013 representing 
25 of his salary representing 166 of the maximum opportunity 
as a result of the successful completion of his personal performance 
measures which were based on the creation of a cohesive and high 
performing leadership team and developing stakeholder relationships 
this was based on the committee’s assessment of gavin’s 
performance over the year taking into account a range of criteria 
including
•	 the objectives put in place with the group executive
•	 the establishment of a new leadership team forum which met 
regularly over the year
•	 the recruitment of a new cfo
•	 succession plans reviewed for senior management
•	 relationship development with shareholders customers 
employees banks and pension trustees and
•	 representation on key trade bodies such as the institute of grocery 
distribution and food and drink federation
the committee also assessed the financial performance and strategic 
targets noting the significant progress that had been made across 
a number of areas however despite the significant increase in 
underlying trading profit delivered in 2013 which had increased 177 
on 2012 performance was below the stretching trading profit target set 
for the year as a consequence the remaining performance conditions 
which were subject to a trading profit underpin were not met the 
committee considers the precise financial targets for 2013 to be 
commercially sensitive going forward the committee has agreed that 
financial targets will except in exceptional circumstances be disclosed 
in the following year’s annual report
alastair murray 
alastair murray was appointed in september 2013 and did not 
participate in the 2013 annual bonus plan
annual bonus t argets for 2014
the committee has determined that the financial performance 
target for 2014 will be based on trading profit as this is aligned to 
the company’s strategy of category growth and also the switch in 
focus from volume to value the actual 2014 trading profit target is 
considered commercially sensitive but will be disclosed as part of the 
performance assessment in the 2014 annual report and accounts 
they also contain targets based on a range of short to medium term 
strategic targets and an element of personal performance as set out 
below
gavin darby
performance measure weighting  of salary
financial performance targets 500 75
•	 trading profit
subject to a minimum trading profit underpin
short to medium term strategic objectives 333 50
•	 strengthening the balance sheet through the 
successful implementation of financial restructuring 
initiatives
•	 developing and agreeing with the board a strategic 
three year plan for the group
•	 establishing an effective governance structure for the 
new hovis jv and
•	 concluding the group’s decomplexity programme
subject to a minimum trading profit underpin
personal performance measures including
•	 launching a new vision and values for the group and
166 25
•	 implementation of actions identified as part of the 
2013 all employee survey
total annual bonus 100 150
alastair murray
performance measure weighting  of salary
financial performance targets 500 375
•	 trading profit
subject to a minimum trading profit underpin
short to medium term strategic objectives 333 250
•	 strengthening the balance sheet through the 
successful implementation of financial restructuring 
initiatives
 
•	 successful delivery of new forecasting and decision 
making systems and processes
•	 supporting the ceo in the development of a three 
year plan for the group
subject to a minimum trading profit underpin
personal performance measures including
•	 supporting the new hovis jv and reviewing the 
finance and isc functions on the basis of a stand 
alone grocery business
166 125
total annual bonus 100 75
dsbp
the dsbp operates alongside the annual cash bonus awards can 
be based on the achievement of a range of groupwide financial and 
strategic targets which are set at the start of each financial year if 
the objective is met the bonus earned will be converted into shares 
following the announcement of the results for the financial year and 
deferred for a period of up to two years these shares will be subject to 
forfeiture over the period of deferral all shares for these awards will be 
sourced in the market
what we did in 2013
alastair murray did not participate in the 2013 dsbp following his 
appointment in september 2013 the performance targets for 2013 
were based on 50 on trading profit and 50 on branded turnover 
following mark moran’s resignation no award will be made in respect  
of 2013
premier foods plc  annual report and accounts 2013
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governance 2294104 13 march 2014 923 am turn 10
what we plan to do in 2014
alastair murray will participate in the dsbp in 2014 the remuneration 
committee has determined that for 2014 in order to support the 
delivery of the group’s category growth strategy it was important 
to focus on branded growth and cashflow the 2014 targets are 
therefore based 50 on power brand turnover and 50 on a cash
based target the actual 2014 performance targets are considered 
commercially sensitive but will be disclosed retrospectively in the 2014 
annual report and accounts
ltip
the current ltip was approved by shareholders in 2011 awards have 
two elements performance shares and matching shares
the committee determined in 2012 that whilst the business is in 
turnaround and the share price continues to be volatile awards under 
the ltip will take the form of performance shares only
the table below details share interests which were awarded during the 
year and the total interests as at the year end all awards are in the 
form of performance shares
gavin darby audited
date of grant 22 feb 2013
as at 1 jan 2013 —
granted in the year 1477572
shares lapsed during the year —
as at 31 dec 2013 1477572
price on day of award 9475p
basis of award 200 of salary
face value of award at date of grant £1400000
 of award at threshold 20
performance period 3 years ending 31 december 2015
as at 31 december 2013 alastair murray has no interests under the ltip 
mark moran audited
date of grant 22 feb 2013 20 mar 2012
as at 1 jan 2013 — 554347
granted in the year 672823 —
shares lapsed during the year 672823 554347
as at 31 dec 2013 — —
price on day of award 9475p 115p
basis of award 150 of salary 150 of salary
face value of award at date 
of grant
£637500 £637500
 of award at threshold 20 20
performance period 3 years ending 
31 december 2015
3 years ending 
31 december 2014
what we did in 2013
the performance conditions attached to the 2013 ltip awards are 
aligned with the strategy of the group the group faces a number 
of challenges including delivering branded sales growth improving 
relations with customers and reducing debt the performance targets 
were therefore based on absolute share price and adjusted eps 
performance which the committee believes are fully aligned with the 
interests of shareholders at this stage in the group’s turnaround these 
measures were unchanged from 2012 however in view of the focus 
on improving shareholder return the committee has determined that 
the weighting across each measure should be altered in favour of 
absolute share price awards will only vest following the achievement of 
stretching performance targets
the 2013 award was subject to an absolute tsr condition 23rds of 
the award and an adjusted eps condition 13rd of the award based 
on the following targets
 of relevant portion 
of award vesting
1
adjusted eps for the 
year ended 
31 december 2015
absolute 
tsr
0 below 329p below 230p
20 329p 230p
50 365p 255p
100 402p or greater 281p or greater
footnote
1 straight line vesting between these points
what we plan to do in 2014
the 2014 award will be subject to a relative tsr condition comprising 
23rds of the award and an adjusted eps condition comprising 
13rd of the award the committee determined that following the 
completion of the proposed capital restructuring details of which 
are set out on pages 40 and 41 the group’s balance sheet would 
be significantly strengthened and therefore it would be appropriate to 
move from an absolute to a relative tsr condition the condition will 
require at least a median ranking to be achieved for 20 of this part 
of the award to vest with full vesting taking place for an upper quartile 
ranking against a selected comparator group of companies the 
committee determined that given the uncertainty as to the number of 
shares to be issued under the proposed placing and rights issue it 
was necessary to delay the grant of the awards and the determination 
of the precise tsr and eps targets until the placing and rights issue 
had been completed full details of the performance conditions will be 
disclosed once the awards are made
coinvestment award 
the coinvestment award is specific to gavin darby following his 
appointment as ceo in 2013 and is designed to align the ceo with 
shareholders’ and the delivery of share price growth on appointment 
gavin darby acquired shares worth 100 of annual base salary in the 
company in return the company made a matching award of shares 
worth 200 of salary which vest on the first of may 2014 2015 
and 2016 the award is subject to a bonus having been paid for the 
relevant financial year and continued employment 
following the payment of an annual bonus to gavin darby in respect  
of 2013 the performance condition for the first tranche of his  
coinvestment award 492524 has now been satisfied and 
accordingly was reflected in the single figure table on page 70
gavin darby audited
date of grant 22 february 2013
as at 1 jan 2013 —
performance shares  
granted in the year
1
1477572
shares lapsed during the year —
as at 31 dec 2013 1477572
price on day of award 9475p
basis of award 200 of salary
face value of award £1400000
 of award at threshold na
performance period vests in three equal tranches on  
1 may 2014 2015 and 2016
footnotes
1 full details of gavin darby’s coinvestment award are detailed in the 2012 annual report 
and accounts
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remuneration report continued
share interest table
to align executive directors’ interests with those of shareholders they are expected to build a holding of shares within three years of appointment 
at least equal to their annual salary valued at the time of purchase all employees are encouraged to develop a shareholding in the company via 
the sharesave plan awards under all company share plans may be satisfied using either newly issued shares or shares purchased in the market 
and held in the company’s employment benefit trust which currently holds 97122 shares the company complies with the association of british 
insurers guidelines in respect of the dilutive effect of newly issued shares the table below shows directors’ interests in company shares
director
ordinary shares 
owned as at 
31 dec 2013
ordinary shares 
owned as at 
31 dec 
2012
extent to
which share
 ownership
 guideline has
 been met
1
unvested share 
interests under 
the ltip
2
unvested share
 interests under
 the
coinvestment
 award
2
sharesave 
plans
6
total
gavin darby 750268 — 100 1477572 1477572 2106 3707518
alastair murray
3
— — — — — — —
david beever 31900 31900 — — — — 31900
ian krieger 20000 — — — — — 20000
jennifer laing 16078 — — — — — 16078
pam powell
4
— — — — — — —
charles miller smith
5
325027 268027 — — — — 325027
david wild 5000 5000 — — — — 5000
former directors
michael clarke
7
374078 374078 100 — — — 374078
mark moran
7
1754000 1754000 236 1227170 — — 2981170
geoff eaton
7
— — — — — — —
ian mchoul
7
10000 10000 — — — — 10000
footnotes
1 shares are valued at the date of purchase for the purposes of determining if the share holding guideline has been met
2 the ltip and coinvestment award have performance conditions for further details please see page 73 above
3  alastair murray was appointed on 30 september 2013 due to a number of price sensitive strategic projects being undertaken alastair murray has been in a prohibited period and unable to  
purchase shares alastair murray intends to purchase shares in the company following the release of the company’s 2013 annual results
4 pam powell was appointed on 7 may 2013
5 charles miller smith holds his shares in the form of contracts for difference
6  all employees were invited to participate in the 2013 sharesave plan at a discounted option price of 1111p based on the average share price on 3 to 5 september 2013 following a  
scaleback the maximum amount of options an individual could be awarded was 2106 the sharesave plan has no performance conditions other than continued employment and will vest on 1 
december 2016
7 for former directors the figures represent the number of shares held at the date immediately before they ceased to be directors
premier foods plc  annual report and accounts 2013
74
governance 2294104 13 march 2014 923 am turn 10
total shareholder return
source thomson reuters datastream
3500
3000
2500
2000
1500
1000
500
00
31 dec 08 31 dec 09 31 dec 10 31 dec 11 31 dec 12 31 dec 13
  premier foods
  ftse 250 excluding investment trusts
  ftse food producers index
value £
the graph illustrates the performance of the company against the 
ftse 250 index and the ftse food producers and processors index 
over the past five years as the committee consider these to be the 
most appropriate comparator indices 
the market price of a share in the company on 31 december 2013 
was 1250 pence the range during the 2013 financial year was 5975 
pence to 1855 pence
the table below shows the single figure for total remuneration annual 
bonus and ltip vesting as a percentage of maximum opportunity for 
the current year and the previous four years
year ceo
single figure 
for total 
remuneration
1
annual  
bonus as a 
percentage 
of max bonus 
possible
ltip shares 
vested as a 
percentage of 
max shares 
possible
2013 gavin darby £1646916 16 nil
michael clarke
2
£1122795 nil nil
2012 michael clarke £1699575 66 nil
2011 michael clarke £2277070 nil nil
robert schofield
3
£895485 nil nil
2010 robert schofield £715052 10 nil
2009 robert schofield £929967 29 nil
footnotes
1 details of single figure of total remuneration are set out on page 70
2 michael clarke acted as ceo until 28 january 2013 details of his 2013 emoluments are 
given in the footnotes to the single figure table on page 70
3  robert schofield acted as ceo until the appointment of michael clarke on 16 august 2011 
the 2011 figure for robert schofield includes all payments until retirement on 28 april 2012
percentage change on ceo pay
for the purpose of this table pay is defined as salary benefits and 
annual bonus the average pay of management grades is used for the 
purposes of comparison as management grades are members of the 
group’s annual bonus plan
ceo
1
percentage 
change
base salary 7
benefits 68
annual bonus 77
management grades
base salary 2
benefits
2
nil
annual bonus
3
nil
footnotes
1 ceo figures relate to michael clarke in respect of 2012 and gavin derby in respect of 2013
2 there was no increase in benefits for management grades in the year 
3 a very small number of management grades received a bonus in respect of 2012 and 
accordingly were not statistically significant when taken as a whole
relative importance of spend on pay
the following table sets out the amounts and percentage change  
in total employee costs and dividends for the years ended  
31 december 2012 and 2013 the terms of the current facilities 
agreement contain restrictions on the payment of dividends recurring 
cash flow and net debt have therefore been included as additional 
indicators cash flow demonstrates the cash available to reinvest in the 
business and service debt payments and the net debt highlights the 
overall reduction in debt over the course of the year
2013
£m
2012
£m
change

total employee costs
1
2931 3875 24
recurring cash flow
2
868 500 736
net debt
3
8308 9507 12
dividends paid nil nil nil
footnotes
1 total employee costs include the cost of both grocery and bread businesses the 
reduction in total employee costs represents disposals completed in 2012 and 2013 in 
addition to the closure of bakeries and mills in 2013 please see note 6 to the financial 
statements for further information
2 page 38 provides greater detail on recurring cash flow 
3 note 26 provides greater detail on the net debt figure
agm voting
vote advisory vote on 2012 remuneration report
for 132704853 98
against 3220495 2 
abstain 12711358
any issues raised  
company response
as highlighted in the chairman’s letter on page 63 an 
extensive engagement exercise was undertaken following 
the appointment of gavin darby in february 2013 to explain 
the background to his appointment and the remuneration 
arrangements that had been put in place
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articles of association
the company’ s articles may only be amended by a special resolution at a 
general meeting the articles are available on the group’ s website 
wwwpremierfoodscoukaboutuscorporategovernance
articlesofassociationcfm
profit and dividends
the profit before tax on continuing operations for the financial year was 
£44m 2012 restated loss of £8m the directors do not recommend the 
payment of a dividend for 2013 2012 £nil
research and development
applied research and development work continues to be directed  
towards the introduction of new and improved products the application  
of new technology to reduce unit and operating costs and to improve 
service to customers t otal research and development spend including 
capitalised development costs was £100m 2012 restated £184m
directors’ and officers’ liability insurance
this insurance covers the directors and officers against the costs of 
defending themselves in civil proceedings taken against them in their 
capacity as a director or officer of the company and in respect of 
damages resulting from the unsuccessful defence of any proceedings 
substantial shareholdings
details of substantial shareholdings are set out on page 136
going concern
on 4 march 2014 the group announced its proposal to diversify its 
sources of finance to provide a solid foundation on which it can drive 
future growth through its categorybased strategy and leveraging 
its strengths this transformational capital restructure includes a 
fully underwritten equity offering of approximately £350m gross of 
fees through a placing and rights issue the issue of £475m senior 
secured loan notes and a new £300m revolving credit facility with a 
smaller bank syndicate significantly the group has also reached a 
pensions framework agreement with the respective pension scheme 
trustees following the triennial actuarial valuation which provides the 
platform for this new capital structure to be put in place in order for 
the capital restructuring to proceed and for the funds to be available 
shareholders will be required to vote at the general meeting in order 
to amongst other things authorise the board to allot shares in the 
company under the placing and the rights issue
the group’s 2013 financial statements have been prepared on a going 
concern basis which assumes that the group will continue to be able 
to meet its liabilities as they fall due for the foreseeable future
due to the interconditionality of the above elements of the refinancing 
if the shareholders do not vote in favour of the resolutions and the 
placing and the rights issue do not occur no funds will be available 
to be drawn by or released to the group under the new revolving 
credit facility or the new bonds and the revised schedules of pension 
contributions modified funding arrangements and associated matters 
in relation to the relevant pension schemes pursuant to the new 
framework agreement will not become effective if this were to be the 
case although the group’s current facilities do not expire within the 
next 12 months the group expects that it would be unable to comply 
with certain of its financial covenants under the current facilities on or 
after 31 december 2014 in this scenario the group would need to 
obtain certain consents or waivers from the group’s lenders in respect 
of such financial covenants under the current facilities if the group 
were unable to maintain compliance with such financial covenants or 
were unable to obtain such consents or waivers this would lead to a 
default under the group’s existing financing arrangements unless the 
group were able to renegotiate or refinance the current facilities while 
the board would seek to renegotiate or refinance the current facilities 
in such circumstances there can be no certainty that the group would 
be able to do so either on acceptable terms or at all in the event that 
the group were unable to renegotiate or refinance the current facilities 
in these circumstances the group’s lenders would be able to demand 
repayment of all borrowings
the board has concluded that the resolutions which are required 
for the placing and the rights issue to proceed such that the equity 
proceeds are received in line with the timetable set out in the 
associated prospectus are likely to be passed the board has taken 
into consideration the undertakings received from shareholders that 
they will vote in favour of the resolution historical voting trends the 
underwritten element of the placing and the rights issue and the 
backstop banks’ commitment to purchase the new bonds
nevertheless the board acknowledges that there is some theoretical 
uncertainty as to whether sufficient shareholders will vote in favour 
of the resolutions to enable the capital restructuring to proceed the 
board believes that this uncertainty is extremely remote but the 
consequence of not succeeding may be material the directors believe 
that adopting the going concern basis in preparing the consolidated 
financial statements is appropriate nevertheless the directors are 
prudently making full disclosure as required by accounting standards 
to indicate the existence of a material uncertainty which may cast 
significant doubt about the group’s ability to continue as a going 
concern the financial statements do not include the adjustments that 
would result if the group were unable to continue as a going concern
the auditor’s report of the financial statements contains an unmodified 
audit opinion however it includes an emphasis of matter in respect of 
going concern
statement of directors’ responsibilities for 
the annual report
the directors are responsible for preparing the annual report the 
directors’ remuneration report 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 
financial statements in accordance with international financial reporting 
standards ifrss as adopted by the european union and the parent 
company financial statements in accordance with united kingdom 
generally accepted accounting practice united kingdom accounting 
standards and applicable law in preparing the group financial 
statements the directors have also elected to comply with ifrss issued 
by the international accounting standards board iasb 
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 company and group for that period in preparing these 
financial statements the directors are required to
•	 select suitable accounting policies and then apply them consistently
•	 make judgements and accounting estimates that are reasonable and 
prudent
•	 state whether ifrss as adopted by the european union and ifrss 
issued by iasb and applicable uk accounting standards have been 
followed subject to any material departures disclosed and explained 
in the group and parent company financial statements respectively 
and
directors’ report
premier foods plc  annual report and accounts 2013
76
governance 2294104 13 march 2014 923 am turn 10
•	 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 directors’ remuneration report comply 
with the companies act 2006 and as regards the group financial 
statements article 4 of the ias regulation they are also responsible 
for safeguarding the assets of the company and the group and hence 
for taking reasonable steps for the prevention and detection of fraud 
and other irregularities
the directors are responsible for the maintenance and integrity of 
the company’s website wwwpremierfoodscouk legislation in 
the united kingdom governing the preparation and dissemination of 
financial statements may differ from legislation in other jurisdictions 
information made available on the website does not constitute part of 
this annual report
the directors consider that the annual report and accounts taken 
as a whole is fair balanced and understandable and provides the 
information necessary for shareholders to assess the company’s 
performance business model and strategy 
each of the directors whose names and functions are listed on page 
49 confirm that to the best of their knowledge
•	 the group financial statements which have been prepared in 
accordance with ifrss as adopted by the eu give a true and 
fair view of the assets liabilities financial position and profit of the 
group and
•	 the directors’ report contained on pages 1 to 77 and 136 to 137 
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
independent auditors
the audit committee has recommended pwc’ s reappointment and pwc 
has indicated its willingness to continue as auditors the reappointment 
of pwc and the setting of their remuneration will be proposed at the 2014 
agm
auditors and the disclosure of information to auditors
the companies act requires directors to provide the group’ s auditors 
with every opportunity to take whatever steps and undertake whatever 
inspections they consider to be appropriate for the purpose of enabling 
them to give their audit report the directors having made appropriate 
enquiries confirm that
•	 so far as each director is aware there is no relevant audit information 
of which the group’ s auditors are unaware and 
•	 each director has taken all the steps that they ought to have taken as 
a director to make themselves aware of any relevant audit information 
and to establish that the group’ s auditors are aware of that information
summary of general disclosures incorporated into this directors’ report
companies act 2006 
s416 names of all directors who served at any point during the year
page 52
large and mediumsized companies and groups accounts and reports regulations 2008
schedule 76 financial risk management objectives and policies inc hedging if material page 116
schedule 76 exposure to price risk credit risk liquidity risk and cash flow risk pages 110–117
schedule 77 important events since year end pages 130–131
schedule 77 likely future developments pages12 and 13
schedule 55  710 policy on disabled staff and careers page 58
schedule 711 arrangements to engage employees page 58
schedule 71314 information on capital securities transfer restrictions persons with significant holdings special rights voting rights in share scheme agreements of 
holders rules on appointment of directors and changing articles agreements affected by change of control employeedirector agreements which  
may affect takeover
page 126
schedule 71516 
171819
emissions information  statement explaining any omissions  method of calculation  ratios  comparatives  reporting period if different page 27
by order of the board
andrew mcdonald 
general counsel  company secretary 
4 march 2014
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did you know
we spent over 
£13 billion with 
suppliers in 2013 
80 of which 
was with uk 
producers and 
suppliers
mr kipling snack packs
the mr kipling snack pack range of individually wrapped cake 
slices launched in 2011 have proved very popular for home
snacking lunchbox and on the go
in 2013 we announced we are investing £20 million in a new production 
and packaging line for snack packs at our carlton site the new line will 
be capable of producing 300 million slices a year doubling our current 
capacity the investment is part of our broader plan to accelerate growth 
in our cake business the installation will take around a year involving 
a mixing station oven and sophisticated packing robotics in 2013 we 
added chocolate banoffee and caramel to the existing lemon and 
angel slice flavours 
for more information on consumers  
and brands see pages
1819 2294104 13 march 2014 923 am    proof 3
contents
this section contains the independent 
auditor’s report to shareholders the 
financial statements and related notes 
and also supplementary information for 
shareholders
audit opinion 8083
group accounts 8488
notes to the financial statements 89131
company financial statements 132
notes to the company financial statements 133135
shareholder information 136137
glossary 138
financial
statements 2294104 13 march 2014 923 am    proof 3
independent auditors’ report to the members  
of premier foods plc
report on the financial statements
our opinion  
in our opinion
•	 the financial statements defined below give a true and fair view of 
the state of the group’s and of the parent company’s affairs as at 
31 december 2013 and of the group’s profit and of the group’s and 
parent company’s cash flows for the year then ended
•	 the group financial statements have been properly prepared in 
accordance with international financial reporting standards ifrss 
as adopted by the european union
•	 the parent company financial statements have been properly 
prepared in accordance with united kingdom generally accepted 
accounting practice and
•	 the financial statements have been prepared in accordance with 
the requirements of the companies act 2006 and as regards the 
group financial statements article 4 of the ias regulation
this opinion is to be read in the context of what we say in the 
remainder of this report
emphasis of matter  going concern
in forming our opinion on the financial statements which is not 
modified we have considered the adequacy of the disclosure 
made in note 2 to the financial statements concerning the group’s 
and the company’s ability to continue as a going concern the 
matters explained in note 2 to the financial statements relating to the 
shareholder vote required for the fully underwritten rights issue due 
to take place on 8 april 2014 indicate the existence of a material 
uncertainty which may cast significant doubt about the group’s and 
the company’s ability to continue as a going concern the financial 
statements do not include the adjustments that would result if the 
group or company were unable to continue as a going concern
what we have audited
the group financial statements and parent company financial 
statements the “financial statements” which are prepared by premier 
foods plc comprise
•	 the consolidated company balance sheets as at 31 december 
2013
•	 the consolidated statement of profit or loss and statement of 
comprehensive income for the year then ended
•	 the consolidated statement of cash flows for the year then ended 
•	 the consolidated statement of changes in equity for the year then 
ended 
•	 the parent company reconciliation of movements in shareholders’ 
funds for the year then ended and
•	 the notes to the financial statements which include a summary of 
significant accounting policies and other explanatory information 
the financial reporting framework that has been applied in the 
preparation of the group financial statements comprises applicable law 
and ifrss as adopted by the european union the financial reporting 
framework that has been applied in the preparation of the parent 
company financial statements comprises applicable law and united 
kingdom accounting standards united kingdom generally accepted 
accounting practice
certain disclosures required by the financial reporting framework have 
been presented elsewhere in the annual report and accounts for the 
year ended 31 december 2013 the “annual report” rather than in the 
notes to the financial statements these are crossreferenced from the 
financial statements and are identified as audited
what an audit of financial statements involves 
we conducted our audit in accordance with international standards 
on auditing uk and ireland “isas uk  ireland” 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 parent company’s circumstances and have been consistently 
applied and adequately disclosed
•	 the reasonableness of significant accounting estimates made by the 
directors and
•	 the overall presentation of the financial statements 
in addition we read all the financial and nonfinancial information 
in the annual report to identify material inconsistencies with the 
audited financial statements and to identify any information that is 
apparently materially incorrect based on or materially inconsistent 
with the knowledge acquired by us in the course of performing the 
audit if we become aware of any apparent material misstatements or 
inconsistencies we consider the implications for our report
overview of our audit approach
materiality
we set certain thresholds for materiality these helped us to determine 
the nature timing and extent of our audit procedures and to evaluate 
the effect of misstatements both individually and on the financial 
statements as a whole 
based on our professional judgement we determined materiality for 
the group financial statements as a whole to be £445million in arriving 
at this value we had regard to ebitda which we consider to be the 
most relevant measure of the group’s recurring performance
we agreed with the audit committee that we would report to them 
misstatements identified during our audit above £220000 as well as 
misstatements below that amount that in our view warranted reporting 
for qualitative reasons
overview of the scope of our audit
the group comprises two divisions being grocery and discontinued 
operations the group financial statements are a consolidation of 25 
reporting units which together make up the grocery discontinued 
operations and the group’s centralised functions 
in establishing the overall approach to the group audit we determined 
the type of work that we needed to perform at the reporting units to 
enable us to conclude whether sufficient appropriate audit evidence 
had been obtained as a basis for our opinion on the group financial 
statements as a whole
accordingly of the group’s 25 reporting units we identified 5 that in 
our view required an audit of their complete financial information due 
to their size or risk characteristics specific audit procedures on certain 
balances and transactions were performed at the remaining operating 
units this together with additional procedures performed at the group 
level gave us the evidence we needed for our opinion on the group 
financial statements as a whole
premier foods plc  annual report and accounts 2013
80
financial statements 2294104 13 march 2014 923 am    proof 3
areas of particular audit focus
in preparing the financial statements the directors made a number of 
subjective judgements for example in respect of significant accounting 
estimates that involved making assumptions and considering future 
events that are inherently uncertain we primarily focused our work in 
these areas by assessing the directors’ judgements against available 
evidence forming our own judgements and evaluating the disclosures 
in the financial statements
in our audit we tested and examined information using sampling and 
other auditing techniques to the extent we considered necessary to
provide a reasonable basis for us to draw conclusions we obtained 
audit evidence through testing the effectiveness of controls substantive 
procedures or a combination of both 
we considered the following areas to be those that required particular 
focus in the current year this is not a complete list of all risks or areas 
of focus identified by our audit we discussed these areas of focus 
with the audit committee their report on those matters that they 
considered to be significant issues in relation to the financial statements 
is set out on page 61
area of focus how the scope of our audit addressed the area of focus
going concern 
this was considered to be an area 
of focus due to the capital structure 
of the group and its reliance on the 
refinancing to be completed after 
the financial statements are signed 
which is fully disclosed in note 2 to the 
financial statements 
 
the group’s refinancing included a rights issue due to take place on 8 april 2014 we evaluated the 
likelihood of the successful completion of the rights issue we also evaluated the likelihood of the rights 
issue raising sufficient funds to enable the group to continue in operation for at least a year from the 
date of this report
we tested the key judgements within the group’s future cashflow forecasts including power brand 
growth and transformation activities by developing an understanding of and challenging the directors’ 
growth estimates comparing historical growth estimates to past results to assess budgeting accuracy 
and assessing the directors’ contingency plans
we also considered forecast compliance with financial covenants and assessed the sensitivity of the 
director’s calculations to changes in key inputs in particular forecast underlying trading profit
our conclusion on going concern is below
carrying value of goodwill and 
parent company investment 
the group holds material goodwill 
relating to continuing operations and 
the parent company holds a material 
investment in subsidiary on its balance 
sheet
we focused on this area as the 
assessment of whether the goodwill 
in the group financial statements and 
the investment in the parent company 
financial statements involves complex 
and subjective judgements by the 
directors about the future results of the 
business the company investment of 
£4811 million was fully impaired by the 
directors in the year
 
 
in evaluating whether any impairment was necessary to the carrying value of the goodwill relating 
to continuing operations and whether the impairment of the parent company’s investment was 
warranted we obtained and tested the directors’ calculations including the value in use computations 
and discount rate and tested both the methodology and the assumptions applied we also tested the 
historical accuracy of forecasts and budgets 
we applied sensitivity analysis to the calculations to assess the impact of variations in the key 
assumptions including the forecast underlying trading profit both individually and in aggregate
sale of the bread business 
we focused on this area due to the 
impact on the group’s continuing 
operations see note 10 and the 
significant impairment recognised on 
disposal whose value was based on 
subjective judgements made by the 
directors specifically the valuation of 
the contingent deferred consideration 
from the sale of the bread business
 
we tested the fair value less costs to sell off the bread business by challenging the assumptions 
underpinning the directors’ evaluation of the deferred contingent consideration and agreeing the costs 
to sell to supporting documentation to check that they were appropriately recognised
we also considered the adequacy of the disclosures within the group financial statements
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independent auditors’ report to the members  
of premier foods plc
area of focus how the scope of our audit addressed the area of focus
carrying value of deferred tax assets 
the group holds significant deferred 
tax assets on the balance sheet
we focused on this area as it involves 
complex and subjective judgements by 
the directors about the future results of 
the business
 
we tested the directors’ assessment of the recoverability of both recognised and unrecognised 
deferred tax assets by evaluating the likelihood of achieving expected taxable profits against which 
such assets are to be utilised to do this we compared the expected taxable profits to board approved 
budgets and forecasts and evaluated the sensitivity of the judgement of whether the assets would be 
recoverable to the estimates of growth rates
the valuation of the sales rebates 
and discount accruals 
material sales rebates and discount 
accruals are held on the balance 
sheet which require the directors to 
estimate expected levels of rebates 
and discounts with reference to recent 
promotional activity and historical 
invoicing trends 
 
we tested the valuation of the sales rebates and discount accruals by challenging the directors’ 
judgements and comparing the value of the prior year accrual with actual discount invoicing received 
post yearend 
we also tested the sufficiency of the accrual by comparing the amount and ageing of disputed 
balances against historic recovery rates from the group’s customers
risk of management override of 
internal controls  
isas uk  ireland require we  
consider this
 
 
we assessed the overall control environment of the group including the arrangements for staff to 
“whistleblow” inappropriate actions and interviewed senior management and the group’s internal 
audit function
we examined the significant accounting estimates and judgements relevant to the financial statements 
for evidence of bias by the directors that may represent a risk of material misstatement due to fraud
this included testing manual journal entries and evaluating significant accounting estimates for 
example goodwill value in use computations for evidence based judgements
risk of fraud in revenue 
recognition 
isas uk  ireland presume there is a 
risk of fraud in revenue recognition
we focused on the risk that revenue 
may have been recognised for all 
revenue streams for transactions that 
had not occurred
 
 
we tested journal entries posted to revenue accounts to identify any unusual or irregular items which 
we agreed to supporting documentation to check that the revenue was recognised based on the 
date the goods are delivered and title passes we also tested the reconciliations between the revenue 
systems used by the group and its financial ledgers
going concern
under the listing rules we are required to review the directors’ 
statement set out on page 76 in relation to going concern we have 
nothing to report having performed our review
as noted in the directors’ statement the directors have concluded 
that it is appropriate to prepare the group’s and parent company’s 
financial statements using the going concern basis of accounting the 
going concern basis presumes that the group and parent company 
have adequate resources to remain in operation and that the directors 
intend them to do so for at least one year from the date the financial 
statements were signed 
as outlined in note 2 to the financial statements the group’s and 
the parent company’s ability to remain in operation is reliant on the 
refinancing to be completed after the financial statements are signed 
including the rights issue due to take place on 8 april 2014 as part 
of our audit we have concluded that the directors’ use of the going 
concern basis is appropriate although because the successful 
completion of the rights issue is a prerequisite for the group’s and the 
parent company’s ability to continue as a going concern a material 
uncertainty exists which may cast significant doubt about the ability
because not all future events or conditions can be predicted even if 
the rights issue is successfully completed these statements are not 
a guarantee as to the group’s and the parent company’s ability to 
continue as a going concern
premier foods plc  annual report and accounts 2013
82
financial statements 2294104 13 march 2014 923 am    proof 3
opinions on other matters prescribed by the 
companies act 2006
in our opinion
•	 the information given in the strategic report and the directors’ 
report for the financial year for which the financial statements are 
prepared is consistent with the financial statements
•	 the part of the directors’ remuneration report to be audited has 
been properly prepared in accordance with the companies act 
2006 and
•	 the information given in the corporate governance statement set 
out on pages 46 to 77 in the annual report with respect to internal 
control and risk management systems and about share capital 
structures is consistent with the financial statements
other matters on which we are required to report by 
exception
adequacy of accounting records and information and 
explanations received
under the companies act 2006 we are required to report to you if in 
our opinion
•	 we have not received all the information and explanations we 
require for our audit or
•	 adequate accounting records have not been kept by the parent 
company or returns adequate for our audit have not been received 
from branches not visited by us or
•	 the parent company financial statements and the part of the 
directors’ remuneration report to be audited are not in agreement 
with the accounting records and returns
we have no exceptions to report arising from this responsibility
directors’ remuneration
under the companies act 2006 we are required to report to you if in 
our opinion certain disclosures of directors’ remuneration specified by 
law have not been made and under the listing rules we are required 
to review certain elements of the report to shareholders by the board 
on directors’ remuneration we have no exceptions to report arising 
from these responsibilities
corporate governance statement
under the companies act 2006 we are required to report to you if in 
our opinion a corporate governance statement has not been prepared 
by the parent company  we have no exceptions to report arising from 
these responsibilities
under the listing rules we are required to review the part of the 
corporate governance statement relating to the company’s 
compliance with nine provisions of the uk corporate governance 
code “the code” we have nothing to report having performed our 
review
on page 77 of the annual report as required by the code provision 
c11 the directors state that they consider the annual report taken 
as a whole to be fair balanced and understandable and provides 
the information necessary for members to assess the group’s 
performance business model and strategy on page 61 as required 
by c38 of the code the audit committee has set out the significant 
issues that it considered in relation to the financial statements and how 
they were addressed under isas uk  ireland we are required to 
report to you if in our opinion
•	 the statement given by the directors is materially inconsistent with 
our knowledge of the group acquired in the course of performing 
our audit or
•	 the section of the annual report describing the work of the audit 
committee does not appropriately address matters communicated 
by us to the audit committee
we have no exceptions to report arising from this responsibility
other information in the annual report
under isas uk  ireland we are required to report to you if in our 
opinion information in the annual report is
•	 materially inconsistent with the information in the audited financial 
statements or
•	 apparently materially incorrect based on or materially inconsistent 
with our knowledge of the group and parent company acquired in 
the course of performing our audit or
•	 is otherwise misleading
we have no exceptions to report arising from this responsibility
responsibilities for the financial statements and the 
audit
our responsibilities and those of the directors 
as explained more fully in the directors’ responsibilities statement set 
out pages 76 to 77 the directors are responsible for the preparation 
of the group and parent company financial statements and for being 
satisfied that they give a true and fair view 
our responsibility is to audit and express an opinion on the group and 
parent company financial statements in accordance with applicable 
law and isas uk  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
pauline campbell  
senior statutory auditor 
for and on behalf of pricewaterhousecoopers llp 
chartered accountants and statutory auditors 
london 
4 march 2014
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consolidated statement of profit or loss
note
year ended
31 dec 2013
£m
year ended
31 dec 2012
restated
1  
£m
continuing operations
revenue 4 8562  10709 
cost of sales 5561 7216
gross profit 3001  3493 
selling marketing and distribution costs 1119 1416
administrative costs 1335 1235
net other operating expense 21 05
operating profit 5 526  837 
before lossprofit on disposal of operations 550  506 
lossprofit on disposal of operations 11 24 331 
finance cost 7 622 861
finance income 7 24  41 
net movement on fair valuation of interest rate financial instruments 7 116  97
profitloss before taxation from continuing operations  44  80
taxation chargecredit 8 511  180 
lossprofit after taxation from continuing operations 467  100 
loss from discontinued operations 10 1992 279
loss for the year attributable to owners of the parent 2459 179
basic and diluted lossearnings per share
from continuing operations pence 9 195 42
from discontinued operations pence 9 831 116
from loss for the year 1026 74
adjusted earningsloss per share
2
from continuing operations pence 9 259 282
from discontinued operations pence 9 18 69
from adjusted profit for the year 277 213
1 comparatives have been restated to reflect the reclassification of the bread business as a discontinued operation and the adoption of ias 19 revised
2 adjusted earningsloss per share is defined as trading profit less net regular interest payable less a notional tax charge at 2325 2012 245 divided by the weighted 
average number of ordinary shares of the company
the notes on pages 89 to 131 form an integral part of the consolidated financial statements
premier foods plc  annual report and accounts 2013
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financial statements 2294104 13 march 2014 923 am    proof 3
consolidated statement of comprehensive income
note
year ended
31 dec 2013
£m
year ended
31 dec 2012
restated
1  
£m
loss for the year 2459 179
other comprehensive lossesincome
items that will never be reclassified to profit or loss
remeasurements of defined benefit liability 23 1527 1914
deferred tax credit 8 84 372
items that are or may be reclassified to profit or loss
exchange differences on translation 03 —
other comprehensive losses net of tax 1446 1542
total comprehensive losses attributable to owners of the parent 3905 1721
1 comparatives have been restated to reflect the reclassification of the bread business as a discontinued operation and the adoption of ias 19 revised
the notes on pages 89 to 131 form an integral part of the consolidated financial statements
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note
as at
31 dec 2013
£m
as at
31 dec 2012
£m
assets
 noncurrent assets
 property plant and equipment 13 1963  3742 
 goodwill 14 7139  7139 
 other intangible assets 15 5755  6770 
 deferred tax assets 8 727  719 
 15584  18370 
 current assets
 assets held for sale 12 268 810 
 inventories 17 689  1162 
 trade and other receivables 18 2483  2986 
 financial assets — derivative financial instruments 21 05  10 
 cash and cash equivalents 26 1570  532 
 5015  5500 
total assets 20599  23870 
liabilities
 current liabilities 
 liabilities held for sale 12 14 34
 trade and other payables 19 3367 4124
 financial liabilities 
 — shortterm borrowings 20 1691 2298
 — derivative financial instruments 21 95 196
 provisions for liabilities and charges 22 150 256
 current income tax liabilities 07 08
 5324 6916
 noncurrent liabilities
 financial liabilities — longterm borrowings 20 8187 7741
 retirement benefit obligations 23 6033 4668
 provisions for liabilities and charges 22 572 483
 other liabilities 24 304 13
 15096 12905
total liabilities 20420 19821
net assets 179  4049 
equity
 capital and reserves
 share capital 25 240  240 
 share premium 25 11247  11247 
 merger reserve 25 4047  5875 
 other reserves 25 93  93
 profit and loss reserve 25 15263 13221
capital and reserves attributable to owners of the parent 178  4048 
 noncontrolling interest 01  01 
total equity 179  4049 
the notes on pages 89 to 131 form an integral part of the consolidated financial statements
the financial statements on pages 84 to 131 were approved by the board of directors on 4 march 2014 and signed on its behalf by
gavin darby 
chief executive officer
alastair murray 
chief financial officer
consolidated balance sheet
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consolidated statement of cash flows
note
year ended
31 dec 2013
£m
year ended
31 dec 2012
£m
cash generated from operating activities 26 1234  564 
interest paid 385 568
interest received 26  43 
taxation received — 03 
cash generated from operating activities 875  42 
sale of subsidiariesbusinesses  908  3122 
purchase of property plant and equipment 326 494
purchase of intangible assets 78 172
sale of property plant and equipment 148  02 
cash generated from investing activities 652  2458 
repayment of borrowings 933 3122
proceeds from borrowings 910  15 
proceeds from securitisation programme 243  724 
financing fees and other costs of finance 275 240
cash used in financing activities 55 2623
net inflowoutflow of cash and cash equivalents 1472  123
cash cash equivalents and bank overdrafts at beginning of year 97  221 
effect of movement in foreign exchange 01 01
cash cash equivalents and bank overdrafts at end of year 26 1570  97 
the notes on pages 89 to 131 form an integral part of the consolidated financial statements
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 note
share
capital
£m
share
premium
£m
merger
reserve
£m
other
reserves
£m
profit
and loss
reserve 
£m
non
controlling
interest
£m
total
equity
£m
at 1 january 2013 240 11247 5875 93 13221 01 4049
loss for the year —  — — — 2459 — 2459
remeasurements of defined 
benefit liability 23 —  — — — 1527 — 1527
deferred tax credit 8 —  — — — 84 — 84
exchange differences on 
translation —  — — — 03 — 03
other comprehensive losses —  — — — 1446 — 1446
total comprehensive losses —  — — — 3905 — 3905
sharebased payments —  — — — 35 — 35
realisation of merger reserve — — 1828 — 1828 — —
at 31 december 2013 240 11247 4047 93 15263 01 179
at 1 january 2012 240 11247 6060 93 11728 01 5727
profit for the year — — — — 179 — 179
remeasurements of defined 
benefit liability 23 — — — — 1914 — 1914
deferred tax charge 8 — — — — 372 — 372
other comprehensive losses — — — — 1542 — 1542
total comprehensive losses — — — — 1721 — 1721
sharebased payments — — — — 43 — 43
realisation of merger reserve — — 185 — 185 — —
at 31 december 2012 240 11247 5875 93 13221 01 4049
1 comparatives have been restated to reflect the reclassification of the bread business as a discontinued operation and the adoption of ias 19 revised
the notes on pages 89 to 131 form an integral part of the consolidated financial statements
consolidated statement of changes in equity
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1 general information
premier foods plc the “company” is a public limited company incorporated and domiciled in england and wales registered number 
5160050 with its registered office at premier house centrium business park griffiths way st albans hertfordshire al1 2re the principal 
activity of the company and its subsidiaries the “group” is the manufacture and distribution of branded and own label food and beverage 
products as described in note 16 further information about the group’s activities can be found in the group at a glance section of this annual 
report on pages 6 to 7 copies of the annual report and accounts are available from this address
these group consolidated financial statements were authorised for issue by the board of directors on 4 march 2014
2 accounting policies
the principal accounting policies applied in the preparation of these consolidated financial statements are set out below these policies have 
been consistently applied to all the years presented unless otherwise stated
21 basis of preparation 
the consolidated financial statements of premier foods plc have been prepared in accordance with international financial reporting 
standards “ifrs” as adopted by the european union eu “adopted ifrs” in response to ias regulation ec16062002 related 
interpretations and the companies act 2006 applicable to companies reporting under ifrs and on the historical cost basis with the 
exception of derivative financial instruments which are incorporated using fair value amounts are presented to the nearest £01m
the preparation of financial statements in conformity with adopted ifrs requires the use of certain critical accounting estimates it also 
requires management to exercise its judgement in the process of applying the group’s accounting policies the areas involving a higher 
degree of judgement or complexity or areas where assumptions and estimates are significant to the consolidated financial statements are 
disclosed in note 3
the following accounting standards and interpretations issued by the international accounting standards board “iasb” or ifric as 
endorsed by the eu are effective for the first time in the current financial year and have been adopted by the group
international financial reporting standards
annual improvements 2011
amendments to ifrs 7 financial instruments disclosures — offsetting financial assets and financial liabilities
ifrs 13 fair value measurement
amendments to ias 1 presentation of items of other comprehensive income
ias 12 income taxes
ias 19 revised employee benefits
there has been no significant impact on the group’s results net assets cash flows or disclosures on adoption of new or revised standards in 
the period other than on adoption of ias 19 revised as set out in note 23
new standards and interpretations not applied
the following amendments to published standards effective for periods on or after 1 january 2014 have been endorsed by the eu
international financial reporting standards
ifrs 10 consolidated financial statements
ifrs 11 joint arrangements
ifrs 12 disclosure of interests in other entities
ias 27 revised separate financial statements
amendments to ias 32 financial instruments presentation — offsetting financial assets and financial liabilities
the following standards and amendments to published standards effective for periods on or after 1 january 2014 have not been endorsed 
by the eu
international financial reporting standards
ifrs 9 financial instruments
amendments to ifrs 10 ifrs 12  
and ias 27
investment entities
amendments to ias 36 recoverable amount disclosures for nonfinancial assets
amendments to ias 39 novation of derivatives and continuation of hedge accounting
ifric 21 levies
it is not expected that any of the new standards and interpretations not applied will have a material impact on the results net assets or cash 
flows of the group 
notes to the financial statements
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notes to the financial statements
2 accounting policies continued
basis for preparation of financial statements on a going concern basis
on 4 march 2014 the group announced its proposal to diversify its sources of finance to provide a solid foundation on which it can drive 
future growth through its categorybased strategy and leveraging its strengths this transformational capital restructure includes a fully 
underwritten equity offering of approximately £350m gross of fees through a placing and rights issue the issue of £475m senior secured 
loan notes and a new £300m revolving credit facility with a smaller bank syndicate significantly the group has also reached a pensions 
framework agreement with the respective pension scheme trustees following the triennial actuarial valuation which provides the platform for 
this new capital structure to be put in place in order for the capital restructuring to proceed and for the funds to be available shareholders 
will be required to vote at the general meeting in order to amongst other things authorise the board to allot shares in the company under the 
placing and the rights issue
the group’s 2013 financial statements have been prepared on a going concern basis which assumes that the group will continue to be able 
to meet its liabilities as they fall due for the foreseeable future
due to the interconditionality of the above elements of the refinancing if the shareholders do not vote in favour of the resolutions and the 
placing and the rights issue do not occur no funds will be available to be drawn by or released to the group under the new revolving credit 
facility or the new bonds and the revised schedules of pension contributions modified funding arrangements and associated matters in 
relation to the relevant pension schemes pursuant to the new framework agreement will not become effective if this were to be the case 
although the group’s current facilities do not expire within the next twelve months the group expects that it would be unable to comply with 
certain of its financial covenants under the current facilities on or after 31 december 2014 in this scenario the group would need to obtain 
certain consents or waivers from the group’s lenders in respect of such financial covenants under the current facilities if the group were 
unable to maintain compliance with such financial covenants or were unable to obtain such consents or waivers this would lead to a default 
under the group’s existing financing arrangements unless the group were able to renegotiate or refinance the current facilities while the 
board would seek to renegotiate or refinance the current facilities in such circumstances there can be no certainty that the group would be 
able to do so either on acceptable terms or at all in the event that the group were unable to renegotiate or refinance the current facilities in 
these circumstances the group’s lenders would be able to demand repayment of all borrowings
the board has concluded that the resolutions which are required for the placing and the rights issue to proceed such that the equity 
proceeds are received in line with the timetable set out in the associated prospectus are likely to be passed the board has taken into 
consideration the undertakings received from shareholders that they will vote in favour of the resolution historical voting trends the 
underwritten element of the placing and the rights issue and the backstop banks’ commitment to purchase the new bonds
nevertheless the board acknowledges that there is some theoretical uncertainty as to whether sufficient shareholders will vote in favour 
of the resolutions to enable the capital restructuring to proceed the board believes that this uncertainty is extremely remote but the 
consequence of not succeeding may be material the directors believe that adopting the going concern basis in preparing the consolidated 
financial statements is appropriate nevertheless the directors are prudently making full disclosure as required by accounting standards to 
indicate the existence of a material uncertainty which may cast significant doubt about the group’s ability to continue as a going concern the 
financial statements do not include the adjustments that would result if the group were unable to continue as a going concern
the auditor’s report of the financial statements contains an unmodified audit opinion however it includes an emphasis of matter in respect of 
going concern
22 basis of consolidation
the consolidated financial statements include the financial statements of premier foods plc and entities controlled by the company its 
subsidiaries up to 31 december each year control is achieved where the company is exposed to or has rights to variable returns from 
involvement with an investee and has the ability to affect those returns through its power over the investee
the results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of profit or loss from the 
effective date of acquisition or up to the effective date of disposal as appropriate in addition comparatives are also restated to reclassify 
material disposed businesses into discontinued operations where appropriate
on the acquisition of a business fair values are attributed to the identifiable assets liabilities and contingent liabilities acquired goodwill arises 
when the fair value of the consideration for a business exceeds the fair value of the net assets acquired goodwill arising on acquisitions is 
capitalised and subject to impairment review both annually and when there are indications that the carrying value may not be recoverable 
accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group
all intragroup transactions balances income and expenses are eliminated on consolidation
23 revenue
revenue comprises the invoiced value for the sale of goods net of sales rebates discounts value added tax and other taxes directly 
attributable to revenue and after eliminating sales within the group revenue is recognised when the outcome of a transaction can be 
measured reliably and when it is probable that the economic benefits associated with the transaction will flow to the group revenue is 
recognised on the following basis
i sale of goods
sales of goods are recognised as revenue on transfer of the risks and rewards of ownership which typically coincides with the time when the 
merchandise is delivered to customers and title passes
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2 accounting policies continued
ii sales rebates and discounts
sales rebates and discount reserves are established at the time of sale based on management’s best estimate of the amounts necessary to 
meet claims by the group’s customers in respect of these rebates and discounts these estimates are based on experience and history a 
provision is made at the time of sale and released if unutilised after assessment that the likelihood of such a claim being made has become 
remote
24 segmental reporting
operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker “codm” 
the codm is responsible for allocating resources and assessing performance of the operating segments see note 4 for further details 
25 sharebased payments
the company operates a number of equitysettled and cashsettled sharebased compensation plans the fair value of the employee 
services received in exchange for the grant of the options is recognised as an expense over the vesting period the total amount to be 
expensed over the vesting period is determined by reference to the fair value of the options granted excluding the impact of any nonmarket 
vesting conditions for example profitability and sales growth targets nonmarket vesting conditions are included in assumptions about the 
number of options that are expected to vest at each balance sheet date the group revises its estimates of the number of options that are 
expected to vest and recognises the impact of the revision to original estimates if any in the statement of profit or loss with a corresponding 
adjustment to equity
26 foreign currency translation
transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction monetary assets and liabilities 
denominated in foreign currencies are translated into sterling the group’s presentation currency at rates of exchange ruling at the end of the 
financial year 
the results of overseas subsidiaries with functional currencies other than in sterling are translated into sterling at the average rate of exchange 
ruling in the year the balance sheets of overseas subsidiaries are translated into sterling at the closing rate exchange differences arising from 
retranslation at year end exchange rates of the net investment in foreign subsidiaries are recorded as a separate component of equity in other 
reserves when a foreign operation is sold exchange differences previously taken to equity are recognised in the statement of profit or loss as 
part of the gain or loss on sale 
goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and 
translated at the closing rate
all other exchange gains or losses are recorded in the statement of profit or loss
27 property plant and equipment “ppe”
property plant and equipment is stated at historical cost less accumulated depreciation and impairment
ppe is initially recorded at cost cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its 
working condition for its intended use subsequent expenditure is added to the carrying value of the asset when it is probable that incremental 
future economic benefits will transfer to the group all other subsequent expenditure is expensed in the period it is incurred
differences between the cost of each item of ppe and its residual value are written off over the estimated useful life of the asset using the 
straightline method reviews of the estimated remaining useful lives and residual values of individual productive assets are performed 
annually taking account of commercial and technological obsolescence as well as normal wear and tear freehold land is not depreciated 
the useful economic lives of owned assets range from 20 to 50 years for buildings and 3 to 35 years for vehicles plant and equipment
all items of ppe are reviewed for impairment when there are indications that the carrying value may not be fully recoverable 
assets under construction represent the amount of expenditure recognised in the carrying amount of an item of property plant and equipment 
in the course of its construction directly attributable costs that are capitalised as part of the ppe include the employee costs and an 
appropriate portion of relevant overheads when the item of property plant and equipment is brought into use it is depreciated 
28 business combinations and goodwill 
business combinations are accounted for using the acquisition method the consideration for each acquisition is measured at the aggregate 
of the acquisition date fair values of assets given liabilities incurred or assumed and equity instruments issued by the group in exchange for 
control of the acquiree identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured 
at their fair values at the acquisition date irrespective of the extent of any noncontrolling interest acquisition related costs are recognised in 
profit or loss as incurred
for the purpose of impairment testing goodwill acquired in a business combination is allocated to each of the cash generating units “cgus” 
or groups of cgus that is expected to benefit from the synergies of the combination each unit or group of units to which the goodwill is 
allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes goodwill is 
monitored at the operating segment level
the group has applied ifrs 3 revised ‘business combinations’ to business combinations after 1 july 2009 the accounting for business 
combinations transacted prior to this date have not been restated 
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notes to the financial statements
2 accounting policies continued
29 intangible assets
in addition to goodwill the group recognises the following intangible assets 
acquired intangible assets
acquired trademarks brands customer relationships and licences that are controlled through custody or legal rights and that could be sold 
separately from the rest of the business are capitalised where fair value can be reliably measured all of these assets are considered to have 
finite lives and are amortised on a straightline basis over their estimated useful economic lives that range from 7 to 40 years
research and development
research expenditure is charged to the statement of profit or loss in the year in which it is incurred
costs incurred in developing a product typically its recipe or packaging are charged to income in the year in which they are incurred until the 
product or process is technically and commercially feasible in which case they are capitalised and amortised over the useful economic lives in 
accordance with ias 38 ‘intangible assets’
software
development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the 
group are recognised as intangible assets when the project or process is technically and commercially feasible directly attributable costs 
that are capitalised as part of the software product include the software development employee costs and an appropriate portion of relevant 
overheads
software development costs are amortised over their estimated useful lives on a straightline basis over a range of 3 to 10 years 
the useful economic lives of intangible assets are determined based on a review of a combination of factors including the asset ownership 
rights acquired and the nature of the overall product life cycle reviews of the estimated remaining useful lives and residual values of individual 
intangible assets are performed annually
210 impairment 
the carrying value of nonfinancial assets other than goodwill and inventories are reviewed at least annually to determine whether there is an 
indication of impairment assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances 
indicate that the carrying amount may not be recoverable nonfinancial assets other than goodwill that have suffered an impairment loss are 
reviewed for possible reversal of the impairment at each reporting date
where an indication of impairment exists the recoverable amount is estimated based on the greater of its value in use and its fair value less 
costs to sell in assessing value in use the estimated future cash flows adjusted for the risks specific to each asset are discounted to their 
present value using a discount rate that reflects current market assessment of the time value of money and the general risks affecting the food 
manufacturing industry
impairment losses are recognised in the statement of profit or loss in the year in which they occur
for the purpose of impairment testing assets are grouped together into the smallest group of assets that generates cash inflows from 
continuing use that are largely independent of the cash flows of other assets 
211 financing cost and income
i finance cost
borrowing costs are accounted for on an accruals basis in the statement of profit or loss using the effective interest method
ii finance income
finance income is recognised on a time proportion basis taking into account the principal amounts outstanding and the interest rates 
applicable taking into consideration the interest element of derivatives
212 leases
assets held under finance leases where substantially all the risks and rewards of ownership are transferred to the group are capitalised 
and included in property plant and equipment at the lower of the present value of future minimum lease payments or fair value each asset 
is depreciated over the shorter of the lease term or its estimated useful life on a straightline basis obligations relating to finance leases net 
of finance charges in respect of future periods are included under borrowings the interest element of the rental obligation is allocated to 
accounting periods during the lease term to reflect a constant rate of interest on the remaining balance of the obligation for each accounting 
period 
leases in which a significant portion of risks and rewards of ownership are retained by the lessor are classified as operating leases rental 
costs under operating leases net of any incentives received from the lessor are charged to the statement of profit or loss on a straightline 
basis over the lease period
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2 accounting policies continued
213 inventories
inventory is valued at the lower of cost and net realisable value where appropriate cost includes production and other attributable overhead 
expenses as described in ias 2 ‘inventories’ cost is calculated on a firstin firstout basis by reference to the invoiced value of supplies 
and attributable costs of bringing the inventory to its present location and condition net realisable value is the estimated selling price in the 
ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale
all inventories are reduced to net realisable value where the estimated selling price is lower than cost
provision is made for slow moving obsolete and defective inventory where appropriate
214 taxation
income tax on the profit or loss for the year comprises current and deferred tax
current tax
income tax is recognised in the statement of profit or loss except to the extent that it relates to items recognised directly in other 
comprehensive income “oci” in which case it is also recognised in oci current tax is the expected tax payable on the taxable income  
for the year using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of  
previous years
deferred tax
deferred taxation is accounted for in respect of temporary differences between the carrying amount of assets and liabilities in the financial 
statements and the corresponding tax bases used in computation of taxable profit deferred taxation is not provided on the initial recognition 
of an asset or liability in a transaction other than in a business combination if at the time of the transaction there is no effect on either 
accounting or taxable profit or loss
deferred tax is measured at the tax rates that are expected to apply in the periods in which the asset or liability is settled based on tax rates 
and tax laws that have been enacted or substantively enacted at the balance sheet date it is recognised in the statement of profit or loss 
except when it relates to items credited or charged directly to oci in which case the deferred tax is also recognised in oci
deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary 
difference can be utilised their carrying amount is reviewed at each balance sheet date on the same basis
deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and when the group 
intends to settle its current tax assets and liabilities on a net basis
215 employee benefits
group companies provide a number of longterm employee benefit arrangements primarily through pension schemes the schemes are 
generally funded through payments to insurance companies or trusteeadministered funds determined by periodic independent actuarial 
calculations the group has both defined benefit and defined contribution plans 
defined benefit plans
a defined benefit plan is a pension plan that defines the amount of pension benefit that an employee will receive on retirement usually 
dependent on factors such as age years of service and compensation 
the liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation 
at the balance sheet date less the fair value of plan assets together with adjustments for remeasurements and past service costs defined 
benefit obligations are calculated using assumptions determined by the group with the assistance of independent actuaries using the 
projected unit credit method the present value of the defined benefit obligation is determined by discounting the estimated future cash 
outflows using yields of highquality corporate bonds that are denominated in the currency in which the benefits will be paid and that have 
terms to maturity approximating to the terms of the related pension liability
remeasurements arising from experience adjustments and changes in actuarial assumptions are charged or credited to the statement of 
comprehensive income in the year in which they arise
current service costs past service costs administration costs and the net interest on the net defined benefit liability are recognised 
immediately in the statement of profit or loss
curtailments are recognised as a past service cost when the group is demonstrably committed to make a significant reduction in the number 
of employees covered by a plan or amends the terms of a defined benefit plan so that a significant element of future service by current 
employees no longer qualifies or qualify for amended benefits
defined contribution plans
a defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity which then invests 
the contributions to buy annuities for the pension liabilities as they become due based on the value of the fund the group has no legal or 
constructive obligations to pay further contributions
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notes to the financial statements
2 accounting policies continued
obligations for contributions to defined contribution pension plans are recognised as an expense in the statement of profit or loss as they fall 
due differences between contributions payable in the year and contributions actually paid are recognised as either accruals or prepayments 
in the balance sheet
216 provisions
provisions for example restructuring or property exit costs are recognised when the group has present legal or constructive obligations 
as a result of past events it is probable that an outflow of resources will be required to settle the obligations and a reliable estimate of the 
amount can be made in the case of where the group expects a provision to be reimbursed for example under an insurance contract 
the reimbursement is recognised as a separate asset when the reimbursement is virtually certain where material the group discounts its 
provisions using a pretax rate that reflects current market assessments of the time value of money and the risks specific to the liability where 
discounting is used the increase in the provision due to the passage of time is recognised as a finance expense
217 contingent liabilities and contingent assets
a contingent liability is a possible obligation that arises from past events and the existence of which will only be confirmed by the occurrence 
or nonoccurrence of one or more uncertain future events not wholly within the control of the group or the amount of obligation cannot be 
measured reliably a contingent liability is not recognised but is disclosed in the notes to the financial statements when an outflow becomes 
probable it is recognised as a provision 
a contingent asset is a possible asset that arises from past events and the existence of which will be confirmed only by the occurrence or 
nonoccurrence of one or more uncertain events not wholly within the control of the group contingent assets are not recognised but are 
disclosed in the notes to the financial statements when an inflow of economic benefits is probable when inflow is virtually certain an asset is 
recognised
218 financial instruments
financial assets and financial liabilities are recognised on the group’s balance sheet when the group becomes a party to the contractual 
provisions of the instrument
trade and other receivables
trade and other receivables are initially measured at fair value and subsequently measured at amortised cost less any provision for 
impairment a provision is made for impairment when there is objective evidence that the group will not be able to collect all amounts due 
according to the terms of the receivables trade and other receivables are discounted when the time value of money is considered material 
the rights and obligations relating to those trade receivables that have been sold to third parties are derecognised from the balance sheet 
where the risks and rewards of ownership are considered to have transferred cash received from third parties in exchange for the transfer of 
ownership is recorded within cash and cash equivalents with the cost of financing prior to settlement by the customer recorded as interest on 
an accruals basis 
cash and cash equivalents
cash and cash equivalents with original maturities at inception of less than 90 days comprise cash in hand and demand deposits and other 
shortterm highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes 
in value
for the purpose of the statement of cash flows cash and cash equivalents comprise cash at bank cash in hand shortterm deposits with an 
original maturity of three months or less held for the purpose of meeting shortterm cash commitments and bank overdrafts
financial liabilities and equity
financial liabilities and equity instruments issued by the group are classified according to the substance of the contractual arrangements 
entered into and the definitions of a financial liability and an equity instrument an equity instrument is any contract that evidences a residual 
interest in the assets of the group after deducting all of its liabilities the accounting policies adopted for specific financial liabilities and equity 
instruments are set out below
bank borrowings
interestbearing bank loans and overdrafts are measured initially at fair value and subsequently at amortised cost using the effective interest rate 
method any difference between the proceeds net of transaction costs and inclusive of debt issuance costs and the settlement or redemption of 
borrowings is recognised over the term of the borrowings in accordance with the group’s accounting policy for borrowing costs
trade and other payables 
trade and other payables are initially measured at fair value and subsequently measured at amortised cost trade payables and other liabilities 
are discounted when the time value of money is considered material
equity instruments
equity instruments issued by the company are recorded at the proceeds received net of directly attributable issue costs
premier foods plc  annual report and accounts 2013
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financial statements 2294104 13 march 2014 923 am    proof 3
2 accounting policies continued
derivative financial instruments 
derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risk and 
characteristics are not closely related to those of the host contracts and the host contracts are not carried at fair value with unrealised gains 
or losses reported in the statement of profit or loss derivatives are initially recognised at fair value on the date a derivative contract is entered 
into and are subsequently remeasured at their fair value movements in fair value of foreign exchange derivatives are recognised within other 
operating income and expense and those relating to interest rate swaps are recorded within the net movement on fair valuation of interest rate 
financial instruments
other items at fair value through profit or loss
other items at fair value through profit or loss are initially recognised at fair value on the date the contract is entered into and are subsequently 
remeasured at their fair value movements in fair value are recorded within the net movement on fair valuation of interest rate financial 
instruments see notes 7 and 21 for further details
219 noncurrent assets held for sale
noncurrent assets and associated liabilities that are expected to be recovered primarily through sale rather than continuing use are classified 
as held for sale immediately before classification as held for sale the assets and associated liabilities are remeasured in accordance with 
the group’s accounting policies thereafter the assets are measured at the lower of their carrying amount and fair value less costs to sell 
impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in profit or loss 
gains are not recognised in excess of any cumulative impairment loss
220 deferred income
deferred income is recognised and released over the period to which the relevant agreement relates
3 critical accounting policies estimates and judgements
the following are areas of particular significance to the group’s financial statements and include the use of estimates and the application of 
judgement which is fundamental to the compilation of a set of financial statements
31 employee benefits
the present value of the group’s defined benefit pension obligations depends on a number of actuarial assumptions the primary 
assumptions used include the discount rate applicable to scheme liabilities the longterm rate of inflation and estimates of the mortality 
applicable to scheme members
at each reporting date and on a continuous basis the group reviews the macroeconomic company and scheme specific factors 
influencing each of these assumptions using professional advice in order to record the group’s ongoing commitment and obligation to 
defined benefit schemes in accordance with ias 19 revised key assumptions used are mortality rates discount rates and inflation set with 
reference to bond yields each of the underlying assumptions is set out in more detail in note 23 
32 goodwill and other intangible assets
impairment reviews in respect of goodwill are performed annually unless an event indicates that an impairment review is necessary 
impairment reviews in respect of intangible assets are performed when an event indicates that an impairment review is necessary examples 
of such triggering events include a significant planned restructuring a major change in market conditions or technology expectations of 
future operating losses or a significant reduction in cash flows the recoverable amounts of cgu’s are determined based on the higher of net 
realisable value and value in use calculations these calculations require the use of estimates
the group has considered the impact of the assumptions used on the calculations and has conducted sensitivity analysis on the impairment 
tests of the cgu’s carrying values see note 14 for further details
acquired trademarks brands and customer relationships are considered to have finite lives that range from 7 to 40 years the determination 
of the useful lives takes into account certain quantitative factors such as sales expectations and growth prospects and also many qualitative 
factors such as history and heritage and market positioning hence the determination of useful lives are subject to estimates and judgement 
for further details see note 15
33 advertising and promotion costs
trade spend and promotional activity is dependent on market conditions and negotiations with customers trade spend is charged to the 
statement of profit or loss according to the substance of the agreements with customers and the terms of any contractual relationship 
promotional support is generally charged to the statement of profit or loss at the time of the relevant promotion these costs are accrued 
on best estimates the actual costs may not be known until subsequent years when negotiations with customers are concluded such 
adjustments are recognised in the year when the liability becomes probable
expenditure on advertising is charged to the statement of profit or loss when incurred except in the case of airtime costs when a particular 
campaign is used more than once in this case they are charged in line with the airtime profile
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notes to the financial statements
4 segmental analysis
ifrs 8 requires operating segments to be determined based on the group’s internal reporting to the codm the codm has been determined 
to be the chief executive officer and chief financial officer as they are primarily responsible for the allocation of resources to segments and 
the assessment of performance of the segments 
the codm uses divisional contribution as the key measure of the segments’ results it is defined as gross profit after marketing and 
distribution costs and is a consistent measure within the group and reflects the segments’ underlying trading performance for the period 
under evaluation the reporting of this measure at the monthly business review meetings which are organised according to product types 
has been used to identify and determine the group’s operating segments
the group uses trading profit to review overall group profitability trading profit is defined as operating profit before refinancing costs 
restructuring costs profits and losses associated with divestment activity amortisation and impairment of intangible assets the revaluation 
of foreign exchange and other derivative contracts under ias 39 and pension administration costs and net interest on the net defined benefit 
liability
the group’s operating segments are “grocery” and “discontinued operations” the grocery segment which has been redefined to include 
all continuing operations sells both sweet and savoury ambient food products the discontinued operations segment primarily sells bread 
morning goods and flour products during the year the group realigned how it reported divisional results to the codm in line with updated 
internal reporting lines 2012 comparatives have been restated to reflect this change in 2013 the group’s operating segments have been 
monitored below divisional contribution for strategic purposes
during 2012 the group completed the disposal of the four irish brands chivers gateaux mcdonnells and the erin licence the elephant 
atta ethnic flour business the vinegar and sour pickles business and the sweet spreads and jellies business and during 2013 the group 
completed the disposal of the sweet pickles and table sauces business the results of these businesses have not been reported separately 
as they were fully integrated within the grocery and bread segments in 2012
on 27 january 2014 the group announced the conditional sale of its majority share in the bread business the assets and associated 
liabilities to be sold with the transaction are held for sale in the financial statements as a result of the transaction the bread business has 
been classified as a discontinued operation as it was a separate major component of the group 2012 comparatives have been restated to 
reflect this change
the segment results for the year ended 31 december 2013 and for the year ended 31 december 2012 and the reconciliation of the segment 
measures to the respective statutory items included in the consolidated financial statements are as follows
year ended 31 dec 2013
grocery
£m
discontinued 
operations
£m
total 
group
£m
revenue
external 8562  6546  15108 
intersegment — 270  270 
result
divisional contribution 2029  278  2307 
total sga costs 634 221 855
trading profit 1395  57  1452 
amortisation of intangible assets 438 21 459
fair value movements on foreign exchange and other derivative contracts 19 — 19
restructuring costs associated with divestment activity 73 119 192
refinancing costs 02 — 02
net interest on pensions and administrative expenses 313 — 313
operating profitloss before impairment and loss on disposal of operations 550  83 467 
impairment — 2344 2344
loss on disposal of operations 24 —  24
operating profitloss 526  2427 1901
finance cost 622 — 622
finance income 24 — 24 
net movement on fair valuation of interest rate financial instruments 116 — 116 
profitloss before taxation 44  2427 2383
depreciation 173 156 329
premier foods plc  annual report and accounts 2013
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financial statements 2294104 13 march 2014 923 am    proof 3
4 segmental analysis continued
year ended 31 dec 2012 restated
1
grocery
£m
discontinued 
operations
£m
total
£m
revenue
external 10709  6853  17562 
intersegment 05  212  217 
result
divisional contribution 2278  263  2541 
total sga costs 687 482 1169
trading profitloss 1591  219 1372 
amortisation of intangible assets 504 29 533
fair value movements on foreign exchange and other derivative contracts 20 — 20 
restructuring costs associated with divestment activity 313 148 461
refinancing costs 11 — 11
net interest on pensions and administrative expenses 277 — 277
operating profitloss before impairment and profit on disposal of operations 506  396 110 
impairment — 362 362
profit on disposal of operations 331  306  637 
operating profitloss 837  452 385 
finance cost 861 02 863
finance income 41 — 41 
net movement on fair valuation of interest rate financial instruments 97 — 97
loss before taxation 80 454 534
depreciation 234 162 396
1 comparatives have been restated to reflect the reclassification of the bread business as a discontinued operation and the adoption of ias 19 revised
further details of the impairment to discontinued operations are available in note 14 of the group’s consolidated financial statements
revenues on a continuing basis of £1737m and £1437m 2012 £2269m and £1746m are derived from two external customers 
intersegment transfers or transactions are entered into under the same terms and conditions that would be available to unrelated third 
parties 
the group primarily supplies the uk market although it also supplies certain products to other european countries and a number of other 
countries the following table provides an analysis of the group’s revenue which is allocated on the basis of geographical market destination 
and an analysis of the group’s noncurrent assets by geographical location 
continuing operations — revenue
31 dec 2013
£m
31 dec 2012
restated
1
£m
united kingdom 8213 10194
other europe 217 295
rest of world 132 220
total 8562 10709
1 comparatives have been restated to reflect the reclassification of the bread business as a discontinued operation
discontinued operations — revenue
31 dec 2013
£m
31 dec 2012
 restated
1
£m
united kingdom 6367 6693
other europe 179 158
rest of world — 02
total 6546 6853
1 comparatives have been restated to reflect the reclassification of the bread business as a discontinued operation
noncurrent assets
31 dec 2013
£m
31 dec 2012
£m
united kingdom 15584 18370
5 operating profit for continuing operations
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notes to the financial statements
5a analysis of costs by nature
year ended
31 dec 2013
£m
year ended
31 dec 2012
 restated
1
£m
employee benefits expense note 6 1341 1948
depreciation of property plant and equipment 173 234
amortisation of intangible assets 438 504
operating lease rental payments 55  147 
repairs and maintenance expenditure 234 347
research and development costs 42 57
loss on disposal of noncurrent assets 78 41
net foreign exchange gainloss 02 05
past service credit relating to defined benefit schemes 223 317
charge relating to restructuring and onerous lease provisions 73 313
refinancing costs 02 11
auditors’ remuneration 10 22
1 comparatives have been restated to reflect the reclassification of the bread business as a discontinued operation and the adoption of ias 19 revised
operating lease commitments are further disclosed in note 27
5b auditors’ remuneration
year ended
31 dec 2013
£m
year ended
31 dec 2012
£m
fees payable to the company’s auditors for the audit of the parent company and  
consolidated financial statements 04 04
fees payable to the company’s auditors and its associates for other services
— the audit of the company’s subsidiaries pursuant to legislation 02 04
— other services relating to taxation 01 01
— services relating to corporate finance transactions 03 23
total auditors’ remuneration 10 32
the total operating profit charge for auditors’ remuneration was £10m 2012 £22m
in 2012 £23m of costs were directly attributable to advice related to the group’s refinancing and support with the necessary circulars in 
connection with the disposal programme £10m of the £23m was capitalised resulting in a total of £28m held on the balance sheet at  
31 december 2012 with the remaining £13m charged to operating profit £07m of these capitalised fees were charged to operating profit in 
2013 resulting in a total of £21m held on the balance sheet at 31 december 2013
premier foods plc  annual report and accounts 2013
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financial statements 2294104 13 march 2014 923 am    proof 3
6  employees
year ended
31 dec 2013
£m
year ended
31 dec 2012
  restated
1
£m
staff costs for the group during the year — continuing operations
wages and salaries 1299 1741
social security costs 133 179
termination benefits 11 111
share options granted to directors and employees 41 46
contributions to defined contribution schemes note 23 20 05
credit for defined benefit schemes note 23 163  134 
total — continuing operations 1341 1948
staff costs for the group during the year — discontinued operations
wages and salaries 1426 1589
social security costs 132 147
termination benefits 99 10
share options granted to directors and employees 06 01
contributions to defined contribution schemes note 23 14 03
creditcharge for defined benefit schemes note 23 87  177
total — discontinued operations 1590 1927
total — continuing and discontinued operations 2931 3875
1 comparatives have been restated to reflect the reclassification of the bread business as a discontinued operation
average monthly number of people employed including executive and non executive directors
2013
 number 
2012
 number 
average monthly number of people employed — continuing operations
management 720  799 
administration 501  573 
production distribution and other 3062  3357 
total — continuing operations 4283  4729 
average monthly number of people employed — discontinued operations
management 516  618 
administration 211  321 
production distribution and other 3369  4119 
total — discontinued operations 4096  5058 
total — continuing and discontinued operations 8379  9787 
directors’ remuneration is disclosed in the audited sections of the annual report on remuneration on pages 70 to 75 which form part of 
these financial statements
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financial statements 2294104 13 march 2014 923 am    proof 3
notes to the financial statements
7 finance income and costs
year ended
31 dec 2013
£m
year ended
31 dec 2012
restated
1
£m
interest payable on bank loans and overdrafts 77 102
interest payable on term facility 174 246
interest payable on revolving facility 58 94
interest payable on interest rate derivatives 72 58
interest payable on interest rate financial liabilities designated as other financial liabilities at  
fair value through profit or loss — 115
other interest payable 14 07
amortisation of debt issuance costs and deferred fees 227 131
 622 753
write off of financing costs
2
 — 108
total finance cost 622 861
interest receivable on bank deposits 24 41 
total finance income 24  41 
movement on fair valuation of interest rate derivatives 116 148
movement on fair valuation of interest rate financial liabilities designated as other financial liabilities at  
fair value through profit or loss — 51 
net movement on fair valuation of interest rate financial instruments 116  97
net finance cost 482 917
1 comparatives have been restated to reflect the reclassification of the bread business as a discontinued operation
2 relates to the writeoff of debt issuance costs in 2012 relating to the group’s previous financing agreement
the net movement on fair valuation of interest rate financial instruments relates to a £116m favourable movement on interest rate swaps held 
2012 £192m adverse in 2012 there was an additional £95m favourable movement in swaps held before refinancing in march 2012
8 taxation
current tax
analysis of the chargecredit for the year
continuing 
operations
£m
discontinued 
operations
£m
total
£m
2013
current tax
— current year — — —
— prior years — — —
overseas current tax
— current year — — —
— prior years — — —
deferred tax
— current year 527 379 148
— prior years 32 — 32
— adjustment to restate opening deferred tax at 200 16 56 40
income tax chargecredit for the year 511 435 76
2012 restated
1
current tax
— current year — — —
— prior years 01 — 01 
overseas current tax 
— current year 11 — 11
— prior years — — —
deferred tax
— current year 275  175  450 
— prior years 139 — 139
— adjustment to restate opening deferred tax at 230 54 — 54 
income tax credit for the year 180 175  355 
1 comparatives have been restated to reflect the reclassification of the bread business as a discontinued operation and the adoption of ias 19 revised
premier foods plc  annual report and accounts 2013
100
financial statements 2294104 13 march 2014 923 am    proof 3
8 taxation continued
income tax charge for the year
as a result of the 2012 finance act provision to reduce the uk corporation tax rate from 24 to 23 from 1 april 2013 the applicable rate of 
corporation tax for the year is 2325 as a result of the 2013 finance act provision to reduce the uk corporation tax rate to 20 from 1 april 
2015 deferred tax balances have been restated at 20 the rate at which they are expected to reverse
tax relating to items recorded in oci for continuing operations was
 year ended 
31 dec 2013
£m
 year ended 
31 dec 2012 
restated
1
£m
deferred tax charge on reduction of corporate tax rate 133 45
deferred tax credit on pension movements 283 414 
deferred tax chargecredit on losses 66 03 
84 372 
1 comparatives have been restated to reflect the adoption of ias 19 revised
the tax charge for the year differs from the standard rate of corporation tax in the united kingdom of 2325 2012 245 the reasons for 
this are explained below
 year ended 
31 dec 2013
 £m 
 year ended 
31 dec 2012
restated
1
 £m 
profitloss before taxation for continuing operations 44  80 
tax chargecredit at the domestic income tax rate of 2325 2012 245 10 19
tax effect of
nondeductible items
2
03 119 
other disallowable items 05 02
adjustment for overseas results taxed at different rate — 10
adjustment for sharebased payments 10 11
previously unrecognised losses utilised 33 117 
capital gain on disposal of business 33 130
adjustment due to current year deferred tax being provided at 200 2012 230 04 06
movements in losses recognised
4
522 169 
adjustment to restate opening deferred tax at 200 2012 230 16 54 
adjustments to prior years
3
32 139
deferred tax released on disposal of properties 19 —
income tax chargecredit 511 180 
1 comparatives have been restated to reflect the reclassification of the bread business as a discontinued operation
2 in 2012 nondeductible items primarily related to profits made on the disposal of businesses during the year
3 in 2012 adjustments to prior years primarily related to a disclaim of capital allowances in 2011 group accounts not repeated in the tax returns
4 the proposed disposal of the bread business has resulted in a significant increase in the potential net deferred tax asset as a result of this increase it has been decided 
that potential deferred tax assets relating to corporation tax losses should not be recognised in the current year
deferred tax
deferred tax is calculated in full on temporary differences using the tax rate appropriate to the jurisdiction in which the assetliability arises 
and the tax rates that are expected to apply in the periods in which the asset or liability is settled in all cases this is 200 2012 230 
except for an asset of £05m 2012 £17m relating to irish retirement benefit obligations where the local rate of 125 has been used
2013
£m
2012
restated
1
£m
at 1 january 719 109
chargedcredited to the income statement 76 365
credited to oci 84 372
transferred to held for sale — 34
disposal of subsidiariesbusinesses — 57
at 31 december 727 719
1 comparatives have been restated to reflect the reclassification of the bread business as a discontinued operation the adoption of ias 19 revised
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financial statements 2294104 13 march 2014 923 am    proof 3
notes to the financial statements
8 taxation continued
due to the level of taxable profits anticipated the group has not recognised deferred tax assets of £149m 2012 £205m relating to capital 
losses £959m 2012 £339m relating to uk corporation tax losses and £249m 2012 £286m relating to act under current legislation 
these losses can generally be carried forward indefinitely 
deferred tax liabilities
intangibles 
£m
other 
£m
total 
£m
at 1 january 2012 1329 43 1372
prior year restatement of opening balances 106  03  109 
disposal of subsidiariesbusinesses 57  —  57 
current year credit 150  —  150 
prior year charge 07 06 13
transfer to held for sale 23  —  23 
at 31 december 2012 1000 46 1046
prior year restatement of opening balances 114 06 120 
current year credit 38 — 38 
prior year charge 03 — 03 
deferred tax credit on discontinued activities 121 — 121 
at 31 december 2013 730 40 770
deferred tax assets
accelerated 
tax depreciation 
£m
retirement 
benefit 
obligation 
£m
share based 
payments 
£m
financial 
instruments 
£m
losses  
£m
total 
£m
at 1 january 2012 63 700 01 501 — 1263 
prior year restatement of  
opening balances  
— to income statement 05 10 — 40 — 55
— to oci — 45 — — — 45
current year chargecredit 78 — 04 18 242 186 
credited to oci — 414 — — 03 417 
deferred tax credit on 
discontinued activities 73 01 — — 40 114
prior year charge 126 — — — — 126
transferred to held for sale 11 — — — — 11
at 31 december 2012 
restated
1
62 1060 03 479 285 1765
prior year restatement of  
opening balances
— to income statement 32 12 01 63 28 136 
— to oci — 123 — — 10 133 
current year creditcharge 35 05 07 19 583 565 
prior year creditcharge — 04 01 372 402 35 
credited to oci — 283 — — 66 217 
deferred tax credit on 
discontinued activities 314 — — — — 314 
at 31 december 2013 255 1207 10 25 — 1497
net deferred tax asset £m
at 31 december 2013 727
at 31 december 2012 719
1 comparatives have been restated to reflect the reclassification of the bread business as a discontinued operation and the adoption of ias 19 revised
where there is a legal right of offset and an intention to settle as such deferred tax assets and liabilities may be presented on a net basis this 
is the case for most of the group’s deferred tax balances and therefore they have been offset in the tables above substantial elements of the 
group’s deferred tax assets and liabilities primarily relating to the defined benefit pension obligation are greater than one year in nature
deferred tax assets in respect of corporation tax losses are only recognised as other deferred tax assets are realised and to the extent that it 
is anticipated they will be utilised in the near future
premier foods plc  annual report and accounts 2013
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financial statements 2294104 13 march 2014 923 am    proof 3
9 earningsloss per share
basic loss per share has been calculated by dividing the loss attributable to owners of the parent of £2459m 2012 £179m loss by the 
weighted average number of ordinary shares of the company 
year ended 31 dec 2013 year ended 31 dec 2012 restated
1
basic
dilutive effect 
of share 
options diluted basic
dilutive effect 
of share 
options diluted
continuing operations
 lossprofit after tax £m  467 467  100  100 
 weighted average number of shares m  2398  — 2398  2398 — 2398 
 lossearnings per share pence  195 — 195 42 — 42 
discontinued operations
 loss after tax £m  1992 1992 279 279
 weighted average number of shares m  2398 —  2398  2398 — 2398 
 loss per share pence  831 —  831 116 — 116
total 
 loss after tax £m   2459 2459 179 179
 weighted average number of shares m  2398 —  2398  2398 — 2398 
 loss per share pence  1026 —  1026 74 — 74
1 comparatives have been restated to reflect the reclassification of the bread business as a discontinued operation the adoption of ias 19 revised
dilutive effect of share options
the dilutive effect of share options is calculated by adjusting the weighted average number of ordinary shares outstanding to assume 
conversion of all dilutive potential ordinary shares the only dilutive potential ordinary shares of the company are share options a calculation 
is performed to determine the number of shares that could have been acquired at fair value determined as the average annual market share 
price of the company’s shares based on the monetary value of the subscription rights attached to the outstanding share options 
no adjustment is made to the profit or loss in calculating basic and diluted earnings per share
2013
 number 
2012
number
weighted average number of ordinary shares for the purpose of basic earnings per share 239828166 239806206
effect of dilutive potential ordinary shares
— share options 453414 —
weighted average number of ordinary shares for the purpose of diluted earnings per share 240281580 239806206
given that the group made a loss in the year there is no dilutive effect of share options
adjusted earnings per share “adjusted eps”
adjusted earnings per share is defined as trading profit less net regular interest payable less a notional tax charge at 2325 2012 245 
divided by the weighted average number of ordinary shares of the company  
net regular interest payable is defined as net interest after excluding noncash items including writeoff of financing costs fair value 
adjustments on interest rate financial instruments and other interest
trading profit and adjusted eps have been reported as the directors believe these provide an alternative measure by which the shareholders 
can better assess the group’s underlying trading performance
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financial statements 2294104 13 march 2014 923 am    proof 3
notes to the financial statements
9 earningsloss per share continued
year ended 31 dec 2013
continuing
£m
discontinued
£m
total
£m
operating profitloss 526 2427 1901
impairment of property plant and equipment and intangible assets — 2344 2344
loss on disposal of operations 24 — 24
operating profitloss before impairment and profit on disposal of operations 550 83 467
net interest on pension and administrative expenses 313 — 313
fair value movements on foreign exchange and other derivative contracts 19 — 19
amortisation of intangible assets 438 21 459
restructuring costs associated with divestment activity 73 119 192
refinancing costs 02 — 02
trading profit 1395 57 1452
less net regular interest payable 584 — 584
adjusted profit before tax 811 57 868
notional tax at 2325 189 13 202
adjusted profit after tax 622 44 666
average shares in issue m 2398 2398 2398
adjusted eps pence 259 18 277
net regular interest payable
net interest payable 482 — 482
exclude fair value adjustments on interest rate financial instruments 116 — 116
exclude other interest 14 — 14
net regular interest payable 584 — 584
year ended 31 dec 2012 restated
1
continuing
£m
discontinued
£m
total
£m
operating profitloss 837 452 385
impairment of property plant and equipment and intangible assets — 362 362
profit on disposal of operations 331 306 637
operating profitloss before impairment and loss on disposal of operations 506 396 110
net interest on pension and administrative expenses 277 — 277
fair value movements on foreign exchange and other derivative contracts 20 — 20
amortisation of intangible assets 504 29 533
restructuring costs associated with divestment activity 313 148 461
refinancing costs 11 — 11
trading profitloss 1591 219 1372
less net regular interest payable 695 — 695
adjusted profitloss before tax 896 219 677
notional tax at 245 220 54 166
adjusted profitloss after tax 676 165 511
average shares in issue m 2398 2398 2398
adjusted eps pence 282 69 213
net regular interest payable
net interest payable 917 02 919
exclude writeoff of financing costs and other 118 01 119
exclude fair value adjustments on interest rate financial instruments 97 — 97
exclude other interest 07 01 08
net regular interest payable 695 — 695
1 comparatives have been restated to reflect the reclassification of the bread business as a discontinued operation and the adoption of ias 19 revised
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financial statements 2294104 13 march 2014 923 am    proof 3
10 discontinued operations
income and expenditure incurred on discontinued operations during the year predominantly comprises the bread business in light of the 
announcement of the conditional sale of the group’s majority share in this business on 27 january 2014 in addition to other operations that 
were disposed of in prior years
note
year ended
31 dec 2013
£m
year ended
31 dec 2012
£m
revenue 6546 6853 
operating expenses 6629 7249
operating loss before impairment and profit on disposal of operations 83 396
impairment 14 2344 362
profit on disposal of operations — 306 
operating loss 2427 452
finance cost — 02
loss before taxation 2427 454
taxation credit 435  175 
loss after taxation on discontinued operations for the year 1992 279
further details of the impairment to discontinued operations are available in note 14 of the group’s consolidated financial statements
during the year discontinued operations contributed to a net inflow of £147m 2012 £118m inflow to the group’s operating cash flows a 
net inflow of £38m 2012 £146m inflow to investing activities and £nil 2012 £340m outflow to financing activities
11 disposal of businesses
on 2 february 2013 the group completed its sale of the sweet pickles and table sauces business to mizkan for £925m before disposal 
costs this is not a discontinued operation as it was previously integrated and reported as part of the grocery business
year ended
31 dec 2013
£m
net cash inflow arising on disposal
initial consideration 925
proceeds deferred working capital adjustments and disposal costs 178
net cash inflow for the year 747
property plant and equipment 376
intangible assets and goodwill 342
inventories 87
provisions and lease obligations 34
net assets disposed 771
loss on disposal before tax 24
12 assets and liabilities held for sale
as at 31 december 2013 the assets and associated liabilities relating to the bread business were held for sale in light of the announcement 
of the conditional sale of the group’s majority share in this business on 27 january 2014 the disposal is expected to be completed in the 
second quarter of 2014 on recognition of the assets and liabilities as held for sale an impairment loss of £2344m was recognised in order to 
write down the disposal group to fair value less costs to sell management has assessed fair value less costs to sell based on the initial cash 
consideration of £150m being received for 51 of the business less estimated costs to sell 
the bread business is presented in the “discontinued operations” reportable segment in accordance with “ifrs8 operating segments” 
as at 31 december 2012 the assets and associated liabilities relating to the sweet pickles and table sauces business were held for sale 
in light of the announcement of the conditional sale of this business on 30 october 2012 the disposal completed on 2 february 2013 for 
consideration of £925m
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financial statements 2294104 13 march 2014 923 am    proof 3
notes to the financial statements
12 assets and liabilities held for sale continued
2013
£m
2012
£m
noncurrent assets
 property plant and equipment — 376 
 goodwill — 311
 other intangible assets — 31
current assets
 inventories 250 92
 trade and other receivables 18 —
total assets held for sale 268 810
current liabilities
 trade and other payables 14 —
 deferred tax liabilities — 34
total liabilities held for sale 14 34
net assets and liabilities held for sale 254 776
13 property plant and equipment
 
land and 
buildings
£m
vehicles plant 
and equipment
£m
assets under 
construction
£m
total
£m
cost
at 1 january 2012 1432 4043 684 6159
additions — — 434 434
disposals 165 737 45 947
reclassifications 14 14 — —
transferred from intangible assets
2
— 448 — 448 
transferred into use 15  782  797 —
reversal of fair value adjustment
1
 795  79 — 874 
transferred to held for sale 120 514 08 642
at 31 december 2012 1943 4115 268 6326
additions — 02  278  280 
disposals 170 195 — 365
transferred to intangible assets and transferred into use 25 199  279 55
at 31 december 2013 1798 4121 267 6186
aggregate depreciation and impairment
at 1 january 2012 195 1791 — 1986
depreciation charge for the year 48 348 — 396
disposals 54  399 — 453 
impairment charge 56 41 28 125
reclassifications 04 04 — —
reversal of fair value adjustment 236 560 — 796
transferred to held for sale 29  237 — 266 
at 31 december 2012 456 2100 28 2584
depreciation charge for the year 36 292 — 328
disposals 91  153 — 244 
impairment charge 718 837 — 1555
at 31 december 2013 1119 3076 28 4223
net book value
at 31 december 2011 1237 2252 684 4173
at 31 december 2012 1487 2015 240 3742
at 31 december 2013 679 1045 239 1963
1 following an exercise to verify property plant and equipment in 2012 fair value adjustments that arose on the acquisition of rhm in 2007 were corrected
2 £448m of assets were classified as intangible assets at 31 december 2011 these were reclassified to property plant and equipment in 2012
the net book value of the group’s vehicles plant and equipment includes an amount of £nil 2012 £07m in respect of assets held under 
finance leases none of the additions of £280m for the year related to assets held under finance leases 2012 £nil 
the group’s borrowings are secured on the assets of the group including property plant and equipment
premier foods plc  annual report and accounts 2013
106
financial statements 2294104 13 march 2014 923 am    proof 3
13 property plant and equipment continued
impairment
an impairment charge of £1555m was recognised in 2013 against property plant and equipment due to the write down of the bread 
business to fair value less costs to sell in light of the announcement of the conditional sale of the group’s majority share in this business on  
27 january 2014
an impairment charge of £125m was recognised in 2012 due to planned site closures and restructuring from the group’s decision to exit a 
branded and own label contract in the bread division
14 goodwill
2013
£m
2012
£m
carrying value
at 1 january  7139  8562 
disposals — 1112
transferred to held for sale — 311
at 31 december  7139  7139 
goodwill attached to each of the group’s cgu’s is as follows
2013
 £m 
2012
 £m 
grocery 7139 7139
net carrying value of goodwill 7139  7139 
impairment tests for goodwill
goodwill is tested annually for impairment or more frequently if there are indications that goodwill may be impaired the recoverable amount 
of a cgu is determined based on value in use calculations or fair value less costs to sell depending on the way in which the value of the cgu 
is expected to be recovered
key assumptions
the key assumptions for calculating value in use are those relating to the cash flows long term growth rate and discount rate
cash flow assumptions
the cash flows used in the value in use calculation are pretax cash flows based on the latest approved management forecasts in respect 
of the following four years these are calculated as trading profit before depreciation assumptions regarding these future cash flows are 
based upon actual results in prior periods adjusted for expected developments in the following years with reference to market conditions and 
reasonable management expectations for the businesses including short term growth projections where appropriate all income and costs are 
taken into account
an estimate of capital expenditure required to maintain these cash flows is also made 
long term growth rate assumptions
the four year management forecasts are extrapolated in perpetuity using growth assumptions relevant for the business sector the growth 
rate applied is 240 2012 225 and is not considered to be higher than the average longterm industry growth rate
discount rate
the discount rate applied to the cash flows is calculated using a pretax rate based on the weighted average cost of capital “wacc” which 
would be anticipated for a market participant investing in the group the directors believe it is appropriate to use a single common discount 
rate for all impairment testing as each cgu shares similar risk profiles
the group has considered the impact of the current economic climate in determining the appropriate discount rate to use in impairment 
testing at 31 december 2013 the pretax rate used to discount the forecasted cash flows has been determined to be 113 2012 112
changing the assumptions selected by management in particular the discount rate and growth rate assumptions used in the cash flow 
projections could significantly affect the group’s impairment evaluation and hence results
impairment
a total impairment charge of £2344m was recognised in 2013 primarily against property plant and equipment and other intangible assets 
allocated to the bread cgu this was due to the write down of the bread business to fair value less costs to sell in light of the announcement 
of the conditional sale of the group’s majority share in this business on 27 january 2014
a total impairment charge of £237m was recognised in 2012 against other intangible assets allocated to the bread cgu
with regards to the grocery cgu the directors believe no reasonable change in circumstances that would impact the key assumptions used 
in the impairment testing would cause the carrying value to exceed its recoverable amount
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financial statements 2294104 13 march 2014 923 am    proof 3
notes to the financial statements
14 goodwill continued
impairment charge
property plant 
and equipment
£m
other 
intangible 
assets
£m
other assets
£m
total
£m
2013
bread 1555 669 120  2344 
2012
bread 125 237  —  362 
15 other intangible assets
software
£m
brands 
trademarks 
licences
£m
customer 
relationships
£m
assets under 
construction
£m
total 
£m
cost
at 1 january 2012 1631  8932  1491  373  12427 
additions — — — 127  127 
disposals 12 449 143 — 604
transfer to property plant and equipment
1
 448 — — — 448
transferred into use 329 — — 329 —
transferred to held for sale — 71 — — 71
at 31 december 2012 1500  8412  1348  171  11431 
additions — — — 58  58 
disposals 175 — — — 175
transferred from ppe and transferred into use 73 120 — 138 55 
at 31 december 2013 1398  8532  1348  91  11369 
accumulated amortisation and impairment
at 1 january 2012 551 2341 1308 — 4200
disposals 10  148  111 — 269 
amortisation charge for the year 189 274 70 — 533
impairment charge — 237 — — 237
transferred to held for sale — 40 — — 40 
at 31 december 2012 730 2664 1267 — 4661
disposals 175 — — — 175 
amortisation charge for the year 121 276 62 — 459
impairment charge 143 526 — — 669
at 31 december 2013 819 3466 1329 — 5614
net book value
net book value 31 december 2011 1080 6591 183 373 8227
net book value 31 december 2012 770  5748  81  171  6770 
net book value 31 december 2013 579 5066  19  91  5755 
brands trademarks and licences are considered to have finite useful lives and are amortised on a straightline basis over their estimated useful 
lives of 20 to 40 years software is amortised on a straightline basis over its estimated useful life of 3 to 10 years customer relationships are 
amortised on a straightline basis over their estimated useful lives of 7 years all amortisation is recognised within administrative costs for 2013 
and 2012
included in the assets under construction additions for the year above are £17m of internal costs 2012 £61m
as at 31 december 2013 the group’s borrowings are secured on the assets of the group including other intangible assets
impairment
an impairment charge of £669m was recognised in 2013 against other intangible assets due to the write down of the bread business to fair 
value less costs to sell in light of the announcement of the conditional disposal of the group’s majority share in this business on 27 january 
2014
an impairment charge of £237m was recognised in 2012 against other intangible assets as a result of adverse trading conditions experienced 
in the year
premier foods plc  annual report and accounts 2013
108
financial statements 2294104 13 march 2014 923 am    proof 3
15 other intangible assets continued
the material brands held on the balance sheet are as follows
brandtrademark
carrying 
value at
 31 dec 2013
£m
estimated 
useful life 
remaining
years
bisto 1393 23
oxo 897 33
batchelors 731 23
sharwoods 658 23
mr kipling 541 23
16 investments
principal subsidiaries
name of subsidiary 
country of incorporation
or registration and principal 
operations principal activity
effective interest in ordinary 
share capital at 31 december
2013 2012
operating subsidiaries
premier foods group limited united kingdom manufacture and distribution of 
ambient food products cakes 
bread own label and other food 
products
100 100
premier foods group services limited united kingdom head office company 100 100
other subsidiaries
premier foods investments limited united kingdom financing company 100 100
each of the principal subsidiary undertakings has the same yearend as premier foods plc the companies listed above are those that 
materially affect the results and the assets of the group the company has taken advantage of s410 2 of the companies act 2006 and in 
accordance a full list of subsidiary undertakings will be annexed to the company’s next annual return
17 inventories
2013
£m
2012
£m
raw materials 182 457
work in progress 27 26
finished goods and goods for resale 480 679
inventories 689 1162
inventory writeoffs in the year amounted to £164m 2012 £157m
the borrowings of the group are secured against all the assets of the group including inventories
18 trade and other receivables
2013
£m
2012
£m
trade receivables 2542 2795
trade receivables provided for 294 163
net trade receivables 2248 2632
prepayments 131 272
other tax and social security receivable 02 72
other receivables 102 10
trade and other receivables 2483 2986
the borrowings of the group are secured against all the assets of the group including trade and other receivables at year end the group has 
benefited from a £120m securitisation programme to allow it to borrow against trade receivable balances further details of the securitisation 
programme are available in note 20 of the group’s consolidated financial statements
19 trade and other payables
2013
£m
2012
£m
trade payables 2688 3163
tax and social security payable 163 131
other payables and accruals 516 830
trade and other payables 3367 4124
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financial statements 2294104 13 march 2014 923 am    proof 3
notes to the financial statements
20 bank and other borrowings
2013
£m
2012
£m
current
secured senior credit facility — revolving note a 176 150
debt issuance costs 03 03 
173 147
secured senior credit facility — term note a 324 774
debt issuance costs 06  15 
 318 759
bank overdrafts — 435
total bank borrowings due within one year 491 1341
finance lease obligations note 21 — 01
securitisation facility note b   1200 956
total borrowings due within one year 1691 2298
noncurrent
secured senior credit facility — revolving note a 1869 1167
debt issuance costs 34  77 
 1835 1090
secured senior credit facility — term note a 6471 6778
debt issuance costs 119  131 
 6352 6647
total bank borrowings due after more than one year 8187 7737
finance lease obligations note 21 — 03
other loans  — 01
total borrowings due after more than one year 8187 7741
total bank and other borrowings 9878 10039
the borrowings are secured by a floating charge over all assets of the group
cash and bank deposits and shortterm borrowings have been offset to the extent possible in accordance with the group’s banking 
agreements
the total facility as at 31 december 2013 was £10363m 2012 £11424m 
a senior term credit facility and revolving credit facility arrangement
the term loan and revolving credit facility mature on 30 june 2016 the current applicable bank margin is 325 additionally amortisations 
will occur semiannually from 30 june 2014 banking covenants of net debtebitda and ebitdainterest are in place and are tested 
biannually 
a floating to fixed amortising swap with a nominal value of £745m is in place attracting a swap rate of 159
all term loan and securitised debt attract interest charges based on libor
b securitisation facility
the debtors securitisation facility is secured against the group’s trade receivables it is a three year programme maturing in december 2016 
with a £120m facility priced at 275 above the cost of commercial paper
see note 31 for details of the group’s capital restructuring
21 financial instruments
the group’s activities expose it to a variety of financial risks market risk arising from adverse movements in foreign currency commodity 
prices and interest rates credit risk and liquidity risk the group uses a variety of derivative financial instruments to manage certain of these 
risks the management of these risks along with the daytoday management of treasury activities is performed by the group’s treasury 
function the policy framework governing the management of these risks is defined by the board the framework for management of these 
risks is incorporated into a policies and procedures manual
the group also enters into contracts with suppliers for its principal raw material requirements some of which are considered commodities 
diesel and energy these commodity and energy contracts are part of the group’s normal purchasing activities some of the risk relating 
to diesel is mitigated with the use of derivative financial instruments the treasury risk management committee monitors and reviews the 
group’s foreign currency exchange commodity price and energy price exposures and recommends appropriate hedging strategies for each
premier foods plc  annual report and accounts 2013
110
financial statements 2294104 13 march 2014 923 am    proof 3
21 financial instruments continued
a market risk
i foreign exchange risk
the group’s main operating entities’ functional currency and the group’s presentation currency is sterling although some transactions are 
executed in nonsterling currencies including euros and us dollars the transactional amounts realised or settled are therefore subject to the 
effect of movements in these currencies against sterling management of these exposures is centralised and managed by the group’s treasury 
function it is the group’s policy to manage the exposures arising using forward foreign currency exchange contracts and currency options 
hedge accounting is not sought for these transactions 
the group generates some of its profits in nonsterling currencies and has assets in nonsterling jurisdictions principally the euro 
the principal foreign currency affecting the translation of subsidiary undertakings within the group financial statements is the euro the rates 
applicable are as follows
principal rate of exchange eur£ 
year ended 
31 dec 2013
year ended 
31 dec 2012
year end 12006 12257
average 11796 12317
the majority of the group’s assets and liabilities are denominated in the functional currency of the relevant division or subsidiary
the table below shows the group’s currency exposures as at 31 december 2013 and 2012 that gave rise to net currency gains and losses 
recognised in the consolidated statement of profit or loss as a result of monetary assets and liabilities that are not denominated in the 
functional currency of the subsidiaries involved
functional currency of subsidiaries
 
sterling
£m
euro
£m
total
£m
at 31 december 2013
net foreign currency monetary assets
— euro 16 — 16
— us dollar 06 — 06 
total 10 — 10
at 31 december 2012
net foreign currency monetary assets
— euro 05 — 05
— us dollar 08 — 08
total 13 — 13
in addition the group also has forward foreign currency exchange contracts outstanding at the yearend in order to manage the exposures 
above but also to hedge future transactions in foreign currencies the sterling nominal amounts outstanding are as follows
 
2013
payable 
receivable
£m
2012
payable 
receivable
£m
euro 380 486
us dollar 184 152
total 564 638
sensitivities are disclosed below using the following reasonably possible scenarios
if the us dollar were to weaken against sterling by 20 us dollar cents with all other variables held constant post tax profit would decrease by 
£12m 2012 £13m decrease
if the us dollar were to strengthen against sterling by 20 us dollar cents with all other variables held constant post tax profit would increase 
by £22m 2012 £16m increase
if the euro were to weaken against sterling by 10 euro cents with all other variables held constant post tax profit would decrease by £19m 
2012 £29m decrease
if the euro were to strengthen against sterling by 10 euro cents with all other variables held constant post tax profit would increase by £27m 
2012 £34m increase
this is primarily driven by the effect on the mark to market valuation of the foreign exchange derivatives of the group where the hedged rates 
differ from the spot rate 
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financial statements 2294104 13 march 2014 923 am    proof 3
notes to the financial statements
21 financial instruments continued
ii commodity price risk
the group purchases a variety of commodities for use in production and distribution which can experience significant price volatility which 
include interalia wheat cocoa edible oils diesel and energy the price risk on these commodities is managed by the group through the 
treasury risk management committee it is the group’s policy to minimise its exposure to this volatility by adopting an appropriate forward 
purchase strategy or by the use of derivative instruments where they are available 
iii interest rate risk
the group’s borrowing facilities comprise term debt and a revolving facility principally in sterling interest is charged at floating rates plus a 
margin on the amounts drawn down and at half the margin for the nonutilised portion of the facility hence the borrowings are sensitive to 
changes in interest rates
the group then seeks to mitigate the effect of adverse movements in interest rates by entering into derivative financial instruments that reduce 
the level of exposure to floating rates the target of fixedcapped debt is defined in the group treasury policy and procedures however the 
amount hedged can be amended subject to agreement by the board hedge accounting is not sought for these transactions
the gross cash flows on the interest rate derivatives are sensitive to changes in interest rates as they are driven by three month libor which 
is reset on a quarterly basis as at 31 december 2013 the reset rate was 0526 2012 0515
the weighted average interest rate for these derivative financial instruments is as follows
weighted 
average 
interest rate 

currency sterling
at 31 december 2013 16
at 31 december 2012 16
the following table reflects the likely contractual maturity date of the interest rate derivative contracts taking into account zero cost call 
features where market rates at the balance sheet date indicate they will be triggered by the banks
within 1 year
£m
1 and 2 years
£m
2 and 3 years
£m
3 and 4 years
£m
4 and 5 years
£m
over 5 years
£m
total
£m
2013
derivative financial 
liabilities
— fixed rate 250 850 5100 — — — 6200
2012
derivative financial 
liabilities
— fixed rate 800 250 850 5100 — — 7000
fixed rate derivative financial liabilities constitute one swap with a nominal value of £620m 2012 £700m which is an amortising floating to 
fixed interest rate swap maturing in 2016
cash and deposits earn interest at floating rates based on banks shortterm treasury deposit rates shortterm trade and other receivables are 
interestfree 
the group’s provisions of £722m as at 31 december 2013 2012 £739m include £272m relating to onerous leases 2012 £187m which 
are considered to be floating rate financial liabilities these cash flows are discounted where the effect is material  
at 31 december 2013 for every 50 basis points reduction in rates below the last floating reset rate of 0526 2012 0515 based on three 
month libor with all other variables held constant annualised net interest expense would decrease by £08m 2012 £11m decrease 
at 31 december 2013 if interest rates were 200 basis points higher than the last floating reset rate of 0526 2012 0515 based on 
three month libor with all other variables held constant annualised net interest expense would increase by £32m 2012 £45m increase  
the group’s other financial assets and liabilities are not exposed to material interest rate risk
premier foods plc  annual report and accounts 2013
112
financial statements 2294104 13 march 2014 923 am    proof 3
21 financial instruments continued
b credit risk
the group’s principal financial assets are cash and cash deposits and trade and other receivables
the group has no significant concentrations of credit risk cash and cash equivalents are deposited with highcredit quality financial 
institutions and trade receivables are due principally from major grocery retailers though it is the group’s policy to insure trade debt
at 31 december 2013 trade and other receivables of £572m 2012 £779m were past due but not impaired these relate to customers with 
whom there is no history of default
the ageing of trade and other receivables was as follows
 past due 
fully 
performing
£m
1–30 days
£m
31–60 days
£m
61–90 days
£m
91–120 days
£m
over 120 days
£m
total
£m
trade and other 
receivables
2013 1778 200 103 72 66 131 2350
2012 1863 348 78 60 53 240 2642
at 31 december 2013 trade and other receivables of £294m 2012 £163m were determined to be specifically impaired and provided for 
the total includes receivables from customers which are considered to be experiencing difficult economic situations
the group does not hold any collateral as security against its financial assets
movements in the provision for impairment of trade receivables are as follows
2013
£m
2012
£m
at 1 january 163 275
receivables written off during the year as uncollectable 06 259
provision for receivables impairment raised 137 147
at 31 december 294 163
the group has benefited from a £120m securitisation programme to allow it to borrow against trade receivable balances 
c liquidity risk
the group manages liquidity risk through both the treasury and finance functions cash flow forecasts are prepared and reviewed on a weekly 
basis normally covering a period of three months
in addition cash flow forecasts are prepared as part of the group’s overall budgeting and forecasting processes and performance is 
monitored against this each month this is intended to give the board sufficient forward visibility of debt levels
the group’s net debt level can vary significantly from month to month and there is some volatility within months this reflects trading patterns 
timing of receipts from customers and payments to suppliers patterns of inventory holdings and the timing of the spend on major capital and 
restructuring projects for these reasons the debt levels at the yearend date may not be indicative of debt levels at other points throughout 
the year
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financial statements 2294104 13 march 2014 923 am    proof 3
notes to the financial statements
21 financial instruments continued
the following table analyses the group’s financial liabilities into relevant maturity groupings based on the contractual undiscounted cash flows
 
within 1 year
£m
1 and 2 years
£m
2 and 3 years
£m
3 and 4 years
£m
4 and 5 years
£m
over 5 years
£m
total
£m
at 31 december 2013
trade and other payables 3204 — — — — — 3204
bank term loan 500 600 5695 — — — 6795
bank revolver facility 
drawn down — — 2045 — — — 2045
other loans 1200 — — — — — 1200
at 31 december 2012
trade and other payables 3993 — — — — — 3993
bank overdraft 435 — — — — — 435
bank term loan 774 500 600 5678 — — 7552
bank revolver facility 
drawn down 150 — — 1167 — — 1317
finance leases 01 03 01 — — — 05
other loans — 957 — — — — 957
the bank term loan and bank revolver facility are repriced quarterly to libor and other liabilities are not repriced before the  
maturity date
the group has £2752m 2012 £1956m of facilities available and not drawn as at 31 december 2013 expiring between 2 and 3 years
the borrowings are secured by a fixed and floating charge over all the assets of the group
the following table analyses the contractual undiscounted cash flows of interest on the floating rate debt to maturity based on the last fixed 
rate reset of 0526 2012 0515 plus applicable margin
within 1 year
£m
1 and 2 years
£m
2 and 3 years
£m
3 and 4 years
£m
4 and 5 years
£m
over 5 years
£m
total
£m
interest       
2013 327 310 148 — — — 785
2012 257 327 303 140 — — 1027
the following table analyses the group’s derivative financial instruments into relevant maturity groupings based on the remaining period at the 
balance sheet date to the contractual maturity date the amounts disclosed are the undiscounted cash flows 
 
within 1 year
£m
1 and 2 years
£m
2 and 3 years
£m
3 and 4 years
£m
4 and 5 years
£m
over 5 years
£m
total
£m
at 31 december 2013
forward foreign 
exchange contracts
— outflow 564 — — — — — 564
— inflow 547 — — — — — 547
commodities
— outflow 70 — — — — — 70
interest rate swaps
— outflow 100 88 39 — — — 227
— inflow 33 29 13 — — — 75
 154 59 26 —  — — 239
at 31 december 2012
forward foreign 
exchange contracts
— outflow 638 — — — — — 638
— inflow 644 — — — — — 644
commodities
— outflow 64 — — — — — 64
interest rate swaps
— outflow 106 101 88 39 — — 334
— inflow 34 33 29 13 — — 109
 130 68 59 26 — — 283
the above table incorporates the contractual cash flows of the interest rate derivatives with floating rates of interest calculated based on 
libor of 0526 2012 0515 at the balance sheet date 
premier foods plc  annual report and accounts 2013
114
financial statements 2294104 13 march 2014 923 am    proof 3
21 financial instruments continued
d fair value
the following table shows the carrying amounts which approximate to fair value except as noted below of the group’s financial assets 
and financial liabilities fair value is the amount at which a financial instrument could be exchanged in an arm’s length transaction between 
informed and willing parties other than a forced or liquidation sale and excludes accrued interest set out below is a summary of methods 
and assumptions used to value each category of financial instrument
 
 
2013
book  market 
value
£m
2012
book  market 
value
£m
loans and receivables 
cash and cash equivalents 1570 532
trade and other receivables 2350 2642
financial assets at fair value through profit or loss
derivative financial instruments
— forward foreign currency exchange contractscurrency options 02 07
— commodity and energy derivatives 03 03
financial liabilities at fair value through profit or loss
derivative financial instruments
— forward foreign currency exchange contractscurrency options 19 03
— commodity and energy derivatives — 01
— interest rate swaps 76 192
financial liabilities at amortised cost
trade and other payables 3204 3993
bank term loan 6795 7552
bank revolver facility drawn down 2045 1317
bank overdraft — 435
finance leases — 04
other loans 1200 957
the following table presents the group’s assets and liabilities that are measured at fair value at 31 december 2013 using the following fair 
value measurement hierarchy
•	 quoted prices unadjusted in active markets for identical assets or liabilities level 1
•	 inputs other than quoted prices included within level 1 that are observable for the asset or liability either directly that is as prices or 
indirectly that is derived from prices level 2
•	 inputs for the asset or liability that are not based on observable market data that is unobservable inputs level 3
the following table presents the group’s assets and liabilities that are measured at fair value as at 31 december
2013
level 2
2012
level 2
financial assets at fair value through profit or loss
derivative financial instruments
— forward foreign currency exchange contractscurrency options 02 07
— commodity and energy derivatives 03 03
financial liabilities at fair value through profit or loss
derivative financial instruments
— forward foreign currency exchange contractscurrency options 19 03
— commodity derivatives — 01
— interest rate swaps 76 192
fair value estimation
derivatives
forward exchange contracts are marked to market using prevailing market prices hedge accounting has not been applied to forward 
contracts and as a result the movement in the fair value of £20m has been charged to the statement of profit or loss in the year 2012  
£19m credit 
commodity derivatives are marked to market using prevailing prices and are also not designated for hedge accounting as a result the fair 
value movement of £01m has been credited to the statement of profit or loss 2012 £02m credit 
interest rate swaps are marked to market using prevailing market prices interest rate swaps are also not designated for hedge accounting as 
a result the movement in the fair value of £116m has been charged to the statement of profit or loss in the year 2012 £148m charge 
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financial statements 2294104 13 march 2014 923 am    proof 3
notes to the financial statements
21 financial instruments continued
short and long term borrowings loan notes and interest payable
fair value is calculated based on discounted expected future principal and interest rate cash flows the fair value of the floating rate debt 
approximates the carrying value above 
finance lease liabilities
the fair value of finance lease liabilities approximated book value in 2012
trade and other receivablespayables
the carrying value of receivablespayables with a remaining life of less than one year is deemed to reflect the fair value given their short 
maturity the fair values of noncurrent receivablespayables are also considered to be the same as the carrying value due to the size and 
nature of the balances involved 
e obligations under finance leases
minimum lease payments
present value of minimum lease 
payments
 
2013
£m
2012
£m
2013
£m
2012
£m
not later than one year — 01 — 01
later than one year but not later than five years — 03 — 02
later than five years — 01 — 01
— 05 — 04
less future finance charges — 01 na na
present value of lease obligations — 04 — 04
less amounts due for settlement within 12 months na na — 01
amounts due for settlement after 12 months na na — 03
as at 31 december 2013 there were no assets held under finance leases
for the year ended 31 december 2013 the average effective borrowing rate was nil 2012 38
interest rates are fixed at the contract date and thus expose the group to fair value interest rate risk all leases are on a fixed repayment basis 
and no arrangements have been entered into for contingent rental payments 
the fair value of the group’s lease obligations in 2012 approximated their carrying value the group’s obligations under finance leases in 2012 
were secured by the lessor’s title to the leased assets
f capital risk management
the group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide returns 
for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital
in order to maintain or adjust the capital structure the group may return capital to shareholders issue new shares or sell assets to reduce 
debt in order to bring gearing down the group is in the process of an asset reduction programme aimed at reducing debt during the year 
the group has used disposal proceeds of £933m to repay borrowings
as part of the renegotiated banking facilities the group was required to repay £330m of disposal proceeds by 30 june 2014 to the banking 
syndicate this was exceeded and completed ahead of schedule proceeds of £925m from the sale of the sweet pickles and table sauces 
business were received on 4 february 2013 
the directors do not recommend the payment of a dividend for the year ended 31 december 2013 2012 £nil
consistent with others in the industry the group monitors capital on the basis of the gearing ratio this ratio is calculated as net debt divided 
by total capital net debt is calculated as total borrowings less cash and cash equivalents total capital is calculated as equity plus net debt
the gearing ratios at 31 december 2013 and 31 december 2012 were as follows
2013
£m
2012
£m
total borrowings 9878 10039
less cash and cash equivalents 1570 532
net debt 8308 9507
total equity 177 4049
total capital 8485 13556
gearing ratio 98 70
the increase in gearing in 2013 is primarily due to large noncash charges in relation to impairment of the bread business and an increase in 
the retirement benefit obligation
under the group’s financing arrangement the group is required to meet two covenant tests which are calculated and tested on a 12 month 
rolling basis at the half year and full year each year the group has complied with these tests at june and december 2013 
premier foods plc  annual report and accounts 2013
116
financial statements 2294104 13 march 2014 923 am    proof 3
21 financial instruments continued
g financial compliance risk
risk
the group continues to operate with a high level of net debt of £8308m 2012 £9507m and is subject to operating within banking 
covenants set out in its refinancing agreement agreed with its bank syndicate in march 2012 which include net debtebitda and ebitda
interest covenant tests in the event these covenants are not met then the group would be in breach of its financing agreement and as would 
be the case in any covenant breach the banking syndicate could withdraw their funding to the group
in addition to covenant compliance the group must ensure that it manages its liquidity such that it has sufficient funds to meet its obligations 
as they fall due
it also supports three defined benefit pension schemes in the uk all three schemes have significant technical funding deficits which could 
have an adverse impact on the financial condition of the group 
mitigation
the group has financing arrangements which provide funding until june 2016 and has in place a debtor securitisation program to provide 
additional funding and liquidity in addition the group achieved its trading expectations for 2013
the group reviews its performance on an ongoing basis and formally tests and reports on covenant compliance to the group’s banking 
syndicate at each reporting date as well as providing forecast covenant compliance tests twice a year in the event of a forecast covenant 
breach the group would seek a covenant waiver or amendment from its banking syndicate
the group manages liquidity risk through both the treasury and finance functions cash flow forecasts are prepared and reviewed on a weekly 
basis normally covering a period of three months in addition cash flow forecasts are prepared as part of the group’s overall budgeting and 
forecasting processes and performance is monitored against this each month
funding agreements have been reached with the trustees of the pension schemes which mitigate our exposure in 2014 during 2013 the uk 
defined benefit schemes were closed to future accrual which will help mitigate the deficit going forward the group continues to monitor the 
pension risks closely working with the trustees to ensure a collaborative approach see note 31 for details of the group’s capital restructuring
22 provisions for liabilities and charges
restructuring 
£m
other
£m
total
£m
at 1 january 2012 229 240 469
utilised during the year 140  42 182
additional charge in the year 372 114 486
unwind of provision 03 05 08
released during the year 34  08 42
reclassifications 11 11 —
at 31 december 2012 441 298 739
utilised during the year 262  42 304
additional charge in the year 148 177 325
unwind of provision 03 02 05
released during the year 15  28 43
reclassifications 08  08 —
at 31 december 2013 307 415 722
analysis of total provisions
2013
£m
current  74 76 150
noncurrent  233 339 572
 307 415 722
analysis of total provisions
2012
£m
current  250 06 256
noncurrent  191 292 483
 441 298 739
restructuring provisions at 31 december 2013 primarily relate to provisions for nonoperational leasehold properties restructuring provisions 
at 31 december 2012 primarily relate to provisions in respect of the restructuring of the bread business and programmes aimed at reducing 
the group’s overhead cost base
other provisions at 31 december 2013 and 2012 primarily relate to insurance claims dilapidations against leasehold properties and 
environmental liabilities the costs relating to dilapidation provisions will be incurred over a number of years in accordance with the length 
of the leases these provisions have been discounted at rates between 081 and 362 the unwinding of the discount is charged to the 
statement of profit or loss under interest payable
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financial statements 2294104 13 march 2014 923 am    proof 3
notes to the financial statements
23 retirement benefit schemes
defined benefit schemes
the group operates a number of defined benefit schemes under current and former employees have built up an entitlement to retirement 
benefits on their retirement these are as follows
a the premier schemes which comprise
premier foods pension scheme “pfps”  
premier ambient products pension scheme “papps”  
premier grocery products pension scheme “pgpps”  
premier grocery products ireland pension scheme “pgpips”  
chivers 1987 pension scheme  
chivers 1987 supplementary pension scheme 
b the rhm schemes which comprise
rhm pension scheme 
premier foods ireland pension scheme
the most recent full actuarial valuation of both the pfps and rhm pension schemes was carried out on 31 march 2010  5 april 2010 
valuations as at 31 march 2013  5 april 2013 are currently being carried out and are due to be completed in 2014
the exchange rates used to translate the overseas euro based schemes are £100  11796 euros for the average rate during the year and 
£100  12006 euros for the closing position at 31 december 2013
in july 2010 the uk government announced changes to the inflation index used for statutory pension increases both for pensions in 
payment and pensions in deferment to apply to private sector pension schemes in 2012 a credit to past service costs of £464m in respect 
of the rhm pension scheme was recognised 
in march 2012 as part of the group’s refinancing package trustees of the group’s uk pension schemes agreed to defer deficit contribution 
payments until 1 january 2014
on 30 september 2013 the group’s uk defined benefit pension schemes closed to future accrual the future pension provision for these 
members is now made through the group’s defined contribution pension scheme in accordance with ias 19 revised the scheme 
obligations were revalued by the scheme actuaries immediately prior to the change and assumptions reviewed at that date the resulting 
change of £182m has been credited to the income statement within past service costs
all defined benefit plans are held separately from the company under trusts trustees are appointed to operate the schemes in accordance 
with their respective governing documents and pensions law the schemes meet the legal requirement for member nominated trustees 
representation on the trustee boards and the uk schemes have appointed a professional independant trustee as chair of the boards the 
members of the trustee boards undertake regular training and development to ensure that they are equipped appropriately to fulfil their 
function as trustees in addition each trustee board has appointed professional advisers to give them the specialist expertise they need to 
support them in the areas of investment funding legal covenant and administration
the trustee boards of the uk schemes generally meet at least 4 times a year to conduct their business to support these meetings the 
trustees have delegated certain aspects of the schemes’ operation to give specialist focus eg investment administration and compliance 
to committees for which further meetings are held as appropriate throughout the year these committees regularly report to the full trustee 
boards
the schemes invest through investment managers appointed by the trustees in a broad range of assets including uk and global equities and 
corporate and government bonds the plan assets do not include any of the group’s own financial instruments nor any property occupied 
by or other assets used by the group the pension schemes hold a security over the assets of the group which rank pari passu with the 
banks in the event of insolvency
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financial statements 2294104 13 march 2014 923 am    proof 3
23 retirement benefit schemes continued
the main risks to which the company is exposed in relation to the funded pension schemes are as follows
•	 liquidity risk — all schemes have significant technical funding deficits which could have an adverse impact on the financial condition of 
the group the company does not pay dividends and is restricted from paying dividends under the terms of its financing arrangements 
the group is also restricted from raising additional forms of debt finance other than a basket of c£20m and is not able to use free cash 
flow for acquisitions funding agreements were in place with the trustees of the pension schemes which mitigated the group’s exposure 
in 2013 the current schedule of contributions in place following the 2010 actuarial valuations provide for the deficit contributions to 
resume from january 2014 and continue until 2022 the group continues to monitor the pension risks closely working with the trustees 
to ensure a collaborative approach see note 31 for details of the revised schedule of contributions agreed as part of the capital 
restructuring
•	 mortality risk — the assumptions adopted make allowance for future improvements in life expectancy however if life expectancy 
improves at a faster rate than assumed this would result in greater payments from the schemes and consequently increases in the 
schemes liabilities the trustees review the mortality assumption on a regular basis to minimise the risk of using an inappropriate 
assumption
•	 yield risk — a fall in government bond yields will increase both the scheme’s assets and liabilities however the liabilities may grow by 
more in monetary terms thus increasing the deficit in the scheme
•	 inflation risk — the majority of the scheme’s liabilities increase in line with inflation and so if inflation is greater than expected the liabilities 
will increase 
the schemes can limit or “hedge” their exposure to the yield and inflation risks described above by investing in assets that move in the 
same direction as the liabilities in the event of a fall in yields or a rise in inflation the rhm pension scheme has fully hedged interest rate and 
inflation exposure to the extent of its funding level the pfps is in the process of implementing a 30 hedging of its liabilities and has put in 
place a plan to increase the hedging level when market conditions are considered to be attractive
the liabilities of the schemes are approximately 49 in respect of former active members who have yet to retire and approximately 51 in 
respect of pensioner members already in receipt of benefits the mean duration of the liabilities is approximately 17 years
ias 19 revised has been applied retrospectively from 1 january 2012 the principal change is that expected returns on plan assets of 
defined benefit plans are not recognised in profit or loss instead interest on the net defined benefit obligation is recognised in profit or loss 
calculated using the discount rate used to measure the defined benefit obligation in addition certain administration expenses are recognised 
in profit or loss rather than being deducted from the return on plan assets under the previous standard comparatives have been restated for 
the impact of the adoption of ias 19 revised ias 19 revised does not impact the balance sheet
impact of transition to ias 19 revised on consolidated statement of profit or loss
  
as at 
31 dec
 2013
£m
as at 
31 dec
2012
£m
increase in pensions expense 379 402
decrease in current tax expense 84   95
net decrease in profit and loss for the year 295 307
attributable to equity holders of the parent 295 307
noncontrolling interest — —
increase in remeasurements in other comprehensive income 379 402
increase in tax effect of remeasurements in other comprehensive income 84 95
net increase in other comprehensive income 295 307
net increase in total comprehensive income — —
attributable to equity holders of parent — —
noncontrolling interest — —
there was no material impact on the group’s consolidated statement of cash flows and consolidated balance sheet
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financial statements 2294104 13 march 2014 923 am    proof 3
notes to the financial statements
23 retirement benefit schemes continued
at the balance sheet date the combined principal actuarial assumptions used for all the schemes were as follows
 
premier 
schemes
rhm 
schemes
2013
discount rate 440 440
inflation — rpi 335 335
inflation — cpi 235 235
expected salary increases na  na
future pension increases 215 215
2012
discount rate 445 445
inflation — rpi 295 295
inflation — cpi 215 215
expected salary increases 395 395
future pension increases 205 205
for the smaller overseas schemes the discount rate used was 350 2012 340 expected salary increases are not applicable as closed 
to accrual 2012 300 and future pension increases of 175 2012 175 
the mortality assumptions are based on standard mortality tables which allow for future mortality improvements the assumptions are as 
follows
premier 
schemes
rhm 
schemes total
2013 life expectancy
male pensioner currently aged 65 878 863 867
female pensioner currently aged 65 900 885 888
male nonpensioner currently aged 45 892 876 880
female nonpensioner currently aged 45 915 900 903
2012 life expectancy
male pensioner currently aged 65 881 861 866
female pensioner currently aged 65 902 885 889
male nonpensioner currently aged 45 894 874 879
female nonpensioner currently aged 45 918 900 905
a sensitivity analysis on the principal assumptions used to measure the scheme liabilities at the year end is as follows
change in assumption impact on scheme liabilities
discount rate increasedecrease by 01 decreaseincrease by £63m£65m
inflation — rpi increasedecrease by 01 increasedecrease by £27m£26m
inflation — cpi increasedecrease by 01 increasedecrease by £27m£26m
assumed life expectancy at age 60 rate of mortality increase by 1 year increase by £121m
the sensitivity information has been derived using projected cash flows for the schemes valued using the relevant assumptions and 
membership profile as at 31 december 2013 extrapolation of these results beyond the sensitivity figures shown may not be appropriate
premier foods plc  annual report and accounts 2013
120
financial statements 2294104 13 march 2014 923 am    proof 3
23 retirement benefit schemes continued
the fair values of plan assets split by type of asset are as follows
pension scheme assets
premier 
schemes
£m
percentage
 of total

rhm schemes
£m
percentage
 of total

total
£m
percentage
 of total 
assets with a quoted price in an active 
market at 31 december 2013
uk equities 09 02 466 17 475 15
global equities 193 36 2329 88 2522 78
government bonds 121 23 5036 187 5157 160
corporate bonds 603 113 3238 121 3841 119
property 09 02 1808 67 1817 56
absolute return products 3702 697 8980 334 12682 394
cash 91 17 1832 68 1923 60
other 586 110 01 — 587 18
assets without a quoted price in an 
active market at 31 december 2013
infrastructure funds — — 1935 72 1935 60
swaps — — 1166 43 1166 36
private equity — — 1902 71 1902 59
other — — 509 18 509 17
fair value of scheme assets at  
31 december 2013 5314 100 26870 100 32184 100
assets with a quoted price in an active 
market at 31 december 2012
uk equities 07 01 953 36 960 30
global equities 160 30 2993 112 3153 98
government bonds 155 29 5729 214 5884 183
corporate bonds 865 161 5223 195 6088 190
property 10 02 1043 39 1053 33
absolute return products 2717 507 4404 165 7121 222
cash 95 18 4935 185 5030 157
other 1350 252 — — 1350 42
assets without a quoted price in an 
active market at 31 december 2012
infrastructure funds — — 1532 57 1532 48
swaps — — 1946 73 1946 61
private equity — — 1859 70 1859 58
other — — 09 — 09 —
fair value of scheme assets at  
31 december 2012 5359 100 26734 100 32093 100
the schemes invest in interest rate and inflation swaps to protect from fluctuations in interest and inflation
the amounts recognised in the balance sheet arising from the group’s obligations in respect of its defined benefit schemes are as follows
  
premier 
schemes
£m
rhm 
schemes
£m
total
£m
2013
present value of funded obligations 9169 29048 38217
fair value of plan assets 5314 26870 32184
deficit in scheme 3855 2178 6033
2012
present value of funded obligations 8711 28050 36761
fair value of plan assets 5359 26734 32093
deficit in scheme 3352 1316 4668
the aggregate deficit has increased by £137m during the year 2012 £184m primarily due to the increase in actuarial inflation  
assumptions used 
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financial statements 2294104 13 march 2014 923 am    proof 3
notes to the financial statements
23 retirement benefit schemes continued
changes in the present value of the defined benefit obligation were as follows
  
premier 
schemes
£m
rhm 
schemes
£m
total
£m
2013
opening defined benefit obligation 8711 28050 36761
current service cost 34 76 110
past service credit 177 183 360
interest cost 373 1213 1586
remeasurement losses 566 1184 1750
exchange differences 13 04 17
contributions by plan participants 22 40 62
benefits paid 373 1336 1709
closing defined benefit obligation at 31 december 2013 9169 29048 38217
2012 restated
1
opening defined benefit obligation 7819 26565 34384
current service cost 63 115 178
past service creditcost 186 316 130
interest cost 373 1240 1613
remeasurement losses 581 1602 2183
exchange differences 10 04 14
contributions by plan participants 38 68 106
benefits paid 339 1220 1559
closing defined benefit obligation at 31 december 2012 8711 28050 36761
1 comparatives have been restated to reflect the adoption of ias 19 revised
changes in the fair value of plan assets were as follows
  
premier 
schemes
£m
rhm 
schemes
£m
total
£m
2013    
opening fair value of plan assets 5359 26734 32093
interest income on plan assets 229 1161 1390
remeasurement gains 21 202 223
administrative costs 59 57 116
contributions by employer 108 121 229
contributions by plan participants 22 40 62
exchange differences 07 05 12
benefits paid 373 1336 1709
closing fair value of plan assets at 31 december 2013 5314 26870 32184
2012 restated
1
   
opening fair value of plan assets 5142 26418 31560
interest income on plan assets 244 1244 1488
remeasurement gains 141 128 269
administrative costs 18 129 147
contributions by employer 161 230 391
contributions by plan participants 38 68 106
exchange differences 10 05 15
benefits paid 339 1220 1559
closing fair value of plan assets at 31 december 2012 5359 26734 32093
1 comparatives have been restated to reflect the adoption of ias 19 revised
premier foods plc  annual report and accounts 2013
122
financial statements 2294104 13 march 2014 923 am    proof 3
23 retirement benefit schemes continued
the reconciliation of the net defined benefit liability over the period is as follows
  
premier 
schemes
£m
rhm 
schemes
£m
total
£m
2013
deficit in schemes at beginning of period 3352 1316 4668
amount recognised in profit or loss 60 02 62
remeasurements recognised in other comprehensive income 545 982 1527
contributions by employer 108 121 229
currency lossesgains 06 01 05
deficit in schemes at end of period 3855 2178 6033
2012 restated
1
deficit in schemes at beginning of period 2677 147 2824
amount recognised in profit or loss 396 76 320
remeasurements recognised in other comprehensive income 440 1474 1914
contributions by employer 161 230 391
currency losses — 01 01
deficit in schemes at end of period 3352 1316 4668
1 comparatives have been restated to reflect the adoption of ias 19 revised
remeasurements recognised in other comprehensive income are as follows
premier
schemes
£m
rhm
schemes
£m
total
£m
2013
remeasurement loss on plan liabilities 566 1184 1750
remeasurement gain on plan assets 21 202 223
net remeasurement loss for the year 545 982 1527
2012
remeasurement loss on plan liabilities 581 1602 2183
remeasurement gain on plan assets 141 128 269
net remeasurement loss for the year 440 1474 1914
the actual return on plan assets was a £1613m gain 2012 £1757m gain which is £223m more 2012 £269m more than the interest 
income on plan assets of £1390m 2012 £1488m at the start of the relevant periods 
the remeasurement loss on liabilities of £1750m 2012 £2183m loss comprises a loss on member experience of £450m 2012 £336m 
loss and a loss due to changes in actuarial assumptions of £1300m 2012 £1847 loss
the net remeasurement loss taken to the consolidated statement of comprehensive income was £1527m 2012 £1914m loss these were 
£1244m 2012 £1489m net of taxation with tax at 2325 for uk schemes and 125 for irish schemes
the group expects to contribute approximately £88m to its defined benefit plans in 2014 in relation to expenses and government levies 
2013 £256m including regular contributions and £83m 2013 £20m of additional contributions to fund the scheme deficits under the 
2012 schedule of contributions the increase in future deficit funding is a result of the revised refinancing package whereby the trustees 
of the group’s uk pension schemes have agreed to the suspension of deficit contribution payments until 1 january 2014 see note 31 for 
details of the revised schedule of contributions agreed as part of the capital restructuring
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financial statements 2294104 13 march 2014 923 am    proof 3
notes to the financial statements
23 retirement benefit schemes continued
the total amounts recognised in profit or loss are as follows
 
premier 
schemes
£m
rhm 
schemes
£m
total
£m
2013
operating profit
current service cost 34 76 110
past service credit 177 183 360
administrative costs 59 57 116
net interest cost 144 52 196
total 60 02 62
2012 restated
1
operating profit
current service cost 63 115 178
past service costcredit 186 316 130
administrative costs 18 129 147
net interest costincome 129 04 125
total 396 76 320
1 comparatives have been restated to reflect the adoption of ias 19 revised
defined contribution schemes
a number of companies in the group operate defined contribution schemes predominantly stakeholder arrangements in addition a number 
of schemes providing life assurance benefits only are operated the total expense recognised in the statement of profit or loss of £34m 
2012 £08m represents contributions payable to the plans by the group at rates specified in the rules of the plans 
24 other liabilities
2013
£m
2012
£m
deferred financing fees 158 –
deferred income 140 –
other accruals 06 13
other liabilities 304 13
25 reserves and share capital
share premium
the share premium reserve comprises the premium paid over the nominal value of shares for shares issued
merger reserve
the merger reserve comprises the nonstatutory premium arising on shares issued as consideration for acquisition of subsidiaries where 
merger relief under section 612 of the companies act 2006 applies less subsequent realised losses relating to those acquisitions during the 
year the company transferred to the pl reserve an amount that became realised on the write down of the bread business
other reserves
other reserves comprise the hedging reserve which represents the effective portion of the gains or losses on derivative financial instruments 
that have historically been designated as hedges and the translation reserve which represents exchange differences arising from re
translation at year end exchange rates of the net investment in foreign subsidiaries
profit and loss reserve
the profit and loss reserve represents the cumulative surplus or deficit and the own shares reserve which represents the cost of shares in 
premier foods plc purchased in the market and held by the employee benefit trust on behalf of the company in order to satisfy options and 
awards under the company’s incentive schemes
premier foods plc  annual report and accounts 2013
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financial statements 2294104 13 march 2014 923 am    proof 3
25 reserves and share capital continued
share capital
number of 
shares
ordinary shares
£m
share premium
£m
total
£m
at 1 january 2011 239805802 240 11247 11487
shares issued under share option schemes 404 — — —
at 31 december 2012 239806206 240 11247 11487
shares issued under share option schemes 21960 — — —
at 31 december 2013 239828166  240  11247 11487
during the year 21960 2012 404 ordinary shares of 10 pence each were issued to certain employees at a price of 70 pence per ordinary 
share 2012 96 pence pursuant to exercise of share options under the sharesave plan
share award schemes
the company has share award schemes for certain senior executives and key individuals for 2013 a summary of the company’s share 
award schemes is as follows
1 a ceo coinvestment award “ceo coinvestment award” the scheme is structured as a share matching plan and was specifically 
created to facilitate the recruitment of gavin darby as ceo in 2013 gavin darby is required to commit and retain a significant amount of 
capital in the form of premier foods’ shares the number of shares subject to awards the periods in which they were granted and the 
periods in which they may be awarded are given below these awards are equitysettled and vest on 1 may 2014 1 may 2015 and 1 may 
2016 no further awards will be made under this plan
2 a longterm incentive plan “2011 ltip” for executive directors and senior managers approved by shareholders in 2011 the 2011 ltip 
comprises two elements performance shares and matching shares
for performance shares participants have the right to subscribe for ordinary shares at nil cost the number of shares subject to awards 
the periods in which they were granted and the periods in which they may be awarded are given below these awards are equitysettled 
and have a maximum term of three years 
the vesting of the 2011 performance share award is conditional on achievement of an earnings per share performance target the 
vesting of the 2012 and 2013 performance share awards are conditional on achievement of a combination of absolute adjusted earnings 
per share targets and average share price targets
for matching shares participants are required to commit and retain a significant amount of capital in the form of premier foods’ shares 
the number of shares subject to awards the periods in which they were granted and the periods in which they may be awarded are given 
below these awards are equitysettled and have a maximum term of three years 
the vesting of the 2011 matching share award is conditional on achievement of an absolute share price target matching shares were not 
awarded in 2012 or 2013
3 a deferred share bonus plan “dsbp” for executive directors and senior managers which operates alongside the annual bonus plan 
awards are satisfied in the form of shares deferred for a period of up to two years there were no awards outstanding at 31 december 
2013
4 a restricted stock plan “rsp” which provides specific adhoc share awards to senior managers awards are normally subject only to 
continued employment these awards may be equitysettled or cashsettled and normally have a retention term of two to three years
5 michael clarke recruitment award “recruitment award” awards made following the appointment of michael clarke to compensate 
him for forfeited equity awards from his previous employer the recruitment award was subject to continued employment and the 
remuneration committee’s assessment of both personal and group performance at the relevant vesting dates a portion of the awards 
granted under the recruitment award relating to employment in 2013 have now vested and been exercised the remaining options 
lapsed on cessation of employment in june 2013 there were no awards outstanding at 31 december 2013
6 a longterm incentive plan “2004 ltip” for executive directors and senior managers approved by shareholders in 2004 the number of 
shares subject to awards the periods in which they were granted and the periods in which they may be awarded are given below these 
awards were equitysettled and had a maximum term of three years no further awards are anticipated under this plan
the performance and vesting conditions of the scheme are aligned with those of the coinvestment plan below during the year 
performance conditions were not met and the 2010 award lapsed in full there were no awards outstanding at 31 december 2013 
7 a coinvestment plan “2007 cip” for executive directors and senior managers the scheme was structured as a share matching plan 
and the individuals involved in the scheme were required to commit and retain a significant amount of capital in the form of premier foods’ 
shares the number of shares subject to awards the periods in which they were granted and the periods in which they may be awarded 
are given below these awards were equitysettled and had a maximum term of three years no further awards are anticipated under  
this plan
the vesting of matching awards is conditional on achievement against a combination of eps and tsr performance targets during the year 
performance conditions were not met and so the 2010 cip award lapsed in full there were no awards outstanding at 31 december 2013
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financial statements 2294104 13 march 2014 923 am    proof 3
notes to the financial statements
25 reserves and share capital continued
share option schemes
the company has share option schemes for certain senior executives and key individuals the employees involved in the schemes hold 
options to subscribe for up to 67m 2012 61m ordinary shares of 10 pence each between 2014 and 2016 granted at prices ranging 
between 10 pence per ordinary share and 1620 pence per ordinary share for 2013 a summary of the company’s share option schemes is 
as follows
1 a savings related share option scheme “sharesave plan” for all employees the employees involved in this hmrc approved save 
as you earn scheme have the right to subscribe for up to 65m ordinary shares the number of shares subject to options the periods 
in which they were granted and the periods in which they may be exercised are given below these options are equitysettled have a 
maximum term of 35 years and generally vest only if employees remain in employment to the vesting date
2 the company adopted an executive share option scheme “esos” at the time of flotation for executive directors and senior managers 
a portion of the options granted under the esos have now vested and are exercisable between three and ten years after grant as certain 
performance criteria have been met these options are equitysettled and the number of shares subject to options the periods in which 
they were granted and the periods in which they may be exercised are given below the last award was made in 2004 and will lapse in 
2014 no further awards will be made under this scheme 
details of the share awards of the premier foods plc ceo coinvestment award are as follows
premier foods plc ceo coinvestment award
2013
awards
weighted 
average 
exercise price 
p
outstanding at beginning of year — —
granted during the year 1477572 10
outstanding at the end of the year 1477572 10
exercisable at the end of the year — —
the awards outstanding at 31 december 2013 had a weighted average remaining contractual life of 11 years the weighted average fair 
value of awards granted during the year was nil pence per award
details of the share awards of the premier foods plc 2011 ltip performance share award are as follows
premier foods plc 2011 ltip performance share award
2013 2012
awards
weighted 
average 
exercise price 
p awards
weighted 
average 
exercise price 
p
outstanding at beginning of year 3883365  10  564653  10 
granted during the year 2150395 10 3608689 10
forfeited during the year 2986906 10 289977 10
outstanding at the end of the year 3046854 10 3883365 10
exercisable at the end of the year — — — —
the awards outstanding at 31 december 2013 had a weighted average remaining contractual life of 16 years 2012 21 years the weighted 
average fair value of awards granted during the year was nil pence per award
details of the share awards of the premier foods plc 2011 ltip matching share award are as follows
premier foods plc 2011 ltip matching share award
2013 2012
awards
weighted 
average 
exercise price 
p awards
weighted 
average 
exercise price 
p
outstanding at beginning of year 267376  10  267376  10 
forfeited during the year 140749 10 — —
outstanding at the end of the year 126627 10 267376 10
exercisable at the end of the year — — — —
the awards outstanding at 31 december 2013 had a weighted average remaining contractual life of 04 years 2012 14 years 
premier foods plc  annual report and accounts 2013
126
financial statements 2294104 13 march 2014 923 am    proof 3
25 reserves and share capital continued
details of the share awards of the premier foods plc restricted stock plan are as follows 
premier foods plc restricted stock plan
2013 2012
awards
weighted 
average 
exercise price 
p awards
weighted 
average 
exercise price 
p
outstanding at beginning of year 104347  10 — —
granted during the year 3931327 10 104347 10
outstanding at the end of the year 4035674 10 104347 10
exercisable at the end of the year — — — —
the awards outstanding at 31 december 2013 had a weighted average remaining contractual life of 12 years 2012 23 years the weighted 
average fair value of awards granted during the year was nil pence per award
details of the share awards of the premier foods plc recruitment award are as follows
premier foods plc recruitment award
2013 2012
awards
weighted 
average 
exercise price 
p awards
weighted 
average 
exercise price 
p
outstanding at beginning of year 875000  10 — —
granted during the year — — 875000 10
exercised during the year 500000 10 — —
forfeited during the year 375000 10 — —
outstanding at the end of the year — — 875000 10
exercisable at the end of the year — — — —
there were no awards outstanding at 31 december 2013
details of the share awards of the premier foods plc 2004 ltip are as follows
premier foods plc 2004 ltip
2013 2012
awards
weighted 
average 
exercise price 
p awards
weighted 
average 
exercise price 
p
outstanding at beginning of year 196330 10 509167 10
forfeited during the year 196330 10 312837 10
outstanding at the end of the year — — 196330 10
exercisable at the end of the year — — — —
there were no awards outstanding at 31 december 2013 
details of the share awards of the premier foods plc 2007 cip are as follows
premier foods plc 2007 cip
2013 2012
awards
weighted 
average 
exercise price 
p awards
weighted 
average 
exercise price 
p
outstanding at beginning of year 308414 10 833428 10
forfeited during the year 308414 10 525014 10
outstanding at the end of the year — — 308414 10
exercisable at the end of the year — — — —
there were no awards outstanding at 31 december 2013
stock code pfd wwwpremierfoodscouk
127
financial statements 2294104 13 march 2014 923 am    proof 3
notes to the financial statements
25 reserves and share capital continued
details of the share options of the premier foods plc sharesave plan are as follows
premier foods plc sharesave plan
2013 2012
options
weighted 
average 
exercise price 
p options
weighted 
average 
exercise price 
p
outstanding at beginning of year 5959333 114 6191072 170
exercised during the year 21960 70 592 96
granted during the year 2391628 111 2367721 51
forfeited during the year 1850155 166 2598868 228
outstanding at the end of the year 6478846 98 5959333 114
exercisable at the end of the year 1044438 152 462306 360
during the year 24m 2012 24m options were granted under the sharesave schemes with a weighted average exercise price at the date of 
exercise of 111 pence per ordinary share 2012 51 pence 
the options outstanding at 31 december 2013 had a weighted average exercise price of 98 pence 2012 114 pence and a weighted 
average remaining contractual life of 19 years 2012 19 years
details of the share options of the premier foods plc esos are as follows
premier foods plc executive share option scheme
2013 2012
year of expiry options
weighted 
average 
exercise price 
p options
weighted 
average 
exercise price 
p
outstanding at beginning of year 131885 1620 131885 1620
outstanding at the end of the year 2014 131885 1620 131885 1620
exercisable at the end of the year 131885 1620 131885 1620
the options outstanding at 31 december 2013 had a weighted average exercise price of 1620 pence 2012 1620 pence and a weighted 
average remaining contractual life of 06 years 2012 16 years
in 2013 the group’s continuing operations recognised an expense of £38m 2012 £47m related to all equitysettled share based payment 
transactions 
a summary of the range of exercise price and weighted average remaining contractual life is shown below 
weighted average remaining life and exercise prices
as at 31 dec 2013 as at 31 dec 2012
number 
outstanding at 
end of the year
weighted 
average 
remaining 
contractual life 
years
weighted 
average 
exercise price 
p
number 
outstanding at 
end of the year
weighted 
average 
remaining 
contractual life 
years
weighted 
average 
exercise price 
p
at 10 pence 8686727 13 10 5530485 18 10
£010 to £990 6478846 19 98 5959333 19 114
£1000 to £2000 131885 06 1620 131885 16 1620
total 15297458 15 61 11621703 19 81
premier foods plc  annual report and accounts 2013
128
financial statements 2294104 13 march 2014 923 am    proof 3
26 notes to the cash flow statement
reconciliation of profit before tax to cash flows from operating activities
year ended
31 dec 2013
£m
year ended
31 dec 2012
restated
1
£m
continuing operations
profitloss before taxation 44 80
net finance cost 482 917
operating profit 526 837
depreciation of property plant and equipment 173 234
amortisation of intangible assets 438 504
lossprofit on the sale of businesses 24 331
loss on disposal of property plant and equipment 78 41
revaluation lossesgains on financial instruments 19 21
employee incentive schemes 41 46
net cash inflow from operating activities before interest tax and movements in working capital 1299 1310
decreaseincrease in inventories 50 88
decreaseincrease in trade and other receivables 357 01
decrease in trade and other payables and provisions 456 538
movement in retirement benefit obligations 163 237
cash generated from continuing operations 1087 446
discontinued operations 147 118
cash generated from operating activities 1234 564
1 comparatives have been restated to reflect the reclassification of the bread business as a discontinued operation and the adoption of ias 19 revised
reconciliation of cash and cash equivalents to net borrowings
year ended
31 dec 2013
£m
year ended
31 dec 2012
£m
net inflowoutflow of cash and cash equivalents 1472 123
decrease in finance leases 04 03
increasedecrease in borrowings 214 2620
other noncash movements 63 2056
decrease in borrowings net of cash 1199 444
total net borrowings at beginning of year 9507 9951
total net borrowings at end of year 8308 9507
analysis of movement in borrowings 
as at  
1 jan 2013
£m
cash flow
£m
other  
noncash 
movements
£m
as at  
31 dec 2013
£m
bank overdrafts 435 435 — —
cash and bank deposits 532  1037  01  1570 
net cash and cash equivalents 97  1472  01  1570 
borrowings — term facilities 7552 757 — 6795
borrowings — revolving credit facilities 1317 728 — 2045
finance leases 04 04  — —
securitisation facility 957 243 —  1200
gross borrowings net of cash
1
 9733 1262  01  8470
debt issuance costs 226 — 64 162 
total net borrowings
1
 9507 1262  63 8308
1 borrowings excludes derivative financial instruments and other financial liabilities fair valued through profit or loss
the group has the following cash pooling arrangements where both the group and the bank have a legal right of offset
as at 31 dec 2013 as at 31 dec 2012
offset 
asset
offset 
liability
net 
offset 
asset
offset 
asset
offset
liability
net 
offset 
asset
cash cash equivalents and bank 
overdrafts 3228 1658 1570 2612 2515 97
stock code pfd wwwpremierfoodscouk
129
financial statements 2294104 13 march 2014 923 am    proof 3
notes to the financial statements
27 operating lease commitments
the group has lease agreements in respect of property plant and equipment for which future minimum payments extend over a number  
of years leases primarily relate to the group’s properties which principally comprise offices and factories lease payments are typically 
subject to market review every five years to reflect market rentals but because of the uncertainty over the amount of any future changes 
such changes have not been reflected in the table above within our leasing arrangements there are no significant contingent rentals renewal 
purchase or escalation clauses
the future aggregate minimum lease payments under noncancellable operating leases for continuing operations are as follows
2013 2012
property
£m
plant and
 equipment
£m
property
£m
plant and
 equipment
£m
within one year 38 05 120 55
between 2 and 5 years 132 13 440 44
after 5 years 156 — 668 01
total operating lease commitments 326 18 1228 100
the group sublets various properties under noncancellable lease arrangements sublease receipts of £15m 2012 £12m were 
recognised in the statement of profit or loss during the year the total future minimum sublease payments at the year end is £31m  
2012 £34m
28 capital commitments
capital expenditure for continuing operations contracted for at the end of the reporting period but not yet incurred is as follows
2013
£m
2012
£m
contracts placed for future capital expenditure not provided in the financial statements
intangible assets — 04 
property plant and equipment 31 85
total capital commitments 31 89
29 contingencies
there were no material contingent liabilities at 31 december 2013 other contingencies and guarantees in respect of the parent company are 
described in note 9 of the parent company financial statements
30 related party transactions
key management personnel of the group are considered to be the executive and nonexecutive directors and the group executive 
details of their remuneration are set out below in aggregate for each of the categories specified in ias 24 “related party disclosures”  
further information about the remuneration of individual directors is provided in the audited section of the annual report on remuneration on 
pages 70 to 75
year ended
31 dec 2013
£m
year ended
31 dec 2012
£m
short term employee benefits 58 56 
post employment benefits 03 02 
termination benefits — 02 
share based payments 36 13 
total 97 73 
wp x investments limited “warburg pincus” is considered to be a related party of the group by virtue of its 173 2012 173 equity 
shareholding in premier foods plc and of its power to appoint a member to the board of directors which has been exercised 
apart from the information above there were no other related party transactions
31 subsequent events
disposal of bread business
on 27 january 2014 the group announced that it had agreed to sell a majority share in the bread business to the gores group llc the 
disposal is expected to be completed in the second quarter of 2014
the disposal is subject to and conditional upon i the passing of the resolutions by shareholders at the general meeting ii premier foods 
plc obtaining certain consents andor waivers from the lenders under the group’s finance facilities iii premier foods plc obtaining certain 
consents andor waivers from the trustees of each of the pension schemes and iv obtaining competition approval from the european 
commission conditions ii and iii will be satisfied upon completion of the capital refinancing plan 
premier foods plc  annual report and accounts 2013
130
financial statements 2294104 13 march 2014 923 am    proof 3
31 subsequent events continued
premier foods plc has agreed to pay the gores group llc reasonable outofpocket costs if the disposal does not complete due to a failure 
to satisfy the conditions except that where the disposal does not complete due to a failure to satisfy the competition condition premier 
foods plc will only be liable for the gores group llc’s costs if it is responsible for such failure the costs indemnity is capped at the lower of 
the gores group llc’s costs and 1 of premier foods plc’s market capitalisation at the time of signing the disposal agreement
capital restructuring
on 4 march 2014 the group announced its proposal to diversify its sources of finance to provide a solid foundation on which it can drive future 
growth through its category based strategy and leveraging its strengths this transformational capital restructure includes a fully underwritten 
equity raise of approximately £350m gross of fees through a placing and rights issue the issue of £475m senior secured loan notes and a new 
£300m revolving credit facility with a smaller bank syndicate significantly the group has also reached a pensions framework agreement with the 
pension scheme trustees following the triennial actuarial valuation which provides the platform for this new capital structure to be put in place
equity issue
the group announced it is proposing to raise new equity of approximately £350m gross of fees the issue will be fully underwritten by a group 
of lending banks this issuance will reduce the indebtedness of the group and substantially strengthens the balance sheet
pensions agreement
the group has agreed what it considers to be a comprehensive and significant agreement with the pension scheme trustees the pension 
deficit contribution schedule will on completion of the capital restructuring be revised with the impact of reducing cash payments when 
compared to the previous schedule by £161m over the next six years committed deficit contributions are fixed until december 2019 and set 
out in the “capital refinancing terms” table below under the new arrangements the pension schemes will be granted security up to £450m 
in aggregate and will have certain dividend matching rights for any dividends paid by the group up to 2019 
revolving credit facility and securitisation facility
the group’s existing term loan and revolving credit facilities will be repaid to the respective lenders on completion of the recapitalisation these 
facilities will be replaced by senior secured notes and a revolving credit facility of £300m which is due to mature in march 2019 and attracts 
an initial bank margin of 350 above libor the group has agreed with the lenders of the new revolving credit facility that dividends are 
permitted to be distributed to shareholders when the group’s net debtebitda ratio falls below a ratio of 30x this facility has been arranged 
with a significantly smaller group of lenders than was the case previously and includes an appropriate covenant package the details of which 
are set out in the “capital refinancing terms” table below
following completion of the joint venture transaction the group’s ability to draw on its existing securitisation facility of £120m is expected to 
reduce to around £60m and attracts a margin of 275 above the cost of commercial paper
senior secured notes
to achieve its objective of diversifying its sources of finance the group also announced its intention to raise approximately £475m of senior 
secured notes this programme will extend the maturity of this tranche of the group’s debt by up to seven years and will bring in a new and 
diversified investor base the notes are likely to be issued as a combination of fixed and floating rates although in the case of floating rate 
notes the group intends to use plain vanilla swaps to eliminate the net interest rate exposure the group has also entered into a backstop 
arrangement on standard market terms under which issuance of these notes is effectively underwritten
capital refinancing terms
equity approximate firm placing £100m
approximate rights issue £250m
approximate gross issue proceeds £350m
pension contributions fixed until 2019 revised deficit contribution schedule as follows
2014  £35m
2015    £9m
2016  £42m
2017  £50m
2018  £44m
2019  £42m
total £222m
recovery period extended to 2032
lending facilities revolving credit facility “rcf” £300m
rcf maturity march 2019
rcf margin 350  libor
committment fee on undrawn facilities 40 of applicable margin
securitisation facility  margin £120m at 275  cost of commercial paper
senior secured notes amount £475m
tenor 6 year floating7 year fixed
stock code pfd wwwpremierfoodscouk
131
financial statements 2294104 13 march 2014 923 am    proof 3
premier foods plc — company financial statements
the following statements reflect the financial position of the company premier foods plc as at 31 december 2013 and 2012 these financial 
statements have been prepared in accordance with generally accepted accounting practice in the united kingdom “uk gaap” the directors 
have taken advantage of the exemption available under section 408 of the companies act 2006 and not presented a company profit and loss 
account
balance sheet
note
as at
31 dec 2013
£m
as at
31 dec 2012
£m
fixed assets 
 investments in group undertakings 3 —  4791 
current assets 
 debtors 4 8956  6604 
 deferred tax assets 6 11  09 
 cash at bank and in hand  03  03 
total assets  8970  11407 
 creditors amounts falling due within one year 5 3141 597
net current assets 5829  6019 
total assets less current liabilities  5829  10810 
capital and reserves    
 called up share capital 7 240  240 
 share premium account 7 11247  11247 
 merger reserve 7 —  297 
 profit and loss account 7 5658  974
total shareholders’ funds  5829 10810 
the notes on pages 133 to 135 form an integral part of the financial statements
the financial statements on pages 132 to 135 were approved by the board of directors on 4 march 2014 and signed on its behalf by
gavin darby 
chief executive officer
alastair murray 
chief financial officer
premier foods plc  annual report and accounts 2013
132
financial statements 2294104 13 march 2014 923 am    proof 3
1  accounting policies
basis of preparation 
the financial statements have been prepared on the going concern basis and in accordance with the companies act 2006 and applicable 
accounting standards in the united kingdom “uk gaap” under the historical cost convention the loss for the year of £5016m 2012 
£2464m loss is recorded in the accounts of premier foods plc the directors have taken advantage of the exemption available under section 
408 of the companies act 2006 and not presented a profit and loss account for the company
the directors consider that the accounting policies set out below are the most appropriate and have been consistently applied
the company is exempt under the terms of financial reporting standard 8 “related party disclosures” “frs 8” from disclosing related party 
transactions with entities that are wholly owned subsidiaries of the premier foods plc group or investees of the premier foods plc group
fixed asset investments
investments held as fixed assets are stated at cost less any provision for impairment in their value
taxation
the charge for taxation is based on the profit for the year and takes into account deferred taxation 
the company provides in full for deferred tax arising from timing differences between the recognition of gains and losses in the financial 
statements and their inclusion in tax computations to the extent that a liability or an asset is expected to be payable or recoverable in the 
foreseeable future deferred tax is measured at the average tax rates that are expected to apply in the periods in which the timing differences 
are expected to reverse based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date the 
company discounts its deferred tax liability as appropriate
deferred tax assets are recognised to the extent that it is probable that future taxable benefit will be available against the temporary difference 
can be utilised their carrying amount is reviewed at each balance sheet date on the same basis
cash and liquid resources
shortterm cash deposits which can be called on demand without any material penalty are included within cash balances in the  
balance sheet
share based payments
the company operates a number of equitysettled sharebased compensation plans the fair value of employee share option plans is 
calculated using an optionpricing model in accordance with financial reporting standard 20 sharebased payment “frs 20” the 
resulting cost is charged to the profit and loss account over the vesting period of the options for employees employed by the parent 
company or treated as an investment in subsidiaries in respect of employees employed by the subsidiaries where the cost is recharged  
the value of the charge is adjusted to reflect expected and actual levels of options vesting 
the total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted excluding the 
impact of any nonmarket vesting conditions for example profitability and sales growth targets nonmarket vesting conditions are included 
in assumptions about the number of options that are expected to vest at each balance sheet date the group revises its estimates of the 
number of options that are expected to vest and recognises the impact of the revision to original estimates if any in profit and loss with a 
corresponding adjustment to equity
dividends
dividend distribution to the company shareholders is recognised as a liability in the company’s financial statements in the period in which the 
dividends are approved by the company’s shareholders and for interim dividends in the period in which they are paid
operating lease agreements
leases in which a significant portion of risks and rewards of ownership are retained by the lessor are classified as operating leases rental 
costs under operating leases net of any incentives received from the lessor are charged to the profit and loss account on a straightline basis 
over the lease period
2 operating profit
audit fees in respect of the company are £nil 2012 £nil note 5b of the group consolidated financial statements provides details of the 
remuneration of the company’s auditors on a group basis
at 31 december 2013 the company had three employees 2012 three and their remuneration totalled £16m 2012 £23m this excludes 
the company’s six 2012 eight non executive directors whose remuneration totalled £06m 2012 £07m directors’ emolument disclosures 
are provided in the single figure table on page 70 of this annual report
notes to the company financial statements
stock code pfd wwwpremierfoodscouk
133
financial statements 2294104 13 march 2014 923 am    proof 3
notes to the company financial statements
3 investments in group undertakings
2013
£m
2012
£m
cost
at 1 january 17573 17539
additions 20 34
at 31 december 17593  17573 
accumulated impairment
at 1 january 12782 10242
impairment charge for the year 4811 2540
at 31 december 17593 12782
nbv at 31 december — 4791
impairment
an impairment charge of £4811m 2012 £2540m was recognised in the year against the value of the company’s investment in subsidiaries 
principally as a result of the announcement of the conditional sale of the group’s majority share in the bread business on 27 january 2014
during the year a capital contribution of £20m 2012 £34m was given in the form of share incentive awards to employees of subsidiary 
companies which were reflected as an increase in investments see note 16 in the group financial statements for a list of the principal 
subsidiary undertakings the companies listed are those that principally affect the results and assets of the company the directors consider 
that to give full particulars of subsidiary undertakings would lead to a statement of excessive length a full list of subsidiary undertakings is 
available from the company secretary
4 debtors
 
2013
£m
2012
£m
amounts owed by group undertakings 8956 6604
amounts owed by group undertakings are unsecured have no fixed date of repayment are repayable on demand and are not subject to 
interest rate risk as they are interest free with the exception of £3302m 2012 £3197m which attracted interest at a rate of libor plus 
30 2012 libor plus 30 carrying value approximates fair value 
5 creditors amounts falling due within one year
 
2013
£m
2012
£m
amounts owed to group undertakings 2975  452 
corporation tax 166  145 
total creditors falling due within one year 3141 597
amounts owed to group undertakings are unsecured have no fixed date of repayment are repayable on demand and are not subject to 
interest rate risk as they are interest free with the exception of £394m 2012 £387m which attracted interest at a rate of libor plus 30 
2012 libor plus 30 carrying value approximates fair value
6 deferred tax
2013
£m
2012
£m
at 1 january  09  08 
charged to the profit and loss account 02 01 
at 31 december 11 09 
the deferred tax asset relates to sharebased payments
premier foods plc  annual report and accounts 2013
134
financial statements 2294104 13 march 2014 923 am    proof 3
7 called up share capital and other reserves
 
called up share 
capital
£m
share premium 
account
£m
merger reserve
£m
profit and loss 
account 
£m
total
£m
at 1 january 2012 240  11247  2280  536 13231 
loss for the year — — — 2464 2464
realisation of merger reserve b — — 1983 1983 —
share based payments a — — — 43  43 
at 31 december 2012 240  11247  297  974 10810 
loss for the year — — — 5016 5016
realisation of merger reserve b — — 297 297 —
share based payments a — — — 35  35 
at 31 december 2013 240  11247  —  5658 5829 
called up share capital
2013
£m
2012
£m
issued and fully paid
239828166 2012 239806206 ordinary shares of 10 pence each 240 240
a share based payments
the costs reflect the company’s share option schemes in operation further details are available in note 25 of the group’s consolidated 
financial statements
the charge relating to employees of the company amounted to £17m 2012 £10m further details of these schemes can be found in the 
annual report on remuneration on pages 70 to 75
b realisation of merger reserve
the company transferred to the profit and loss account an amount that became realised on the write down of the related investment
8 operating lease commitments
at 31 december 2013 the company had annual commitments under noncancellable operating leases in respect of land and buildings as 
follows
 
2013
£m
2012
£m
between 2 and 5 years 03 —
after 5 years —  03 
the lease expense has been borne by a subsidiary company
9 contingencies and guarantees
premier foods plc has provided guarantees to third parties in respect of borrowings of certain subsidiary undertakings the maximum amount 
guaranteed at 31 december 2013 is £12bn 2012 £12bn
10 subsequent events
details of subsequent events are shown in note 31 to the group financial statements
stock code pfd wwwpremierfoodscouk
135
financial statements 2294104 13 march 2014 923 am    proof 3
share capital information
the company’s issued share capital at 31 december 2013 comprised 239828166 ordinary 10p shares during the year 21960 ordinary shares 
were issued details of the movements can be found in note 25 all of the ordinary shares rank equally with respect to voting rights the rights to 
receive dividends and distributions on a winding up
substantial shareholdings
information provided to the company pursuant to the financial conduct authority’s “fca” disclosure and transparency rules “dtrs” is 
published on a regulatory information service and on the group’s website as at 4 march 2014 the company has been notified of the following 
interests of 3 or more in the company
shareholder
ordinary
shares
 of 
 capital
nature
 of holding
warburg pincus 41573972 1733 direct
paulson  co inc 25830000 1077 direct
schroders plc cazenove capital management limited 24024331 1002 indirect
standard life investments ltd 12178274 508 direct
jpmorgan asset management uk limited 11953403 498 indirect
norges bank investment management nbim 9220355 384 direct
shareholder information  frequently 
asked questions “faqs”
restrictions on transfer of securities
in accordance with the articles there are no 
restrictions on share transfers limitations 
on the holding of any class of shares or any 
requirement for prior approval of any transfer
shareholder faqs
many of the information requests received by 
our shareholder helpline can be found in the 
investor section of our website shareholders 
can also sign up for regulatory news alerts to 
receive an email when news on the group is 
released these include additional financial 
news releases throughout the year which are 
not mailed to shareholders
wwwpremierfoodscoukinvestor
relations
managing your shares
the company’s register of members 
is maintained by our registrar equiniti 
shareholders with queries relating to their 
shareholding should contact equiniti directly 
using the details given in key contacts below
duplicate documents
many shareholders still receive duplicate 
documentation from having more than one 
account on the share register if you think 
you fall into this category and would like 
to combine your accounts please contact 
equiniti
notifying the company of a change 
of address
shareholders should notify equiniti in writing of 
any change if shares are held in joint names 
the notification must be signed by the first 
named shareholder
notifying the company of a change 
of name
to notify the company of a change of name 
please inform equiniti in writing a copy of any 
marriage certificate or change of name deed 
should be provided as evidence of the name 
change
transferring premier foods plc 
shares
transferring shares to someone else requires 
the completion of a stock transfer form these 
forms are available by calling equiniti 
lost premier foods plc share 
certificates
shareholders who have lost their share 
certificates or have had their certificates 
stolen should inform equiniti immediately by 
phone 
found an old share certificate for 
premier foods plc
shareholders who find they have an old share 
certificate and wish to find out its value should 
contact equiniti directly using the details 
below 
sharegift
shareholders with a small number of shares 
the value of which makes it uneconomic to 
sell them may wish to consider donating 
them to charity through sharegift a registered 
charity administered by the orr mackintosh 
foundation find out more at  
wwwsharegiftorg or call  
44 020 7930 3737
viewing the articles of the company
the articles and other documents referred 
to in this annual report are available for 
inspection at the registered office the articles 
set out the powers of directors amongst 
other things and are available on the group’s 
website
wwwpremierfoodscoukaboutus
corporategovernancearticlesof
associationcfm
shareholder security
shareholders are reminded to remain vigilant 
against the threat of share scams and fraud 
in particular be wary of any unsolicited mail 
or phone calls offering to buy or sell shares or 
offers of free reports about the company for 
further information and guidance please refer 
to the fca’s website  
wwwfcaorgukconsumersscams
premier foods plc  annual report and accounts 2013
136
supplementary information 2294104 13 march 2014 923 am    proof 3
annual general meeting agm
the agm usually takes place in london and 
is an opportunity for all shareholders to ask 
questions and vote on the resolutions put 
forward by the board at least 20 working 
days before the agm the notice of agm 
a copy of this annual report if they request 
a copy in writing and a form of proxy are 
issued to shareholders all documents relating 
to the agm are available on the group’s 
website
the notice of agm sets out the proposed 
resolutions and a brief synopsis of each of 
them shareholders are invited to either attend 
the agm in person or appoint a proxy to vote 
on their behalf voting at the agm is by poll as 
this gives a more democratic outcome given 
that the proxy votes are added to the votes 
cast in person details of the proxy votes for 
against and withheld are made available on the 
group’s website after the agm
the chairmen of the audit nomination and 
remuneration committees are normally 
available at the agm to take any relevant 
questions and all other directors are expected 
to attend all directors attended the 2013 
agm
2014 agm — tuesday 29 april 2014 
at 1100 am
the 2014 agm will be held at the holiday 
inn — bloomsbury coram street london 
wc1n 1ht 
key contacts
registered office and head office
premier foods plc premier house  
centrium business park griffiths way 
st albans hertfordshire al1 2re  
registered in england and wales 5160050 
tel 44 01727 815850
general counsel  company 
secretary
andrew mcdonald 
email  
companysecretarypremierfoodscouk 
tel 44 01727 815850
investor relations
richard godden 
email investorrelationspremierfoodscouk 
tel 44 01727 815850
registrar 
equiniti aspect house spencer road 
lancing west sussex bn99 6da 
tel 0871 384 2030 or 44 0121 415 7047  
textelminicom 0871 384 2255 or  
44 0121 415 7028 
calls to 0871 numbers cost 8p per minute 
plus network extras lines are open 830 am 
to 530 pm monday to friday
stock code pfd wwwpremierfoodscouk
137
financial statements supplementary information 2294104 13 march 2014 923 am    proof 3
adjusted earnings per share
adjusted earnings per share is defined as 
adjusted profit before tax less a notional tax 
rate for the group divided by the weighted 
average number of shares in issue during the 
period
adjusted profit before tax
trading profit less net regular interest payable
amortisation
an annual charge made in a company’s profit 
and loss account to reduce the value of an 
intangible asset to its residual value over its 
useful economic life
articles
articles of association — the constitution of 
the company
calledup share capital
ordinary shares issued and fully paid 
capex
capital expenditure
capital refinancing plan
capital restructuring
a plan comprising of three components the 
raising of gross proceeds of approximately 
£350 million by way of a placing and rights 
issue the raising of gross proceeds of 
approximately £475 million by way of the issue 
of senior secured loan notes and a £300 
million new revolving credit facility
cgu
cashgenerating unit — the smallest 
identifiable group of assets that generate cash 
inflows that are largely independent of the 
cash inflows from other assets or groups of 
assets
code
the uk corporate governance code 2012
companies act
the companies act 2006
company the
premier foods plc
csr
corporate social responsibility
dsb
deferred share bonus plan
divisional contribution
trading profit before all sga costs
ebitda
earnings before interest tax depreciation and 
amortisation
eps
earnings per share — calculated as total 
earnings divided by the weighted average 
number of shares in issue during the period
fca
financial conduct authority
fair value
the amount for which an asset could be 
exchanged or a liability settled between 
knowledgeable willing parties in an arm’s 
length transaction
finance lease
a lease that transfers substantially all the risks 
and rewards incidental to ownership of an asset
frc
financial reporting council
free cash flow
the amount of money that a business has 
at its disposal at any given time after paying 
out operating costs interest payments on 
bank loans and bonds salaries research and 
development and other fixed costs
fsa
food standards agency 
ftse 250350 index
index comprising the 250350 largest 
companies listed on the london stock 
exchange in terms of their market 
capitalisation
fy
full yearfinancial year
gdas
guidance daily amounts
group the
the company and its subsidiaries
group executive
the group executive support the ceo in 
carrying out the duties delegated to him by 
the board
hmrc
her majesty’s revenue and customs
hovis joint venture
an agreement to create a stand alone joint 
venture for the bread business
ias
international accounting standards
ifrs
international financial reporting standards
ims
interim management statement
intangible assets
an identifiable nonmonetary asset without 
physical substance eg patents goodwill 
trademarks and copyrights
interest rate hedging 
entering into a financial derivative to protect 
against unfavourable changes in interest rates 
interest rate swaps
an agreement between two parties that allows 
either party to modify the interest cost without 
changing the characteristics of the underlying 
debt
kpi
key performance indicator
libor
the london interbank offered rate
mark to market
the recording of a financial asset or liability to 
reflect its fair value rather than its book value
net regular interest payable
the net interest after excluding noncash 
items namely exceptional writeoff of 
financing costs accelerated amortisation of 
debt issuance costs fair value adjustments 
on interest rate financial instruments and the 
unwind of the discount on provisions
nonbranded
nonbranded products comprise retailer 
brand and business to business sales
operating lease
a lease that is not a finance lease
operating profit
a company’s profit after deducting its 
operating costs from gross profit
ordinary share
an ordinary share of 10 pence in the share 
capital of the company
pro forma
pro forma comparisons are calculated as 
follows current year actual results which 
include acquisitions andor disposals from the 
relevant date of completion are compared 
with prior year actual results adjusted to 
include the results of acquisitions andor 
disposals for the commensurate period in the 
prior year
relationship agreement
the relationship agreement entered into 
between the company and warburg pincus 
llc dated 5 march 2009
riddor
reporting of injuries diseases and dangerous 
occurrences regulations 
rpi
retail price index
sga
selling general and administrative costs
trading profit
operating profit before refinancing costs 
restructuring costs profits and losses 
associated with divestment activity 
amortisation and impairment of intangible 
assets the revaluation of foreign exchange 
and other derivative contracts under ias39 
and pension administration costs and net 
interest on the net defined benefit liability
tsr
total shareholder return — the growth in 
value of a shareholding over a specified period 
assuming that dividends are reinvested to 
purchase additional shares
yoy
year on year 
glossary
premier foods plc  annual report and accounts 2013
138
supplementary information 2294104 24 march 2014 1120 am    proof 3
cautionary statement
the purpose of this annual report is to provide information to shareholders of premier foods plc “the company” the company its directors employees and advisers do 
not accept or assume responsibility to any other person to whom this document is shown or into whose hands it may come and any such responsibility or liability is expressly 
disclaimed it contains certain forwardlooking statements with respect to the financial condition results operations and businesses of the company these statements and 
forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future there are a number of factors that could 
cause actual results or developments to differ materially from those expressed or implied by these forwardlooking statements and forecasts nothing in this annual report 
should be construed as a profit forecast
trademarks
the group’s trademarks are shown in italics throughout this annual report the group has an exclusive worldwide licence to use the loyd grossman name on certain 
products the group has an exclusive licence to use the cadbury trademark in the uk and other specified territories on a variety of ambient cake products cadbury is a 
trademark of mondelez international inc
this annual report is printed by an fsc
®
 forest stewardship 
council certified printer using vegetable based inks 
this report has been printed on claro silk a white coated paper and 
board using 100 efc pulp
our brands 2294104 24 march 2014 1120 am    proof 3
premier foods plc
premier house
centrium business park
griffiths way
st albans
hertfordshire
al1 2re
t 01727 815850
f 01727 815982
registered in england and wales no 5160050
wwwpremierfoodscouk
 premier foods plc  annual report and accounts for the year ended 31 december 2013
costs


Summary:
 2294104 24 march 2014 1120 am    proof 3
as part of our recently announced 
capital restructuring we set out a 
sevenpoint investment proposition 
that highlights the strengths and 
opportunities of the new premier 
foods see panel on page 16 i 
believe there are strong reasons to 
invest in the future of the company 
premier foods is a highquality branded grocery business with 
strong ebitda margins operating cash flows and growth prospects 
together with a new capital structure and pension deficit contribution 
arrangements we have a positive foundation to drive future growth
how have you found your first year at premier foods
it’s been an eventful yet hugely exciting year when i joined the 
company i had four key goals in mind firstly i wanted to maintain our 
trading momentum and deliver our results for 2013 in line with market 
expectations i’m delighted we’ve been able to do that despite a 
challenging consumer environment looking further ahead i was keen 
we find a sustainable solution for the hovis business and additionally 
address our capital structure and pension deficit in a way that would 
create greater certainty and confidence in the future of our business for 
all stakeholders finally i believed it was important to map out a clear 
strategy to continue to grow the premier foods business in the coming 
years i’m proud that we’ve been able to deliver on all of these goals
are you satisfied with how the business 
performed in 2013
broadly yes last year was difficult for the food industry generally 
as consumer disposable incomes remained under pressure driving 
a more intense promotional environment with little overall volume 
growth in the market the very hot summer also affected some of our 
categories with a consequent impact on our brands this meant we 
lost some of the momentum of the first half of the year although we 
did continue to grow market share in several of our categories grocery 
power brand sales grew 20  in the year and sales of our support 
brands grew 11 in the final quarter reversing previous declines 
we also made significant progress in reducing our overhead costs 
and kickstarted a new initiative to reduce complexity throughout the 
business the progress we made in 2013 gives us a good base on 
which to build in 2014 and the coming years
chief executive’s review
a new focused grocery business
gavin darby
chief executive 
officer
“our strategy to drive category 
growth is the best way to grow 
our brands simply put it’s 
about encouraging more people 
to use more of our brands in 
more ways more often”
business overview
premier foods plc  annual report and accounts 2013
12 2294104 24 march 2014 1120 am    proof 3
what difference will the hovis joint venture make
after all the painful restructuring in 2013 to reduce excess capacity and 
improve the efficiency of both the baking and flour milling businesses 
it was essential we find a way to secure the investment necessary to 
implement our longerterm plan to grow the business the joint venture 
with the gores group does just that the agreement helps unlock a 
major investment plan to improve the operational infrastructure and re
invigorate the hovis brand and enables premier foods to share in the 
expected upside of this investment through a 49 stake in the venture 
with the hovis business as part of a joint venture we can now focus 
our full attention on growing our core grocery business
will the new capital structure be more sustainable than 
previous restructurings
the new capital structure significantly reduces our leverage diversifies 
our sources of funding and provides a longerterm arrangement 
that helps provide stability and certainty the planned raising of 
approximately £350m in new equity will reduce our adjusted net debt 
to 33x our 2013 grocery ebitda and significantly reduce our interest 
payments the constructive agreement we reached with our pension 
trustees on deficit contributions will also be a great help in allowing 
the company to continue its recovery as we’ll effectively reduce our 
contributions by £156m over the first three years of the agreement 
this is transformational for the group and important to all our 
stakeholders as it provides the means and focus to continue investing 
in growing our brands 
how do you plan to grow the business in the 
current trading environment 
at our half year results in 2013 i outlined our strategy to drive category 
growth as the best way to achieve growth of our brands this remains 
our focus growing the size of the market sectors we operate in 
as well as our share of those sectors is a more sustainable way to 
drive growth in partnership with our customers simply put it’s about 
encouraging more people to use more of our products in more ways 
more often innovation and marketing are critical to this approach and 
we’ll be further investing in both in support of our brands and funded 
by a tight control over costs more information on our category growth 
strategy is set out on page 16
how important is innovation for premier foods
innovation and marketing are central to our category growth strategy 
in addition to developing new products we look for new ways to 
improve our existing products encourage new uses and create 
innovative ways to communicate about our brands the launch of 
ambrosia devon dream last year is a good example of how we’ve 
stretched the ambrosia brand into the summer months with a lighter 
dessert topping oxo shake  flavour is another innovation that helps 
take the oxo brand from traditional stock cubes to a versatile range of 
seasonings over the past two years we’ve stepped up our marketing 
to support our innovation and remind consumers how great our 
products taste for example ambrosia custard was back on tv for the 
first time in a decade in 2013 and batchelors was advertised on tv for 
the first time in five years we’ve also been investing in other ways to 
advertise and promote our brands through digital channels and creative 
partnerships 
how are you addressing changing shopping patterns
the strength and breadth of our brand portfolio together with our 
manufacturing and supply chain capabilities gives us a big advantage 
in serving today’s multiformat retail environment most of our sales 
remain with the major supermarkets and we work hard to strengthen 
our partnership with these customers by developing joint business 
plans but we also have opportunities and plans to grow with other 
channels which although a smaller part of the market are becoming 
increasingly popular these include convenience outlets foodservice 
branded discounters and online our flexibility to produce different 
pack and case sizes and offer product formats under the banner of 
our support brands gives us a broad scope to meet the different 
requirements of these customers
given the competitive environment what scope do you 
have to reduce costs as a way to build profitability
it’s important to continue improving our efficiency and effectiveness 
to fund the investment needed in our innovation and marketing 
activities over the past few years we’ve been very good at reducing 
our overhead costs and maintaining a tight rein over manufacturing 
and logistics costs and we’ll continue with this level of control in 
2013 we initiated a further focus on reducing complexity throughout 
the business as a way to stepchange our thinking as a result we 
committed to cutting our supplier base in half by the end of 2014 
through developing fewer longerterm strategic partnerships we also 
looked at the profitability and strategic fit of every one of our products 
resulting in the elimination of more than 400 lowmargin products from 
the portfolio so far there are many other opportunities to go after 
what are you doing to motivate employees and build a 
winning team culture
it’s been a tough time for our people over the last few years given 
the degree of change many of our colleagues have left as part of 
businesses we’ve sold and our hovis colleagues will soon be part 
of the new joint venture we have also had to make some difficult 
decisions to slim down our overhead structures and improve our 
operational efficiency particularly in the bread business i believe 
we are substantially through that period now and we’re preparing 
for the future we’re taking a fresh look at our purpose vision 
values and behaviours and we have started to invest more in our 
people for example through reinitiating our graduate recruitment 
programme doubling the number of apprentices and strengthening our 
commercial skills whilst this remains a journey i’m encouraged by the 
determination of the premier foods team to deliver a bright future for 
our business 
gavin darby 
chief executive officer
stock code pfd wwwpremierfoodscouk
business overview
13 2294104 24 march 2014 1120 am    proof 3
did you know
since 2011 we 
have reduced 
salt levels
in our products 
by more than 
286 tonnes
sharwood’s packaging 
redesign
in 2013 we launched a packaging redesign across the entire 
sharwood’s range aimed at helping us to stand out from other 
brands and make it easier to shop for sharwood’s the new 
design reflects the positioning for the brand which is all about 
‘making meal times come alive’
the new packaging as pictured here is easier to read and more 
recognisable with a consistent logo across the whole range the 
improved pack hierarchy includes colour signposting to identify 
individual flavours as well as signage of heat levels on both the label 
and the shelf ready packaging accompaniments such as naan 
breads have also been colour coded to match the ranges they 
complement 
for more information on consumers
and brands see pages
1819 2294104 24 march 2014 1120 am    proof 3
strategic
review
contents
the strategic review sets out the key 
elements of our strategy our approach to 
sustainability risk management and how 
we have performed against our kpi’s
strategy and business model 1617
consumers and brands 1819
customers 2021
people 2223
costs 2425
sustainability 2627
risk management 2831
key performance indicators 3233