thorntons plc
annual report and accounts 2013
rebalance and grow
revitalise
restore
thorntons plc annual report and accounts 2013
0thtar13coverindd   3 9242013   104014 am about thorntons
creating quality chocolate gifts  
for over 100 years
our delicious treats have been delighting customers for over 
100 years today thorntons is a £220m turnover company 
and our products can be found across a multichannel network 
compromising shops franchises online and through a wide 
choice of retail partners
our vision is to be britain’s bestloved chocolate 
brand making every customer smile
read more in the chief executive’s 
report on page 06
our values of creativity excellence and bringing people together  
underpin our strategy helping to inform our people their actions  
and our communication with our customers
thorntons plc 
annual report and accounts 2013
0thtar13coverindd   4 9242013   104016 am 01
thorntons plc
annual report and accounts 2013
highlights
revenue
£1200m
operating profit
£30m
•	 revenues up 18 to £2211 million 2012 £2171 million
•	 profit before tax and exceptional items increased 
to £56 million 2012 £09 million
•	 preexceptional operating profit “ebit” margin 
increased to 33 2012 13
•	 basic eps 56p 2012 loss of 14p
•	 cash generated from operations £83 million 
2012 £15 million
•	 net debt £275 million 2012 £291 million
•	 ias 19 pension deficit reduced to £249 million 
2012 £291 million
 retail
c ontents
review of the year
ifc about thorntons
01 highlights
02 chairman’s statement
04 our business and strategy
06 chief executive’s report
12 finance director’s report
16 risks and risk management
18  c o r p o r a t e r es p o nsi bi li t y
c orporate
22 board of directors
23 corporate governance
26 audit committee report
29 report of the directors
32  report on the directors’ remuneration
financial statements
43 independent auditors’ report 
45  consolidated income statement
46  statements of comprehensive income
47  statements of changes in equity
48 balance sheets
49 cash flow statements
50  notes to the financial statements
83 fiveyear summary
84 shareholder analysis
ibc  c or p or a t e i n f or m a t i on 
and financial calendar
read about our business  
and strategy on page 04
read more about  
our rebrand on page 09
find out more online at 
wwwthorntonscouk
revenue
£1011m
operating profit
£212m
 fmcg
1thtar13frontsmjwkwindd   1 9242013   104131 am 02
thorntons plc
annual report and accounts 2013
c hairman’s statement 
significant recovery in profits
this is my first opportunity to report on 
thorntons following my appointment as 
chairman on 1 february 2013 i am pleased 
to report a significant recovery in profits 
as thorntons continues to evolve towards 
becoming a multichannel uk business 
and longer term an international fast 
moving consumer goods “fmcg” 
company with a uk multichannel retailer 
the impact of the continuing weak uk 
economy on our customers and our 
company has been significant but as a 
result of management actions we have 
made good progress and are on track 
with our plan we have offset the legacy 
of our large retail estate by enhancing 
and developing other routes to market 
whilst retaining critical mass in our 
manufacturing operations 
the steps taken have been defined 
by our strategy and business model 
and successfully implemented by 
establishing businesswide objectives 
and ensuring clear accountability 
throughout the organisation 
the results for the financial year ended 
29 june 2013 reflect the success we 
have had in implementing this approach 
sales increased by 18 to £2211 million 
2012 £2171 million reported pretax 
profit before exceptional items was 
£56 million 2012 £09 million 
we have grown sales reduced costs 
and increased profits there is much 
more to do to realise the full potential 
of the thorntons brand but the past 
year has shown good progress 
towards that objective
we remain focused on improving 
profitability and creating 
shareholder value
c olleagues and directors
the progress that we have made would not 
have been possible without the continued 
and combined effort enthusiasm and 
passion of everyone at thorntons as a 
result of growing production volumes 
we have secured employment at our 
factory in alfreton derbyshire we play 
an important role in the local economy 
and are proud when others declare our 
manufacturing efficiency and quality 
as world class 
i would like to express my gratitude to 
those who have had to leave us during 
the year as we continue to reduce the 
size of our own store retail estate this 
is a planned and managed programme 
that has allowed us to retain many of 
our colleagues through redeployment 
to other stores 
i would also like to thank our franchisees 
suppliers and commercial partners without 
whose continued support and partnership 
we would not have been able to make 
such positive progress over the year
one of the great joys of being part of 
thorntons is watching and sampling the 
remarkable creativity of those involved in 
our product development every year we 
set new standards and the year ahead 
promises to be the most exciting yet
following my appointment as 
chairman keith edelman became 
senior independent director last 
november we welcomed martin george 
as a nonexecutive director who brings 
extensive commercial and marketing 
skills to us in addition to diana houghton 
who chairs our audit committee
•	 we have grown sales reduced costs 
and increased profits there is much 
more to do to realise the full potential 
of the thorntons brand but the past 
year has shown good progress 
towards that objective
•	 i am confident that we can continue 
to grow the company through the 
delivery of our strategy and by careful 
assessment of future strategic choices 
continue the successful transformation 
of our company
 summary
1thtar13frontsmjwkwindd   2 9242013   104131 am 03
thorntons plc
annual report and accounts 2013
i believe we now have a very highcalibre 
team of nonexecutive directors and 
executive directors led by jonathan hart 
as chief executive as a result i am 
confident that we can continue to grow 
the company through the delivery of 
our strategy and by careful assessment 
of future strategic choices continue the 
successful transformation of our company
dividend
the key to the future success of the 
business is underpinned by funding our 
investment requirements and rebuilding 
our balance sheet the board has therefore 
decided not to recommend the payment 
of a dividend this year but aims to return 
to a progressive dividend policy when the 
recovery strategy delivers a satisfactory 
dividend cover ratio and the company 
has sufficient distributable reserves
outlook
we approach the coming year with the 
strong conviction that we have the right 
strategy and that we are demonstrating 
this through these results consumer 
expenditure remains under pressure we 
are not expecting any improvement in the 
economy and as such do not expect this 
to support our efforts in the year ahead 
i am encouraged by the improving market 
sentiment towards thorntons and we 
are now working on plans to extend our 
transformation beyond the first threeyear 
plan we have an amazing company and 
with everyone pulling together we have 
an amazing opportunity ahead of us 
paul wilkinson
chairman
10 september 2013
“ i am encouraged by 
the improving market 
sentiment towards 
thorntons and we are 
now working on plans 
to extend our 
transformation 
beyond the first 
three‑year plan ”
1thtar13frontsmjwkwindd   3 9242013   104131 am 04
thorntons plc
annual report and accounts 2013
our business and strategy
together we make every day special
we are a famous british chocolate maker providing quality gifts 
for over 100 years through our chocolate and our people we help 
our customers say important things to those they care about 
 what we do
retail division
•   296 own stores and cafés across 
the uk and ireland
•  a franchise estate of 186 stores
 •    thorntons direct – online consumer 
and corporate sales
fmc g division
•  uk commercial and international sales
•   pur chasing
•   manufacturing and distribution
•   private label
 our strategy aims to transform the business
where we ’re going next
emerging international 
fmcg business and 
uk multichannel 
retailer
where we’ve come from
uk retail business  
with growing  
commercial sales
where we are now
uk multichannel 
business
1thtar13frontsmjwkwindd   4 9242013   104135 am 05
thorntons plc
annual report and accounts 2013
how we are doing it
future plans
•	 significant opportunities to maintain 
strong growth in uk commercial channel
•	 careful and structured countryby country 
approach to international growth
future plans
•	 extensive refresh of range and packaging
•	 continuing focus on product innovation 
in yearround gifting and key seasons
•	 further improvements to customer 
experience across all channels
future plans
•	 continuing rebalancing of sales to higher 
net margin contribution fmcg division
•	 continuing disciplined approach to 
margin and cost management
read more about revitalising  
our brand on page 09
read about how we measure our 
performance with our kpis on page 13
progress in 2013
•	 reduction in own store estate on track 
towards a sustainable and profitable level
•	 continued growth in uk commercial 
and international sales
progress in 2013
•	 continued development of yearround 
gifting range
•	 strength and reputation in the key 
seasons retained
•	 clear and consistent brand positioning
progress in 2013
•	 continued focus on improving margins 
and controlling costs
•	 all key financial metrics improved
to restore
our profitability to industry 
competitive returns over 
the medium to long term
to rebalance and grow
our sales and resources 
to meet our customers’ current 
and future needs delivering a 
reduced and sustainable retail 
estate and growing sales 
through all other channels
to revitalise
our brand through clear 
and consistent brand 
positioning across all customer 
touch‑points encouraging 
customers to buy from us 
once more per year 
1thtar13frontsmjwkwindd   5 9242013   104136 am 06
thorntons plc
annual report and accounts 2013
c hief executive’s report
making progress on our strategy and sales
we have made encouraging 
progress with the transformation 
of thorntons over the past year 
our strategy continues to be executed 
well and has started to deliver positive 
results and our evolving multichannel 
structure is a key strength despite the 
continuing economic challenges facing 
our customers and the business in 
general we are pleased that we have 
established a positive momentum 
the year can be summarised as one 
of improved sales reduced costs and 
increased profits 
sales in the year increased by 18 
to £2211 million 2012 £2171 million 
preexceptional operating expenses 
reduced by £30 million to £913 million 
2012 £943 million reported pretax 
profit before exceptional items was 
£56 million 2012 £09 million 
our customers have responded well to 
our new products and our multichannel 
approach ensures that our ranges are 
available where they want to buy them 
this is reflected in further improvement 
in our key market shares
in line with our strategy and as detailed 
further in the finance director’s report 
from the beginning of the 2014 financial 
year we have reorganised our activities 
into two divisions fast moving consumer 
goods “fmcg” which was formerly 
sales  operations and retail this 
reflects the transformation of our 
business and fits with our longterm 
vision for the business 
strategy
having completed the second year of our 
threeyear plan to transform the business 
and restore profits we are encouraged by 
the progress that we have made and have 
now begun to develop our objectives and 
plans beyond this period our strategy is 
underpinned by three main objectives
rebalance our sales to ensure that 
our products are available where our 
customers want them we are making 
good progress with reducing our own 
stores estate towards a sustainable and 
profitable level for the longer term our 
store closure programme is on track and 
our fmcg division and the uk commercial 
sales channel within it will respectively 
become the largest division and channel 
by the end of the 2014 financial year
revitalise the thorntons brand developing 
our yearround chocolate gifting range 
whilst also retaining our strength and 
reputation for the key seasons we have 
been working hard to establish and 
articulate our new brand positioning 
and visual identity and to establish clear 
product categorisation we have begun 
to refresh our entire range and improve 
the way in which our products are 
merchandised across our channels 
restore our profitability to industry 
competitive returns over the medium 
to long term we have continued to focus 
on improving margins and controlling 
costs across the business and have seen 
the actions we have taken increase 
preexceptional earnings before interest 
and taxation “ebit” margin to 33 
2012 13 although we still have some 
way to go to restore ebit margins to the 
industry average we have clear plans 
in place to continue this improvement 
and are confident in doing so
market opportunity
the chocolate market has maintained 
growth in recent years the overall 
chocolate market was worth £39 billion 
consumers are increasingly engaged 
with chocolate in response to the austere 
economic climate the likelihood of 
purchasing chocolate as a treat to share 
or as a gift is increasing more than ever 
consumers increasingly view chocolates 
as an affordable and acceptable alternative 
to higher priced gift categories 
our strategy both reflects and supports 
these trends the opportunity for us 
to grow our business is significant 
thorntons has a core of over four million 
loyal customers about 8 of uk adults 
taking the market as a whole over 50 
of all adults 26 million people purchased 
boxed chocolates or chocolate 
assortments in the past year 
•	 having completed the second year of 
our threeyear plan to transform the 
business and restore profits we are 
encouraged by the progress that we 
have made and have now begun to 
develop our objectives and plans 
beyond this period
•	 we are focusing on delivering product 
which will strengthen our credentials 
as a yearround gifting retailer as well 
as further underpinning our leading 
position in the key seasons
 summary
1thtar13frontsmjwkwindd   6 9242013   104136 am 07
thorntons plc
annual report and accounts 2013
we are a famous british chocolate maker providing quality gifts for over 100 years through our 
chocolate and our people we help our customers say important things to those they care about 
together we make every day special
who we are and what makes us different
our brand values 
mass‑ premium  
market positioning
massmainstream
premiumluxury
read more about our brand progress on page 09
helping our  
customers communicate  
through chocolate
thinking  
of you
happy  
birthday
congratulations
thank 
you
i love you
our brand positioning
strengthening  
our brand through  
year‑ round relevance 
impulsive 
gifting
for others
for me
new  
investment  
and growth
c ontinued 
investment  
and growth
planned  
gifting
eg christmas 
birthdays
creativity excellence bringing people together
1thtar13frontsmjwkwindd   7 9242013   104136 am 08
thorntons plc
annual report and accounts 2013
c hief executive’s report
continued
uk commercial sales
uk commercial sales grew by 112 to 
£887 million 2012 £798 million we saw 
further progress in breadth and depth of 
distribution for our yearround products 
our share of the boxed chocolate market 
increased to 119 2012 117 and our 
leading share of the core inlaid boxed 
chocolate market improved further to 
352 2012 331 as we launched our 
continental brand into the major grocers
we saw excellent growth in the key 
seasons of christmas and easter our 
share of christmas specialities grew to 
43 2012 28 as customers responded 
well to our advent calendars selection 
boxes and santa and rudolph models 
at easter we saw a growth in share to 48 
2012 40 with a strong sellthrough 
across our easter range looking ahead 
we anticipate further growth in these 
key seasons 
we have and will continue to invest 
in improving our customer account 
management and category management 
expertise as we plan for continued 
growth of this channel
international sales
international sales grew to £61 million 
2012 £39 million a year ago we 
set out our plans for our international 
channel over the past year we have 
been encouraged by the response that 
we have had from the markets in our 
first phase of development in particular 
we have experienced growth in sales 
in australia and south africa along 
with further growth in sales in the 
united arab emirates “uae” our 
tax and dutyfree business continues 
to progress well both in the uk and 
in the uae
we are committed to commercial 
distribution through the major 
supermarkets in these countries and 
are comfortable with this early progress 
we continue to improve our knowledge 
of this sector and will invest sensibly 
and modestly to support this growth
private label
private label sales grew to £63 million 
2012 £13 million as a result of the 
decision taken in early 2012 to reenter 
this sector where we can deliver an 
acceptable margin and where the 
thorntons brand is not in direct 
competition with the products 
we supply
manufacturing operations
leveraging our manufacturing overheads 
as we grow remains central to our strategy 
of rebalancing the business over the 
course of the year overall output has 
grown by 4 2012 37 to record levels 
this growth has been achieved whilst 
controlling our cost base retaining 
excellent customer service levels and 
substantially improving product quality 
performance targeted investment to 
maintain the infrastructure improve 
our capacity and drive efficiencies 
continues with the addition of a third 
robotic packing line which will be 
operational prior to our peak 2013 
christmas period
our purchasing strategy continues 
to drive significant business benefits 
regarding productivity capacity and 
risk mitigation in both direct materials 
and indirect spend 
as we have expanded our manufacturing 
output we have been able to reward 
loyal skilled temporary employees 
with permanent contracts and are now 
one of the most significant industrial 
employers in the local community
retail division
total retail sales including own stores 
franchise and thorntons direct declined by 
93 to £1200 million 2012 £1321 million
own stores
total sales declined by 80 to 
£1025 million 2012 £1114 million 
primarily as a result of the continuing 
store closure programme during the 
period 35 stores closed 2012 36 in 
line with our plan one of which was 
resited leaving a total of 296 stores 
at the year end 2012 330 stores
“ we approach the year ahead 
with continued caution about 
the economic environment 
but with a confidence that 
the actions we have taken 
will continue to deliver 
positive results ”
market opportunity continued
the uk gifting market is worth 
approximately £38 billion of which 
chocolate gifting accounts for £516 million 
and is growing well thorntons has the 
opportunity to grow market share and 
ultimately grow the chocolate gifting 
market though our focus on yearround 
gifting in particular the market for 
birthday gifts which accounts for 
onethird of the overall gifting market
the year in review
fmcg division formerly 
sales  operations
total sales in the fmcg division 
increased by 190 to £1011 million 
2012 £850 million as all three 
channels – uk commercial sales 
international sales and private 
label – saw strong growth
1thtar13frontsmjwkwindd   8 9242013   104136 am 09
thorntons plc
annual report and accounts 2013
revitalising our brand
clear brand positioning
a new master brand identity
new product categorisation and supporting range refresh
improved instore experience across our channels
read more about brand positioning on page 07
new classics range  
jul 2013 launch
new nostalgia range  
sep 2013 launch
new indulgence range  
jan 2015 launch
creating yearround relevance through our products
further store refits new finishing touches new event bays building the fmc g brand
strength in season
further range 
refresh
remaining ranges 
jun 2014 and 2015
new logo new colour palette new emblem new corner architecture
strength out of season
1thtar13frontsmjwkwindd   9 9242013   104154 am 10
thorntons plc
annual report and accounts 2013
c hief executive’s report
continued
the year in review continued
own stores continued
given the continued challenges for 
the high street economy we made 
pleasing progress during the year 
overall likeforlike sales were down 
08 2012 down 38 however 
we saw growth in likeforlike sales 
across each of the key seasons in 
the second half of the financial year 
valentine’s day mother’s day easter 
and father’s day resulting in a small 
likeforlike growth for the second half 
overall this achievement reflects 
the significant effort and investment 
made by the teams in improving 
the customer experience through 
engaging with our customers further 
improving merchandising and focusing 
on personalisation 
we refitted eleven stores to our new 
format during the year and have been 
encouraged by their performance to 
date our refurbished stores clearly 
demonstrate our ambition for these 
to be destinations where our brand 
is brought to life we plan a further 
20 to 25 refurbishments during the 
course of the 2014 financial year
franchise
franchise sales declined by 206 to 
£85 million 2012 £107 million primarily 
as a result of the administration of our 
major franchise partner in may 2012 
despite this we ended the year with 
186 franchise locations 2012 177 
reflecting 20 openings and eleven 
closures during the period despite 
the challenges for the independent 
business in the current economic 
climate we consider the addition of 
20 new franchise locations powerful 
evidence of the attraction of the 
thorntons brand to the card and gift 
retail market of these new locations 
ten were “full format” and ten were 
our “small format” during the period 
four locations underwent the new 
franchise fitout reflecting the 
new brand visual identity 
business performance in the last quarter 
of the financial year saw a return to growth 
and demonstrates a positive response 
from franchisees to the new products 
packaging and promotions as well as 
initiatives to personalise and improve 
the customer experience 
thorntons direct
sales across both our online consumer 
and our corporate businesses were 
disappointing with overall sales down by 
100 to £90 million 2012 £100 million
the performance over the past year is 
not a reflection of our customers’ demand 
to buy personalised gifts from us we 
encountered significant issues with the 
development and late deployment of 
our new website which was launched in 
september 2012 without the planned full 
functionality and consumer offer this was 
compounded by operational issues during 
our key christmas trading period which 
led us to moderate our marketing efforts 
in order to protect customer service since 
then we have made considerable progress 
towards addressing the issues and our 
website now looks and feels fresh and is 
working well we are confident that we 
will see a return to growth in the first half 
of the 2014 financial year
despite being a small part of our overall 
business the opportunity for the consumer 
online business remains strong and we 
are continuing to invest appropriately 
customers brand and product innovation
we have been working hard to improve 
our brand’s positioning and visual 
identity enhancing our product range 
categorisation and packaging and 
delivering outstanding merchandising 
across all our channels we are in the 
process of delivering a stepchange to 
the look and feel of our brand increasingly 
we are able to demonstrate this through 
the new branding on our latest packaging 
refurbished stores grocery merchandising 
and marketing communications we have 
created a separate feature in this report 
where we are proud to demonstrate this 
and look forward to sharing further 
significant progress when we report 
in a year’s time
we are focusing on delivering product 
which will strengthen our credentials 
as a yearround gifting retailer as well 
as further underpinning our leading 
position in the key seasons 
our new “today i thought of you” 
range of boxed chocolates along with 
our relaunched models repackaged 
alphabet truffles and fastgrowing 
little gifts range demonstrates our 
approach to yearround gifting this 
together with a personalised experience 
through icing gift creations and gift 
wrapping brings us closer to our objective 
to gain customer reappraisal for thorntons 
and to encourage an extra purchase each 
year from customers by ensuring a 
yearround relevance for key gifting 
occasions and “just because” moments 
our innovative new items for the key 
seasons were well received by our 
customers at christmas we achieved 
excellent sales of advent calendars with 
our new continental advent calendar 
for grownups being a particular success 
our seasonal models saw significant 
growth in sales with again a notable 
success for our new continental table 
centrepiece at easter our lace egg 
demonstrated the artisan skills of our 
derbyshire team and we recreated an 
egg from long ago with our marvellously 
magnificent egg with over 1kg of 
chocolate for the family to share
during the course of the past year we 
secured the licence to the snowman 
and the snowdog we consider the 
combination of this christmas icon and 
the quality and trust associated with 
thorntons to be a powerful proposition 
for christmas 2013 and beyond
our customers are responding positively to 
the changes we are making total uk sales 
of thorntonsbranded products at retail 
prices including our successful licensed 
items including cakes and biscuits are 
growing now significantly in excess of 
£300 million we are seeing growth in 
spontaneous awareness at a level twice 
that of other brands in our market sector 
advocacy is high and increasing and we 
are observing improvements in customers’ 
positive response to thorntons focus on 
quality and that the brand is worth paying 
more for in our own stores we have seen 
significant improvement in our measures of 
customer experience overall satisfaction 
has increased over the past year to 85 in 
june 2013 72 in june 2012 the likelihood 
1thtar13frontsmjwkwindd   10 9242013   104154 am 11
thorntons plc
annual report and accounts 2013
to revisit has grown from 65 in june 2012 
to 76 in june 2013 and the likelihood to 
recommend has grown from 66 to 77 
over the same period 
l ooking ahead
we approach the year ahead with 
continued caution about the economic 
environment but with a confidence that 
the actions we have taken will continue 
to deliver positive results we have 
begun to plan beyond the threeyear 
turnaround period to ensure that 
our momentum continues
we are confident in our strategy of 
rebalance revitalise and restore and 
intend to maintain the same fundamental 
direction we are pleased to have 
demonstrated our strategy’s flexibility 
to handle changes in circumstances 
our current threeyear plan has been 
focused on restoring profitability within 
a broadly flat or low topline growth 
the next three years will see us adding 
growth to topline sales as well
rebalancing
fmcg division
our uk commercial sales channel 
has seen strong growth over a number 
of years our assessment of future 
prospects is positive we believe that 
there remain significant opportunities 
to maintain this strong growth including 
further growth at the key seasons of 
christmas and easter as well as in the 
convenience and independent sector 
along with opportunities to work with 
the major grocers to develop richer 
gifting propositions this channel will 
become the largest by the end of the 
2014 financial year and we envisage 
that this strong growth rate should be 
sustainable for at least the next three years
our international sales despite 
starting from a low base are anticipated 
to continue to grow strongly we will 
continue to follow a careful and structured 
countrybycountry approach investing 
and learning from our experience as we 
progress we believe that this approach 
to “internationalising” our business is the 
most efficient and appropriate in terms 
of the implications for our infrastructure 
we maintain our previously stated belief 
that this channel will begin to materially 
add to overall profits within the next 
two to four years
retail division
our own store restructuring will continue 
with approximately 40 stores closing in 
the coming year we will continue to take 
advantage of opportunities to extend 
trading on reduced rent and anticipate 
having approximately 20 stores at any 
one time on shortterm lease or licences 
we will continue to pursue options to 
exit further stores in order to deliver our 
original objective of an estate of 180 to 
200 stores and a profitable and sustainable 
portfolio within the next two to three years 
as planned reflecting a continued and 
significant commitment to the high street
we have taken the decision to split 
the consumer and business elements of 
thorntons direct from the beginning of the 
2014 financial year the consumer online 
business will increasingly align with our 
own stores in terms of offering customer 
flexibility of purchase and delivery over 
time as sales made in store are processed 
and delivered online and vice versa we 
will be combining these sales and reducing 
our reliance on own store likeforlike 
as a key measure
regarding the businesstobusiness 
element of this channel corporate gifting 
will remain within the retail division we 
foresee a good opportunity to improve 
this business through leveraging our 
own stores many of which trade with 
existing corporate customers our sales 
to corporate resellers will in future be 
reported in uk commercial sales 
within the fmcg division 
our franchise channel remains important 
and offers a significant opportunity for 
customers to engage with and reappraise 
the thorntons brand we will be working 
with franchisees to ensure that the 
new developments in brand look and 
customer experience are demonstrated 
in their locations
revitalising
our extensive refresh of range and 
packaging will manifest itself over the 
coming year completing in 2015 this 
culmination of over two years of focused 
effort will deliver a major signal to all 
our customers that thorntons has been 
transformed included within this is a 
constant focus on product innovation 
with clear priorities on yearround 
gifting as well as the key seasons
we will continue to work on further 
improving our merchandising and 
customer experience across all our 
channels our refurbishment programme 
will see around 75 of our bestlocated own 
stores refitted over the next three years 
whilst at the same time we take the best 
operational expertise from these stores 
and introduce it across the entire estate 
we are not just seeking to improve the 
experience in each of our channels but 
are also working on future plans to knit 
together the experiences across all our 
channels in order that the customer starts 
to see us as one business with one voice 
and one approach we are also investing 
in the development of our people to 
provide them with the skills knowledge 
and capability to deliver our plans
restoring profitability
we have been able to demonstrate 
improved profitability over the past 
year we will continue to deploy the 
approaches and disciplines that have 
delivered this progress product and 
packaging engineering ingredient 
optimisation and skilful procurement 
we have implemented a disciplined 
approach to margin and cost 
management that will stand 
us in good stead in the future 
our strategy remains rebalance sales 
and costs in our retail division where 
net contribution is low and grow our 
fmcg division where net contribution 
margin is significantly higher
jonathan hart
chief executive 
10 september 2013
1thtar13frontsmjwkwindd   11 9242013   104154 am 12
thorntons plc
annual report and accounts 2013
finance director’s report
key performance indicators
from the beginning of the 2014 financial 
year as detailed further in the chief 
executive’s report we have reorganised 
our activities into two divisions fast 
moving consumer goods “fmcg” 
which was formerly sales  operations 
and retail this reflects the transformation 
of our business and fits with our longterm 
vision for the business 
as the business continues to progress in its 
strategy of “rebalancing” revenues from the 
retail division towards its growing fmcg 
division the previous choice of financial key 
performance indicators “kpis” has been 
reviewed by the board
of the previous five published kpis 
two have now been replaced own store 
likeforlike sales has been replaced 
with a measure of the sales participation 
between the two divisions ie fmcg 
and retail gross margin return 
on sales has been replaced with 
operating profit earnings before 
interest and taxation “ebit” margin 
these decisions are based on the 
change in influence of retail sales to the 
overall profitability of the group and in 
recognition that sales through the fmcg 
channels are at an inherently lower gross 
margin as the business succeeds in 
implementing its rebalancing strategy 
there will be downward pressure on 
total group gross margin albeit more 
than offset by an improving operating 
profit margin a sixth kpi earnings per 
share “eps” has been added to ensure 
a focus is kept on returns to equity
the six kpis are set out in the charts 
on page 13 opposite
as can be seen from the charts 
opposite all of the six kpis have 
progressed significantly in the 
year under review
profit before taxation
reported profit before taxation and 
exceptionals increased to £56 million 
2012 £09 million 
group sales increased by 18 to 
£2211 million 2012 £2171 million as 
growth in our fmcg division both in 
the uk and internationally more than 
offset the impact of reduced sales in 
our retail division 
we have made good progress increasing 
channelspecific gross margins based 
on the implementation of measures 
developed over the last 18 months 
as a consequence we have been able 
to offset the anticipated downward 
pressure of structural mix on total 
company gross margins and maintain 
flat annual gross margins at 440
a significant amount of cost was taken 
out of the business again in the year 
under review with preexceptional 
operating expenses totalling £913 million 
2012 £943 million an improvement 
of £30 million on the year and an 
improvement of 199 basis points 
when expressed as a percentage 
of total revenues
revenue
thorntons’ sales are made through two key operating divisions whose performance 
is summarised below
2013
£m

mix
2012
£m

mix

increase
decrease
total fmcg division sales 1011 458 850 391 190
total retail division sales 1200 542 1321 609 93
total group sales 2211 1000 2171 1000 18
an overview of the sales performance by division and the channels within each division is 
set out in the chief executive’s report we intend to use the above divisional analysis of sales 
revenues in our external financial reporting from quarter one of the 2014 financial year
“ c ash generated from operations was £83 million 
2012 £15 million this improvement was due to a 
combination of improved profitability better working 
capital management and lower capital expenditure 
partially offset by higher cash tax payments”
1thtar13frontsmjwkwindd   12 9242013   104154 am 13
thorntons plc
annual report and accounts 2013
05
cash generated from operations £m
£83m
56p
£56m
33 18
earningsloss per share basic p
preexceptional operating profit 
ebit margin 
net sales movement 
2012 2013
15
83
profit before tax and  
exceptional items £m
56
key performance indicators
restoring all key financial metrics
exceptional items
the exceptional charge for the year under review is made up of the following items 
2013 
£m 
2012
£m
onerous lease provision releasecharge 03 19
asset impairment charge 07 12
total 04 31
as a result of the performance of 
retail own stores during the last three 
financial years significant impairment 
and onerous lease charges have been 
incurred assets are reviewed for 
impairment on a regular basis and 
a provision made where necessary 
a discounted cash flow is calculated 
for each store including attributable 
overheads using the group’s weighted 
average cost of capital the net book 
value of assets attributable to the retail 
store is impaired to the extent that the 
net present value of the cash flows is 
lower than the net book value
the provision for onerous leases is held in 
respect of leasehold properties for which 
the group is liable to fulfil rent and other 
property commitments for stores from 
which either the group no longer trades 
or for which future trading cash inflows 
are projected to be insufficient to cover 
these cash outflows amounts have 
been provided for any projected net 
cash outflows up to the lease expiry 
date of the relevant property on a 
discounted basis
458
percentage participation 
of fmcg division 
2012
2013 2012 2013
2012 2013 2013 2012 2013
15
14
09
56
18
458
391
33
13
2012
the exceptional onerous lease provision 
release for the financial year was 
£03 million 2012 charge of £19 million 
the lowering of the charge for the 
second financial year in succession 
reflects both the continued disposal 
of some of the most affected outlets 
and the improvement in own stores’ 
likeforlike sales performance to minus 
08 2012 minus 38 the balance 
on the onerous lease provision at the 
year end stood at £24 million 
2012 £42 million
further details of the calculation of the 
asset impairment charge of £07 million 
2012 £12 million are set out in note 13 
to these accounts on page 61 of this report
1thtar13frontsmjwkwindd   13 9242013   104155 am 14
thorntons plc
annual report and accounts 2013
finance director’s report
continued
underlying profit
underlying profits for the year under review improved from £28 million to 
£66 million oneoff costs decreased yearonyear primarily as a result of less 
restructuring activity combined with lower average store closure costs and one 
fewer store being closed
2013 
£m 
2012
£m
profit before taxation and exceptional items 56 09
redundancy and restructure charges 03 09
store closure costs 07 10
total underlying profit 66 28
 profits before taxation exceptional items and other oneoff costs
operating margins
preexceptional operating margins improved to 33 2012 13 demonstrating the 
positive effect of our strategy the table below summarises the main contributors to 
the annual improvement
operating profit margin fy12 13
impact of gross margins – structural mix 11
impact of gross margins – other factors 10
reduction in operating costs net of reduction in other operating income 21
operating profit margin fy13 33
operating expenses
operating expenses before exceptional 
items reduced by £30 million to 
£913 million 2012 £943 million as a 
percentage of sales operating expenses 
reduced from 434 in 2012 to 413 
in 2013
the reduction in operating expenses 
has come primarily from the closure of 35 
2012 36 own stores in the financial year 
under review and the continued focus 
on tight cost control across the business
during the period £07 million 
2012 £10 million of costs were 
incurred in respect of these closures
other operating income
other operating income decreased 
to £13 million 2012 £15 million due  
to a reduction in rent receivable this 
relates to own stores only and the 
movement is partly due to store closures 
and partly due to changes in subletting 
arrangements 
taxation
the postexceptional tax charge of 
£14 million 2012 credit of £13 million 
for the year represents 274 of the 
postexceptional profit before taxation 
2012 594 of loss the charge is 
higher than the effective statutory rate 
of 2375 due primarily to the tax effect 
of permanently disallowable items and 
the impact on deferred tax balances 
of the change in corporation tax rate 
applicable during the year
“ p r e ‑ e x c ep t i ona l o pe r a t i ng 
margins improved to 33 
2012 13 demonstrating 
the positive effect of 
our strategy”
1thtar13frontsmjwkwindd   14 9242013   104155 am 15
thorntons plc
annual report and accounts 2013
c apital expenditure
investment in fixed assets totalled 
£42 million 2012 £43 million net 
of disposal proceeds none of which 
2012 £nil was funded through new 
finance leases
during the year £09 million 
2012 £04 million was spent on 
eleven 2012 three new format store 
refits the balance of £33 million was 
spent on supply chain it projects and 
brand developments
pensions
the ias 19 pension scheme deficit 
decreased from £291 million in 2012 
to £249 million at the 2013 year end 
partly as a result of the agreement 
with the scheme’s trustees to increase 
annual company deficit contributions 
to £275 million an increase of £055 
million on the previous agreement 
the scheme closed to future accrual on 
5 april 2013 with no curtailment gain or 
loss further information on this can be 
found in note 22
mike killick
finance director
10 september 2013
shareholders’ returns and dividends
the improved operating results set out 
above have led to basic earnings per share 
of 56p 2012 loss per share of 14p
despite the group’s improved 
profitability and cash position the 
board is not recommending the payment 
of a final dividend 2012 £nil the board 
similarly proposed not to pay an interim 
dividend 2012 £nil resulting in no 
dividend payments being recommended 
for the full financial year under review 
2012 £nil the board aims to return to 
a progressive dividend policy when the 
recovery strategy delivers a satisfactory 
dividend cover ratio and sufficient 
distributable reserves
c ash and debt
cash generated from operations 
was £83 million 2012 £15 million this 
improvement was due to a combination 
of improved profitability better working 
capital management and lower capital 
expenditure partially offset by higher 
cash tax payments
net debt at the year end was 
£275 million an improvement 
of £16 million on the 2012 figure 
of £291 million contributing to 
a significant reduction in gearing
details of the company’s ongoing 
borrowing facilities of £575 million 
committed from june 2011 to october 
2015 are set out in note 18 of these 
accounts on page 64 of this report 
1thtar13frontsmjwkwindd   15 9242013   104155 am 16
thorntons plc
annual report and accounts 2013
risks and risk management
economic and industry risks
risk description mitigating activities c hange
a competitive 
marketplace
the uk confectionery market has many strong players 
and maintaining a competitive position depends on 
thornton’s continued ability to offer products that have 
a strong appeal to consumers and which are readily 
available in the places that they wish to purchase them 
any significant shift in consumer trends coupled with 
a failure to anticipate and react to such changes or 
a failure to invest adequately in our business could 
reduce demand for products resulting in loss of 
market share reduced sales reduced attractiveness 
to potential franchisees or harm to the image of 
the brand 
•	 product innovation is critical to 
maintaining consumer relevance 
and the group has a rigorous 
process for identifying researching 
and developing new product ideas 
which is regularly reviewed 
•	 the group’s multichannel strategy 
is also a means by which it can 
satisfy consumers’ needs better 
than some of its competitors whilst 
also mitigating the overall risk to 
the business from a downturn 
in any specific channel 
economic 
downturn 
or recession
during times of economic uncertainty or hardship 
consumer demand for products may fall or 
consumers may choose to purchase lower value 
consumer goods as opposed to higher value 
consumer goods resulting in a fall in demand for 
products the economic climate may also result in 
the failure of commercial or franchise businesses 
and consequently customers andor franchisees 
defaulting on supply payments reduced sales as a 
result of an economic downturn or recession in the 
uk may have an adverse effect on the profitability 
and cash flow of the business
•	 thorntons consequently offers a 
range of products across various 
price points and has flexible trading 
and promotional plans that enable it 
to respond to consumer and market 
trends rapidly 
key input prices 
are driven by 
commodity 
markets
material adverse changes in certain commodity 
prices could affect the group’s profitability 
•	 the group buys key inputs 
forward and works with suppliers 
to choose the optimal time and 
quantity for purchases whilst this 
policy may sometimes preclude 
the group from taking advantage 
of shortterm dips in prices 
it provides a stable cost base 
for the group to make 
its trading decisions 
1thtar13frontsmjwkwindd   16 9242013   104155 am 17
thorntons plc
annual report and accounts 2013
operational risks
risk description mitigating activities c hange
a substantial 
decrease in our 
ability to supply 
our customers 
with our products
a major interruption or substantial decrease in 
the ability to supply customers could damage 
sales and brand reputation as well as relationships 
with customers and consumers the majority of 
the group’s products for sale are produced at 
thornton park in alfreton derbyshire 
•	 thornton park has significant 
fire protection across the site 
contingency and emergency 
recovery plans for it utilities 
and major incidents which are 
regularly reviewed and appropriate 
insurance cover is also in place
food products 
must have the 
highest integrity
product contamination accidental or malicious is a risk 
faced by all food producers thorntons has extremely 
rigorous policies and security systems for guarding 
against accidental or malicious contamination of 
ingredients or finished products 
•	 in the unlikely event that these 
policies and systems fail a robust 
process for product recall and 
consumer communication 
in addition to comprehensive 
insurance cover is in place
people risks
risk description mitigating activities c hange
the business 
is dependent 
upon the skills 
enthusiasm and 
wellbeing of 
its people
management evaluates the balance of skills knowledge 
and experience within the team when considering the 
role and capabilities required for a particular senior 
appointment the group uses professional external 
recruitment specialists as and when appropriate as 
well as contacts of its directors and the group’s advisers 
•	 management aspires to keep 
colleagues informed of internal 
and external developments and 
regularly reviews how staff are 
feeling through surveys and 
communication sessions a channel 
outside the normal line structures 
for communication and resolution 
of issues exists through the joint 
industrial council for thornton 
park and the retail council for 
storebased colleagues strong 
recruitment processes formalised 
succession planning together with 
ongoing individual training and 
development plans help mitigate 
the risk of the loss of key staff
1thtar13frontsmjwkwindd   17 9242013   104155 am 18
thorntons plc
annual report and accounts 2013
c orporate responsibility
 
 
1 our chocolates and our factory
here at thorntons we take our corporate 
responsibilities very seriously 
as britain’s bestloved chocolate maker we want to make sure we 
look after our colleagues everyone involved in our supply chain and 
of course our customers too 
each year we use thousands of tonnes of 
cocoa in our chocolate factory and over 
300 different raw materials go into the 
making of our chocolates we source 
from suppliers from around the world 
and we aim to ensure that each and 
every one of them maintains similarly 
high levels of ethical social and 
environmental standards 
almost all of our chocolates are made 
in our factory in alfreton in derbyshire 
we are really proud to have been a great 
british company for over 100 years after 
the business was started in 1911 in 
sheffield by joseph william thornton 
ingredients and nutrition
in our factory we take great pride in the 
ingredients that go into our chocolates 
after cocoa the top three ingredients 
we use are sugar butter and milk and 
combined we use over 3500 tonnes 
of these every year 
we make sure our customers 
fully understand what goes into the 
chocolates and for whom they are suitable 
by highlighting this on our packaging our 
chocolates are viewed by many as luxury 
gifts which therefore should only be 
enjoyed as a treat alongside a balanced 
healthy diet we provide advice on 
consumption and feature detailed 
nutritional advice on pack where size 
permits so that customers can make 
an informed choice additional information 
is always available on request in store or 
through our customer contact centre
the majority of our product range is made 
with natural colouring and flavours and 
our entire children’s range contains no 
artificial colours or added preservatives 
our environment 
with such a large operation we are 
always looking to reduce waste improve 
our recycling on site save energy and 
generally become more efficient in 
our operations
packaging and recycling
we take the environmental impact of 
our packaging very seriously we strive to 
reduce not only the amount of packaging 
that is used but also to increase the 
amount of recyclable packaging 
where possible
to reduce the environmental impact 
of our plastics we have moved from 
virgin pet to rpet in the majority of 
our plastic formers which now have a 
minimum recycled content of 50 all of 
our packaging that contains recyclable 
content is clearly marked so customers 
can see which parts can and cannot 
be recycled
we believe that a partnership approach 
is the key to driving zero waste to landfill 
and we are working with a dedicated 
integrated waste management company 
along with recycling champions on site 
despite increasing production volumes we 
have increased our overall recycling rate 
from 84 to 998 this financial year 
this sustainable approach to waste 
management has been achieved 
through a number of successful recycling 
initiatives including a drive to further 
educate employees from all around the 
business about segregating waste at 
source introducing dry mixed recycling 
to the canteen and to the factory and 
increasing the amount of cardboard we 
bale on site a total of 308 additional 
tonnes during the financial year 2013
energy
saving energy is a key focus for us and 
over the past year we have saved over 
18 million kwh and almost 1000 tonnes 
of co 2 by replacing over 500 lights 
across all of our warehouses with energy 
efficient lighting and controls we 
continue to beat our climate change 
agreement targets which are set by 
the food and drink federation and our 
consumption of gas and electricity has 
further reduced from last year to 
4125 kwhtonne of product  
we produce 
various initiatives have helped 
us to achieve this during the last 
year including a comprehensive 
programme to continually audit and 
reduce compressed air and steam 
leaks across site we have upgraded 
our hot water generation with new energy 
efficient boilers in our manufacturing plant 
and have also made extensive modifications 
to our boiler house steam system which 
have reduced our gas usage and increased 
the efficiency of our factory processes 
1thtar13frontsmjwkwindd   18 9242013   104155 am 19
thorntons plc
annual report and accounts 2013
we have also begun to upgrade our site’s 
external lighting system with energy 
efficient led lights
we will continue to reduce our energy 
consumption per tonne of product by 
further upgrading our steam system and by 
implementing a new energy efficient steam 
boiler with an economiser and also new 
burners with full turndown we are also 
investing in our packing facility and will be 
installing a new air compressor which will 
save us 15 to 20 of the energy we use 
we also plan to upgrade the hot water 
generation system and some of our 
chilling equipment
during the coming year we will also be 
collating all our greenhouse gas ghg 
emissions data in line with the new ghg 
reporting regulations
health and safety 
in our factory food safety is of 
paramount importance we are 
regularly and independently audited 
against the exacting requirements of 
the british retail consortium’s global 
standard for food safety and we were 
reaccredited in may 2013 with its 
highest grade a status 
we want to make sure that we 
continually improve health and safety and 
we have an ongoing safety improvement 
programme that includes regular health 
and safety risk assessments in addition 
independent external health and safety 
audits are conducted at least once every 
two years in both manufacturing and our 
own stores and improvements are 
made in line with any recommendations
training 
such a big factory operation requires 
some essential health safety and 
hygiene training we ensure that all 
factory staff have completed a level 2 
food safety qualification and a level 2 
health and safety in the workplace 
qualification both of which are cieh 
accredited many managers and 
coaches also train up to level 3 and 4 
in food safety other training in manual 
handling hazard control hazardous 
substances and allergens is also 
essential for all factory staff 
we source a lot of ingredients to make 
our chocolates and it is really important 
that we can offer our customers great 
quality we also care about where our 
ingredients come from and sustainability 
means that we can continue to be 
britain’s bestloved chocolate maker for 
years to come 
c ocoa 
each year we use thousands of 
tonnes of cocoa from two main suppliers 
cargill and barry callebaut they are 
both committed to making sure that we 
have plenty of quality cocoa in the future 
and that they actively support farmers 
and their families 
we know there is so much more we can 
do to support sustainable cocoa farming 
we are exploring our options since we 
want to continue to make our chocolates 
in the future and support the growth and 
livelihoods of the cocoa farmers the 
cocoa we use comes mainly from ghana 
and the ivory coast the “cargill cocoa 
promise” and barry callebaut’s “quality 
partner program” have made great 
improvements through farmer field 
schools and community support
fantastic training – farmers are being 
educated in good agricultural practices 
which help to increase the yield and 
improve the quality of the beans more 
farmers are now joining certification 
programmes so they are making more 
money from their yield and have access 
to even more training and tools every 
year they are improving their livelihood 
and communities 
great farms – good farmers need great 
farms and they get these through better 
infrastructure access to finance and 
conservation projects these programmes 
help farmers make the most of their land 
and help them understand how to 
maximise their business
c aring for communities – farmer and 
family welfare is a priority for the partner 
programmes with a big focus on health 
and wellbeing services access to 
education and better facilities in local 
areas including schools and fresh water 
wells keeping child labour and poor 
working conditions at bay is something 
else that they are working hard to combat
we are also members of the world cocoa 
foundation “wcf” one of the wcf’s aims 
is to encourage responsible sustainable 
cocoa farming amongst small familyrun 
farms and we are looking at ways to make 
a greater contribution to improving the 
conditions of cocoa farmers
palm oil
palm oil is another ingredient where 
sustainability is hugely important 
and work needs to be done to prevent 
further destruction of the rainforest 
and its inhabitants we are a member 
of greenpalm a certificated trading 
programme exclusively endorsed by 
the roundtable on sustainable palm oil 
whereby manufacturers can offset their 
use of palm products by paying a producer 
for an equivalent amount produced 
sustainably this gives producers an 
incentive to work sustainably and allows 
people whose livelihoods depend on palm 
oil production to continue making a living
2 sustainability
1thtar13frontsmjwkwindd   19 9242013   104156 am 20
thorntons plc
annual report and accounts 2013
c orporate responsibility
continued
from recruitment to training from 
engaging to retaining thorntons is a 
great place to work and is really focused 
on recruiting and keeping the best 
people we currently have just under 
4000 employees working across the 
business and over 150 members of 
staff have been with the company 
for more than 20 years 
our vision is to be britain’s bestloved 
chocolate brand making every customer 
smile this is something that we all work 
towards every day in every role across 
the business and this vision is underpinned 
by our three values 
•	 excellence
•	 bringing people together and
•	 creativity
as we continue to work towards our 
vision everyone at thorntons tries to 
live and breathe these values and we 
are always looking to attract passionate 
people who naturally exude them 
skills and training
we are passionate about learning 
and know that it’s key to our success 
we believe that there are learning 
opportunities in everything we do 
and we encourage all of our employees 
to discover these opportunities and 
build on them 
we make sure training is available 
and we are continually supporting our 
people and growing our organisational 
capabilities 
we also have a very successful graduate 
scheme that has been running for several 
years this offers a breadth of career 
opportunities across the whole business 
including thorntons direct marketing 
supply chain including purchasing 
manufacturing and logistics retail 
commercial sales finance and hr
making our employees smile
keeping our employees smiling 
is important to us so we believe in 
ongoing employee engagement giving 
back through benefits and rewards 
and encouraging socialising to really 
bring people together and live our 
brand values
engagement
we believe in twoway conversations 
with our employees and we try 
to make sure everyone’s voice is 
heard and everyone is kept informed 
with all the latest business news 
we regularly survey our employees 
on a wide range of issues including 
company benefits working conditions 
and working relationships with the 
results of the survey fed back to 
employees and used to identify 
and implement improvements
with so many stores around the country 
we use various communication tools 
to make sure the whole business is kept 
up to date we have a news feed to stores 
our store colleagues receive our choc 
chat newsletter every month and once a 
year we have a threeday retail and 
franchise conference to share the business 
strategy and plans with every store 
manager and franchise partner
at thornton park we use our intranet 
to carry weekly news display notice 
boards around site and our executive 
team gives regular business updates 
to all employees every quarter
giving back to our employees
we appreciate the hard work that goes 
into making thorntons britain’s leading 
chocolate brand and we want to reward 
the people that are making this happen 
3 our employees
so along with offering competitive 
salaries we also offer a range of  
benefits including
•	 bonuses
•	 employee life and medical insurance
•	 child care vouchers
•	 membership of the thorntons sports 
and social club
•	 local gym discounts
•	 excellent holiday allowance and
•	 a staff discount
continually recognising the great work 
people do is really important so this year 
we have launched our new recognition 
awards which allow colleagues to put their 
peers forward to be recognised either 
individually or as a team this includes 
everything from thoughtful thank you 
cards prizes for on the spot recognition 
employee of the month team of the 
quarter and then an annual award 
as the top prize
1thtar13frontsmjwkwindd   20 9242013   104158 am 21
thorntons plc
annual report and accounts 2013
chocolate lovers can now buy their 
favourite thorntons products when and 
where they want we are a true multi
channel business with just under 300 
stores nearly 200 franchises an online 
shop and a commercial business 
selling our chocolates into the major 
grocers retailers convenience stores 
and independent retailers 
wherever people buy their thorntons 
products we want to make sure they 
have a fantastic customer experience 
we undertake regular consumer surveys 
and have recently invested in a customer 
experience tool so we can easily gather 
feedback from customers since this 
was launched we have heard from over 
60000 customers and their feedback has 
helped us drive continued improvement in 
customer service across all of our stores
we also have a customer contact 
centre that is open seven days a week 
which handles customer complaints and 
compliments we have processes to make 
sure we get back to our customers as 
quickly as we possible and we aim to 
answer any queries within 24 hours
waste recycled
59
waste sent to landfill
1
waste recycled
59
waste sent to landfill
1
paper recycled on site
810 tonnes
energy saved
18m kwh
4 our customers 5 our community
we not only care about our employees 
and our customers but we also care 
about the wider community and 
the world around us 
we choose one national charity 
partner to fully support across all 
of our fundraising and we are proud 
to announce that we’ve just started 
working with the charity smile train 
wwwsmiletrainorguk we are in the 
business of making people smile and 
so are they so we thought they were 
the perfect partner for us smile train 
literally fixes children’s smiles as it is 
the world’s leading cleft lip charity 
before smile train we supported the 
nspcc for three years raising over 
£150000 in that time for them to 
support the work that they do for 
children across the uk
we are based in derbyshire and have been 
proud to call the county our home since 
the 1980s we believe that charity starts 
at home so as well as supporting smile 
train we also support the derbyshire 
community foundation which gives 
grants throughout the year to support 
community projects in the region
water consumed  
532  11
m
3
tonne of production
lost time  
accident frequency
20  10
100000 hours worked 
waste to landfill
1 
1thtar13frontsmjwkwindd   21 9242013   104159 am 22
thorntons plc
annual report and accounts 2013
board of directors
c hairman
paul wilkinson
chairman n
joined thorntons as a nonexecutive 
director in august 2006 and appointed 
chairman in february 2013 he holds a 
portfolio of executive nonexecutive and 
advisory roles in the food consumer and 
retail sectors as well as the public sector 
previous appointments include chairman 
of rank hovis mcdougall and prior to that 
he held management roles at unilever and 
grand metropolitan he was previously an 
independent director of arytza ag a major 
international food group based in zurich 
other appointments include chairman of 
fengrain and the national skills academy 
for food and drink he is chairman of the 
nomination committee
executive directors
jonathan hart
chief executive
joined thorntons in january 2011 he was 
previously managing director of caffè nero 
for five years prior to which he held senior 
positions at abbey woolworths and itm 
communications and spent more than 
a decade with dixons group plc where 
latterly he was responsible for the group’s 
high street brands including dixons the link 
and dixons taxfree as group managing 
director and as group managing director 
of pc world international
barry bloomer
managing director fmcg division
joined thorntons in july 2005 
and was appointed to the board in 
july 2006 he previously spent ten years 
at black  decker latterly as european 
operations director and prior to that 
eight years in various positions including 
manufacturing and quality director for 
philips components limited
 
mike killick
finance director
joined thorntons in january 2012 and was 
appointed to the board in february 2012 
he is a qualified accountant with extensive 
experience in the retail sector most recently 
he was interim finance director to a private 
equity healthcare business and prior to that 
previous appointments included eleven 
years at peacocks latterly as chief financial 
officer until january 2011 bennetts gb 
insurance going places retail leisure 
and burton group plc
non‑ executive directors
keith edelman 
nonexecutive director a r n
joined thorntons in february 2012 he holds 
a portfolio of nonexecutive directorships 
in public and private companies previous 
positions in his executive career include 
managing director at arsenal holdings and 
group chief executive at storehouse group 
bhsmothercare current appointments 
include nonexecutive chairman goals 
soccer centres plc and the retailing group 
beale plc senior independent director at 
the uk branded fashion retailer supergroup 
plc and nonexecutive director of safestore 
holdings plc selfstorage and the london 
legacy development corporation he is the 
senior independent director and chairman 
of the remuneration committee
 
diana houghton
nonexecutive director a r n
joined thorntons in december 2008 she 
is a corporate development and strategy 
specialist with broad experience of the 
consumer goods retail and leisure retail 
sectors and also possesses extensive 
corporate finance expertise she spent 
six years as the corporate development 
director of allied domecq before working 
as a consultant to a number of companies 
investment banks and private equity houses 
other appointments include a senior advisory 
role with the national audit office she is 
chair of the audit committee
martin george
nonexecutive director a r 
joined thorntons in november 2012 he 
holds a portfolio of nonexecutive roles 
in the sports goods hospitality and charity 
sectors and consultancy roles across a 
number of other industries previously he 
was group development director at bupa 
and held a number of senior positions at 
british airways latterly as commercial director 
he has extensive experience in the marketing 
and commercial development of consumer 
brands as well as commercial and 
general management 
key 
a audit committee  
n nomination committee  
r remuneration committee
1thtar13frontsmjwkwindd   22 9242013   104159 am 23
thorntons plc
annual report and accounts 2013
c orporate governance
the board
the company is headed 
by a board of directors 
collectively responsible 
for the success of the 
company the board 
provides leadership within 
a framework of prudent 
and effective controls 
designed to enable risk to 
be assessed and managed 
it sets the company’s strategy and is 
responsible for reviewing management 
performance and for ensuring that 
the necessary financial and human 
resources are in place in order to meet 
the company’s objectives the board 
also sets the company’s values and 
standards mindful of its obligations to 
shareholders and other stakeholders
the board currently comprises the 
chairman three executive directors 
and three nonexecutive directors 
the board regards k g edelman 
m p george and d j houghton as being 
independent the chairman and chief 
executive both have clearly defined roles 
and responsibilities which are set out 
in writing and approved by the board 
the chairman has responsibility for the 
leadership and the running of the board 
including but not limited to ensuring 
that a fixed schedule of matters covering 
key areas of the group’s affairs including 
strategy annual budgets significant 
capital expenditure and major litigation 
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 22 all directors are 
subject to reappointment by shareholders 
at the first annual general meeting “agm” 
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 together 
with the audit committee report on 
pages 26 to 28 and the report on the 
directors’ remuneration on pages 32 to 
42 describes how the board applies the 
principles of good governance and best 
practice as set out in the uk corporate 
governance code 2010 issued by the 
financial reporting council “the code” 
available on its website wwwfrcorg
read more online at wwwfrcorg
throughout the financial year under 
review the board considers that the 
company has complied fully with all 
applicable provisions recommended 
in the code
the information required under 
rule 726 of the disclosure and 
transparency rules of the financial 
services authority is included in the 
report of the directors on pages  
29 to 31
read the report of the  
directors on pages 29 to 31
board composition
skills and experience 
1
3 3
 chairman 1
 executive director 3
 nonexecutive director 3
 financial 2
 retailmarketing 3
 manufacturing 2
2
3
2
0thtar13middlesmmrindd   1 9242013   104051 am 24
thorntons plc
annual report and accounts 2013
c orporate governance
continued
following their appointment and 
thereafter at intervals of no more 
than three years in line with the code 
requirement for all ftse 350 companies 
the board has agreed that all directors 
will retire and offer themselves for 
reappointment by shareholders 
on an annual basis 
the board regularly reviews the 
operational performance and plans 
of the company and as necessary 
determines the company’s strategy 
the executive directors also meet under 
the chairmanship of the chief executive 
on a weekly basis to discuss operational 
matters and ensure that board decisions 
are implemented 
all board members receive agendas 
and comprehensive papers prior to 
each board meeting all directors have 
access to the services of the company 
secretary who is responsible to the 
board for ensuring that board procedures 
are followed and that applicable rules 
and regulations are adhered to the 
board maintains a register of potential 
conflicts of interest with its directors 
and confirms that no such conflicts exist 
the register is reviewed and updated 
as necessary throughout the financial 
year directors may also obtain further 
information from any manager or 
employee of the company and there 
is a procedure for directors to obtain 
independent advice from external 
advisers consultants or any such further 
professional individual or entity at the 
company’s expense the company 
maintains appropriate liability insurance 
for the benefit of its directors
the chairman meets at least annually 
with the nonexecutive directors 
without executive directors present 
and the nonexecutive directors led by 
the senior independent director keith 
edelman meet annually to consider the 
chairman’s performance taking into 
account the executive directors’ views 
the senior independent director is also 
available to shareholders if they have any 
concerns that contact through the normal 
channels of the chairman chief executive 
or finance director has failed to resolve 
or for which such contact is inappropriate
the terms and conditions of appointment 
of the nonexecutive directors are 
available during normal business hours 
at the company’s registered office and 
will be available for inspection at the agm
new appointments to the board 
receive an appropriate induction to gain 
an understanding of the company’s 
business which includes meetings 
with senior management
given the skills and experience of the 
nonexecutive directors their general 
training requirements are left to their 
own discretion the company makes 
the necessary resources available to 
meet any identified requirements the 
chairman conducts a formal appraisal 
process for the board its committees 
and individual directors including 
directors due to offer themselves for 
reappointment at the agm through 
use of a questionnaire and onetoone 
meetings which facilitates a board 
discussion and where appropriate 
agreed actions for improvements the 
executive directors are also included 
in the company’s annual performance 
appraisal arrangements which include 
development and training requirements
board c ommittees
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 which were reviewed 
and amended in july 2012 and they 
are available on the company’s web 
site wwwthorntonscouk and upon 
request from the company secretary 
during the financial year under review 
there were three meetings of the audit 
committee three formal meetings of 
the remuneration committee and one 
formal meeting of the nomination 
committee with full attendance of all 
eligible directors in addition to formal 
committee meetings ad hoc decisions 
of the committees are taken after 
discussion throughout the financial 
year as necessary through the form 
of written resolutions
audit c ommittee
the audit committee throughout 
the financial year comprised three 
independent directors and was chaired 
by d j houghton p n wilkinson served 
on the committee until his appointment as 
chairman of the board on 1 february 2013 
at which time m p george joined the 
committee it meets three times each 
financial year with the external auditors 
and considers any issues that are identified 
during the course of their audit work the 
board is satisfied that the committee 
members have recent and relevant 
financial experience 
full details of the responsibilities and 
governance of the audit committee are 
set out in its report on pages 26 to 28 
d j houghton chair of the committee 
will be available at the agm to respond 
to any shareholder enquiries in relation 
to the committee’s report
role of the chairman
•	 	 responsible for the leadership 
and the running of the board
•	 	 ensures that a fixed schedule of 
matters covering key areas of the 
group’s affairs including strategy 
annual budgets significant capital 
expenditure and major litigation 
is exclusively retained for the 
board’s review and approval
•	 	 e nsur es	 that	a framework exists 
to allow the clear dissemination 
of relevant and timely information 
to all directors for such 
discussion to occur
•	 	 responsible for communications 
with shareholders and for 
ensuring effective contributions 
from the nonexecutive director
0thtar13middlesmmrindd   2 9242013   104051 am 25
thorntons plc
annual report and accounts 2013
nomination c ommittee
the nomination committee is 
composed of two independent directors 
k g edelman and d j houghton and the 
chairman of the board p n wilkinson 
j a von spreckelsen served as the 
committee chairman until his retirement 
on 1 february 2013 at which time p n 
wilkinson succeeded him as chair the 
committee is responsible for reviewing 
the credentials of each and every potential 
director before such nominee is proposed 
to the board in considering potential 
appointments to the board the committee 
evaluates the balance of skills knowledge 
and experience on the board when 
considering the role and capabilities 
required for a particular appointment 
when appointments are being considered 
the committee uses professional external 
recruitment specialists as and when 
appropriate as it did in relation to the 
appointment of m p george who joined 
the board as a nonexecutive director on 
1 november 2012 as well as contacts of its 
directors and the company’s advisers the 
committee also reviews the contribution 
of those directors offering themselves 
for reappointment by shareholders at 
the agm
remuneration c ommittee
the remuneration committee is 
composed of the three independent 
directors and is chaired by k g edelman 
p n wilkinson served on the committee 
as chair until his appointment as chairman 
of the board on 1 february 2013 at which 
time k g edelman succeeded him as chair 
and m p george joined the committee 
the board has delegated authority 
to the committee for setting the 
chairman’s the executive directors’ and 
the company secretary’s remuneration 
and performancerelated awards further 
details of the committee and directors’ 
remuneration are set out in the report 
on the directors’ remuneration on 
pages 32 to 42
director attendance
attendance by directors at meetings for which they were eligible during 
the financial year ended 29 june 2013 was as follows
relations with shareholders
communications with shareholders 
are given high priority following 
the announcement of the company’s 
halfyear and fullyear results the 
directors normally represented by the 
chief executive and finance director 
make detailed business presentations to 
institutional shareholders and investment 
analysts the chairman meets regularly 
with major shareholders and on request 
and the senior independent director 
is also available to all shareholders 
feedback directly from shareholders and 
via the company’s advisers after these 
regular analyst and shareholder meetings 
ensures that the board understands 
shareholder views finally the company’s 
investor web site wwwthorntonscouk
investor allows shareholders to view 
company results stock exchange 
announcements and other 
relevant information
the board uses the agm to communicate 
with both private and institutional investors 
and welcomes their attendance each year 
the board reviews any governance and 
voting guidelines issued by representative 
bodies of its shareholders the directors 
present a business review similar to the 
analyst presentations referred to above 
and welcome questions from all those 
attending the chairman aims to ensure 
that the chairpersons of the board 
committees are available all code 
provisions regarding constructive use 
of the agm are complied with
mark r henson
company secretary
10 september 2013
audit nomination remuneration
director board committee committee committee
p n wilkinson 99 11 11 22
j a von spreckelsen 55 na 11 na
b bloomer 89 na na na
k g edelman 99 22 11 33
m p george 66 22 na 22
j d hart 99 na na na
d j houghton 99 33 11 33
m d killick 99 na na na
0thtar13middlesmmrindd   3 9242013   104052 am 26
thorntons plc
annual report and accounts 2013
audit c ommittee report
financial reporting
the main activities of the audit 
committee during the financial 
year ended 29 june 2013 included
•	 reviewing the group’s fullyear 2012 
and halfyear 2013 financial statements 
having received in both cases a report 
from the external auditors on their audit 
and review respectively
•	 assessing the going concern principle 
underpinning the financial statements 
and concluding it remained entirely 
appropriate
•	 reviewing the output of management’s 
risk assessment procedures used to 
evaluate and mitigate business risk
•	 reviewing the effectiveness of 
the group’s internal controls and 
disclosures in the annual report
•	 agreeing the fees and terms of 
appointment of the external auditors
•	 reviewing the external auditors 
effectiveness and
•	 reviewing the work plan and reports 
submitted by internal audit
the committee considered the 
following significant accounting 
issues during the year
•	 own store performance including 
asset impairment and onerous 
lease provisions
•	 commercial customer promotional 
costs discounts and rebates
•	 going concern projections and
•	 pension fund deficit and sufficiency 
of distributable reserves
audit c ommittee
the audit committee throughout the financial 
year comprised three independent directors
• d j houghton chair
• k g edelman
•  m p george appointed 1 february 2013
p n wilkinson served on the committee until his appointment as 
chairman of the board on 1 february 2013 at which time m p george 
joined the committee
the committee meets three times each financial year with the external 
auditors and considers any issues which are identified during the course 
of their audit work meetings are also attended by invitation by the 
finance director and other management as appropriate the committee 
meets at least annually with the external auditors without any executive 
directors present
key responsibilities
the audit committee’s key responsibilities are
•	 monitoring the integrity of the group’s financial statements
•	 reviewing the effectiveness of the group’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
•	 developing and implementing a policy on the engagement 
of the external auditors to supply nonaudit services and
•	 monitoring the group’s whistle blowing procedures
0thtar13middlesmmrindd   4 9242013   104052 am 27
thorntons plc
annual report and accounts 2013
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 
internal controls and risk management
the group’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 
group’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 group’s system of internal 
control and its effectiveness to the audit 
committee due to the size of the group 
the executive directors are able to monitor 
performance and evaluate and manage 
on a continual basis the risks faced by the 
group the key procedures that have been 
established to provide effective internal 
control including over the financial 
reporting process and the preparation 
of consolidated financial statements and 
to comply with the financial reporting 
council’s guidance on internal control 
revised guidance for directors on the 
combined code include
•	 a formalised reporting structure 
which includes the setting of detailed 
annual budgets and key performance 
indicators which are updated on a 
regular basis to form forecasts which 
are reviewed at both management 
and board meetings
•	 regular board meetings are held at 
which all key aspects of the business 
are discussed including comparison 
of actual performance against budgets 
and forecasts
•	 monthly reports are made to the 
board by the chief executive finance 
director and other executive directors
•	 there is a weekly review of operational 
performance and operational matters 
by the executive directors
•	 meetings are held by each executive 
director on a weekly and monthly 
basis to review the progress 
of specific financial and nonfinancial 
responsibilities within their functions
•	 the control review and monitoring 
of key business projects by specific 
steering committees each headed 
by an executive director who 
sponsors the project
•	 defined authorisation levels for 
capital expenditure
•	 defined authorisation levels for 
the placing of orders and contracts
•	 clear authorisation levels and 
segregation of accounting duties 
to control major financial risks
•	 daily cash movements are reconciled 
and monitored by the finance 
department and the group’s cash 
flow is monitored monthly in 
comparison to budget and forecast
•	 the group’s reporting systems 
provide weekly updates on key 
statistics including sales production 
and margin analysis
•	 an internal audit function which 
monitors maintains and controls 
a retail audit risk report regularly 
conducting store audits in line with 
risk strategy and also evaluates the 
effectiveness of systems of internal 
control and operational processes 
businesswide
•	 executive directors and senior 
management identify and review 
key operational and compliance 
risks and then implement appropriate 
procedures to address those risks 
a corporate risk register is maintained 
and reviewed with key risks reviewed 
on a quarterly basis
•	 major commercial technological 
and financial risks are assessed by the 
board throughout each financial year 
the conclusions are then incorporated 
in the group’s business strategy and 
adopted by the board and
•	 a formal arrangement for staff to raise 
any concerns over financial reporting 
or other matters in confidence
the board and audit committee review 
management reports prepared by the 
external and internal auditors and consider 
the suitability of suggested improvements 
to the system of internal controls
the board and audit committee 
have reviewed the effectiveness of 
the internal control system including 
financial operational and compliance 
controls and risk management in 
accordance with the code on an 
ongoing basis for the period from 
30 june 2012 to the date of this report 
and have determined that they were 
not aware of any significant failings 
or weaknesses in the system of 
internal control
principal risks and uncertainties
as described above in the internal 
control procedures key risks are reviewed 
by the executive directors and senior 
management the assessment of risks on 
the basis of likelihood and potential impact 
together with the controls and actions to 
manage or mitigate them are reviewed by 
the audit committee and board the key 
risks and uncertainties facing the business 
are considered in detail in the business 
review on pages 16 and 17
0thtar13middlesmmrindd   5 9242013   104052 am 28
thorntons plc
annual report and accounts 2013
internal audit
the committee receives regular detailed 
reports from the internal audit function 
on its work carried out and the results of 
its investigations including recommended 
improvements the committee also 
reviews its proposed work plan for future 
periods to ensure that its activities 
are appropriate
independence of external auditors
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 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 that limits 
tenure to a maximum of five years
the committee specifically reviews the 
levels of all fees paid to the auditors for 
audit and nonaudit services annually 
which are set out in note 8 on page 57 
the external auditors report to the audit 
committee each financial 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 effectiveness of the external audit 
process is dependent on appropriate 
audit risk identification at the start of the 
audit cycle we receive a detailed audit 
plan from pricewaterhousecoopers llp 
identifying their assessment of these key 
risks for the 2013 financial year the 
primary risks identified were in relation 
to own store performance including 
asset impairment and onerous lease 
provisions commercial customer 
promotional costs discounts and 
rebates going concern projections 
and pension fund deficit 
these risks are tracked through the 
year and we challenged the work done 
by the auditors to test management’s 
assumptions and estimates in these 
areas we assess the effectiveness of 
the audit process in addressing these 
matters through the reporting we receive 
from pricewaterhousecoopers llp 
at both the halfyear and year ends 
in addition we also seek feedback from 
management on the effectiveness of 
the audit process
for the 2013 financial year management 
were satisfied that there had been 
appropriate focus and challenge on the 
primary areas of audit risk and assessed 
the quality of the audit process to be 
good the audit committee concurred 
with the view of management
we hold private meetings with the 
external auditor at each committee 
meeting to provide additional 
opportunity for open dialogue and 
feedback from the committee and 
the auditor without management being 
present matters typically discussed 
include the auditor’s assessment 
of business risks and management 
activity thereon the transparency 
and openness of interactions with 
management confirmation that there 
has been no restriction in scope placed 
on them by management independence 
of their audit and how they have exercised 
professional scepticism i also meet with 
the external lead audit partner outside 
the formal committee process 
throughout the year
the committee has also introduced an 
external audit questionnaire with senior 
members of the finance team to assess 
the effectiveness of the audit process 
the results of which will be reviewed 
annually by the committee
approved on behalf of the board 
and signed on its behalf by
diana houghton
chair of the audit committee
10 september 2013
audit c ommittee report
continued
0thtar13middlesmmrindd   6 9242013   104052 am 29
thorntons plc
annual report and accounts 2013
report of the directors
the directors of thorntons plc 
together with its subsidiaries “the 
group” have pleasure in presenting 
their annual report and the audited 
financial statements of the company 
and group for the 52 weeks ended 
29 june 2013
principal activities and business review
the principal activities of the company and 
group during the financial year were the 
manufacturing retailing and distribution 
of highquality confectionery and other 
sweet foods a review of the group’s 
performance during the financial year 
with commentary on the financial results 
future development and principal risks 
and uncertainties facing the company 
is contained in the business review 
pages 02 to 21 which are incorporated 
into this report by reference
financial risk management
details of the group’s financial risk 
management policies are set out 
in note 19 on pages 66 to 69
directors
the current directors of the company 
together with their biographical details 
are shown on page 22 the directors 
during the financial year who served for the 
whole of the financial year and up to the 
date of signing these financial 
statements except where stated were
chairman
p n wilkinson served throughout 
the year and appointed chairman 
1 february 2013
j a von spreckelsen retired 
1 february 2013
nonexecutive directors
k g edelman 
d j houghton 
m p george appointed 1 november 2012
executive directors
j d hart 
b bloomer
m d killick 
m p george having been appointed 
by the board since the last annual 
general meeting “agm” offers himself 
for reappointment at the company’s 
forthcoming agm in accordance with 
the company’s articles of association 
in line with the recommendations of the 
uk corporate governance code all the 
other directors will also be retiring and 
offering themselves for reappointment 
by shareholders at the agm
details of the directors’ service 
arrangements are set out in the 
remuneration report on page 37
details of the directors’ beneficial 
interests in the ordinary share capital 
of the company and in options over such 
shares granted under the company’s 
share option schemes are shown in the 
remuneration report on pages 41 to 42 
no director held a material interest either 
during or at the end of the financial year 
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 financial year under review are shown 
in note 24 to the accounts on pages 75 
and 76 no person has any special rights 
of control over the company’s share 
capital and all issued shares are fully paid
the directors were granted a general 
authority at the 2012 agm to allot relevant 
securities up to a nominal amount of 
£1663448 and the authority applies until 
the conclusion of this year’s agm when 
shareholders will be asked to grant a 
similar authority in line with current 
investor guidelines separate authorities 
will also be proposed to renew the 
directors’ limited authority to disapply 
shareholders’ preemption rights and to 
purchase a proportion of the company’s 
share capital in the market again in line 
with investor guidelines
c hange of control 
significant agreements
there are no agreements that the 
company considers significant and 
to which the company is a party that 
would take effect alter or terminate 
upon change of control of the company 
following a takeover bid with the 
exception of a number of banking 
and leasing agreements which upon 
a change of control of the company 
are terminable at the banks’ and 
lessors’ discretion
there are no agreements between any 
group company and any of its employees 
or any director of the company which 
provide for compensation to be paid to 
the employee or director for termination 
of employment or for loss of office as 
a consequence of a takeover of the 
company other than provisions that 
would normally apply on any termination 
of employment
results and dividends
2013 2012
profit before tax and exceptional items £56m £09m
taxation chargecredit before exceptional items £14m £08m 
no interim dividend was paid during the year and no final dividend is recommended in respect of the financial year ended 
29 june 2013 2012 £nil
1thtar13backsmmrindd   1 9242013   104109 am 30
thorntons plc
annual report and accounts 2013
report of the directors
continued
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 24 on 
pages 75 and 76
employee involvement
it is the group’s policy to keep 
employees fully informed of matters 
affecting them as employees and to 
make them aware of the financial and 
economic factors influencing group 
performance the views of employees 
are taken into account in making 
decisions affecting their interests 
and information of relevance to 
all employees is communicated 
through a council system of employee 
representation and regular business 
updates encouragement is given 
to colleagues to contribute towards 
the group’s financial performance by 
annual bonus schemes and participation 
in the company’s share schemes
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
c haritable and political contributions
during the financial year the group made 
local and national charitable contributions 
of £16000 2012 £9000 including £9000 
to the retail trust it is the policy of the 
board not to make political donations 
and accordingly none were made 
in the financial year 2012 £nil
payment of suppliers
the group does not follow any specific 
external code or standard on payment 
practice its policy is to
•	 	 a g re e 	 t h e	 t e r m s 	o f 	 p ay m e n t 	 w i t h	
suppliers when agreeing the terms 
of each transaction
•	 	 e n s u r e 	t h a t 	t h o s e 	s u p p l i e r s	
are made aware of the terms 
of payment by inclusion of the 
relevant terms in contracts and
•	 	 p ay	 i n	a c c o r d a n c e 	 w i t h	
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 
30 june 2013 was 40 days 2012 43 days
independent auditors
following a recommendation of the audit 
committee to the board a resolution to 
reappoint pricewaterhousecoopers llp 
as auditors to the company will be 
proposed at the agm
disclosure of information to auditors
in the case of each of the persons who 
were directors at the date this report 
was approved
•	 so far as each of the directors is aware 
there is no relevant audit information 
as defined in the companies act 2006 
of which the company’s auditors are 
unaware and
•	 each of the directors has taken all the 
steps that he or she ought to have taken 
as a director in order to make himself 
or herself aware of any relevant audit 
information and to establish that the 
company’s auditors are aware of 
that information
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 29 june 2013 and at 10 september 2013
ordinary shares 
crystal amber fund limited 4459249 65
miton group plc 3100000 45 
mrs j s harcus 2806186 41
investmentaktiengesellschaft fuer langfristige investoren tgv 2753962 40
 these include joint holdings as trustees and consequently certain shares are allocated against more than one name
1thtar13backsmmrindd   2 9242013   104109 am 31
thorntons plc
annual report and accounts 2013
statement of directors’ responsibilities
the directors are responsible for preparing 
the annual report the report on the 
directors’ remuneration and the financial 
statements in accordance with applicable 
law and regulations
company law requires the directors 
to prepare financial statements for 
each financial year under that law the 
directors have prepared the group and 
parent company financial statements in 
accordance with international financial 
reporting standards “ifrss” as adopted 
by the european union “eu” under 
company law the directors must not 
approve the financial statements unless 
they are satisfied that they give a true and 
fair view of the state of affairs of the group 
and the company and of the profit or loss 
of the group for that financial year in 
preparing these financial statements 
the directors are required to
•	 select suitable accounting policies 
and then apply them consistently
•	 make judgements and accounting 
estimates that are reasonable 
and prudent
•	 state whether applicable ifrss 
as adopted by the eu have been 
followed subject to any material 
departures disclosed and explained 
in the financial statements and
•	 prepare the financial statements on 
the going concern basis unless it is 
inappropriate to presume that the 
company will continue in business
the directors are responsible for 
keeping adequate accounting records 
that are sufficient to show and explain 
the company’s transactions and disclose 
with reasonable accuracy at any time the 
financial position of the company and the 
group and enable them to ensure that the 
financial statements and the report on 
the directors’ remuneration comply with 
the companies act 2006 and as regards 
the group financial statements article 4 
of the ias regulation they are also 
responsible for safeguarding the assets 
of the company and the group and 
hence for taking reasonable steps for 
the prevention and detection of fraud 
and other irregularities
the directors are responsible for 
the maintenance and integrity of 
the company’s web site legislation in 
the united kingdom “uk” governing 
the preparation and dissemination of 
financial statements may differ from 
legislation in other jurisdictions 
each of the directors whose names 
and functions are listed on page 22 
confirm that to the best of their 
knowledge and belief
•	 the financial statements which have 
been prepared in accordance with ifrss 
as adopted by the eu give a true and fair 
view of the assets liabilities financial 
position and profit of the group and 
company and
•	 the report of the directors on 
pages 29 to 31 includes a fair review 
of the development and performance 
of the business and the position of the 
group together with a description of 
the principal risks and uncertainties 
that it faces
articles of association
the company’s articles of association 
may only be amended by a special 
resolution at a general meeting 
of shareholders
annual general meeting
the notice convening the company’s agm 
on 24 october 2013 can be found in the 
separate notice of agm accompanying 
this annual report and includes full details 
of the business to be transacted
approved by the board and signed on its 
behalf by
mark r henson
company secretary
10 september 2013
1thtar13backsmmrindd   3 9242013   104110 am 32
thorntons plc
annual report and accounts 2013
report on the directors’ remuneration
introduction from the chairman of the remuneration committee
i am pleased to present the directors’ report on remuneration 
the report has been prepared in accordance with the companies act 2006 and the relevant legal and accounting regulations 
relating to directors’ remuneration and meets the requirements of the uk listing authority listing rules the committee can 
also confirm that it has complied throughout the year with the principles and provisions in relation to remuneration in the uk 
corporate governance code 2010 
whilst the uk government’s recent proposed changes to remuneration disclosure and voting do not apply to this year’s remuneration 
report i have taken regard of those changes in this year’s format in the interests of transparency in remuneration disclosure and 
consequently this report incorporates a number of the new disclosure requirements
the report sets out in the policy section the group’s remuneration policy detailing the different elements that make up 
executive directors’ remuneration how each element operates and where relevant the performance measures applicable 
it then outlines how these policies have been applied in the remuneration paid to all directors for the financial year under 
review in developing the arrangements the committee and its advisers have regard to the best practice provisions in the 
uk corporate governance code and current market practice
review of the 2013 financial year
as described in the business review section of this annual report thorntons has made progress as evidenced by the improved 
financial performance in 2013 and consequently an annual bonus to executive directors of 3 of base salary is due for exceeding 
the threshold profit targets set by the committee for the 2013 financial year no ltip awards were granted in 2010 in respect 
of the threeyear financial performance ended 29 june 2013 and consequently no awards vested during or will vest in respect 
of the year ended 29 june 2013 
outlook for the 2014 financial year
the committee considers the current policy on executive remuneration to be appropriate and no significant changes are 
anticipated during this financial year 
given the continuing cautiousness over the economic outlook and taking into account the awards under discussion with the 
general workforce no increase in annual salary is being awarded to the executive directors for the new financial year 
the annual bonus potential for executive directors remains unchanged at up to a maximum of 100 of base salary dependent 
on profit performance there are clear financial targets based on the achievement of group profit and the committee is satisfied 
that these are challenging and in order for the maximum bonus to be earned will demonstrate significant further improvement 
in the profit performance of the business any element of bonus above 50 of salary will be payable in shares that must be 
retained by the executives for three years from when any bonus becomes payable
the committee will continue to monitor the performance conditions for any future ltip awards to ensure that the conditions 
continue to be appropriate for the group and the prevailing market and reflect the application of a “pay for performance” 
philosophy in the best interests of the group and shareholders
the committee will also continue to monitor remuneration policy to ensure it remains aligned to the business strategy 
and delivery of shareholder value
keith edelman 
remuneration committee chairman
 
1thtar13backsmmrindd   4 9242013   104110 am 33
thorntons plc
annual report and accounts 2013
advisers
during the financial year the 
committee received independent 
general remuneration and share 
scheme advice from deloitte llp 
which was appointed by the committee 
and also advised the group on tax and 
pension matters the committee also 
had access to independent 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 group’s web site  
wwwthorntonscouk and upon 
request from the company secretary
remuneration policy 
the policy for the current and future 
financial years for the remuneration 
and incentivisation of the executive 
directors is
•	 to ensure that individual rewards 
and incentives are aligned with the 
performance of the group 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 group 
to attract retain and motivate 
highcalibre executives
information not subject to audit
remuneration committee membership
the remuneration committee is composed of the company’s 
independent nonexecutive directors k g edelman chairman 
d j houghton and m p george 
p n wilkinson served as committee chairman until 1 february 2013 
when he was appointed chairman of the board at which point k g 
edelman was appointed chair and m p george joined the 
remuneration committee
the company secretary attends the meetings as secretary 
to the committee 
role of the c ommittee
the committee’s key responsibilities are 
•	 reviewing the ongoing appropriateness and relevance 
of remuneration policy
•	 reviewing and approving the remuneration packages of the 
executive directors
•	 monitoring the level and structure of remuneration of the senior 
management and
•	 production of the annual report on the directors’ remuneration
1thtar13backsmmrindd   5 9242013   104110 am 34
thorntons plc
annual report and accounts 2013
report on the directors’ remuneration
continued
remuneration policy continued
further details on the policy are set out below
component
purpose and link  
to strategy operation maximum potential value performance measures
base salary to provide a 
competitive base 
salary for the market 
in which thorntons 
operates to attract 
and retain executives 
of a suitable calibre 
reviewed each financial 
year and takes into 
account a range of 
issues including 
primarily underlying 
group performance 
comparative salary 
levels market forces 
and having regard 
to pay and conditions 
elsewhere in the group
salary increases 
are reviewed in the 
context of the wider 
workforce increases
salary increases 
will not normally be 
changed beyond cost 
of living increase with 
the exception of
•	 changes in role 
and responsibility
•	 a salary falling 
significantly below 
competitive 
positioning or 
•	 oth e r e x c e p ti on a l 
circumstances
none although 
individual contribution 
and overall performance 
is considered when 
determining the level 
of any salary increase
other benefits to provide broadly 
market competitive 
benefits as part of the 
total remuneration 
package
other benefits provided 
include principally life 
insurance private 
medical insurance 
company car or car 
allowance fuel allowance 
and where relevant 
relocation expenses 
set at a level 
which the committee 
deems appropriate 
and provides sufficient 
consideration of benefit 
based on individual 
circumstances
na
pension to provide an 
appropriate level of 
retirement benefit
executive directors are 
eligible to participate 
in the group defined 
contribution pension 
plan or an approved 
personal pension 
in appropriate 
circumstances such 
as where contributions 
exceed the annual or 
lifetime allowance 
executive directors 
may be permitted to 
take a cash supplement 
instead of contributions 
to a pension plan 
executive directors 
receive a defined 
pension contribution 
equal to 14 of 
base salary
executive directors 
may be permitted 
to take a cash 
supplement instead 
of contributions to 
a pension plan to 
the same level
pensionable 
salary is based on 
basic salary only and 
excludes any other 
form of remuneration 
including bonus 
payments or 
benefits in kind
na
sharesave scheme to create alignment 
with the group and 
promote a sense of 
ownership
hmrcapproved 
monthly savings 
scheme facilitating 
the purchase of 
shares at a discount
contributions limit 
of £250 per month
not subject 
to performance 
measures in line with 
the hmrcapproved 
operation of such 
allemployee plans
1thtar13backsmmrindd   6 9242013   104110 am 35
thorntons plc
annual report and accounts 2013
component purpose and link to strategy operation maximum potential value performance measures
annual bonus and 
deferred bonus plan
to incentivise executive 
directors and senior 
management to deliver 
annual business 
performance
annual bonus scheme 
targets reviewed each 
financial year
based on internal 
budget and external 
expectations
executive directors 
may be required to 
defer a proportion 
of any bonus earned 
into shares over a 
threeyear period 
between 0 and 75 
of bonus dependent 
on level of bonus
executive directors 
may also have the 
opportunity to 
voluntarily defer 
up to 100 of any 
bonus earned into 
shares over a 
threeyear period
total bonus capped 
at 100 salary for 
executive directors 
and nonpensionable
performance is 
measured against 
internal pbt targets 
stretching targets are 
required for maximum 
payout
long term 
incentive plan “ltip”
to incentivise 
executive directors  
and to deliver genuine 
performancerelated 
pay with a clear line of 
sight for executives and 
a direct alignment with 
shareholders’ interests
longterm incentive 
awards are granted 
under the ltip  approved 
by shareholders in 
october 2007 under 
the ltip annual awards 
of share options may 
be granted with an 
exercise price equal 
to the market value 
of the shares at the 
date of grant
participants will not 
be entitled to exercise 
their share options for 
a period determined by 
the committee which 
is no earlier than three 
years from the date 
of grant 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 condition
executive directors 
may receive an award 
under the ltip in any 
financial year over 
shares worth up to 
a maximum of 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
relevant performance 
measures are set that 
reflect underlying 
business performance
performance 
measures reviewed 
annually to maintain 
appropriateness 
and relevance
1thtar13backsmmrindd   7 9242013   104110 am 36
thorntons plc
annual report and accounts 2013
report on the directors’ remuneration
continued
remuneration policy continued
the tables below show how the make up of each of the executive directors’ remuneration varies for minimum to maximum 
levels of performance achievement
assumptions used in the tables
•	 fixed pay is made up of current base salary standard benefits in kind for 201213 and anticipated company pension 
contributions for 201314
•	 minimum performance no annual bonus or ltip vesting for 201314
•	 in line with expectations annual bonus 12 salary ltip vesting for 201314 equivalent to 150 salary and
•	 maximum performance full bonus 100 salary ltip vesting for 201314 equivalent to 150 salary
c hief executive fiveyear historic remuneration
the table below shows the total remuneration paid to the company’s chief executive for the last five years and is calculated 
in the same manner as the single figure remuneration in the table on page 40
year incumbent
ceo total
remuneration
annual bonus 
as  of salary
ltip vesting as 
 of maximum
2013 j d hart £437000 3 —
2012 j d hart £372000 — —
2011 j d hart appointed january 2011 £178000 — —
2011 m r davies resigned september 2011 £327000 — —
2010 m r davies £358000 — —
2009 m r davies £353000 — —
 includes £59000 relocation
nonexecutive directors
an overview of the nonexecutive directors’ remuneration is set out below
purpose and link to strategy operation maximum potential value performance
nonexecutive 
director fees
nonexecutive 
director remuneration 
is set at a level that 
reflects market 
conditions and 
is sufficient to 
attract individuals 
with appropriate 
knowledge and 
experience
fees paid to non
executive directors 
for their services are 
approved by the board
these fees are paid on 
a prorata basis if they 
hold office for part of 
the financial year 
fees are based on 
the level of fees paid 
to nonexecutive 
directors serving 
on the board of 
similarsized uk 
listed companies 
and the time 
commitment 
and contribution 
expected for  
the role
nonexecutive 
directors’ fees 
are not subject to 
any performance 
conditions
chief executive
100
minimum 
performance
in line with 
expectation
maximum 
performance
30
40
4
44
52
4
44
52
4
56
28
42
100
minimum 
performance
in line with 
expectation
maximum 
performance
finance director
33
27
40
100
minimum 
performance
in line with 
expectation
maximum 
performance
managing director fmcg
33
27
40
  fixed pay    annual bonus   ltip
1thtar13backsmmrindd   8 9242013   104110 am 37
thorntons plc
annual report and accounts 2013
service contracts and payments on policy for outside appointments
all of the executive directors have service contracts with the company contracts entered into before 2012 may be terminated 
by the company or director by giving twelve months’ notice the notice period of all executive directors’ service contracts is 
kept under review by the remuneration committee and during 2012 the committee reduced the standard notice period for 
the company and executive directors to six months for future appointments it is the practice of the committee that if the 
employment of an executive director is terminated any compensation payment is calculated in accordance with normal legal 
principles including the application of mitigation to the extent appropriate to the circumstances of the termination there are 
no specific contractual obligations in the event of a change of control of the company
all nonexecutive directors have initial fixedterm agreements with the company of no more than three years there is no 
entitlement to any compensation in the event of such agreement not being renewed or the agreement terminating earlier
details of the directors’ service contracts notice periods and where applicable expiry dates are set out below
name commencement expiry notice period
j d hart 4 january 2011 — twelve months
b bloomer 18 july 2006 — twelve months
m d killick 17 february 2012 — six months
k g edelman 21 february 2012 21 february 2015 three months
m p george 1 november 2012 1 november 2015 three months
d j houghton 5 december 2008 5 december 2014 three months
p n wilkinson 1 february 2013 1 february 2016 three months
l egacy arrangements
prior to the introduction of the ltip in october 2007 b bloomer had previously been granted share options under the thorntons plc 
2001 executive share option scheme subject to the achievement of performance targets these options may be exercised 
between three and ten years after the date of grant following the introduction of the ltip in 2007 no further awards under 
this scheme to directors are anticipated
options granted in 2006 were split into three equal tranches with a requirement that a share price of 160p 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 was required to reach 185p and 210p in addition before any tranche may 
be exercised growth in eps must have exceeded the rpi by at least 3 per annum cumulatively over at least a threeyear 
and a maximum sixyear period the share price must also reach the relevant targets on the day prior to exercise and the 
remuneration committee must be satisfied that there had been an improvement in the underlying performance of the 
company in line with these requirements the first two tranches of options granted on 11 july 2006 are exercisable subject 
to the company’s share price reaching the required target prices on the day prior to any exercise the third tranche did not 
pass the performance criteria and consequently lapsed
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
1thtar13backsmmrindd   9 9242013   104111 am 38
thorntons plc
annual report and accounts 2013
report on the directors’ remuneration
continued
single total figure of remuneration
the tables on page 40 detail the total remuneration receivable by each director for the financial years ended 30 june 2012 
and 29 june 2013
the figures in the single figure tables are derived from the following
total salary and fees the amount of salaryfees received in the year
taxable benefits   the taxable value of benefits received in the year these are principally medical insurance 
company car or car allowance and fuel allowance
pension    the pension figure represents the cash value of company pension contributions paid to the 
executive directors’ personal pension schemes
annual bonus   the annual bonus is the cash value of the bonus earned in respect of the financial year including 
any deferred shares if any which must be held for a minimum threeyear period
ltip    no ltip awards were granted in 2010 and consequently no awards vested during or in respect 
of the financial year ended 29 june 2013 
individual elements of remuneration
base salary and fees
base salaries for individual executive directors are reviewed annually by the remuneration committee and are set with reference 
to individual performance experience and responsibilities within the group as well as with reference to similar roles in comparable 
companies for 201213 and 201314 the executive directors did not receive a salary increase the annualised base salaries for 
201213 and 201314 are as set out below
201213 base salary 201314 base salary  increase
j d hart £345000 £345000 —
b bloomer £180000 £180000 —
m d killick £190000 £190000 —
executive directors are permitted to hold one nonexecutive directorship outside of the company and to retain any earnings 
relating to such appointment m d killick was a nonexecutive director of finance wales public limited company until 31 may 2013 
for which he received director fees of £20000 per annum no other executive director holds any nonexecutive positions
the fees paid to nonexecutive directors other than the chairman have just been reviewed having remained unchanged since 
2007 and with effect from 1 september 2013 consist of a basic fee of £35000 per annum and in recognition of legislative and 
corporate governance responsibilities a supplement of £5000 per annum is paid to the senior independent director £6000 
to the chair of the remuneration committee and £7000 to the chair of the audit committee 
pensions
the executive directors with the exception of j d hart who does not participate in any company pension arrangement have 
private pensions to which the company contributes a fixed percentage 14 of basic salary contributions made on behalf of 
directors to defined contribution arrangements are identified in the directors’ remuneration table on page 40
annual incentive plan
the remuneration committee reviews and approves the annual bonus scheme targets each financial year for the financial year 
ended 29 june 2013 the executive directors were awarded a maximum bonus opportunity equal to 100 of base salary 
dependent on profit performance
the directors consider that the profit target is commercially sensitive and should therefore remain confidential to the company 
this would provide our competitors with insight into our business plans and expectations the following table sets out the bonus 
payout to the executive directors for 201213 and how this reflects profit performance for the year
preexceptional pbt performance executive director bonus as a percentage of salary
201213 £56m 3
for 201213 any bonus earned in excess of 25 of base salary would have been payable in shares in the company that must 
be retained by the executive directors for three years from when any bonus becomes payable since the bonus earned was 
less than 25 of salary the bonus will be paid in cash
for 201314 the executive directors opportunity to earn bonus remains based on profit targets and the maximum bonus also 
remains at 100 of base salary any element of bonus above 50 of salary will be payable in shares that must be retained by 
the executives for three years from when any bonus becomes payable
1thtar13backsmmrindd   10 9242013   104111 am 39
thorntons plc
annual report and accounts 2013
l ong term incentive plan “l tip”
there are currently two outstanding grants of awards in respect of the periods 2011 to 2014 and 2012 to 2015 under the ltip 
the remuneration committee monitors the performance of existing awards against set 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 the performance targets for the 2011 and 2012 awards are based on stretching share price improvement over 
threeyear periods with a cumulative eps hurdle to ensure there is no benefit arising simply from an upward turn in the market at 
the point of measurement awards vest dependent on the company’s share price on the third anniversary of the date of grant 
with 2 of the award vesting for each whole pence improvement in the share price between 101p and 150p 2011 award and 
110p and 160p 2012 award
total award vesting 
as a  of salary 2011 award
absolute share price 
required to vest 2011 award
total award vesting 
as a  of salary 2012 award
absolute share price 
required to vest 2012 award
75 ie 100 of the award 150p 52 ie 100 of the award 160p
15 ie 20 of the award 110p 10 ie 20 of the award 120p
15 ie 2 of the award 101p 1 ie 2 of the award 111p
0 100p 0 110p
the eps hurdle is such that the awards will not vest regardless of share price performance unless the company’s cumulative 
adjusted eps for 2012 2013 and 2014 is at least 316p 2011 award and for 2013 2014 and 2015 at least 335p 2012 award absolute 
measures were considered appropriate to focus management on restoring the company’s profitability for simplicity and clarity of line 
of sight and to align shareholder and executive interests by driving shareholder value through share price growth the committee 
considers that the stretching share price and eps targets reflect the application of a “pay for performance” philosophy in the best 
interests of the company and shareholders the march 2012 award to m d killick was based on a reduced percentage of salary 
to reflect the reduction in the company share price in the intervening period from the october 2011 awards but has the same 
performance criteria as described above to align him with his executive colleagues
share price
the midmarket price of the ordinary shares at 29 june 2012 the last dealing day prior to 30 june 2012 was 1963p and at 28 june 2013 
the last dealing day prior to 29 june 2013 was 9225p the range for the financial year was from 1963p to 10050p
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 2013 to 10 september 2013 the interests of the directors named in the table 
on page 41 in the shares of the company were unchanged
performance graph
the graph below shows the tsr performance for the company’s shares in comparison to the ftse small cap index for the five 
years to 29 june 2013 for the purposes of the graph tsr has been calculated as the percentage change during the fiveyear 
period in the market price of the shares assuming that dividends are reinvested
this graph shows the value by the end of the 2013 financial year of £100 invested in the group over the last five financial years 
compared with £100 invested in the ftse small cap index which the directors believe is the most appropriate comparative index
160
140
120
100
80
60
40
20
0
jul 13 jul 08 jul 09 jul 10 jul 11 jul 12
thorntons plc ftse small cap
1thtar13backsmmrindd   11 9242013   104111 am 40
thorntons plc
annual report and accounts 2013
report on the directors’ remuneration
continued
information subject to audit
directors’ remuneration
the following table shows an analysis of the various elements of remuneration receivable by those directors who served during 
the 52 weeks ended 29 june 2013
2013
salary
and fees
£’000
taxable
benefits
£’000
compensation
for loss
of office
£’000
annual
bonus
£’000
subtotal
£’000
pension
£’000
ltip
£’000
total
remuneration
£’000
c hairman
p n wilkinson 69 — — — 69 — — 69
j a von spreckelsen 
retired 1 february 2013 92 — — — 92 — — 92
executive directors
j d hart 345 82 — 10 437 — — 437
b bloomer 180 20 — 5 205 25 — 230
m d killick 190 35 — 6 231 27 — 258
nonexecutive directors
k g edelman 37 — — — 37 — — 37
d j houghton 38 — — — 38 — — 38
m p george 
appointed 1 november 2012 22 — — — 22 — — 22
973 137 — 21 1131 52 — 1183
 taxable benefits include £59164 j d hart and £16374 m d killick in respect of relocation expenses
2012
salary and
fees
£’000
taxable
benefits
£’000
compensation
for loss
of office
£’000
annual
bonus
£’000
subtotal
£’000
pension
£’000
ltip
£’000
total
remuneration
£’000
c hairman
j a von spreckelsen 150 — — — 150 — — 150
executive directors
j d hart 345 27 — — 372 — — 372
b bloomer 180 21 — — 201 25 — 226
m d killick 
appointed 17 february 2012 73 11 — — 84 12 — 96
w h m robson 
resigned 17 february 2012 127 13 — — 140 19 — 159
p d j wright 
resigned 1 july 2011 8 1 188 — 197 — — 197
nonexecutive directors
k g edelman appointed 
21 february 2012 11 — — — 11 — — 11
d j houghton 38 — — — 38 — — 38
p n wilkinson 43 — — — 43 — — 43
975 73 188 — 1236 56 — 1292
1thtar13backsmmrindd   12 9242013   104111 am 41
thorntons plc
annual report and accounts 2013
share options and awards
the interests of the executive directors in share options held under the executive share option schemes and the sharesave 
scheme were as follows
director scheme date of grant
subscription 
price pence
awards and
options
held at
30 june 2012
or date of
appointment
awards and
options
granted in
period
options
exercised
shares sold
options
lapsed
forfeited
awards and
options
held at
29 june
2013
last date
awards and
options can
be exercised
j d hart 2011 share 
option plan 16 feb 2011 9900 696969 — — — 696969 16 feb 2021
ltip 2007 5 oct 2011 4600 562500 — — — 562500 5 oct 2021
ltip 2007 24 oct 2012 3175 — 562500 — — 562500 24 oct 2022
sharesave 22 nov 2012 2600 — 14261 — — 14261 30 june 2016
b bloomer 2001
executive 11 jul 2006 12850 500000 — — 166667 333333 11 jul 2016
ltip 2007 20 oct 2009 13225 186301 — — 186301 — na
ltip 2007 5 oct 2011 4600 293478 — — — 293478 5 oct 2021
ltip 2007 24 oct 2012 3175 — 293478 — — 293478 24 oct 2022
sharesave 10 oct 2007 14800 4358 — — 4358 — na
sharesave 18 nov 2010 8400 11165 — — — 11165 30 june 2016
sharesave 22 nov 2012 2600 — 23769 — — 23769 30 june 2018
m d killick ltip 2007 23 mar 2012 2437 257284 — — — 257284 23 mar 2022
ltip 2007 24 oct 2012 3175 — 309783 — — 309783 24 oct 2022
j a von 
spreckelsen 
retired 1 
february 
2013
2001
executive
5 jun 2006 11600 1200000 — — 1200000 — na
  to facilitate the recruitment of j d hart as chief executive on 16 february 2011 he was granted an option over 696969 ordinary shares in the company with 
an exercise price of 99p per share this award was made pursuant to listing rule 942 2 the option will become exercisable subject to the satisfaction of a 
performance condition to be measured over the period from 4 january 2011 to 4 january 2014 based on the annual increase in absolute tsr for the company 
over that period as below
annual increase in absolute tsr
percentage of the
option that will vest
15 100
11 75
8 50
less than 8 0
for tsr performance between these points vesting will be calculated on a straightline interpolation rounded to the nearest whole 
share the company’s tsr will be averaged across a period of three months before the start of the performance period and three 
months before the date on which the performance period ends in addition for the option to vest the remuneration committee must be 
satisfied that the underlying financial performance of the company is satisfactory if j d hart ceases employment as a good leaver before 
his option has become exercisable the committee shall determine the extent to which the option shall become exercisable taking into 
account the period of time that has elapsed between grant and cessation and the extent to which the performance condition is satisfied 
at the relevant date in the event of a change of control or other relevant transaction before the option has become exercisable the 
option will become exercisable at the time of the relevant event to the extent determined by the committee taking into account 
the period of time that has elapsed between grant and the relevant event and the extent to which the performance condition is satisfied 
the option shall not be taken into account for pension purposes
there is no requirement for the directors to pay any contributions on the granting of any options under any of the company’s 
share schemes
the earliest dates of exercise for the options set out in the table above are shown in note 24 on page 76
1thtar13backsmmrindd   13 9242013   104112 am 42
thorntons plc
annual report and accounts 2013
information subject to audit continued
share options and awards continued
dilution headroom
options granted under the company’s allemployee save as you earn scheme are met by the issue of new shares when the 
options are exercised all other plans are met by shares already held in the company’s employee benefit trusts or market 
purchases the number of shares issued under the schemes are monitored for the impact on dilution limits and to ensure these 
remain within the limits set by the association of british insurers guidelines
shareholder voting at agm 2012
last year’s annual general meeting received the following votes from shareholders to approve the remuneration report 2012
for 21503180 9843 of votes cast
against 342947 157  of votes cast
abstain 82526
directors’ interests
the interests of the directors and their immediate families in the company’s ordinary shares as at 30 june 2012 or date 
of appointment if later at 29 june 2013 and up to the date of signing of these financial statements were as follows
ordinary shares
the directors’ beneficial interests in ordinary shares were
29 june 2013
number
30 june 2012
or date of
appointment if later
number
c hairman
p n wilkinson 1200503 25000
executive directors
j d hart 150000 95431
b bloomer 35084 20598
m d killick 255000 251438
nonexecutive directors
k g edelman 66547 —
d j houghton 100000 100000
m p george appointed 1 november 2012 — —
approved by the board and signed on its behalf by
keith edelman
chairman of the remuneration committee
10 september 2013 
 
report on the directors’ remuneration
continued
1thtar13backsmmrindd   14 9242013   104112 am 43
thorntons plc
annual report and accounts 2013
independent auditors’ report
to the members of thorntons plc
we have audited the financial statements of thorntons plc for the 52 weeks ended 29 june 2013 which comprise the consolidated 
income statement the statements of comprehensive income the statements of changes in equity the balance sheets the cash 
flow statements and the related notes the financial reporting framework that has been applied in their preparation is applicable 
law and international financial reporting standards “ifrs” as adopted by the european union and as regards the parent 
company financial statements as applied in accordance with the provisions of the companies act 2006
respective responsibilities of directors and auditors 
as explained more fully in the statement of directors’ responsibilities set out on page 31 the directors are responsible for the 
preparation of the financial statements and for being satisfied that they give a true and fair view our responsibility is to audit 
and express an opinion on the financial statements in accordance with applicable law and international standards on auditing 
uk and ireland those standards require us to comply with the auditing practices board’s ethical standards for auditors 
this report including the opinions has been prepared for and only for the company’s members as a body in accordance with 
chapter 3 of part 16 of the companies act 2006 and for no other purpose we do not in giving these opinions accept or assume 
responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save 
where expressly agreed by our prior consent in writing
scope of the audit of the financial statements 
an audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable 
assurance that the financial statements are free from material misstatement whether caused by fraud or error this includes 
an assessment of whether the accounting policies are appropriate to the group’s and the parent company’s circumstances 
and have been consistently applied and adequately disclosed the reasonableness of significant accounting estimates made 
by the directors and the overall presentation of the financial statements in addition we read all the financial and nonfinancial 
information in the annual report and accounts to identify material inconsistencies with the audited financial statements if we 
become aware of any apparent material misstatements or inconsistencies we consider the implications for our report
opinion on financial statements 
in our opinion 
•	 the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 29 june 2013 
and of the group’s profit and group’s and parent company’s cash flows for the 52 weeks then ended
•	 the group financial statements have been properly prepared in accordance with ifrs as adopted by the european union 
•	 the parent company financial statements have been properly prepared in accordance with ifrs as adopted by the european 
union and as applied in accordance with the provisions of the companies act 2006 and
•	 the financial statements have been prepared in accordance with the requirements of the companies act 2006 and as regards 
the group financial statements article 4 of the las regulation 
opinion on other matters prescribed by the c ompanies act 2006 
in our opinion 
•	 the part of the report on the directors’ remuneration to be audited has been properly prepared in accordance with 
the companies act 2006
•	 the information given in the report of the directors for the financial year for which the financial statements are prepared 
is consistent with the financial statements and
•	 the information given in the corporate governance statement set out on pages 23 to 25 of the annual report and accounts 
with respect to internal control and risk management systems and about share capital structures is consistent with the 
financial statements
1thtar13backsmmrindd   15 9242013   104112 am 44
thorntons plc
annual report and accounts 2013
matters on which we are required to report by exception 
we have nothing to report in respect of the following 
under the companies act 2006 we are required to report to you if in our opinion 
•	 adequate accounting records have not been kept by the parent company or returns adequate for our audit have not been 
received from branches not visited by us or 
•	 the parent company financial statements and the part of the report on the directors’ remuneration to be audited are not 
in agreement with the accounting records and returns or 
•	 certain disclosures of directors’ remuneration specified by law are not made or 
•	 we have not received all the information and explanations we require for our audit or
•	 a corporate governance statement has not been prepared by the parent company 
under the listing rules we are required to review 
•	 the statement of directors’ responsibilities set out on page 31 in relation to going concern
•	 the parts of the corporate governance statement relating to the company’s compliance with the nine provisions 
of the uk corporate governance code specified for our review and
•	 certain elements of the report to shareholders by the board on directors’ remuneration
randal c asson senior statutory auditor
for and on behalf of pricewaterhousecoopers llp
chartered accountants and statutory auditors
leeds
10 september 2013
 
independent auditors’ report
to the members of thorntons plc continued
1thtar13backsmmrindd   16 9242013   104112 am 45
thorntons plc
annual report and accounts 2013
c onsolidated income statement
52 weeks ended 29 june 2013
52 weeks ended 29 june 2013 53 weeks ended 30 june 2012
note
before 
exceptionals
 £’000
exceptional
items
note 4
£’000
total
£’000
before 
exceptionals
 £’000
exceptional
items
note 4
£’000
total
£’000
revenue 3 221052 — 221052 217144 — 217144
cost of sales 123882 — 123882 121507 — 121507
gross profit 97170 — 97170 95637 — 95637
operating expenses 91318 396 91714 94349 3065 97414
other operating income 5 1363 — 1363 1474 — 1474
operating profitloss 7215 396 6819 2762 3065 303
finance income 6 25 — 25 2 — 2
finance costs 7 1674 — 1674 1913 — 1913
profitloss before taxation 8 5566 396 5170 851 3065 2214
taxation chargecredit 9 1336 81 1417 846 470 1316
profitloss attributable to owners of 
the parent 4230 477 3753 1697 2595 898
earningsloss per share 10
basic 56p 14p
diluted 53p 14p
the notes on pages 50 to 82 are an integral part of these consolidated and company financial statements
the company has elected to take the exemption under section 408 of the companies act 2006 not to present the parent 
company income statement the profit after tax for the parent company for the period was £2437000 2012 loss after tax 
of £1263000
1thtar13backsmmrindd   17 9242013   104112 am 46
thorntons plc
annual report and accounts 2013
statements of comprehensive income
52 weeks ended 29 june 2013
group company
52 weeks 53 weeks 52 weeks 53 weeks
ended ended ended ended
29 june 2013 30 june 2012 29 june 2013 30 june 2012
note £’000 £’000 £’000 £’000
profitloss for the period 3753 898 2437 1263
other comprehensive incomeexpense
–  actuarial gainloss recognised in the defined 
benefit pension scheme 22 1129 7197 1129 7197
– movement of deferred tax on pension liability 21 516 1359 516 1359
total other comprehensive incomeexpense 613 5838 613 5838
total comprehensive incomeexpense for the financial period 
attributable to owners of the parent 4366 6736 3050 7101
the above items of other comprehensive income are not expected to be subsequently reclassified to profit or loss
the notes on pages 50 to 82 are an integral part of these consolidated and company financial statements 
1thtar13backsmmrindd   18 9242013   104112 am 47
thorntons plc
annual report and accounts 2013
statements of changes in equity
52 weeks ended 29 june 2013
share share retained
capital premium earnings total
group note £’000 £’000 £’000 £’000
at 25 june 2011 6837 13768 1296 19309
loss for the period — — 898 898
other comprehensive expenseincome
–  actuarial loss recognised in the defined benefit pension scheme — — 7197 7197
– movement of deferred tax on pension liability — — 1359 1359
total comprehensive expense for the period ended 30 june 2012 — — 6736 6736
transactions with owners
– sharebased payment credit 25 — — 459 459
– dividends 11 — — 167 167
at 30 june 2012 6837 13768 8658 11947
profit for the period — — 3753 4089
other comprehensive incomeexpense
–  actuarial gain recognised in the defined benefit pension scheme — — 1129 1129
– movement of deferred tax on pension liability — — 516 516
total comprehensive income for the period ended 29 june 2013 — — 4366 4366
transactions with owners
– sharebased payment charge 25 — — 51 51
– effect of tax on share option movement 9 — — 242 242
at 29 june 2013 6837 13768 3999 16606
share share retained
capital premium earnings total
company note £’000 £’000 £’000 £’000
at 25 june 2011 6837 13768 5728 26333
loss for the period — — 1263 1263
other comprehensive expenseincome
– actuarial loss recognised in the defined benefit pension scheme — — 7197 7197
– movement of deferred tax on pension liability — — 1359 1359
total comprehensive expense for the period ended 30 june 2012 — — 7101 7101
transactions with owners
– sharebased payment credit 25 — — 459 459
– dividends 11 — — 167 167
at 30 june 2012 6837 13768 1999 18606
profit for the period — — 2437 2437
other comprehensive incomeexpense
– actuarial gain recognised in the defined benefit pension scheme — — 1129 1129
– movement of deferred tax on pension liability — — 516 516
total comprehensive expense for the period ended 29 june 2013 — — 3050 3050
transactions with owners
– sharebased payment charge 25 — — 51 51
– effect of tax on share option movement 9 — — 242 242
at 29 june 2013 6837 13768 1344 21949
retained earnings are net of investments in own shares of £2163000 2012 £2163000 being held by trusts operating 
the following plans
•	 2007 ltip with 504610 shares 2012 504610 at an original cost of £1035000 2012 £1035000 and
•	 2001 executive share option scheme with 905070 shares 2012 905070 at an original cost of £1128000 2012 £1128000
the notes on pages 50 to 82 are an integral part of these consolidated and company financial statements
1thtar13backsmmrindd   19 9242013   104112 am 48
thorntons plc
annual report and accounts 2013
balance sheets
as at 29 june 2013
group company
2013 2012 2013 2012
note £’000 £’000 £’000 £’000
assets
noncurrent assets
intangible assets 12 1720 2140 1720 2140
property plant and equipment 13 43340 47221 19102 22174
investment in subsidiaries 14 — — 27368 27368
deferred tax assets 21 1691 2346 6296 7264
46751 51707 54486 58946
c urrent assets
inventories 15 38990 38070 38976 38056
trade and other receivables 16 18585 15467 18570 15452
current tax assets — — 1862 1572
cash and cash equivalents 26b 2550 2918 2516 2407
60125 56455 61924 57487
total assets 106876 108162 116410 116433
equity and liabilities
equity attributable to owners of the parent
ordinary shares 24 6837 6837 6837 6837
share premium 13768 13768 13768 13768
accumulated lossesretained earnings 3999 8658 1344 1999
total equity 16606 11947 21949 18606
l iabilities
noncurrent liabilities
borrowings 18 800 1653 800 1653
retirement benefit obligations 22 24887 29080 24887 29080
provisions for liabilities 20 1760 3299 1760 3299
other noncurrent liabilities 23 2032 2490 2032 2490
29479 36522 29479 36522
c urrent liabilities
trade and other payables 17 29968 27559 34593 29541
borrowings 18 29283 30354 29283 30354
current tax liabilities 434 370 — —
provisions for liabilities 20 1106 1410 1106 1410
60791 59693 64982 61305
total liabilities 90270 96215 94461 97827
total equity and liabilities 106876 108162 116410 116433
the notes on pages 50 to 82 are an integral part of these consolidated and company financial statements
the financial statements on pages 45 to 49 were approved by the board of directors and were signed on its behalf by
michael killick
finance director
10 september 2013 
company number 174706
1thtar13backsmmrindd   20 9242013   104113 am 49
thorntons plc
annual report and accounts 2013
c ash flow statements
52 weeks ended 29 june 2013
group company
52 weeks 53 weeks 52 weeks 53 weeks
ended ended ended ended
29 june 2013 30 june 2012 29 june 2013 30 june 2012
note £’000 £’000 £’000 £’000
c ash flows from operating activities
cash generated from operations 26a 8310 1497 8688 867
corporate taxation paidreceived 972 628 872 629
net cash generated from operating activities 7338 2125 7816 1496
c ash flows from investing activities
proceeds from sale of property plant and equipment 82 539 82 539
purchase of property plant and equipment 4275 4875 4275 4870
net cash used in investing activities 4193 4336 4193 4331
c ash flows from financing activities
interest paid 1589 2222 1589 1813
capital element of finance lease rental payments 1324 2234 1325 2230
borrowings repaidadvanced 600 8000 600 8000
dividends paid 11 — 167 — 167
net cash used inreceived from financing activities 3513 3377 3514 3790
net decreaseincrease in cash and cash equivalents 
and bank overdrafts 368 1166 109 955
cash and cash equivalents at beginning of period 26b 2918 1752 2407 1452
c ash and cash equivalents at end of period 26b 2550 2918 2516 2407
the notes on pages 50 to 82 are an integral part of these consolidated and company financial statements
1thtar13backsmmrindd   21 9242013   104113 am 50
thorntons plc
annual report and accounts 2013
notes to the financial statements
1 general information
thorntons plc “the company” is a company incorporated and domiciled in the uk and is listed on the london stock exchange 
the address of the company’s registered office is thornton park somercotes derbyshire de55 4xj
2 summary of significant accounting policies
a summary of the group accounting policies adopted in the preparation of the consolidated financial statements is set out 
below together with an explanation of where changes have been made to previous policies on the adoption of new accounting 
standards in the financial year these policies have been consistently applied to all the financial years presented unless 
otherwise stated
21 basis of preparation
these consolidated financial statements have been prepared in accordance with international financial reporting standards 
“ifrss” and international financial reporting interpretations committee “ifric” interpretations as adopted by the european 
union “eu” and with those parts of the companies act 2006 applicable to companies reporting under ifrs these consolidated 
financial statements have been prepared under the historical cost convention and a going concern basis
the preparation of financial statements in conformity with ifrs requires the use of estimates and assumptions that affect the 
reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and 
expenses during the reporting period although these estimates are based on management’s best knowledge actual results 
may ultimately differ a summary of critical accounting estimates used in the preparation of the financial statements is set out 
on pages 54 and 55
211 going concern
the group meets its daytoday working capital requirements through its bank facilities the group’s forecasts taking account 
of reasonably possible changes in trading performance show that the group will be able to operate within the level of its current 
facilities after making enquiries the directors are satisfied that the group has adequate resources to continue in operational 
existence for the foreseeable future the group therefore continues to adopt the going concern basis in preparing its consolidated 
financial statements and further information on the group’s borrowings is given in note 18
212 changes in accounting policy and disclosures
a standards amendments to published standards and interpretations effective for the period ended 29 june 2013
there are no ifrss or ifric interpretations that are effective for the first time for the period ended 29 june 2013 that have 
had a material impact on the group
b new standards amendments to published standards and interpretations issued but not effective for the period ended 
29 june 2013 and not early adopted
there are no ifrss or ifric interpretations that are not yet effective that would be expected to have a material impact on the group 
22 basis of consolidation
the consolidated financial statements incorporate the results of the company and each of its subsidiaries for the financial year 
ended 29 june 2013 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
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
23 segmental reporting
segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker which 
has been identified as the executive committee “executive” the chief operating decision maker is responsible for allocating 
resources and assessing performance of the operating segments
24 foreign currencies
transactions in foreign currencies are translated in sterling at the exchange rate ruling at the date of transaction monetary 
assets and liabilities denominated in foreign currencies are retranslated to sterling at the exchange rates ruling at the balance 
sheet date and any exchange differences arising are taken to the income statement
1thtar13backsmmrindd   22 9242013   104113 am 51
thorntons plc
annual report and accounts 2013
25 revenue recognition
revenue comprises the amounts receivable for goods and services in the normal course of business net of trade discounts 
and value added tax
retail sales and allowances are recognised at the date of the transaction with consumers in addition provisions are made for 
expected returns as necessary for sales promotion purposes thorntons plc operates a variety of schemes that give rise to 
goods being sold at a discount to the standard retail price these include staff discounts and the redemption of promotional 
vouchers revenue is adjusted to show sales net of all related discounts
wholesale sales including sales to franchise outlets are recognised either when goods are dispatched to customers or the 
customer has accepted the products depending on the sales channel provision is made for expected returns and allowances 
as necessary including discounts and rebates
revenue from the provision of the sale of goods on the internet is recognised at the point that the risks and rewards of the 
inventory have passed to the customer which is the point of despatch
26 other operating income
other operating income comprises amounts receivable in respect of licensing income franchise fees and rental income net 
of value added tax where applicable licence income and rental income are recognised on an accruals basis in accordance with 
the risks and rewards of the relevant agreements franchise fees are nonrefundable and are charged in return for the initial 
grant of a fiveyear franchise and the income is therefore held as deferred income on the balance sheet and released to the 
income statement on a straightline basis over this fiveyear period fees in respect of subsequent renewals are likewise 
amortised over the renewal period
27 exceptional items
exceptional items are material items that derive from events or transactions which individually or if of a similar type in 
aggregate need to be disclosed by virtue of their size or incidence if the financial statements are to give a true and fair view
28 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
29 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
land and assets in the course of construction are not depreciated other property plant and equipment 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  up to 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
pretrading expenditure on new stores is charged to the income statement as incurred
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’
1thtar13backsmmrindd   23 9242013   104113 am 52
thorntons plc
annual report and accounts 2013
notes to the financial statements
continued
2 summary of significant accounting policies continued
210 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 
computer software development 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 these are amortised over their estimated useful lives not exceeding five years
assets in the course of construction are not amortised
211 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
212 derivatives and other financial instruments
derivatives are initially recognised at fair value on the date the contract is entered into and are subsequently remeasured at fair 
value where appropriate the group enters into derivatives in order to minimise relevant currency and interest rate exposure 
these are designated as hedges of the cost of a highly probable forecast transaction or commitment “cash flow hedging instrument”
to qualify for hedge accounting the group is required at inception to document in advance the relationship between the item 
being hedged and the hedging instrument and to document and reassess at each reporting date whether the hedge will be 
highly effective in offsetting changes in cash flows of the hedged item on an ongoing basis
the effective portion of changes in the fair value of cash flow hedging derivatives is recognised in other comprehensive income 
within the hedging reserve the change in fair value relating to the ineffective portion of the hedge is recognised in the income 
statement immediately within finance costs amounts accumulated within equity are recycled to the income statement in the 
periods when the hedged item will affect profit
when a hedging instrument expires or is sold or no longer meets the criteria for hedge accounting any cumulative gain or loss 
on the hedging instrument previously recognised in equity is retained in equity and is recognised when the forecast transaction 
is ultimately recognised in the income statement if the hedged transaction is no longer expected to occur the cumulative gain 
or loss that was recognised in equity is immediately transferred to the income statement
the group seeks to limit its exposure to volatility in raw material and energy costs by buying these forward where possible 
for a period of up to a year under ias 39 the group takes advantage of the “own use” exemption and does not fair value 
these contracts
213 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 firstin firstout basis it excludes borrowing costs 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
214 trade receivables
trade receivables are amounts due from customers for goods and services in the ordinary course of business classified as 
current as all are expected to be received within one year
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 receivable probability that the receivable 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
1thtar13backsmmrindd   24 9242013   104113 am 53
thorntons plc
annual report and accounts 2013
215 cash and cash equivalents
cash and cash equivalents include cash in hand deposits on call with banks other shortterm liquid investments with maturities 
of three months or less and bank overdrafts bank overdrafts if applicable are shown within borrowings in current liabilities on 
the balance sheet
216 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
217 trade and other payables
trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from 
suppliers classified as current as all are expected to be received within one year
trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method
218 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
219 borrowings
borrowings are recognised initially at fair value net of transaction costs subsequent measurement is based on amortised cost and 
any difference between the proceeds net of transaction costs and the redemption value is recognised in the income statement 
over the period of the borrowings using the effective interest rate method if borrowings are renegotiated before the end of their 
term remaining nonamortised transaction costs are written off to the income statement
borrowing facilities are provided by a number of different banks and are subject to continued covenant compliance these covenants 
being measured halfyearly in line with the annual and interim reporting cycles use of these facilities is generally short term in nature 
with loan maturity dates ranging from less than one week to several months borrowings are actively monitored in order to manage 
their cost and level of exposure to each individual bank which in the normal course of business results in the settlement of these 
liabilities and the separate drawdown of new loans within twelve months of the balance sheet date in light of this these borrowings 
are classified as current
net debt is cash and cash equivalents bank and other loans and finance leases
220 finance leases
leases are classified as finance leases where the terms of the lease transfer substantially all the risks and rewards of ownership 
to the group all other leases are classified as operating leases
property plant and equipment held under finance leases are capitalised in the balance sheet at fair value of leased assets 
or if lower the present value of the minimum lease payments assets are depreciated over the shorter of their lease term 
and their expected useful lives the interest element of leasing payments represents a constant proportion of the capital 
balance outstanding and is charged to the income statement over the period of the lease
221 current and deferred taxation
the charge for current tax is based on the results for the period after making allowance for nonassessable or disallowable 
items calculated using rates of tax that have been enacted at the balance sheet date
deferred taxation is recognised using the liability method on temporary differences arising between the tax bases of assets 
and liabilities and their carrying amounts in the consolidated financial statements
deferred tax liabilities are recognised in full for all taxable temporary differences and deferred tax assets are recognised to the extent 
that it is probable that taxable profits will be available against which deductible temporary differences can be utilised however if the 
deferred tax arises from the initial recognition of an asset or liability in a transaction other than a business combination that at the time 
of the transaction affects neither accounting nor taxable profit it is not accounted for deferred taxation is measured based on tax 
rates and laws enacted or substantively enacted at the balance sheet date and are expected to apply when the related deferred 
income tax asset is realised or deferred income tax liability is settled
deferred tax assets and liabilities are offset when there is a legal enforceable right to set off current tax assets against current 
tax liabilities when they relate to income taxes levied by the same taxation authority and where the group intends to settle its 
current tax assets and liabilities on a net basis
1thtar13backsmmrindd   25 9242013   104113 am 54
thorntons plc
annual report and accounts 2013
notes to the financial statements
continued
2 summary of significant accounting policies continued
222 provisions
provisions for onerous leases and dilapidations are 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 
223 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 and closed to future accrual in april 2013
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 highquality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms 
to maturity approximating to the terms of the related pension liability
actuarial gains and losses are recognised in full in the period in which they occur they are recognised directly in equity and are 
presented in the statement of comprehensive income other income and administrative expenses associated with the defined 
benefit scheme are recognised in the income statement
the contributions made by the employees up to the date of closure 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
224 employee share option schemes
where share options are granted to employees as part of their remuneration the fair value of options granted is recognised as 
an employee expense in the income statement with a corresponding increase in equity the fair value is measured at the grant 
date and expensed through the income statement over the period during which the employees become unconditionally entitled 
to the options the amount recognised in the income statement is adjusted at each balance sheet date for the expected and 
actual number of options vesting with a corresponding entry in equity
the fair value of the options is measured using a black scholes option valuation model for options with nonmarket performance 
conditions and a monte carlo model for options with market performance conditions
the proceeds received net of any directly attributable transaction costs are credited to share capital and share premium when 
the options are exercised exercised options are equity settled
own shares held by the employee share ownership plan “esop” trusts are carried at cost and disclosed within note 10
225 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
226 critical accounting estimates and judgements 
the preparation of financial statements in conformity with ifrs requires management to make estimates and assumptions 
actual results could differ from these estimates information about such judgements and estimates is contained in the 
accounting policies and notes to the consolidated financial statements and the key areas are summarised below
2261 provisions
the group makes judgements to determine whether there is objective evidence which indicates that inventory should be held 
at net realisable value 
the store dilapidation provision is estimated based on past experience of cash outflows 
1thtar13backsmmrindd   26 9242013   104113 am 55
thorntons plc
annual report and accounts 2013
the group provides against onerous leases based on future estimated trading cash flows and a discount rate is used in this 
calculation a 1 change in this discount rate would result in a £67000 change in the provision at year end 
assets are reviewed for impairment on a regular basis and a provision made where necessary a discounted cash flow is 
calculated for each retail store including attributable overheads using the group’s weighted average cost of capital assets 
attributable to the retail stores are impaired to the extent that the net present value of the cash flows is lower than the net 
book value
2262 retirement benefit obligation
the valuation of the retirement benefit obligation is dependent upon a series of assumptions the key ones being discount rates 
mortality rates investment returns and inflation on the rate of salary and pension increases these judgements and estimates 
are determined after taking into account the requirements of ias 19 ‘retirement benefit obligations’ and after taking expert 
advice from the group actuaries these are set out in note 22 to the financial statements
3 segmental reporting
the executive reviews the group’s internal reporting in order to assess performance and allocate resources the operating 
segments of the group have been determined on this basis
all revenue arises from uk operations to external customers and therefore the executive does not consider the business from 
a geographic perspective only an operational one two reportable segments “retail” which incorporates own stores franchise 
and thorntons direct and “sales  operations” “so” encompassing the commercial trading channel and manufacturing 
operations have been identified this latter segment will be referred to as “fmcg” from the beginning of the 2014 financial year 
one commercial customer represents greater than 10 of group revenue with revenue in the period of £285 million 
2012 £287 million
the executive assesses the performance of the operating segments based on a measure of operating profit costs specific 
to head office and finance costs are not included in the result for each operating segment as these costs are not managed 
on a segmented basis
total segment assets exclude it assets nontrade receivables and cash and cash equivalents as these are managed centrally 
assets are substantially located in the uk
52 weeks ended 29 june 2013 53 weeks ended 30 june 2012
retail so c entral total retail so central total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
total revenue 119919 101133 — 221052 132150 84994 — 217144
depreciation and 
amortisation excluding 
exceptional impairment 1786 4815 1238 7839 2524 5012 1260 8796
segment operating profit 2991 21255 — 24246 3432 16625 — 20057
head office costs 17031 17295
exceptional items 396 — — 396 3060 — 5 3065
operating profitloss 6819 303
net finance costs 1649 1911
profitloss before 
taxation 5170 2214
additions to noncurrent 
assets other than 
deferred tax assets 1440 1844 1088 4372 1300 2493 827 4620
total assets 8334 84909 13634 106876 10351 83628 14183 108162
1thtar13backsmmrindd   27 9242013   104113 am 56
thorntons plc
annual report and accounts 2013
notes to the financial statements
continued
4 exceptional items 
exceptional items comprise
52 weeks
ended
29 june 2013
£’000 
53 weeks
ended
30 june 2012
£’000
impairment and onerous lease charges 396 3060
outsourcing costs — 5
total exceptional items 396 3065
tax chargecredit attributable to exceptional items 81 470
total exceptional items after tax 477 2595
impairment and onerous lease charges
as a result of the performance of retail own stores during the financial year impairment and onerous lease charges have been 
required further detail of the impairment charge can be found in note 13 and the onerous lease charge in note 20
tax charge attributable to exceptional items
this is the tax charge arising in relation to the exceptional items which are an allowable deduction for tax and it has been 
calculated at the uk standard corporation tax rate of 2375
5 other operating income
52 weeks 
ended
29 june 2013
£’000 
53 weeks
ended
30 june 2012
£’000
franchise fee income 126 122
licensing income 1108 1080
rent receivable 129 272
1363 1474
6 finance income
52 weeks 
ended
29 june 2013
£’000 
53 weeks
ended
30 june 2012
£’000
other finance income 25 2
7 finance costs
52 weeks 
ended
29 june 2013
£’000
53 weeks
ended
30 june 2012
£’000
interest payable on bank borrowings 839 825
arrangement fee amortisation on bank borrowings 195 213
net exchange differences on foreign currency payments — 37
interest payable on finance leases 197 314
provisions unwinding of discount rate 228 252
other finance costs 215 272
1674 1913
1thtar13backsmmrindd   28 9242013   104113 am 57
thorntons plc
annual report and accounts 2013
8 profitloss before taxation
note
52 weeks 
ended
29 june 2013
£’000 
53 weeks
ended
30 june 2012
£’000
the following items have been included in arriving at profitloss before taxation
employee benefits expense 28 61074 59874
oneoff restructuring costs redundancies 101 578
store closure costs 719 1042
cost of inventories recognised as an expense 81213 81268
onerous lease charges
– unwinding of existing provisions 1127 968
– new provisions during the financial year 341 1837
depreciation of property plant and equipment 13
– unwinding of existing impairment provisions 883 969
– new impairment provisions during the financial year 737 1223
– depreciation excluding impairment charges 7436 8366
amortisation of intangible assets 12 1286 1399
loss on disposal of property plant and equipment 43 160
operating lease rentals payable 29
– land and buildings minimum lease payments 17324 20377
– land and buildings contingent rents 221 296
– other 1321 1173
repairs and maintenance expenditure on property plant and equipment 5187 5077
trade receivables impairment charge 19 495 100
government grant income 20 21
product research and development 416 322
services provided by the company’s auditors
during the period the group obtained the following services from the company’s auditors as detailed below
52 weeks 
ended
29 june 2013
£’000
53 weeks
ended
30 june 2012
£’000
audit services
fees payable to the company’s auditors for the audit of the company and 
consolidated financial statements 99 93
other services
fees payable to the company’s auditors and its associates for other services
– audit of thorntons plc subsidiaries pursuant to legislation 5 5
– other services supplied pursuant to legislation 34 85
138 183
1thtar13backsmmrindd   29 9242013   104114 am 58
thorntons plc
annual report and accounts 2013
notes to the financial statements
continued
9 taxation
analysis of charge in period
52 weeks 
ended
29 june 2013
£’000 
53 weeks
ended
30 june 2012
£’000
current tax
– current tax on profits in the period 1143 —
– adjustments in respect of prior period 106 270
1037 270
deferred tax note 21
– origination and reversal of temporary differences 292 466
– adjustment in respect of prior period 257 766
– effect of change in tax rate 169 354
taxation chargecredit 1417 1316
tax on items charged to equity
52 weeks 
ended
29 june 2013
£’000 
53 weeks
ended
30 june 2012
£’000
deferred tax credit on sharebased payments 242 —
deferred tax chargecredit on actuarial gainloss 260 1727
effect of changes in the rate of taxation 256 368
274 1359
tax reconciliation
the tax for the period is higher 2012 higher than the standard rate of corporation tax in the uk of 2375 2012 255 
the differences are explained below
52 weeks 
ended
29 june 2013
£’000 
53 weeks
ended
30 june 2012
£’000
profitloss before tax 5170 2214
profitloss multiplied by the rate of corporation tax in the uk of 2375 2012 255 1228 565
effects of
– adjustments in respect of prior periods 151 496
– expenses not deductible for tax purposes 215 71
– effect of other timing differences — 1
– effect of reduction in tax rate 177 327
total taxation 1417 1316
the finance act 2013 reduced the main rate of corporation tax from 24 to 23 from 1 april 2013 accordingly the company’s 
profits for this accounting period are taxed at an effective rate of 2375 and will be taxed at 23 in the future the act also 
included legislation to further reduce the main rate to 21 from 1 april 2014 and 20 from 1 april 2015 this further reduction 
had not been substantively enacted at the balance sheet date and therefore is not included in these financial statements
1thtar13backsmmrindd   30 9242013   104114 am 59
thorntons plc
annual report and accounts 2013
10 earningsloss per share
basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average 
number of ordinary shares outstanding during the period excluding those held in the esop trusts which are treated as cancelled
for diluted earnings per share the weighted average number of ordinary shares in issue is adjusted to assume conversion of 
all dilutive potential ordinary shares dilutive potential ordinary shares are those share options granted to employees where 
the exercise price is less than the average market price of the company’s ordinary shares during the period
reconciliations of the earnings and weighted average number of shares used in the calculations are set out below
52 weeks ended 29 june 2013 53 weeks ended 30 june 2012
earnings
£’000
basic
earnings
per share
diluted
earnings
per share
earnings
£’000
basic
earnings
per share
diluted
earnings
per share
profit before exceptional items 4230 63p 60p 1697 25p 25p
effect of exceptional items 477 07p 07p 2595 39p 39p
profitloss attributable to owners of the parent 3753 56p 53p 898 14p 14p
2013 2012
weighted average number of ordinary shares 66955838 66955838
dilutive effect of shares from share options 3837750 1233787
fully diluted weighted average number of ordinary shares 70793588 68189625
11 ordinary dividends
2013 2012
group and company £’000 £’000
final dividend paid for the 53 weeks ended 30 june 2012 of £nil 
52 weeks ended 25 june 2011 025p — 167
amounts recognised as distributions to owners of the parent — 167
no final dividend will be paid in respect of the period ended 29 june 2013
the trusts operating the long term incentive plan scheme “ltip 2007” have fully waived dividends on the 504610 2012 504610 
shares held at 29 june 2013 and all but 001p per share on the 905070 2012 905070 shares held in respect of the 2001 
executive share option scheme
1thtar13backsmmrindd   31 9242013   104114 am 60
thorntons plc
annual report and accounts 2013
notes to the financial statements
continued
12 intangible assets
group and company
computer
software
£’000
c ost
at 1 july 2012 28022
additions 866
disposals 530
at 29 june 2013 28357
accumulated amortisation
at 1 july 2012 25882
charge for the financial year 1286
disposals 530
at 29 june 2013 26637
net book amount at 29 june 2013 1720
net book amount at 30 june 2012 2140
group and company
computer
software
£’000
c ost
at 26 june 2011 27311
additions 761
disposals 50
at 30 june 2012 28022
accumulated amortisation
at 26 june 2011 24519
charge for the financial year 1399
disposals 36
at 30 june 2012 25882
net book amount at 30 june 2012 2140
net book amount at 25 june 2011 2792
intangible assets held under finance leases were valued at £64044 2012 £202804
amortisation costs for intangible assets directly involved in production are recognised in cost of sales within the income 
statement totalling £500000 2012 £505000 all other amortisation costs are recognised within operating expenses
included above are £64000 2012 £392000 of assets in the course of construction which are not being amortised 
at the balance sheet date
1thtar13backsmmrindd   32 9242013   104114 am 61
thorntons plc
annual report and accounts 2013
13 property plant and equipment
land and buildings
group
long
leasehold
and freehold
£’000
short
leasehold
£’000
other plant
vehicles and
equipment
£’000
retail
fittings and
equipment
£’000
totals
£’000
c ost
at 1 july 2012 39065 7698 86107 49900 182770
additions at cost 291 318 1778 1120 3507
disposals 24 592 1758 4771 7145
at 29 june 2013 39332 7424 86127 46249 179132
accumulated depreciation
at 1 july 2012 13248 6622 69331 46348 135549
charge for the financial year 867 397 4225 1801 7290
disposals 7 572 1737 4731 7047
at 29 june 2013 14108 6447 71819 43418 135792
net book amount at 29 june 2013 25224 977 14308 2831 43340
net book amount at 30 june 2012 25817 1076 16776 3552 47221
land and buildings
group
long
leasehold
and freehold
£’000
short
leasehold
£’000
other plant
vehicles and
equipment
£’000
retail
fittings and
equipment
£’000
totals
£’000
c ost
at 26 june 2011 38912 8236 86490 53556 187194
additions at cost 153 445 2416 845 3859
disposals — 983 2799 4501 8283
at 30 june 2012 39065 7698 86107 49900 182770
accumulated depreciation
at 26 june 2011 12345 6584 67107 48491 134527
charge for the financial year 903 864 4558 2295 8620
disposals — 826 2334 4438 7598
at 30 june 2012 13248 6622 69331 46348 135549
net book amount at 30 june 2012 25817 1076 16776 3552 47221
net book amount at 25 june 2011 26567 1652 19383 5065 52667
assets are reviewed for impairment on a regular basis and a provision made where necessary a discounted cash flow is 
calculated for each retail store including attributable overheads using the group’s weighted average cost of capital of 585 
the net book value of assets attributable to the retail store is impaired to the extent that the net present value of the cash flows 
is lower than the net book value
the net impairment charge for the financial year of £737000 2012 £1223000 has been recognised within the depreciation 
charge for the financial year and has been classified as an exceptional item see note 4
included above are £986000 2012 £396000 of assets in the course of construction which are not being depreciated 
at the balance sheet date
1thtar13backsmmrindd   33 9242013   104114 am 62
thorntons plc
annual report and accounts 2013
notes to the financial statements
continued
13 property plant and equipment continued
land and buildings
company
long
leasehold
and freehold
£’000
short
leasehold
£’000
other plant
vehicles and
equipment
£’000
retail
fittings and
equipment
£’000
totals
£’000
c ost
at 1 july 2012 1043 7659 86107 49740 144549
additions at cost 291 318 1778 1120 3507
disposals 24 592 1758 4771 7145
at 29 june 2013 1310 7385 86127 46089 140911
accumulated depreciation
at 1 july 2012 257 6587 69330 46201 122375
charge for the financial year 63 395 4225 1798 6481
disposals 7 572 1737 4731 7047
at 29 june 2013 313 6410 71818 43268 121809
net book amount at 29 june 2013 997 975 14309 2821 19102
net book amount at 30 june 2012 786 1072 16777 3539 22174
land and buildings
company
long
leasehold
and freehold
£’000
short
leasehold
£’000
other plant
vehicles and
equipment
£’000
retail
fittings and
equipment
£’000
totals
£’000
c ost
at 26 june 2011 890 8197 86490 53402 148979
additions at cost 153 445 2416 839 3853
disposals — 983 2799 4501 8283
at 30 june 2012 1043 7659 86107 49740 144549
accumulated depreciation
at 26 june 2011 215 6551 67107 48346 122219
charge for the financial year 42 862 4557 2293 7754
disposals — 826 2334 4438 7598
at 30 june 2012 257 6587 69330 46201 122375
net book amount at 30 june 2012 786 1072 16777 3539 22174
net book amount at 25 june 2011 675 1646 19383 5056 26760
depreciation costs for property plant and equipment directly involved in production are recognised within cost of sales within the 
income statement totalling £4541000 2012 £4696000 all other depreciation costs are recognised within operating expenses
property plant and equipment held under finance leases have the following net book amount
l and and
buildings
– long
leasehold
and freehold
other plant
vehicles and
equipment
retail
fittings and
equipment
land and
buildings
– long
leasehold
and freehold
other plant
vehicles and
equipment
retail
fittings and
equipment
2013 2013 2013 2012 2012 2012
group and company £’000 £’000 £’000 £’000 £’000 £’000
cost 784 10227 11270 784 10384 12434
aggregate depreciation 394 7162 10594 342 7008 11521
net book amount 390 3065 676 442 3376 913
1thtar13backsmmrindd   34 9242013   104114 am 63
thorntons plc
annual report and accounts 2013
14 investment in subsidiaries
2013 2012
company £’000 £’000
c ost
at 29 june 2013 and 30 june 2012 27369 27369
provisions for impairment
at 29 june 2013 and 30 june 2012 1 1
net book value at beginning and end of period 27368 27368
the company owns the whole of the issued ordinary share capital of the following principal operating subsidiaries to avoid a 
statement of excessive length details of investments in dormant companies included in the consolidated accounts have been 
omitted a full list of subsidiaries can be obtained upon request from the company’s registered office
subsidiary country of incorporation principal activity country of operation
strand court properties limited england property investment united kingdom
thorntons jersey limited jersey retail trading company jersey
the directors believe that the carrying value of the company’s investments in its subsidiaries is not less than book value
15 inventories
group company
2013 2012 2013 2012
£’000 £’000 £’000 £’000
raw materials 3635 4213 3635 4213
work in progress 3307 3224 3307 3224
finished goods and goods for resale 32048 30633 32034 30619
38990 38070 38976 38056
during the financial year £25000 relating to the writedown of inventory to net realisable value was recognised as an expense 
and included within cost of sales 2012 £132500 for the company and group
16 trade and other receivables
group company
2013 2012 2013 2012
£’000 £’000 £’000 £’000
trade receivables 11946 9632 11946 9632
less provision for impairment 778 749 778 749
net trade receivables 11168 8883 11168 8883
other receivables 1125 571 1125 571
prepayments and accrued income 6292 6013 6277 5998
18585 15467 18570 15452
the group’s exposure to credit risk and impairment losses related to trade receivables is disclosed in note 19 trade receivables 
are denominated in sterling
prepayments and accrued income include the following propertyrelated rent rates insurances and surcharge prepayments
group company
2013 2012 2013 2012
£’000 £’000 £’000 £’000
propertyrelated prepayments 3883 4214 3868 4200
1thtar13backsmmrindd   35 9242013   104114 am 64
thorntons plc
annual report and accounts 2013
notes to the financial statements
continued
17 trade and other payables 
group company
2013 2012 2013 2012
£’000 £’000 £’000 £’000
trade payables 14735 15846 14735 15846
other taxation and social security payable 2668 2505 2667 2484
amounts owed to other group companies — — 4625 2007
other payables 368 231 368 231
accruals and deferred income 12197 8977 12198 8973
29968 27559 34593 29541
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 
2012 £21035 primarily relating to a grant received in the financial year ended june 2004 for the relocation of toffee manufacturing 
operations from the original belper site to thornton park this government grant totalling £400000 is being released to the 
income statement on a straightline basis over 20 years see note 23
18 borrowings
group company
2013 2012 2013 2012
current £’000 £’000 £’000 £’000
bank loans and overdrafts due within one year or on demand
– unsecured bank loans and overdrafts 28300 28900 28300 28900
– finance lease obligations 983 1454 983 1454
29283 30354 29283 30354
group company
2013 2012 2013 2012
noncurrent £’000 £’000 £’000 £’000
finance lease obligations 800 1653 800 1653
bank loans and overdrafts are denominated in sterling and incur interest based on libor or uk base rates 
the effective interest rates at the balance sheet dates were as follows
2013 2012
group and company  
bank borrowings 251 264
finance leases 107 136
the group’s borrowings are all denominated in sterling
maturity of financial liabilities
the table below analyses the group’s financial liabilities excluding trade and other payables which are all less than one year and 
shown in note 17 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
2013 2012
finance finance
debt leases total debt leases total
group and company £’000 £’000 £’000 £’000 £’000 £’000
less than one year 28300 1031 29331 28900 1552 30452
between one and two years — 515 515 — 901 901
between two and five years — 309 309 — 823 823
28300 1855 30155 28900 3276 32176
1thtar13backsmmrindd   36 9242013   104115 am 65
thorntons plc
annual report and accounts 2013
the group entered into new committed bank facilities on 24 june 2011 which total £575 million and expire in october 2015 debt 
due in less than one year reflects the ongoing utilisation on a shortterm basis of fouryear revolving facilities described in the 
following borrowing facilities note all loans in place at 29 june 2013 are classified as current on the basis that they will be settled 
within twelve months
borrowing facilities
the group must comply with the principal lending covenants tested semiannually in respect of interest cover net debt to 
earnings and earnings before interest tax depreciation amortisation and rent “ebitdar” to fixed costs ratio for both interest 
cover and net debt to earnings earnings is defined as earnings before interest tax depreciation and amortisation “ebitda” 
for all covenants earnings is defined to exclude exceptional items
the group has the following undrawn committed floating rate borrowing facilities available at 29 june 2013
2013 2012
group and company £’000 £’000
expiring within one year 5000 5000
expiring between two and five years 29200 28600
34200 33600
the facility in place at 29 june 2013 that expires within one year is an overdraft facility which is renewable annually those expiring 
between two and five years are part of revolving facilities their utilisation being managed via regular review during their term 
all these facilities incur commitment fees at market rates 
the minimum lease payments under finance leases fall due as follows
2013 2012
minimum
lease
payments
future
finance
charges
present
value of
finance
lease
liabilities
minimum
lease
payments
future
finance
charges
present
value of
finance
lease
liabilities
group and company £’000 £’000 £’000 £’000 £’000 £’000
less than one year 1031 48 983 1552 98 1454
between one and two years 515 19 496 901 47 854
between two and five years 309 5 304 823 24 799
1855 72 1783 3276 169 3107
the fair value of obligations under finance leases equates to their carrying value as the interest rates being paid on these are 
substantially those prevailing in the open market
the fair values of other financial instruments are not materially different to their carrying value due to their relatively short 
maturity or small size the group does not have any financial instruments that are measured in the balance sheet at fair value
1thtar13backsmmrindd   37 9242013   104115 am 66
thorntons plc
annual report and accounts 2013
notes to the financial statements
continued
19 financial instruments
the group’s financial instruments comprise cash and cash equivalents bank loans finance leases and other items such as trade 
payables and trade receivables that arise from its operations the principal function of these financial instruments is to raise 
finance for the group’s operations the group’s activities expose it to a variety of financial risks which relate to interest rates 
liquidity capital price foreign currency and credit the group’s overall risk management programme focuses on the potential 
movements in interest rates pricing in particular raw material costs and credit and on minimising the potential adverse effects 
on the group’s financial performance risk management is carried out by both the finance and procurement teams under policies 
approved by the board the group uses either forward purchasing or derivative financial instruments to hedge certain risk exposures
interest rate risk 
funding received from banks is at floating rates fixed in the short term for the duration of each loan floating rate borrowings are 
exposed to the risk of rising interest rates given the seasonality of the group’s trading the level of bank borrowings fluctuate during 
each financial year particularly in the lead up to the christmas and easter trading periods where borrowings increase on a shortterm 
basis this leaves a level of core bank borrowings which is monitored and assessed for potential movements in interest rates and the 
cost of using hedging instruments to manage the interest rate risk management estimates that a 1 movement in interest rates 
would result in posttax increasedecrease of around £03 million
borrowings of a longerterm nature such as those required to fund fixed asset acquisitions are funded through finance leases 
such that the total finance lease exposure remains broadly constant from year to year and to this extent provides an element 
of fixed interest borrowing
liquidity risk 
the group uses banking facilities and finance leases as its primary sources of funding and is therefore exposed to liquidity risk 
the group has historically been very cash generative the bank position and headroom of the group is monitored daily and 
capital expenditure has to be approved in accordance with its policy which defines the level of authorisation required at the 
end of the financial period the group has a shortterm committed overdraft facility of £5 million
capital risk
the group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order 
to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce 
the cost of capital
in order to maintain or adjust the capital structure the group may adjust the amount of dividends paid to shareholders return 
capital to shareholders issue new shares or sell assets to reduce debt further details on the group’s borrowings and the 
dividends proposed by the group are outlined in the finance director’s report on page 15 and the chairman’s statement on 
pages 02 and 03
consistent with others in the industry the group monitors capital on the basis of gearing ratio this ratio is calculated as net 
debt divided by total equity net debt is calculated as total borrowings including current and noncurrent borrowings as shown 
in the balance sheet less cash and cash equivalents total equity is taken from shareholders’ equity attributable to owners of 
the parent as shown in the balance sheet
the group’s aim is to seek to maintain or reduce the level of net debt and improve operating cash flow the gearing ratios 
at 29 june 2013 and 30 june 2012 were as follows
2013 2012
£’000 £’000
total borrowings 30083 32007
less cash and cash equivalents 2550 2918
net debt 27533 29089
equity 16606 11947
gearing ratio 1658 2435
price risk 
the group seeks to limit its exposure to volatility in raw material and energy costs by buying these forward where possible for a 
period of up to a year under ias 39 the group takes advantage of the “own use” exemption and does not fair value these contracts
1thtar13backsmmrindd   38 9242013   104115 am 67
thorntons plc
annual report and accounts 2013
foreign currency risk 
the group’s exposure to foreign currency risk on trading transactions is not significant however hedging arrangements are made 
in respect of the largest purchase contracts when placed it is the group’s policy to hedge significant fixed asset or capital transactions 
where appropriate
credit risk
retail sales represent a large proportion of the group’s sales and present no credit risk as they are made for cash where credit 
sales are concerned the group operates effective credit control procedures in order to minimise exposure to overdue debts and 
where possible also carries insurance against the cost of bad debts the insurance counterparties involved in transactions are 
limited to highquality financial institutions
at 29 june 2013 there were no significant concentrations of credit risk the maximum exposure to credit risk is represented 
by the carrying amount of each financial asset included in the balance sheet
the carrying amount of financial assets representing the maximum credit exposure at the reporting date was
2013 2012
£’000 £’000
trade receivables 11468 8883
cash and cash equivalents 2550 2918
the carrying amounts of the group’s trade and other receivables are denominated in sterling 
the maximum exposure to credit risk for trade receivables at the reporting date by geographic region was
2013 2012
£’000 £’000
uk 10712 8563
europe 24 47
rest of world 732 273
11468 8883
the maximum exposure to credit risk for trade receivables at the reporting date by sales division was
2013 2012
£’000 £’000
retail 926 1067
sales  operations 9923 7523
central 619 293
11468 8883
the ageing of gross trade receivables at the reporting date was
2013 2012
gross impaired gross impaired
£’000 £’000 £’000 £’000
current 10185 7 7821 —
one to 30 days past due 870 — 647 —
31 to 60 days past due 112 — 304 —
more than 60 days past due 1079 771 860 749
12246 778 9632 749
a significant proportion of the receivables less than 60 days past due relates to large corporate customers for which there is 
no objective evidence that the group will not be able to recover amounts owing and therefore no impairment has been made 
past due not impaired receivables total £414000 2012 £1062000
1thtar13backsmmrindd   39 9242013   104115 am 68
thorntons plc
annual report and accounts 2013
notes to the financial statements
continued
19 financial instruments continued
credit risk continued
the movement in impairment in respect of trade receivables during the financial year was as follows
£’000
at 1 july 2012 749
charged to income statement 535
released to income statement 40
utilised in period 466
at 29 june 2013 778
the impairment charge recognised in operating expenses in the income statement net of amounts recovered previously written 
off amounted to £495000 2012 £100000
the other classes within trade and other receivables do not contain impaired assets
currency exposure
net monetary assets and liabilities of the group that are not denominated in sterling were as follows
euro us dollar
2013 2012 2013 2012
£’000 £’000 £’000 £’000
net foreign currency monetary assetsliabilities
cash and cash equivalents 331 452 413 133
trade and other payablesreceivables 531 510 — 10
200 58 413 143
the following significant exchange rates applied during the financial year
average rate reporting date spot rate
2013 2012 2013 2012
euro 12134 11834 11693 12408
us dollar 15687 15845 15167 15709
currency sensitivity analysis
the group has used a sensitivity analysis technique that calculates the estimated change to the income statement and equity 
had a 10 weakening in sterling occurred against all other currencies from the rates applicable at 29 june 2013 this analysis 
assumes that all other variables in particular interest rates remain constant and represents management’s estimate of the 
volatility that could be material to the group’s results
the amounts generated from the sensitivity analysis are estimates of the impact of market risk assuming that specified 
changes occur
a 10 weakening of sterling against the following currencies at 29 june 2013 would have decreased profit and loss and equity 
by the following amounts
profit and loss equity
2013 2012 2013 2012
£’000 £’000 £’000 £’000
euro 440 624 336 465
us dollar — — — —
a 10 strengthening of sterling against the above currencies would have had an equal and opposite effect to the amounts shown
1thtar13backsmmrindd   40 9242013   104115 am 69
thorntons plc
annual report and accounts 2013
interest rate risk
the financial assets of the group that were exposed to interest rate risk at 29 june 2013 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 18 
sensitivity analysis
the interest rates applicable to finance leases are fixed and therefore not subject to movements in interest rates a 1 adverse 
movement in the effective interest rates applicable to shortterm bank borrowings at 29 june 2013 representing management’s 
estimate of the volatility that could be material to the group’s results would have decreased profit and loss and equity by the 
amounts shown below
profit and loss equity
2013 2012 2013 2012
£’000 £’000 £’000 £’000
bank borrowings 318 310 242 231
20 provisions for liabilities
group and company
onerous
lease
provision
£’000
dilapidations
provision
£’000
total
£’000
at 1 july 2012 4191 518 4709
charged to income statement 1112 29 1141
released to income statement 1994 39 2033
utilised in period 1127 52 1179
unwinding of discount rate 228 — 228
at 29 june 2013 2410 456 2866
provisions are analysed between current and noncurrent as follows
onerous
lease
provision
dilapidations
provision total
onerous
lease
provision
dilapidations
provision total
2013 2013 2013 2012 2012 2012
£’000 £’000 £’000 £’000 £’000 £’000
current 923 183 1106 1206 204 1410
noncurrent 1487 273 1760 2985 314 3299
2410 456 2866 4191 518 4709
the provision for onerous leases is held in respect of leasehold properties for which the group is liable to fulfil rent and other property 
commitments for stores from which either the group no longer trades or for which future trading cash flows are projected to be 
insufficient to cover these costs amounts have been provided for the shortfall between projected cash flows and the property costs 
up to the lease expiry date on a discounted basis the credit in the current financial year of £882000 net of exit costs settled of 
£541000 is deemed to be exceptional given its nature and it is therefore shown in note 4
obligations are payable within a range of less than one to nine years 2012 one to 19 years the weighted average being 
five years 2012 seven years 
the group provides for property dilapidations where appropriate based on estimated undiscounted costs of the dilapidation 
repairs spread over the period of the tenancy
1thtar13backsmmrindd   41 9242013   104115 am 70
thorntons plc
annual report and accounts 2013
notes to the financial statements
continued
21 deferred tax
deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 23 2012 24
the movement on the deferred tax account is shown below
deferred tax liabilitiesassets
group company
2013 2012 2013 2012
£’000 £’000 £’000 £’000
at beginning of period 2346 599 7264 4826
income statement charge 549 1232 658 1141
taken to equity employee benefits 242 — 242 —
actuarial gainloss 260 1727 260 1727
effect of changes in the rate of taxation ias 19 256 368 256 368
effect of changes in the rate of taxation income statement 169 354 36 62
effect of other timing differences 1 — — —
at end of period 1691 2346 6296 7264
deferred tax liabilities
the movements in deferred tax assets and liabilities prior to the offsetting of balances within the same jurisdiction as permitted 
by ias 12 during the period are as follows
group
accelerated
capital
allowances
£’000
other
£’000
total
£’000
at 1 july 2012 5066 41 5107
credited to the income statement 809 2 811
at 29 june 2013 4257 39 4296
deferred tax assets
group
retirement
benefit
obligations
£’000
total
£’000
at 1 july 2012 7453 7453
charged to the income statement 1192 1192
deferred tax on actuarial gain charged to equity 516 516
deferred tax on sharebased payments credited to equity 242 242
at 29 june 2013 5987 5987
deferred tax liabilities
company
accelerated
capital
allowances
£’000
total
£’000
at 1 july 2012 189 189
credited to the income statement 189 189
at 29 june 2013 — —
1thtar13backsmmrindd   42 9242013   104115 am 71
thorntons plc
annual report and accounts 2013
deferred tax assets
company
retirement
benefit
obligations
£’000
accelerated
capital
allowances
£’000
total
£’000
at 1 july 2012 7453 — 7453
chargedcredited to the income statement 1192 309 883
deferred tax on actuarial gain charged to equity 516 — 516
deferred tax on sharebased payments credited to equity 242 — 242
at 29 june 2013 5987 309 6296
deferred tax liabilities
group
accelerated
capital
allowances
£’000
other
£’000
total
£’000
at 26 june 2011 7125 44 7169
credited to the income statement 2059 3 2062
at 30 june 2012 5066 41 5107
deferred tax assets
group
retirement
benefit
obligations
£’000
total
£’000
at 26 june 2011 6570 6570
charged to the income statement 476 476
deferred tax on actuarial loss credited to equity 1359 1359
at 30 june 2012 7453 7453
deferred tax liabilities
company
accelerated
capital
allowances
£’000
total
£’000
at 26 june 2011 1744 1744
credited to the income statement 1555 1555
at 30 june 2012 189 189
deferred tax assets
company
retirement
benefit
obligations
£’000
total
£’000
at 26 june 2011 6570 6570
charged to income statement 476 476
deferred tax on actuarial loss credited to equity 1359 1359
at 30 june 2012 7453 7453
deferred income tax assets are recognised for tax loss carryforwards to the extent that the realisation of the related tax benefit 
through future taxable profits is probable
1thtar13backsmmrindd   43 9242013   104116 am 72
thorntons plc
annual report and accounts 2013
notes to the financial statements
continued
22 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 the defined contribution scheme are as follows
2013 2012
£’000 £’000
defined contribution scheme included within employee benefit expense note 28 400 270
defined benefit scheme
the company operates a career average revalued earnings “care” defined benefit pension scheme “the scheme” 
following consultation with employee members in december 2012 it was announced that the defined benefit scheme would 
be closed to future accrual in april 2013 the closure of the scheme did not result in a curtailment gain or loss as past service 
benefits for active members were already linked to care revaluation on the date of closure all active members became deferred 
members and their past service benefits switched to being linked to deferred revaluation rather than care revaluation however 
as both care revaluation and deferred revaluation were linked to rpi inflation the same assumption had been adopted historically 
and the closure did not therefore change the value of the ias 19 past service liabilities for the relevant members the scheme has 
been closed to new entrants since 31 july 2002
the company has opted to recognise all actuarial gains and losses immediately via the statement of comprehensive income
a formal actuarial valuation was carried out with an effective date of 31 may 2011 the results of this valuation have been updated 
to 29 june 2013 by a qualified independent actuary
the thorntons pension scheme was actuarially valued by an independent professionally qualified actuary as at 29 june 2013 
under ias 19 the principal actuarial assumptions at the balance sheet date were
2013 2012
 
discount rate 490 460
retail prices index “rpi” inflation 340 290
rate of increase to care benefits before retirement na 290
rate of increase to pensions in payment
– service before 6 april 1997 000 000
– service after 5 april 1997 330 280
rate of increase to deferred pensions 340 290
expected return on plan assets 650 570
the assumption as to how many members will take up the maximum taxfree commutation on retirement is based on the 
scheme’s own experience of commutation levels
the sensitivities regarding the principal assumptions used to measure the scheme liabilities are set out below
change in impact on
assumption scheme liabilities
rate of increase in pensions postapril 1997 increase by 01 increase by £04m
discount rate decrease by 01 increase by £17m
inflation assumption increase by 01 increase by £09m
1thtar13backsmmrindd   44 9242013   104116 am 73
thorntons plc
annual report and accounts 2013
the mortality rates used are as follows
l ife expectancy 
at age 65 years
2013 mortality table male female
current pensioners s1nxa cmi2012mf 1 221 245
future pensioners s1nxa cmi2012mf 1 234 260
life expectancy 
at age 65 years
2012 mortality table male female
current pensioners s1nxa cmi2010mf 1 220 243
future pensioners s1nxa cmi2010mf 1 234 259
the expected return on plan assets is a blended average of projected longterm returns for the various asset classes equity 
returns are based on a selection of an equity risk premium above the riskfree rate which is measured in accordance with the 
yields on government bonds bond returns are selected by reference to yields on government and corporate debt as appropriate 
to the scheme’s holdings of these instruments returns are projected over the entire life of the benefit obligation
the assets of the scheme were invested as follows
29 june 2013 30 june 2012 25 june 2011 26 june 2010 27 june 2009
£’000  £’000  £’000  £’000  £’000 
equities 41769 64 31770 57 30945 62 25274 59 20977 60
bonds 15266 24 13711 25 12295 25 11106 26 8481 25
gilts 7768 12 7466 13 6601 13 5645 13 5211 15
other 154 — 2695 5 206 — 1060 2 81 —
64957 100 55642 100 50047 100 43085 100 34750 100
actual return 
on plan assets 6888 1797 5105 6723 4466 
history of assets liabilities experienced gains and losses
29 june 2013 30 june 2012 25 june 2011 26 june 2010 27 june 2009
£’000 £’000 £’000 £’000 £’000
lossesgains arising on scheme liabilities
due to experience — 415 — — 4695
percentage of defined benefit obligation 0 0 0 0 8
due to change of basis 2687 6567 5177 8751 3067
percentage of defined benefit obligation 3 8 7 13 5
experience adjustments
gainslosses arising on scheme assets 3816 1045 2802 4711 7001
percentage of assets 6 2 6 11 20
1thtar13backsmmrindd   45 9242013   104116 am 74
thorntons plc
annual report and accounts 2013
notes to the financial statements
continued
22 retirement benefit obligations continued
pensions and other postretirement obligations
the amounts recognised in the balance sheet are determined as follows
2013 2012 2011 2010 2009
£’000 £’000 £’000 £’000 £’000
present value of funded obligations 89844 84722 75311 67304 56063
fair value of plan assets 64957 55642 50047 43085 34750
net deficit 24887 29080 25264 24219 21313
the amounts recognised in the income statement are as follows
2013 2012
£’000 £’000
current service cost 557 756
interest cost 3855 4198
expected return on plan assets 3072 2842
total included within employee benefit expense note 28 1340 2112
of the total charge £03 million 2012 £06 million and £10 million 2012 £15 million were included in cost of sales 
and operating expenses respectively
changes in the present value of the defined benefit obligations are as follows
2013 2012
£’000 £’000
present value of obligation at beginning of period 84722 75311
current service cost 557 756
interest cost 3855 4198
employee contributions 525 642
benefit payments 2502 2337
actuarial losses 2687 6152
present value of obligation at end of period 89844 84722
in august 2012 and as part of the schedule of contributions agreed with the trustees to thorntons’ pension scheme it was 
agreed that the company’s annual deficit contribution would increase from 1 june 2012 from £22 million to £275 million 
it was also agreed that the company would make an additional contribution over each of the next three financial years 
equivalent to the higher of either
•	 a third of any reduction in the net debt excluding vat creditors for the financial years ending june 2013 2014 and 2015 or
•	 the amount of dividends paid to shareholders above the level of £15 million
as part of the company’s arrangements with the trustees of the pension scheme a £30 million bank guarantee 2012 £30 million 
is in place that will be paid into the scheme in the event of either the company’s insolvency the failure to replace the guarantee 
on annual renewal or a windingup of the scheme by the company 
changes in the fair value of plan assets are as follows
2013 2012
£’000 £’000
fair value of plan assets at beginning of period 55642 50047
employer contributions 4404 5493
employee contributions 525 642
benefits paid 2502 2337
expected return on scheme assets 3072 2842
actuarial gain 3816 1045
c losing fair value of plan assets at end of period 64957 55642
1thtar13backsmmrindd   46 9242013   104116 am 75
thorntons plc
annual report and accounts 2013
analysis of the movement in the balance sheet deficit
2013 2012
£’000 £’000
at beginning of period 29080 25264
employer pension cost 1340 2112
employer contributions 4404 5493
actuarial losses recognised in the period 1129 7197
at end of period 24887 29080
cumulative actuarial gains and losses recognised in equity
2013 2012
£’000 £’000
at beginning of period 25613 18416
net actuarial losses recognised in the period 1129 7197
c umulative loss 24484 25613
the pension contributions to be paid by the group during the financial period ending 28 june 2014 are expected to be in the 
region of £3188000
23 other noncurrent liabilities
2013 2012
group and company £’000 £’000
accruals and deferred income 2032 2490
included in the above are amounts totalling £189000 2012 £209000 held in respect of government grants
24 ordinary shares
2013 2012
group and company £’000 £’000
issued and fully paid
ordinary shares of 10p each 68365518 2012 68365518 6837 6837
allotments during the financial year
during the financial year no shares 2012 nil were issued under either the company’s executive share option schemes or the 
sharesave scheme
since the end of the financial year no shares have been issued 2012 nil under either the executive share option schemes 
or the sharesave scheme
rights and restrictions attaching to shares
holders of the company’s ordinary shares of 10p each are entitled to participate in the payments of dividends prorata to their 
holdings the directors may propose and pay interim dividends and recommend a final dividend for shareholders’ approval for 
any accounting period out of the profits available for distribution under english law
the rights attached to the company’s ordinary shares in addition to those conferred on their holders by law are set out in 
the company’s articles of association “the articles” a copy of which can be obtained on request from the company secretary 
the articles contain certain restrictions on the transfer of ordinary shares and on the exercise of voting rights attached to them 
including where the company has exercised its right to prohibit transfer following the omission of their holder or any person 
interested in them to provide the company with information requested by it in accordance with part 22 of the companies act 2006 
rules about the appointment and replacement of directors are set out in the articles changes to the articles must be approved 
by shareholders passing a special resolution the directors’ powers are conferred on them by uk legislation and by the articles 
at any general meeting a resolution put to the vote of the meeting is decided on a show of hands unless before or on the 
declaration of the result of a show of hands a poll is properly demanded on a show of hands every member who is present 
in person at a general meeting of the company has one vote proxies may not vote on a show of hands on a poll every member 
who is present in person or by proxy has one vote for every share of which heshe is the holder
1thtar13backsmmrindd   47 9242013   104116 am 76
thorntons plc
annual report and accounts 2013
notes to the financial statements
continued
24 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 29 june 2013 exercisable
date of grants
at 30 june
2012
granted or
reinstated forfeited exercised lapsed
at 29 june
2013
exercise
price from to
2 oct 2002 16516 — — — 16516 — 11100p 2 oct 2005 2 oct 2012
5 jun 2006 1200000 — 800000 — 400000 — 11600p 5 jun 2009 5 jun 2016
11 jul 2006 500000 — — — 166667 333333 12850p 11 jul 2009 11 jul 2016
20 oct 2009 206169 — — — — 206169 13200p 20 oct 2012 20 oct 2019
16 feb 2011 696969 — — — — 696969 9900p 16 feb 2014 16 feb 2021
5 oct 2011 1331333 — — — — 1331333 4600p 5 oct 2014 5 oct 2021
23 mar 2012 257284 — — — — 257284 2400p 23 mar 2015 23 mar 2022
28 may 2012 66762 — — — — 66762 2100p 28 may 2015 28 may 2022
24 oct 2012 — 1808833 — — — 1808833 3175p 24 oct 2015 24 oct 2022
4275033 1808833 800000 — 583183 4700683 
sharesave scheme
number of options during the 52 weeks ended 29 june 2013 exercisable
date of grant
at 30 june
2012
granted or
reinstated forfeited exercised lapsed
at 29 june
2013
exercise
price from to
10 oct 2007 95430 — — — 95430 — 14800p 1 jan 2013 30 jun 2013
18 nov 2009 115420 — — — 114412 1008 10800p 1 jan 2013 30 jun 2013
18 nov 2009 139744 — — — 38293 101451 10800p 1 jan 2015 30 jun 2015
18 nov 2010 139294 — — — 38734 100560 8400p 1 jan 2014 30 jun 2014
18 nov 2010 199442 — — — 41251 158191 8400p 1 jan 2016 30 jun 2016
23 nov 2011 446003 — — — 101985 344018 3300p 1 jan 2015 30 jun 2015
23 nov 2011 453242 — — — 50543 402699 3300p 1 jan 2017 30 jun 2017
22 nov 2012 — 746364 — — 17167 729197 2600p 1 jan 2016 30 jun 2016
22 nov 2012 — 581504 — — — 581504 2600p 1 jan 2018 30 jun 2018
1588575 1327868 — — 497815 2418628 
25 sharebased payments
under the company’s executive share option schemes the remuneration committee can grant options over shares in the 
company to directors and employees of the company options are granted with a fixed exercise price equal to the market price 
of the shares under option at the date of grant the contractual life of an option is ten years awards of options under the scheme 
are generally reserved for employees at senior management level and above details of the performance conditions attaching to 
awards of options are described in the report on the directors’ remuneration on pages 32 to 42 fair value is measured by the use 
of the black scholes 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
1thtar13backsmmrindd   48 9242013   104116 am 77
thorntons plc
annual report and accounts 2013
the fair values per option granted during the financial year and the assumptions used in their calculation are as follows
2013 2012
executive threeyear fiveyear executive executive executive threeyear fiveyear
1 sharesave sharesave 1 2 3 sharesave sharesave
grant date 24 oct 12 22 nov 12 22 nov 12 5 oct 11 23 mar 12 28 may 12 23 nov 11 23 nov 11
share price at grant date 3212p 2975p 2975p 4425p 2575p 2025p 3650p 3650p
exercise price 3175p 2600p 2600p 4600p 2437p 2087p 3300p 3300p
number of employees 10 173 60 9 1 1 150 79
shares under option 1808833 746364 581504 1760681 257284 66762 459638 458514
vesting period years 3 3 5 3 3 3 3 5
expected volatility 6096 6081 6081 5041 6262 6197 5001 5001
option life years 10 3 5 10 10 10 3 5
expected life years 3 3 5 3 3 3 3 5
riskfree rate 038 044 086 086 051 034 079 137
expected dividends 
expressed as a 
dividend yield 1167 1008 1008 847 1456 1852 959 959
possibility of ceasing 
employment before 
vesting na 876 7464 na na na 611 6756
fair value per option 3p 8p 2p 4p 1p 3p 8p 2p
the expected volatility is based on historical volatility over the last three years the expected life is the average expected period 
to exercise the riskfree rate of return is the yield on zerocoupon uk government bonds of a term consistent with the assumed 
option life 
a reconciliation of executive share option movements over the period to 29 june 2013 is shown below
2013 2012
executive share options number
weighted
average
exercise
price number
weighted
average
exercise
price
outstanding at start of period 4275033 102p 5261666 123p
granted 1808833 32p 2084727 43p
forfeited 800000 116p 2792806 97p
exercised — — — —
lapsed 583183 119p 278554 115p
outstanding at end of period 4700683 56p 4275033 102p
exercisable at end of period 539502 130p 16516 111p
1thtar13backsmmrindd   49 9242013   104117 am 78
thorntons plc
annual report and accounts 2013
notes to the financial statements
continued
25 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
2013 2012
range of exercise prices number
weighted
average
exercise
price 
c ontracted
weighted
average
remaining
years number
weighted
average
exercise
price 
contracted
weighted
average
remaining
years
20p–111p 4161181 47p 87 2368864 59p 91
116p–153p 539502 130p 43 1406169 150p 44
170p–192p — — — 500000 170p 40
the weighted average share price during the period for options exercised over the period was £nil 2012 £nil the total credit for 
the period relating to employee sharebased payment plans was £22000 2012 £555000 this net credit comprised a charge of 
£80000 2012 £100000 a credit of £187000 2012 £655000 relating to the reversal of charges for schemes forfeited on resignation 
and a oneoff charge of £85000 relating to historic option schemes after deferred tax the total credit was £17000 2012 £414000
a reconciliation of sharesave scheme option movements over the period to 29 june 2013 is shown below
2013 2012
sharesave scheme options number
weighted
average
exercise
price number
weighted
average
exercise
price
outstanding at start of period 1588575 63p 1686906 101p
granted 1327868 26p 918152 33p
exercised — — — —
lapsed 497815 86p 1016483 100p
outstanding at end of period 2418628 38p 1588575 63p
exercisable at end of period 1008 108p — —
for share options outstanding at the end of the period the range of exercise prices and weighted average contractual life 
is disclosed below
2013 2012
sharesave scheme number
weighted
average
exercise
price 
c ontractual
weighted
average
remaining
life
years number
weighted
average
exercise
price 
contractual
weighted
average
remaining life
years
oct 2007 — — — 95430 148p 10
oct 2009 1008 108p 00 115420 108p 10
oct 2009 101451 108p 20 139744 108p 30
nov 2010 100560 84p 10 139294 84p 20
nov 2010 158191 84p 30 199442 84p 40
nov 2011 344018 33p 20 446003 33p 30
nov 2011 402699 33p 40 453242 33p 50
nov 2012 729197 26p 29 — — —
nov 2012 581504 26p 39 — — —
the weighted average share price during the period for options exercised over the period was £nil 2012 £nil the total charge 
for the period relating to employee sharebased payment plans was £73000 2012 £96000 after deferred tax the total charge 
was £56000 2012 £70000
1thtar13backsmmrindd   50 9242013   104117 am 79
thorntons plc
annual report and accounts 2013
26 c ash flow from operating activities
a cash generated from operations
group company
2013 2012 2013 2012
£’000 £’000 £’000 £’000
c ontinuing operations
operating profitloss 6819 303 5362 1725
adjustments for
depreciation and amortisation 8576 10019 7767 9153
amortisation of government grants received 20 21 20 21
loss on disposal of property plant and equipment 43 160 43 160
sharebased payment chargecredit 51 459 51 459
operating cash flow before working capital movements 15469 9396 13203 7108
c hanges in working capital
increase in inventories 920 1052 920 1046
increasedecrease in trade and other receivables 3222 22 3223 22
increasedecrease in payables 1891 4520 4536 2868
decreaseincrease in provisions 1843 1032 1843 1032
defined benefit pension contributions in excess of service costs 3065 3381 3065 3381
c ash generated from operations 8310 1497 8688 867
b cash and cash equivalents for the cash flow statement
group company
2013 2012 2013 2012
£’000 £’000 £’000 £’000
cash and cash equivalents 2550 2918 2516 2407
27 reconciliation of movement in net debt
group company
2013 2012 2013 2012
note £’000 £’000 £’000 £’000
decreaseincrease in cash and cash equivalents 368 1166 109 955
cash flows from increasedecrease in debt 1924 5766 1924 5766
movement in net debt in the period 1556 4600 2033 4811
net debt at beginning of period 29089 24489 29600 24789
net debt at end of period 19 27533 29089 27567 29600
net debt comprises
group company
2013 2012 2013 2012
£’000 £’000 £’000 £’000
cash 2550 2918 2516 2407
unsecured bank loans 28300 28900 28300 28900
finance leases 1783 3107 1783 3107
27533 29089 27567 29600
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thorntons plc
annual report and accounts 2013
notes to the financial statements
continued
28 employees and directors
group company
2013 2012 2013 2012
employee benefit expense during the period note £’000 £’000 £’000 £’000
wages and salaries 54321 53293 54264 53242
social security costs 4531 4337 4527 4334
health cover medical and life assurance 256 271 256 271
staff incentives and relocation costs 175 50 175 50
sharebased payments 51 459 51 459
pension costs 22 1740 2382 1740 2382
61074 59874 61013 59820
group company
2013 2012 2013 2012
average monthly number of people including executive directors employed number number number number
management and administration 265 247 264 246
selling and distribution 2217 2342 2212 2336
manufacturing 1337 1189 1337 1189
3819 3778 3813 3771
group and company
2013 2012
key management compensation £’000 £’000
salaries social security costs and shortterm employee benefits 1900 1802
postemployment benefits 67 71
termination benefits — 188
sharebased payments 78 558
2045 1503
the key management figures given above include directors and all other members of the executive committee
2013 2012
directors £’000 £’000
aggregate emoluments 1131 1236
aggregate gains made on the exercise of share options — —
company contributions to money purchase pension schemes 52 56
1183 1292
pension scheme contributions above represent the total contributions made by the company on behalf of all directors in respect 
of approved pension arrangements 
further detail in respect of directors’ remuneration can be found in the report on the directors’ remuneration on pages 32 to 42
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thorntons plc
annual report and accounts 2013
29 operating lease commitments – minimum lease payments
2013 2012
l and and land and
buildings other buildings other
group £’000 £’000 £’000 £’000
c ommitments under noncancellable operating leases
within one year 14220 844 16470 877
later than one year and less than five years 29718 1404 40903 1592
after five years 9434 — 20940 —
53372 2248 78313 2469
2013 2012
l and and land and
buildings other buildings other
company £’000 £’000 £’000 £’000
c ommitments under noncancellable operating leases
within one year 14160 844 16410 877
later than one year and less than five years 29502 1404 40663 1592
after five years 9434 — 20904 —
53096 2248 77977 2469
the group has entered into operating leases in respect of retail stores vehicles fork lift trucks and equipment retail store 
leases have remaining terms of between 18 days and 12 years with renewal by mutual agreement at the expiry of the lease term 
and commonly with fiveyear upwards only rent review periods contingent rentals not included in the commitments above are 
payable on approximately 17 of retail stores where leases contain a store revenuebased component standard institutional 
restrictions common to those in place with other high street retailers are applicable to the group’s retail leases nonstore 
leases have remaining lease terms of between one day and five years
land and buildings operating lease commitments as at 30 june 2012 have been corrected to remove the lease commitment 
associated with a long leasehold which was already included in the balance sheet within fixed assets
30 c ontingent liabilities
as at 29 june 2013 the group had provided guarantees in respect of customs and excise duty deferment of £163000 2012 £100000 
the company has a contingent liability in respect of the thorntons pension scheme further details of which are shown in note 22
31 c apital and other financial commitments
group company
2013 2012 2013 2012
£’000 £’000 £’000 £’000
bulk supplies of raw ingredients 16946 16617 16946 16617
the majority of bulk raw material supply contracts are denominated in sterling and therefore carry no foreign currency exposure
the volatility of pricing within key raw material ingredients continues to prompt the use of forward contracts where practical
in addition to the bulk contracts detailed above at 29 june 2013 further contracts had been agreed to set market ratios of cocoa liquor and 
butter up to september 2014 although the price was not fixed the company had a commitment to purchase fixed volumes at the contracted 
ratios which at the latest agreed contract prices valued this commitment at £4517000 no such contracts were in place at 30 june 2012
major noncash transactions
during the period the group and company entered into no major noncash transactions 
1thtar13backsmmrindd   53 9242013   104117 am 82
thorntons plc
annual report and accounts 2013
notes to the financial statements
continued
32 related party transactions
group
there are no related party transactions requiring disclosure in the financial statements 2012 £nil key management 
compensation is shown in note 28 to the financial statements
company
funds are transferred within the group dependent on the operational needs of individual companies the directors do not 
consider it meaningful to set out the gross amounts of transfers between individual companies 
rent payable to strand court properties limited of £2221000 2012 £2221000 is included within the company’s profit after 
tax 2012 loss after tax for the financial year
revenue generated by the company’s subsidiary thorntons jersey limited is paid over to the company on a periodic basis 
to cover the costs settled by the company on behalf of its subsidiary
balances owed to other group undertakings are shown in note 17 to the financial statements
1thtar13backsmmrindd   54 9242013   104117 am 83
thorntons plc
annual report and accounts 2013
fiveyear summary
the figures below are extracted from this annual report and are prepared under ifrs
2013 2012 2011 2010 2009
£’000 £’000 £’000 £’000 £’000
c onsolidated income statement
revenue 221052 217144 218255 214553 214805
operating profitloss 6819 303 852 7582 9740
net finance costs 1649 1911 1923 1445 1652
profitloss before taxation 5170 2214 1071 6137 8088
taxation chargecredit 1417 1316 818 1783 4483
profitloss attributable to equity shareholders 3753 898 253 4354 3605
balance sheet
net assets 16606 11947 19309 25968 28738
net borrowings 25750 25982 19148 20074 18612
net debt 27533 29089 24489 26021 26674
gearing ratio 1658 2435 1268 1002 928
additions to intangible assets and property  
plant and equipment 4373 4620 5887 5700 10345
other financial data
basic earningsloss per share 56p 14p 04p 65p 54p
dividends per share — — 22p 61p 61p
number of outlets – continuing operations
own stores 296 330 364 377 379
franchises 186 177 227 222 197
stock market ratios
yearend share price 92p 20p 60p 82p 74p
shares in issue 684m 684m 684m 684m 683m
market capitalisation £631m £134m £412m £557m £505m
dividend yield — — 37 74 82
 53week period
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thorntons plc
annual report and accounts 2013
shareholder analysis
at 29 june 2013
shareholders shareholders shares shares
shareholding range number  number 
up to 500 5180 586 1334893 20
501–1000 1419 161 1175735 17
1001–10000 1944 220 5956112 87
10001–100000 211 24 6114972 89
100000 79 09 53783806 787
8833 1000 68365518 1000
shareholders shareholders shares shares
category of shareholding number  number 
corporate bodies and nominees 456 52 49478669 724
private shareholders 8377 948 18886849 276
8833 1000 68365518 1000
1thtar13backsmmrindd   56 9242013   104117 am thorntons plc 
annual report and accounts 2013 85
c orporate information
c ompany secretary and registered office
mark r henson fcis
thornton park
somercotes
alfreton
derbyshire de55 4xj
tel 0845 075 7565
wwwthorntonscouk
registered in the united kingdom
no 174706
independent auditors
pricewaterhousecoopers llp
chartered accountants and statutory auditors
benson house
33 wellington street
leeds ls1 4jp
registrars
capita registrars
northern house
woodsome park
fenay bridge
huddersfield hd8 0ga
tel 0871 664 0300
fax 01484 600911
wwwcapitaregistrarscom
principal bankers
barclays bank plc
hsbc bank plc
lloyds tsb bank plc
financial advisers and corporate brokers
investec investment banking
financial pr advisers
cardew group limited
risk and insurance advisers
marsh limited
financial calendar
for 52 weeks ended 29 june 2013
11 september 2013  preliminary results announced
september 2013 annual report and accounts circulated
24 october 2013  agm
for 52 weeks ending 28 june 2014
11 january 2014   halfyear accounting period end 
28 weeks
february 2014  halfyear results announced
28 june 2014  accounting period end 52 weeks
september 2014  preliminary results announced
september 2014  annual report and accounts circulated
november 2014 agm
share dealing service
if you would like to buy or sell shares capita share dealing service 
offers an easytouse competitive executiononly service this 
means that they will only buy and sell shares and will not offer any 
other service for example financial advice if you want to use this 
service phone 0871 664 0364 or visit wwwcapitadealcom capita 
share dealing services is a trading name of capita irg trustees 
limited which is authorised and regulated by the financial 
services authority wwwfsagovukregister184113 and is also 
authorised to conduct business in ireland under the provisions 
of the eu markets in financial instruments directive and is 
part of the capita group plc terms and conditions apply
thorntons’ commitment to environmental issues is reflected 
in this annual report which has been printed on revive 50 silk 
and 100 offset fsc
®
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this document was printed by park communications using 
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0thtar13coverindd   6 9242013   104016 am thorntons plc
thornton park 
somercotes 
alfreton 
derbyshire de55 4xj 
tel 0845 075 7565 
wwwthorntonscouk
thorntons direct
tel 0845 121 1911 
wwwthorntonscouk
for information on 
investor relations visit
wwwthorntonscouk
thorntons plc annual report and accounts 2013
0thtar13coverindd   1 9242013   104016 am


Summary:
 02
thorntons plc
annual report and accounts 2013
c hairman’s statement 
significant recovery in profits
this is my first opportunity to report on 
thorntons following my appointment as 
chairman on 1 february 2013 i am pleased 
to report a significant recovery in profits 
as thorntons continues to evolve towards 
becoming a multichannel uk business 
and longer term an international fast 
moving consumer goods “fmcg” 
company with a uk multichannel retailer 
the impact of the continuing weak uk 
economy on our customers and our 
company has been significant but as a 
result of management actions we have 
made good progress and are on track 
with our plan we have offset the legacy 
of our large retail estate by enhancing 
and developing other routes to market 
whilst retaining critical mass in our 
manufacturing operations 
the steps taken have been defined 
by our strategy and business model 
and successfully implemented by 
establishing businesswide objectives 
and ensuring clear accountability 
throughout the organisation 
the results for the financial year ended 
29 june 2013 reflect the success we 
have had in implementing this approach 
sales increased by 18 to £2211 million 
2012 £2171 million reported pretax 
profit before exceptional items was 
£56 million 2012 £09 million 
we have grown sales reduced costs 
and increased profits there is much 
more to do to realise the full potential 
of the thorntons brand but the past 
year has shown good progress 
towards that objective
we remain focused on improving 
profitability and creating 
shareholder value
c olleagues and directors
the progress that we have made would not 
have been possible without the continued 
and combined effort enthusiasm and 
passion of everyone at thorntons as a 
result of growing production volumes 
we have secured employment at our 
factory in alfreton derbyshire we play 
an important role in the local economy 
and are proud when others declare our 
manufacturing efficiency and quality 
as world class 
i would like to express my gratitude to 
those who have had to leave us during 
the year as we continue to reduce the 
size of our own store retail estate this 
is a planned and managed programme 
that has allowed us to retain many of 
our colleagues through redeployment 
to other stores 
i would also like to thank our franchisees 
suppliers and commercial partners without 
whose continued support and partnership 
we would not have been able to make 
such positive progress over the year
one of the great joys of being part of 
thorntons is watching and sampling the 
remarkable creativity of those involved in 
our product development every year we 
set new standards and the year ahead 
promises to be the most exciting yet
following my appointment as 
chairman keith edelman became 
senior independent director last 
november we welcomed martin george 
as a nonexecutive director who brings 
extensive commercial and marketing 
skills to us in addition to diana houghton 
who chairs our audit committee
•	 we have grown sales reduced costs 
and increased profits there is much 
more to do to realise the full potential 
of the thorntons brand but the past 
year has shown good progress 
towards that objective
•	 i am confident that we can continue 
to grow the company through the 
delivery of our strategy and by careful 
assessment of future strategic choices 
continue the successful transformation 
of our company
 summary
1thtar13frontsmjwkwindd   2 9242013   104131 am 03
thorntons plc
annual report and accounts 2013
i believe we now have a very highcalibre 
team of nonexecutive directors and 
executive directors led by jonathan hart 
as chief executive as a result i am 
confident that we can continue to grow 
the company through the delivery of 
our strategy and by careful assessment 
of future strategic choices continue the 
successful transformation of our company
dividend
the key to the future success of the 
business is underpinned by funding our 
investment requirements and rebuilding 
our balance sheet the board has therefore 
decided not to recommend the payment 
of a dividend this year but aims to return 
to a progressive dividend policy when the 
recovery strategy delivers a satisfactory 
dividend cover ratio and the company 
has sufficient distributable reserves
outlook
we approach the coming year with the 
strong conviction that we have the right 
strategy and that we are demonstrating 
this through these results consumer 
expenditure remains under pressure we 
are not expecting any improvement in the 
economy and as such do not expect this 
to support our efforts in the year ahead 
i am encouraged by the improving market 
sentiment towards thorntons and we 
are now working on plans to extend our 
transformation beyond the first threeyear 
plan we have an amazing company and 
with everyone pulling together we have 
an amazing opportunity ahead of us 
paul wilkinson
chairman
10 september 2013
“ i am encouraged by 
the improving market 
sentiment towards 
thorntons and we are 
now working on plans 
to extend our 
transformation 
beyond the first 
three‑year plan ”
1thtar13frontsmjwkwindd   3 9242013   104131 am