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TitleGreene King plc
LanguageEnglish
File Size6.2 MB
Total Pages100
Table of Contents
                            Performance
Our focus
Retail
Pub partners
Brewing & brands
Chairman’s statement
Market Overview
Chief executive’s review
Delivering our strategy
Operational review
Financial review
Key performance indicators
Risks and uncertainties
Corporate social responsibility
Current year priorities
Board of directors
Senior management
Corporate governance statement
Directors’ Remuneration report
Directors’ report
Directors’ responsibilities statements
Group accounts
Independent auditor’s report
Group income statement
Group statement of comprehensive income
Group balance sheet
Group cash flow statement
Group statement of changes in equity
Notes to the accounts
	1 Accounting policies
	2 Segment information
	3 Revenue
	4 Other income and expenses
	5 Exceptional items
	6 Employment costs
	7 Finance (costs)/income
	8 Share-based payment plans
	9 Pensions
	10 Taxation
	11 Dividends paid and proposed
	12 Earnings per share
	13 Goodwill
	14 Property, plant and equipment
	15 Financial assets
	16 Subsidiary undertakings
	17 Business combinations
	18 Inventories
	19 Trade and other receivables
	20 Cash and cash equivalents
	21 Property, plant and equipment held for sale
	22 Trade and other payables: current
	23 Borrowings
	24 Financial instruments
	25 Provisions
	26 Share capital
	27 Reserves
	28 Working capital and non-cash movements
	29 Analysis of and movements in net debt
	30 Financial commitments
	31 Related party transactions
	32 Post balance sheet events
	33 Contingent liabilities
Company accounts
Independent auditor’s report (company)
Company balance sheet
Notes to the company accounts
	34 Accounting policies
	35 Profit for the period
	36 Auditor’s remuneration
	37 Directors’ remuneration and employee costs
	38 Investments
	39 Deferred tax
	40 Other creditors
	41 Borrowings
	42 Allotted and issued share capital
	43 Reconciliation of shareholders’ funds
	44 Contingent liabilities
Group financial record
Shareholder information
Corporate advisers
                        
Document Text Contents
Page 1

AnnuAl report 2012
Greene King plc

Time well spent

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Greene King plc Annual report 2012

Contents

Section one

review of the yeAr
2 Performance

3 Our focus
10 Chairman’s statement

11 Market overview

Section two

Business review
12 Chief executive’s review
14 Delivering our strategy

16 Operational review
23 Financial review

26 Risks and uncertainties
29 Corporate social responsibility

Section three

CorporAte governAnCe
34 Board of directors

35 Senior management
36 Corporate governance statement
41 Directors’ remuneration report

48 Directors’ report
50 Directors’ responsibilities statements

Section four

finAnCiAl stAtements
52 Independent auditor’s report (group)

53 Group income statement
54 Group statement of comprehensive income

55 Group balance sheet
56 Group cash flow statement

57 Group statement of changes in equity
58 Notes to the group accounts

89 Independent auditor’s report (company)
90 Company balance sheet

91 Notes to the company accounts
96 Group financial record

Visit this report online
greenekingreports.com/ar12

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Page 50

Greene King plc Annual report 2012

48

Corporate governance

direCtors’ report

The directors present their annual report
together with the audited financial statements
of the company and group for the fifty-two
weeks ended 29 April 2012.

Profits and dividends
The group’s profit before taxation
and exceptional items for the period
amounted to £152.0m (2011: £140.0m).
An interim dividend of 6.7p per share
(2011: 6.3p) was paid on 27 January 2012.
The directors recommend a final dividend
of 18.1p per ordinary share (2011: 16.8p),
making a total dividend for the year of
24.8p per share (2011: 23.1p). Subject to the
approval of shareholders at the AGM, the final
dividend will be paid on 10 September 2012
to shareholders on the register at the close
of business on 10 August 2012.

Activities
Greene King plc is the holding company
for a group whose principal activities are
operating managed, tenanted and leased
public houses, brewing beer, and wholesaling
beers, wines, spirits and soft drinks.

Business review
Under the provisions of the Companies
Act 2006, the company is required to produce
a business review containing a fair review of the
business of the company and a description
of the principal risks and uncertainties
facing the company. Shareholders are
referred to the chief executive’s review, the
operational review, the financial review, the
KPIs, the risks and uncertainties section and
the corporate social responsibility report for
the required information. They are intended
to provide a balanced and comprehensive
analysis of the development and performance
of the business of the group during the
financial year and the position of the
group at the end of the year.

Directors
Details of the current directors are given
on page 34. All of the directors held
office throughout the period apart from
Matthew Fearn, finance director, who
was appointed on 1 September 2011 and

Mike Coupe, non-executive director, who
was appointed on 26 July 2011. In addition
Ian Bull held office until 1 July 2011.

Under article 85 of the company’s articles
of association no directors are due to retire by
rotation this year. However, Rooney Anand,
Ian Durant and Norman Murray are offering
themselves for re-election at the forthcoming
AGM. For an explanation of the board’s
approach to the annual re-election of directors,
please refer to the AGM notice of meeting.

Details of the directors’ service agreements,
remuneration, and interests in share options
and awards are set out in the directors’
remuneration report. There have been
no changes in their interests between
29 April 2012 and the date of this report.

Interests in contracts
No director had a material interest in any
contract, other than an employment contract,
that was significant in relation to the group’s
business at any time during the period.

Substantial shareholdings
The company has been notified of the
following interests in 3% or more of the
issued share capital of the company.

29 April
2012

26 June
2012

Standard Life
Investments Ltd 6.36% 6.36%
Capital Research &
Management Company 5.19% 5.19%
AXA S.A. 4.99% 4.99%
Legal & General
Group plc 3.98% Below 3%

Share capital
Details of the authorised and issued share
capital of the company, which comprises
a single class of shares, ordinary shares
of 12.5p, are set out in note 26 to the accounts.
The rights attaching to the shares are set out in
the articles of association. There are no special
control rights in relation to the company’s
shares and the company is not aware of any
agreements between holders of securities that

may result in restrictions on the transfer
of securities or on voting rights.

A total of 542,138 ordinary shares, with an
aggregate nominal value of £67,767 were
allotted, for cash, during the period in
connection with the company’s sharesave
and executive option schemes. In addition
a further 117,867 shares were acquired by
the company to satisfy awards under the
company’s deferred share option scheme.

The trustees of the company’s employee
benefit trust (EBT), Kleinwort Benson
(Guernsey) Trustees Limited, transferred
21,090 ordinary shares to employees to
satisfy the vesting of LTIP awards or to
recognise their long service. The company
makes regular use of the EBT to satisfy the
exercise of share options and will make
market purchases of the company’s shares
from time to time to ensure that it has
sufficient shares to enable it to do so.

Voting rights
In a general meeting of the company, on a
show of hands, every member who is present
in person or by proxy and entitled to vote
shall have one vote. On a poll every member
who is present in person or by proxy shall
have one vote for every share of which they
are the holder. The AGM notice gives full
details of deadlines for exercising voting
rights in respect of resolutions to be
considered at the meeting.

Under the Free4All Employee Profit Share
Scheme, participants are the beneficial owners
of the shares but not the registered owners.
The registered owner is the trustee, Killik & Co
Trustees Ltd. The trustee will invite
participants to direct it on the exercise of any
voting rights attaching to the shares held under
the scheme by the trustee on the participants’
behalf. The trustee will only be entitled to vote
on a show of hands if all directions received
from participants are identical. The trustee
is under no obligation to call for a poll.
In the case of a poll, the trustee will follow
the directions of the participants.

No voting rights will be exercised in respect
of any own shares.

1 May 2011
(or date of appointment if later) 29 April 2012

Rooney Anand 176,106 199,753
John Brady 10,000 10,000
Tim Bridge 1,340,991 1,340,991
Mike Coupe — 2,000
Ian Durant 22,320 22,320
Matthew Fearn 1,449 6,162
Norman Murray 36,700 36,700
At 29 April 2012, Tim Bridge had a non-beneficial interest in 88,700 (2011: 89,768) shares, in addition to the holding shown above.

There have been no changes in the interests of the directors between 29 April 2012 and the date of this report.

The beneficial interests of each of the directors and their immediate families in the ordinary share capital of the company are shown below:

direCtors’ interests in shares

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Corporate governance

www.greeneking.co.uk 49

Transfer of shares
There are no restrictions on the transfer
of shares in the company other than those
which may from time to time be applicable
under existing laws and regulations (for
example under the Market Abuse Directive).

In addition, pursuant to the Listing Rules
of the Financial Services Authority, directors
of the company and persons discharging
managerial responsibility are required to
obtain prior approval from the company
to deal in the company’s securities, and are
prohibited from dealing during closed periods.

Change of control
All of the company’s share incentive plans
contain provisions relating to a change of
control and full details of these plans are
provided in the directors’ remuneration
report. Outstanding options and awards
would normally vest and become exercisable
on a change of control, subject to the
satisfaction of performance conditions,
if applicable, at that time.

The group’s banking facility agreements contain
provisions entitling the counterparties to
exercise termination or other rights in the event
of a change of control. Certain of the company’s
trading contracts also contain similar provisions.

There are two employees who, on a change
of control of the company resulting in the
termination of their employment, would be
entitled to compensation for loss of office.
However, in the context of the company as
a whole, these agreements are de minimis.

Articles of association
The company’s articles of association may
only be amended by special resolution at
general meetings of shareholders.

Appointment and replacement
of directors
The number of directors on the board shall
be no less than five nor more than twelve.
Directors may be appointed by the company
by ordinary resolution or by the board of
directors. A director appointed by the board
of directors holds office until the next
following AGM, and is then eligible for
election by the shareholders.

The articles provide that at each AGM
all those directors who were elected, or
last re-elected, at the AGM held in the third
calendar year before the current year shall retire
from office and may stand for re-election.

The company may by ordinary resolution,
of which special notice has been given,
remove any director from office.

Any director automatically ceases to be
a director if (i) they give the company a written
notice of resignation, (ii) they give the company
a written offer to resign and the directors decide
to accept this offer, (iii) all of the other directors
remove them from office by notice in writing
served upon them, (iv) they are or have been
suffering from mental ill health and have a court
order for their detention or the appointment

of a guardian made in respect of them, (v)
a bankruptcy order is made against them or
they make any arrangement or composition
with their creditors generally, (vi) they are
prohibited from being a director by law or (vii)
they are absent from board meetings for six
months without leave and the other directors
resolve that their office should be vacated.

Powers of the directors
The business of the company is managed
by the directors who may exercise all the
powers of the company, subject to its articles
of association, any relevant legislation and any
directions given by the company by passing
a special resolution at a general meeting.
In particular, the directors may exercise all
the powers of the company to borrow money,
issue shares, appoint and remove directors
and recommend and declare dividends.

Communications with shareholders
Shareholders who are interested in signing
up to e-communications should refer to the
shareholders information page for further
information on how to register via
www.greeneking-shares.com.

Charitable donations
Donations by the company for charitable
purposes made during the period amounted
to £29,021 (2011: £25,777). The group makes
no political donations.

Payments to suppliers
The group understands the benefits to be
derived from maintaining good relationships
with its suppliers and where possible enters into
agreements over payment terms. Where such
terms have not been agreed it is the group policy
to settle invoices 60 days following the end of
month of invoicing. This policy is dependent
on suppliers providing accurate, timely and
sufficiently detailed invoices. Payment in
respect of 62 days’ average purchases from
trade creditors of the group was outstanding
at the end of the period (2011: 70 days).

Directors’ and officers’
indemnity insurance
The group has taken out insurance to indemnify,
against third party proceedings, the directors of
the company whilst serving on the board of the
company and of any subsidiary. This cover
indemnifies all employees of the group who
serve on the boards of all subsidiaries. These
indemnity policies subsisted throughout the year
and remain in place at the date of this report.

Financial instruments
The group’s policy on the use of financial
instruments is set out in note 24.

Post balance sheet events
Details of events occurring after the year end
are set out in note 32.

Directors’ statement as to disclosure
of information to auditor’s
The directors who were members of the board
at the time of approving the directors’ report

are listed on page 34. Having made enquiries
of fellow directors and of the company’s
auditor, each of these directors confirms that:

• to the best of each director’s knowledge
and belief, there is no information relevant
to the preparation of their report of which
the company’s auditor are unaware; and

• each director has taken all the steps a director
might reasonably be expected to have taken
to be aware of relevant audit information and
to establish that the company’s auditor are
aware of that information.

Going concern
The group’s business activities, together with the
factors likely to affect its future development,
performance and position, are set out in the
chief executive’s review. The financial position
of the group, its cash flows, liquidity position and
borrowing facilities are described in the financial
review. In addition, note 24 to the financial
statements includes the group’s objectives,
policies and processes for managing its capital; its
financial risk management objectives; details of
its financial instruments and hedging activities;
and its exposure to credit and liquidity risk.

The directors are of the opinion that the
group’s forecast and projections, taking account
of reasonably possible changes in trading
performance, show that the group should be able
to operate within its current borrowing facilities
and comply with its financing covenants.

After making enquiries, the directors have
a reasonable expectation that the company
and the group have adequate resources to
continue in operational existence for the
foreseeable future. Accordingly, they continue
to adopt the going concern basis in preparing
the annual report and financial statements.

Auditor
Ernst & Young LLP has expressed its willingness
to continue in office and a resolution to
re-appoint the firm as the company’s
auditor will be proposed at the AGM.

Annual general meeting
The AGM will be held at twelve noon
on Tuesday 4 September 2012 at the
Millennium Grandstand, Rowley Mile
Racecourse Conference Centre, Newmarket,
Suffolk. The notice of the AGM is set out
in the separate circular to shareholders.

The directors consider that all of the resolutions
set out in the notice of AGM are in the best
interests of the company and its shareholders
as a whole. The directors will be voting in favour
of them and unanimously recommend that
shareholders vote in favour of each of them.

By order of the board

Lindsay Keswick
Company secretary
27 June 2012

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shAreholDer informAtion

Financial calendar
Ex-dividend date 8 August 2012
Record date for final dividend 10 August 2012
AGM 4 September 2012
Payment of final dividend 10 September 2012
Announcement of interim results December 2012
Payment of interim dividend January 2013
Preliminary announcement of the 2012/13 results July 2013

Registrars
Capita Registrars
The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU

Telephone: 0871 664 0300*
Fax: 01484 601512
E-mail: [email protected]
Website: www.capitaregistrars.com
* Calls cost 10p per minute plus network extras; lines are open 8.30am to 5.30pm,

Monday to Friday.

E-communications
Greene King plc has teamed up with Climate Care to help combat
climate change by providing shareholders with the opportunity
to receive communications from the company electronically. The
company will donate £1 to Climate Care for every shareholder that
registers. Climate Care funds projects that reduce greenhouse gases
– the main cause of climate change.

To register, visit www.greeneking-shares.com and either log
in or click on “Register new user” and follow the instructions.

By registering your e-mail address you will receive e-mails with a
web link to information posted on the company’s website, including
the report and accounts, notice of meetings and other information
communicated to shareholders.

Indirect investors’ information rights
Beneficial owners of shares held on their behalf by a different
registered holder now have certain information rights regarding
Greene King. They have the right to ask their registered holder
to nominate them to receive all non-personalised information
distributed to shareholders, in accordance with the provisions
of section 146 of the Companies Act 2006.

Should you wish to be nominated to receive information from
Greene King directly, please contact your registered holder, who
will need to notify our registrars, Capita Registrars, accordingly.
Please note that, once nominated, beneficial owners of shares must
continue to direct all communications regarding those shares to the
registered holder of those shares rather than to the registrars or to
Greene King directly.

Company secretary and registered office
Lindsay Keswick
Westgate Brewery, Bury St Edmunds, Suffolk IP33 1QT

Telephone: 01284 763 222
Fax: 01284 706 502
Website: www.greeneking.co.uk

Share dealing services
Stocktrade
Telephone: 0845 601 0995

Redmayne Bentley
Moseley’s Farm Offices, Fornham All Saints, Bury St Edmunds
Suffolk IP28 6JY

Telephone: 01284 723 761

Capita Share Dealing Services
Telephone: 0871 664 0454*
Website: www.capitadeal.com
* Calls cost 10p per minute plus network extras; lines are open 8.00am to 4.30pm,

Monday to Friday.

Killik & Co
Telephone: 020 7337 0716
Email: [email protected]

Capital gains tax
For the purpose of computing capital gains tax, the market value
of the ordinary shares on 31 March 1982, after adjustment for the
capitalisation issues in 1980 and 1982 was 72.5625 pence. After
take-up of the rights issue in July 1996, the March 1982 value
becomes 129.6875 pence. With the take-up of the rights issue in
May 2009, the March 1982 value becomes 182.3046875p pence.

CorporAte ADvisers
Financial advisers
Lazard & Co. Limited
50 Stratton Street, London W1J 8LL

Stockbrokers
Deutsche Bank AG London
Winchester House, 1 Great Winchester Street, London EC2N 3EQ

Auditor
Ernst & Young LLP
One Cambridge Business Park, Cambridge CB4 0WZ

Solicitors
Linklaters
One Silk Street, London EC2Y 8HQ

Greene King’s commitment to environmental issues is reflected in this
annual report which has been printed on Revive 75 White Silk, a recycled
paper stock which contains 75% recovered fibre and 25% virgin wood
fibre. This document was printed by Pureprint Group using ,
their environmental print technology, which minimises the impact
of printing on the environment. Vegetable based inks have been
used and 99% of dry waste is diverted from landfill. The printer
is a CarbonNeutral® company. Both the printer and the paper mill
are registered to ISO 14001.

Elemental Chlorine Free


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Greene King plc
Registered in England No. 24511

Registered Office
Westgate Brewery
Bury St Edmunds

Suffolk
IP33 1QT

Telephone: 01284 763222
www.greeneking.co.uk

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