thorntons plc 
thornton park
somercotes
alfreton
derbyshire de55 4xj
telephone 0845 075 7565
wwwthorntonscouk
thorntons direct 
telephone 0845 121 1911
wwwthorntonscouk
for information on 
investor relations visit
wwwthorntonscouk
thorntons plc annual report and accounts 2008
thorntons plc annual report and accounts 2008
1thtar08coverindd   1 19092008   090805 about thorntons
established by joseph william thornton 
in 1911 thorntons today is a £200m 
turnover company with 379 shops 
and cafés and 250 franchises 
together with internet mail order 
and commercial services
thorntons’ commitment to environmental issues is reflected in 
this annual report which has been printed on revive 5050 silk 
and revive 5050 offset both recycled paper stocks containing 
50 recovered waste and 50 virgin fibre the pulp used in this 
product is bleached using a totally chlorine free tcf process 
this document was printed by vitesse using soyabased inks and 
watersoluble lacquers and all production processes used make 
the minimum demand on the environment and produce the 
minimum amount of waste 
both the printer and the paper mill are registered to iso 14001 
and fsc approved
cert no fscoc002830 
 01 highlights
 02 about thorntons
 04 chairman’s statement
 06 chief executive’s report
 10 finance director’s report
 12 corporate social responsibility
 15 board of directors 
 16 corporate information
 17 report of the directors
 20 corporate governance
 24 report on the directors’ remuneration
 32 independent auditors’ report 
 34 consolidated income statement
 34  statements of recognised income and expense
 35 balance sheets
 36 cash flow statements
 37 statement of accounting policies
 43 notes to the financial statements
 74 five year summary
 75 shareholder analysis
 76 financial calendar
1thtar08coverindd   2 19092008   090810 highlights
profit before tax rose by 196 to £85m 2007 £71m 
revenue increased by 119 to £2081m 2007 £1860m
earnings per share increased 138 to 91p 2007 80p 
recommended final dividend of 485p 2007 485p
consistent sales growth across all channels
2008 profit before tax up by 196
£85m
2008 revenue increased by 119
£2081m
2008 earnings per share increased 138
91p
2008 recommended final dividend
485p
thorntons plc annual report and accounts 2008 01
1thtar08frontindd   1 19092008   090524 about thorntons
thorntons will return to sustainable longterm profitable growth by 
 investing in the brand 
 developing innovative new products 
 modernising the instore environment 
 expanding our commercial and direct business and 
 attracting and retaining the best people 
our routes to market
retail
thorntons trades from around 380 own 
stores across the whole of the uk and ireland
our stores and cafés are the touchpoint 
for the thorntons brand they are located 
in all major shopping conurbations and 
provide a broad range of innovative 
quality products – whether for a special 
gift sharing or a personal treat
personalised service and expertise are offered 
to ensure a delightful chocolate experience
franchise 
the franchise channel is a key growth 
area with an estate in excess of 250 stores 
with a customer offer equal to that of 
a thorntons retail store along with a 
secondary offer usually of cards and 
gifts a franchise store provides a great 
destination for gifting on the high street
a full member of the british franchise 
association thorntons is seeing increased 
interest in its franchise offer and expects 
continued growth in store numbers in the 
year ahead
02 thorntons plc annual report and accounts 2008
1thtar08frontindd   2 19092008   090525 commercial
the high street is becoming a leisure 
destination for customers seeking more 
experiential shopping and more considered 
purchases for thorntons this means a 
need to ensure its products are more 
widely available 
thorntons has developed this opportunity 
and the commercial sales team has become 
a successful and integral part of the overall 
brand development of thorntons this goes 
hand in hand with developing our own stores 
to be flagship destinations for the company
our strategy of providing our customers with 
the opportunity to enjoy all the great values 
of the thorntons brand whilst meeting their 
new shopping habits in a busier time 
constrained world is proving successful 
thorntons classics holds the no1 brand 
position in the boxed chocolate category 
ac nielsen july 2008
thorntons will continue this growth by 
developing new product ranges and ensuring 
they are available to a wider range of 
thorntons customers
thorntons direct
sending a heartfelt message through 
chocolates and gifts has been the business 
of thorntons direct since 1998
between then and now we have sent 
thousands of special gifts of chocolates 
toffee fudge champagne hand tied 
bouquets and hampers
these gifts which include a personal 
message are sent to and from friends 
and family brides grooms wedding 
guests and many more
thorntons direct also helps corporate 
clients create and deliver a variety of 
branded solutions including bespoke 
gifts for their staff and customers
we receive in excess of two million 
website visitors per year and mail 
over half a million catalogues to 
lovers of thorntons products
thorntons plc annual report and accounts 2008 03
1thtar08frontindd   3 19092008   090536 chairman’s statement
i am pleased to report that thorntons 
continues to make good progress and that 
despite tougher market conditions sales 
rose by 119 profit before taxation was 
up by 196  and earnings per share by 
138 sales have increased across all 
channels our own stores franchise stores 
commercial customers and thorntons 
direct we have now delivered steady 
growth for seven consecutive quarters
underpinning this growth is the strategy 
we have been implementing to return 
thorntons to sustainable longterm 
profitable growth by
  investing in the brand to give it greater 
relevance and a more premium feel
 developing innovative new products
 modernising the instore environment
  further expanding our commercial 
and direct business
 attracting and retaining the best people
we remain committed to expanding our 
own store portfolio as well as the number 
of franchise stores despite a more challenging 
economic environment which affects the 
property market our success in all four 
channels is encouraging and will continue 
to provide us with a solid platform from 
which to present our continually evolving 
range of quality products to new and 
loyal customers
the group’s balance sheet remains strong 
operating cash flow before working capital 
movements improved by £21m to £219m 
which together with our committed 
banking facilities enables us to fund the 
continuing expansion of the business
the progress we have made during the past 
year would not have been possible without 
the hard work and commitment of all our 
staff and i would like to take this opportunity 
to thank them for all their efforts
since the year end on 1 august 2008 
dominic prendergast stepped down from 
the board i would like to thank him for his 
contribution to the business over the past 
seven years and wish him well for the future 
thorntons’ prospects are good and i remain optimistic about 
its future we are well placed to meet the challenges we face 
and to achieve our financial goal of longterm sustainable growth 
in earnings per share supported by a strong balance sheet 
04 thorntons plc annual report and accounts 2008
1thtar08frontindd   4 19092008   090536 we have a highly experienced team 
whose focus it is to continue to implement 
our growth strategy thorntons’ prospects 
are good and i remain optimistic about 
its future we are well placed to meet the 
challenges we face and to achieve our 
financial goal of longterm sustainable 
growth in earnings per share supported 
by a strong balance sheet 
the board has recommended a final 
dividend of 485p per share which subject 
to shareholder approval will be paid on 
28 november 2008 
john von spreckelsen
chairman
9 september 2008
dessert gallery
chocolate fountain
thorntons plc annual report and accounts 2008 05
1thtar08frontindd   5 19092008   090618 chief executive’s report
longterm goals
reestablish thorntons as 
the undisputed leading 
premium chocolate 
brand in the uk
to increase our share of 
the uk chocolate market 
by more than 50
to increase all year 
round business to 
reduce dependency 
on christmas and easter
to improve our operating 
profit percentage
selective development 
of export sales
the past year has seen continued growth for 
thorntons sales rose by 119 to £2081m 
surpassing the £200m mark for the first 
time with growth in all channels profit 
before tax increased by 196 to £85m
this performance improvement has been 
achieved by focusing on the five point strategy 
outlined in the chairman’s statement
investment in the brand
thorntons has a very loyal customer 
base with a very strong brand franchise 
our challenge is to give the brand a broader 
appeal and we have made good progress 
during the year our tv commercial aired 
before christmas helped improve overall 
perception of the brand and went on to 
win a silver and a bronze award at the 
2008 british television advertising awards 
our product innovation and store 
improvements detailed below as well 
as numerous other activities have all 
played a part in rejuvenating the brand 
and consumers have noticed and 
appreciated the changes in july 2008 
superbrands published its official ranking 
of the uk’s top 500 brands for 200809 
and i am delighted to report that thorntons 
jumped from 81st to 18th place and now 
ranks as the uk’s number one brand in the 
food – chocolate and confectionery category
developing innovative new products
there has been a steady stream of successful 
innovation during the year starting with the 
relaunch of our flagship continental range 
last autumn we increased the choice of 
chocolates with new recipes as well as 
reintroducing some old favourites and 
succeeded in arresting the longterm decline 
of the continental range and growing the 
brand by 5 thorntons moments a product 
designed to be shared by the family or 
as an informal gift was launched in the 
spring and has performed ahead of 
our expectations 
the new designs for our seasonal ranges 
at christmas valentine’s day mother’s day 
and easter all delivered improved sales with 
a view to reducing our reliance on christmas 
and easter we have improved our ice cream 
offering introducing two new flavours 
for sale in our own stores we have also 
launched a new ice cream stick which 
comes in two delicious flavours toffee 
temptation and chocolate trio they are 
available in our own stores supermarkets 
and convenience stores 
looking ahead we have a new range 
of luxury chocolate blocks and a super 
premium box of chocolates coming out 
this autumn together with a product 
pipeline packed with exciting ideas for 
the next three years
06 thorntons plc annual report and accounts 2008
1thtar08frontindd   6 19092008   090622 modernising the instore 
environment
whilst we have continued to improve 
the look of our current estate the most 
notable achievements during the year were 
the design of the new store concept and the 
improvement to our infrastructure with the 
specification of a new electronic point 
of sale “epos” system
the new concept has been designed to give 
the stores a more contemporary feel and 
create a more exciting shopping experience 
making our wonderful products the “heroes 
of the store” since the year end the first 
three new stores opened in kingston upon 
thames reading and bluewater in august 
with further openings expected in september 
in nottingham and edinburgh we will 
closely monitor the performance of these 
stores until after christmas before we 
decide what further actions to take
we have begun to replace our epos 
equipment which is expected to be 
completed before christmas our current 
equipment is more than ten years old and 
no longer compatible with today’s chip and 
pin or cashless payment systems the capital 
cost of this project is over £4m spread over 
two years the new system will help to 
reduce customer waiting time significantly 
in the peak christmas season as well as 
providing us with more user friendly and 
valuable sales information
 further expanding our commercial 
and direct businesses
a key part of our longterm strategy is 
to make our products available to more 
customers throughout the country other 
retailers and our website will play an 
important role in achieving this our own 
stores and franchisees offer customers 
a wide range of products and individual 
service with the added benefits of 
personalised gift wrapping or icing of 
messages whereas the supermarkets and 
convenience stores provide the benefits 
of wider availability of a narrower range 
the thorntons direct business offers the 
ultimate choice in product personalisation 
and the benefit of 247 shopping and 
delivery to even the remotest location 
all have a vital role to play and i am very 
pleased that we have delivered growth 
across all four channels
attracting and retaining 
the best people
our people are key to the success of our 
growth strategy in retail we have improved 
the competitiveness of our pay and benefits 
package and provided more training to both 
store managers and sales assistants as a 
result we have colleagues who are better 
able to provide customers with an enjoyable 
shopping experience and excellent customer 
service as well as seeing reduced staff turnover
thorntons has a very loyal customer base with a very strong 
brand franchise our challenge is to give the brand a broader 
appeal and we have made good progress during the year
thorntons’ new retail concept launch 
chocolate tempering in thorntons’ kitchen
thorntons plc annual report and accounts 2008 07
1thtar08frontindd   7 19092008   090633 attracting and retaining 
the best people continued
on the supply side we followed last 
year’s successful implementation of the 
“regrading programme” with substantial 
changes to the shift patterns and can now 
operate 247 on many of our production 
lines i am pleased to say that these changes 
involved extensive consultations with our 
staff and were implemented with their 
full support
finally we have begun to implement 
programmes to develop our managers 
internally creating career opportunities 
and internal succession opportunities 
the recently announced promotions of 
lysanne mccallion to director of retail 
and of hannah legg who joins the 
executive team as head of thorntons direct 
are good examples of these changes i am 
also pleased to welcome sarah riley who 
joined us in august as director of human 
resources replacing carmel brown carmel 
left us in july 2008 to pursue a change of 
career and i would like to thank her for 
her contribution to thorntons and wish 
her good luck in her new endeavour
operational performance
own stores
our own retail stores performed well this 
year with overall and likeforlike growth in 
every quarter resulting in sales of £1351m 
and a 46 growth for the year the retail 
estate increased by a net 11 stores to 379 
as a result of 14 openings and 3 closures 
as we continue to address a small number 
of poorly performing stores we remain 
committed to our goal of reaching 400 stores 
while we have made progress the current 
uncertainties in the property market may 
have an impact on the timing we will 
closely monitor the situation and take 
advantage of opportunities for good 
sites as they arise
franchise stores
the franchise business grew by 145 
to £149m in the year with a net increase 
of 32 stores we now have 250 stores 
and are making good progress towards 
the mediumterm target of 300 i would 
like to express my thanks to franchisees for 
their ongoing commitment and dedication 
to the thorntons brand we appreciate 
their candid feedback and suggestions for 
improvement and the fact that 40 of the 
independent store openings in the course 
of the financial year came from existing 
franchisees opening additional stores 
with us is a testament to their loyalty
commercial sales
the commercial business rose 338 to 
£495m and is becoming an increasingly 
important part of the business generating 
nearly a quarter of our sales all the major 
multiples are customers and thorntons 
is now the undisputed brand leader in 
what ac nielsen defines as the “inlaid box 
chocolate category” with a market share of 
22 ac nielsen the launch of thorntons 
moments into the twist wrap category has 
also proved to be a success and made a 
significant contribution to the sales growth 
in the commercial channel
thorntons direct
finally our direct business which includes 
the consumer online and corporate end 
user businesses continued last year’s trend 
with sales of £86m which represents 
growth of 266 for the full year product 
innovation increasing the size of our customer 
database improving conversion rates and 
delivery accuracy have all contributed to 
the success of this channel
supply chain
the performance of our supply chain 
continues to improve customer service 
levels increased to 95 up from 94 
last year and 88 the previous year
the most significant impact on the 
supply side of the business this year has 
undoubtedly been the substantial increases 
in raw material prices and energy costs 
as has been widely reported dairy product 
prices rose by more than 70 at one point 
during the year before dropping back 
down again chocolate prices have risen 
40 year on year and the market continues 
to be volatile and difficult to predict energy 
price increases have also been challenging 
we have however succeeded in absorbing 
the high input costs by improving 
productivity and increasing prices thus 
restoring profitability we expect input 
costs to remain high during the current 
financial year but we are well placed to 
mitigate the likely impact through increased 
pricing across all our product ranges 
i strongly believe we will continue to improve our performance 
overall as long as we remain close to our traditional values of 
high quality products and innovation and place our customers 
at the forefront of our thinking
08 thorntons plc annual report and accounts 2008
chief executive’s report continued
1thtar08frontindd   8 19092008   090633 commercial
£495m
own stores
£1351m
thorntons direct
£86m
franchise stores
£149m
outlook
despite the uncertain general economic 
environment and the challenges faced 
by all retailers i am confident about 
thorntons’ progress and prospects
during the course of the last year we 
have developed a longterm plan with 
the following goals
  to be recognised as the uk’s leading 
premium chocolate brand given the 
recent “superbrands” report arguably 
we already are but we will not be 
complacent as more remains to be 
done to consolidate this position
  to increase our share of the uk 
chocolate market by more than 50 
our sales today represent approximately 
6 of the total market and we believe 
there are many opportunities for growth 
as we realise our new product pipeline 
and expand into new categories
  to increase our all year round business 
and reduce our financial dependency 
on christmas and easter our new 
ice cream products are good examples 
of this strategy
  to improve our operating profit 
margin during the last few years 
our profit as a percentage of sales 
has hovered around the 4 mark and 
we believe that this can be improved 
through innovation product design 
pricing and productivity improvements
  to grow internationally through the 
selective development of export sales 
this is a longerterm goal as our priority 
is to grow and improve performance in 
the uk first nevertheless lead times can 
be long and we feel it is right to include 
this goal in the development of our 
longterm plans
thorntons is continuing with its progress 
during the first weeks of the new financial 
year i strongly believe we will continue to 
improve our performance overall as long 
as we remain close to our traditional values 
of high quality products and innovation 
and place our customers at the forefront 
of our thinking
mike davies
chief executive
9 september 2008
revenue
thorntons plc annual report and accounts 2008 09
1thtar08frontindd   9 19092008   090635 profits and tax
operating profit improved by 167 to 
£103m 2007 £89m compared with 
a growth in sales of 119 cost of sales 
495 and operating expenses 461 
together remained at the same percentage 
of sales as last year which allowed the 
benefit of the sales increase to flow through 
to the bottom line finance costs increased 
only marginally as improved working capital 
management during the year mitigated the 
adverse effect of interest rate rises since 
august last year as a result profit before 
taxation “pbt” improved by 196 to £85m
the tax charge for the year of £24m 
represents 284 of pbt compared with 
last year’s unusually low tax charge of 
252 which included a oneoff £05m 
credit 71 of pbt due to the effect 
of the reduction in the standard rate 
of corporation tax from 30 to 28 on 
the deferred tax provision the total tax 
charge this year includes a £03m credit 
33 of pbt arising from finally agreeing 
in principle the tax due for prior financial 
years if allowance is made for the prior 
year tax credit the underlying current year 
tax charge is 316 which as in previous 
years is higher than the effective statutory 
rate of 295 this is due to an historic 
element of capital investment for which 
no tax allowances are available
the finance act 2008 was passed shortly 
after the year end and included legislation 
phasing out the benefit of industrial buildings 
allowances which are deductible for tax 
purposes over a period of four years 
this change has a minimal effect on the 
200708 tax charge but will generate a 
oneoff deferred tax charge in 200809 of 
approximately £29m which is a noncash 
item once the tax allowances are fully 
phased out the group’s annual tax cash 
cost will increase by some £250000 which 
will be mitigated by the reduction in the 
corporation tax rate from 30 to 28 
effective from 1 april 2008
shareholder returns and dividends
basic earnings per share have increased 
from 80p to 91p an increase of over 
13 if we exclude the oneoff tax 
credit due to tax rate changes worth 
08p included in last year’s comparative 
earnings per share the underlying 
increase in earnings per share is 26 
dividends paid in the year amounted 
to 68p per share an interim dividend 
of 195p was paid during the financial 
year and the board is recommending 
a final dividend of 485p at the annual 
general meeting on 23 october 2008 to 
be paid to shareholders in november 2008 
the total dividend in respect of the year’s 
earnings amounts therefore to 68p
cash and debt
cash generated from operations before 
taxation declined from £161m last year 
to £140m this year whilst operating cash 
flow improved from £198m to £219m 
the improvement was offset by £79m of 
adverse working capital movement including 
the effect of pension scheme liability 
changes the adverse working capital 
movement included i a buildup of stocks 
in anticipation of higher sales in the next 
financial year which were only partially 
funded by higher trade creditors 
ii increased debtors due to the increase 
in commercial and franchise credit sales 
in the last quarter of the year and iii the 
effect of the continuing payments made 
to reduce the group’s pension deficit
cash invested in fixed assets amounted to 
£75m 200607 £83m of which £18m 
200607 £32m was funded through 
finance leasing the net balance sheet 
addition to fixed assets of £79m was 
slightly more than the cash figure and 
included £45m of expenditure on either 
improving or adding to the retail estate 
with the balance being invested in new 
product tooling manufacturing and 
it improvements
the group benefited from having renegotiated 
its committed banking facilities for a three 
year period on favourable terms shortly 
before the effects of the “credit crunch” 
adversely affected the banking market
10 thorntons plc annual report and accounts 2008
finance director’s report
1thtar08frontindd   10 19092008   090635 business performance
the board continues to apply the following 
key performance indicators in order to 
measure progress towards achieving 
shareholder value
  net sales growth – the yearonyear 
increase in sales revenue excluding any 
impact from acquisitions or disposals
  likeforlike sales growth – the change 
in the sales of our own shops which 
are open for trading for corresponding 
periods comparing the current year 
with the previous year
  gross return on sales – gross margin 
as a percentage of net sales revenue
  profit before tax – current year profit before 
tax compared with the previous year
  operating cash flow – cash generated 
from operations before working capital 
movements taxation asset investment 
and financing activities
performance against these was as follows
   2008 2007 2006
net sales growth 119 53 59
likeforlike  
sales growth 29 08 37
gross return  
on sales 505 537 520
profit before tax £85m £71m £52m
operating  
cash flow £219m £198m £180m
a review of each of the above is included 
under the appropriate heading elsewhere 
in this report
sales
the group’s sales are made through a 
number of channels whose performances 
are summarised below 
   2008 2007  
revenue £m £m  increase
own stores 1351 1292 46
franchise 149 130 145
commercial 495 370 338
thorntons direct 86 68 266
total 2081 1860 119
the sales figures for 200708 are for a 
52 week year compared with a 53 week 
year in 200607 if the 53rd week’s sales 
of £23m are excluded from the 200607 
reported figures the reported sales growth 
improves to 133
a detailed review of the sales 
performance by channel is included 
in the chief executive’s report
margins
the gross margin improved by £51m driven 
by the growth in sales offset by a decline in 
percentage margins from 537 last year to 
505 this year the decline in margin was 
due to a number of factors including the 
change in the proportion of sales through 
the various channels which is largely 
mitigated by the lower costs of serving the 
faster growing channels improving the 
product offering and the effect of absorbing 
the significant raw material cost increases 
experienced this year until new sales pricing 
implemented in the second half of the year 
offset the effect of cost increases
costs
operating expenses have grown by £40m 
representing a growth of 44 which is 
significantly less than the sales growth 
of 119 as a consequence operating 
expenses have decreased from 494 of 
sales last year to 461 of sales and have 
offset the decline in gross profit percentage 
a large part of the overall increase 
in operating expenses represents the 
operating costs of expanding the number 
of shops in the retail estate and investing 
in new franchisees the remainder of the 
increase in operating expense includes the 
effects of inflation on payroll costs together 
with higher distribution costs related to the 
higher volume of sales
profits on asset mainly property disposals 
declined from £353000 last year to £143000 
in the current year
other operating income
there has been a 410 improvement 
in other operating income from £08m 
to £11m which is mainly due to increased 
sales by existing licensees of thorntons 
branded products and to the addition of 
a new range of ice cream products sold 
by a new licensee
pensions
the ias 19 pension scheme deficit has 
increased from £154m last year to £160m 
at the end of the current financial year 
the discount rate for the scheme’s liabilities 
has increased significantly since last year 
from 55 to 63 in line with market 
trends and has reduced the cost of future 
liabilities by £35m however the general 
decline in the value of equity markets has 
led to a reduction in the scheme’s asset 
valuation of £30m which offsets most of 
the actuarial gain on liabilities leaving the 
deficit impacted by the ongoing service cost
the company continues to inject funds into 
the scheme in order to reduce the scheme 
deficit over time deficit reduction payments 
totalled £17m during the year
information systems
significant progress was made during the 
year on defining and specifying new shop 
till systems which are required to replace 
our current systems as they are over ten years 
old and obsolescent the first pilot shop 
implementation took place in august 2008 
and we plan to complete the rest of the 
estate before the christmas season in order 
to benefit from the faster response times of 
the new system which will help to reduce 
queuing in our shops at peak times
other projects undertaken during the 
year included upgrading thornton direct’s 
systems in order to comply with current 
credit card security standards completing 
the company’s chip and pin project and 
upgrading the communications network 
capability at thornton park
john wall
finance director
9 september 2008
thorntons plc annual report and accounts 2008 11
1thtar08frontindd   11 19092008   090636 12 thorntons plc annual report and accounts 2008
corporate social responsibility 
thorntons plc recognises it has social 
ethical and environmental responsibilities 
arising from its operations integrity is one 
of our brand values and we are committed 
to the welfare of our colleagues customers 
suppliers and the communities in which 
we operate
making our products
sourcing our ma terials
our products use over 300 different 
raw materials which are sourced by 
our suppliers from all around the world 
the majority of our product range are 
made with natural colouring and flavours 
and our entire children’s range contains 
no artificial colours flavours or added 
preservatives a few years ago we introduced 
an organic product range and we are about 
to launch our first ‘fairtrade’ products this 
autumn to qualify as ‘fairtrade’ products 
must meet the international ‘fairtrade’ 
standards which relate to three areas of 
sustainable development social economic 
and environmental development
we currently ensure ethical social and 
environmental standards are maintained 
by auditing and visiting 95 of our suppliers 
on a regular basis our main concern is 
food safety but our audits also review 
ethics health and safety employee pay 
employment conditions use of child labour 
and environmental policies and practices 
over the last twelve months our 
purchasing policy has been reviewed 
and revised to ensure all suppliers are 
treated fairly we apply the highest 
moral and business standards and treat 
information we receive from suppliers 
in confidence we aim to build longterm 
relationships with our suppliers on the 
basis of openness and honesty 
thorntons is a member of the world 
cocoa foundation “wcf” one of the 
wcf’s objectives is to encourage responsible 
sustainable cocoa farming amongst these 
small familyrun businesses through a 
better understanding of their aims objectives 
and projects we are examining ways we can 
make a greater contribution to improving 
the conditions of cocoa farmers
our employees
in addition to providing core benefits of 
remuneration including annual incentive 
schemes holidays sick pay life assurance 
and pension provision thorntons offers 
a recently reviewed flexible benefits 
programme training and development 
programmes discounts and participation 
in company share scheme offers thorntons 
recognises that work plays an important 
role in people’s lives but equally important 
is the time spent with families and friends 
and it has developed family friendly policies 
including maternitypaternityadoption 
leave parental leave time off for dependents 
and compassionate leave employees and 
their immediate families also have access 
to a confidential counselling and legal 
assistance helpline which operates 24 hours 
a day 365 days a year and the company 
has a published procedure “whistle blowing 
policy” for employees to report any 
concerns confidentially 
last year we undertook a major restructuring 
and simplification of grading and pay rates 
for our employees this year we commissioned 
an external company to survey all of our 
employees covering a wide range of issues 
including company benefits working 
conditions and working relationships 
the results of the survey will be fed back 
to all employees and used to further identify 
and implement improvements
the company has recently taken steps 
to improve its succession planning 
by undertaking an audit of the skills 
qualifications and aspirations of our 
management staff this information is 
vital to ensure we develop the capability 
to grow the business in line with our 
longterm goals management performance 
is reviewed annually and under the 
new grading structures the company 
is planning to introduce management 
development reviews 
training is available to all staff and we aim 
to develop both individuals and teams in 
line with our business needs such that we 
grow our organisational capability 
community issues
the seasonal nature of our business 
means that we employ a large number of 
temporary staff from the local community in 
our production and indeed we have a policy 
to recruit staff locally in order to provide 
a benefit to the local community as the 
business expands we have been able to 
offer temporary staff permanent positions 
integrity is one of our brand values and we are committed 
to the welfare of our colleagues customers suppliers and 
the communities in which we operate
1thtar08frontindd   12 19092008   090636 thorntons’ training in progress 
thorntons plc annual report and accounts 2008 13
many of our ingredients are sourced from 
local uk based suppliers and this factor is 
considered in our purchasing decisions for 
both ingredients and packaging of goods 
thorntons retains links with its former staff 
through annual outings and dinners and builds 
new relationships through local school 
activities and work placement schemes
health and safety in production
in order to ensure continual improvement 
in health and safety thorntons has a safety 
improvement programme and central to 
this programme is regular health and safety 
risk assessments and over the year we have 
trebled the number of risk assessments and 
complemented these with training courses 
for managers we have also improved the 
documentation of hazards during this 
period an analysis of our health and safety 
statistics identified manual handling and 
slips trips and falls as the major causes of 
losttime accidents clear manual handling 
control measures have been introduced 
which has resulted in a steady decline in 
lost time accidents in production of 47 
over the last two years 
we monitor and review the incidents and 
accidents in the workplace so that we can 
take appropriate action to improve working 
conditions in order to improve the safety of 
visitors employees and contractors around 
the site we have introduced pedestrian and 
vehicle segregation in areas of high traffic 
flow we have also improved our procedures 
for accepting visitors and contractors on to 
the production site
a health and safety site committee meets 
regularly to discuss unresolved health 
and safety matters and reviews statistics 
on accidents and lost time accidents
in september this year we are planning 
an independent external health and safety 
audit and this will be followed by assistance 
from external consultants to further improve 
our accident reporting procedures
occupational heal th
whilst always aiming to minimise 
accidents occurring in the workplace 
we are also working with our insurers 
and have improved our occupational 
health service to employees by providing 
post accident access to private medical 
services which will assist with the 
rehabilitation process we also use an 
external occupational health company 
to provide us with health management 
services and a doctor attends thornton park 
weekly free eye tests and spectacles where 
required are provided for all vdu operatives 
we have also introduced a wellbeing 
policy to help deal with stress at work 
in the coming year we plan to undertake a 
new noise assessment across thornton park 
and provide audiometric screening for all 
relevant employees 
offering customers choice
customers
we believe in offering customers choices 
about what they purchase and offer both 
organic and diabetic ranges we have 
recently introduced a range of fairtrade 
products and have plans to develop 
dairyfree easter eggs for easter 2009 
as our products are luxury gift items they 
are not viewed as part of a balanced diet 
but we can provide advice on consumption 
and do inform consumers about nutrients 
through the pack labelling where size 
permits thorntons also provides information 
on specific ingredients on request 
eg whether products are glutenfree 
or contain alcohol
we undertake regular consumer surveys 
which include questions about ethics and 
respond to the results of these surveys 
when developing our products in addition 
we obtain feedback from staff serving 
customers in our stores of their perception 
of issues that affect customer satisfaction 
and build them into our plans
customer complaints are handled centrally 
and we are proud of the process we have 
established all complaint investigations 
are started within 24hrs of receipt and 
we attempt to resolve each one to the 
satisfaction of our customers our policy 
is to communicate with our customers in 
“plain english” all complaints are recorded 
so that we can undertake a detailed 
analysis monitor trends and identify 
key issues
packaging
packaging and waste are key issues for 
the company and we have already made 
progress in our purchasing policies for 
packaging materials we have developed 
environmental policies for the procurement 
of packaging and are moving towards 
sourcing forest stewardship council 
“fsc” approved materials for our cartons 
farmer field school in côte d’lvoire
1thtar08frontindd   13 19092008   090644 14 thorntons plc annual report and accounts 2008
corporate social responsibility continued 
offering customers choice continued
packaging continued
and have been phasing out the use of 
polyvinyl chloride over the last 18 months 
our cartons are sourced from the uk and 
we are currently reviewing the overall 
environmental impact of using more 
recycled materials in the cartons 
there is currently a major initiative to reduce 
packaging on easter eggs and easter 
products as measured by the percentage 
of cardboard packaging to product 
transport
we have taken a number of initiatives 
in goods transport to reduce the impact 
of our products on the environment 
these initiatives are principally designed to 
reduce fuel consumption through improved 
efficiency of vehicles or their movements 
we have recently purchased more fuel 
efficient and low emission vehicles 
which exceed current european emission 
requirements the vehicle manufacturer 
has also provided training to drivers 
on more efficient driving methods
as regards lorry movements we have 
introduced back hauling of cardboard from 
the retail stores in empty vehicles returning 
to our production site we are also making 
use of “thermal containers” in our trailers 
these containers are frozen at our production 
site and loaded onto vehicles at the last 
possible moment as chiller units are not 
required fuel efficiency increases and there 
is more efficient utilisation of space within 
the trailer
over the next six months we are beginning 
a project to reduce the frequency of 
deliveries fuel costs and consumption 
by reviewing the mix of vehicles used and 
ensuring that wherever possible full loads 
are carried we will also be examining 
the case for using biofuels through an 
assessment of the overall environmental 
benefit over the lifecycle of the product
external issues
environment 
during the last year our priorities for 
improving our environmental performance 
have been in the areas of waste management 
and energy use for waste management 
we set up teams to identify waste reduction 
opportunities as a result we have entered 
into an integrated waste management 
contract with our waste contractor and 
improved both the segregation and the 
proportion of waste recycled including 
plastic wrapping sheets and moulds metal 
straps and cardboard although this has 
required new equipment there has been 
a net reduction in our waste costs also 
cardboard generated in our retail outlets 
is being sent to our production site at 
thornton park in the returning empty lorries
at our production site we have taken 
a number of initiatives to reduce energy 
consumption by for example reducing 
compressed air leaks installing a daylight 
trigger on lighting in the packing area 
and changing to high frequency battery 
chargers we have also spent approximately 
£100000 on a new energy efficient 
compressor with improved capacity and 
have been championing a change in staff 
behaviour through a sticker and poster 
campaign reminding staff to turn off lights 
and computers when not in use this 
is followed up with occasional reminders 
and newsletter articles looking forward 
we are examining the feasibility of 
cogeneration of electricity and process 
steam on site
next year at our 380 retail stores we have 
a programme to replace the lighting and 
we are taking the opportunity to install 
energy efficient fittings and lamps we have 
also embarked on a programme to replace 
our air conditioning equipment in 100 stores 
with energy efficient equipment this will 
also be phasing out r22 refrigerant by 2010 
we have also been trialling a biotreatment 
process for reducing both the chemical 
oxygen demand and suspended solids 
content of our effluent waste which 
if successful will reduce both costs and 
the environmental impact our environment 
team is additionally assessing the feasibility 
of composting our kitchen waste
other community issues
a staff fundraising committee is actively 
involved in raising money for children’s 
charities last year the committee raised 
£22000 for barnardo’s by coordinating 
a range of initiatives including sponsorship 
from suppliers for runners in a marathon 
and arranging collection points in stores 
another project is raising money for 
the guide dogs for the blind association 
through sponsorship of participants in 
for example the coniston challenge it is 
the policy of the board not to make any 
political donations 
thorntons’ more fuel efficient and low emission vehicles thorntons’ staff complete london marathon
1thtar08frontindd   14 19092008   090650 chairman
john von spreckelsen  
nonexecutive chairman aged 65 r n
joined thorntons in june 2006 he was 
previously chief executive officer of 
budgens plc and chairman of somerfield plc 
currently he is chairman of mcleish holdings 
limited a nonexecutive director of mep 
mayflower holdings an operating partner 
of merchant equity partners llp in the uk 
and deputy chairman of but sas in france 
he was chairman of safestore holdings plc 
until march 2008 he is chairman of the 
nomination committee
executive directors
mike davies 
chief executive aged 55
joined thorntons in october 2006 
previously held a number of senior 
positions in mars inc including managing 
director of the uk and ireland european 
vicepresident sales and latterly as president 
of latin america sitting on mars inc’s 
worldwide operating board prior to joining 
mars mr davies spent three years with 
procter  gamble
barry bloomer 
operations director aged 46
joined thorntons in july 2005 and was 
appointed to the board in july 2006 
previously european operations director 
of black  decker and prior to that 
quality director for philips components
john wall 
finance director aged 58
a chartered accountant joined thorntons 
in december 2004 prior to this he had 
a number of finance director roles including 
group finance director lee cooper group 
and controller of the european division 
of thomas  betts corporation
peter wright 
marketing director aged 41
joined thorntons in august 2007 
previously held a number of senior 
marketing positions in tesco plc including 
uk director for brand marketing uk 
director for stores and nonfood marketing 
and latterly as marketing director for tesco 
ireland prior to joining tesco he held a 
number of senior marketing positions both 
in the uk and internationally with diageo
nonexecutive directors
martin davey 
nonexecutive director ag ed 55 a r n
joined thorntons in april 2004 he is 
chairman of cranswick plc whose 
activities are focused on the food sector 
he is chairman of the audit committee 
and is the senior independent director
paul wilkinson  
nonexecutive director ag ed 63 a r n
joined thorntons in august 2006 he holds 
a portfolio of executive nonexecutive and 
advisory roles in the food consumer and 
retail sectors he is a director of aryza ag 
he is chairman of the remuneration 
committee and is regarded as an 
independent director
key
a audit committee 
r remuneration committee  
n nomination committee
the terms of reference of the audit 
remuneration and nomination committees 
are available on the company’s website 
wwwthorntonscouk and upon request 
to the company secretary
board of directors
thorntons plc annual report and accounts 2008 15
1thtar08frontindd   15 19092008   090650 secretary and registered office
mark r henson fcis 
thornton park 
somercotes 
derbyshire de55 4xj
tel 0845 075 7565 
wwwthorntonscouk
registered no 174706 
independent auditors
pricewaterhousecoopers llp
chartered accountants and registered auditors 
leeds
registrars
capita registrars 
northern house 
woodsome park  
fenay bridge 
huddersfield hd8 0la
tel 0870 1623131  
fax 01484 600911 
wwwcapitaregistrarscom
principal bankers
barclays bank plc
fortis bank sanv uk branch 
hsbc plc
lloyds tsb bank plc
financial advisors and corporate brokers
dresdner kleinwort
financial pr advisors
cardew group limited
corporate information
16 thorntons plc annual report and accounts 2008
1thtar08frontindd   16 19092008   090650 annual report and accounts 2008 thorntons plc 17
the directors of thorntons plc have pleasure in presenting their annual report and the audited financial statements of the company 
and group for the 52 weeks ended 28 june 2008
principal activities and business review
the principal activities of the group during the period were the manufacturing retailing and distribution of high quality confectionery and 
other sweet foods a review of the group’s performance during the period with commentary on the financial results future development 
and principal risks and uncertainties facing the company is contained in the chairman’s statement pages 4 and 5 the chief executive’s 
report pages 6 to 9 the finance director’s report pages 10 and 11 and the corporate governance statement pages 20 to 23 which 
are incorporated into this report by reference and taken together fulfil the companies act requirements of the business review
financial risk management
details of the group’s financial risk management policies are set out in note 17 on pages 55 to 57
results and dividends
the profit for the financial year before tax was £85m an interim dividend of 195p per share was paid on 25 april 2008 2007 195p 
the directors recommend a final dividend of 485p per share 2007 485p which is not reflected in the attached accounts representing 
a total for the period of 680p 2007 680p subject to shareholders’ approval the final dividend will be paid on 28 november 2008 to 
shareholders on the register at the close of business on 31 october 2008
directors
the current directors of the company together with their biographical details are shown on page 15 the directors during the year 
who served for the whole of the period and up to the date of signing the financial statements except where stated were
chairman  
j a von spreckelsen 
nonexecutive directors
m t p davey
p n wilkinson 
executive directors
b bloomer 
m r davies 
d prendergast resigned 1 august 2008
j r wall
p d j wright appointed 13 august 2007 
the directors retiring by rotation at the annual general meeting “agm” are b bloomer and p n wilkinson who being eligible offer 
themselves for reappointment the interests of the directors and their immediate families in the shares of the company and in options 
over such shares granted under the company’s share option schemes are shown in the report on directors’ remuneration on pages 24 
to 31 no director was materially interested either during or at the end of the period in any contract of significance in relation to the 
business of the company or its subsidiaries
share capital
details of the company’s voting and share capital structure and any changes during the year under review are shown in note 22 to the 
accounts on pages 64 and 65 no person has any special rights of control over the company’s share capital and all issued shares are fully paid
report of the directors 
2thtar08backindd   1 19092008   090439 18 thorntons plc annual report and accounts 2008
report of the directors continued
interests in voting rights
the company has been notified of the following significant interests in voting rights of the company’s issued share capital as at 
9 september 2008
       ordinary  
       shares 
oppenheimer funds       7032561 103
joseph rowntree charitable trust       4000000 60
svg capital plc       3507000 52
legal and general       3416693 50
ms p a thornton       3177611 48
mrs j s harcus       2806186 42
fidelity international ltd       2794616 41
strategic equity capital plc       2117000 31
 these include joint holdings as trustees and consequently certain shares are allocated against more than one name
employee share schemes
the company operates a number of share option schemes for the benefit of employees information regarding the schemes and the 
number of options outstanding is given in note 22 on pages 64 and 65
employee involvement
it is the group’s policy to keep employees fully informed of matters affecting them as employees and to make them aware of the financial 
and economic factors influencing group performance the views of employees are taken into account in making decisions affecting their 
interests and information of relevance to all employees is communicated through a council system of employee representation and 
newsletters encouragement is given to colleagues to contribute towards the group’s financial performance by annual bonus schemes 
and participation in the company’s share schemes
equal opportunities and employment of disabled persons
employment policies are designed to provide equal opportunity irrespective of age gender sexual orientation disability religion race or 
marital status applications for employment by disabled persons are given full and fair consideration and whenever practicable provision 
is made for their special needs the group applies the same criteria to disabled employees for training career development and promotion 
as to any other employee if existing employees become disabled every effort is made to ensure their continued employment
research and development
the group continues an active programme of research and development in all areas of its activities with the constant review of existing 
products and development of new products being an integral part of this programme
charitable and political contributions
during the period the group made charitable contributions of £5000 2007 £5000 and gave £3000 2007 £2000 to local causes 
it is the policy of the board not to make political donations and accordingly none were made in the period 2007 £nil
payment of suppliers
the group does not follow any specific external code or standard on payment practice its policy is to 
 agree the terms of payment with suppliers when agreeing the terms of each transaction
 ensure that those suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts and
 pay in accordance with its contractual and other legal obligations
the payment policy applies to all creditors for revenue and capital supplies of goods and services without exception the group 
and company’s average creditor payment period at 28 june 2008 was 37 days 2007 36 days
2thtar08backindd   2 19092008   090439 annual report and accounts 2008 thorntons plc 19
auditors
following a recommendation of the audit committee to the board a resolution to reappoint pricewaterhousecoopers llp as auditors 
to the company will be proposed at the agm
disclosure of informa tion to a uditors
in the case of each of the persons who were directors at the date this report was approved
  so far as each of the directors is aware there is no relevant audit information as defined in the companies act 1985 of which the 
company’s auditors are unaware and
  each of the directors has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant 
audit information and to establish that the company’s auditors are aware of that information
statement of directors’ responsibilities in respect of the annual report the report on directors’ remuneration 
and the financial statements
the directors are responsible for preparing the annual report the report on directors’ remuneration and the financial statements 
in accordance with applicable united kingdom law and those international financial reporting standards “ifrs” as adopted by the 
european union
the directors confirm to the best of their knowledge
  the financial statements prepared in accordance with the applicable accounting standards give a true and fair view of the assets 
liabilities financial position and profit of thorntons plc and the undertakings included in the consolidation taken as a whole and
  the report of the directors includes a fair review of the development and performance of the business and the position of thorntons plc 
and the undertakings included in the consolidation taken as a whole together with a description of the principal risks and uncertainties 
that they face
company law requires the directors to prepare financial statements for each financial period under that law the directors have prepared 
the group and parent company financial statements in accordance with ifrs as adopted by the european union the financial statements 
are required by law to give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group 
for that period
in preparing these financial statements the directors are required to
  select suitable accounting policies and then apply them consistently
  make judgements and estimates that are reasonable and prudent
  state that the financial statements comply with ifrs as adopted by the european union and
  prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company or group will 
continue in business in which case there should be supporting assumptions or qualifications as necessary
the directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial 
position of the company and the group and to enable them to ensure that the financial statements and the report on directors’ remuneration 
comply with the companies act 1985 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 maintenance and integrity of the thorntons plc website is the responsibility of the directors who accept that uk legislation governing 
the preparation and dissemination of financial statements may differ from legislation in other jurisdictions who may have access to the internet
approved by the board on 9 september 2008 and signed on its behalf by
mark r henson 
company secretary
2thtar08backindd   3 19092008   090439 20 thorntons plc annual report and accounts 2008
corporate governance
statement on compliance
the company recognises the importance of and is committed to high standards of corporate governance the board is accountable to 
the shareholders for good corporate governance this report describes how the board applies the principles of good governance and 
best practice as set out in the june 2006 combined code on corporate governance the “combined code”
throughout the year under review the board considers that the company has complied fully with all provisions recommended in section 1 
of the combined code 
the board
the company is headed by a board of directors collectively responsible for the success of the company the board provides leadership 
within a framework of prudent and effective controls designed to enable risk to be assessed and managed it sets the company’s strategy 
and is responsible for reviewing management performance and for ensuring the necessary financial and human resources are in place in 
order to meet the company’s objectives the board also sets the company’s values and standards mindful of its obligations to 
shareholders and other stakeholders
the board currently comprises the chairman four executive directors and two nonexecutive directors the board regards m t p davey 
and p n wilkinson as being independent the chairman and chief executive both have clearly defined roles and responsibilities which 
are set out in writing and approved by the board the chairman has responsibility for the leadership and the running of the board 
including but not limited to ensuring that a fixed schedule of matters is exclusively retained for the board’s review and approval and 
that a framework exists to allow the clear dissemination of relevant and timely information to all directors for such discussion to occur 
he is also responsible for communications with shareholders and for ensuring effective contributions from the nonexecutive directors 
the chairman has commitments outside of the company as detailed in his biography on page 15 all directors are subject to 
reappointment by shareholders at the first agm following their appointment and thereafter at intervals of no more than three years
the board meets regularly normally nine times per financial year and during the period under review there was full attendance at the 
nine board meetings that took place by directors eligible to attend the board regularly reviews the operational performance and plans 
of the company and as necessary determines the company’s current and proposed strategy the executive directors also meet under 
the chairmanship of the chief executive on a weekly basis to discuss operational matters all board members receive agendas and 
comprehensive papers prior to each board meeting all directors have access to the services of the company secretary who is responsible 
to the board for ensuring that board procedures are followed and that applicable rules and regulations are adhered to directors may also 
obtain further information from any manager or employee of the company and there is a procedure for directors to obtain independent 
advice from external advisors consultants or any such further professional individual or entity at the company’s expense the company 
maintains appropriate liability insurance for the benefit of its directors
the chairman meets at least annually with the nonexecutive directors without executive directors present and the nonexecutive 
directors led by the senior independent director meet annually to consider the chairman’s performance taking into account the 
executive directors’ views the senior independent director is also available to shareholders if they have any concerns which contact 
through the normal channels of the chairman chief executive or finance director has failed to resolve or for which such contact 
is inappropriate
the terms and conditions of appointment of the nonexecutive directors are available during normal business hours at the company’s 
registered office and will be available for inspection at the agm
new appointments to the board receive an appropriate induction to gain an understanding of the company’s business which includes 
meetings with senior management
given the skills and experience of the nonexecutive directors their general training requirements are left to their own discretion the company 
makes the necessary resources available to meet any identified requirements the chairman conducts a formal annual appraisal process 
for the board its committees and individual directors including those directors due to offer themselves for reappointment at the agm 
the executive directors are also included in the company’s annual performance appraisal arrangements which include development and 
training requirements
the board delegates its authority for certain matters to its audit remuneration and nomination committees the board approves the 
terms of reference of each of the committees and they are available on the company’s website wwwthorntonscouk and upon request 
to the company secretary during the period under review there were three meetings of the audit committee and two formal meetings 
of the remuneration and nomination committees with full attendance of all eligible directors except for apologies from m t p davey in 
respect of one remuneration committee meeting in addition to formal committee meetings ad hoc decisions of the committees are 
taken after discussion throughout the year as necessary through the form of written resolutions
2thtar08backindd   4 19092008   090439 annual report and accounts 2008 thorntons plc 21
nomination committee
the nomination committee is composed of the two independent directors and the chairman of the board j a von spreckelsen 
the committee is chaired by j a von spreckelsen and is responsible for reviewing the credentials of each and every potential director 
before such nominee is proposed to the board in considering potential appointments to the board the committee evaluates the 
balance of skills knowledge and experience on the board when considering the role and capabilities required for a particular 
appointment the committee uses professional external recruitment specialists as and when appropriate the committee also 
reviews the contribution of directors offering themselves for reappointment by shareholders
remuneration committee
the remuneration committee is composed of the two independent directors and the chairman of the board j a von spreckelsen 
and is chaired by p n wilkinson the board has delegated authority to the committee for setting the chairman’s the executive directors’ 
and the company secretary’s remuneration and performancerelated awards further details of the committee and directors’ remuneration 
is set out in the report on directors’ remuneration on pages 24 to 31
audit committee
the audit committee is composed of the two independent directors and is chaired by m t p davey it meets three times a year with 
the external auditors and considers any issues which are identified during the course of their audit work the board is satisfied that 
both committee members have recent and relevant financial experience meetings are also attended by invitation by the chairman 
chief executive finance director and financial controller the committee meets at least annually with the external auditors without 
the executive directors present 
the audit committee is responsible for monitoring the integrity of the company’s financial statements reviewing the company’s internal 
financial controls and internal control and risk management systems monitoring and reviewing the effectiveness of the internal audit 
function making recommendations to the board regarding the appointment reappointment or removal of the external auditors and 
approving their remuneration and terms of engagement reviewing and monitoring the external auditors’ independence and objectivity 
and the effectiveness of the audit process and developing and implementing a policy on the engagement of the external auditors to 
supply nonaudit services
in respect of safeguarding the objectivity and independence of the external auditors the committee has a formal policy regarding 
the provision of nonaudit services by the external auditors including certain services which they cannot provide so as not to compromise 
their independence for example bookkeeping or other internal accounting services internal audit management roles or legal services 
the policy also provides for tendering for services where appropriate and has specific preapproved categories of work subject to the 
level of fees involved a formal rotation policy of the audit partner also exists which limits tenure to a maximum of five years 
the committee also specifically reviews the levels of all fees paid to the auditors for audit and nonaudit services annually the external 
auditors report to the audit committee each year on the actions they have taken to comply with professional and regulatory requirements 
and best practice designed to ensure their independence the committee reviews whether the auditors believe there are any relationships 
that may affect their independence and additionally the auditors formally confirm their independence in writing to the board in respect 
of the period covered by these financial statements
the committee also receives regular detailed reports from the internal audit function and to ensure its activities are appropriate reviews 
its proposed workplan for future periods
2thtar08backindd   5 19092008   090440 22 thorntons plc annual report and accounts 2008
corporate governance continued
internal controls
the company’s control environment is the responsibility of the company’s directors and managers at all levels the board is therefore 
responsible for establishing and maintaining the company’s system of internal control and for reviewing its effectiveness no control 
system can provide absolute protection against material misstatement or loss but it is designed to manage rather than eliminate the 
risk of failure to achieve business objectives and to provide the directors with reasonable assurance that problems should be identified 
on a timely basis and dealt with appropriately
the board has delegated responsibility for reviewing the company’s system of internal control and its effectiveness to the audit committee 
due to the size of the company the executive directors are able to monitor performance evaluate and manage on a continual basis the 
risks faced by the company the key procedures that have been established to provide effective internal control and to comply with the 
financial reporting council’s guidance on internal control revised guidance for directors on the combined code october 2005 include
  a formalised reporting structure which includes the setting of detailed annual budgets and key performance indicators which are 
updated on a regular basis to form forecasts which are reviewed at both management and board meetings
  regular board meetings are held at which all key aspects of the business are discussed including comparison of actual performance 
with budgets
 monthly reports are made to the board from the chief executive finance director and other executive directors
 there is a weekly review of operational performance and operational matters by the executive directors
  meetings are held by each executive director on a weekly and monthly basis to review the progress of specific financial and nonfinancial 
responsibilities within their functions
  the control review and monitoring of key business projects by specific steering committees each headed by an executive director 
who sponsors the project
 there are defined authorisation levels for capital expenditure
 there are defined authorisation levels for the placing of orders and contracts
 there are clear authorisation levels and segregation of accounting duties to control major financial risks
  daily cash movements are reconciled and monitored by the treasury department and the company’s cash flow is monitored monthly 
in comparison to budget and forecast
 the company’s reporting systems provide weekly updates on key statistics including sales production and gross margin analysis
  a committee comprising executive directors meets to identify and review key operational and compliance risks and then implement 
appropriate procedures to address those risks a review of the committee’s work is included in the board’s agenda
  major commercial technological and financial risks are assessed by the board throughout each financial year the conclusions are then 
incorporated in the company’s business strategy and adopted by the board and
 there is a formal arrangement for staff to raise any concerns over financial reporting or other matters in confidence
the board and audit committee review management reports prepared by the external and internal auditors and consider the suitability 
of suggested improvements to the system of internal controls
the board and audit committee have reviewed the effectiveness of the internal control system including financial operational and 
compliance controls and risk management in accordance with the code on an ongoing basis for the period from 1 july 2007 to the date 
of this report and have determined that they were not aware of any significant failings or weaknesses in the system of internal control
principal risks and uncertainties
as described above in the internal control procedures key risks are reviewed by the executive committee the assessment of risks on the 
basis of likelihood and potential impact together with the controls and actions to manage or mitigate them are passed to the full board 
for approval the key risks and uncertainties facing the business are considered to be as follows
a very competitive market
the uk confectionery market has many strong players and the slowdown in consumer spending has intensified competition product 
innovation is key to combating and overcoming the competition the company has a rigorous process for identifying researching and 
developing new product ideas which is regularly reviewed and improved the company’s multichannel strategy is also a means by which 
it can satisfy consumers’ needs better than its competitors
2thtar08backindd   6 19092008   090440 annual report and accounts 2008 thorntons plc 23
principal risks and uncertainties continued
the comp any’s products are prominent in the na tional deba te on health
thorntons has always sought to make products with wholesome recipes for example only using cocoa butter in its chocolate in line 
with other premium confectionery developments in food science are monitored directly and via industry associations recent production 
changes arising from these types of concerns include the phase out of hydrogenated vegetable oil and artificial colours thorntons seeks 
to inform consumers about the strong provenance of its ingredients and beneficial effects of cocoa consumption
food products must ha ve the highest integrity
product contamination accidental or malicious is a risk faced by all food producers thorntons has extremely rigorous policies and 
security systems for guarding against accidental or malicious contamination of ingredients or finished products in the unlikely event that 
these policies and systems fail a robust process for product recall and consumer communication in addition to comprehensive insurance 
cover is in place
single site production
most of the company’s products for sale are produced at thornton park in alfreton derbyshire the remainder is bought in from 
suppliers who have a particular expertise or cost advantage over the company’s own facility the operating site has been built up over 
the last 20 years with varying standards of fire protection recognising this vulnerability the company invested over £2m in firewalls and 
a sprinkler system to improve the protection of the site contingency and recovery plans for it and utilities are also regularly reviewed
input prices are driven by commodity markets
the company buys key inputs forward by 4 to 18 months and works with suppliers to choose the optimal time and quantity for 
purchases whilst this policy may sometimes prevent the company taking advantage of shortterm dips in prices it provides a sound 
cost base for the company to make its trading decisions
the business is dependent on the skills enthusiasm and wellbeing of its people
management aspires to keep colleagues informed of internal and external developments and regularly reviews how they are feeling 
through surveys and communication sessions a channel outside the normal line structures for communication and resolution of 
issues exists through the joint industrial council for thornton park and the retail council for storebased colleagues 
relations with shareholders
communications with shareholders are given high priority following the announcement of the company’s interim and final results 
the directors normally represented by at least the chairman chief executive and finance director make detailed business presentations 
to institutional shareholders the senior independent director is also available to all shareholders feedback via the company’s brokers 
after these regular analyst and shareholder meetings ensures the board understands shareholder views and messages finally the company’s 
website wwwthorntonscoukinvestor allows shareholders to view company results and announcements and other relevant information 
and also raise questions to put back to the company
the board uses the agm to communicate with private and institutional investors and welcomes their participation the directors present 
at each agm a business review to all attending shareholders who may ask any questions they wish it is not a requirement that these be 
previously submitted to the company in writing furthermore at each agm the chairman aims to ensure that the chairmen of the board 
committees are available all code provisions regarding constructive use of the agm are complied with
going concern
the directors are satisfied on the basis of current financial projections and facilities available that the company and the group have 
adequate financial resources to continue to operate for the foreseeable future for this reason the directors continue to adopt the going 
concern basis in preparing the financial statements 
approved by the board on 9 september 2008 and signed on its behalf by
mark r henson
company secretary
2thtar08backindd   7 19092008   090440 24 thorntons plc annual report and accounts 2008
report on the directors’ remuneration
information not subject to audit
remunera tion committee
the remuneration committee is composed of the company’s two independent nonexecutive directors p n wilkinson chairman 
and m t p davey and the chairman of the board j a von spreckelsen 
the committee is responsible for setting the chairman’s executive directors’ and company secretary’s remuneration and performancerelated 
awards it also monitors the remuneration of the company’s senior managers during the period the chief executive attended committee 
meetings by invitation and provided advice on issues other than those relating to his remuneration the company secretary attends the 
meetings as secretary to the committee during the year the committee received independent general remuneration and share scheme 
advice from deloitte  touche llp who were appointed by the committee and also advised the company on tax matters the committee 
also had access to professional market surveys on boardroom pay no director is involved in any decision relating to his own remuneration 
the terms of reference of the committee are available on the company’s website wwwthorntonscouk and upon request from the 
company secretary
remunera tion policy the policy for the current and future periods for the remuneration and incentivisation of the executive directors is as follows
  to ensure that individual rewards and incentives are aligned with the performance of the company and the interests of shareholders
  to ensure that performancerelated elements of remuneration constitute a significant proportion of an executive’s remuneration 
package and
  to maintain a competitive remuneration package which enables the company to attract retain and motivate high calibre executives
during the previous year the committee undertook a detailed review of the company’s executive remuneration arrangements and 
implemented incentive arrangements to support the objective of rewarding those individuals who deliver real and genuine shareholder 
value in developing the arrangements the committee and its advisors carefully considered the best practice provisions in the combined 
code and current market practice and evaluated various options before consulting fully with the company’s major institutional 
shareholders and key governance bodies including the abi before concluding the remuneration arrangements
salaries
salaries for the executive directors are targeted at remaining competitive for the market size of business and unless they fall below what 
the committee considers to be competitive will not normally be changed beyond a cost of living increase outside of this target the level 
of salary of the executive directors is reviewed each year by the remuneration committee and takes into account a range of issues 
including primarily underlying group performance and also published information of comparative salary levels and relative remuneration 
levels within the company
taxable benefits comprise principally healthcare insurance policies a fully expensed company car or car allowance a fuel allowance and 
where applicable relocation expenses
annu al incentive plan
the remuneration committee reviews and approves the annual bonus scheme targets each year for the 200809 financial year the bonus 
potential for executive directors is 60 of base salary for ontarget profit performance and has been increased to a maximum of 100 
of base salary for exceptional outperformance there are clear financial targets based on the achievement of group profit and the 
committee is satisfied that these are challenging and in order for the maximum bonus to be earned will demonstrate a genuine step 
change in the profit performance of the business 
despite the significant sales growth achieved in the year in a difficult trading environment the challenging profit targets set at the 
beginning of the year were not met and consequently the executive directors will receive no bonus in respect of the 200708 year
2thtar08backindd   8 19092008   090440 annual report and accounts 2008 thorntons plc 25
information not subject to audit continued
l ongterm incentive plan “ltip ”
as part of the review of remuneration during 200607 the committee introduced new longterm incentive arrangements approved by 
shareholders last october which deliver genuine performance related pay with a clear line of sight for executives and a direct alignment 
with shareholders’ interests
under the ltip annual awards of share options will be granted with an exercise price equal to the market value of the shares at the 
date of grant executive directors may receive an award under the ltip in any financial year over shares worth 150 of their basic annual 
salary excluding bonuses commissions and benefits in kind provided that to the extent that an award exceeds 100 of their basic 
annual salary the vesting of such excess will be dependent on the achievement of a significantly more stretching performance target
the participants will not be entitled to exercise their options for a period determined by the committee which is generally no earlier than 
three years from the date of award the vesting of awards at the end of the performance period will be subject to the relevant participant 
remaining in employment and the achievement of specified stretching performance conditions
there is currently one grant of awards being operated in respect of the period 2007 to 2010 under the ltip with a performance target 
based on the company’s total shareholder return “tsr” tsr will normally be averaged across a period of three months before the start 
of the performance period and three months before the date on which the performance period ends this is in keeping with normal 
market practice and is a practical adjustment to smooth out the impact of shortterm market influences and to provide a more robust 
measure of the company’s performance awards will vest on a sliding scale between each step as follows
  compound equivalent 
 of total award vesting annual tsr growth required over three year vesting period
150 20 73
100 15 52
25 8 26
in order to reassure shareholders that executives will not benefit simply from an upward turn in the market the committee will require 
underlying real eps performance to increase by at least rpi  10 per annum before any awards vest even if the tsr targets are 
achieved in addition for any award above 100 to vest the underlying annual growth in real eps must be at least rpi  12
absolute tsr was chosen as the measure for awards under the ltip because it creates a direct line of sight for executives to increase 
shareholder value against the company’s current business position the remuneration committee monitors the performance of existing 
awards against the above targets on an annual basis and reviews the performance conditions for future awards to ensure that the 
conditions continue to be appropriate for the company and the prevailing market based on the company’s tsr performance during 
the first year of the operation of the ltip  no options awarded in 2007 would vest the actual percentage of the award vesting will be 
determined by the remuneration committee at the end of the three year performance period 
share option scheme
under the thorntons plc 2001 executive share option scheme the chairman and executive directors have all previously been granted 
share options subject to the achievement of performance targets these options may be exercised between three and ten years after 
the date of grant following the introduction of the ltip last year no further awards under this scheme to directors are anticipated
executive directors with twelve months’ service along with all eligible employees are also entitled to participate in the company’s 
allemployee sharesave scheme
2thtar08backindd   9 19092008   090440 26 thorntons plc annual report and accounts 2008
report on the directors’ remuneration continued
information not subject to audit continued
supplement ary notes regarding existing share scheme options and a w ards
the thorntons plc 2001 executive share option scheme “the scheme’’
options granted under the scheme can be exercised at any time between three and ten years after the grant date subject to the 
fulfilment of certain performance criteria options granted under the scheme in 2001 and 2002 were split into three equal tranches with 
a requirement that a share price of 135p and 140p respectively be achieved within a minimum of three and a maximum of six years from 
the date of grant before the first third could be exercised with regard to the second and third tranches of options granted in both years 
the share price was required to reach 160p and 185p respectively in addition before any tranche may be exercised growth in earnings 
per share must exceed the retail prices index by at least 2 per annum cumulatively over at least a three year and a maximum six year 
period and the share price must have reached the relevant targets on the day prior to the exercise and the remuneration committee 
must be satisfied that there has been an improvement in the underlying performance of the company
options granted in 2006 and 2007 were split into three equal tranches with a requirement that a share price of 160p 2006 and 200p 2007 
be achieved within a minimum of three and a maximum of six years from the date of grant before the first tranche could be exercised 
with regard to the second and third tranches the share price is required to reach 185p 2006 and 225p 2007 and 210p 2006 and 
250p 2007 respectively in addition before any tranche may be exercised growth in earnings per share must exceed the retail prices 
index by at least 3 per annum cumulatively over at least a three year and a maximum six year period the share price must have reached 
the relevant targets on the day prior to the exercise and the remuneration committee must be satisfied that there has been an improvement 
in the underlying performance of the company
under the scheme rules in the event of a change of control of the company options may be exercised within one month or such 
longer period as the remuneration committee determines and provided that such options have met their attaching performance criteria 
the remuneration committee also has discretion but always acting fairly reasonably and objectively to determine whether and if so 
to what extent beyond that indicated by the performance condition options shall be exercisable having regard to all the circumstances
sharesave scheme
options granted under the hm revenue  customs approved sharesave scheme can be exercised at any time during the six month period 
commencing three or five years from the start of the savings contract options may be granted under the sharesave scheme at a discount 
of up to 20 of the market value of a share in the company on the date immediately preceding the date on which employees are invited 
to participate in the scheme there are no performance criteria under the sharesave scheme
the approved share scheme has now expired and a resolution will be put forward to shareholders at the annual general meeting to be 
held on 23 october 2008 to approve a new savings related share option scheme the 2008 saye scheme further details of the 2008 
saye scheme are set out in the circular to shareholders accompanying this annual report
share price
the midmarket price of the ordinary shares at 29 june 2007 the last dealing day prior to 30 june 2007 was 175p and at 27 june 2008 
the last dealing day prior to 28 june 2008 was 114p and the range for the period was from 112p to 200p
the company’s register of directors’ interests which is open to inspection contains full details of directors’ shareholdings and options to 
subscribe during the period from 1 july 2008 to 9 september 2008 the interests of the directors named in the table on page 30 in the 
shares of the company were unchanged
2thtar08backindd   10 19092008   090440 annual report and accounts 2008 thorntons plc 27
information not subject to audit continued
performance graph
the graph below shows the total shareholder return performance for the company’s shares in comparison to the ftse small cap index 
for the five years to 28 june 2008 for the purposes of the graph total shareholder return has been calculated as the percentage change 
during the five year period in the market price of the shares assuming that dividends are reinvested
this graph shows the value by the end of the 200708 financial year of £100 invested in thorntons over the last five financial years 
compared with £100 invested in the ftse small cap index which given the company forms a constituent part the directors believe 
is the most appropriate comparative index
pensions
the executive directors with the exception of m r davies who does not participate in any company pension arrangement have private 
pensions to which the company contributes a fixed percentage of basic salary
a table identifying the accrued benefits of executive directors who participate in the approved pension arrangements and the 
contributions made on behalf of directors to defined contribution arrangements are identified in the directors’ pension benefits table 
on page 30
pensionable salary is based on basic salary only and excludes any other form of remuneration including bonus payments or benefits 
in kind
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2thtar08backindd   11 19092008   090442 28 thorntons plc annual report and accounts 2008
report on the directors’ remuneration continued
information not subject to audit continued
contracts of service and early termina tion
all of the executive directors have service contracts with the company currently these contracts may be terminated by the company 
or director by giving one year’s notice the notice period of all executive directors’ service contracts is kept under review by the 
remuneration committee it is the remuneration committee’s view that the notice period for the executive directors is appropriate and 
consistent with current market practice it is the practice of the committee that if the employment of an executive director is terminated 
any compensation payment is calculated in accordance with normal legal principles including the application of mitigation to the extent 
appropriate to the circumstances of the termination there are no contractual obligations in the event of a change of control of the company
all nonexecutive directors have initial fixedterm agreements with the company of no more than three years there is no entitlement 
to any compensation in the event of such agreement not being renewed or the agreement terminating earlier save for a twelve month 
notice period required from either party in the case of the chairman j a von spreckelsen
details of the directors’ service contracts notice periods and where applicable expiry dates are set out below
name   commencement expiry notice period
b bloomer   18 july 2006 — 1 year
m t p davey   5 april 2004 5 april 2010 na
m r davies   2 october 2006 — 1 year
j a von spreckelsen   5 june 2006 — 1 year
j r wall   7 december 2004 — 1 year
p n wilkinson   15 august 2006 15 august 2009 na
p d j wright   13 august 2007 — 1 year
nonexecutive directors’ fees
the fees paid to nonexecutive directors for their services are approved by the board these fees are paid on a pro rata basis if they 
hold office for part of the year in recognition of increased legislative and corporate governance responsibilities a supplement of 
£5000 per annum is paid to the senior independent director and nonexecutives who chair one or more board committees
2thtar08backindd   12 19092008   090442 annual report and accounts 2008 thorntons plc 29
information subject to audit
directors’ remunera tion
the following table shows an analysis of the various elements of remuneration receivable by those directors who served during the period 
to 28 june 2008
   salary  performance   basic annual 
   and taxable related   salaryfees 
  	 fees	 benefits	 payments total total july  
   2008 2008 2008 2008 2007 2008 
   £’000 £’000 £’000 £’000 £’000 £’000
chairman      
j a von spreckelsen    92 3 — 95 100 150
executive directors      
b bloomer   159 16 — 175 238 164
p burdon resigned 30 september 2006   — — — — 315 na
m r davies    328 17 — 345 312 339
p s douty resigned 15 december 2006   — — — — 267 na
d prendergast resigned 1 august 2008   159 18 — 177 194 na
j r wall   179 16 — 195 251 186
p d j wright appointed 13 august 2007   146 71 — 217 — 171
nonexecutive directors      
m t p davey
†
   43 — — 43 36 43
j e jackson retired 1 september 2006   — — — — 6 na
c j thornton retired 1 september 2006   — — — — 5 na
p n wilkinson
§
   38 — — 38 28 38
   1144 141 — 1285 1752 1091
  j a von spreckelsen received basic fees of £91667 2007 £100000 with a further £58333 2007 £100000 paid directly by the company into his personal 
pension in the period with effect from 1 july 2008 the total fees are now all paid as basic fees with no pension payments being made 
†
 fees paid in respect of the services provided by m t p davey are paid directly to cranswick plc
§
 fees paid in respect of the services provided by p n wilkinson are paid to parkside capital limited
2thtar08backindd   13 19092008   090442 30 thorntons plc annual report and accounts 2008
report on the directors’ remuneration continued
information subject to audit continued
directors’ pension benefits
   transfer transfer      
  total  value of value of   transfer   
 gross  accrued  accrued  accrued  total increase in value of net   
 increase in pension at pension at pension at change in accrued increase in pension pension 
 accrued 28 june  28 june 30 june value during pension net accrual over  contributions contributions 
 pension 2008 2008 2007 period of inflation period 2008 2007 
 £’000 pa £’000 pa £’000 £’000 £’000 £’000 pa £’000 pa £’000 £’000 
   § §  †  †  
chairman
j a von spreckelsen na — — — — — — 58 100
executive directors
b bloomer na — — — — — — 22 22
m r davies na — — — — — — — —
d prendergast 
resigned 1 august 2008 3 16 149 98 41 2 13 — —
j r wall na — — — — — — 25 24
p d j wright na — — — — — — 20 —
pension accruals shown are the amounts to which the member would be entitled as a leaving service benefit based on service to the end 
of the financial year
†
 items are calculated after deducting the directors’ contributions
§
  these values have been prepared in accordance with the pension trustees’ direction that the allowance for pre6 april 1997 discretionary pension increases in payment 
is removed from the calculation of cash equivalent transfer values
directors’ interests
the interests of the directors and their immediate families in the company’s ordinary shares as at 30 june 2007 or date of appointment 
if later and 28 june 2008 were as follows
ordinary shares
the directors’ holdings in ordinary shares were 
       28 june  30 june  
       2008 2007
chairman
j a von spreckelsen       650000 400000
executive directors
b bloomer       5512 5512
m r davies       120000 80000
d prendergast resigned 1 august 2008       20000 10000
j r wall       6000 6000
p d j wright       5000 —
nonexecutive directors
m t p davey       30000 10000
p n wilkinson       25000 25000
all the above are beneficial interests
it is a policy of the board that all directors must hold a minimum of 1000 shares such shares must be purchased as soon as practicable 
following the director’s appointment subject to the restrictions imposed by the model code on directors’ dealings
2thtar08backindd   14 19092008   090442 annual report and accounts 2008 thorntons plc 31
information subject to audit continued
share options and a w ards
the interests of the executive directors in share options held under the executive share option schemes and the sharesave scheme were 
as follows
    awards and      last date 
    options held at  awards and   awards and  awards 
   subscription 30 june 2007  options   options held and options 
   price or date of  granted in options options at 28 june  can be 
director scheme date of grant pence appointment period exercised lapsed 2008 exercised
j a von spreckelsen 2001 executive 5 jun 2006 116 1200000 — — — 1200000 5 jun 2016
b bloomer 2001 executive 11 jul 2006 1285 500000 — — — 500000 11 jul 2016
 ltip 2007 23 nov 2007 192 — 123904 — — 123904 23 nov 2017
 sharesave 9 oct 2006 113 5151 — — — 5151 31 may 2010
 sharesave 10 oct 2007 148 — 4358 — — 4358 31 may 2013
m r davies 2001 executive 2 oct 2006 153 1200000 — — — 1200000 2 oct 2016
 ltip 2007 23 nov 2007 192 — 255849 — — 255849 23 nov 2017
d prendergast  
resigned  
1 august 2008 2001 executive 22 nov 2001 90 500000 — — 333334 166666 22 nov 2011
 ltip 2007 23 nov 2007 192 — 123904 — — 123904 23 nov 2017 
 sharesave 18 oct 2002 94 5940 — 5940 — — 30 jun 2008
 sharesave 9 oct 2006 113 8926 — — — 8926 31 may 2012
 sharesave 10 oct 2007 148 — 4358 — — 4358 31 may 2013
j r wall 2001 executive 3 apr 2006 119 500000 — — — 500000 3 apr 2016
 ltip 2007 23 nov 2007 192 — 140455 — — 140455 23 nov 2017
 sharesave 9 oct 2006 113 5151 — — — 5151 31 may 2010
 sharesave 10 oct 2007 148 — 2490 — — 2490 31 may 2011
p d j wright 2001 executive 13 sep 2007 170 — 500000 — — 500000 13 sep 2017
  the aggregate gain on exercise of options during the period for d prendergast was £3475 
there is no requirement for the directors to pay any contributions on the granting of any options under any of the company’s share schemes
the earliest date of exercise for the options set out in the table above are shown in note 22 on page 65
approved by the board on 9 september 2008 and signed on its behalf by
paul wilkinson
chairman of the remuneration committee
2thtar08backindd   15 19092008   090443 32 thorntons plc annual report and accounts 2008
independent auditors’ report to the members of thorntons plc
we have audited the group and parent company financial statements the ‘‘financial statements’’ of thorntons plc for the 
52 week period ended 28 june 2008 which comprise the consolidated income statement the balance sheets the cash flow 
statements the statements of recognised income and expense the statement of accounting policies and the related notes 
these financial statements have been prepared under the accounting policies set out therein we have also audited the information 
in the report on directors’ remuneration that is described as having been audited
respective responsibilities of directors and auditors
the directors’ responsibilities for preparing the annual report the report on directors’ remuneration and the financial statements 
in accordance with applicable law and international financial reporting standards “ifrs” as adopted by the european union are set 
out in the statement of directors’ responsibilities
our responsibility is to audit the financial statements and the part of the report on directors’ remuneration to be audited in accordance 
with relevant legal and regulatory requirements and international standards on auditing uk and ireland this report including the 
opinion has been prepared for and only for the company’s members as a body in accordance with section 235 of the companies act 1985 
and for no other purpose we do not in giving this opinion 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
we report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements and 
the part of the report on directors’ remuneration to be audited have been properly prepared in accordance with the companies act 1985 
and as regards the group financial statements article 4 of the ias regulation we also report to you whether in our opinion the information 
given in the report of the directors is consistent with the financial statements the information given in the report of the directors includes 
that specific information presented in the other sections of the annual report that are crossreferred from the “principal activities and 
business review” section of the report of the directors
in addition we report to you if in our opinion the company has not kept proper accounting records if we have not received all the 
information and explanations we require for our audit or if information specified by law regarding directors’ remuneration and other 
transactions is not disclosed
we review whether the corporate governance statement reflects the company’s compliance with the nine provisions of the combined 
code 2006 specified for our review by the listing rules of the financial services authority and we report if it does not we are not 
required to consider whether the board’s statements on internal control cover all risks and controls or form an opinion on the 
effectiveness of the group’s corporate governance procedures or its risk and control procedures
we read the other information contained in the annual report and consider whether it is consistent with the audited financial statements 
the other information comprises only the financial summary the chairman’s report the chief executive’s report the finance director’s 
report the report of the directors the corporate governance statement the unaudited part of the report on directors’ remuneration 
the corporate social responsibility statement and the other items listed within the contents section we consider the implications for our 
report if we become aware of any apparent misstatements or material inconsistencies with the financial statements our responsibilities 
do not extend to any other information
basis of audit opinion
we conducted our audit in accordance with international standards on auditing uk and ireland issued by the auditing practices board 
an audit includes examination on a test basis of evidence relevant to the amounts and disclosures in the financial statements and the 
part of the report on directors’ remuneration to be audited it also includes an assessment of the significant estimates and judgements 
made by the directors in the preparation of the financial statements and of whether the accounting policies are appropriate to the 
group’s and company’s circumstances consistently applied and adequately disclosed
we planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to 
provide us with sufficient evidence to give reasonable assurance that the financial statements and the part of the report on directors’ 
remuneration to be audited are free from material misstatement whether caused by fraud or other irregularity or error in forming our 
opinion we also evaluated the overall adequacy of the presentation of information in the financial statements and the part of the report 
on directors’ remuneration to be audited
2thtar08backindd   16 19092008   090443 annual report and accounts 2008 thorntons plc 33
opinion
in our opinion
  the group financial statements give a true and fair view in accordance with ifrs as adopted by the european union of the state 
of the group’s affairs as at 28 june 2008 and of its profit and cash flows for the 52 weeks then ended
  the parent company financial statements give a true and fair view in accordance with ifrs as adopted by the european union as 
applied in accordance with the provisions of the companies act 1985 of the state of the parent company’s affairs as at 28 june 2008 
and cash flows for the 52 weeks then ended
  the financial statements and the part of the report on directors’ remuneration to be audited have been properly prepared in 
accordance with the companies act 1985 and as regards the group financial statements article 4 of the ias regulation and
  the information given in the report of the directors is consistent with the financial statements
pricewaterhousecoopers llp
chartered accountants and registered auditors 
leeds
9 september 2008 
2thtar08backindd   17 19092008   090443 34 thorntons plc annual report and accounts 2008
consolidated income statement 52 weeks ended 28 june 2008
       52 weeks 53 weeks 
       ended ended 
       28 june 30 june 
       2008 2007 
      note £’000 £’000
revenue      1 208122 185989
cost of sales       103017 86022
gross	profit       105105 99967
operating expenses       95918 91923
other operating income      2 1139 808
operating	profit       10326 8852
finance income      3 45 61
finance costs      4 1901 1832
profit	before	taxation      5 8470 7081
taxation      6 2402 1785
profit	attributable	to	equity	shareholders       6068 5296
   
earnings per share      8  
basic       91p 80p
diluted       90p 79p
all activities in both the current and previous year relate to continuing operations 
statements of recognised income and expense 52 weeks ended 28 june 2008
     group group company company 
     52 weeks 53 weeks 52 weeks 53 weeks 
     ended ended ended ended 
     28 june 30 june 28 june 30 june 
     2008 2007 2008 2007 
    note £’000 £’000 £’000 £’000
actuarial lossgain recognised in the defined benefit pension scheme  20 2148 1510 2148 1510
movement of deferred tax on actuarial lossgain    19 601 453 601 453
effect of reduction in tax rate     — 342 — 342
net	expenseincome	recognised	directly	in	equity	   1547 715 1547 715
profit attributable to equity shareholders     6068 5296 5984 5149
t otal	recognised	income	attributable	to	equity	shareholders	 
for	the	financial	period     4521 6011 4437 5864
 
2thtar08backindd   18 19092008   090443 annual report and accounts 2008 thorntons plc 35
balance sheets as at 28 june 2008
     group group company company 
     2008 2007 2008 2007 
    note £’000 £’000 £’000 £’000
assets     
noncurrent assets     
intangible assets    10 4786 5950 4786 5950
property plant and equipment    11 64084 66378 63893 66180
investment in subsidiaries    12 — — 18 18
     68870 72328 68697 72148
current assets     
inventories    13 24307 18202 24299 18193
trade and other receivables    14 15155 12628 15501 14121
cash and cash equivalents     1088 2858 1005 2624
     40550 33688 40805 34938
liabilities     
current liabilities     
trade and other payables    15 22014 19859 24455 23744
borrowings    16 24057 22577 24224 22577
current tax liabilities     984 1418 942 1001
provisions for liabilities    18 122 181 122 181
     47177 44035 49743 47503
net current liabilities     6627 10347 8938 12565
noncurrent liabilities     
borrowings    16 5295 6692 5295 6692
deferred tax liabilities    19 2750 2512 2714 2476
retirement benefit obligations    20 15965 15417 15965 15417
other noncurrent liabilities    21 2612 1996 2612 1997
provisions for liabilities    18 586 478 585 478
     27208 27095 27171 27060
net assets     35035 34886 32588 32523
shareholders’	equity     
ordinary shares    22 6835 6811 6835 6811
share premium    24 13750 13551 13750 13551
retained earnings    24 14450 14524 12003 12161
t otal	equity	attributable	to	parent’s	equity	holders    35035 34886 32588 32523
the financial statements on pages 34 to 73 were approved by the board of directors on 9 september 2008 and were signed on its behalf by
mike davies   john wall
chief executive   finance director
2thtar08backindd   19 19092008   090444 36 thorntons plc annual report and accounts 2008
cash 	 flow 	 statements 	52 weeks ended 28 june 2008
 
     group group company company 
     52 weeks 53 weeks 52 weeks 53 weeks 
     ended ended ended ended 
     28 june 30 june 28 june 30 june 
     2008 2007 2008 2007 
    note £’000 £’000 £’000 £’000
cash	flows	from	operating	activities    25a 11481 14600 11465 26409
cash	flows	from	investing	activities     
proceeds from sale of property plant and equipment     262 400 262 400
purchase of property plant and equipment     5680 5030 5680 5027
net cash used in investing activities     5418 4630 5418 4627
cash	flows	from	financing	activities     
net proceeds from issue of ordinary shares     223 748 223 748
interest paid     1831 1849 1815 1848
interest received     37 25 21 21
capital element of finance lease rental payments     3712 4526 3712 4526
borrowings advanced     2000 3000 2000 3000
dividends paid    9 4550 4512 4550 4512
net	cash	used	in	financing	activities     7833 7114 7833 7117
net	decreaseincrease	in	cash	and	cash	equivalents	 
and bank overdrafts     1770 2856 1786 14665
cash and cash equivalents at beginning of period    25b 2858 2 2624 12041
cash	and	cash	equivalents	at	end	of	period	   25b 1088 2858 838 2624
2thtar08backindd   20 19092008   090444 annual report and accounts 2008 thorntons plc 37
statement of accounting policies
basis of preparation
these consolidated financial statements have been prepared in accordance with international financial reporting standards “ifrs” and 
international financial reporting interpretations committee “ifric” interpretations as adopted by the european union “eu” and with 
those parts of the companies act 1985 applicable to companies reporting under ifrs these consolidated financial statements have been 
prepared under the historical cost convention with the exception of derivative financial instruments and sharebased payments which are 
recognised at fair value a summary of the more important group accounting policies adopted in the preparation of the consolidated final 
statements is set out below together with an explanation of where changes have been made to previous policies on the adoption of new 
accounting standards in the financial year these policies have been consistently applied to all the years presented unless otherwise stated
the preparation of financial statements in conformity with ifrs requires the use of estimates and assumptions that affect the reported 
amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the 
reporting period although these estimates are based on management’s best knowledge actual results may ultimately differ
adoption of ifrs 7
ifrs 7 ‘financial instruments disclosures’ and the complementary amendment to ias 1 ‘presentation of financial statements – capital 
disclosures’ have been adopted from 1 july 2007 ifrs 7 and the amendment to ias 1 have introduced new quantitative and qualitative 
disclosures relating to financial instruments and they do not have any impact on the classification or valuation of financial instruments
interpret ations effective in the period ended 28 june 2008 but which had no significant imp act
the following interpretations to existing standards are mandatory for the accounting period ended 28 june 2008 but they have not had 
a significant impact on the group or company
 ifric 10 ‘interims and impairment’ and
 ifric 11 ‘ifrs 2 – group and treasury share transactions’
st andards amendments and interpret ations tha t are not yet effective and ha ve not been early adopted
the following standard and interpretation have been published and are mandatory for accounting periods beginning on or after 29 june 2008 
or later periods but which the group and the company have not early adopted
  ifrs 8 ‘operating segments’ – work is currently being undertaken to establish how this standard which is effective from 1 january 2009 
may affect the group’s and company’s segmental disclosures and
  ifric 14 ‘the limit on a defined benefit asset minimum funding requirements and their interaction’ – work is currently being 
undertaken to establish how this interpretation which is effective from 1 january 2008 will impact on the value of the group and 
company’s retirement benefit obligation going forward this assessment will take account of the latest actuarial valuation however 
it is expected that the adoption of ifric 14 will have no material financial impact
amendments and interpret ations tha t are not yet effective and ha ve not been early adopted which are not expected 
to ha ve an imp act
the following amendments to existing standards and interpretations have been published and are mandatory for accounting periods 
beginning on or after 29 june 2008 or later periods and are not expected to have a significant impact on the group or company
 revised ias 1 ‘presentation of financial statements’
 revised ias 23 ‘borrowing costs’
 revised ias 27 ‘consolidated and separate financial statements’
 ias 32 amendment ‘financial instruments presentation’ and ias 1 amendment ‘presentation of financial statements’
 ifrs 1 amendment ‘first time adoption of ifrs’ and ias 27 amendment ‘consolidated and separate financial statements’
 revised ifrs 3 ‘business combinations’
 ifrs 2 amendment ‘sharebased payments’
 ifric 12 ‘service concession arrangements’
 ifric 13 ‘customer loyalty programmes relating to ias 18 revenue’
 ifric 15 ‘agreements for construction of real estates’ and
 ifric 16 ‘ hedges of a net investment in a foreign operation’
2thtar08backindd   21 19092008   090444 38 thorntons plc annual report and accounts 2008
statement of accounting policies continued
basis of consolidation
the consolidated financial statements incorporate the results of the company and each of its subsidiaries for the financial year ended 
28 june 2008 subsidiaries are entities controlled by the group where control is deemed to exist when the group has the power directly 
or indirectly to govern the financial and operating policies of an entity so as to obtain benefits from its activities the results of subsidiaries 
are included in the consolidated financial statements from the date the control commences until the date that control ceases
the purchase method of accounting is used to account for the acquisition of subsidiaries by the group the cost of an acquisition is 
measured as the fair value of the assets given equity instruments issued and liabilities incurred or assumed at the date of exchange 
plus costs directly attributable to the acquisition identifiable assets acquired and liabilities and contingent liabilities assumed in a business 
combination are measured initially at their fair values at the acquisition date irrespective of the extent of any minority interest the excess 
of the cost of acquisition over the fair value of the group’s share of the identifiable net assets acquired is recorded as goodwill if the cost 
of acquisition is less than the fair value of the net assets of the subsidiary acquired the difference is recognised directly in the income statement
intercompany transactions balances and unrealised gains on transactions between group companies are eliminated unrealised losses 
are also eliminated but considered an impairment indicator of the asset transferred accounting policies of subsidiaries have been changed 
where necessary to ensure consistency with the policies adopted by the group
property plant and equipment
property plant and equipment are stated at cost less accumulated depreciation cost comprises the purchase price of property plant 
and equipment together with any incidental costs of acquisition
subsequent costs are included in the asset’s carrying value or recognised as a separate asset as appropriate only when it is probable 
that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably all other 
repairs and maintenance expenditure is charged to the income statement as incurred
all property plant and equipment other than land and assets in the course of construction are depreciated to write their cost down 
to residual value over their remaining useful lives by equal annual instalments as follows
long leasehold and freehold premises   50 years
short leasehold land and buildings    period of the lease
other plant vehicles and equipment   3 – 15 years
retail fittings and equipment   up to 10 years
the assets’ residual values and useful lives are reviewed and adjusted if appropriate at each balance sheet date the need for an 
impairment writedown is assessed by comparison of the carrying value of the asset against the higher of its net realisable value 
or value in use
gains and losses on disposals are determined by comparing the proceeds net of disposal costs with the carrying amount and are 
recognised within operating expenses in the income statement
intangible assets
acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring into use the specific software 
these costs are amortised over their estimated useful lives three to five years
costs associated with maintaining computer software programmes are recognised as an expense as incurred costs that are directly 
associated with the production of identifiable and unique software products controlled by the group and that will probably generate 
economic benefits exceeding costs beyond one year are recognised as intangible assets
computer software development costs are recognised as assets and are amortised over their estimated useful lives not exceeding five years
2thtar08backindd   22 19092008   090444 annual report and accounts 2008 thorntons plc 39
employee share option schemes
where share options are granted to employees as part of their remuneration the fair value of options granted is recognised as an 
employee expense in the income statement with a corresponding increase in equity the fair value is measured at the grant date and 
expensed through the income statement over the period during which the employees become unconditionally entitled to the options 
the amount recognised in the income statement is adjusted each balance sheet date for the expected and actual number of options 
vesting with a corresponding entry in equity
the fair value of the options is measured using a blackscholes option valuation model of options with nonmarket performance 
conditions and a monte carlo model for options with market performance conditions
the proceeds received net of any directly attributable transaction costs are credited to share capital and share premium when the options 
are exercised exercised options are equity settled
own shares held by the employee share ownership plan “esop” trusts are carried at cost and disclosed within note 24
investments in subsidiaries
investments in subsidiaries are stated at cost provision being made where appropriate for impairment assessed by comparing the 
carrying value to the higher of net realisable value or value in use
inventories
inventories are stated at the lower of cost and net realisable value cost includes materials direct labour and an attributable proportion of 
manufacturing overheads based on normal operating capacity according to the stage of production reached and valued on a fifo basis 
net realisable value is the estimated value which would be realised after deducting all costs of completion marketing and selling provision 
is made to reduce the cost to net realisable value having regard to the age and condition of inventory as well as its anticipated saleability
trade receivables
trade receivables are recognised initially at fair value and subsequently carried net of provisions for impairment a provision for impairment is 
established where there is objective evidence that the group will not be able to collect all amounts due according to the original terms of 
the receivables significant financial difficulties of the debtor probability that the debtor will enter bankruptcy or financial reorganisation 
and default or delinquency in payments more than 60 days overdue are considered indicators that the trade receivable is impaired the amount 
of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows the carrying 
amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the income statement 
within operating expenses when a trade receivable is uncollectible it is written off against the allowance account for trade receivables 
subsequent recoveries of amounts previously written off are credited against operating expenses in the income statement 
cash and equivalents
cash and cash equivalents include cash in hand deposits on call with banks other shortterm liquid investments with maturities 
of three months or less and bank overdrafts bank overdrafts are shown within borrowings in current liabilities on the balance sheet
trade and other payables
trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method
borrowings
borrowings are recognised initially at fair value net of transaction costs subsequent measurement is based on amortised cost and any 
difference between the proceeds net of transaction costs and the redemption value is recognised in the income statement over the 
period of the borrowings using the effective interest rate method
borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 
twelve months after the balance sheet date
2thtar08backindd   23 19092008   090444 40 thorntons plc annual report and accounts 2008
statement of accounting policies continued
current taxation
the charge for current tax is based on the results for the period after making allowance for nonassessable or disallowable items 
it is calculated using rates of tax that have been enacted at the balance sheet date
deferred taxation
deferred tax on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts 
for financial reporting purposes is accounted for using the liability method
deferred tax liabilities are recognised in full for all taxable temporary differences and deferred tax assets are recognised to the extent that 
it is probable that taxable profits will be available against which deductible temporary differences can be utilised however if the deferred 
tax arises from the initial recognition of an asset or liability in a transaction other than a business combination that at the time of the 
transaction affects neither accounting nor taxable profit it is not accounted for
deferred taxation is measured based on tax rates and laws enacted or substantively enacted at the balance sheet date and are expected 
to apply when the related deferred income tax asset is realised or deferred income tax liability is settled
deferred tax assets and liabilities are offset when there is a legal enforceable right to set off current tax assets against current tax liabilities 
and when they relate to income taxes levied by the same taxation authority and the group intends to settle its current tax assets and 
liabilities on a net basis
provisions
a provision is recognised in the balance sheet when the group has a legal or constructive obligation whereby as a result of a past event 
it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the 
amount of the obligation if the effect is material provisions are determined by discounting the expected future cash flows at a pretax 
rate that reflects current market assessments of the time value of money and where appropriate the risks specific to the liability
share capital
ordinary shares are classified as equity
incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction net of tax from the 
proceeds when applicable
revenue
revenue comprises the amounts receivable for goods and services provided outside the group in the normal course of business 
net of trade discounts and value added tax
retail sales and allowances are recognised at the date of the transaction with consumers in addition provisions are made for expected 
returns as necessary for sales promotion purposes thorntons plc operates a variety of schemes that give rise to goods being sold at 
a discount to the standard retail price these include staff discounts and the redemption of promotional vouchers revenue is adjusted 
to show sales net of all related discounts
wholesale sales including sales to franchise outlets are recognised either when goods are dispatched to customers or the customer 
has accepted the products depending on the sales channel and collectability of the related receivables is reasonably assured provision 
is made for expected returns and allowances as necessary
other operating income
other operating income comprises amounts receivable in respect of licensing income franchise fees and rental income net of value added 
tax where applicable licence income and rental income are recognised on an accruals basis in accordance with the risks and rewards of 
the relevant agreements franchise fee income is released to the income statement on a straightline basis over a period of five years from 
date of invoice
2thtar08backindd   24 19092008   090445 annual report and accounts 2008 thorntons plc 41
postretirement benefits
defined benefit pension scheme
the retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation and unfunded 
liabilities as reduced by the fair value of defined benefit scheme assets this scheme was closed to new entrants with effect from august 2002
the defined benefit obligation is calculated annually by independent actuaries using the projected unit method the present value of the 
defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high quality corporate 
bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating to the 
terms of the related pension liability
actuarial gains and losses are recognised in full in the period in which they occur they are recognised directly in equity and are presented 
in the statement of recognised income and expense other income and administrative expenses associated with the defined benefit 
scheme are recognised in the income statement
the contributions made by the employees and the group are held in a trust fund separate from the group’s finances
defined contribution pension scheme
the group also operates a defined contribution pension scheme which requires contributions to be made to a separately administered 
fund contributions to the fund are determined as a percentage of employees’ earnings and are charged to the income statement as 
incurred the group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to 
pay all employees the benefits relating to employee service in the current and prior periods
foreign currencies
transactions in foreign currencies are translated in sterling at the exchange rate ruling at the date of transaction monetary assets and 
liabilities denominated in foreign currencies are retranslated to sterling at the exchange rates ruling at the balance sheet date and any 
exchange differences arising are taken to the consolidated income statement
finance leases
leases are classified as finance leases where the terms of the lease transfer substantially all the risks and rewards of ownership to the 
group all other leases are classified as operating leases
property plant and equipment held under finance leases are capitalised in the balance sheet at fair value of leased assets or if lower 
the present value of the minimum lease payments assets are depreciated over the shorter of their lease term and their expected useful 
lives the interest element of leasing payments represents a constant proportion of the capital balance outstanding and is charged to 
the consolidated income statement over the period of the lease
operating leases
the costs of all operating leases are charged against operating profit on a straightline basis at existing rental levels incentives to sign 
leases including reverse premiums and rentfree periods are treated as deferred income and are credited to the income statement in 
equal instalments over the term of the lease
rental income from operating leases is recognised on a straightline basis over the period of the lease at current rental levels
new store expenditure
pretrading expenditure on new stores is charged to the income statement as incurred
2thtar08backindd   25 19092008   090445 42 thorntons plc annual report and accounts 2008
statement of accounting policies continued
derivatives and other financial instruments
derivatives are initially recognised at fair value on the date the contract is entered into and are subsequently remeasured at fair value 
where appropriate the group enters into derivatives in order to minimise relevant currency and interest rate exposure to the group 
these are designated as hedges of the cost of a highly probable forecast transaction or commitment “cash flow hedging instrument”
to qualify for hedge accounting the group is required at inception to document in advance the relationship between the item being 
hedged and the hedging instrument and to document and reassess at each reporting date whether the hedge will be highly effective 
in offsetting changes in cash flows of the hedged item on an ongoing basis
the effective portion of changes in the fair value of cash flow hedging derivatives is recognised in equity within the hedging reserve 
the change in fair value relating to the ineffective portion of the hedge is recognised in the income statement immediately within finance 
costs amounts accumulated within equity are recycled to the income statement in the periods when the hedged item will affect profit
when a hedging instrument expires or is sold or no longer meets the criteria for hedge accounting any cumulative gain or loss on the 
hedging instrument previously recognised in equity is retained in equity and is recognised when the forecast transaction is ultimately 
recognised in the income statement if the hedged transaction is no longer expected to occur the cumulative gain or loss that was 
recognised in equity is immediately transferred to the income statement
grants
grants and other contributions towards the cost of property plant and equipment are included in payables as deferred income and 
credited to the income statement over the life of the asset and recognised at fair value where there is a reasonable assurance the grant 
will be received and that the group will comply with conditions of the grant 
exceptional items
exceptional items are material items which derive from events or transactions which individually or if of a similar type in aggregate need 
to be disclosed by virtue of their size or incidence if the financial statements are to give a true and fair view
dividends
final dividends are recognised as a liability in the period in which they are approved by the company’s shareholders interim dividends 
are recognised when they are paid
net debt
net debt is cash and cash equivalents bank and other loans and finance leases
research and development
expenditure in respect of research and development is written off against profits in the period in which it is incurred unless the 
development costs meet the criteria for capitalisation under ias 38 ‘intangible assets’
critical accounting estimates and judgements
provisions
judgement is required in the areas of stock and store dilapidation provisioning but the directors do not consider the impact on reported 
results to be material
retirement benefit obliga tion
the valuation of the retirement benefit obligation is dependent upon a series of assumptions the key ones being discount rates mortality 
rates investment returns salary inflation and the rate of pension increases these are set out in note 20 to the financial statements
2thtar08backindd   26 19092008   090445 annual report and accounts 2008 thorntons plc 43
notes 	 to 	 the 	 financial 	 statements
1 segmental reporting
the group’s operations consist of the vertically integrated manufacture distribution and retail of confectionery products given this level 
of integration the directors consider that there is only one business segment and therefore the disclosures are given in the primary 
financial statements or related notes
revenue arises from uk operations and therefore no separate reporting for geographical segments is required
2 other operating income
       52 weeks 53 weeks 
       ended ended 
       28 june 30 june  
       2008 2007 
       £’000 £’000
franchise fee income       209 180
licensing income       648 446
rent receivable       282 182
       1139 808
3 finance income
       52 weeks 53 weeks 
       ended ended 
       28 june 30 june  
       2008 2007 
       £’000 £’000
interest on bank deposits       37 24
other finance income       8 37
       45 61
4 finance costs
       52 weeks 53 weeks 
       ended ended 
       28 june 30 june  
       2008 2007 
       £’000 £’000
interest payable on bank borrowings       1305 1237
net exchange differences on foreign currency payments       23 37
interest payable on finance leases       540 632
other finance costs       33 —
       1901 1832
2thtar08backindd   27 19092008   090445 44 thorntons plc annual report and accounts 2008
notes 	 to 	 the 	 financial 	 statements 	continued
5 profit before taxation
       52 weeks 53 weeks 
       ended ended 
       28 june 30 june  
       2008 2007 
       £’000 £’000
the following items have been included in arriving at profit before taxation  
employee benefits expense note 27       60751 53914
cost of inventories recognised as an expense       59126 48260
depreciation of property plant and equipment  
– owned assets       6933 6818
– under finance leases       2295 2191
amortisation of intangible assets       2018 1973
profit on disposal of property plant and equipment       143 353
operating lease rentals payable  
– land and buildings       20275 19514
– other       976 814
repairs and maintenance expenditure on property plant and equipment     5207 5494
trade receivables impairment       125 —
government grant income       21 20
costs associated with offer talks       — 14
product research and development       412 352
costs associated with offer talks incurred in 2007 relate to residual charges following an aborted offer for the business in 2006 
services provided by the group’s a uditors
during the period the group obtained the following services from the group’s auditors as detailed below
       52 weeks 53 weeks 
       ended ended 
       28 june 30 june  
       2008 2007 
       £’000 £’000
audit services  
– audit of the parent and consolidated accounts       95 99
– audit of thorntons plc subsidiaries pursuant to legislation      3 3
– other services supplied pursuant to legislation       27 26
tax compliance services       — 72
actuarial services       — 12
advice in respect of the company’s pension schemes       18 50
       143 262
2thtar08backindd   28 19092008   090445 annual report and accounts 2008 thorntons plc 45
6 taxation
analysis of charge in period
       52 weeks 53 weeks 
       ended ended 
       28 june 30 june  
       2008 2007 
       £’000 £’000
current tax  
– current period       2517 2346
– adjustment in respect of prior period       444 44
       2073 2302
deferred tax note 19  
– current period       159 74
– adjustment in respect of prior period       170 63
– effect of reduction in tax rate       — 506
       2402 1785
tax on items charged to equity
       52 weeks 53 weeks 
       ended ended 
       28 june 30 june  
       2008 2007 
       £’000 £’000
current tax credit on exercise of share options       — 253
deferred tax chargecredit on sharebased payments       510 38
effect of reduction in tax rate on sharebased payments       — 12
       510 303
deferred tax creditcharge on actuarial gain       601 453
effect of reduction in tax rate on pension liability       — 308
effect of reduction in tax rate on other timing differences      — 34
       91 492
the finance act 2008 includes legislation which would prevent the group from claiming industrial buildings allowances on affected assets 
after 2011 the directors estimate that upon enactment of the finance act 2008 the proposed changes would lead to an increase in the 
deferred tax charge of approximately £29m in the 200809 financial year 
the standard rate of corporation tax reduced to 28 with effect from 1 april 2008 the standard rate of corporation tax expected for the 
year on a weighted average basis is therefore 295
2thtar08backindd   29 19092008   090445 46 thorntons plc annual report and accounts 2008
notes 	 to 	 the 	 financial 	 statements 	continued
6 taxation continued
tax reconcilia tion
the tax for the period is lower 2007 lower than the standard rate of corporation tax in the uk 295 the differences are explained below
       52 weeks 53 weeks 
       ended ended 
       28 june 30 june  
       2008 2007 
       £’000 £’000
profit on ordinary activities before tax       8470 7081
profit on ordinary activities multiplied by rate of corporation tax in the uk of 295 2007 30   2499 2124
effects of  
– adjustments to tax provision in respect of prior periods      274 19
– expenses not deductible for tax purposes       177 148
– effect of reduction in tax rate       — 506
total taxation       2402 1785
7 profits for the financial period
the parent company has not prepared its own profit and loss account as permitted by section 2301 of the companies act 1985 
of the group profit attributable to shareholders a profit after tax of £5986000 2007 £5149000 has been dealt with in the 
accounts of the company
8 earnings per share
basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of 
ordinary shares outstanding during the period excluding those held in the employee share trust “esop” which are treated as cancelled
for diluted earnings per share the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive 
potential ordinary shares dilutive potential ordinary shares are those share options granted to employees where the exercise price is less 
than the average market price of the company’s ordinary shares during the period
reconciliations of the earnings and weighted average number of shares used in the calculations are set out below
 52 weeks ended  53 weeks ended  
 28 june 2008  30 june 2007 
    basic diluted  basic diluted 
   earnings earnings earnings earnings earnings earnings 
   £’000 per share per share £’000 per share per share
profit before effect of reduction in tax rate   6068 91p 90p 4790 72p 71p
effect of reduction in tax rate   — — — 506 08p 08p
profit	attributable	to	equity	shareholders   6068 91p 90p 5296 80p 79p
     2008   2007
weighted average number of ordinary shares     66810143   66346144
dilutive effect from share options     456486   741783
fully diluted weighted average number of ordinary shares    67266629   67087927
 
2thtar08backindd   30 19092008   090445 annual report and accounts 2008 thorntons plc 47
9 ordinary dividends
       2008 2007 
group and company      note £’000 £’000
final dividend paid for the 53 weeks ended 30 june 2007 of 485p 
52 weeks ended 24 june 2006 485p       3235 3211
interim dividend paid in respect of the 52 weeks ended 28 june 2008  
of 195p 53 weeks ended 30 june 2007 195p       1315 1301
amounts	recognised	as	distributions	to	equity	holders	    24 4550 4512
in addition the directors are proposing a final dividend in respect of the year ended 28 june 2008 of 485p per share which will absorb 
an estimated £32m of shareholders’ funds it will be paid on 28 november 2008 to shareholders who are on the register of members on 
31 october 2008
the trusts operating the longterm incentive plan scheme “ltip 2007” have fully waived dividends on the 504610 shares 2007 504610 
held at 28 june 2008 and all but 001p per share on the 905070 2007 921586 shares held in respect of the 2001 executive share 
option scheme
10 intangible assets
        computer  
        software 
group and company        £’000
cost 
at 30 june 2007         22716 
additions – externally acquired        848
additions – internally generated         6 
at 28 june 2008        23570
aggregate amortisation  
at 30 june 2007        16766 
charge for the year         2018 
at 28 june 2008         18784 
net book amount at 28 june 2008         4786 
2thtar08backindd   31 19092008   090445 48 thorntons plc annual report and accounts 2008
notes 	 to 	 the 	 financial 	 statements 	continued
10 intangible assets continued
        computer  
        software 
group and company        £’000
cost 
at 25 june 2006        20972
additions – externally acquired         1813 
additions – internally generated         87 
disposals         156 
at 30 june 2007         22716 
aggregate amortisation 
at 25 june 2006         14945 
charge for the year         1973 
disposals         152 
at 30 june 2007         16766 
net book amount at 30 june 2007         5950 
net book amount at 25 june 2006        6027
intangible assets held under finance leases were valued at £2465000 2007 £3729000
amortisation costs for intangible assets directly involved in production are recognised in cost of sales within the income statement 
all other amortisation costs are recognised within operating expenses 
11 property plant and equipment
 land and buildings
    long  other plant retail  
    leasehold short vehicles and fittings and  
    and freehold leasehold equipment equipment total 
group    £’000 £’000 £’000 £’000 £’000
cost     
at 30 june 2007    38672 6899 76944 50046 172561
additions at cost    19 820 2581 3631 7051
disposals    — 72 525 675 1272
at 28 june 2008    38691 7647 79000 53002 178340
accumulated depreciation     
at 30 june 2007    8913 4386 48947 43937 106183
charge for the period    831 453 5303 2641 9228
disposals    — 59 504 592 1155
at 28 june 2008    9744 4780 53746 45986 114256
net book amount at 28 june 2008    28947 2867 25254 7016 64084
2thtar08backindd   32 19092008   090445 annual report and accounts 2008 thorntons plc 49
11 property plant and equipment continued
 land and buildings
    long  other plant retail  
    leasehold short vehicles and fittings and  
    and freehold leasehold equipment equipment total 
group    £’000 £’000 £’000 £’000 £’000
cost     
at 25 june 2006    38641 6859 74729 47769 167998
additions at cost    31 301 2451 3255 6038
disposals    — 261 236 978 1475
at 30 june 2007    38672 6899 76944 50046 172561
accumulated depreciation     
at 25 june 2006    8082 4207 43903 42414 98606
charge for the period    831 420 5278 2480 9009
disposals    — 241 234 957 1432
at 30 june 2007    8913 4386 48947 43937 106183
net book amount at 30 june 2007    29759 2513 27997 6109 66378
net book amount at 25 june 2006    30559 2652 30826 5355 69392
 land and buildings
    long  other plant retail  
    leasehold short vehicles and fittings and  
    and freehold leasehold equipment equipment total 
company    £’000 £’000 £’000 £’000 £’000
cost     
at 30 june 2007    38463 6860 76944 49902 172169
additions at cost    19 820 2581 3631 7051
disposals    — 72 525 675 1272
at 28 june 2008    38482 7608 79000 52858 177948
accumulated depreciation     
at 30 june 2007    8883 4362 48947 43797 105989
charge for the period    827 451 5303 2640 9221
disposals    — 59 504 592 1155
at 28 june 2008    9710 4754 53746 45845 114055
net book amount at 28 june 2008    28772 2854 25254 7013 63893
2thtar08backindd   33 19092008   090446 50 thorntons plc annual report and accounts 2008
notes 	 to 	 the 	 financial 	 statements 	continued
11 property plant and equipment continued
 land and buildings
    long  other plant retail  
    leasehold short vehicles and fittings and  
    and freehold leasehold equipment equipment total 
company    £’000 £’000 £’000 £’000 £’000
cost     
at 25 june 2006    38432 6819 74729 47629 167609
additions at cost    31 301 2451 3252 6035
disposals    — 260 236 979 1475
at 30 june 2007    38463 6860 76944 49902 172169
accumulated depreciation     
at 25 june 2006    8057 4185 43903 42274 98419
charge for the period    826 418 5278 2480 9002
disposals    — 241 234 957 1432
at 30 june 2007    8883 4362 48947 43797 105989
net book amount at 30 june 2007    29580 2498 27997 6105 66180
net book amount at 26 june 2006    30375 2634 30826 5355 69190
depreciation costs for tangible fixed assets directly involved in production are recognised within cost of sales within the income statement 
all other depreciation costs are recognised within operating expenses
tangible assets held under finance leases have the following net book amount
  land and other  land and   
  buildings –  plant retail buildings –  other plant retail 
 	 long 	 leasehold	 vehicles 	 and 	 	 fittings 	 and	long leasehold vehicles and  fittings and 
 	 and 	 freehold	 equipment	 equipment	 and freehold equipment equipment 
  2008 2008 2008 2007 2007 2007 
group and company  £’000 £’000 £’000 £’000 £’000 £’000
cost    784 9125 15886 784 8812 14584
aggregate depreciation   133 6052 12680 80 4917 11741
net book amount   651 3073 3206 704 3895 2843
2thtar08backindd   34 19092008   090446 annual report and accounts 2008 thorntons plc 51
12 investment in subsidiaries
       company company 
       2008 2007 
       £’000 £’000
cost of shares       19 19
less accumulated provisions for impairments       1 1
net book value       18 18
the company owns the whole of the issued ordinary share capital of the following principal operating subsidiaries to avoid a statement 
of excessive length details of investments in dormant companies included in the consolidated accounts have been omitted a full list of 
subsidiaries can be obtained upon request from the company’s registered office
subsidiary country of incorporation principal activity country of operation
strand court properties limited england property investment united kingdom
thorntons jersey limited jersey retail trading company jersey
the directors believe that the carrying value of the investments is supported by their underlying net assets
13 inventories
     group group company company 
     2008 2007 2008 2007 
     £’000 £’000 £’000 £’000
raw materials     2557 2021 2557 2021
work in progress     2963 2409 2963 2409
finished goods and goods for resale     18787 13772 18779 13763
     24307 18202 24299 18193
during the year £80000 2007 £216000 expense relating to the writedown of inventory to net realisable value was released and 
reflected in cost of sales 
2thtar08backindd   35 19092008   090446 52 thorntons plc annual report and accounts 2008
notes 	 to 	 the 	 financial 	 statements 	continued
14 trade and other receivables
     group group company company 
     2008 2007 2008 2007 
     £’000 £’000 £’000 £’000
trade receivables     7597 5609 7597 5609
less provision for impairment     354 240 354 240
net trade receivables     7243 5369 7243 5369
amounts owed by group undertakings     — — 359 1506
other receivables     1199 539 1199 539
prepayments and accrued income     6713 6720 6700 6707
     15155 12628 15501 14121
the group’s exposure to credit risk and impairment losses related to trade receivables is disclosed in note 17
amounts owed from other group companies are unsecured interest free and have no fixed repayment terms
prepayments and accrued income include £52m 2007 £47m of property related rent rates insurances and surcharge prepayments
15 trade and other payables – current
     group group company company 
     2008 2007 2008 2007 
     £’000 £’000 £’000 £’000
trade payables     9387 8028 9387 8028
other taxation and social security payable     3149 2409 3147 2408
amounts owed to other group companies     — — 2451 3901
other payables     97 175 97 175
accruals and deferred income     9381 9247 9373 9232
     22014 19859 24455 23744
amounts owed to other group companies are unsecured interest free and have no fixed repayment terms
within accruals and deferred income is a balance in respect of government grants within the group and company of £21035 
2007 £21035 primarily relating to a grant received in the year ending june 2004 in respect of the relocation of toffee manufacturing 
operations from the original belper site to thornton park this government grant totalling £400000 is being released to the income 
statement on a straight line basis over 20 years
2thtar08backindd   36 19092008   090446 annual report and accounts 2008 thorntons plc 53
16 borrowings
     group group company company 
     2008 2007 2008 2007 
current     £’000 £’000 £’000 £’000
bank loans and overdrafts due within one year or on demand    
– unsecured bank loans and overdrafts     21000 19000 21167 19000
– finance lease obligations     3057 3577 3057 3577
     24057 22577 24224 22577
     group group company company 
     2008 2007 2008 2007 
noncurrent     £’000 £’000 £’000 £’000
finance lease obligations     5295 6692 5295 6692
bank loans and overdrafts are denominated in pounds sterling and bear interest based on libor or uk base rates 
the effective interest rates at the balance sheet dates were as follows
       2008 2007 
        
bank borrowings       604 634
finance leases       448 504
the group’s borrowings are denominated in the following currencies
       2008 2007 
       £’000 £’000
pounds sterling       29352 29269
2thtar08backindd   37 19092008   090446 54 thorntons plc annual report and accounts 2008
notes 	 to 	 the 	 financial 	 statements 	continued
16 borrowings continued
ma turity of financial liabilities
the table below analyses the group’s financial liabilities into relevant maturity groupings based on the remaining period at the balance 
sheet date to the contractual maturity date the amounts disclosed in the table below are the contractual undiscounted cash flows
    finance 2008  finance 2007 
   debt leases  total  debt leases total 
   £’000 £’000 £’000 £’000 £’000 £’000
less than one year   21044 3090 24134 19033 4026 23059
between one and two years   — 5129 5129 — 2822 2822
between two and five years   — 894 894 — 4481 4481
   21044 9113 30157 19033 11329 30362
debt due in less than one year reflects the ongoing utilisation of three year revolving facilities described in the following borrowing facilities note
borrowing f acilities
the group has the following undrawn committed floating rate borrowing facilities available at 28 june 2008 the group must comply 
with the principal lending convenants in respect of interest cover and the net debt to ebitda ratio at 28 june 2008 none of these 
convenants had been breached
       2008 2007 
       £’000 £’000
expiring within one year       5000 41400
expiring between two and five years       29000 —
       34000 41400
the facilities expiring between two and five years are three year revolving facilities due for renewal prior to august 2010 their utilisation 
being managed via regular review during their term all these facilities incur commitment fees at market rates
the minimum lease payments under finance leases fall due as follows
       2008 2007 
       £’000 £’000
not later than one year       3090 4026
later than one year but not more than five       6023 7303
more than five years       — —
       9113 11329
future finance charges on finance leases       761 1060
present value of finance lease liabilities       8352 10269
the fair value of obligations under finance lease equates to their carrying value as the interest rates being paid on these are substantially 
those prevailing in the open market the fair values of other financial instruments are not materially different to their carrying value due 
to their relatively short maturity or small size
2thtar08backindd   38 19092008   090446 annual report and accounts 2008 thorntons plc 55
17 derivatives and other financial instruments
the group’s financial instruments comprise cash and cash equivalents bank loans liquid resources finance leases onerous lease and 
dilapidation provisions and other items such as trade payables and trade receivables that arise from its operations the principal function 
of these financial instruments is to raise finance for the group’s operations the main risks arising from the group’s financial instruments 
can be analysed as follows
interest ra te risk 
funding received from banks is at floating rates fixed in the short term for the duration of each loan floating rate borrowings are exposed 
to the risk of rising interest rates borrowings of a longer term nature such as those required to fund fixed asset acquisitions are funded 
each year through finance leases to the extent that total finance lease exposure remains broadly constant from year to year and provides 
an element of fixed interest borrowing
liquidity risk 
the group uses banking facilities and finance leases as its primary sources of funding the group has historically been very cash 
generative the bank position and headroom of the group is monitored daily and capital expenditure has to be approved in accordance 
with its policy which defines the level of authorisation required the group’s bank facilities were renewed in july 2007 and consist of a 
revolving credit facility of £500m shared among four banks and committed for three years the group also has a shortterm committed 
overdraft facility of £50m
price risk 
the group seeks to limit its exposure to volatility in raw material and energy costs by buying these forward where possible for a period 
of up to a year
foreign currency risk 
the group’s exposure to foreign currency risk on trading transactions is not significant however hedging arrangements are made in 
respect of the largest purchase contracts when placed it is the group’s policy to hedge significant fixed asset or capital transactions 
where appropriate
credit risk 
retail sales represent a large proportion of the group’s sales and present no credit risk as they are made for cash where credit sales 
are concerned the group operates effective credit control procedures in order to minimise exposure to overdue debts and also carries 
insurance against the cost of significant bad debts counterparties involved in transactions are limited to high quality financial institutions
the carrying amount of financial assets representing the maximum credit exposure at the reporting date was
       2008 2007 
       £’000 £’000
trade receivables       7597 5609
the carrying amounts of the group’s trade and other receivables are denominated in pounds sterling 
the maximum exposure to credit risk for trade receivables at the reporting date by geographic region was
       2008 2007 
       £’000 £’000
uk        7119 5307
europe       124 62
       7243 5369
the maximum exposure to credit risk for trade receivables at the reporting date by sales channel was
       2008 2007 
       £’000 £’000
commercial       5057 3959
franchise       2186 1410
       7243 5369
2thtar08backindd   39 19092008   090446 56 thorntons plc annual report and accounts 2008
notes 	 to 	 the 	 financial 	 statements 	continued
17 derivatives and other financial instruments continued
credit risk 
the aging of gross trade receivables at the reporting date was
     2008  2007
     gross impaired gross impaired 
     £’000 £’000 £’000 £’000
current     5442 — 4533 55
30 days past due     1163 — 779 3
60 days past due     192 1 105 8
more than 60 days past due     800 353 192 174
     7597 354 5609 240
a significant proportion of the receivables less than 60 days past due relate to large corporate customers for which there is no objective 
evidence that the group will not be able to recover amounts owing and therefore no impairment has been made receivables more than 
60 days not impaired of £447000 2007 £18000 arise where equal and opposite payable and receivable balances are held in respect 
of a major supplier and customer 
the movement in impairment in respect of trade receivables during the year was as follows
       2008 2007 
       £’000 £’000
at 30 june 2007 24 june 2006       240 320
charged to profit and loss account       123 6
utilised in period       9 86
at 28 june 2008 30 june 2007       354 240
the impairment charge recognised in the income statement net of amounts recovered previously written off amounted to £125000 2007 £nil
the other classes within trade and other receivables do not contain impaired assets
currency exposure
net monetary assets and liabilities of the group that are not denominated in the local functional currency were as follows
       euro euro 
       2008 2007 
       £’000 £’000
net foreign currency monetary assetsliabilities
cash and cash overdraft       70 140
trade and other payables       547 528
       477 388
the following significant exchange rate applied during the year
        reporting date 
     average rate  spot rate
     2008 2007 2008 2007
euro     13391 14594 12659 14829
2thtar08backindd   40 19092008   090446 annual report and accounts 2008 thorntons plc 57
17 derivatives and other financial instruments continued
sensitivity analysis
the group has used a sensitivity analysis technique that measures the estimated change to the income statement and equity had a 10 
weakening in sterling occurred against all other currencies from the rates applicable at 28 june 2008 this analysis assumes that all other 
variables in particular interest rates remain constant the analysis has been prepared on the same basis for 2007
the amounts generated from the sensitivity analysis are estimates of the impact of market risk assuming that specified changes occur
a 10 weakening of sterling against the following currency at 28 june 2008 would have decreased profit and loss by the amounts
       profit	 profit 
       and loss and loss 
       2008 2007 
       £’000 £’000
euro       53 43
a 10 strengthening of sterling against the above currency would have had an equal and opposite effect to the amounts shown
interest ra te risk
the financial assets of the group that were exposed to interest rate risk at 28 june 2008 consisted of cash and shortterm deposits and 
financial liabilities consisted of shortterm bank borrowings and finance leases these are detailed along with their effective interest rates 
in note 16 
sensitivity analysis
a 05 adverse movement in the effective interest rates applicable to these financial liabilities at 28 june 2008 would have decreased 
profit by the amounts shown below
       profit	 profit 
       and loss and loss 
       2008 2007 
       £’000 £’000
bank borrowings       4 3
finance leases       77 92
       81 95
18 provisions for liabilities
       group company 
       onerous onerous 
       leases and leases and 
       dilapidation dilapidation 
       £’000 £’000
at 30 june 2007       659 659
charged to profit and loss account       148 147
utilised in period       32 32
released in period       67 67
at 28 june 2008       708 707
2thtar08backindd   41 19092008   090446 58 thorntons plc annual report and accounts 2008
notes 	 to 	 the 	 financial 	 statements 	continued
18 provisions for liabilities continued
provisions are analysed between current and noncurrent as follows
     group group company company 
     2008 2007 2008 2007 
     £’000 £’000 £’000 £’000
current     122 181 122 181
noncurrent     586 478 585 478
     708 659 707 659
the provision for onerous leases is in respect of leasehold properties from which the group no longer trades but is liable to fulfil rent 
and other property commitments up to the lease expiry date obligations are payable within a range of one to nine years 2007 one to 
ten years the weighted average being three years 2007 four years amounts have been provided based on current rentals future rent 
reviews could require additional provisions to be made
the group provides for property dilapidations where appropriate based on estimated undiscounted costs of the dilapidation repairs 
spread over the period of the tenancy
19 deferred tax
deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 28 2007 28
the movement on the deferred tax account is shown below
     group group company company 
     2008 2007 2008 2007 
     £’000 £’000 £’000 £’000
at beginning of period     2512 2284 2476 2265
profit and loss chargecredit     329 11 329 28
taken to equity employee benefits     510 38 510 38
actuarial gainloss     601 453 601 453
effect of reduction in tax rate on accelerated capital allowances    — 521 — 521
effect of reduction in tax rate on sharebased payments     — 12 — 12
effect of reduction in tax rate on pension liability     — 308 — 308
effect of reduction in tax rate on other timing differences    — 49 — 49
at end of period     2750 2512 2714 2476
of the total group and company deferred tax balance at 28 june 2008 £86000 2007 £350000 is expected to be released within 
one year
2thtar08backindd   42 19092008   090447 annual report and accounts 2008 thorntons plc 59
19 deferred tax continued
the movements in deferred tax assets and liabilities prior to the offsetting of balances within the same jurisdiction as permitted by ias 12 
during the period are shown below
deferred t ax liabilities
      accelerated 
      capital 
      allowances other total 
group      £’000 £’000 £’000
at 30 june 2007      7301 50 7351
credited to profit and loss account      86 14 100
at 28 june 2008      7215 36 7251
deferred t ax assets
      retirement 
      benefit 
     provisions obligations other total 
group     £’000 £’000 £’000 £’000
at 30 june 2007     67 4317 455 4839
chargedcredited to profit and loss account     59 448 78 429
deferred tax on sharebased payments charged to equity    — — 510 510
deferred tax on actuarial loss credited to equity     — 601 — 601
at 28 june 2008     8 4470 23 4501
deferred t ax liabilities
      accelerated 
      capital 
      allowances other total 
company      £’000 £’000 £’000
at 30 june 2007      7301 14 7315
credited to profit and loss account      86 14 100
at 28 june 2008      7215 — 7215
deferred t ax assets
      retirement 
      benefit 
     provisions obligations other total 
company     £’000 £’000 £’000 £’000
at 30 june 2007     67 4317 455 4839
chargedcredited to profit and loss account     59 448 78 429
deferred tax on sharebased payments charged to equity    — — 510 510
deferred tax on actuarial loss credited to equity     — 601 — 601
at 28 june 2008     8 4470 23 4501
2thtar08backindd   43 19092008   090447 60 thorntons plc annual report and accounts 2008
notes 	 to 	 the 	 financial 	 statements 	continued
19 deferred tax continued
deferred t ax liabilities
      accelerated 
      capital 
      allowances other total 
group      £’000 £’000 £’000
at 24 june 2006      8161 19 8180
creditedcharged to profit and loss account      339 32 307
effect of reduction in tax rate      521 1 522
at 30 june 2007      7301 50 7351
deferred t ax assets
      retirement 
      benefit 
     provisions obligations other total 
group     £’000 £’000 £’000 £’000
at 24 june 2006     152 5381 363 5896
chargedcredited to profit and loss account     81 303 88 296
deferred tax on sharebased payments credited to equity    — — 38 38
deferred tax on actuarial gain charged to equity     — 453 — 453
effect of reduction in tax rate     4 308 34 346
at 30 june 2007     67 4317 455 4839
deferred t ax liabilities
      accelerated 
      capital 
      allowances other total 
company      £’000 £’000 £’000
at 24 june 2006      8161 — 8161
creditedcharged to profit and loss account      339 15 324
effect of reduction in tax rate      521 1 522
at 30 june 2007      7301 14 7315
deferred t ax assets
      retirement 
      benefit 
     provisions obligations other total 
company     £’000 £’000 £’000 £’000
at 24 june 2006     152 5381 363 5896
chargedcredited to profit and loss account     81 303 87 297
deferred tax on sharebased payments credited to equity    — — 38 38
deferred tax on actuarial gain charged to equity     — 453 — 453
effect of reduction in tax rate     4 308 33 345
at 30 june 2007     67 4317 455 4839
2thtar08backindd   44 19092008   090447 annual report and accounts 2008 thorntons plc 61
20 retirement benefit obligations
pension arrangements are operated through a defined contribution scheme and a defined benefit scheme for both the group 
and the company
defined contribution scheme
pension costs for defined contribution scheme are as follows
       2008 2007 
       £’000 £’000
defined contribution scheme       229 300
defined benefit scheme
the thorntons’ pension and life assurance scheme assets are held in a separate trustadministered fund to meet longterm pension 
liabilities to past and present employees the trustees of the fund are required to act in the best interest of the beneficiaries and in 
accordance with the trust deed and rules the most recently completed triennial valuation of the fund was performed by an independent 
actuary for the trustees of the scheme and was carried out as at 31 may 2005 the group has agreed with the trustees that it will aim 
to eliminate the deficit by november 2017 and will continue to monitor funding levels on a regular basis the triennial valuation due 
as at 31 may 2008 is currently being prepared by the actuaries for discussion with the trustees and the company 
the group continues to provide through an agreement with lloyds tsb a £5m guarantee payable to the scheme should the group 
become insolvent or the scheme or any part of it be wound up
the thorntons’ pension and life assurance scheme was actuarially valued by an independent professionally qualified actuary as at 28 june 2008 
under ias 19 principal actuarial assumptions at the balance sheet date were
      2008 2007 2006 
        
rate of increase in pensionable salaries      495 430 400
rate of increase in pensions   
– in deferment      380 315 290
– preapril 1997      000 000 000
– postapril 1997      360 310 265
discount rate      630 550 530
inflation assumption      380 315 290
expected return on plan assets      700 710 660
the assumption as to how many members will take up the maximum taxfree commutation on retirement is based on the scheme’s own 
experience of commutation levels
the sensitivities regarding the principal assumptions used to measure the scheme liabilities are set out below
      impact on 
    change in scheme  
    assumption liabilities
rate of increase in pensionable salaries    increase by 01 increase by £045m
rate of increase in pensions postapril 1997    increase by 01 increase by £02m
discount rate    increase by 01 decrease by £11m
inflation assumption    increase by 01 increase by £09m
expected return on plan assets    increase by 01 decrease by £005m
 
2thtar08backindd   45 19092008   090447 62 thorntons plc annual report and accounts 2008
notes 	 to 	 the 	 financial 	 statements 	continued
20 retirement benefit obligations continued
defined benefit scheme continued
the mortality rates used are as follows
    life expectancy  
    at age 65 years
   mortality table male female
current pensioners   pa92mc yob  1935 3 189 217
future pensioners   pa92mc yob  1965 3 205 232
the expected return on plan assets is a blended average of projected longterm returns for the various asset classes equity returns are 
based on a selection of an equity risk premium above the riskfree rate which is measured in accordance with the yields on government 
bonds bond returns are selected by reference to yields on government and corporate debt as appropriate to the scheme’s holdings of 
these instruments returns are projected over the entire life of the benefit obligation
the major categories of plan assets as a percentage of total plan assets are as follows
       2008 2007 
        
equities       64 69
bonds       36 30
other       — 1
pensions and other postretirement obliga tions
the amounts recognised in the balance sheet are determined as follows
     2008 2007 2006 2005 
     £’000 £’000 £’000 £’000
present value of funded obligations     53993 54785 51527 48485
fair value of plan assets     38028 39368 33586 29488
net	deficit     15965 15417 17941 18997
the amounts recognised in the income statement are as follows
       2008 2007 
       £’000 £’000
current service cost       784 873
interest cost       2997 2775
expected return on plan assets       2662 2302
t otal	included	within	staff	employment	benefits	expense	note	27	    1119 1346
of the total charge £07m 2007 £08m and £04m 2007 £05m were included respectively in cost of sales and administrative expenses
2thtar08backindd   46 19092008   090447 annual report and accounts 2008 thorntons plc 63
20 retirement benefit obligations continued
pensions and other postretirement obliga tions continued
changes in the present value of the defined benefit obligations are as follows
       2008 2007 
       £’000 £’000
present value of obligation at beginning of period       54785 51527
current service cost       784 873
interest cost       2997 2775
employee contributions       980 950
benefit payments       2064 1812
actuarial gainslosses       3489 472
present value of obligation at end of period       53993 54785
changes in the fair value of plan assets are as follows
       2008 2007 
       £’000 £’000
fair value of plan assets at beginning of period       39368 33586
employer contributions       2719 2360
employee contributions       980 950
benefits paid       2064 1812
actual lossreturn on assets       2975 4284
closing fair value of plan assets at end of period       38028 39368
analysis of the movement in the balance sheet deficit
       2008 2007 
       £’000 £’000
at beginning of period       15417 17941
employer pension cost       1119 1346
employer contributions       2719 2360
net actuarial lossesgains recognised in the period       2148 1510
at end of period       15965 15417
cumula tive actu arial gains and losses recognised in equity
       2008 2007 
       £’000 £’000
at beginning of period       1224 2734
net actuarial lossesgains recognised in the period       2148 1510
cumulative loss       3372 1224
the contribution expected to be paid by the group during the financial period ending 27 june 2009 amounts to £17m
2thtar08backindd   47 19092008   090447 64 thorntons plc annual report and accounts 2008
notes 	 to 	 the 	 financial 	 statements 	continued
21 other noncurrent liabilities
       2008 2007 
group and company       £’000 £’000
accruals and deferred income       2612 1997
included in the above are amounts totalling £293037 2007 £314072 held in respect of government grants
22 ordinary shares
       2008 2007 
group and company       £’000 £’000
authorised  
85000000 ordinary shares of 10p each 2007 85000000      8500 8500
issued and fully paid  
ordinary shares of 10p each 68348234 2007 68111468      6835 6811
allotments during the year
during the year no shares 2007 566666 were issued under the provision of the company’s executive share option schemes and 236766 
2007 299347 were issued under the sharesave scheme representing a total nominal value of £23677 2007 £86601
the average price of shares issued under the sharesave scheme was £094 2007 £068 and the aggregate consideration received 
under this scheme was £222867 2007 £203199
since the end of the year no shares have been issued under the provisions of the executive share option schemes 2007 nil and no shares 
2007 184 have been issued under the sharesave scheme
rights and restrictions a tt aching to shares
holders of the company’s ordinary shares of 10p each are entitled to participate in the payments of dividends pro rata to their holdings 
the directors may propose and pay interim dividends and recommend a final dividend for shareholders’ approval for any accounting 
period out of the profits available for distribution under english law
at any general meeting a resolution put to the vote of the meeting is decided on a show of hands unless before or on the declaration 
of the result of a show of hands a poll is properly demanded on a show of hands every member who is present in person at a general 
meeting of the company has one vote proxies may not vote on a show of hands on a poll every member who is present in person or 
by proxy has one vote for every share of which he is the holder
2thtar08backindd   48 19092008   090447 annual report and accounts 2008 thorntons plc 65
22 ordinary shares continued
share options
options outstanding including those held by directors are listed below
executive schemes
   number of options 
   during the 52 weeks  
   ended 28 june 2008  exercisable
  at 30 june     at 28 june exercise 
date of grant 2007 granted forfeited exercised lapsed 2008 price from to
22 nov 2001 500000 — — — 333334 166666 90p 22 nov 2004 22 nov 2011
12 mar 2002 214720 — — — 198204 16516 111p 12 mar 2005 12 mar 2012
02 oct 2002 99100 — 33034 16516 — 49550 111p 02 oct 2005 02 oct 2012
03 oct 2003 88000 — — — — 88000 125p 03 oct 2006 03 oct 2013
03 apr 2006 544000 — — — — 544000 119p 03 apr 2009 03 apr 2016
05 jun 2006 1200000 — — — — 1200000 116p 05 jun 2009 05 jun 2016
11 jul 2006 500000 — — — — 500000 129p 11 jul 2009 11 jul 2016
02 oct 2006 1200000 — — — — 1200000 153p 02 oct 2009 02 oct 2016
13 sep 2007 — 500000 — — — 500000 170p 13 sep 2010 13 sep 2017
23 nov 2007 — 644112 — — — 644112 192p 23 nov 2010 23 nov 2017
  4345820 1144112 33034 16516 531538 4908844
sharesa ve scheme
   number of options 
   during the 52 weeks  
   ended 28 june 2008  exercisable
  at 30 june granted    at 28 june exercise 
date of grant 2007 or reinstated forfeited exercised lapsed 2008 price from to
25 oct 2001 22043 — — — 22043 — 67p 01 jan 2007 30 jun 2007
18 oct 2002 271808 — 9430 232057 — 30321 94p 01 jan 2008 30 jun 2008
16 oct 2003 301210 — 23113 4525 — 273572 100p 01 jan 2009 30 jun 2009
12 oct 2004 226315 — 18370 — — 207945 150p 01 jan 2010 30 jun 2010
09 oct 2006 224874 — 33188 184 — 191502 113p 01 jan 2010 30 jun 2010
09 oct 2006 258973 — 16744 — — 242229 113p 01 jan 2012 30 jun 2012
10 oct 2007 — 270794 33225 — — 237569 148p 01 jan 2011 30 jun 2011
10 oct 2007 — 292281 7491 — — 284790 148p 01 jan 2013 30 jun 2013
  1305223 563075 141561 236766 22043 1467928
2thtar08backindd   49 19092008   090447 66 thorntons plc annual report and accounts 2008
notes 	 to 	 the 	 financial 	 statements 	continued
23 sharebased payments
under the company’s executive share option schemes the remuneration committee can grant options over shares in the company 
to directors and employees of the company options are granted with a fixed exercise price equal to the market price of the shares under 
option at the date of grant the contractual life of an option is ten years awards of options under the scheme are generally reserved for employees 
at senior management level and above details of the performance conditions attaching to awards of options are described in the report on 
directors’ remuneration on pages 24 to 31 fair value is measured by the use of the blackscholes model for options with internal 
performance criteria and the monte carlo model for options with external performance conditions
the thorntons sharesave scheme enables eligible employees to acquire options over ordinary shares of the company at a discount of 
up to 20 to the market price in conjunction with a save as you earn contract the options are exercisable within a period of six months 
commencing three or five years from the date of the savings contract
the fair value per option granted during the year and the assumptions used in their calculation are as follows
 2008 2008 2008 2008 2007 2007 2007 2007 
 executive  executive sharesave sharesave executive executive sharesave sharesave 
 1 2 1 2 1 2 1 2
grant date 13 sep 07 23 nov 07 10 oct 07 10 oct 07 11 jul 06 02 oct 06 09 oct 06 09 oct 06
share price at grant date 185p 193p 172p 172p 127p 152p 152p 152p
exercise price 170p 192p 148p 148p 129p 153p 113p 113p
number of employees 1 4 201 144 1 1 195 149
shares under option 500000 644112 270794 292281 500000 1200000 234204 267607
vesting period years 3 3 3 5 3 3 3 5
expected volatility 2619 2737 2655 2655 2618 2657 2652 2652
option life years 10 10 3 5 10 10 3 5
expected life years 3 3 3 5 3 3 3 5
riskfree rate 500 435 509 503 470 476 480 470
expected dividends expressed  
as a dividend yield 390 353 390 390 520 520 520 520
possibility of ceasing employment  
before vesting na na 4494 4723 na na 4656 4723
fair value per option three tranches 41p–45p 30p 40p 45p 20p–23p 24p–28p 40p 40p
the expected volatility is based on historical volatility over the last three years the expected life is the average expected period to 
exercise the riskfree rate of return is the yield on zerocoupon uk government bonds of a term consistent with the assumed option life 
2thtar08backindd   50 19092008   090448 annual report and accounts 2008 thorntons plc 67
23 sharebased payments continued
a reconciliation of executive share option movements over the period to 28 june 2008 is shown below
     2008  2007
      weighted  weighted 
      average  average 
      exercise   exercise 
executive share options     number  price number price
outstanding at start of period     4345820 125p 4598984 106p
granted     1144112 182p 1700000 146p
forfeited     33034 111p 1303918 99p
exercised     16516 111p 649246 98p
lapsed     531538 98p — —
outstanding at end of period     4908844 125p 4345820 125p
exercisable at end of period     199698 93p 216217 95p
for share options outstanding at the end of the period the range of exercise prices and weighted average contractual life is disclosed below
    2008  2007
     contractual   contractual 
     weighted   weighted 
    weighted average  weighted average 
    average remaining  average remaining 
    exercise life   exercise life 
range of exercise prices   number  price years number price   years
90p111p   232732 96p 36 813820 98p 46
116p153p   3532000 131p 80 3532000 131p 90
170p192p   1144112 182p 93 — — —
the weighted average share price during the period for options exercised over the period was nil 2007 147p the total charge for 
the period relating to employee sharebased payment plans was £369000 2007 £230000 after deferred tax the total charge was 
£266000 2007 £160000
a reconciliation of sharesave scheme option movements over the period to 28 june 2008 is shown below
     2008  2007
      weighted  weighted 
      average  average 
       exercise   exercise 
sharesave scheme options     number price number price
outstanding at start of period     1305223 99p 1237586 99p
reinstated     — — 10805 89p
granted     563075 148p 501811 113p
forfeited     141561 124p 108935 108p
exercised     236766 94p 301034 68p
lapsed     22043 67p 35010 75p
outstanding at end of period     1467928 128p 1305223 99p
exercisable at end of period     30321 94p 22043 67p
2thtar08backindd   51 19092008   090448 68 thorntons plc annual report and accounts 2008
notes 	 to 	 the 	 financial 	 statements 	continued
23 sharebased payments continued
for share options outstanding at the end of the period the range of exercise prices and weighted average contractual life is disclosed below
    2008  2007
     contractual   contractual 
     weighted   weighted 
    weighted average  weighted average 
    average remaining  average remaining 
    exercise life   exercise life 
sharesave scheme   number  price years number price  years
oct 2001   — — — 22043 67p —
oct 2002   30321 94p — 271808 94p 10
oct 2003   273572 100p 10 301210 100p 20
oct 2004   207945 150p 20 226315 150p 30
oct 2006   191502 113p 20 224874 113p 30
oct 2006   242229 113p 40 258973 113p 50
oct 2007   237569 148p 30 — — —
oct 2007   284790 148p 50 — — —
the weighted average share price during the period for options exercised over the period was 164p 2007 146p the total charge for the 
period relating to employee sharebased payment plans was £87000 2007 £61000 after deferred tax the total charge was £62000 
2007 £43000
24 statement of changes in shareholders’ equity
     share  share retained 
     capital premium earnings total 
group    note £’000 £’000 £’000  £’000
at 25 june 2006     6724 12890 12340 31954
total recognised income and expense     — — 6011 6011
new share capital issued    22 87 661 — 748
sharebased payment credit     — — 291 291
effect of tax on share option movement    6 — — 303 303
movement in investment in own shares     — — 91 91
dividends    9 — — 4512 4512
at 30 june 2007     6811 13551 14524 34886
total recognised income and expense     — — 4521 4521
new share capital issued    22 24 199 — 223
sharebased payment charge     — — 447 447
effect of tax on share option movement    6 — — 510 510
movement in investment in own shares     — — 18 18
dividends    9 — — 4550 4550
at 28 june 2008     6835 13750 14450 35035
2thtar08backindd   52 19092008   090448 annual report and accounts 2008 thorntons plc 69
24 statement of changes in shareholders’ equity continued
     share  share retained 
     capital premium earnings total 
company    note £’000 £’000 £’000  £’000
at 25 june 2006     6724 12890 10124 29738
total recognised income and expense     — — 5864 5864
new share capital issued    22 87 661 — 748
sharebased payment credit     — — 291 291
effect of tax on share option movement    6 — — 303 303
movement in investment in own shares     — — 91 91
dividends    9 — — 4512 4512
at 30 june 2007     6811 13551 12161 32523
total recognised income and expense     — — 4437 4437
new share capital issued    22 24 199 — 223
sharebased payment charge     — — 447 447
effect of tax on share option movement    6 — — 510 510
movement in investment in own shares     — — 18 18
dividends    9 — — 4550 4550
at 28 june 2008     6835 13750 12003 32588
deducted from retained earnings are investments in own shares of £2163000 2007 £2182000 being held by trusts operating 
the following plans
  lapsed longterm incentive plan now holds no shares 2007 504610 at an original cost of £nil 2007 £1035000 having been 
closed with shares transferring to a new 2007 ltip trust 
  2007 longterm incentive plan with 504610 shares 2007 nil at an original cost of £1035000 2007 £nil and
  2001 executive share option scheme with 905070 shares 2007 921586 at an original cost of £1128478 2007 £1146811
2thtar08backindd   53 19092008   090448 70 thorntons plc annual report and accounts 2008
notes 	 to 	 the 	 financial 	 statements 	continued
25 cash flow from operating activities
a cash genera ted from opera tions
     group group company company 
     2008 2007 2008 2007 
     £’000 £’000 £’000 £’000
continuing operations    
operating profit     10326 8852 10215 8676
adjustments for    
depreciation and amortisation     11246 10982 11238 10975
amortisation of government grants received     21 20 21 20
profit on disposal of property plant and equipment     143 353 143 353
sharebased payment charge     447 291 447 291
operating	cash	flow	before	working	capital	movements	   21855 19752 21736 19569
changes in working capital    
increase in inventories     6105 2885 6106 2884
increase in trade and other receivables     2520 875 3479 9594
increase in payables     2309 1059 3366 2484
increase in provisions     49 26 48 123
decrease in postemployment benefits     1600 1014 1600 1014
cash generated from operations before taxation     13988 16063 13965 27872
corporate taxation     2507 1463 2500 1463
cash	flows	from	operating	activities     11481 14600 11465 26409
b cash and cash equiv alents for the cash flow st atement
     group group company company 
     2008 2007 2008 2007 
     £’000 £’000 £’000 £’000
cash and cash equivalents     1088 2858 1005 2624
bank overdraft     — — 167 —
net position     1088 2858 838 2624
2thtar08backindd   54 19092008   090448 annual report and accounts 2008 thorntons plc 71
26 reconciliation of movement in net debt
     group group company company 
     2008 2007 2008 2007 
     £’000 £’000 £’000 £’000
decreaseincrease in cash and cash equivalents     1770 2856 1786 14665
cash flows from decrease in debt     1712 1526 1712 1526
change in net debt resulting from cash flow     58 4382 74 16191
inception of new finance leases     1795 3222 1795 3222
movement in net debt in the period     1853 1160 1869 12969
net debt at beginning of period     26411 27571 26645 39614
net debt at end of period     28264 26411 28514 26645
27 employees and directors
     group group company company 
     2008 2007 2008 2007 
employee	benefit	expense	during	the	period     £’000 £’000 £’000 £’000
wages and salaries     54638 47504 54585 47456
social security costs     4679 4261 4676 4258
health cover medical and life assurance     195 178 195 178
staff incentives and relocation costs     163 34 163 34
sharebased payments     456 291 456 291
pension costs note 20     1348 1646 1348 1646
     61479 53914 61423 53863
     group group company company 
     2008 2007 2008 2007 
average monthly number of people including executive directors employed   number number number number
management and administration     221 207 220 206
selling and distribution     2775 2556 2771 2552
manufacturing     1570 1240 1570 1240
     4566 4003 4561 3998
2thtar08backindd   55 19092008   090448 72 thorntons plc annual report and accounts 2008
notes 	 to 	 the 	 financial 	 statements 	continued
27 employees and directors continued
group and comp any
       2008 2007 
key management compensation       £’000 £’000
salaries and shortterm employee benefits       1732 1702
postemployment benefits       136 214
termination benefits       — 389
sharebased payments       369 247
       2237 2552
the key management figures given above include directors and all other members of the executive committee
       2008 2007 
directors       £’000 £’000
aggregate emoluments       1204 1299
aggregate gains made on the exercise of share options       — 268
company contributions to money purchase pension schemes      125 201
       1329 1768
pension scheme contributions above represent the total contributions made by the company on behalf of all directors in respect of approved 
pension arrangements
retirement benefits are accruing to one director 2007 one under defined benefit schemes
further detail in respect of directors’ remuneration can be found in the report on directors’ remuneration on pages 24 to 31
28 operating lease commitments – minimum lease payments
     2008  2007
     land and  land and  
     buildings other buildings other 
group     £’000 £’000 £’000 £’000
commitments under noncancellable operating leases    
within one year     18770 628 16632 641
later than one year and less than five years     62803 1429 57088 500
after five years     43428 80 40654 —
     125001 2137 114374 1141
     2008  2007
     land and  land and  
     buildings other buildings other 
company     £’000 £’000 £’000 £’000
commitments under noncancellable operating leases    
within one year     18710 628 16572 641
later than one year and less than five years     62563 1429 56849 500
after five years     43151 80 40317 —
     124424 2137 113738 1141
2thtar08backindd   56 19092008   090448 annual report and accounts 2008 thorntons plc 73
29 contingent liabilities
as at 28 june 2008 the group had provided guarantees in respect of customs and excise duty deferment of £100000 2007 £100000
30 capital and other financial commitments
     group group company company 
     2008 2007 2008 2007 
     £’000 £’000 £’000 £’000
contracts placed for future capital expenditure not provided in the financial statements  754 58 754 58
bulk supplies of raw ingredients     15687 12255 15687 12255
     16441 12313 16441 12313
major noncash transactions
during the period the group entered into finance lease agreements in respect of various shop fitting costs and plant and equipment with 
capital values at the inception of the leases of £1795000 2007 £3222000
31 related party transactions
group
there are no related party transactions requiring disclosure in the financial statements 2007 £nil
comp any
funds are transferred within the group dependent on the operational needs of individual companies the directors do not consider it 
meaningful to set out the gross amounts of transfers between individual companies balances owed by and to other group undertakings 
are shown in notes 14 and 15 to the financial statements
2thtar08backindd   57 19092008   090449 74 thorntons plc annual report and accounts 2008
five year summary
the figures for 2007 and 2008 are extracted from this annual report and along with 2006 and 2005 are prepared under ifrs the figures 
for 2004 were prepared and are presented under uk gaap 
    ifrs ifrs ifrs ifrs uk gaap 
    2008 2007 2006 2005 2004 
    £’000 £’000 £’000 £’000 £’000
consolidated income statement     
revenue    208122 185989 176626 187704 178746
operating profit    10326 8852 7307 10445 9584
net finance costs    1856 1771 2142 2366 2578
profit before taxation    8470 7081 5165 8079 7006
taxation    2402 1785 1517 2529 2037
profit attributable to equity shareholders    6068 5296 3648 5550 4969
balance sheet     
net assets    35035 34886 31954 31575 41406
net borrowings    19912 16142 15998 18063 15930
net debt    28264 26411 27571 28391 25996
gearing ratio    807 757 863 899 628
additions to intangible assets and property plant and equipment   7905 7938 7513 11204 10359
other	financial	data     
basic earnings per share excluding exceptional items    91p 80p 64p 103p 88p
dividends per share    68p 68p 68p 68p 68p
number of outlets – continuing operations
own stores    379 368 367 369 378
franchises    250 218 212 216 203
stock market ratios     
year end share price    114p 175p 131p 142p 159p
shares in issue    683m 681m 672m 666m 666m
market capitalisation    £779m £1192m £878m £944m £1059m
dividend yield    60 39 52 48 43
 53 week period
2thtar08backindd   58 19092008   090449 annual report and accounts 2008 thorntons plc 75
shareholder analysis
shareholder ownership analysis at 28 june 2008
 shareholders shareholders shares shares 
shareholding range number  number 
up to 500 5537 585 1435769 21
501–1000 1575 166 1293182 19
1001–10000 2100 221 6101049 89
10001–100000 180 19 5808510 85
100000  81 09 53709724 786
 9473 1000 68348234 1000
 shareholders shareholders shares shares 
category of shareholder number  number 
corporate bodies and nominees 549 58 50270832 736
private shareholders 8924 942 18077402 264
 9473 1000 68348234 1000
2thtar08backindd   59 19092008   090449 76 thorntons plc annual report and accounts 2008
for 52 weeks ended 28 june 2008
23 october 2008 agm
28 november 2008 final dividend payable
for 52 weeks ending 27 june 2009
10 january 2009 interim accounting period end 28 weeks
february 2009 interim results and dividend announced
april 2009  interim dividend payable
27 june 2009  accounting period end 52 weeks
september 2009  results and final dividend announced
september 2009  annual report circulated
share dealing service
if you want to buy or sell shares capita share dealing service offer an easytouse competitive executiononly service this means that 
they will only buy and sell shares and will not offer any other service for example financial advice if you want to use this service phone 
0870 458 4577 or visit wwwcapitadealcom the service is provided by capita irg trustees limited which is authorised and regulated 
by the financial services authority wwwfsagovukregister 184113 and is a subsidiary of capita irg plc terms and conditions apply 
financial calendar
2thtar08backindd   60 19092008   090449 about thorntons
established by joseph william thornton 
in 1911 thorntons today is a £200m 
turnover company with 379 shops 
and cafés and 250 franchises 
together with internet mail order 
and commercial services
thorntons’ commitment to environmental issues is reflected in 
this annual report which has been printed on revive 5050 silk 
and revive 5050 offset both recycled paper stocks containing 
50 recovered waste and 50 virgin fibre the pulp used in this 
product is bleached using a totally chlorine free tcf process 
this document was printed by vitesse using soyabased inks and 
watersoluble lacquers and all production processes used make 
the minimum demand on the environment and produce the 
minimum amount of waste 
both the printer and the paper mill are registered to iso 14001 
and fsc approved
cert no fscoc002830 
 01 highlights
 02 about thorntons
 04 chairman’s statement
 06 chief executive’s report
 10 finance director’s report
 12 corporate social responsibility
 15 board of directors 
 16 corporate information
 17 report of the directors
 20 corporate governance
 24 report on the directors’ remuneration
 32 independent auditors’ report 
 34 consolidated income statement
 34  statements of recognised income and expense
 35 balance sheets
 36 cash flow statements
 37 statement of accounting policies
 43 notes to the financial statements
 74 five year summary
 75 shareholder analysis
 76 financial calendar
1thtar08coverindd   2 19092008   090810 thorntons plc 
thornton park
somercotes
alfreton
derbyshire de55 4xj
telephone 0845 075 7565
wwwthorntonscouk
thorntons direct 
telephone 0845 121 1911
wwwthorntonscouk
for information on 
investor relations visit
wwwthorntonscouk
thorntons plc annual report and accounts 2008
thorntons plc annual report and accounts 2008
1thtar08coverindd   1 19092008   090805


Summary:
 chief executive’s report
longterm goals
reestablish thorntons as 
the undisputed leading 
premium chocolate 
brand in the uk
to increase our share of 
the uk chocolate market 
by more than 50
to increase all year 
round business to 
reduce dependency 
on christmas and easter
to improve our operating 
profit percentage
selective development 
of export sales
the past year has seen continued growth for 
thorntons sales rose by 119 to £2081m 
surpassing the £200m mark for the first 
time with growth in all channels profit 
before tax increased by 196 to £85m
this performance improvement has been 
achieved by focusing on the five point strategy 
outlined in the chairman’s statement
investment in the brand
thorntons has a very loyal customer 
base with a very strong brand franchise 
our challenge is to give the brand a broader 
appeal and we have made good progress 
during the year our tv commercial aired 
before christmas helped improve overall 
perception of the brand and went on to 
win a silver and a bronze award at the 
2008 british television advertising awards 
our product innovation and store 
improvements detailed below as well 
as numerous other activities have all 
played a part in rejuvenating the brand 
and consumers have noticed and 
appreciated the changes in july 2008 
superbrands published its official ranking 
of the uk’s top 500 brands for 200809 
and i am delighted to report that thorntons 
jumped from 81st to 18th place and now 
ranks as the uk’s number one brand in the 
food – chocolate and confectionery category
developing innovative new products
there has been a steady stream of successful 
innovation during the year starting with the 
relaunch of our flagship continental range 
last autumn we increased the choice of 
chocolates with new recipes as well as 
reintroducing some old favourites and 
succeeded in arresting the longterm decline 
of the continental range and growing the 
brand by 5 thorntons moments a product 
designed to be shared by the family or 
as an informal gift was launched in the 
spring and has performed ahead of 
our expectations 
the new designs for our seasonal ranges 
at christmas valentine’s day mother’s day 
and easter all delivered improved sales with 
a view to reducing our reliance on christmas 
and easter we have improved our ice cream 
offering introducing two new flavours 
for sale in our own stores we have also 
launched a new ice cream stick which 
comes in two delicious flavours toffee 
temptation and chocolate trio they are 
available in our own stores supermarkets 
and convenience stores 
looking ahead we have a new range 
of luxury chocolate blocks and a super 
premium box of chocolates coming out 
this autumn together with a product 
pipeline packed with exciting ideas for 
the next three years
06 thorntons plc annual report and accounts 2008
1thtar08frontindd   6 19092008   090622 modernising the instore 
environment
whilst we have continued to improve 
the look of our current estate the most 
notable achievements during the year were 
the design of the new store concept and the 
improvement to our infrastructure with the 
specification of a new electronic point 
of sale “epos” system
the new concept has been designed to give 
the stores a more contemporary feel and 
create a more exciting shopping experience 
making our wonderful products the “heroes 
of the store” since the year end the first 
three new stores opened in kingston upon 
thames reading and bluewater in august 
with further openings expected in september 
in nottingham and edinburgh we will 
closely monitor the performance of these 
stores until after christmas before we 
decide what further actions to take
we have begun to replace our epos 
equipment which is expected to be 
completed before christmas our current 
equipment is more than ten years old and 
no longer compatible with today’s chip and 
pin or cashless payment systems the capital 
cost of this project is over £4m spread over 
two years the new system will help to 
reduce customer waiting time significantly 
in the peak christmas season as well as 
providing us with more user friendly and 
valuable sales information
 further expanding our commercial 
and direct businesses
a key part of our longterm strategy is 
to make our products available to more 
customers throughout the country other 
retailers and our website will play an 
important role in achieving this our own 
stores and franchisees offer customers 
a wide range of products and individual 
service with the added benefits of 
personalised gift wrapping or icing of 
messages whereas the supermarkets and 
convenience stores provide the benefits 
of wider availability of a narrower range 
the thorntons direct business offers the 
ultimate choice in product personalisation 
and the benefit of 247 shopping and 
delivery to even the remotest location 
all have a vital role to play and i am very 
pleased that we have delivered growth 
across all four channels
attracting and retaining 
the best people
our people are key to the success of our 
growth strategy in retail we have improved 
the competitiveness of our pay and benefits 
package and provided more training to both 
store managers and sales assistants as a 
result we have colleagues who are better 
able to provide customers with an enjoyable 
shopping experience and excellent customer 
service as well as seeing reduced staff turnover
thorntons has a very loyal customer base with a very strong 
brand franchise our challenge is to give the brand a broader 
appeal and we have made good progress during the year
thorntons’ new retail concept launch 
chocolate tempering in thorntons’ kitchen
thorntons plc annual report and accounts 2008 07
1thtar08frontindd   7 19092008   090633 attracting and retaining 
the best people continued
on the supply side we followed last 
year’s successful implementation of the 
“regrading programme” with substantial 
changes to the shift patterns and can now 
operate 247 on many of our production 
lines i am pleased to say that these changes 
involved extensive consultations with our 
staff and were implemented with their 
full support
finally we have begun to implement 
programmes to develop our managers 
internally creating career opportunities 
and internal succession opportunities 
the recently announced promotions of 
lysanne mccallion to director of retail 
and of hannah legg who joins the 
executive team as head of thorntons direct 
are good examples of these changes i am 
also pleased to welcome sarah riley who 
joined us in august as director of human 
resources replacing carmel brown carmel 
left us in july 2008 to pursue a change of 
career and i would like to thank her for 
her contribution to thorntons and wish 
her good luck in her new endeavour
operational performance
own stores
our own retail stores performed well this 
year with overall and likeforlike growth in 
every quarter resulting in sales of £1351m 
and a 46 growth for the year the retail 
estate increased by a net 11 stores to 379 
as a result of 14 openings and 3 closures 
as we continue to address a small number 
of poorly performing stores we remain 
committed to our goal of reaching 400 stores 
while we have made progress the current 
uncertainties in the property market may 
have an impact on the timing we will 
closely monitor the situation and take 
advantage of opportunities for good 
sites as they arise
franchise stores
the franchise business grew by 145 
to £149m in the year with a net increase 
of 32 stores we now have 250 stores 
and are making good progress towards 
the mediumterm target of 300 i would 
like to express my thanks to franchisees for 
their ongoing commitment and dedication 
to the thorntons brand we appreciate 
their candid feedback and suggestions for 
improvement and the fact that 40 of the 
independent store openings in the course 
of the financial year came from existing 
franchisees opening additional stores 
with us is a testament to their loyalty
commercial sales
the commercial business rose 338 to 
£495m and is becoming an increasingly 
important part of the business generating 
nearly a quarter of our sales all the major 
multiples are customers and thorntons 
is now the undisputed brand leader in 
what ac nielsen defines as the “inlaid box 
chocolate category” with a market share of 
22 ac nielsen the launch of thorntons 
moments into the twist wrap category has 
also proved to be a success and made a 
significant contribution to the sales growth 
in the commercial channel
thorntons direct
finally our direct business which includes 
the consumer online and corporate end 
user businesses continued last year’s trend 
with sales of £86m which represents 
growth of 266 for the full year product 
innovation increasing the size of our customer 
database improving conversion rates and 
delivery accuracy have all contributed to 
the success of this channel
supply chain
the performance of our supply chain 
continues to improve customer service 
levels increased to 95 up from 94 
last year and 88 the previous year
the most significant impact on the 
supply side of the business this year has 
undoubtedly been the substantial increases 
in raw material prices and energy costs 
as has been widely reported dairy product 
prices rose by more than 70 at one point 
during the year before dropping back 
down again chocolate prices have risen 
40 year on year and the market continues 
to be volatile and difficult to predict energy 
price increases have also been challenging 
we have however succeeded in absorbing 
the high input costs by improving 
productivity and increasing prices thus 
restoring profitability we expect input 
costs to remain high during the current 
financial year but we are well placed to 
mitigate the likely impact through increased 
pricing across all our product ranges 
i strongly believe we will continue to improve our performance 
overall as long as we remain close to our traditional values of 
high quality products and innovation and place our customers 
at the forefront of our thinking
08 thorntons plc annual report and accounts 2008
chief executive’s report continued
1thtar08frontindd   8 19092008   090633 commercial
£495m
own stores
£1351m
thorntons direct
£86m
franchise stores
£149m
outlook
despite the uncertain general economic 
environment and the challenges faced 
by all retailers i am confident about 
thorntons’ progress and prospects
during the course of the last year we 
have developed a longterm plan with 
the following goals
  to be recognised as the uk’s leading 
premium chocolate brand given the 
recent “superbrands” report arguably 
we already are but we will not be 
complacent as more remains to be 
done to consolidate this position
  to increase our share of the uk 
chocolate market by more than 50 
our sales today represent approximately 
6 of the total market and we believe 
there are many opportunities for growth 
as we realise our new product pipeline 
and expand into new categories
  to increase our all year round business 
and reduce our financial dependency 
on christmas and easter our new 
ice cream products are good examples 
of this strategy
  to improve our operating profit 
margin during the last few years 
our profit as a percentage of sales 
has hovered around the 4 mark and 
we believe that this can be improved 
through innovation product design 
pricing and productivity improvements
  to grow internationally through the 
selective development of export sales 
this is a longerterm goal as our priority 
is to grow and improve performance in 
the uk first nevertheless lead times can 
be long and we feel it is right to include 
this goal in the development of our 
longterm plans
thorntons is continuing with its progress 
during the first weeks of the new financial 
year i strongly believe we will continue to 
improve our performance overall as long 
as we remain close to our traditional values 
of high quality products and innovation 
and place our customers at the forefront 
of our thinking
mike davies
chief executive
9 september 2008
revenue
thorntons plc annual report and accounts 2008 09
1thtar08frontindd   9 19092008   090635