Download our latest Annual Report - Bakkavor

Annual report
AND accounts 2012

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
bakkavor is a leading international
manufacturer of fresh prepared foods
We specialise in developing private label products
for major global grocery retailers and well-known
international foodservice operators. We have 58
manufacturing facilities, employ over 19,000
people and make over 6,000 products.
highlights
key figures and
developments in 2012
chairman’s address
our chairman, lydur
gudmundsson, provides
an update on our new
corporate structure
and board changes.
bakkavor: the fast read
In this ‘Fast Read’ section of the Annual
Report we have summarised key information
about Bakkavor and how we run our business.
For a more detailed insight into our operating
and financial performance in 2012 please read
our 2012 Annual Report in its entirety.
Our three areas of focus:
leading growing investing
CEO welcome 4
Our business at a glance 5
Our four point strategy for growth 7
Key performance indicators 8
Business model 9
Market trends 11
Leading, Growing, Investing 13
Our risks 19
Corporate governance 20
Our responsibilities 21
our performance
Our CEO, Agust Gudmundsson, and CFO, Peter Gates,
provide a detailed insight into our 2012 operating and
financial performance. We also outline the market
trends influencing our new product development
and report on our progress with our corporate social
responsibility priorities.
Business review 23
Financial review 26
Market trends 29
Our responsibilities 34
our governance
In this section we present our Board and Management
Board profiles, explain our corporate governance
approach and set out our principal risks and how
we aim to address them.
Board of Directors 43
Management Board 44
Corporate governance 45
Our risks 49
Directors’ report 51
financial statements
The Financial Statements of Bakkavor Finance (2) plc
for the 52 weeks ended 29 December 2012.
Independent Auditor’s report 53
Consolidated financial statements 54
Notes to the consolidated financial statements 59
Company financial statements 100
Notes to the Company financial statements 103
Appendix: Reconciliation of continued and108
discontinued activities to total Group trading
page 1 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
highlights
adjusted ebitda 1
£115m £1,718m £23.5m
like -for-like sales 2 free cash flow 3
7% 5% 14%
(£108m: 2011) (£1,629m: 2011)
(£20.6m: 2011)
united kingdom
ADJUSTED EBITDA 1 (£m)
international
ADJUSTED EBITDA 1 (£m)
101
11
12
£104m
4%
7£11m
54%
11 12
26
awards
5 Grocer Own Label Gold Awards, UK
5 Quality Food Awards, UK
1 Fruit Logista Innovation Award, UK
3 Supplier recognition awards from key
customers in the UK, USA and China
2 RoSPA Occupational Health & Safety
Gold Awards, UK
key developments
• Strengthened our market-leading
positions in our core UK fresh
prepared foods market
• Simplified our capital structure
• Maintained a focused capital
investment programme
• Launched Group Apprenticeship Scheme
and Group Innovation Awards
1 Adjusted EBITDA: excludes restructuring costs, management charges to the Group’s parent company,
asset impairments and those additional charges or credits that are one-off in nature and significance.
2 Like-for-like sales: exclude the impact of acquisitions, disposals, closures, foreign exchange translation,
but include the Group’s share of revenue generated by associates.
3 Free cash flow: defined as the amount of cash generated by the business, after meeting its
obligations for interest, tax and pensions, and after investments in tangible fixed assets.
PAGE 2 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
chairman’s address
IN 2012 THE GROUP DELIVERED A STRONG FINANCIAL
PERFORMANCE AGAINST A BACKDROP OF CHALLENGING
MARKET CONDITIONS.
In the same period, we simplified the Group’s capital
structure, facilitating access to wider financial markets.
This will allow the Group to take advantage of the
considerable long-term growth potential in fresh
prepared foods.
Lydur Gudmundsson
Non-executive Chairman
MEETING LONG-TERM CONSUMER DEMAND
Our belief that we can fulfil our vision to be recognised and respected as
the world’s leading fresh prepared foods provider is underpinned by our
ability to meet long-term demand through our world-class operations,
consumer knowledge and manufacturing expertise. We outline our four
point strategy for growth to achieve our vision on page 7. Positive trends
continue to drive the strong long-term demand for fresh prepared foods
and we expand upon this on pages 11 and 29.
2012 PERFORMANCE
Despite continuing economic uncertainty the Group performed well in
2012, achieving like-for-like sales growth of 5.4% which converted into
EBITDA growth of £7.4 million. In the Business Review on page 23 our
CEO expands upon our performance.
CORPORATE RESTRUCTURING
A key achievement in 2012 was to attain a simpler corporate structure,
addressing the Group’s legacy ownership and funding issues.
On 28 September 2012 we announced the completion of this
corporate re-organisation. Bakkavor Finance (2) plc’s ultimate parent
became Bakkavor Group Limited, domiciled in the UK, with a single
class of shares.
In addition, after over 40 years of service in our business, Gordon Pates,
our CEO of UK and Europe, retired from the Management Board in
December 2012. Gordon will continue to work with us as a consultant,
allowing us to continue to benefit from his extensive knowledge and
experience in the fresh prepared foods market.
Our three UK Managing Directors on the Management Board – Ivan
Clingan, Mike Edwards and Steve Broadbent – have assumed Gordon’s
day-to-day responsibilities and will continue to lead our customer
relationships, as they have done for several years in the UK.
OUR PEOPLE
At Bakkavor, we continue to be immensely proud of the calibre of our
people and their passion and loyalty to the Group and we would like to
thank them for their commitment throughout the year. Management
remains focused on providing training to ‘grow our own’ people and
enable them to develop to their best of their abilities.
OUTLOOK
The Group made good progress in 2012, particularly in the last quarter
which gave the business momentum into 2013. Although the economic
climate remains tough we are confident of our strategy and are well
positioned in the fresh prepared foods market.
The leverage covenant in the Group’s banking facilities was also reset
to provide additional headroom.
Finally, my brother, Agust Gudmundsson, and I personally invested
£12.8 million through the issuance of new shares in Bakkavor Group
Limited. These monies were used in repayment of borrowings.
BOARD AND MANAGEMENT BOARD CHANGES
Upon completion of the corporate restructuring, Asgeir Thoroddsen
resigned from the Group Board as Non-executive Director and
Gudmundur Sigurdsson was elected as a Non-executive Director on
25 September 2012. I would like to take this opportunity to thank
Asgeir for his many years of loyal service to the Group.
Lydur Gudmundsson
Non-executive Chairman
20 February 2013
the fast read
how we do business at bakkavor
PAGE 3 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

welcome
to our Bakkavor 'Fast Read' which provides an
overview of our business, complementing more
detailed information on our website.
working smarter
through innovation
I am passionate about innovation
and chair the Group’s Innovation
Committee to drive innovation
throughout the business. In 2012 we
launched our first Group Innovation
Awards covering six categories –
Manufacturing, Core Product, New to
Market Product, Marketing, Packaging
and Process – reaffirming our belief
that innovation is relevant to all
business disciplines across the Group.
The highly competitive market environment in
which we operate is now a given. Our focus on
benefiting commercially and operationally from
our leading positions and relationships, growing
sustainably in existing and new markets and
investing with rigorous discipline has never been
more important. Underpinning this focus is our
relentless commitment to promoting innovation
in everything we do in order for our businesses to
work more effectively and creatively together.
Together with our clear strategy, robust business
model, talented employees and a strong set of
values, we are confident of our ability to succeed
in our chosen markets. I hope you enjoy reading
about our business in the following pages.
Agust Gudmundsson
Chief Executive Officer
Throughout this brochure we indicate
where innovative thinking has brought
significant commercial benefits to our
business, demonstrating our ability to
turn ideas into actions.
page 4
www.bakkavor.com

our
business
at a
glance
Bakkavor is a leading international
manufacturer of fresh prepared
foods, employing over 19,000
people worldwide across 58
operating facilities.
We manufacture products across 18
different categories. In our core UK market
we are leaders in 13 out of the 16 chilled
market categories in which we operate.
Our customers include major global
grocery retailers and well-known
international foodservice operators and
we specialise in making products for them
under their respective private labels.
+40
years'
private label
expertise
over 6,000 products
key figures 2012
adjusted EBITDA 1 (£m)
£115 m (£108m:
FREE CASH FLOW 3 (£m)
£23.5m
REVENUE BY DIVISION
Ready
meals
Ready
meals
Ready to
cook
Ready
meals
meals
7%
2011)
Ready
meals
Ready to
cook
Ready
meals
meals
Dips
Ready to
cook
meals
14%
(£20.6m: 2011)
our products
United Kingdom
83%
International
17%
Prepared
fruit
Ready
meals
Ready to
cook
Ready
meals
meals
Dips
Ready to
cook
meals
Prepared
fruit
Ready
meals
Ready to
cook
Ready
meals
meals
like-for-like sales 2 (£m)
£1,718m (£1,629m:
Capital expenditure (£m)
£32.4m (£41.8m:
EMPLOYEEs BY DIVISION
United Kingdom •
International •
Dips
Ready to
cook
meals
Ready to
cook
meals
Ready meals &
ethnic snacks
••
Dips
Ready to
cook
meals
Ready to
cook meals
••
Pasta
Dips
Prepared
fruit
Dips
••
Ethnic
snacks
Ready
meals
Dips
Pasta
Dips
Prepared
fruit
5%
2011)
22%
2011)
United Kingdom
80%
International
20%
Ready to
cook
meals
Soups
Prepared
Pasta
vegetables
Soups
Ethnic
snacks
Bakery
products
Prepared
vegetable
Soups Prepared
Bakery
Sauces
Pasta
vegetables
Soups
products
Prepared
Bakery
Leafy
Pizza vegetables Desserts & products
salads
pastries
Pasta
Soups Prepared
Bakery
Sauces Sandwiches &
Dips
Pasta
vegetables
Soups
products
Prepared
Bakery
wraps
Sauces
Ethnic
Leafy
Pizza vegetables
& products Stir fries
snacks
Prepared
salads
Desserts
Ethnic
Leafy
pastries
Pizza
Desserts &
fruit
snacks
salads
pastries
Pasta
Dips
Soups
Prepared fruit
••
Leafy salads
••
Pizza
••
Leafy
salads
Pasta
Prepared
vegetables
Pasta
& pastries
•
Pasta
Soups Prepared
Bakery
Sauces •• Sandwiches &
Dips
Pasta
vegetables
Soups
products
Prepared
Bakery
wraps
Sauces Fresh Sandwiches produce
Ethnic
Leafy
Pizza vegetables Desserts & products Stir fries
Smoothies wraps C
snacks
Prepared
salads
Ethnic Soups Leafy
pastries
Pizza Stir fries Desserts & Stir fries
fruit
snacks
salads
pastries
••
•
10 countries
Ready
Ready
Ready to
meals
Dips
meals
cook
of operation
meals
Ready
Ready to
meals
cook Ready
meals meals
page 5
Ready
meals
Ready to
cook
meals
Ready
meals
Prepared
fruit
Dips
Ready to
cook
Ethnic
meals
snacks
Prepared
fruit
Pasta
Ready
meals
Ready to
cook
meals
Dips
Dips
Pasta
Soups Prepared
Bakery
Sauces Sandwiches &
Ready to
Dips
Pasta vegetables Soups products Prepared
Bakery wraps Sauces
cook
vegetables
products
meals
Bakery
Prepared
Ethnic
Leafy
Pizza
Desserts &
fresh prepared
fruit
food
snackscategories
salads
pastries
Stir fries
Prepared
fruit
Leafy
salads
Ready to
meals cook
Pasta
meals
Prepared
fruit
Dips
Prepared Ethnic
We
snacks fruit Pizza
Prepared
fruit
Ethnic
snacks
Prepared
fruit
Pasta
Leafy
salads
Ethnic
snacks
Ready Dips to
Pasta Dips
Soups Pasta
Prepared Soups Prepared Bakery
Bakery Sauces Sandwiches Sauces & Sandwiches &
cook Soups Prepared
Bakery
vegetables
Sauces vegetables Sandwiches
products
& products
wraps
Fresh wraps produce
meals Ethnic vegetables Leafy products Pizza
Desserts & wraps Stir fries Fresh produce Smoothies Convenience
snacks
Prepared
Prepared
salads
Ethnic
Leafy
pastries
Dressed
Pizza
Desserts & Stir fries
salads
Smoothies
fruit
snacks
salads
pastries
also supply fresh
produce in the UK
vegetables
••
products
••
Sandwiches
salads & wraps
••
Fresh Sandwiches produce &
wraps
Fresh produce
Meal
Smoothies Convenience Dressings
salads
Pasta
Soups Prepared
Bakery
Sauces Sandwiches &
Leafy Ethnic
Leafy Pizza vegetables Desserts Pizza & productsDesserts Stir fries&
Smoothies Stir fries wraps Convenience SmoothiesFresh produce Convenience Dressings
salads snacks Desserts & salads Stir fries
pastries
Smoothies pastries Convenience Dressings
salads
Dressings
salads
pastries
Soups Prepared
Bakery
Sauces Sandwiches &
Ethnic
Leafy vegetables Pizza productsDesserts & Stir fries wraps SmoothiesFresh produce Convenience
snacks Prepared salads Ethnic
Leafy
pastries Pizza
Desserts & Stir fries salads Smoothies
fruit
snacks
salads
pastries
Soups Prepared
Bakery
Sauces Sandwiches &
Pizza vegetables Desserts & products Stir fries
Smoothies wraps ConvenienceFresh produ
Leafy Sauces pastries
Pizza
Desserts & Smoothies Stir fries
salads
Smoothies
salads
pastries
••
•
Dressings
Convenience
salads
salads
•
salads
••
••
Dressings
Fresh produce
Dressings
Convenience
salads
Dressings

usiness segments
united kingdom
market leader in 13 of
facilities
our 16 product categories
32 *
adjusted EBITDA 1 (£m)
101
11
12
£104m
4%
like-for-like sales 2 (£m)
1,342
11
12
£1,416m
6%
83%
of group sales
* 32 facilities based in 24 locations
international *
adjusted EBITDA 1 (£m)
17%
of group sales
7
11 12
£11m
54%
canada
usa
europe
china
like-for-like sales 2 (£m)
287
11 12
£302m
5%
facilities
26
south africa
1 Adjusted EBITDA: excludes restructuring costs, management charges to the Group’s parent company,
asset impairments and those additional charges or credits that are one-off in nature and significance.
2 Like-for-like sales: exclude the impact of acquisitions, disposals, closures, foreign exchange translation,
but include the Group’s share of revenue generated by associates.
3 Free cash flow: defined as the amount of cash generated by the business, after meeting its obligations
for interest, tax and pensions, and after investments in tangible fixed assets.
* International: Includes French and Spanish operations which are being sold subject to Competition
Authority clearance.
page 6

our four
point
strategy
for
growth
our vision
To be recognised and respected as the world’s
leading fresh prepared foods provider.
we aim to drive profitable growth through:
Building on our leading positions in high-potential,
fast-growing fresh prepared foods markets
strategy in action 2012
We re-invigorated the fresh soup market by expanding our
successful New York Soup Co range to include Skinny and
Fully Loaded varieties. This was a direct result of focused
market research and has led to a loyal customer following,
a market share gain in 2012 and an incremental increase in
the overall value of the soup market.
Leveraging our strong customer relationships to drive
mutual and profitable growth
strategy in action 2012
Our Creative Food business has invested in a new
manufacturing facility in Xiamen (China) to meet the
high demand experienced by one of our key customers
for fresh prepared foods in the Chinese foodservice
market. This business opportunity occurred as a direct
result of the strong relationship we have forged with
our customer, our proven track record of supporting
their strategic growth plans and our commitment to
high-quality products and standards.
Our New York Soup Co
products
Creative Food's new
manufacturing facility
Setting the industry benchmark for safety, quality,
service and innovation through the talent and
commitment of our people
strategy in action 2012
Two Chefs (USA), Isleport Foods (UK) and Creative Food
(China) all received supplier awards from their customers
in recognition of their service and partnership approach.
In addition, and testament to our product quality and
innovation, we received 11 food product awards in 2012.
Our determination to provide a safe environment in which
to work continues to improve with our health and safety
performance remaining ahead of the latest food and drink
industry benchmark.
Employees at the Group's
2012 Innovation Awards
Delivering sustainable long-term growth through
capital investment and a continued focus on efficiency
strategy in action 2012
We officially opened a dedicated facility for handling
nuts, sesame and nut oils in April 2012. This facility at
Caledonian Produce is the only one of its kind in the UK
and has enabled us to meet the high demand for recipes
containing these ingredients, improve our manufacturing
efficiency and release capacity at the adjacent site for
other growth projects.
Our wholefood nutty salad
page 7

key performance indicators
WE USE A RANGE OF FINANCIAL AND NON-FINANCIAL PERFORMANCE
INDICATORS TO MEASURE WHAT MATTERS TO US AND HOW SUCCESSFUL
WE ARE AT ACHIEVING OUR LONG-TERM STRATEGIC AIMS.
financial kpis: investing in growth through product innovation
KPI 2012 performance why this is important
like-for-like sales
£1,718m
Growth in our like-for-like sales
11 1,629
demonstrates how successful our
underlying business is at generating
12
5%
sales through product innovation,
effective promotional mechanisms
and business wins.
ADJUSTED EBITDA
11 107.7
12
FREE CASH FLOW
11 20.6
12
£23.5m
Generating free cash flow enables
us to re-invest funds back into the
business for future growth and to pay
down debt.
non-financial kpis: COMMITMENT TO A SUSTAINABLE BUSINESS
KPI 2012 performance why this is important
MAJOR ACCIDENTS PER
100,000 EMPLOYEES
Industry
average
08 09 10 11
12
EMPLOYEE RETENTION
We measure % retention
rates for managers and
site-graded employees.
EMPLOYEE SUCCESSION
We measure % of
employees (above a
certain band) who are
reviewed proactively
every six months for
career development.
£115.1m
improvement
on 2011
26%
management
90% retained vs 90%
site- graded
92% employees RETAINED vs 75%
75%
REVIEWED
in 2012
7%
14%
target
target
Our aim is to
review 100%
EVERY MONTH
REPORTS ARE MADE TO THE
MANAGEMENT BOARD ON
ALL OF OUR KPIs
Our Adjusted EBITDA demonstrates
whether we are generating a good
return on investment through
sales, and offsetting underlying
cost pressures in our business with
productivity investments.
We are committed to taking every
reasonable step to deliver quality
products whilst protecting the health
and safety of our employees.
Retaining high-calibre employees
who have the right behavioural values
and having systems in place to ensure
they can develop with us to the best of
their potential is fundamental to our
long-term success.
page 8

our business model
creating long-term value
Our primary business
focus is the manufacture
of fresh prepared foods for
major grocery retailers and
international foodservice
operators under their
respective private labels.
1 2
We create safe, high-quality foods
for our customers which deliver
a return for them whilst providing
choice and value for money to
their consumers. We use the
cash generated to re-invest in
future business growth and to
meet our financial obligations.
Our re-investment in the business
allows us to make continuous
improvements to our resources,
processes and products which
strengthen our position as a partner
and employer of choice.
Over 2,000
products
launched in 2012
customers
We aim to develop
long-lasting relationships
with our customers by
working closely with them to
understand their customers
and their requirements.
This ensures that we
develop, manufacture and
supply safe, innovative,
high-quality products.
5
Core values
underpin the way
we do business
5.4%
3
underlying
sales growth
In 2012
supplier awards
Received from our
customers in 2012
products
We continue to be at the
forefront of consumer
and market trends. This is
fundamental to developing
products that meet the needs
of today’s consumers and
enabling us to stay ahead of
the market. Our innovative
culture allows us to take action
quickly and responsively in
our fast-moving markets.
11
UK FOOD AWARDS
IN 2012
market insight
Doubled our investment since 2009
page 9

3 4 5
assets
Our commitment to
continuous improvement
means we are focused on
making the right investments,
implementing the right
processes and recruiting and
developing the right people to
ensure that we make quality
products as efficiently and
effectively as possible in a
safe environment.
cash
We maintain a strong focus
on cash generation through
effective working capital
management and reviews
of capital expenditure plans.
We work closely with both
customers and suppliers to
ensure our delivery and
supply chain is as efficient
as possible.
re-investment
Our capital expenditure
programme is highly selective
and we expect to meet our
targeted returns on investment
for all projects. We are focused
on maintaining investment
levels in the business whilst
also reducing leverage and
debt to strengthen our
capital structure.
£32.4m
CAPITAL
EXPENDITURE
£563.9m
NET DEBT
100%
(£27.5M
IN 2012
reduction
on 2011)
CASH RE-INVESTMENT
IN Chinese BUSINESS
One of our major capital projects in
2012 was a new state-of-the-art frying
facility in the UK. This investment has
improved product quality and efficiency,
strengthened our core frying capabilities
and is one of our centres of excellence
within the Group.
£23.5m
Free cash
flow
(£2.9m improvement
on 2011)
Re-invested all cash generated in
the Chinese operation back into the
business and built a new factory to
meet customer demand.
page 10

market trends
putting knowledge into action
trends affecting
our marketplace
4 key macro trends
have a significant effect on a large
scale. They influence and shape all
aspects of society in both the short
and long term.
6 key consumer trends
reflect the changing demands,
desires and attitudes of society as
a result of the macro trends.
6 key retail trends
are shaped by consumer demand
for products and services, and
influence the way retailers invest
in and develop their proposition
to achieve sustainable growth and
provide consumer choice.
bakkavor action
At Bakkavor we use our market
insight and bespoke research to
develop and launch commerciallysuccessful
products which meet the
needs of today’s consumer and the
growth aspirations of our retail and
foodservice partners.
Our ability to translate market trends into commercially-successful
products is critical to our long-term growth, particularly in today’s
competitive business environment.
Here we outline some of the key reasons behind our focused investment in the
fresh prepared foods market and summarise the macro trends which are influencing
consumer trends, shaping retail developments and, ultimately, the foods that we make.
why fresh prepared foods
1
DYNAMIC
2
TIME-SAVING
3
STRATEGIC
4
built
5
BENEFIT
& RESILIENT GROWTH
The fresh prepared foods sector is one of the most dynamic and diverse in
the food industry. It continues to grow faster than the overall food market
by meeting consumer demand for high-quality food with fresh ingredients,
alongside choice, convenience and value for money.
& COST-SAVING LIFESTYLE CHOICE
People are interested in new tastes and quality ingredients but do not
always have the time, skill or budget to cook from scratch every day.
Fresh prepared foods bridge this gap, increasingly becoming a lifestyle
choice, due to their fresh appeal, ease of cooking (or preparing) and
availability across a range of price tiers.
IMPORTANCE FOR PRIVATE LABEL GROWTH
Fresh prepared foods are sold predominantly under retailer private labels
and are an integral part of a retailer’s overall brand strategy. They enable
retailers to differentiate themselves from their competitors, which is crucial
in today’s challenging retail environment. Private label continues to gain
share in developed countries around the world.
on LONG-LASTING RELATIONSHIPS
Making fresh prepared foods under private labels brings with it the need
for deep trust and understanding between suppliers and their customers.
As products are made with fresh natural ingredients, suppliers must meet
demanding customer specifications, involving day-to-day communication
and excellent relationships. This is a barrier to entry rather than a risk.
OF SPEED TO MARKET
Compared to manufacturer-branded products, fresh prepared foods give
retailers the opportunity to launch differentiated private label ranges
relatively efficiently and cost-effectively, allowing them to benefit quickly
from the demand for high-quality, convenient foods with fresh ingredients.
page 11

More online
For more information, please
refer to 'Market trends' in the
online annual report.
annualreport12.bakkavor.com
macro trends
• Health concerns
• Societal &
technological change
• Financial insecurity
• Environmental issues
15m
500m
TOP 10 COUNTRIES PROJECTED TO HAVE
THE HIGHEST NUMBER OF SINGLE PERSON
HOUSEHOLDS IN: 2020 (m)
31.6
36.3
British consumers worry
about their financial
situation every single day.
obese adults worldwide – nearly
double the rate in 1980.
8.0
Ita
10.5
UK
10.5
Fra
12.3
Indo
12.9
Rus
15.5
Ger
17.4
Ind
18.2
Jap
Chi
USA
Source: Russell Investments
Source: The Lancet
Source: Euromonitor International
consumer trends
• Well-being
• Time pressure
• Indulgence
• Ethical consumption
• Expanding repertoires
• Smart shopping
13,600 6/10
more on promotion. Appstore in 2012.
shoppers claim to be buying 'health' apps on Apple's
Source: IGD
Source: Miniwatts Marketing Group
Our crayfish and mango salad with a coconut
chilli dressing
retail trends
• Targeted health
• Convenient shopping
• Ethnic focus
• Ethics & environment
• Classic re-invention
• Value & promotions
£11.1bn
VALUE OF
UK INTERNET
GROCERY MARKET
Source: IGD
STRONG GROWTH PREDICTED FOR CONVENIENCE
STORES VALUE OF UK CONVENIENCE MARKET
(£bn), 2012-2017F
33.9
35.6
37.4
39.4
41.5
43.6
2012 2013f 2014f 2015f 2016f 2017f
bakkavor action
• Naturally light
• Social communication
• Just for one
• New taste sensations
• Meal deals
• Classic favourites
• Environmentally friendly
we launched
2000 + PRODUCTS IN 2012
Our Spanish-style chicken meal salad for one
page 12

for us, leadership means exceeding
expectations in all we do
By applying our market insight, excelling at customer
service and developing products at the right commercial
price we have gained leading positions in our markets.
We strive to be the supplier of choice for existing and
new customers.
leading through innovation
MARKET RE-INVIGORATION
We used qualitative and quantitative research to
develop and successfully launch our modern New York
Soup Co brand. The brand has re-invigorated the chilled
soups sector in the UK and over the past year we have
included Skinny and Fully Loaded varieties. We market
our New York Soup Co brand to consumers through a
dedicated website and Facebook page. Already our
New York Soup Co has a loyal following of buyers.
leading
market
positions
In the UK – the largest and most
developed market in which Bakkavor
operates – we are leaders in 13 of our
16 UK product categories.
why it matters
Leadership and product diversity bring
with them proven expertise, influence,
economies of scale and the ability to
share ‘know-how’ across our Group.
We use these leadership attributes,
backed up by investments in insight,
quality and innovation to build on
strong customer partnerships to drive
mutual growth.
page 13

leading
customer
service
leading
market
insight
We make thousands of products
everyday. We have an excellent track
record in food safety and work in
collaboration with our customers
to meet their individual quality and
safety requirements.
why it matters
Our absolute focus on customer
service and food safety is not just a
licence to operate but a true barrier to
entry in our complex and just-in-time
manufacturing environment.
The consumer is at the heart of
everything we do. Our considerable
investment in consumer insight,
leading-edge research and our
management expertise set us apart
from our competition.
why it matters
Our ability to translate market trends
into commercially-successful products
is critical to the growth of the business.
It strengthens our reputation for
launching winning concepts with our
retail and foodservice customers and
enables us to gain market share.
facebook.com/newyorksoupco
page 14

we aim to grow
our business
by targeting opportunities
in high-growth markets,
developing a strong
product pipeline and
maximising the potential
of our people.
growing in the
right markets
Growth for fresh prepared foods
continues to exceed the demand
for food in general and we remain
focused on this dynamic area of
the food market. Our core market is
the UK and we are also targeting
high-growth markets such as China.
why it matters
Our focus on fresh prepared foods
allows us to build scale and expertise
in this area which we can replicate in
high-growth geographical markets
around the world.
5%
10%
uk fresh
prepared
foods
growth
Chinese
Foodservice
Growth
growing through innovation
TALENT PIPELINES
The Bakkavor Development and Succession (DAS) process is focused on
developing our people to meet their full potential, and we track individual
employees ready to be promoted immediately as well as those ready for
a move in the next 12 months. In 2012 we introduced Functional Talent
Pipelines to help us measure the strength of each function today and its
potential for the future. These initiatives help us promote from within
wherever possible.
page 15

growing our
product pipeline
Within our market categories we target
specific growth opportunities based
on our consumer insight and customer
understanding.
why it matters
Targeting growth opportunities through
new product development is equally
important to both our strategic business
aspirations and those of our customers,
who are looking to gain market share.
11
food
awards
growing our
own people
We are committed to nurturing and
growing the talents of our own people
as a priority. Three key areas underpin
our culture of personal development
and help us to shape successful careers
within the Group: annual performance
reviews, development and succession
planning and training.
50%
target
vacancies
to be filled
by existing
employees
why it matters
By ‘growing our own’ people, we
ensure that our strong values and
expert knowledge stay within the
business. This approach also reinforces
our aspiration to provide clear career
development opportunities.
page 16

we are investing for
sustainable growth
This means selecting capital
projects that bring significant
benefits to the business
as well as attracting good
people to develop their
careers with us.
£170m
spent on capital projects
over the past 5 years
1
investing with
discipline
We have a targeted capital
expenditure programme which
is rigorously focused on growth
opportunities and efficiency
improvements.
why it matters
Our focus has the ultimate aim
of improving returns in order to
facilitate future expansion plans.
investing with innovation
A UNIQUE PROCESS
Our new dedicated facility for handling nuts, sesame and nut oils officially
opened in April 2012 at Caledonian Produce. This facility is the only one of
its kind in the UK and has enabled us to extend our process capabilities and
meet growing consumer demand for healthy, high-protein foods.
page 17

2
6centres
of
excellence
investing in
excellence
We are strengthening our category
leadership and supporting our
growth plans by investing in centres
of excellence which set us apart
from our competition through
leading processes, technology
and machinery.
why it matters
Our specific and targeted investments
have led to market share gain, new
business wins and the re-invigoration
of key market categories in which
we operate.
3 investing
in people
group apprenticeship
scheme launched in 2012
We have established schemes to
recruit talented graduates and school
leavers into the business and we
are actively involved in promoting
the benefits of working in food
manufacturing by supporting
industry initiatives.
why it matters
Working on initiatives that attract
talented people into our dynamic
business and marketplace is vital to
ensure we have the right resource
in place to meet customer needs
and the long-term demand for fresh
prepared foods.
page 18

our risks
More online
For more information, please
refer to 'Our risks' in the online
annual report.
annualreport12.bakkavor.com
OPERATIONAL RISKS
GROUP TECHNICAL DIRECTOR
LOSS OF KEY
EMPLOYEES
FOOD SAFETY
& INTEGRITY
COMMODITY
PRICE INFLATION
HEALTH
AND SAFETY
CHIEF EXECUTIVE OFFICER
CONSUMER
UNDERSTANDING
COVENANT
COMPLIANCE
MARKET RISKS
CUSTOMER
RELATIONSHIPS
INTEREST RATES,
LIQUIDITY
AND CREDIT
CHIEF FINANCIAL OFFICER
FINANCIAL RISKS
management of
all risks assigned to
INDIVIDUAL MANAGEMENT
BOARD MEMBERS
Bakkavor Group has identified eight key risks to the business. The
successful mitigation of these risks is paramount to the day-to-day
running of the business and the achievement of our long-term vision.
risk management
Our decentralised model empowers our management to identify, evaluate and
manage the risks they face proactively. The management of principal risks is
assigned to key members of the Management Board. It is their responsibility
to report to the Board on a monthly basis regarding the actions associated with
each of those risks.
page 19

corporate governance
how we manage bakkavor
how we operate
We operate within a governance framework which we believe provides
assurance to all our stakeholders that Bakkavor is a well-managed,
responsible company and which allows us to ensure that the Group Board
and the Management Board:
• have assessed the necessary options and are taking the business in the right
strategic direction
• are leading and managing the business effectively and are accountable for their actions
• have put in place appropriate controls which are used actively throughout the business
• consider the interests of all our stakeholders in making executive decisions.
STAKEHOLDERS
GROUP board
The Board retains ultimate responsibility for upholding corporate governance standards
and determining the strategic objectives of the Group.
MANAGEMENT BOARD
GROUP
BOARD
GROUP OPERATIONS
Management Board
The Management Board implements the strategic objectives set by the Group Board
and approves Group policies. It monitors achievement against objectives and
compliance with policies.
group operatIONS
Within appropriate risk parameters managers at our business units are tasked
with the detailed planning and implementation of strategic objectives set by the
Management Board.
our management
stakeholders
We address all stakeholder interests through the Bakkavor values (see page 21).
Our values are fundamental to our ability to run our business with integrity. We recruit
new people and reward all managers against their ability to demonstrate our values
in the day-to-day running of the business.
average
number
of years in
the food
industry
leading
industry
experts
in food
technology
total years
of service
at Bakkavor
Our highly experienced Management Board is tasked with the successful
operational running of our business within our corporate governance and
risk management frameworks.
board
20 2 114
1 Agust
Gudmundsson
Chief Executive
Officer
2 Peter Gates
Chief Financial
Officer
3 Ann Savage
Group Technical
Director
4 John Gorman
President –
Bakkavor North
America
5 Einar Gustafsson
Managing Director
– Bakkavor Asia
6 Mike Edwards
Sector Managing
Director
7 Ivan Clingan
Sector Managing
Director
8 Steve Broadbent
Sector Managing
Director
1 2 3 4
5 6 7 8
page 20

our responsibilities
doing things the right way
bakkavor
values
Bakkavor has five core values that directly
influence the way we run our business. Our
values define and shape our culture; they
are what make Bakkavor different.
customer care
We are committed to supplying outstanding quality,
value and service, never forgetting that our relationship
with our customers is pivotal to our success.
can do
We encourage personal initiative and empower
our people to make things happen. Our motivation
comes from a determination to succeed in all we do.
teamwork
We believe everyone has a valuable part to
play in the success of the business. We aim to
communicate effectively and are committed to
the highest standards of ethics and integrity.
innovation
We thrive on challenges, looking for innovative ways
to grow and improve our business further.
getting it right, keeping it right
We strive to deliver the right result every time in
the most effective way, providing value for our
customers and stakeholders alike.
managing our
responsibilities
We have the structure and resources in place to
manage our key Corporate Social Responsibility
(CSR) areas effectively.
food safety & csr initiatives
PRIORITY FOCUS AREAS
• Food safety
• Health & Safety (H&S)
• Environment
employee initiatives
PRIORITY FOCUS AREAS
• Employee retention
• Employee training and development
• Other employee areas: diversity,
temporary labour
community initiatives
PRIORITY FOCUS AREAS
• Community understanding
and support
Measuring and improving our performance
Performance in the three areas below is highlighted in our KPIs
on page 8. Other CSR measures are reported online.
Health & safety
Major accidents per 100,000 employees.
Employee retention
% retention rates for managers and
site-graded employees.
Employee succession
% employees (above a certain band)
who have been reviewed every six
months for career development.
RESPONSIBILITY
Group Technical Director,
Central and business
Technical teams
RESPONSIBILITY
Group and business
HR teams
RESPONSIBILITY
Bakkavor businesses
3 Group
KPIs
page 21

More online
For more information, please
refer to 'Our responsibilities' in
the online annual report.
annualreport12.bakkavor.com
engaging with
our stakeholders
We aim to engage effectively with our identified
stakeholders – the people who matter most to
our business.
running our
business sustainably
By concentrating on areas which really matter to us
we aim to run our business in a sustainable way and
uphold our commitment to continuous improvement.
Key stakeholder groups
Employees
Encouraging effective employee engagement and
communication across, and within, our businesses.
Customers
Building on our strong relationships to meet and exceed
customer expectations.
Local communities
Understanding our local communities and encouraging
our businesses to support their needs.
Suppliers
Working closely with key suppliers to engage on safety,
quality and pricing for mutual long-term benefit.
Investors
Communicating in an open, timely and unbiased manner
with current and potential investors.
Industry
Taking an active role in industry working groups to ensure
we are part of the debate.
Some priority focus areas for 2013
Health and Safety
Continued development of our proactive accident
prevention culture.
Environment
Working with our partners to improve further the amount of
waste diverted from landfill.
Employee development
Implementation of a revised development and succession
programme and related measures.
Employee engagement
Bespoke training to enhance the effectiveness of our Site
Employee Forums.
Industry engagement
Helping to tackle long-term youth unemployment.
COMMUNICATING MORE EFFECTIVELY WITH OUR EMPLOYEES
At our 2012 Group Employee Forum we relaunched our values
using a new ‘winning team’ theme to bring them to life and to
embed them across the Group. The new look values are now
being rolled out across the Group.
always the
winning team
SKILLS FOR WORK
In September 2012 we took part in a nationwide industry
initiative in the UK to help tackle the issue of long-term youth
unemployment through Skills for Work workshops. A number
of our sites held half-day training sessions on CV writing and
interview techniques.
page 22

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
business review
2012 WAS A GOOD YEAR FOR THE GROUP, PARTICULARLY
OUR PERFORMANCE IN THE LAST QUARTER WHICH GAVE
THE BUSINESS MOMENTUM GOING INTO 2013.
Although the economic climate remains tough we are
confident of our strategy and are well positioned in the
fresh prepared foods market.
Agust Gudmundsson
Chief Executive Officer
WE ARE A LEADING INTERNATIONAL
MANUFACTURER OF FRESH PREPARED
FOODS, EMPLOYING OVER 19,000
PEOPLE WORLDWIDE ACROSS 58
OPERATING FACILITIES.
LIKE-FOR-LIKE SALES 2 (£m)
£1,718m
REVENUE BY DIVISION
5%
(£1,629m: 2011)
United Kingdom
83%
International
17%
SALES REVIEW
In a very challenging economic environment,
Bakkavor has retained its market share and
extended its market-leading positions in key
categories. We continue to grow ahead of
the total foods market and we have benefited
from our leading positions within this sector.
Coupled with business wins enjoyed over the
year and high levels of promotional activity, we
continued to see good volume growth. This
was achieved despite a number of adverse
factors, including subdued consumer spending
and exceptionally poor weather throughout the
spring and summer.
Our North American and Asian businesses
continue to build on their strong customer
relationships to drive International revenues.
Our Asian business, in particular, benefited
from a renewed capital investment programme
that allowed us to increase capacity in line with
our customers’ rapid growth plans.
INFLATIONARY PRESSURES
Whilst we benefited from deflation in raw
material pricing in 2012 we are expecting that
to reverse later in 2013. At this stage, however,
we do not anticipate inflation reaching the
levels seen in 2011.
CONTINUED EXCELLENCE IN INNOVATION
Raising the benchmark for innovation within
the industry is core to our Group as we focus
on attracting new customers and increasing
sales. During the past year alone, we created
and launched over 2,000 products across the
business, received three supplier awards for
excellence and won 11 industry food awards.
INVESTING IN OUR BUSINESS
Throughout 2012 we have focused on a series of
capital projects to consolidate our market-leading
positions and support our growth objectives.
These investments have included: capacity
enhancements to leverage the increasing
demand for our products, such as chilled soups
in the UK; product differentiation, which included
water-only washing for our leaf based products;
and efficiency investments as we continue to
automate our production facilities.
SALE OF FRENCH AND SPANISH BUSINESSES
The Group has reached formal agreement to
sell its French and Spanish produce businesses
for €33 million debt-free cash-free. Completion
of the transaction is subject to clearance by
the Competition Authorities, which is expected
by the end of the first half of 2013. The
disposal of these businesses marks an
important step in reshaping our portfolio to
focus on our core fresh prepared market.
FOOD INTEGRITY
In January 2013 incidences of horsemeat
contamination in the food supply chain affected
a number of retailers and producers in Europe
and weakened consumer trust in the food
they buy. We maintain strict controls regarding
product authenticity and quality control and
are subject to regular inspection by food safety
and other authorities for compliance with food
laws such as traceability and food hygiene. We
comply with strict national and international
regulations and routinely inspect our
production facilities and audit our suppliers. We
remain committed to the highest standards of
food safety and integrity and continue to work
with customers, suppliers and the authorities
on rebuilding consumer trust.
2 Like-for-like sales: exclude the impact of acquisitions, disposals, closures, foreign exchange
translation, but include the Group’s share of revenue generated by associates.
PAGE 23 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
business review
united kingdom
leader
in 13 of our
16 markets
OUR UK LOCATIONS
*
2 3
5
4
6 8 12
7 9 10
11 14 13
16 15
17 18 19
22 21
24
23
20
1 Caledonian Produce
West Lothian
2 Melrow Salads
Merseyside
3 Hitchen Foods
Wigan
4 Yorkshire Fresh Fruit
Selby
5 New Primebake
Barton-on-Humber
6 New Primebake
Nantwich
7 New Primebake
Crewe
8 Welcome Foods
Huthwaite
9 Laurens Patisseries
Newark
10 Bakkavor Spalding
Spalding
11 Freshcook
Holbeach St Marks
12 Cucina Sano
Boston
13 Bakkavor Meals
Sutton Bridge
14 Wingland Foods
Sutton Bridge
15 Bakkavor Pizza
Holbeach St Marks
16 Bourne Prepared Produce
Bourne
17 Bakkavor Meals
Park Royal
18 Bakkavor Meals
Elveden
19 Anglia Crown Ltd
Colchester
20 Tilmanstone Salads
Dover
21 Bakkavor Meals
Wembley
22 Bakkavor Pizza
Harrow
23 Alresford Salads
Alresford
24 Isleport Foods
Highbridge
* 32 facilities based in 24 locations
GROWTH IN THE UK FRESH
PREPARED MARKET CONTINUED TO
OUTPERFORM THE TOTAL FOODS
MARKET. WE HAVE BENEFITED FROM
OUR MARKET-LEADING POSITIONS
WITHIN THIS SECTOR.
ADJUSTED EBITDA 1 (£m)
101
11
LIKE-FOR-LIKE SALES 2 (£m)
1,342
11
12
12
£104m
4%
£1,416m
6%
SEGMENT description
Our UK businesses primarily manufacture
private label fresh prepared food products on
behalf of all major grocery retailers in the UK.
Facilities
We operate 32 facilities and employ 15,440 people.
Market positions
We have over 40 years’ experience in the UK
and enjoy leading or number two positions in
all of the 16 market categories in which we
are present. We estimate our consolidated
market share across the categories in which
we operate in the UK is close to 30% and two
times larger than that of our nearest competitor.
Sales performance
Our UK segment generated revenue of
£1,407.0 million in 2012, 83% of Group
revenue and a 1.4% increase on 2011. On a
like-for-like basis however, we were pleased
to deliver 5.5% growth in the year and 10.2%
in the final quarter. This level of growth,
which was ahead of the market, was due to
the successful delivery of a strong seasonal
offering and was supported by our capital
investment strategy over the past two years
and increased spend on innovation. This strong
revenue performance also delivered double
digit growth in adjusted EBITDA.
With regards to the full year, growth was
almost entirely driven by increased volumes
from promotional activity and new business.
This was achieved despite a number of
adverse factors, including subdued consumer
spending and unusually poor weather
throughout the spring and summer which
impacted the sale of cold eat products.
Adjusted EBITDA performance
Adjusted EBITDA for the UK was £104.2
million, compared with £100.6 million in
2011, an increase of £3.6 million or 3.6%.
Adjusted EBITDA margin increased by 20 basis
points to 7.4% in 2012 as the UK benefited
from increased sales and improved factory
efficiencies, effective promotional management
and factory efficiencies. This growth was also
underpinned by the successes of our capital
investment strategy in the past two years and
increased spend on innovation.
KEY INNOVATIONS AND ACHIEVEMENTS IN 2012
Raising the benchmark for innovation within
the industry is an integral part of our Group
strategy as we focus on attracting consumers
and stimulating sales. We created and
launched over 1,300 products into the UK
market during 2012 and won 11 industry
food awards in recognition of our product
development expertise.
In the UK our innovation pipeline was strong
throughout the year as a direct result of
targeted capital investments in key categories.
In soups we extended our highly successful
New York Soup Co range. Investment in our
pizza category led to new business, including
a major new range for one of our key retailer
customers. Our investment in salad leaf
processing technology further strengthened
our market position.
1 Adjusted EBITDA: excludes restructuring costs, management charges to the Group’s parent company,
asset impairments and those additional charges or credits that are one-off in nature and significance.
2 Like-for-like sales: exclude the impact of acquisitions, disposals, closures, foreign exchange translation,
but include the Group’s share of revenue generated by associates.
page 24 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
business review
international*
+5%
like-for-like
sales growth
OUR INTERNATIONAL LOCATIONS
canada
us
europe
south africa
china
CHINA
Creative Food Group
Shanghai
Beijing
Wuhan
Haiman
Xiamen
Xianyang
Guangzhou
5 farms: Beijing Hebei,
Anhui and Jiangsu
Gastro Primo
Hong Kong
La Rose Noire
Hong Kong
US
Two Chefs
California
Pennsylvania
CANADA
Bakkavor Foods Canada
Ontario
EUROPE
Cinquième Saison
St Pol-de-Léon, France
Mâcon, France
Crudi
Torreilles, France
Sogesol
Murcia, Spain
Vaco Olen
Olen, Belgium
Vaco Herselt
Herselt, Belgium
Heli Fresh Foods
Milin, Czech Republic
Italpizza
Modena, Italy
SOUTH AFRICA
Spring Valley Foods
Johannesburg
* International: Includes French and Spanish operations which
are being sold subject to Competition Authority clearance.
OUR FOCUS ON INNOVATION
CONTINUED IN OUR INTERNATIONAL
BUSINESSES AS WE WORKED WITH
OUR KEY CUSTOMERS TO SUPPORT
THEIR EXTENSIVE GROWTH PLANS.
adjusted ebitda 1 (£m)
11
like-for-like sales 2 (£m)
287
7£11m
12
54%
£302m
SEGMENT description
Our International businesses predominantly
supply private label products to major grocery
retailers and global foodservice operators.
Facilities
We operate 26 facilities and employ
3,950 people.
Countries of operations
We have manufacturing operations in nine
countries: Belgium, Czech Republic, France,
Italy, Spain, the USA, Canada, mainland China
and Hong Kong and South Africa.
Sales performance
Revenue derived from the International
business segment represented £287.2 million
or 17% of Group revenue, equating to a
1% decrease on statutory revenues on the
previous year and a 5.1% increase in likefor-like
revenues. This increase was primarily
driven by our North American and Asian
businesses as these regions continued to
build strong customer relationships. Our Italian
pizza business also achieved strong sales
growth driven by business wins.
Adjusted EBITDA performance
Adjusted EBITDA for the International segment
was £10.9 million, compared with £7.1 million
in 2011, an increase of £3.8 million or 53.5%.
Adjusted EBITDA margin increased by 140
basis points to 3.8% in 2012. Our International
segment continues to benefit from investment
in relationships and growing sales. Our Italian
business continues to win new contracts
and our Asian business is benefiting from a
continuing capital investment programme
that has enabled it to grow capacity to meet
customer demand and deliver efficiencies.
Key innovations and achievements in 2012
Our focus on innovation in 2012 continued in
our International businesses as we worked with
our key retailers and foodservice operators to
support their extensive growth plans.
We launched a range of breakfast products
with a key foodservice customer in Asia as
well as a number of bakery and desserts lines
in North America.
Our continuous commitment to customer
service was recognised through two supplier
awards in the USA and China.
11
12
5%
1 Adjusted EBITDA: excludes restructuring costs, management charges to the Group’s parent company,
asset impairments and those additional charges or credits that are one-off in nature and significance.
2 Like-for-like sales: exclude the impact of acquisitions, disposals, closures, foreign exchange translation,
but include the Group’s share of revenue generated by associates.
page 25 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
financial review
WE DELIVERED A STRONG PERFORMANCE IN 2012 WITH
LIKE-FOR-LIKE SALES GROWTH OF 5.4%.
This was achieved through new business wins as
well as supporting our customers’ pricing initiatives
and promotional campaigns.
Peter Gates
Chief Financial Officer
financial highlights
5.4%
like-for-like
sales growth
GROUP REVENUES
We continued to show good sales growth for the year despite tough
trading conditions, with like-for-like sales growth of 5.4%. This increase
was almost entirely volume driven through successful participation
in promotional activities, new product launches and new business
development. Our pricing, which excludes the one-off costs of
promotion activity, remained relatively flat as raw material inflation
stabilised during Fiscal Year 2012 and price increases negotiated to
offset the effect of the inflation during 2011 remained in place. For
further analysis of the Group’s revenue performance refer to our
Business Review on page 23.
GROSS PROFIT
ADJUSTED EBITDA MARGIN (%)
6.4
6.8%
0.4%
11 12
FREE CASH FLOW (£m)
20.6
£23.5m
14%
11 12
The gross profit margin for 2012 was 26.9%, representing a year-on-year
increase of 90 basis points. Through a combination of successful new
product developments and effective promotional campaigns the Group
has seen its gross margin return to levels experienced prior to 2011, a year
which was materially affected by unprecedented raw material inflation.
DISTRIBUTION AND OTHER ADMINISTRATIVE COSTS
Distribution and other administrative costs increased by £15.2 million,
or 4.3%, as further costs were incurred to support our investments in
innovation and technical excellence to strengthen our leading competitive
position. Furthermore, additional personnel costs were incurred to deliver
like-for-like sales growth; engineering costs increased to support the final
stages of capital investments; and utility costs also increased as a result
of inflation.
ADJUSTED EBITDA
The adjusted EBITDA for the Group was £115.1 million, compared with
£107.7 million in 2011, an increase of £7.4 million or 6.9%. Adjusted EBITDA
margin increased by 40 basis points from 6.4% in 2011 to 6.8% in 2012.
PAGE 26 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
financial review
RECONCILIATION TO ADJUSTED EBITDA 1 FY 2012
£m
FY 2011
£m
Operating profit/(loss) 56.8 (2.8)
Add back:
Depreciation 39.5 39.8
Amortisation 8.7 9.2
Exceptional items (net) 4.4 (7.4)
Bakkavor Group ehf. management charge 0.5 1.2
Impairment of assets 1.0 63.7
Loss on disposal of property, plant and equipment 1.3 0.3
(Profit)/loss on disposal of subsidiaries & associates (0.4) 2.6
Share of results of associates after tax (0.9) (1.1)
Adjusted EBITDA from discontinued operations 4.2 2.2
Adjusted EBITDA 1 115.1 107.7
Exceptional items are those that, in management’s judgement, should be
disclosed by virtue of their nature or amount. Exceptional items comprised:
FY 2012
£m
FY 2011
£m
Restructuring costs 2.8 7.7
Temporary site closure 1.6 –
Defined benefit pension scheme credit – (12.0)
Legal claim settlement – (3.1)
Total 4.4 (7.4)
EXCEPTIONAL ITEMS
For further analysis of the Group’s adjusted EBITDA performance refer
to our Business Review on page 24 and 25.
EXCEPTIONAL ITEMS
During the year, the Group incurred certain one-off costs as part of a
restructuring programme to improve long-term operating performance,
particularly in Europe. The costs incurred to implement this restructuring
amounted to £2.8 million in the year, the majority of which comprised
redundancy costs.
The exceptional costs relating to the temporary closure at one of
our manufacturing sites following a malicious and isolated act of
contamination in the year amounted to £1.6 million. This charge related
primarily to the costs associated with the disposal of products, extending
our installation of CCTV cameras, and the increased costs of working,
which included additional labour costs and further security measures.
The exceptional non-cash credit of £12.0 million in 2011 related to the
fall in the present value of the defined benefit pension scheme liabilities
following the closure of the Group’s scheme to future accrual. Finally,
the Group received £3.1 million in 2011 following the conclusion of a
legal settlement in respect of a trading dispute.
IMPAIRMENT
Each year the Group is required to assess the appropriateness of its
goodwill carrying value by comparing the asset values with future cash
flows expected to be generated from those assets. No impairment of
goodwill or intangible assets has been recognised in 2012, although
an impairment of £1.0m was recognised in relation to tangible fixed
assets which were made redundant. In 2011, an impairment charge of
£63.7 million was recognised reflecting a write-down in the carrying
values of goodwill, intangible assets and tangible fixed assets due to the
combination of adverse trading conditions and management’s decision
to exit certain low-margin businesses.
OPERATING PROFIT
The Company generated an operating profit of £56.8 million (2011: loss of
£2.8 million). In 2011, an impairment charge of £63.7 million was recognised
but the effect of this was partially offset by a £12.0 million exceptional credit
in 2011 relating to the benefit arising from the closure to future accrual
of the defined benefit pension scheme. After stripping out the effect of
these items, the Group’s operating result improved by £7.9 million in 2012,
reflecting the improved sales volumes and factory performance efficiencies.
NET DEBT AND INTEREST
The Group’s net debt totalled £563.9 million (2011: £591.4 million),
representing a reduction of £27.5 million. In line with the term loan
amortisation profile, £4.9 million was repaid. An additional £19.7 million
was repaid from the funds generated from the equity issue in the Group’s
parent company, Bakkavor Group Limited, plus proceeds from the sale of
two vacant properties.
Net finance costs have reduced from £64.9 million in 2011 to £61.1 million
in 2012. This decrease was due to a reduction in average indebtedness
over the period coupled with certain long-term fixed rate interest swaps
maturing in the year. This decrease was partially offset by refinancing
costs related to the corporate re-organisation earlier in the year.
TAX
The Group recorded a tax charge of £2.8 million (2011: £2.5 million credit)
as the Group became profitable in 2012. In addition, a provision was
recognised this year to cover certain tax charges that may now materialise
in relation to prior years.
1 Excludes restructuring costs, asset impairments and those additional charges or credits that are
one-off in nature and significance.
PAGE 27 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
financial review
CASH FLOW
Free cash generation from operations
Free cash generation before financing activities
£ million 2012 2011
Adjusted EBITDA 115.1 107.7
Working capital (2.6) 4.9
Pensions (cash and non-cash) (4.6) (4.4)
Interest paid (54.3) (44.3)
Tax paid (1.0) (3.4)
Capital expenditure (net) (29.1) (39.9)
Free cash generated from operating activities 23.5 20.6
£ million 2012 2011
Free cash generated from operating activities 23.5 20.6
Cash impact of exceptional items (5.2) (3.3)
Payment of deferred consideration (0.2) (4.6)
Acquisition of subsidiary net of cash acquired – (0.2)
Disposal of subsidiary net of cash disposed of 1.4 2.6
Refinancing costs (5.5) (19.1)
Bakkavor Group ehf cash payments (0.5) (1.2)
Cash flow before financing activities 13.5 (5.2)
DISCONTINUED OPERATIONS
The Group has reached formal agreement with Agrial, Société
Cooperative Agricole et Agro-alimentaire, a leading European food
co-operative, for the sale of its French and Spanish produce businesses
comprising Cinquième Saison Saint-Pol SAS, Cinquième Saison Mâcon
SAS, Bakkavor France SAS, Crudi SAS and Sogesol SA for 33 million
Euros debt-free cash-free.
Completion of the transaction is subject to competition authority
clearance, which is expected by the end of the first half of 2013. These
operations have been accounted for as discontinued operations and are
therefore shown separately in the Group’s income statement.
PENSIONS
At 29 December 2012, the defined benefit surplus was £10.0 million
(2011: £9.3 million surplus). There has been little movement in this
surplus as the increase in the fair value of scheme assets has been
broadly offset by a broadly equivalent increase to scheme liabilities.
The defined benefit pension scheme is subject to a triennial valuation
as at March 2013.
FREE CASH GENERATED FROM OPERATING ACTIVITIES
The increase in free cash generation in the year is attributable to an
improved profit performance and a decrease in capital expenditure
(referred to below). Offsetting this was an increase in interest payments
arising from the payment profile attached to the Senior Secured Notes.
These notes were issued in February 2011 with interest payable semiannually
in arrears in February and August. As a result, only one interest
payment was required in the first year.
CAPITAL EXPENDITURE
Our 2011 capital expenditure programme focused on capacity
enhancements across our portfolio of sites to support our growth
objectives and strengthen our market-leading positions. Whilst we
have continued to invest in a broad range of projects in 2012, our focus
has been to ensure the successful integration of these prior year
investments. Nonetheless, we expect capital spend to increase in 2013.
In the event of having to respond to an adverse economic environment
and manage the broader cash requirements of the business as a whole,
we continue to retain flexibility in our discretionary capital spend.
OTHER GAINS & LOSSES
Other gains of £8.4 million (2011: gain of £6.0 million) included a
£6.4 million credit arising on the change in fair value of interest rate
swaps. During the year, £250 million of interest rate swaps matured
leaving £50 million outstanding as at 29 December 2012, which
matures in September 2017.
Peter Gates
Chief Financial Officer
PAGE 28 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
market trends
OUR ABILITY TO TRANSLATE MARKET TRENDS INTO
COMMERCIALLY-SUCCESSFUL PRODUCTS IS CRITICAL TO
OUR LONG-TERM GROWTH, PARTICULARLY IN TODAY’S
COMPETITIVE BUSINESS ENVIRONMENT.
Four key macro trends are influencing consumer
behaviour which, in turn, is shaping retail investment
decisions. Ultimately these trends impact the foods
which we develop and make at Bakkavor.
Here we outline some of the key reasons behind our
focused investment in the fresh prepared foods market
and summarise the macro trends which are influencing
consumer trends, shaping retail developments and,
ultimately, the foods that we make.
4 key macro trends
Health concerns, Societal & technological change,
Financial insecurity and Environmental issues.
6 key consumer trends
Well-being, Time pressure, Indulgence, Ethical consumption,
Expanding repertoires and Smart shopping.
6 key retail trends
Targeted health, Convenient shopping, Ethnic focus, Ethics &
environment, Classic re-invention and Value & promotions.
bakkavor action
At Bakkavor we use our market insight and bespoke research to
develop and launch commercially-successful products which meet
the needs of today’s consumer and the growth aspirations of
our retail and foodservice partners.
why fresh prepared foods
1
2
3
4
DYNAMIC & RESILIENT GROWTH
The fresh prepared foods sector is one of the most dynamic and
diverse in the food industry. It continues to grow faster than the
overall food market by meeting consumer demand for high-quality
food with fresh ingredients, alongside choice, convenience and
value for money.
TIME-SAVING & COST-SAVING LIFESTYLE CHOICE
People are interested in new tastes and quality ingredients but
do not always have the time, skill or budget to cook from scratch
every day. Fresh prepared foods bridge this gap, increasingly
becoming a lifestyle choice, due to their fresh appeal, ease of
cooking (or preparing) and availability across a range of price tiers.
STRATEGIC IMPORTANCE FOR PRIVATE LABEL GROWTH
Fresh prepared foods are sold predominantly under retailer
private labels and are an integral part of a retailer’s overall brand
strategy. They enable retailers to differentiate themselves from
their competitors, which is crucial in today’s challenging retail
environment. Private label continues to gain share in developed
countries around the world.
BUILT ON LONG-LASTING RELATIONSHIPS
Making fresh prepared foods under private labels brings with it
the need for deep trust and understanding between suppliers
and their customers. As products are made with fresh natural
ingredients, suppliers must meet demanding customer
specifications, involving day-to-day communication and excellent
relationships. This is a barrier to entry rather than a risk.
5
BENEFIT OF SPEED TO MARKET
Compared to manufacturer-branded products, fresh prepared foods
give retailers the opportunity to launch differentiated private label
ranges relatively efficiently and cost-effectively, allowing them to
benefit quickly from the demand for high-quality, convenient foods
with fresh ingredients.
PAGE 29 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
macro trends
1. health concerns
500m
adults are obese worldwide.
10% of men and 14% of women -
nearly double the rate of
obesity in 1980. 4
169m
of our leafy and meal
salads were sold in
the uk in 2012.
macro trend
HEALTH CONCERNS
People of all ages are increasingly concerned
about poor health. This is influenced by the
continued rise in global obesity, an ageing
population and sedentary lifestyles, particularly
in the western world. Stress-related sickness
as well as food allergies and intolerances are
also on the rise.
Against this backdrop health awareness
is improving due to the vast amount of
information available through the internet
and media and government-run campaigns
which actively communicate the benefits
of healthier lifestyles. Mobile technology
also allows people to monitor and share
health-related information more easily.
6 in10 increasing
stress
6 in 10 workers in major global economies
are experiencing increased workplace
stress. China has the highest rate of
workplace stress. 5 targeted health
campaigns
In January 2013 the ‘Be Food Smart’
campaign was launched by the
UK government.
consumer trends
WELL-BEING
People are becoming more interested in
pursuing a healthier lifestyle whether through
increased physical exercise, healthy eating
regimes, careful selection (or avoidance)
of specific food ingredients or a better
work-life balance. With information more
easily accessible on product packaging and
online, people are keen to improve their
individual health and well-being needs.
retail trends
TARGETED HEALTH
making
informed choices
“We’re more informed than we’ve ever
been.There’s the 5 A DAY message.” 6
Grocery retailers are developing targeted health
ranges within their portfolio of private label
brands. These ranges cater for different dietary
requirements and preferences: for example,
low-calorie recipes, ‘Free from’ products (e.g.
gluten-free) or meals that combine unique
natural ingredients. Retailers are also providing
clearer information, particularly on their private
label ranges, to help consumers make informed
purchasing decisions.
what does this mean
for bakkavor
Throughout 2012 we worked with our
customers to extend existing healthy ranges,
introduce new recipes and communicate
nutritional advice on-pack. Developments
included naturally balanced ready meal ranges
and healthier soups and pizzas.
bakkavor action: 2012
NATURALLY LIGHT
We launched a PizzaExpress Light range of
pizzas into the retail sector. Giardiniera Light
and Pollo Piccante Light contain fewer than
500 calories each due to a thinner, crispier
dough, low calorie mozzarella and carefully
selected ingredients.
4 The Lancet
5 The Regus Group. www.gostress.com/stress-facts/
6 IGD Winning Shoppers’ Trust
PAGE 30 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
macro trends
2. societal and technological change
72%
of shoppers who own a
smartphone or tablet computer
would like personalised
e-promotions. 7
STRONG GROWTH PREDICTED FOR CONVENIENCE STORES
VALUE OF UK CONVENIENCE MARKET (£bn), 2012–2017F
33.9 35.6 37.4
39.4
41.5
43.6
28.5%
growth 2012-2017
2012 2013f 2014f 2015f 2016f 2017f
Source: IGD
macro trends
SMALLER HOUSEHOLDS STILL GROWING
The breakdown of traditional family structures,
changing lifestyles, and growth in the over 65s
and 20-30 year olds continue to influence the
rise in smaller household sizes.
PERSONALISED SERVICE 24/7
Increased wi-fi accessibility and ownership
of mobile devices allow people to use online
services and access information 24/7. The
popularity of social media has sparked an
expectation for people to receive information
specific to their needs.
consumer trends
TIME PRESSURE
Time-saving shortcuts, such as shopping
for products online and ‘on the move’, are
becoming the norm. People (particularly in
smaller households) continue to look to save
time preparing and cooking food.
EXPANDING REPERTOIRES
Diverse communities, affordable overseas
travel and increased tourism expose people to
new cultures and tastes and gradually increase
people’s willingness to try new things. 43% of
global consumers agree with the statement,
“my taste in food has changed as a result of
exposure to foods from other cultures”. 8
retail trends
CONVENIENT SHOPPING
Grocery retailers are focusing investment in
smaller, town-centre convenience stores and
online shopping (with options such as home
delivery or click and collect). Through store
loyalty cards and the increase in online and
mobile shopping, retailers are improving their
shopper knowledge and attracting current and
potential customers with tailored offers.
ETHNIC FOCUS
Grocery retailers have responded to the rise in
ethnic diversity and demand for new tastes by
dedicating more shelf space to a wider range of
different cuisines.
online grocery
shopping
£11.1bn
The UK’s internet grocery market will be
worth £11.1bn by 2017, almost double its
current value of £5.6bn.This represents a
CAGR of 14.6% between 2012 and 2017. 9
what does this mean
for bakkavor
Sales of Bakkavor products should benefit
directly from the increase in convenience
stores and the rise in single-person
households. An expectation of 24/7 service
and increased retailer investment in online
and delivery services means that fresh
prepared foods are bought with increasing
confidence around the clock.
bakkavor action: 2012
SOCIAL COMMUNICATION
We promote the health benefits of watercress
on Facebook and Twitter. 13 million packs of
our watercress were sold in 2012.
www.facebook.com/watercress
JUST FOR ONE
We launched a range of small 8” premium
pizzas and microwaveable pizza slices.
NEW TASTE SENSATIONS
We launched modern Spanish ready meals and
breads, a restaurant-inspired Indian range and
Mexican meals and side dishes. We also ‘spiced
up’ dips and salads with fresh ingredients such
as jalapeno peppers and wasabi.
7 IGD: Winning Shoppers’ Trust
8 Datamonitor: Experimentation: Consumer & Innovation Trends
9 IGD October 2012
PAGE 31 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
macro trends
3. financial insecurity
6 in10
our best-selling
uk family ready meal
2012: chicken tikka
massala
shoppers claim to be buying more
on promotion since the start of
2012 and half are looking out
for promotions before
going shopping. 10
macro trend
GLOBAL ISSUES – LOCAL WORRIES
Macroeconomic issues are impacting the
spending habits and behaviour of consumers.
High national debt, continued uncertainty
in the euro zone, GDP slow-downs, rising
unemployment and higher living costs are
having a tangible impact on everyday lives.
15 million British consumers worry about their
finances every single day 11 .
consumer trends
SMART SHOPPING
People have adopted a ‘recessionary mindset’
and are becoming ‘smart shoppers’, comparing
prices, responding more readily to promotional
offers and buying more selectively.
ENJOYMENT & INDULGENCE
Despite the recession, people still feel the
need for a reward and look for affordable ways
to treat themselves, family and friends, as
evidenced by the rise in in-home dining.
Stress and financial uncertainty often
cause people to look back to the past for
reassurance and comfort. As a result old
‘classics’ are being revived. Complementing
this trend is a heightened demand for local
and national products, symbolising values,
beliefs and identities.
retail trends
VALUE & PROMOTIONS
In today’s highly competitive and recessionary
environment, private label developments
remain of strategic importance to retailers.
Offering private label ranges at different price
points (from budget to premium) enables
retailers to strengthen their share and provide
customer choice.
Retailers are also employing selective private
label promotions such as ‘Meal deal’ and ‘Dine
In’ offers (a pick and mix selection for a fixed
price) to help consumers save money and
benefit from the trend for in-home dining.
CLASSIC RE-INVENTION
valuing private
label
“I’m going to budget more with food
prices going up. I’ll switch to more
supermarket brands to save money.” 12
To meet demand for old favourites, retailers
are promoting classic dishes using local or
regional ingredients. In the UK, this trend was
particularly prominent in 2012 owing to events
such as the Royal Jubilee.
Grocery retailers are re-introducing traditional
fresh food counters in store, providing
consumers with a personal service, the ability
to choose specific products and quantities and
to ask advice from experts.
what does this mean
for bakkavor
By working with retailers to focus on private
label products (from premium to value and prepackaged
to over-the-counter ranges) Bakkavor
is able to develop products quickly and at
different price points to meet consumer needs.
bakkavor action: 2012
MEAL DEALS
We make starters, main courses, side dishes
and desserts. Our products featured regularly
in meal deal promotions.
CLASSIC FAVOURITES
We worked with our customers to introduce a
diverse range of high quality products for their
in-store counters including Mediterranean
deli products, patisserie cakes, pizzas and
speciality breads.
10 IGD Shoppervista, June 2012
11 Russell Investments
12 IGD: Winning Shoppers’ Trust Oct 2012
PAGE 32 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
macro trends
4. environmental issues
80%
of our new ready meal
tray made from recycled
materials
our 2013
target is 90%
macro trend
GLOBAL SOCIAL AND
ENVIRONMENTAL CONCERNS
More accessible information, greater media
coverage and the localised impact of extreme
weather conditions and natural disasters
have raised the importance of taking personal
action to protect our environment.
ETHICAL CONSUMPTION
More people are assessing the way they lead
their day-to-day lives from an environmental
and social viewpoint. Taking personal
responsibility is becoming increasingly
important as people try to recycle more, save
energy, reduce their carbon footprint and buy
more recyclable and ethical products. This
trend has been heightened further by the
current economic climate with people realising
the financial cost of wasting resources such as
food and energy.
retail trends
ETHICS & ENVIRONMENT
The ability for grocery retailers to demonstrate
to the public that ethical and environmental
issues are being managed effectively has
become increasingly important, with most
major retailers sharing formal commitments
to reduce their impact in areas such as waste,
energy and their carbon footprint. Many
of these commitments are communicated
overtly to their customers in order to enhance
reputation and increase loyalty.
Initiatives include building environmentallyfriendly
stores, increasing recyclable product
packaging, and sourcing more locally-made or
fair-trade products. A key retail development
is the integration of social and environmental
initiatives into private label strategies. This
necessitates commitment from their suppliers
to achieve strategic sustainability goals.
what does this mean
for bakkavor
We work closely with our customers to
help them meet their social, ethical and
environmental objectives for their private
label strategies.
consumer trends bakkavor action: 2012
reducing food
waste
53%
Half of shoppers claim to be focusing
more on reducing food waste (48%) and
only buying what is needed (53%) since
the start of 2012. 13
recyclable
packaging
75%
Being recyclable is shoppers’ top
priority for making packaging more
environmentally friendly, with three
quarters (75%) identifying it as
particularly appealing. 14
ENVIRONMENTALLY FRIENDLY
In conjunction with one of our strategic
packaging suppliers we have developed and
launched the first ready meal oven tray that
is made from 80% recycled materials and is
also fully recyclable. Our target is to increase
the amount of recycled material to over 90%
by 2013.
13 IGD:Winning Shoppers’ trust
14 IGD Environmental sustainability – how to engage shoppers, June 2011
PAGE 33 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
our responsibilities
AT BAKKAVOR WE FOCUS ON DOING THINGS
THE RIGHT WAY.
For us this means engaging with the people that
matter, striving for continuous improvement and
building a sustainable business.
Ann Savage
Group Technical Director
Our Group Technical Director, Ann Savage, has overall responsibility
for the Group’s Corporate Social Responsibility (CSR) policies and
performance and reports monthly to the Management Board, on
which she sits.
OUR RESPONSIBILITY REPORTING IS SPLIT INTO THREE SECTIONS:
managing our
responsibilities
We describe the structure and
resources we have in place in order
to manage our priority focus areas
effectively. We also share our Key
Performance Indicators (KPIs) and
our progress against them.
• structures
• reporting
• performance
engaging our
stakeholders
We demonstrate how we
engage effectively with our key
stakeholders and share some
of our actions in this area.
• identified
stakeholders
• effective
engagement
running our
business
sustainably
We outline some of the key CSR
initiatives implemented in 2012
and actions identified for 2013,
underpinning our commitment
to continuous improvement and
running our business sustainably.
• key initiatives
• future focus
PAGE 34 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
our responsibilities
1. managing our responsibilities
IN THIS SECTION WE DESCRIBE THE STRUCTURE AND
RESOURCES WE HAVE IN PLACE IN ORDER TO MANAGE OUR
PRIORITY FOCUS AREAS EFFECTIVELY.
We also share our Key Performance Indicators (KPIs)
and our progress against them.
1. managing our responsibilities
food safety & csr initiatives
PRIORITY FOCUS AREAS
• Food safety
• Health & Safety (H&S)
• Environment
employee initiatives
PRIORITY FOCUS AREAS
• Employee retention
• Employee training and development
• Other employee areas: diversity,
temporary labour
RESPONSIBILITY
Group Technical Director,
Central and business
Technical teams
RESPONSIBILITY
Group and business
HR teams
OUR APPROACH
Our overall CSR approach ensures compliance with legislation relevant
to our global operations. Where appropriate for our business, we look for
opportunities within our CSR framework to create competitive advantage.
Our established management systems help us to concentrate on
our identified priority focus areas. Within these, we concentrate our
actions where we have direct control and where we can make the most
positive impact.
We take a continuous improvement approach to the development and
sharing of good practice across the business through specialist project
teams, conferences, workshops and our Group Employee Forum (GEF).
The systems we have in place are supported by our values to ensure
we do things the right way, and we recognise and reward our people
for their action and engagement in CSR initiatives at our annual Group
Responsibility Awards. The awards focus on seven categories:
• Good Neighbour
• Environment
• Health & Safety Innovation
community initiatives
PRIORITY FOCUS AREAS
• Community understanding
and support
RESPONSIBILITY
Bakkavor businesses
• Health & Safety Culture
• Health & Safety Star
• Site Employee Forum (SEF) of the Year
• GEF Representative of the Year.
PAGE 35 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
our responsibilities
1. managing our responsibilities
ann savage
group technical director sits on management board
MAJOR ACCIDENTS PER
100,000 EMPLOYEES
HSE Food and
Drink industry
average
26%
TOTAL ACCIDENTS PER
100,000 EMPLOYEES
year-on-year
08 09 10 11 12 08 09 10 11 12
10%
year-on-year
central technical team
food safety, health & safety, environment, food science &
microbiology, technical innovation and agronomy expertise
monitors and supports
adherence to standards
co-ordinates and drives
continuous improvement
food safety, health and safety
& environment initiatives
Our Group Technical Director, Ann Savage, is supported by the Central
Technical team who provide specialist expertise in the key areas of
food safety, food science and microbiology, health and safety, technical
innovation and agronomy. The team’s role is to embed and monitor
sound CSR practices and standards across the business.
FOOD SAFETY
Millions of people eat our products every day. We have a duty to make
food that is safe for people to eat and, as we are entrusted to make
products under our customers’ private labels, we have a duty to respect
and protect the integrity of these brands. We have policies and standards
in place which recognise legal and customer requirements.
Measures and performance
We use quality management systems and tested procedures to guide
our businesses on the high standards we expect. We utilise several
verification processes including scientific testing in our own laboratories,
announced and unannounced audits, and management reviews to
ensure that we do what we say we do. Information from our verification
processes is fed back into our quality management systems and we
take corrective and preventative action when required.
The Bakkavor Management Board is accountable for the effective
implementation of our Food Safety Policy; and the Group’s food safety
performance is presented at each Management Board meeting.
HEALTH AND SAFETY (H&S)
Our responsibility is to take every reasonable step to secure and protect
the health and safety of our employees and those people who are
working on our premises.
We have four health and safety measures as required by law and which
we believe are the most useful to report in our businesses: major
accidents, reportable injuries, total accidents and near misses.
Measures and performance
One of the key H&S measures is Major Accidents per 100,000
employees and in 2012 our performance improved by 26% year on year.
Historically we have performed significantly better than the average for
the food and drink industry and we will continue to track our progress
against this third-party measure. Our total number of accidents also fell
by 10% in 2012 compared to the previous year.
ENVIRONMENT
We are committed to complying with relevant legislation and managing
the direct impacts of our businesses on the environment. Our
Environmental Policy focuses on business improvement initiatives in five
key areas over which we have immediate control: Energy, Waste, Water,
Packaging and Transport.
Measures and performance
In the UK, we measure the amount of total waste, in percentage
and absolute terms, which we divert from landfill. We achieved a
significant step change in improvement when we first started to use this
performance measure in 2009 through a variety of initiatives such as
waste segregation and anaerobic digestion of food waste. In 2012, as in
the previous year, we diverted over 98% of our waste away from landfill.
PAGE 36 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
our responsibilities
1. managing our responsibilities
group head of hr
EMPLOYEE RETENTION
Managers: target 90%
Site-graded employees: target 75%
GROUP-WIDE HR FUNCTION
GRADUATE & APPRENTICE RECRUITMENT,
GROUP HR SYSTEMS, GROUP BENEFITS,
GROUP TRAINING, INDUSTRY LIAISON
AND ENGAGEMENT
EMPLOYMENT LAW REVIEW
COMMITTEE & UPDATE MEETINGS
HR FORUMS & CONFERENCES
10 11 12
managers retained 90%
site-graded employees retained 92%
business hr teams / site-specific hr
employee initiatives
The Group Head of HR, Gillian Haythornthwaite, is responsible for
ensuring employee practices and initiatives are implemented across
the businesses, monitoring performance and reporting monthly to the
Management Board on our employee KPIs. She manages the Group HR
function which covers key employee areas such as Group recruitment, HR
systems, benefits and training, and supports the UK HR business teams.
In addition, Gillian chairs the Employment Law Review Committee,
which is responsible for updating Group policies, processes and
procedures with revisions and changes in legislation. As part of this,
Employment Law update meetings are held for business HR teams
to discuss the impact of these changes and to ensure that they are
communicated effectively.
In order to develop best practice across the Group and drive HR
excellence, the function organises regular HR Forums and an annual HR
Conference. Every two years our businesses carry out self-assessments
– HR Steps to Excellence – which set out what ‘good’ should look like
in the HR function and drive an action plan at business level for our HR
teams to implement.
We have also recently appointed a Group HR Director, Pippa Greenslade,
to ensure that the HR function is fully involved at a strategic level right
across the Group.
EMPLOYEE RETENTION
We aim to nurture a dynamic, inclusive and values-led working
environment which recognises, rewards and promotes our employees
fairly to encourage them to stay with our business.
Measures and performance
Employee retention is one of our key measures and we have set
ourselves a target of 90% for managers and 75% for our site-graded
employees. For the fourth year in a row we have hit or exceeded our
targets, achieving retention rates of 90% for managers and 92% for
site-graded employees in 2012.
We also measure the number of vacancies that we fill internally and
have set ourselves a target of 50%. This is an important measure as it
demonstrates our wish to keep and promote good people within the
business who have the right values and who understand the behaviours
expected of them. This year we just fell short of our target, filling 45%
of vacancies internally, largely due to our success at promoting internally
the previous two years. However we will continue to focus our efforts in
this area through communication and action at our Functional Forums.
% vacancies filled internally
target
50%
2010
52%
2011
52%
2012
45%
PAGE 37
VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
our responsibilities
1. managing our responsibilities
a cohesive workforce is one where:
• EVERYONE IS TREATED WITH DIGNITY AND RESPECT
• THE TALENTS AND SKILLS OF DIFFERENT GROUPS ARE VALUED
• PRODUCTIVITY AND CUSTOMER SERVICE IMPROVE BECAUSE
THE WORKFORCE IS HAPPIER, MORE MOTIVATED AND MORE
AWARE OF THE BENEFITS THAT INCLUSION CAN BRING
EMPLOYEE DEVELOPMENT AND SUCCESSION (DAS)
The Bakkavor DAS process is focused on developing our people to
reach their full potential. It includes performance appraisals, personal
development plans and DAS meetings.
In 2012 we updated the DAS process, making it more relevant to our
business needs across the Group and ensuring that we have the systems
in place to develop and support our most talented people. This process
will facilitate career development across the Group more effectively.
We have introduced a new Functional Talent Pipeline. This will help us
measure the strength of each function today, as well as the potential
to fill roles in the future. In addition, we also track, by individual, those
employees who are ready for an immediate move as well as those
ready for a move in one year. All this helps us to promote from within
wherever possible.
Measures and performance
The DAS process is supported by two key measures – % of DAS
discussions undertaken every six months for all employees above a
certain band and % of completed annual appraisals. Our starting base
in 2012 is 75% for DAS discussions and 80% for completed appraisals
with a target of 100% for both.
ACCELERATED MANAGEMENT SCHEME (AMS)
We recognise the shortage of skilled and motivated people coming into
the food industry and we have established our own programmes to help
address this issue.
DIVERSITY
We are proud of our multi-cultural workforce and are committed to
encouraging diversity within the business. In 2012 we launched a ‘Better
Together’ self-audit tool which identifies what we need to do to make
our workforce even more cohesive than it already is.
TEMPORARY LABOUR
We have seasonal requirements for additional temporary resource and,
in the UK, we work closely with a selected group of fully accredited and
licensed temporary labour providers, whom we audit regularly.
All UK temporary workers are subject to UK legislation and in 2012
we introduced and implemented a new system across our UK sites to
promote sound governance in this area and to ensure compliance with
the requirements of the Agency Workers’ Directive.
community initiatives
Reflecting the strength of our decentralised operating structure, we believe
that our local Bakkavor business teams are best placed to understand
the needs of their communities and support local initiatives. At a Group
level we actively encourage our employees through several established
recognition award schemes and by communicating their achievements
internally and externally. For more information please see page 40.
Measures and performance
Our two-year Accelerated Management Scheme is a fast-track
programme for new graduates and current employees, giving them
hands-on experience in ‘real’ jobs alongside trainers and mentors. AMS
participants specialise in one of six core areas of strategic importance
to the business: Manufacturing, Product Development, Technical (food
safety), Produce procurement, Purchasing, and Finance. We recruited
14 people onto the Scheme in 2012 and many former AMS participants
have since taken on important roles within the Group.
PAGE 38 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
our responsibilities
2. engaging with our stakeholders
IN THIS SECTION WE DEMONSTRATE HOW WE ENGAGE
EFFECTIVELY WITH OUR KEY STAKEHOLDERS AND SHARE
SOME OF OUR ACTIONS IN THIS AREA.
SPEAK-OUT! HELPLINE
We are rolling out an anonymous employee whistle-blowing
telephone and web hotline in 15 languages to encourage
employees to raise issues which they feel cannot be dealt
with, for whatever reason, through normal management
lines. The HR team also uses this channel to encourage
communication where site-specific issues have been
identified. This two-way approach means action can
be taken quickly and effectively. 21 sites now
have the hotline in place.
2. engaging with our stakeholders
key identified
stakeholder groups
• employees
• customers
• local communities
EMPLOYEE ENGAGEMENT: COMMUNICATION
• suppliers
• investors
• industry
One of the biggest challenges we face as a large, decentralised food
company is ensuring we communicate effectively and encourage
employee engagement across, and within, our businesses.
CUSTOMER ENGAGEMENT: PARTNERSHIP APPROACH
We are committed to providing our customers with outstanding service,
quality, innovation and value. We commission regular consumer research
to ensure we stay ahead of emerging trends and we build strong
relationships with customers across all levels of the business so that we
can develop and make innovative and commercially-viable products.
As part of our commitment to our customers we aim to not only meet
but exceed their specific scorecard criteria, which cover a range of
performance indicators such as commercial, technical, service, new
product development and innovation, as well as how we do business.
Senior management customer champions are also appointed to ensure
that customer communication, relations and account planning are given
a high profile within the business.
In addition, we work collaboratively with customers to support specific
initiatives as set out in their Corporate Responsibility agendas.
in 2012 we received three awards from major
customers for our partnership approach.
We provide open channels of communication between employees
and management through regular Site Employee Forums (SEFs) and
the annual Group Employee Forum (GEF) where matters of common
concern are discussed and learnings, best practice and ideas are shared.
This enables positive policy development and the communication and
discussion of operational changes.
PAGE 39 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
our responsibilities
2. engaging with our stakeholders
IN 2012, THE GROUP DONATED OVER £159,000 TO
CHARITABLE ORGANISATIONS.
The largest contributor within the Group was
Bakkavor Spalding’s Staff Shop, based in Lincolnshire,
which donates all proceeds to local charities and
employee events.
Employees at our GEF 2012, who organise site events to raise money for local charities
SUPPLIER ENGAGEMENT: COLLABORATIVE WORKING
We have developed our most successful relationships with suppliers
who understand customer service, food safety excellence, a quest for
continuous improvement and the importance of innovative forward
thinking. These criteria form part of our supplier selection process and
are essential in meeting our long-term needs.
Over the past few years our focus has been heavily geared towards
managing the impact of price volatility in commodity markets. To help
mitigate the effects of price fluctuations we are, where possible,
increasingly hedging our exposure via longer forward contracts on key
commodity items and establishing cost-principled pricing contracts to
reduce the impact of market sentiment. This involves working closely
with key suppliers. Having an established relationship with them is a
vital part of the contract negotiation process.
Human Rights and ethical auditing
Bakkavor supports the United Nations’ Universal Declaration of
Human Rights and the core conventions of the International Labour
Organisation. We, and our suppliers, are required to comply with all
local and national laws covering working hours and conditions, health
and safety, rates of pay, terms of employment and minimum age of
employment. We carry out ethical audits on our suppliers, where
required, based on risk-assessment and customer specifications. We
are founder members of SEDEX, which helps to risk-assess the supply
chain according to the ETI Base Code.
INVESTOR ENGAGEMENT: OPENNESS AND TRANSPARENCY
COMMUNITY ENGAGEMENT: UNDERSTANDING AND HELPING
We expect our local management teams to understand the issues
facing their communities and we encourage them to support local
initiatives. At our annual Group Responsibility Awards ceremony we
present our Good Neighbour Award to the site that has made the most
positive impact in its local community.
At the 2012 awards held in May, nine sites submitted an entry for
our Good Neighbour Award and Ann Savage, GEF Chairperson, was
delighted to announce Caledonian Produce as the overall winner.
Caledonian successfully linked up with the local newspaper to ask
people in its community which charities the business should support.
This forged a positive relationship with the local paper and proved an
effective way of engaging with the local community.
In 2012, the Group donated over £159,000 to charitable organisations.
The largest contributor within the Group was Bakkavor Spalding’s
Staff Shop, based in Lincolnshire, which donates all proceeds to local
charities and employee events.
INDUSTRY ENGAGEMENT: BEING PART OF THE DEBATE
Our Group Technical Director and Group CSR Manager actively engage
with external CR-related forums and industry working groups and,
between them, sit on all major customer working parties. Examples
of industry engagement include: Industry Grocery Distribution (IGD)
Industry Sustainability Group and Water Stewardship, IGD New and
Emerging Technologies Group and IGD Technical Leadership Forum.
We are committed to open, timely and unbiased communication with all
stakeholders, whilst being conscious of the need to respect commercial
sensitivities. More detail on our investor engagement programme can
be found on page 48 in our Corporate Governance section.
PAGE 40 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
our responsibilities
3. running our business sustainably
IN THIS SECTION WE OUTLINE SOME OF THE KEY CSR
INITIATIVES IMPLEMENTED ACROSS OUR BUSINESSES IN
2012 AS WELL AS IDENTIFIED ACTIONS FOR 2013.
By concentrating on these areas we aim to run
our business in a sustainable way and uphold our
commitment to continuous improvement.

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
our responsibilities
3. running our business sustainably
10
FOLLOWING OUR LAST EMPLOYEE SURVEY IN 2010,
EMPLOYEE COMMUNICATION WAS IDENTIFIED AS A
KEY IMPROVEMENT AREA.
Sbakkavor apprenticeships
taken up in 2012
As a direct result of this, in 2012 we established
a Group Communications Policy which sets out
standards for Group and site communication.
our 2013
target is 30
GROUP APPRENTICESHIPS
2012 action
In May 2012 we launched the Bakkavor Apprenticeship Scheme
(BAS) offering Advanced Apprenticeships in Food Development,
Manufacturing, Food Technology and Administration across various
locations in the UK and working with the University of Lincoln as
our learning provider. Successful applicants are paid more than the
recommended weekly wage during their two-year apprenticeship
and work towards an IPQ Level 3 Diploma in Food Industry Skills. In
September 2012 we took on our first 10 apprentices.
2013 focus
Attracting good people into the business remains a priority. We aim to
offer 30 BAS places in 2013 and have allocated dedicated resource inhouse
to co-ordinate applicants and programmes.
DIVERSITY
2012 action
Our ‘Better Together’ self-audit tool was designed in 2011 and launched
at the beginning of 2012. During the year 16 sites completed the selfaudit
and put in place action plans to improve workforce cohesion.
2013 focus
Following the first self-audits we have started to implement three action
plans to ensure that our approach to diversity remains high on the agenda.
• Diversity maps: our aim is to develop a diversity map for each
business to assess and understand better our diversity profiles.
• Diversity training: our aim initially is to train all managers in Dignity at
Work (our internal diversity programme) and to ensure this training is
refreshed every two years.
• Embedding our values: this initiative, already underway, has been
identified as a key activity to support a more cohesive workforce.
EMPLOYEE COMMUNICATION
2012 action
At our 2012 GEF we relaunched our values using a new ‘winning team’
theme to bring them to life and to embed them across the Group. The new
look values have now been rolled out across the Group (see page 21).
Following our last Employee Survey in 2010, employee communication
was identified as a key improvement area. As a direct result of this, in
2012 we established a Group Communications Policy which sets out
standards for Group and site communication. As part of this policy we
now publish a quarterly Group newsletter which updates all employees
on activities across the Group and our General Managers brief their sites
every quarter on the Group’s performance.
Another initiative which came about as a direct result of the 2010
employee survey was a need to improve the effectiveness of the SEF.
Our first action was to benchmark our SEF against other companies.
Although we were pleased to note that our SEF ranked highly
against those of our peer group, we identified a need to improve the
understanding of the role of the SEF amongst our middle managers and
those responsible for chairing each local SEF.
2013 focus
We have developed customised training programmes for middle managers
and SEF Chair people to improve the effectiveness of the SEF and we aim
to measure their impact in the next employee survey due in 2013.
INDUSTRY ENGAGEMENT
2012 action
In September 2012 we took part in a nationwide UK industry initiative
to help tackle the issue of long-term youth unemployment through
Skills for Work workshops. A number of our sites held half-day training
sessions on CV writing and interview techniques.
2013 focus
We have pledged to continue our proactive involvement in this initiative
and have agreed to take part in the 2013 Skills for Work week.
PAGE 42 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
board of directors*
running our business with integrity
1. Lydur Gudmundsson
Non-executive Chairman
Lydur founded Bakkavor Group with his brother Agust in 1986 and has
served on its Board of Directors since its founding. He served as Chief
Executive Officer of Bakkavor Group from 1986 to 2006, and has served as
the Chairman of the Board of Directors since 2006. Lydur was educated at
the Commercial College of Iceland.
2. Agust Gudmundsson
Chief Executive Officer
Agust founded Bakkavor Group with his brother Lydur in 1986 and has
served on the Board of Directors since the Company’s founding. He has
served as Chief Executive Officer of Bakkavor Group since 2006, having
previously served as the company’s Executive Chairman between 1986 and
2006. Agust was educated at the College of Armuli in Reykjavík, Iceland.
3. Halldor B. Ludvigsson
Non-executive Director
Halldor was elected to the Bakkavor Group Board of Directors in May
2010. He serves as a Managing Director at Arion Banki’s corporate
finance division. Before Halldor joined the bank, he held various
management positions, including serving as the CEO of Maritech,
an international technology company. He holds a master’s degree in
Mechanical Engineering and a BSc in Computer Science from the
University of Iceland. He is a member of the board of Atorka hf., Klakki
ehf., Eignabjarg ehf., Landey ehf. and Interbulk plc.
4. Bjarni Th. Bjarnason
Non-executive Director
Bjarni was elected to the Group’s Board of Directors in May 2010. He is the
Deputy CEO and one of the founders of Arctica Finance hf., an advisory
firm in Iceland. Bjarni has held various corporate advisory positions in
Icelandic banks, serving last as head of corporate advisory at Landsbanki
from 2003 to 2008. He is a member of the Board of Arvakur hf., Byrjun
ehf., Arctica Eignarhaldsfelag ehf., SMI ehf., Viti fjarfestingafelag ehf. and
Þorsmork ehf. Bjarni holds a BSc. degree in Mechanical Engineering from
the University of Iceland and an MBA from Southern Methodist University.
5. Gudmundur I. Sigurdsson
Non-executive Director
Gudmundur was elected to the Bakkavor Group Board of Directors on 25
September 2012. From May 2010 to September 2012, he served as an
alternate Director to the Bakkavor Group Board. Gudmundur is a partner
at Lex law offices, an Icelandic legal firm, where he is an Attorney at Law.
He holds a Cand jur. degree from the Faculty of Law of the University of
Iceland and a Masters degree in Law (LL.M) from Duke University School
of Law. Gudmundur is admitted to practise before the District Court
in Iceland, and from March 2013 he is admitted to practise before the
Supreme Court of Iceland.
1
2
4
WE ARE COMMITTED
TO PRACTISING
AND PROMOTING
GOOD GOVERNANCE
THROUGHOUT THE GROUP.
3
5
* This is the structure of the Board as at 29 December 2012. Asgeir Thoroddsen resigned from
the Group Board as Non-executive Director in September 2012.
PAGE 43 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND 2012 ACCOUNTS 2012
management board*
aligning governance and business objectives
1
2 3
4
5 6
7
8
1. Agust Gudmundsson
Chief Executive Officer
See previous page.
2. Peter Gates
Chief Financial Officer
Peter was appointed CFO of Bakkavor Group in November 2010. He
has worked in a number of international companies, including Saatchi
& Saatchi Co. plc and Avis Europe plc. Peter spent much of 2009 at
Bakkavor as Interim Group Treasurer. He is a Chartered Accountant and
a member of the Association of Corporate Treasurers. Peter has a BSc
(Hons) degree in Economics from the University of Southampton.
3. Ann Savage
Group Technical Director
Ann was appointed Group Technical Director in 2004. She is responsible
for Food Safety, Health and Safety management, Manufacturing
Excellence and Environmental management at Bakkavor. Ann has more
than 30 years of experience in technical, research and development and
manufacturing roles within the retail and food industry. She studied at
the Open University and has a Postgraduate Diploma in Management
Studies from Nottingham University.
4. John Gorman
President – Bakkavor North America
John took up his current position in January 2012, prior to which he
worked as the Group’s Business Director of Fresh Meal Solutions in the
UK. John has over 30 years’ experience in chilled food, 22 of which have
been at Bakkavor and Geest. He has held senior roles in Operations,
Technical and New Product Development and senior offices with a
number of UK Food and Drink research organisations and associations.
John studied Food Technology at Manchester Metropolitan University.
5. Einar Gustafsson
Managing Director – Bakkavor Asia
Einar was appointed Managing Director for Bakkavor Asia in 2005 and
has served within the Group for seven years. He began his career at
Deloitte Consulting, after which he successfully turned around two
businesses in the seafood industry. Einar has a BSc degree in Business
Administration from the University of Southern California and an MBA
from Columbia Business School.
6. Mike Edwards
Sector Managing Director
Mike is Managing Director of the Meals Solutions sector in the UK. He
joined Bakkavor in 2001 as a manufacturing manager and held various
general and senior management roles within the Group before taking
his current position. Prior to joining Bakkavor Mike worked in general
management at Heinz. He has a BA (Hons) in Business Studies from
Portsmouth Polytechnic.
7. Ivan Clingan
Sector Managing Director
Ivan is Managing Director of the Prepared Produce sector in the UK. Since
joining Bakkavor in 1990 Ivan worked in various financial, general and senior
management roles before taking his current position. Prior to Bakkavor he
worked at Nestle. Ivan has a BA (Joint Hons) in Finance and Economics
from the University of Stirling and is a Qualified Accountant (CIMA).
8. Steve Broadbent
Sector Managing Director
Steve is Managing Director of the Convenience Foods sector in the UK.
He joined Bakkavor in 1997 as a general manager and held various roles in
manufacturing, general and senior management before taking his current
position. He entered the food industry in 1982 as a Graduate Trainee
(Manufacturing) at Express Dairy UK Ltd (later a part of Northern Foods)
and has a BSc (Hons) in Applied Biochemistry from Brunel University.
* Gordon Pates, CEO UK & Europe, retired from the Group at the end of December 2012.
PAGE 44 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
corporate governance
AT BAKKAVOR WE BELIEVE THAT EFFECTIVE
GOVERNANCE IS REALISED THROUGH LEADERSHIP
AND COLLABORATION.
STAKEHOLDERS
MANAGEMENT BOARD
GROUP
BOARD
GROUP OPERATIONS
OUR GOVERNANCE FRAMEWORK
Bakkavor Group operates within a governance framework which we
believe identifies all the elements of a sound approach to governance
and responsibility.
The Board, together with the Management Board, uses this framework
to set and monitor governance and responsibility objectives, identify
improvement opportunities and ensure that activities align with business
strategy. Through this framework we provide assurance to all our
stakeholders that Bakkavor is a well-managed, responsible company.
WHAT DOES GOVERNANCE MEAN FOR US
At Bakkavor, governance is about making sure that the Group Board and
the Management Board:
• have assessed the necessary options and are taking the business in
the right strategic direction
• are leading and managing the business effectively and are
accountable for their actions
• have put in place appropriate controls which are used actively
throughout the business
• consider the interests of all our stakeholders in making
executive decisions
HOW DO WE MAKE THIS HAPPEN
At Bakkavor, we believe that effective governance is realised through
leadership and collaboration.
The Group Board retains ultimate responsibility for upholding corporate
governance standards and determining the strategic objectives of
the Group.
The Management Board implements the strategic objectives of the
Group Board, determines investment policies, agrees on performance
criteria and delegates to management of the Group operations the
detailed planning and implementation of those objectives and policies
in accordance with appropriate risk parameters.
The Management Board monitors compliance with policies and
achievement against objectives by holding management accountable
for its activities through monthly and quarterly performance reporting
and budget updates. In addition, the Management Board receives
regular presentations from directors of key Group functions including
Marketing, Human Resources and Legal, enabling it to explore specific
issues and developments in greater detail.
The governance framework is reinforced across the organisation and
addresses all stakeholder interests through the five Bakkavor values,
which define our approach to all aspects of our business. Our values
are: Customer care, Can do, Teamwork, Innovation and Getting it right/
Keeping it right. These values are fundamental to our ability to carry
out our day-to-day business with integrity. We recruit new people and
reward all managers against their ability to demonstrate Bakkavor values
in the day-to-day running of the business. In 2012 our values were
relaunched and communicated across the Group.
PAGE 45 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
corporate governance
OUR BOARD OF DIRECTORS BRINGS A VALUABLE AND
BALANCED RANGE OF EXPERIENCE.
5 core values define our approach
to all aspects of our business:
• customer care
• can do
• teamwork
• innovation
• getting it right /
keeping it right
ABOUT OUR BOARD
Board composition and effectiveness
In conjunction with the issuance of Senior Secure Notes in 2011, the
Company, Bakkavor Finance (2) plc, was incorporated and acts as a
holding company of the Group. The Directors were therefore appointed
either on or subsequent to the Company’s incorporation date. (For
further details of Company appointments refer to the Directors’ Report
on page 51). The table below highlights the appointment of Board
members to the overall Group, prior to the incorporation of the holding
company, Bakkavor Finance (2) plc.
Date of
appointment
Non-executive Chairman Lydur Gudmundsson 01/08/1986
Chief Executive Officer Agust Gudmundsson 01/08/1986
Non-executive Directors Bjarni Th. Bjarnason 14/05/2010
Halldor B. Ludvigsson 14/05/2010
Gudmundur I. Sigurdsson 25/09/2012
Asgeir Thoroddsen
Resigned
25/09/2012
BOARD MEETINGS
The Board of Directors convened six times in 2012. The attendance is
set out below.
Scheduled
Board meeting
Board Director
attendance in 2012
Non-executive Chairman Lydur Gudmundsson 6/6
Chief Executive Officer Agust Gudmundsson 6/6
Non-executive Directors Asgeir Thoroddsen* 3/4
Bjarni Th. Bjarnason 6/6
Halldór B. Ludvigsson 6/6
Gudmundur I. Sigurdsson* 2/2
In advance of each regular Board meeting, the Board members are
provided with a Board report which includes a comprehensive report
of the Group’s financial and operational performance, and a broader
market update. Board members are informed about all significant
matters immediately.
The majority of the Board Directors were independent during the
financial reporting period, with three independent members and two
non-independent members.
It is considered that the size and composition of the Board of Directors
makes it possible for it to discharge its duties efficiently and with integrity.
Together, the Board of Directors brings a valuable and balanced range of
experience as they all hold senior positions in professional and public life.
(See page 43 for profiles of our Board of Directors).
* Asgeir Thoroddsen, Non-executive Director, resigned from the Group Board on 25 September 2012.
Gudmundur Sigurdsson was appointed to the Group Board on 25 September 2012.
PAGE 46 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
corporate governance
OUR DECENTRALISED MODEL EMPOWERS THE
MANAGEMENT OF OUR BUSINESSES TO IDENTIFY,
EVALUATE AND MANAGE THE RISKS THEY FACE.
LOSS OF KEY
EMPLOYEES
OPERATIONAL RISKS
FOOD
SAFETY &
INTEGRITY
GROUP TECHNICAL DIRECTOR
COMMODITY
PRICE INFLATION
HEALTH
AND SAFETY
MARKET RISKS
CONSUMER
UNDERSTANDING
CHIEF EXECUTIVE OFFICER
CUSTOMER
RELATIONSHIPS
INTEREST
RATES,
LIQUIDITY
AND CREDIT
COVENANT
COMPLIANCE
CHIEF FINANCIAL OFFICER
FINANCIAL RISKS
RISK IDENTIFICATION AND MANAGEMENT
Our decentralised model empowers the management of our businesses
to identify, evaluate and manage the risks they face on a timely basis.
Key risks and internal control procedures are reviewed at Group level
by the Management Board and the management of principal risks
is assigned to key members of the Management Board. It is their
responsibility to report to the Board on a monthly basis regarding
the actions associated with each of those risks.
In 2011 we reported eight risks, the mitigation of which is paramount
to the day-to-day running of our business and the achievement of our
long-term vision. Following a risk assessment in 2012, it was confirmed
that all eight identified risks remain key risks to the business. These
are: Food safety and integrity, Health & Safety, Loss of key employees,
Customer relationships, Consumer understanding, Commodity price
Inflation, Covenant compliance and Interest rates, Liquidity & credit.
For more information about why these risks are deemed to be key,
how we aim to mitigate them and who is responsible for managing
them see page 49 and 50.
CONTROLS AND COMPLIANCE
The Board conducts an annual review of the Group’s systems of internal
control. These systems provide an ongoing process that identifies,
evaluates and manages the risks that are significant in relation to the
fulfilment of the Group’s business objectives. The systems are designed
to manage rather than to eliminate all possible risk and to provide
reasonable, but not absolute, assurance against material misstatement
or loss. The system also supports management’s decision-making,
improves the reliability of business performance and assists in the
preparation of the Company’s consolidated accounts.
RISK MANAGEMENT PROCESS
operational risks
technical & she*
audit team(s)
group board
management board
Responsible for management of principal risks and
reviewing key risks and internal control procedures
alongside Audit committee
financial risks
Dedicated teams responsible for assessment and
management of risks at operational level
internal
audit
market risks
marketing and
npd* teams
*SHE: Safety, Health and Environment
*NPD: New Product Development
PAGE 47 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
corporate governance
IN 2012 WE HELD OVER 600 MEETINGS AND TELEPHONE
CALLS WITH INVESTORS AND ANALYSTS.
INVESTOR ENGAGEMENT PROGRAMME
200
one-on-one
investor meetings
agm
quarterly
reporting
corporate
website
relaunched
>350
attendees or call
participants on
results days
45
investors who
toured our
factories
AUDIT COMMITTEE
The Board has delegated authority to the Audit Committee, which
comprises key management across the business, to regularly monitor
internal controls. Each year the Audit Committee meets to discuss
and approve the nature and scope of the audit programme for the
year. The Audit Committee then instructs the internal audit function to
undertake the agreed schedule of audits, during which the effectiveness
of the controls operating within the business are reviewed. The
Group’s internal audit function, which comprises both employees and
professionals from an external provider, RSM Tenon, has the skills and
experience relevant to the operation of each business.
In addition to our internal audit function, the completion of comprehensive
internal control questionnaires is required from all Financial Controllers
within each business unit. These self-assessment representations are
designed to ensure that any material control breakdowns are highlighted
and the operation of internal controls is addressed within each business
unit. The results of these representations are reviewed by internal audit
before being reported to the Audit Committee.
AUDITORS
The Audit Committee is also responsible for the appointment of the
Company’s Auditor, Deloitte LLP. Annually the Committee reviews the
relationships the Company has with Deloitte LLP and considers the
level of non-audit services provided by the Auditor. The engagement
of Deloitte LLP for non-audit services requires approval from the Group
Financial Controller and, if significant, the Audit Committee, to ensure
that any services provided do not impair the objectivity of the external
Auditor. A list of non-audit services provided by Deloitte LLP in 2012
and the associated fees has been provided in Note 6 of the Group’s
financial statements.
Disclosure of information to Auditor
Each of the persons who is a Director at the date of approval of this
Annual Report confirms that:
• so far as the Director is aware, there is no relevant audit information
of which the Company’s Auditor is unaware; and
• the Director has taken all the steps that he ought to have taken
as a Director in order to make himself aware of any relevant audit
information and to establish that the Company’s Auditor is aware
of that information.
This confirmation is given and should be interpreted in accordance with
the provisions of s418(2) of the Companies Act 2006.
Deloitte LLP has expressed its willingness to continue in office as
Auditor and a resolution to reappoint Deloitte LLP will be proposed at
the Company’s Annual General Meeting.
ENGAGING WITH INVESTORS
The Board delegates the management of Bakkavor’s investor
engagement programme to our CEO, CFO and Head of External Affairs.
In 2012 the team ran a comprehensive programme and held over 600
meetings and telephone calls with investors and analysts. Please refer
to the Investor Relations section on our website for an overview of the
2013 Financial Calendar.
PAGE 48 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
our risks
WE HAVE IDENTIFIED EIGHT RISKS, THE SUCCESSFUL
MITIGATION OF WHICH IS PARAMOUNT TO THE DAY-TO-DAY
RUNNING OF OUR BUSINESS AND THE ACHIEVEMENT OF OUR
LONG-TERM VISION. WE SHARE THESE WITH YOU BELOW.
OUR EIGHT KEY RISKS TO THE BUSINESS
1
2
FOOD SAFETY
& INTEGRITY
HEALTH
AND SAFETY (H&S)
WHY THIS RISK AFFECTS US
Millions of people eat our products every day.
We have a duty to make food that is safe for
people to eat and is clearly and correctly labelled.
We have a duty of care to take every reasonable
step to secure and protect the H&S of our
employees across the Group. A relatively high
proportion of our employees (over 80%) work in
fast-moving manufacturing environments.
WHAT MIGHT HAPPEN IF WE GET IT WRONG
Failing to make safe products or label them
accurately would damage our reputation in the
industry and could also, ultimately, jeopardise the
industry’s long-term prospects.
Compromising on the H&S of our 19,000
employees would damage our reputation within
the industry and would further impact the business
through loss of employee trust.
FINANCIAL RISKS MARKET RISKS OPERATIONAL RISKS
3
4
5
6
7
8
LOSS OF KEY
EMPLOYEES
CUSTOMER
RELATIONSHIPS
CONSUMER
UNDERSTANDING
COMMODITY
PRICE INFLATION
COVENANT
COMPLIANCE
INTEREST RATES,
LIQUIDITY AND CREDIT
We have a highly experienced senior
management team which is passionate about
the business and whom we consider to be a
key competitive strength.
We work with a concentrated number of some
of the largest food retailers and foodservice
providers in the world and we aim to be their
supplier of choice.
Our diverse and innovative product range is
critical to developing customer relations and
future growth.
Bakkavor spends over £800 million on
ingredients and packaging every year and may
be exposed to fluctuating prices in significant
areas of expenditure.
We are subject to various financial covenants
and undertakings as a consequence of our
borrowing agreements.
We are a relatively highly leveraged company
and therefore exposed to the external risk of
interest rate fluctuations and the market’s view
of our credit rating.
We would be unable to fulfil our strategic growth
objectives without the recruitment, development
and retention of talented and committed people
who understand and respect our values.
Given the size and relatively small number of
customers, any major customer loss would have
a significantly negative impact on our turnover,
manufacturing efficiency and profit.
Investing in product areas which fail or
underperform is costly in terms of resource,
profitability and our reputation with our customers.
In the short term, increases in cost prices adversely
affect individual product margins. In the longer
term, the inability to pass on significant commodity
cost increases within a reasonable timeframe
would impact the Group’s profit negatively.
In order to achieve our growth objectives, we
require a strong financial platform. Breaching
any covenant would destabilise our platform
for growth and may impair our ability to secure
future financing.
In order to achieve our growth objectives, we require
a strong financial platform. An inability to repay
interest or a downgrading of the Group’s credit rating
may impair our ability to secure future financing.
PAGE 49 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
our risks
WHO MANAGES OUR RISKS
Management of all risks are assigned to Management Board
members and discussed at each Management Board meeting.
Risks 1 & 2: Ann Savage, Group Technical Director
Risks 3, 4, 5 & 6: Agust Gudmundsson, Chief Executive Officer
Risks 7 & 8: Peter Gates, Chief Financial Officer
1
HOW WE MITIGATE OUR RISKS
We use Hazard Analysis Critical Control Point (HACCP) principles to
identify the food safety controls required in our businesses. All operational
staff are trained in food safety using documented procedures derived from
the HACCP plan. We ensure compliance through audit of our sites and our
suppliers of key raw materials, using a combination of internal and external
food safety experts.
PROGRESS
We have continued to invest in food safety processes in order to
remain leading class in this area.
Risk management in action:
In July 2012 one of our sites was the subject of a malicious and
isolated act of contamination. Our risk management processes
prevented any contaminated products from leaving the factory.
We took additional steps by installing CCTV and encouraging
employees to use our new ‘Speak out’ service. For more
information see page 39.
FINANCIAL RISKS MARKET RISKS OPERATIONAL RISKS
2
3
4
5
6
7
8
Our Group Technical Director is responsible for the Group’s H&S policies
and performance and is supported by the Central Technical team which
provides specialist expertise in key areas including H&S. H&S KPIs are
reported monthly to the Management Board.
The team’s role is to embed and monitor sound H&S practices and
standards across the business and to develop a proactive accident
prevention culture across the Group.
We communicate our values internally in order to provide our employees
with a cohesive framework. We recruit, appraise, reward and develop our
employees against these values. We are committed to ‘growing our own’
people and provide relevant training to help our employees reach their
potential. We have developed a ‘talent pipeline’ of employees based on
performance and potential and we identify opportunities for them to grow
within the business.
Customer care is one of our five values. We invest in significant resource
to manage and develop deep and long-lasting relationships with our
customers, ensuring they have access to dedicated Bakkavor employees
at all levels of the decision-making process. At a senior management level
we appoint Customer Champions in the UK to manage customer relations
and long-term strategic account planning.
We regularly commission consumer research and communicate its results
to our marketing and product development teams. Market trends and
Bakkavor’s market share performance are discussed at each Bakkavor
Management Board meeting.
Through its central procurement team the Group aims to benefit from its
scale and strong supplier relationships to achieve the requisite balance
between price, quality, availability and service levels. Where possible it is
the Group’s policy to pass on commodity price increases. Equally, it seeks to
reduce costs and make products as efficiently as possible in order to offset
any delays in achieving price increases.
Bakkavor reviews its projections and covenant position monthly.
The Group believes it is adequately placed to manage this risk
successfully despite the current uncertain economic outlook and
challenging macroeconomic conditions. Mitigating actions in 2012
included successful price negotiations, cost reduction programmes and
enhanced working capital policies, all of which will continue into 2013.
These risks are actively managed by the Group’s Treasury Department. The
Treasury function operates within the framework of strict Board-approved
policies and procedures which are explained further in Note 29 of the
Group Financial Statements.
Our key H&S measure is Major Accidents per 100,000
employees. In 2012 our performance improved by 26% and we
continue to perform significantly better than the average for the
food and drink industry. Our total number of accidents also fell
by 10% in 2012.
In 2012 we relaunched our values across the Group.
See page 21.
For the fourth year in a row we have hit or exceeded our
employee retention targets, achieving retention rates of 90%
for managers and 92% for site-graded employees in 2012.
We filled 45% of our vacancies internally in 2012.
We continue to work collaboratively with customers to secure
joint business plans and deliver growth across the categories
in which we operate. In 2012, we received three supplier
awards from our customers in recognition of our service and
partnership approach.
We launched over 2,000 products in 2012 and won 11 food
product awards, testament to our product quality and innovation.
The Group has increased its level of hedging and as at 29
December 2012 32% of raw material spend for 2013 was hedged.
We will continue to mitigate raw material price volatility through
forward purchasing. However, in certain instances there is not
always a seller willing to enter into such forward contracts.
Further hedging arrangements will be secured where it is both
practical and possible to do so.
We renegotiated our leverage covenant in early 2012, providing
increased headroom and allowing management to focus on the
long-term strategy of the Group. The Directors consider that
the Group has the flexibility to react to further deteriorating
market conditions through implementing previously agreed early
settlement arrangements with our core customers and reducing
our capital expenditure programme. Further actions available to
management include supply chain improvements and additional
cuts to discretionary spend.
Fixed interest rate swaps totalling £300 million matured in the
year, leading to a reduction in interest payments. The Group
continues to enter into forward contracts to reduce the Group’s
exposure to foreign exchange rate movements.
PAGE 50 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
directors’ report
THE DIRECTORS PRESENT THEIR ANNUAL REPORT ON
THE AFFAIRS OF THE BAKKAVOR FINANCE (2) PLC GROUP
(THE “GROUP”).
This is accompanied by the financial statements
and Auditor’s report for the 52 weeks ended
29 December 2012. Comparatives are for the 52
weeks ended 31 December 2011.
index to principal directors’ report disclosures
Auditor 48
Board of Directors 52
Charitable donations 52
Creditor payment policy 52
Directors’ responsibilities 52
Disclosure of information to Auditor 48
Employee involvement 39
Employees with disabilities 52
Equal opportunities 52
Going concern 51
Political donations 52
Principal activities 51
Profit 51
Dividends 52
PRINCIPAL ACTIVITIES
The Group is a leading provider of fresh prepared food products in the
United Kingdom. Our customers include some of the United Kingdom’s
most reputable and well-known grocery retailers, including Tesco, Marks
& Spencer, J Sainsbury, Waitrose, Asda and Morrisons, which sell our
products to their customers predominantly under their respective private
labels. We have also established a significant presence in development
markets for fresh prepared and private label food products, including
Europe, the United States and China. The subsidiaries principally
affecting the profits or net assets of the Group in the period are listed in
Note 8 to the Company only financial statements.
RESULTS FOR THE YEAR
The results of the Group for the year are set out in the Group income
statement. The profit for the year after taxation and exceptional items
was £2.1 million (2011: loss after tax of £75.0 million). Further details of
the Group’s financial performance are outlined in the Business Review.
GOING CONCERN
The Directors, in their detailed consideration of going concern, have
reviewed the Group’s future cash forecasts and revenue projections,
which they believe are based on prudent market data and past
experience, and believe, based on those forecasts and projections, that
it is appropriate to prepare the financial statements of the Company and
the Group on a going concern basis.
In arriving at this conclusion the Directors considered the Group’s
financing arrangements, which comprise £350 million of seven-year
listed bonds issued in February 2011 and £350 million of bank facilities
committed to June 2014. The Company is in advanced discussions
with its lenders regarding the refinancing of these bank facilities. Both
the Company and its lenders are committed to the refinancing of both
the term loan and revolving credit facility and the Board is confident of
announcing new financing arrangements in the near future.
Importantly, the Group’s liquidity remains particularly strong with
£83.8 million of facilities undrawn as at 29 December 2012.
The existing bank facilities are subject to a series of covenants set by
the lenders. Financial covenants are measured quarterly and include an
assessment of leverage (the ratio of net debt to EBITDA, being earnings
before interest, tax, depreciation and amortisation); cash flow cover (the
ratio of finance charges to cash generated from operations); interest
cover (the ratio of finance charges to EBITDA); and capital expenditure
limits. The key financial covenant is leverage; this was re-set earlier in
the year following the successful restructuring of the Company’s parent.
Under the revised covenant, leverage must be less than 5.75 times at
the 2012 financial year-end and less than 5.0 times at the 2013 financial
year-end. At 29 December 2012 the leverage ratio of net debt to EBITDA
was 4.9 times. At the date of this report the Group has complied in
all respects with the terms of its borrowing agreements, including its
financial covenants, and forecasts to continue to do so.
The Group believes it is adequately placed to manage covenant
compliance successfully despite the challenging macroeconomic
environment. In the event that conditions worsen, the Group has the
flexibility to react by accessing additional working capital arrangements
that we have already agreed with key stakeholders. Further actions
available to management may include a reduction to our capital
expenditure programme and further supply chain improvements.
Consequently, the Directors have a reasonable expectation that the
Company and the Group have adequate resources to comply with these
covenants and meet their liabilities as they fall due for a period of at
least 12 months from the date of approval of the financial statements.
For this reason, they continue to adopt the going concern basis in
preparing the financial statements.
FUTURE DEVELOPMENTS
As we enter the new financial year, the ongoing macroeconomic
pressures on consumers and retailers combined with further inflation
on raw material prices remain a challenge for the business. Despite this,
the Directors are of the opinion that the strategic actions implemented
in the current year, coupled with capacity and productivity investments
across the Group, leave the Company in a stronger position to compete
with these economic pressures. Further detail on future prospects are
outlined in the Chairman’s Address and the Business Review.
RESEARCH AND DEVELOPMENT
The main focus of the Group’s research and development expenditure is
product innovation. Research and development expenditure increased by
14.5% to £6.3 million in 2012 (2011: £5.5 million).
PAGE 51 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
directors’ report
DURING THE 2012 PERIOD THE GROUP MADE CHARITABLE
DONATIONS OF £159,000 PRINCIPALLY TO LOCAL CHARITIES
SERVING THE COMMUNITIES IN WHICH THE GROUP
OPERATES (2011: £158,168).
directors and their interests
The Directors, who served throughout the period and to the date
of this report are set out in the table below.
Director Appointed Resigned
A Gudmundsson 21 January 2011 -
L Gudmundsson 7 March 2011 -
B Bjarnason 7 March 2011 -
H Ludvigsson 7 March 2011 -
G Sigurdsson 25 September 2012 -
A Thoroddsen 7 March 2011 25 September 2012
Both A Gudmundsson and P Gates were appointed Directors on the date of incorporation, 21
January 2011. On completion of the refinancing agreement, being 7 March 2011, P Gates resigned
from the Board of Directors to allow for the Director’s of the Company’s parent, Bakkavor Group
ehf., to be appointed. The Company has made qualifying third party indemnity provisions for the
benefit of Directors who remain in force at the date of this report.
EQUAL OPPORTUNITIES
The Group is an equal opportunities employer. Equal opportunities are offered
to all regardless of race, colour, nationality, ethnic origin, sex (including
gender reassignment), marital or civil partnership status, disability, religion,
belief, sexual orientation, pregnancy and maternity, age or trade union
membership. All candidates and employees are treated equally in respect
of recruitment, promotion, training, pay and other employment policies and
conditions. All decisions are based on relevant merit and abilities.
DISABLED EMPLOYEES
The Group gives full and fair consideration to employment applications
made by people with disabilities. We offer equal opportunity to all
disabled candidates and employees who have a disability or who
become disabled during the course of their employment. A full
assessment of the individual’s needs is undertaken and reasonable
adjustments are made to the work environment and/or practices in
order to assist those with disabilities.
DIVIDENDS
The Directors do not propose payment of a dividend for year ended
29 December 2012 (2011: £nil).
FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES
Information on the Group’s financial risk management objectives and
policies and on the exposure of the Group to relevant risks in respect of
financial instruments is set out in the Our Risks section and in Note 29,
Financial Instruments.
SUPPLIER PAYMENT POLICY
The Company’s policy, which is also applied by the Group, is to settle on
appropriate terms of payment with suppliers when agreeing the terms of
each transaction, and to ensure that suppliers are made aware of those terms
of payment and subsequently comply with those terms. Trade creditors of the
Group at 29 December 2012 were equivalent to 66 (2011:60) days’ purchases,
based on the average daily amount invoiced by suppliers during the year.
POLITICAL DONATIONS
No political donations were made during the period (2011: £nil).
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have elected to prepare the financial
statements in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union. 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 Company and the Group
and of the profit or loss of the Group for that period. In preparing these financial
statements, International Accounting Standard 1 requires that Directors:
• properly select and apply accounting policies;
• present information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable information;
• provide additional disclosures when compliance with the specific
requirements in IFRSs are insufficient to enable users to understand
the impact of particular transactions, other events and conditions on
the entity’s financial position and financial performance; and
• make an assessment of the Company and the Group’s ability to
continue as a going concern.
The Directors are responsible for keeping adequate accounting records that
are sufficient to show and explain the Group’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
comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Group and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
By order of the Board
Agust Gudmundsson
Director
20 February 2013
PAGE 52 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
independent auditor’s report
TO THE MEMBERS OF BAKKAVOR FINANCE (2) PLC
We have audited the financial statements of Bakkavor Finance (2) plc (the ‘Company’) and its subsidiaries (the ‘Group’) for the 52 weeks ended 29
December 2012 (‘period’) which comprise the consolidated income statement, consolidated statement of comprehensive income, consolidated
statement of financial position, consolidated statement of changes in equity, consolidated statement of cash flows, and the related notes 1 to 39,
Company income statement, Company statement of changes in equity, Company statement of financial position, Company statement of cash flows,
and the related notes 1 to 13. The financial reporting framework that has been applied in their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union.
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit
work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report
and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and
the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and auditor
As explained more fully in the Directors’ Responsibilities Statement, 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
(APB’s) Ethical Standards for Auditors.
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 non-financial information in the annual report to identify material inconsistencies with the audited financial
statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications of 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 the parent Company’s affairs as at 29 December 2012 and of the Group’s profit and
Company’s result for the period then ended;
• have been properly prepared in accordance with IFRSs as adopted by the European Union; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
Separate opinion in relation to IFRSs as issued by the IASB
As explained in note 2 to the financial statements, the Group in addition to applying IFRSs as adopted by the European Union, has also applied IFRSs
as issued by the International Accounting Standards Board (IASB).
In our opinion the Group financial statements comply with IFRSs as issued by the IASB.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ Report for the financial year for which the financial statements are prepared is consistent with
the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us 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 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.
Christopher Robertson (Senior Statutory Auditor)
for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor, Birmingham, UK
20 February 2013
PAGE 53 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
consolidated income statement
52 WEEKS ENDED 29 DECEMBER 2012
52 weeks ended 29 December 2012 52 weeks ended 31 December 2011
Before
Before
non- Non- non- Nonrecurring
recurring recurring recurring
£m Notes items items Total items items Total
Continuing operations
Revenue 4,5 1,588.6 – 1,588.6 1,565.8 – 1,565.8
Cost of sales (1,160.6) – (1,160.6) (1,158.2) – (1,158.2)
Gross profit 428.0 – 428.0 407.6 – 407.6
Distribution costs (78.0) – (78.0) (75.2) – (75.2)
Other administrative costs (288.6) – (288.6) (276.2) – (276.2)
Exceptional items (net) 7 – (4.4) (4.4) – 7.4 7.4
Bakkavor Group ehf management charge (0.5) – (0.5) (1.2) – (1.2)
Impairment of assets 8 – (1.0) (1.0) – (63.7) (63.7)
Total administrative costs (289.1) (5.4) (294.5) (277.4) (56.3) (333.7)
Profit/(loss) on disposal of subsidiary 31 – 0.4 0.4 – (1.0) (1.0)
Loss on disposal of associate 32 – – – – (1.6) (1.6)
Share of results of associates after tax 18 0.9 – 0.9 1.1 – 1.1
Operating profit/(loss) 6 61.8 (5.0) 56.8 56.1 (58.9) (2.8)
Investment revenue 10 0.1 – 0.1 0.1 – 0.1
Finance costs 12 (61.2) – (61.2) (65.0) – (65.0)
Other gains (net) 11 8.4 – 8.4 6.0 – 6.0
Profit/(loss) before tax 9.1 (5.0) 4.1 (2.8) (58.9) (61.7)
Tax 13 (2.7) (0.1) (2.8) 3.3 (0.8) 2.5
Profit/(loss) for the period from continuing operations 6.4 (5.1) 1.3 0.5 (59.7) (59.2)
Discontinued operations
Profit/(loss) for the period from discontinued operations 14 – 0.8 0.8 (2.4) (13.4) (15.8)
Profit/(loss) for the period 6.4 (4.3) 2.1 (1.9) (73.1) (75.0)
Attributable to:
Equity holders of the parent 6.7 (4.3) 2.4 (0.4) (73.1) (73.5)
Non-controlling interests (0.3) – (0.3) (1.5) – (1.5)
6.4 (4.3) 2.1 (1.9) (73.1) (75.0)
PAGE 54 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
consolidated statement of comprehensive income
52 WEEKS ENDED 29 DECEMBER 2012
52 weeks 52 weeks
ended ended
29 December 31 December
£m Notes 2012 2011
Profit/(loss) for the period 2.1 (75.0)
Other comprehensive income/(expense)
Continuing operations
Exchange differences on translation of foreign operations (3.6) (2.0)
Net exchange gains recycled to income statement on disposal of subsidiary 31 – (0.4)
Actuarial loss on defined benefit pension schemes 36 (3.9) (18.9)
Tax relating to components of other comprehensive income 13 0.9 5.0
(6.6) (16.3)
Discontinued operations
Exchange differences on translation of foreign operations (0.1) (0.1)
(6.7) (16.4)
Total comprehensive expense (4.6) (91.4)
Attributable to:
Equity holders of the parent (4.3) (89.9)
Non-controlling interests (0.3) (1.5)
(4.6) (91.4)
PAGE 55 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
consolidated statement of financial position
29 DECEMBER 2012
£m Notes 29 December 2012 31 December 2011
Non-current assets
Goodwill 15 665.4 667.1
Other intangible assets 16 26.9 35.7
Property, plant and equipment 17 267.9 307.7
Interests in associates 18 10.0 10.0
Other investments 19 0.1 0.1
Retirement benefit asset 36 10.0 9.3
Current assets
980.3 1,029.9
Inventories 20 61.8 62.5
Trade and other receivables 21 189.2 190.1
Cash and cash equivalents 22 30.5 30.1
Derivative financial instruments 24 0.6 0.4
282.1 283.1
Assets classified as held for sale 14 35.2 –
317.3 283.1
Total assets 1,297.6 1,313.0
Current liabilities
Trade and other payables 27 (302.7) (315.2)
Current tax liabilities (22.7) (17.3)
Borrowings 23 (31.8) (32.6)
Obligations under finance leases 26 (0.1) (0.8)
Provisions 28 (0.9) (1.8)
Derivative financial instruments 24 (10.1) (17.9)
(368.3) (385.6)
Liabilities associated with assets classified as held for sale 14 (24.0) –
Non-current liabilities
(392.3) (385.6)
Trade and other payables 27 (0.1) (0.3)
Borrowings 23 (562.2) (586.3)
Obligations under finance leases 26 (0.3) (1.8)
Provisions 28 (10.9) (10.6)
Deferred tax liabilities 25 (22.9) (27.1)
(596.4) (626.1)
Total liabilities (988.7) (1,011.7)
Net assets 308.9 301.3
Equity
Share capital 30 0.1 0.1
Share premium 30 315.2 302.4
Merger reserve 30 45.2 45.2
Capital reserve 30 4.0 4.0
Translation reserve 30 20.0 23.7
Retained earnings (75.6) (75.3)
Equity attributable to owners of the parent 308.9 300.1
Non-controlling interests – 1.2
Total equity 308.9 301.3
The financial statements of Bakkavor Finance (2) plc and the accompanying notes, which form an integral part of the consolidated financial statements,
were approved by the Board of Directors on 20 February 2013. They were signed on behalf of the Board of Directors by:
A Gudmundsson
Director
PAGE 56 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
consolidated statement of changes in equity
52 WEEKS ENDED 29 DECEMBER 2012
Equity attributable to owners of the parent
Non
Share Share Merger Capital Translation Retained controlling Total
£m capital premium reserve reserve reserve earnings Total interests equity
Balance at 1 January 2011 0.1 96.6 45.2 4.0 26.2 12.1 184.2 3.5 187.7
Loss for the period – – – – – (73.5) (73.5) (1.5) (75.0)
Other comprehensive expense for the period – – – – (2.5) (13.9) (16.4) – (16.4)
Total comprehensive expense for the period – – – – (2.5) (87.4) (89.9) (1.5) (91.4)
Acquisition of subsidiary – – – – – – – (0.8) (0.8)
New shares issued – 205.8 – – – – 205.8 – 205.8
Balance at 31 December 2011 0.1 302.4 45.2 4.0 23.7 (75.3) 300.1 1.2 301.3
Profit/(loss) for the period – – – – – 2.4 2.4 (0.3) 2.1
Other comprehensive expense for the period – – – – (3.7) (3.0) (6.7) – (6.7)
Total comprehensive expense for the period – – – – (3.7) (0.6) (4.3) (0.3) (4.6)
Disposal of subsidiary – – – – – – – (0.6) (0.6)
Acquisition of non-controlling interest – – – – – 0.3 0.3 (0.3) –
New shares issued – 12.8 – – – – 12.8 – 12.8
Balance at 29 December 2012 0.1 315.2 45.2 4.0 20.0 (75.6) 308.9 – 308.9
PAGE 57 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
consolidated statement of cash flows
52 WEEKS ENDED 29 DECEMBER 2012
52 weeks 52 weeks
ended ended
29 December 31 December
£m Notes 2012 2011
Net cash generated from operating activities 33 40.7 35.8
Investing activities:
Interest received 0.1 0.1
Dividends received from associates 0.6 1.0
Purchases of property, plant and equipment (32.4) (41.8)
Proceeds on disposal of property, plant and equipment 3.3 1.9
Payment of deferred consideration (0.2) (4.6)
Acquisition of subsidiary net of cash acquired 32 – (0.2)
Disposal of subsidiary net of cash disposed of 31 1.4 2.6
Net cash used in investing activities (27.2) (41.0)
Financing activities:
Issue of shares 12.8 –
Increase in borrowings 0.9 352.2
Repayments of borrowings (25.4) (354.5)
Repayments of obligations under finance leases (0.5) (2.9)
Net cash used in financing activities (12.2) (5.2)
Net increase/(decrease) in cash and cash equivalents 1.3 (10.4)
Cash and cash equivalents at beginning of period 30.1 40.8
Effect of foreign exchange rate changes (0.3) (0.3)
Cash and cash equivalents at end of period 31.1 30.1
Attributable to:
Continuing operations 30.5 25.7
Assets held for sale 0.6 4.4
31.1 30.1
PAGE 58 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
52 WEEKS ENDED 29 DECEMBER 2012
1
GENERAL INFORMATION
Bakkavor Finance (2) plc (the ‘Company’) is a Public Limited Company whose ultimate parent Company and controlling party is Bakkavor Group
Limited (formerly Bakkavor Holdings Limited), a Company registered in the United Kingdom. The address of the registered office is given on page 109.
The principal activities of the Company and its subsidiaries (the ‘Group’) comprise preparation and marketing of fresh prepared foods and the
marketing and distribution of fresh produce. These activities are undertaken in the UK, Continental Europe, Asia, South Africa and the US and products
are primarily sold through high street supermarkets.
In the current year, the Group has adopted the following interpretations with no material impact on the financial statements of the Group:
IFRS 1 Amendments First Time Adoption of IFRSs (Dec 2010)
IFRS 7 Amendments Disclosures: Transfers of Financial Assets (Oct 2010)
IAS 24 Amendments Related Party Disclosures (Nov 2009)
IFRIC 14 Amendments Prepayments of a Minimum Funding Requirement (Nov 2009)
Various Amendments Improvements to IFRSs (May 2010)
At the date of authorisation of these financial statements, the following Standards and Interpretations which have not been applied in these financial
statements were in issue but not yet effective (and in some cases have not yet been adopted by the EU):
IFRS 1 Amendments Government loans (Mar 2012)
IFRS 7 Amendments Disclosures: Offsetting Financial Assets and Financial Liabilities (Dec 2011)
IFRS 9 Financial Instruments (Nov 2009)
IFRS 9 Amendments Financial Instruments (Oct 2010)
IFRS 10 Consolidated Financial Instruments (May 2011)
IFRS 11 Joint Arrangements (May 2011)
IFRS 12 Disclosures of Interests in Other Entities (May 2011)
IFRS 13 Fair Value Measurement (May 2011)
IAS 1 Amendments Presentation of Items of Other Comprehensive Income (June 2011)
IAS 12 Amendments Deferred Tax: Recovery of Underlying Assets (Dec 2010)
IAS 19 Amendments Employee Benefits (June 2011)
IAS 27 Separate Financial Statements (May 2011)
IAS 28 Investments in Associates and Joint Ventures (May 2011)
IAS 32 Amendments Presentation: Offsetting Financial Assets and Financial Liabilities (Dec 2011)
Various Amendments Annual Improvements 2009 – 2011 cycle (May 2012)
Various Amendments
Consolidated Financial Statements, Joint Arrangements and
Disclosures of Interests in Other Entities: Transition Guidance (June 2012)
Various Amendments IFRS 10, IFRS 12 and IAS 27: Investments Entities (Oct 2012)
With the exception of IAS 19 Employee Benefits and IFRS 9 Financial Instruments, which the Group plans to adopt for the periods beginning on
29 December 2013 and 4 January 2015 respectively, the Directors anticipate that the adoption of these Standards and Interpretations will have no
material impact on the financial statements of the Group. The adoption of IAS 19 Employee Benefits and IFRS 9 Financial Instruments will impact
the recognition and disclosure of Employee Benefits and the measurement and disclosure of Financial Instruments. It is not practical to quantify
the future impact of the application of IFRS 9.
PAGE 59 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
2
SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as issued by the International
Accounting Standards Board (IASB). The financial statements have also been prepared in accordance with IFRSs adopted by the European Union.
These financial statements are presented in Pounds Sterling because that is the currency of the primary economic environment in which the Group
operates. Foreign operations are included in accordance with the foreign currency policy set out below.
The financial statements have been prepared on the historical cost basis, except for the revaluation of financial instruments. The principal accounting
policies adopted are set out below.
Corporate Re-organisation
In February 2011 a corporate re-organisation was completed in order to establish Bakkavor Finance (2) plc as an intermediate holding company of the
Group and was accounted for using the principles of merger accounting.
As the corporate re-organisation did not have a direct result on the Group and the underlying business has operated for all periods, the Board of
Directors have prepared the financial statements to present all years on a comparative basis as if the Company had existed for all periods. Therefore the
comparative figures and the first 20 days of January 2011 relate to its indirect parent, Bakkavor Group Limited (formerly Bakkavor Holdings Limited).
Going Concern
The Directors have reviewed the historical trading performance of the Group and the forecasts through to December 2015, to assess the level of
finance required across the Group. See page 51, for the Directors’ consideration of Going Concern.
Basis of consolidation
The Group financial statements comprise the financial statements of the parent undertaking and its subsidiary undertakings, together with the
Group’s share of the results of associated undertakings comprising a 53 or 52 week period ending on the Saturday nearest to 31 December. Where
the fiscal year 2012 is quoted in these financial statements this relates to the 52 week period ended 29 December 2012. The fiscal year 2011 relates to
the 52 week period ended 31 December 2011.
Subsidiaries
Subsidiary undertakings are included in the Group financial statements from the date on which control over the operating and financial policies is
obtained, and cease to be consolidated from the date on which control is transferred out of the Group. Control exists when the Group has the power
directly, or indirectly, to govern the financial and operating policies of an entity so as to obtain economic benefits from its activities.
Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. The carrying amount of
the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference
between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly
in equity and attributed to the owners of the Company.
Associates
An associate is an entity over which the Group is in a position to exercise significant influence, through participation in the financial and operating
policy decisions of the investee. Significant influence is the power to participate in the financial and operating policy decisions of the investee but
is not control or joint control over those policies. The results, assets and liabilities of associates are incorporated in these financial statements using
the equity method of accounting. Investments in associates are carried in the statement of financial position at cost as adjusted by post-acquisition
changes in the Group’s share of the net assets of the associate, less any impairment in the value of individual investments.
Goodwill within the associate is separately identifiable at the date of acquisition. Any negative goodwill is credited in the income statement
in the period of acquisition. Losses may provide evidence of an impairment of the asset transferred in which case appropriate provision is made
for impairment.
Where a Group company transacts with an associate of the Group, profits and losses are eliminated to the extent of the Group’s interest in the
relevant associate.
PAGE 60 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
2
SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Business combinations
Business acquisitions from third parties are accounted for using the acquisition method. The cost of the acquisition is measured at the aggregate of
the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for
control of the acquiree. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are
recognised at their fair value at the acquisition date.
Goodwill arising on business combinations is recognised as an asset and initially measured at cost, being the excess of the cost of the business
combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after the
reassessment, the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the
business combination, the excess is recognised immediately in the income statement.
The share of non-controlling interests in the acquiree is initially measured at the non-controlling interests proportion of the net fair value of the assets,
liabilities and contingent liabilities recognised.
Where a business combination is achieved in stages, the Group’s previously-held interests in the acquired entity are re-measured to fair value at the
acquisition date (i.e. the date the Group attains control) and the resulting gain or loss, if any, is recognised in the income statement.
Assets held for sale and discontinued operations
Disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use.
This condition is regarded as met only when the sale is highly probable, the disposal group is available for immediate sale in its present condition and
management are committed to and expect to complete the sale within 12 months from the date of classification. Disposal groups classified as held
for sale are measured at the lower of carrying amount and fair value less costs to sell.
When the Group is committed to the loss of control of a subsidiary, through a sale transaction, all the assets and liabilities of that subsidiary are
grouped together, but not offset, to present amounts classified as assets and liabilities held for sale separately in the statement of financial position.
Comparative amounts for prior periods are not restated in the statement of financial position. Further disclosures on the components of the disposal
group’s assets and liabilities are provided within the notes to the financial statements (see note 14).
No depreciation is charged in respect of property, plant and equipment from the date the assets are classified as held for sale.
A discontinued operation is a component of an entity that has either been disposed of or is classified as held for sale and represents a separate major
line of business or geographical area of operation.
A disposal group which qualifies as a discontinued operation is presented as a single amount and shown separately from continuing operations in the
income statement and statement of comprehensive income. The components of the disposal group’s income or expense presented in the income
statement are disclosed further in the notes to the financial statements (see note 14).
When amounts relating to discontinued operations are separately presented in the income statement and statement of comprehensive income,
comparative figures for prior periods are also restated in the income statement.
Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group’s interest in the fair value of the identifiable
assets and liabilities of a subsidiary or associate at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently
measured at cost less any accumulated impairment losses. Goodwill which is recognised as an asset is reviewed for impairment at least annually or
more frequently when there is an indication that the unit may be impaired. Any impairment is recognised immediately in the income statement and is
not subsequently reversed.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of
the combination. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated
first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying
amount of each asset in the unit.
On disposal of a subsidiary or associate, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
Other intangible assets
Intangible assets have finite useful lives over which the assets are amortised on a straight line basis. The amortisation charge for customer
relationships and customer contracts is recognised as an expense over 10 years.
PAGE 61 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
2
SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Property, plant and equipment
All property, plant and equipment is stated in the statement of financial position at cost less any subsequent accumulated depreciation and
subsequent accumulated impairment losses.
Depreciation is charged so as to write off the cost or valuation of assets, other than land and properties under construction, over their estimated
useful lives, using the straight-line method, on the following bases:
Buildings – maximum period of 50 years
Plant and machinery – 1 to 20 years
Fixtures and equipment – 3 to 5 years
Freehold land is not depreciated. Most plant and machinery is depreciated over 12 years.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, over the term
of the relevant lease.
Reviews of the estimated remaining useful lives of and residual values of individual productive assets are performed annually, taking account of
commercial and technological obsolescence as well as normal wear and tear. All items of property, plant and equipment are reviewed for impairment
when there are indications that the carrying value may not be recoverable.
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sale proceeds and the carrying amount
of the asset and is recognised in the income statement.
Impairment
The useful economic lives of intangible assets are determined based on a review of a combination of factors including the asset ownership rights and
the nature of the overall product life cycle.
Intangible assets and property, plant and equipment are tested for impairment when an event that might affect asset values has occurred. Examples
of such triggering events include significant planned restructuring, a major change in market conditions or technology, expectations of future operating
losses, or a significant reduction in cash flows.
An impairment loss is recognised, in the income statement, to the extent that the carrying amount cannot be recovered either by selling the asset or
by the discounted future earnings from operating the assets in accordance with IAS 36 “Impairment of Assets”.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and
those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted
average method. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in
marketing, selling and distribution.
Assets held under leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.
All other leases are classified as operating leases.
Finance leases
Assets held under finance leases are recognised as assets of the Group at their fair value or, if lower, at the present value of the minimum lease
payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the statement of financial position
as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a
constant rate of interest on the remaining balance of the liability. The interest element of the finance cost is charged to the income statement over
the lease period.
Operating leases
Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease. Benefits received and
receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term. Income earned from operating
leases is credited to the income statement when earned.
PAGE 62 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
2
SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods provided in the normal
course of business, net of discounts, VAT and other sales-related taxes.
The Group sells fresh prepared foods and fresh produce.
Revenue from the sales of these goods is recognised when all of the following conditions are satisfied:
• the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;
• the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the
goods sold;
• the amount of revenue can be measured reliably;
• it is probable that the economic benefits associated with the transaction will flow into the entity;
• the costs incurred or to be incurred in respect of the transaction can be measured reliably.
As a result, revenue for the sale of these goods is generally recognised upon delivery to the customer.
Foreign currencies
The individual financial statements of each Group company are presented in the currency of the primary economic environment in which it operates (its
functional currency). For the purpose of the consolidated financial statements, the results and financial position of each Group company are expressed
in Pounds Sterling, which is the functional currency of the Company, and the presentation currency for the consolidated financial statements.
In preparing the financial statements of the individual companies, transactions in currencies other than the entity’s functional currency (foreign
currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each statement of financial position date, monetary
assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the statement of financial position date.
Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair
value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the income statement
for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in the income statement for
the period except for differences arising on the retranslation of non-monetary items carried at historical cost of which gains and losses are recognised
directly in other comprehensive income.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated at exchange
rates prevailing on the statement of financial position date. Income and expense items are translated at the annual average rate, unless exchange
rates fluctuate significantly during that period, in which case the exchange rates at the date of transactions are used. Exchange differences arising,
if any, are recognised in other comprehensive income and accumulated in the Group’s translation reserve.
On the disposal of a foreign operation, all of the accumulated exchange differences in respect of that operation attributable to the Group are
reclassified to the income statement. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and
liabilities of the foreign entity and translated at the closing rate.
Research and development
Research and development costs comprise all directly attributable costs necessary to create and produce new products which are both new in design
and those being modified. Expenditure on research and development is recognised as an expense in the period in which it is incurred.
Operating profit
Operating profit is stated after (charging)/crediting exceptional items, disposal of subsidiaries and associates, impairment of assets and share of
results of associates but before investment revenue and finance costs.
Retirement benefit obligations
Defined contribution plans
A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity, which then invests the contributions
to buy annuities for the pension liabilities as they become due based on the value of the fund and hence the Group has no legal or constructive
obligations to pay further contributions. Obligations for contributions to defined contribution pension plans are recognised as an expense in the income
statement as employee service is received. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future
payments is available. Payments made to state-managed retirement benefit schemes are dealt with as payments to defined contribution schemes
where the Group’s obligations under the schemes are equivalent to those arising in a defined contribution retirement benefit scheme.
PAGE 63 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
2
SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Retirement benefit obligations continued
Defined benefit pension plans
A defined benefit plan is a pension plan that defines the amount of pension benefit that an employee will receive on retirement, usually dependent on
factors such as age, years of service and compensation.
For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being
carried out at each statement of financial position date. Actuarial gains and losses are recognised in full in the period in which they occur. They are
recognised outside of the income statement and presented in the statement of comprehensive income.
Past service cost is recognised immediately to the extent that the benefits are already vested, and otherwise is amortised on a straight-line basis over
the average period until the benefits become vested.
The retirement benefit recognised in the statement of financial position represents the present value of the defined benefit obligation as adjusted for
unrecognised past service cost, and as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service
cost, plus the present value of available refunds and reductions in future contributions to the scheme.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the statement of financial position date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the statement of financial position
liability method. Deferred tax liabilities are generally recognised 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. Such assets and liabilities
are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, except where the Group
is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each statement of financial position date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is
charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is
also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when
they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
Financial assets
All financial assets are recognised and derecognised on a trade date where the purchase or sale of a financial asset is under a contract whose
terms require delivery of the financial asset within the timeframe established by the market concerned, and are initially measured at fair value, plus
transaction costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value.
Financial assets are classified into the following specified categories: financial assets at ‘fair value through profit or loss’ (FVTPL), and ‘loans and
receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
Financial liabilities
Financial liabilities held by the Group are classified as other financial liabilities at amortised cost and derivatives at FVTPL.
Loans and receivables
Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and
receivables’. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is
recognised by applying the effective interest rate, except for short term receivables when the recognition of interest would be immaterial.
PAGE 64 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
2
SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Financial assets and financial liabilities continued
Other financial liabilities
Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently
measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.
Effective interest method
Income is recognised on an effective interest basis for debt instruments other than those financial liabilities designated as at FVTPL. The effective
interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period.
The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the debt instrument, or,
where appropriate, a shorter period, to the net carrying amount on initial recognition.
Financial assets and financial liabilities at FVTPL
Financial assets and financial liabilities are classified as at FVTPL when the financial asset/liability is either held for trading or it is designated as
at FVTPL.
A financial asset/liability is classified as held for trading if:
• It has been acquired/incurred principally for the purpose of selling/disposal in the near term; or
• It is a part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term
profit-taking; or
• It is a derivative that is not designated and effective as a hedging instrument.
A financial asset/liability other than a financial asset/liability held for trading may be designated as at FVTPL upon initial recognition if:
• Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or
• The financial asset/liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated
on a fair value basis, in accordance with the Group’s documented risk management or investment strategy, and information about the Group is
provided internally on that basis; or
• It forms part of a contract containing one or more embedded derivatives, and IAS 39 Financial Instruments: Recognition and Measurement permits
the entire combined contract (asset or liability) to be designated as at FVTPL.
Financial assets/liabilities at FVTPL are stated at fair value, with any resultant gain or loss recognised in the income statement. The net gain or loss
recognised in the income statement incorporates any dividend or interest earned on the financial asset and interest paid on the financial liability. Fair
value is determined in the manner described in note 29.
Impairment of financial assets
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at each statement of financial position date. Financial assets
are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset,
the estimated future cash flows of the financial asset have been affected.
Objective evidence of impairment could include:
• significant financial difficulty of the issuer or counterparty; or
• default or delinquency in interest or principal payments; or
• it becoming probable that the borrower will enter bankruptcy or financial re-organisation.
For certain categories of financial assets such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed
for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of
collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period, as well as observable changes
in national and local economic conditions that correlate with default on receivables. For financial assets carried at amortised cost, the amount of the
impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial
asset’s original effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables,
where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written
off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in
the carrying amount of the allowance account are recognised in the income statement. If in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment
loss is reversed through the income statement to the extent that the carrying amount of the asset at the date the impairment is reversed does not
exceed what the amortised cost would have been had the impairment not been recognised.
PAGE 65 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
2
SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Financial assets and financial liabilities continued
Derecognition of financial assets and financial liabilities
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire; or it transfers the financial asset
and substantially all the risks and rewards of ownership of the asset to another entity. Financial liabilities are derecognised when, and only when the
Group’s obligations are discharged, cancelled or expire.
Derivative financial instruments
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Group uses foreign
exchange forward contracts and interest rate swap contracts to manage these exposures. The Group does not use derivative financial instruments for
speculative purposes. The use of financial derivatives is governed by the Group’s policies approved by the Board of Directors, which provide written
principles on the use of financial derivatives. Changes in the fair value of derivative financial instruments are recognised in the income statement
as they arise. Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and
characteristics are not closely related to those of host contracts and the host contracts are not carried at fair value, with gains or losses reported in
the income statement.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will
be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the statement of financial
position date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows
estimated to settle the present obligation, its carrying amount is the present value of those cash flows. When some or all of the economic benefits
required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that
reimbursement will be received and the amount of the receivable can be measured reliably.
A restructuring provision is recognised when the Group has developed a detailed formal plan for the restructuring and has raised a valid expectation
in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The
measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are those amounts that are both
necessarily entailed by the restructuring and not associated with the ongoing activities of the entity. Present obligations arising from onerous contacts
are recognised and measured as provisions. An onerous contract is considered to exist where the Group has a contract under which the unavoidable
costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.
Contingent liabilities
A contingent liability is a possible obligation that arises from past events and the existence of which will only be confirmed by the occurrence or
non-occurrence of one or more uncertain future events not wholly within the control of the Group or the amount of the obligation cannot be measured
reliably. A contingent liability is not recognised but it is disclosed in the notes to the financial statements and is not recognised when the obligation is
not probable. When an outflow becomes probable, it is recognised as a provision.
3
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
Critical judgements in applying the Group’s accounting policies
The following are areas of particular significance to the Group’s financial statements and include the application of judgement, which is fundamental
to the compilation of a set of financial statements:
Assets held for sale and discontinued operations
On 23 November 2012 the Group entered into an agreement with a leading European food co-operative to sell its French and Spanish businesses
Cinquieme Saison Saint-Pol SAS, Cinquieme Saison Macon SAS, Bakkavor France SAS, Crudi SAS and Sogesol SAS. This transaction is subject to
competition authority clearance but the Directors believe it highly probable that the sale will complete within 12 months and so under the terms of
IFRS 5 ‘Non-current Assets Held for Sale and Discontinued Operations’ these assets are considered to be a disposal group classified as held for sale
and measured at the lower of carrying amount and fair value less costs to sell.
The Directors consider the disposal group to be a separate major geographical area of operations and so the group has been classified as a
discontinued operation in these financial statements.
PAGE 66 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
3
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY CONTINUED
Going concern
The Directors, in their detailed consideration of going concern, have reviewed the Group’s future cash forecasts and revenue projections, which they
believe are based on prudent market data and past experience, and believe, based on those forecasts and projections, that it is appropriate to prepare
the financial statements of the Company and the Group on a going concern basis.
In arriving at this conclusion the Directors considered the Group’s financing arrangements, which comprise £350 million of seven-year listed bonds
issued in February 2011 and £350 million of bank facilities committed to June 2014. The Company is in advanced discussions with its lenders regarding
the refinancing of these bank facilities. Both the Company and its lenders are committed to the refinancing of both the Term loan and Revolving Credit
Facility and the Board is confident of announcing new financing arrangements in the near future. Importantly, the Group’s liquidity remains particularly
strong with £83.8 million of facilities undrawn as at 29 December 2012.
The existing bank facilities are subject to a series of covenants set by the lenders. Financial covenants are measured quarterly and include an
assessment of leverage (the ratio of net debt to EBITDA, being earnings before interest, tax, depreciation and amortisation); cash flow cover (the ratio
of finance charges to cash generated from operations); interest cover (the ratio of finance charges to EBITDA) and capital expenditure limits. The key
financial covenant is leverage; this was re-set earlier in the year following the successful restructuring of the Company’s parent. Under the revised
covenant, leverage must be less than 5.75 times at the 2012 financial year-end and less than 5.0 times at the 2013 financial year-end. At 29 December
2012 the leverage ratio of net debt to EBITDA was 4.9 times. At the date of this report the Group has complied in all respects with the terms of its
borrowing agreements, including its financial covenants and forecasts to continue to do so.
The Group believes it is adequately placed to manage covenant compliance successfully despite the challenging macroeconomic environment.
In the event that conditions worsen, the Group has the flexibility to react by accessing additional working capital arrangements that we have already
agreed with key stakeholders. Further actions available to management may include a reduction to our capital expenditure programme and supply
chain improvements. Consequently the Directors have a reasonable expectation that the Company and the Group have adequate resources
to comply with these covenants and meet their liabilities as they fall due for a period of at least 12 months from the date of approval of the financial
statements. For this reason they continue to adopt the going concern basis in preparing the financial statements.
Impairment of goodwill and other intangible assets
The recoverable amount of CGUs are determined based on the higher of net realisable value and value-in use calculations. These calculations require
the use of estimates. The Group has considered the impact of the assumptions used on the calculations and has conducted sensitivity analysis on the
impairment tests of the CGUs carrying values. See notes 15 and 16 for further details.
Fair value of derivatives and other financial instruments
Derivative financial instruments and certain other financial assets are recorded at fair value in the statement of financial position. The fair value of
the financial instruments that do not have quoted market prices requires significant judgement and estimates. The Directors use their judgement in
selecting an appropriate valuation technique for these financial instruments. Valuation techniques commonly used by market practitioners are applied.
For derivative financial instruments, assumptions are made based on quoted market rates adjusted for specific features of the instrument. Other
financial instruments are valued using a discounted cash flow analysis based on assumptions supported, where possible, by observable market
prices or rates. The estimation of fair value of unlisted shares includes some assumptions not supported by observable market prices or rates. These
assumptions are based on past and expected future performance. Details of the assumptions used and of the results of sensitivity analyses regarding
these assumptions are disclosed in note 29.
Pensions
The Group maintains a number of defined benefit pension plans for which it has recorded a pension asset or liability. The pension asset/liability
is based on an actuarial valuation that requires a number of assumptions including discount rate, mortality rates and actual return on plan assets
that may necessitate material adjustments to this asset/liability in the future. The assumptions used by the Group are the best estimates based on
historical trends and the composition of the work force. Details of the principal actuarial assumptions used in calculating the recognised asset/liability
for the defined benefit plan are given in note 36.
Recognition of deferred tax assets and current tax provision
The recognition of deferred tax assets is based upon whether it is probable that sufficient and suitable taxable profits will be available in the future
against which the reversal of temporary differences can be deducted. Where the temporary differences related to losses, the availability of the losses
to offset against forecast taxable profits is also considered. Recognition therefore involves judgement regarding the future financial performance of
the particular legal entity or tax group in which the deferred tax asset has been recognised.
The Group had unrecognised deferred tax assets as a result of unused tax losses of £40.5 million (2011: £17.9 million), available for offset against
future profits. Deferred tax assets are not recognised on the losses carried forward to the extent that it is not probable that the losses will be utilised.
The Group operates in various countries and its income tax returns are subject to audit and adjustment by local tax authorities. The nature of the
Group’s tax exposures is often complex and subject to change and the amounts at issue can be substantial. The Group develops an estimate of the
potential tax liability based on the tax positions taken, historical experience and its internal tax expertise. These estimates are refined as additional
information becomes known. Any outcome upon settlement that differs from a recorded provision may result in a materially higher or lower tax
expense in future periods.
PAGE 67 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
4
SEGMENT INFORMATION
The chief operating decision-maker has been defined as the Management Board headed by the Chief Executive Officer. They review the Group’s
internal reporting in order to assess performance and allocate resources. Management has determined the segments based on these reports.
As at the statement of financial position date, the Group is organised as follows:
• UK:
• International:
The preparation and marketing of fresh prepared foods and fresh produce for distribution in the UK.
The preparation and marketing of fresh prepared foods and fresh produce outside of the UK.
During 2012, management reviewed its current reporting segments and has met the disclosure requirements for combining all of the non-UK
segments into one category, which is represented by the International segment. The UK Prepared and UK Produce segments have also been
combined into one reporting segment. This results in UK and International being presented as the Group’s two segments.
The Group’s segment measure of profit represents operating profit before exceptional items, disposals of subsidiaries, associates and property,
plant and equipment, impairment of assets, management charges and share of results of associates. Measures of total assets are provided to the
Management Board; however, cash and cash equivalents, short term deposits and some other central assets are not allocated to individual segments.
Measures of segment liabilities are not provided to the Management Board.
The following table provides an analysis of the Group’s segment information for the period to 29 December 2012:
£m UK International Un-allocated Group total Discontinued Continuing
operations operations total
Revenue 1,407.0 287.2 – 1,694.2 105.6 1,588.6
Segment profit 63.1 0.7 – 63.8 1.1 62.7
Exceptional items (2.9) (0.7) – (3.6) 0.8 (4.4)
Impairment of assets (1.0) – – (1.0) – (1.0)
Bakkavor Group ehf management charge (0.5) – (0.5)
Profit on disposal of subsidiary 0.4 – 0.4
Loss on disposal of property, plant and equipment (1.3) – (1.3)
Share of results of associates 0.9 – 0.9
Operating profit 58.7 1.9 56.8
Investment revenue 0.1 – 0.1
Finance costs (61.5) (0.3) (61.2)
Other gains (net) 8.4 – 8.4
Profit before tax 5.7 1.6 4.1
Tax (3.6) (0.8) (2.8)
Profit for the period 2.1 0.8 1.3
Other segment information:
Depreciation and amortisation (41.1) (10.2) – (51.3) (3.1) (48.2)
Adjusted EBITDA 104.2 10.9 – 115.1 4.2 110.9
Capital additions 22.6 9.2 – 31.8 1.2 30.6
Total assets 1,077.9 178.4 41.3 1,297.6 35.2 1,262.4
Discontinued operations relate to the Group’s International segment.
The Group manages the performance of its businesses through the use of ‘Adjusted EBITDA’. EBITDA is generally defined as operating profit/ (loss)
before share of results of associates, depreciation and amortisation. In calculating Adjusted EBITDA, we further exclude restructuring costs, asset
impairments and those additional charges or credits that are one-off in nature and significance.
PAGE 68 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
4
SEGMENT INFORMATION CONTINUED
The following table provides an analysis of the Group’s segment information for the period to 31 December 2011 as restated:
£m UK International Un-allocated Group total Discontinued Continuing
operations operations total
Revenue 1,387.8 289.9 – 1,677.7 111.9 1,565.8
Segment profit/(loss) 59.4 (5.0) – 54.4 (2.1) 56.5
Exceptional items 8.5 (1.3) – 7.2 (0.2) 7.4
Impairment of assets (37.3) (39.6) – (76.9) (13.2) (63.7)
Bakkavor Group ehf management charge (1.2) – (1.2)
Loss on disposal of subsidiary (1.0) – (1.0)
Loss on disposal of associate (1.6) – (1.6)
Loss on disposal of property, plant and equiptment (0.3) – (0.3)
Share of results of associates 1.1 – 1.1
Operating loss (18.3) (15.5) (2.8)
Investment revenue 0.1 – 0.1
Finance costs (65.2) (0.2) (65.0)
Other gains (net) 6.0 – 6.0
Loss before tax (77.4) (15.7) (61.7)
Tax 2.4 (0.1) 2.5
Loss for the period (75.0) (15.8) (59.2)
Other segment information:
Depreciation and amortisation (41.2) (12.1) – (53.3) (4.3) (49.0)
Adjusted EBITDA 100.6 7.1 – 107.7 2.2 105.5
Capital additions 31.6 4.9 – 36.5 1.5 35.0
Total assets 1,082.4 189.8 40.8 1,313.0 42.7 1,270.3
Discontinued operations relate to the Group’s International segment.
The effect of reclassifying certain overseas operations on revenue and adjusted EBITDA for 2011 is £19.6 million and £0.2 million profit respectively
which reduces the UK segment and increases the International segment by these amounts.
Major customers
In 2012 the Group’s five largest customers accounted for 80% (2011: 80%) of our total revenue from continuing operations, with no single customer
representing more than 31% (2011: 30%) of our global revenue from continuing operations. The Group does not enter into long-term contracts with
its retail customers.
5
REVENUE
52 weeks 52 weeks
ended ended
29 December 31 December
£m 2012 2011
Continuing operations
Sales of goods 1,588.6 1,565.8
Investment revenue 0.1 0.1
1,588.7 1,565.9
Discontinued operations
Sales of goods (note 14) 105.6 111.9
PAGE 69 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
6
OPERATING PROFIT/(LOSS)
Operating profit/(loss) for the period has been arrived at after charging/(crediting):
52 weeks 52 weeks
ended ended
29 December 31 December
£m 2012 2011
Continuing operations
Depreciation of property, plant and equipment – owned 39.5 38.7
– leased – 1.2
Research and development costs 6.3 5.5
Cost of inventory recognised as an expense 796.0 811.8
Write down of inventories recognised as an expense 0.8 0.2
Amortisation of intangible assets 8.7 9.2
Impairment of assets (note 8) 1.0 63.7
Exceptional items (note 7) 4.4 (7.4)
Loss on disposal of property, plant and equipment 1.3 0.3
(Profit)/loss on disposal of subsidiary (note 31) (0.4) 1.0
Loss on disposal of associate (note 32) – 1.6
Staff costs (note 9) 368.3 336.3
Discontinued operations
Depreciation of property, plant and equipment – owned 2.4 2.8
– leased 0.7 1.2
Research and development costs 0.1 0.1
Cost of inventory recognised as an expense 52.0 56.3
Amortisation of intangible assets – 0.2
Impairment of assets (note 8) – 13.2
Exceptional items (note 7) (0.8) 0.2
Staff costs (note 9) 29.5 31.7
The analysis of auditor remuneration is as follows:
52 weeks 52 weeks
ended ended
29 December 31 December
£’000 2012 2011
Fees payable to the Company’s auditor for the audit of the Company’s annual accounts 70 85
The audit of the Company’s subsidiaries pursuant to legislation 420 549
Total audit fees 490 634
Tax services 82 313
Fees payable to the Company’s auditor and their associates for other services to the Group 45 281
Total non-audit fees 127 594
Of the total prior period non-audit fees, £539,000 relates to the refinancing that was completed in February 2011.
PAGE 70 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
7
EXCEPTIONAL ITEMS (NET)
Exceptional items are those that, in management’s judgement, should be disclosed by virtue of their nature or amount. Exceptional items are
as follows:
52 weeks 52 weeks
ended ended
29 December 31 December
£m 2012 2011
Continuing operations
Restructuring costs (2.8) (7.7)
Temporary site closure (1.6) –
Defined benefit pension scheme credit – 12.0
Legal settlement – 3.1
(4.4) 7.4
Discontinued operations
Restructuring costs – (0.2)
Legal settlement 0.8 –
0.8 (0.2)
Restructuring costs
In 2012, the Group incurred £2.8 million (2011: £7.7 million) of restructuring costs from continuing operations, primarily relating to redundancy costs.
The Group did not incur any restructuring costs in 2012, relating to discontinued operations (2011: £0.2 million).
Temporary site closure
During the period, a malicious act of contamination at one of our sites led to its temporary closure. This charge related primarily to the costs
associated with the disposal of products, extending our installation of CCTV cameras, and the increased costs of working, including additional
labour costs and further security measures.
Defined benefit pension scheme
The exceptional non-cash credit of £12.0 million in 2011, relates to the defined benefit pension scheme. This has arisen due to the closure of the
defined benefit pension scheme to future accrual as at the end of March 2011.
Other exceptional items
During 2012, discontinued operations within the Group received £0.8 million (2011: £nil) from a legal claim made in relation to the acquisition of
a building. This claim has now been settled. In 2011, the Group’s continuing operations received £3.1 million from the settlement of a legal claim.
The allocation of exceptional items by segment is shown in note 4 of the accounts.
8
IMPAIRMENT OF ASSETS
52 weeks 52 weeks
ended ended
29 December 31 December
£m 2012 2011
Continuing operations
Impairment of goodwill – 59.1
Impairment of intangible assets – 2.9
Impairment of property, plant and equipment 1.0 1.7
1.0 63.7
Discontinued operations
Impairment of goodwill – 12.1
Impairment of intangible assets – 1.1
– 13.2
The annual impairment review of the carrying value of goodwill and intangible assets has resulted in no impairment charge being recognised
within the Group (2011: £63.7 million from continuing operations and £13.2 million from discontinued operations).
During the period, the Group has impaired property, plant and equipment by £1.0 million (2011: £1.7 million), within continuing operations in its
UK businesses.
PAGE 71 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
9
STAFF COSTS
The average monthly number of employees (including executive Directors) during the year was:
2012 2011
Number Number
Continuing operations
Production 15,921 14,874
Management and administration 1,630 1,688
Sales and distribution 826 830
18,377 17,392
Discontinued operations
Production 858 856
Management and administration 121 127
Sales and distribution 29 43
1,008 1,026
Their aggregate remuneration comprised:
52 weeks 52 weeks
ended ended
29 December 31 December
£m 2012 2011
Continuing operations
Wages and salaries 329.1 310.4
Social security and other costs 36.4 36.0
Other pension costs/(income) 2.8 (10.1)
368.3 336.3
Discontinued operations
Wages and salaries 21.2 22.8
Social security and other costs 8.3 8.9
29.5 31.7
In 2011, other pension costs included £12.0 million defined benefit pension credits as per note 36.
The Directors’ emoluments were as follows:
52 weeks 52 weeks
ended ended
29 December 31 December
£’000 2012 2011
Directors’ emoluments excluding pension contributions 844 819
Directors’ pension contributions 109 124
953 943
The aggregate emoluments of the highest paid director were £532,793 (2011: £596,520). The accrued pension contributions of the highest paid
director at 29 December 2012 were £73,750 (2011: £76,250).
PAGE 72 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
10
INVESTMENT REVENUE
52 weeks 52 weeks
ended ended
29 December 31 December
£m 2012 2011
Continuing operations
Interest on bank deposits 0.1 0.1
11
OTHER GAINS (NET)
52 weeks 52 weeks
ended ended
29 December 31 December
£m 2012 2011
Continuing operations
Change in the fair value of derivative financial instruments 8.0 6.3
Foreign exchange gains/(losses) 0.4 (0.3)
8.4 6.0
12
FINANCE COSTS
52 weeks 52 weeks
ended ended
29 December 31 December
£m 2012 2011
Continuing operations
Interest on borrowings 53.5 60.3
Interest on obligations under finance leases – 0.1
Amortisation of refinancing costs 6.9 3.8
Unwinding of discount on provisions (note 28) 0.8 0.8
61.2 65.0
Discontinued operations
Interest on borrowings 0.1 0.1
Interest on obligations under finance leases 0.2 0.1
0.3 0.2
PAGE 73 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
13
TAX
52 weeks 52 weeks
ended ended
29 December 31 December
£m 2012 2011
Continuing operations
Current tax:
Current period 0.9 3.8
Prior period adjustment 4.9 (1.3)
Deferred tax:
Current period (note 25) (3.0) (5.5)
Prior period adjustment (note 25) – 0.5
2.8 (2.5)
Discontinued operations
Current tax 0.8 0.1
Deferred tax (note 25) – –
0.8 0.1
Corporation tax is calculated at 24.5% (2011: 26.5%) of the estimated assessable profit/(loss) for the period. Taxation for other jurisdictions is
calculated at the rates prevailing in the respective jurisdictions. Of the charge to current tax, £0.8 million (2011: £0.1 million) related to profits/(losses)
arising in the disposal group, classed as a discontinued operation during the period.
The charge/(credit) for the period can be reconciled to the profit/(loss) per the income statement as follows:
2012 2012 2011 2011
£m % £m %
Profit/(loss) before tax: 4.1 100.0 (61.7) (100.0)
Tax at the blended UK corporation tax rate of 24.5% (2011: 26.5%) 1.0 24.5 (16.3) (26.5)
Non-deductible expenses 1.0 24.5 17.4 28.2
Adjustment in respect of prior periods 4.9 119.5 (0.8) (1.3)
R&D tax credits (0.5) (12.2) (1.7) (2.8)
Tax effect of utilisation of tax losses not previously recognised (0.4) (9.8) (0.7) (1.1)
Tax effect of losses carried forward not recognised 1.1 26.8 1.6 2.6
Overseas taxes at different rates (0.2) (4.9) 0.9 1.5
Release of deferred tax on IBA reversal (2.1) (51.2) (0.8) (1.3)
Deferred tax change in rate (2.0) (48.9) (2.1) (3.4)
Tax charge/(credit) and effective tax rate for the period 2.8 68.3 (2.5) (4.1)
In addition to the amount credited to the income statement, a £0.9 million credit (2011: £5.0m credit) relating to tax has been recognised directly in
other comprehensive income. No other tax charges/credits have been recognised directly in equity.
During the year the relevant deferred tax balances have been re-measured as a result of the change in the UK main corporation tax rate to 24%, which
was substantively enacted on 26 March 2012 and became effective from 1 April 2012; and to 23%, which was substantively enacted on 3 July 2012
and will be effective from 1 April 2013.
Further reductions to the UK corporation tax rate were announced in the March 2012 Budget and December 2012 Autumn Statement. The changes
propose to reduce the rate to 21% by 1 April 2014. The changes had not been substantively enacted at the balance sheet date and therefore are not
recognised in these financial statements.
PAGE 74 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
14
ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS
On 23 November 2012, the Group entered into an agreement with a leading European food co-operative, to sell its French and Spanish businesses
comprising Cinquieme Saison Saint-Pol SAS, Cinquieme Saison Macon SAS, Bakkavor France SAS, Crudi SAS and Sogesol SA for €33 million
(£27 million) debt free and cash free. Completion of the transaction is subject to competition authority clearance, which the Directors believe
will be obtained in the first half of 2013.
The Directors believe this transaction to be highly probable based on the ongoing willingness of both parties to complete the transaction, as
demonstrated by a signed sale and purchase agreement and a commitment from both the Group and the purchaser to address questions raised by
the competition authorities as they continue to review the proposed transaction.
As a result these operations have been classified as a disposal group. Therefore the assets and liabilities of the disposal group are presented
separately in the statement of financial position and the assets and liabilities are classified as held for sale. The disposal group also qualifies as a
discontinued operation and has been presented as such in the income statement.
The proceeds from the disposal are expected to exceed the book value of the related net assets and accordingly no impairment losses have been
recognised on the classification of these operations as held for sale.
The results of the discontinued operations, which represent a separate major geographical area, have been included in the consolidated income
statement as follows:
52 weeks 52 weeks
ended ended
29 December 31 December
£m Notes 2012 2011
Discontinued operations
Revenue 4 105.6 111.9
Cost of sales (75.7) (81.6)
Gross profit 29.9 30.3
Distribution costs (9.4) (10.3)
Other administrative costs (19.4) (22.1)
Exceptional items 7 0.8 (0.2)
Impairment of assets 8 – (13.2)
Total administrative costs (18.6) (35.5)
Operating profit/(loss) 6 1.9 (15.5)
Finance costs 12 (0.3) (0.2)
Profit/(loss) before tax 1.6 (15.7)
Tax 13 (0.8) (0.1)
Profit/(loss) for the period from discontinued operations 0.8 (15.8)
Attributable to:
Equity holders of the parent 0.8 (15.8)
During the year, discontinued operations contributed £0.3 million (2011: cash contributed £1.2 million) to the Group’s net operating cash flows, paid
£1.2 million (2011: paid £2.6 million) in respect of investing activities and paid £0.3 million (2011: paid £1.1 million) in respect of financing activities.
PAGE 75 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
14Non-current assets
Property, plant and equipment 17 20.5
ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS CONTINUED
The major classes of assets and liabilities comprising the operations classified as held for sale are as follows:
29 December
£m Notes 2012
Current assets
Inventories 2.5
Trade and other receivables 11.6
Cash and cash equivalents 0.6
14.7
Total assets classified as held for sale 35.2
Current liabilities
Trade and other payables (21.5)
Current tax liabilities (0.5)
Obligations under finance leases (0.5)
(22.5)
Non-current liabilities
Obligations under finance leases (1.5)
Total liabilities associated with assets classified as held for sale (24.0)
Net assets of disposal group 11.2
15
GOODWILL
£m
Cost
At 1 January 2011 739.9
Adjustment to consideration on acquisition of subsidiaries (note 32) 0.1
Acquisition of subsidiaries (note 32) 0.4
Disposal of subsidiary (note 31) (1.3)
Exchange differences (0.8)
At 31 December 2011 738.3
Adjustment to consideration on acquisition of subsidiaries (note 32) 0.1
Exchange differences (2.5)
At 29 December 2012 735.9
Accumulated impairment losses
At 1 January 2011 –
Impairment (71.2)
At 31 December 2011 (71.2)
Exchange differences 0.7
At 29 December 2012 (70.5)
Carrying amount
At 29 December 2012 665.4
At 31 December 2011 667.1
PAGE 76 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
15
GOODWILL CONTINUED
Goodwill acquired in a business combination is allocated, at acquisition, to the CGUs that are expected to benefit from that business combination.
A summary of the allocation of the carrying value of goodwill is as follows:
29 December 31 December
£m 2012 2011
UK 604.1 604.1
International 61.3 63.0
The recoverable amounts of the CGUs are determined based on value in use calculations.
665.4 667.1
The following impairments have been recognised within the Group’s two reporting segments during the period presented:
29 December 31 December
£m 2012 2011
Continuing operations
UK – 34.3
International – 24.8
– 59.1
Discontinued operations
International – 12.1
– 12.1
There have been no impairments to goodwill in 2012. The 2011 goodwill impairment arose as a result of adverse trading conditions.
The key assumptions used in the impairment reviews were as follows:
• Discount rates: Management uses post-tax rates that reflect current market assessments of the time value of money and the risks specific to the
CGUs. The present value of the future cash flows is calculated using a pre-tax discount rate that ranges from 9.0% to 10.0% (2011: 10.0% to 10.9%).
• Growth rates: The revenue growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices
and expectations of future changes in the market. The Group this year has prepared cash flow forecasts derived from the most recent financial
budgets approved by management for the next three years and extrapolated cash flows for the following two years based on an estimated growth
rate, determined by business unit, to provide a five year forecast. Cash flows are then extrapolated using a perpetuity growth rate of 2 per cent (2011:
2 per cent). The forecast cashflow of CGUS in those territories with growth rates below 2% perpetuity have been adjusted to reflect this.
The assumptions used, and the impact of sensitivities on these assumptions, are shown below:
£m UK International
Sensitivity:
Head room of impairment test based on management assumptions 156.1 9.9
If the pre-tax discount rate were to be increased by a factor of 5%, this would result in an impairment charge of £2.7 million and for an increase of
10% the impairment charge would be £27.5 million. A 10% reduction in the perpetuity growth rate would not result in any further impairment charge.
PAGE 77 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
16
OTHER INTANGIBLE ASSETS
Customer Customer
£m Relationships Contracts Total
Cost
At 1 January 2011 92.7 1.6 94.3
Exchange differences (0.1) – (0.1)
At 31 December 2011 92.6 1.6 94.2
Exchange differences (0.2) – (0.2)
At 29 December 2012 92.4 1.6 94.0
Amortisation
At 1 January 2011 (44.2) (0.9) (45.1)
Impairment (4.0) – (4.0)
Charge for the period (9.2) (0.2) (9.4)
At 31 December 2011 (57.4) (1.1) (58.5)
Charge for the period (8.5) (0.2) (8.7)
Exchange differences 0.1 – 0.1
At 29 December 2012 (65.8) (1.3) (67.1)
Carrying amount
At 29 December 2012 26.6 0.3 26.9
At 31 December 2011 35.2 0.5 35.7
There have been no impairments to other intangible assets in 2012 (2011: £4.0 million).
The breakdown of where the impairments have occurred by reporting segment is as follows:
29 December 31 December
£m 2012 2011
Continuing operations
UK – 1.3
International – 1.6
– 2.9
Discontinued operations
International – 1.1
– 1.1
PAGE 78 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
17
PROPERTY, PLANT AND EQUIPMENT
Land Plant Fixtures
and and and
£m buildings machinery equipment Total
Cost
At 1 January 2011 196.7 261.1 67.4 525.2
Additions 2.9 31.9 1.7 36.5
Acquisition of subsidiary (note 32) – – 0.2 0.2
Disposal of subsidiary (note 31) (2.0) – (2.2) (4.2)
Disposals – (7.9) (0.4) (8.3)
Reclassification from assets held for sale 6.1 – – 6.1
Exchange differences (0.5) (1.2) (0.4) (2.1)
At 31 December 2011 203.2 283.9 66.3 553.4
Additions 5.0 24.2 2.6 31.8
Disposal of subsidiary (note 31) (1.7) (0.8) (0.2) (2.7)
Disposals (7.2) (4.3) (1.8) (13.3)
Transfer to assets held for sale (13.1) (20.5) (17.4) (51.0)
Exchange differences (1.2) (2.0) 0.2 (3.0)
At 29 December 2012 185.0 280.5 49.7 515.2
Accumulated depreciation and impairment
At 1 January 2011 (78.9) (104.7) (27.0) (210.6)
Charge for the period (8.1) (28.3) (7.5) (43.9)
Disposals of subsidiary (note 31) 0.3 – 0.9 1.2
Disposals – 7.6 0.3 7.9
Impairment of assets (0.7) (0.8) (0.2) (1.7)
Exchange differences 0.3 0.8 0.3 1.4
At 31 December 2011 (87.1) (125.4) (33.2) (245.7)
Charge for the period (7.9) (28.0) (6.7) (42.6)
Disposals of subsidiary (note 31) 0.7 0.4 0.1 1.2
Disposals 2.7 4.2 1.8 8.7
Impairment of assets – (0.9) (0.1) (1.0)
Transfer to assets held for sale 5.8 14.3 10.4 30.5
Exchange differences 0.6 1.1 (0.1) 1.6
At 29 December 2012 (85.2) (134.3) (27.8) (247.3)
Carrying amount
At 29 December 2012 99.8 146.2 21.9 267.9
At 31 December 2011 116.1 158.5 33.1 307.7
During the period, the Group has expanded its disclosure of property, plant and equipment to include plant and machinery as a separate category.
The Group believes this better represents the categories of assets held by the Group and as a result the prior period disclosure has been revised to
reflect this change.
The carrying value of the Group’s fixtures and equipment includes an amount of £0.5 million (2011: £4.2 million) in respect of assets held under
finance leases.
At 29 December 2012, the Group had entered into contractual commitments for the acquisition of property, plant and equipment amounting to
£3.2 million (2011: £3.4 million).
During the period, the Group impaired property, plant and equipment by £1.0 million (2011: £1.7 million, UK Produce), within continuing operations in
its UK businesses.
PAGE 79 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
18Aggregated amounts relating to associates
Total assets 16.3 15.9
Total liabilities (10.6) (10.4)
Net assets 5.7 5.5
INTERESTS IN ASSOCIATES
29 December 31 December
£m 2012 2011
Group’s share of net assets of associates 2.0 2.0
Premium on acquisition 8.0 8.0
Interests in associates 10.0 10.0
Revenue 64.5 75.5
Profit for the period 2.2 3.0
Group’s share of associates’ profit for the period 0.9 1.1
Details of the principal associated undertakings of the Group at 29 December 2012 were as follows:
Proportion of voting interest Place of registration Method of
Name 2012 2011 and operation accounting
Manor Fresh Limited 27.5% 27.5% United Kingdom Equity
La Rose Noire Limited 45.0% 45.0% Hong Kong Equity
Manor La Rose Gastro
Fresh Noire Primo
£m Limited Limited Limited Total
Share of net assets/costs
At 1 January 2011 0.5 9.3 2.4 12.2
Share of profit after tax 0.3 0.8 – 1.1
Currency movement – 0.1 – 0.1
Dividend payment (0.2) (0.8) – (1.0)
Disposal of associate – – (2.4) (2.4)
At 31 December 2011 0.6 9.4 – 10.0
Share of profit after tax 0.1 0.8 – 0.9
Currency movement – (0.3) – (0.3)
Dividend payment (0.1) (0.5) – (0.6)
At 29 December 2012 0.6 9.4 – 10.0
19
OTHER INVESTMENTS
Non listed
investments
£m held at cost
At 31 December 2011 and 29 December 2012 0.1
20
INVENTORIES
29 December 31 December
£m 2012 2011
Raw materials and packaging 49.3 48.2
Work-in-progress 2.2 2.4
Finished goods 10.3 11.9
61.8 62.5
PAGE 80 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
21
TRADE AND OTHER RECEIVABLES
29 December 31 December
£m 2012 2011
Amounts receivable from trade customers 159.2 164.8
Allowance for doubtful debts (0.8) (3.2)
Net amounts receivable from trade customers 158.4 161.6
Deferred consideration 0.1 –
Other receivables 13.1 10.7
Prepayments 17.6 17.8
189.2 190.1
The average credit period taken on sales of goods is 34 days (2011 – 36 days). An allowance has been made for estimated irrecoverable amounts from
the sale of goods of £0.8 million (2011: £3.2 million). Allowances against receivables are made on a specific basis based on objective evidence and
previous default experience. Receivables are therefore deemed past due but not impaired when the contractual obligation to pay has been exceeded,
but as yet no objective evidence or previous default experience indicates this debt will be irrecoverable.
The Directors consider that the carrying amount of trade and other receivables approximates to their fair value due to their short-term nature.
The following table is an ageing analysis of trade receivables:
29 December 31 December
£m 2012 2011
Not past due 145.2 145.3
Past due by 1 – 30 days 12.0 14.7
Past due by 31 – 60 days 1.2 1.5
Past due by 61 – 90 days 0.2 0.5
Past due by more than 90 days 0.6 2.8
159.2 164.8
Trade receivables renegotiated in 2012 that would have otherwise have been past due or impaired amounted to £nil (2011: £nil)
The majority of the Group’s customers are all leading UK retailers, representing more than 80% (2011: 80%) of the Group’s revenue and therefore
hold favourable credit ratings. On this basis the Group does not see any need to charge interest, seek collateral or credit enhancements to secure any
of its trade receivables due to their short term nature.
The following table is an analysis of the movement of the Group’s trade receivables allowance for doubtful debts:
29 December 31 December
£m 2012 2011
Balance at beginning of the period (3.2) (4.4)
Allowances recognised against receivables (0.3) (1.1)
Amounts written off as uncollectible during the period 0.4 0.5
Amounts recovered during the period 0.4 1.5
Allowance reversed 1.6 0.3
Transferred to asset held for sale 0.3 –
Balance at end of the period (0.8) (3.2)
The following table is an analysis of the Group’s net trade receivables by currency:
29 December 31 December
£m 2012 2011
GBP 132.7 125.3
USD 4.7 4.6
Euro 15.3 25.2
CZK 0.3 0.3
ZAR 1.6 1.7
RMB 2.5 3.3
CAD 0.3 0.1
HKD 1.0 1.1
158.4 161.6
PAGE 81 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
22
CASH AND CASH EQUIVALENTS
29 December 31 December
£m 2012 2011
Cash and cash equivalents 30.5 30.1
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less which are
readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
The carrying amount of these assets approximates their fair value.
23
BORROWINGS
29 December 31 December
£m 2012 2011
Bank overdrafts 4.4 4.1
Bank loans 237.2 262.8
8.25% Senior Secured Notes 352.4 352.0
594.0 618.9
Borrowings repayable as follows:
On demand or within one year 31.8 32.6
In the second year 217.4 16.6
In the third to fifth years inclusive 344.8 569.7
594.0 618.9
Analysed as:
Amount due for settlement within 12 months (shown within current liabilities) 31.8 32.6
Amount due for settlement after 12 months 562.2 586.3
594.0 618.9
Borrowings by currency
29 December 31 December
£m 2012 2011
GBP 587.5 611.8
Euro 4.5 5.1
RMB 1.4 1.5
CZK 0.4 0.3
HKD 0.2 0.2
594.0 618.9
PAGE 82 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
23
BORROWINGS CONTINUED
29 December 31 December
2012 2011
% %
The weighted average interest rates paid were as follows:
Bank overdrafts 1.84 1.78
Bank loans 6.85 6.93
The Group has a £50 million (2011: £300 million) interest rate swap in place at 29 December 2012. The 8.25% Senior Secured Notes due in 2018,
were issued at a fixed rate, but the Group’s term loan and other borrowings are arranged at floating rates, thus exposing the Group to cash flow
interest rate risk.
The Directors estimate the fair value of the Group’s borrowings are not materially different from their book value due to the current rates available to
the Group being in line with the rates agreed over the facilities and the relative costs of renegotiation of the debt as compared to the capital value.
29 December 31 December
£m 2012 2011
Analysis of net debt
Cash and cash equivalents 30.5 30.1
Borrowings (21.0) (19.5)
Unamortised fees 5.3 4.0
Interest accrual (16.1) (17.1)
Finance leases (0.1) (0.8)
Debt due within one year (31.9) (33.4)
Borrowings (570.9) (597.6)
Unamortised fees 8.7 11.3
Finance leases (0.3) (1.8)
Debt due after one year (562.5) (588.1)
Total net debt (563.9) (591.4)
The Bakkavor Finance (2) plc bond and bank facilities are subject to various restrictive financial covenants including interest cover ratio (EBITDA
as a multiple of finance charges), leverage (net debt as a multiple of EBITDA) and cashflow cover (cashflow as a multiple of finance charges).
At 29 December 2012 the Group was in compliance with all such covenants. The key features of the bond and loans are as follows:
Bakkavor Finance (2) plc bond
Bakkavor Finance (2) plc has £350 million (2011: £350 million) of 8.25% Senior Secured Notes due in 2018. Interest on the Notes is payable
semi-annually each year on February 15 and August 15. The Notes will mature on 15 February 2018.
Bakkavor Finance (2) plc bank facilities
Bakkavor Finance (2) plc has a Term loan of £260 million of which £25 million has been repaid, and a Revolving credit facility (RCF) of £90 million (2011:
£120 million) which both expire on 30 June 2014. The RCF facility was reduced in the period by £30 million as part of an amendment agreement which
saw the Group’s leverage covenant amended. The Group has repaid £25 million and so has drawn £235 million (2011: £260 million) of the Term loan
but has not drawn any (2011: £nil) of the RCF as at 29 December 2012. The RCF facility includes a £5 million (2011: £10 million) ‘carve out’ for overdraft
and £17.5 million (2011: £20 million) for ancillary facilities. At 29 December 2012, £6.2 million (2011: £13.7 million) of the ‘carve out’ was utilised.
The Term loan is repaid in instalments with £4.9 million paid in June 2012 and £4.8 million on 31 December 2012. This is then followed by payments
of £9.2 million in June 2013 and December 2013, with the balance then due on maturity in June 2014. During the period, the Group repaid a further
£19.7 million from the proceeds of business/asset disposals and equity issues to reduce the balance of the Term loan. The interest rate of the Term
loan at 29 December 2012 was a variable rate of 5.48% (2011: 5.63%) which represents LIBOR plus a margin of 4.5%. Both the Senior Secured
Notes and bank facilities are secured by fixed and floating charges over the assets of Bakkavor Finance (2) plc and its subsidiaries as governed by
the Inter-creditor Agreement.
PAGE 83 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
24
DERIVATIVE FINANCIAL INSTRUMENTS
Held for trading derivatives that are not designated in hedge accounting relationships:
29 December 31 December
£m 2012 2011
Foreign currency contracts – included in current assets 0.6 0.4
Foreign currency contracts (0.6) (2.0)
Interest rate contracts (9.5) (15.9)
Included in current liabilities (10.1) (17.9)
Total (9.5) (17.5)
Further details of derivative financial instruments are provided in note 29.
25
DEFERRED TAX
The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon during the current and prior reporting
period.
Accelerated
Retirement
tax Fair value Impairment benefit
£m depreciation gains Intangibles Provisions losses obligations Total
At 1 January 2011 29.6 (6.6) 13.3 (1.4) (1.6) 3.2 36.5
Charge/(credit) to income (7.3) 2.4 (4.4) 0.1 0.1 4.1 (5.0)
Credit to equity – – – – – (5.0) (5.0)
Translation of overseas balances 0.6 – – – – – 0.6
As 31 December 2011 22.9 (4.2) 8.9 (1.3) (1.5) 2.3 27.1
Charge/(credit) to income (3.0) 2.1 (2.7) (0.4) 0.1 0.9 (3.0)
Credit to equity – – – – – (0.9) (0.9)
Translation of overseas balances (0.3) – – – – – (0.3)
As 29 December 2012 19.6 (2.1) 6.2 (1.7) (1.4) 2.3 22.9
Certain deferred tax assets and liabilities have been offset and the net liability is shown as deferred tax liabilities in the statement of financial position.
At the statement of financial position date, the Group had unused tax losses of £40.5 million (2011: £17.9 million) available for offset against future
profits. Deferred tax assets are not recognised on the losses carried forward to the extent that it is not probable that the losses will be utilised.
The Group is not aware of any temporary differences associated with undistributed earnings of subsidiaries due to the availability of tax credits
against such liabilities. The Group is in a position to control the timing of the reversal of any such temporary differences should they arise.
Temporary differences arising in connection with interests in associates are insignificant.
PAGE 84 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
26
OBLIGATIONS UNDER FINANCE LEASES
Minimum
lease payments
Present value of
minimum lease payments
29 December 31 December 29 December 31 December
£m 2012 2011 2012 2011
Amounts payable under finance leases:
Within one year 0.1 0.9 0.1 0.8
In the second to fifth years inclusive 0.3 2.3 0.3 1.8
0.4 3.2 0.4 2.6
Less: future finance charges – (0.6) – –
Present value of lease obligations 0.4 2.6 0.4 2.6
Analysed as:
Amount due for settlement within 12 months (shown within current liabilities) 0.1 0.8
Amount due for settlement after 12 months 0.3 1.8
0.4 2.6
It is the Group’s policy to lease certain fixtures and equipment under finance leases. The weighted average lease term outstanding is 2.8 years
(2011: 4.5 years). For the 52 weeks ended 29 December 2012, the weighted average effective borrowing rate was 3.94% (2011: 4.20%). Interest rates
are fixed at the contract date. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
Obligations are denominated in Euros amounting to £0.3 million (2011: £2.3 million) and Hong Kong dollars £0.1 million (2011: £0.1 million) and the fair
value of the Group’s lease obligations approximates their carrying amount. In 2011, there was also £0.2 million of finance lease obligations denominated
in Sterling which have now expired. The Group’s obligations under finance leases are secured by the lessors’ rights over the leased assets.
27
TRADE AND OTHER PAYABLES
29 December 31 December
£m 2012 2011
Trade payables 190.6 197.1
Social security and other taxation 2.0 3.2
Deferred consideration 0.1 0.3
Other payables 30.5 31.4
Accruals 79.6 83.5
302.8 315.5
Less: amounts due after one year
Deferred consideration – (0.1)
Other payables (0.1) (0.2)
Trade and other payables due within one year 302.7 315.2
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period taken for
trade purchases is 66 days (2011 – 60 days). No interest is incurred against trade payables.
The Directors consider that the carrying amount of trade payables approximates to their fair value.
The following table is an analysis of the Group’s trade payables by currency:
29 December 31 December
£m 2012 2011
GBP 153.2 143.7
USD 3.1 3.3
Euro 28.5 43.6
CZK 0.4 0.4
ZAR 1.8 1.7
RMB 3.2 3.4
CAD 0.4 0.2
HKD – 0.8
190.6 197.1
PAGE 85 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
28
PROVISIONS
Onerous leases
and other Dilapidation
£m provisions provisions Total
At 1 January 2011 6.6 7.9 14.5
Increase of provision 3.0 – 3.0
Release of provision (2.8) (1.1) (3.9)
Utilisation of provision (2.0) – (2.0)
Unwinding of discount 0.4 0.4 0.8
At 31 December 2011 5.2 7.2 12.4
Included in current liabilities 1.2 0.6 1.8
Included in non-current liabilities 4.0 6.6 10.6
At 31 December 2011 5.2 7.2 12.4
Increase of provision 0.9 – 0.9
Release of provision (0.8) – (0.8)
Utilisation of provision (1.1) (0.4) (1.5)
Unwinding of discount 0.3 0.5 0.8
At 29 December 2012 4.5 7.3 11.8
Included in current liabilities 0.9 – 0.9
Included in non-current liabilities 3.6 7.3 10.9
Onerous lease and other provisions include provisions related to unused premises. Of this, £4.5 million (2011: £5.2 million) relates to onerous leases
and related costs that will be utilised over the term of the individual leases to which they relate.
Releases of provisions relate to onerous leases that have been subsequently reviewed due to changing circumstances and adjustments to the
ongoing provisions. The release of provisions follows the original treatment, which are released in administrative costs.
Dilapidation provisions relate to obligations under various property leases to ensure that, at the end of the leases, the buildings are in the condition
agreed with the landlords. The provisions will be utilised at the end of the individual lease terms to which they relate.
29
FINANCIAL INSTRUMENTS
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to
stakeholders through the optimisation of debt and equity balance. The capital structure of the Group consists of borrowings as disclosed in note 23,
cash and cash equivalents and equity attributable to owners of the parent, comprising issued capital, reserves and retained earnings.
The Group manages its capital by collating timely and reliable information to produce various internal reports such as capital expenditure and weekly
cash reports, which enable the Board of Directors to assess the Group’s capital, and manage that capital effectively and in line with the Group’s
objectives. The gearing of the Group is constantly monitored and managed to ensure that the ratio between debt and equity is at an acceptable level
and enables the Group to operate as a going concern and maximise stakeholders return.
Gearing ratio
The gearing ratio at the period end is as follows:
29 December 31 December
£m 2012 2011
Debt 594.4 621.5
Cash and cash equivalents (30.5) (30.1)
Net debt 563.9 591.4
Equity 308.9 301.3
Net debt to net debt plus equity percentage 64.6% 66.2%
Debt is defined as long and short term borrowings, as disclosed in note 23 and finance leases payable.
PAGE 86 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
29
FINANCIAL INSTRUMENTS CONTINUED
Externally imposed capital requirement
The Group is subject to externally imposed capital requirements on capital expenditure as a result of bank covenants, which we have fully complied
with throughout the period (see note 23, Borrowings).
Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on
which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2
to the financial statements.
Categories of Financial Instruments
29 December 31 December
£m 2012 2011
Financial assets
Fair value through profit and loss:
Derivative financial instruments 0.6 0.4
Loans and receivables at amortised cost:
Trade receivables 158.4 161.6
Deferred consideration 0.1 –
Other receivables 13.1 10.7
Cash and cash equivalents 30.5 30.1
202.7 202.8
Financial liabilities
Fair value through profit and loss:
Derivative financial instruments 10.1 17.9
Other Financial liabilities at amortised cost:
Trade payables 190.6 197.1
Deferred consideration 0.1 0.3
Other payables 30.5 31.4
Borrowings 594.0 618.9
Finance leases 0.4 2.6
825.7 868.2
The fair value of the financial assets approximates to their carrying value due to the short term nature of the receivables. Fair values have been
determined as level 2 under IFRS 7.
The fair value of other financial liabilities at amortised cost approximates to their carrying value. The trade and other payables approximate to their
fair value due to the short term nature of the payables. The finance lease fair value approximates to the carrying value based on discounted future
cash flows.
Financial risk management
The Group is exposed to a number of financial risks such as access to and cost of funding, interest rate exposure, currency exposure and working
capital management. The Group seeks to minimise these risks where possible and does this by constantly monitoring, reviewing, effectively
managing and using derivative financial instruments as detailed in the Directors’ report. Use of financial instruments is governed by Group policies
which are approved by the Board of Directors. The treasury function does not operate as a profit centre, makes no speculative transactions and only
enters into or trades financial instruments to manage specific exposures.
To ensure the management of those financial risks faced by the Group remain effective, it is very important that any new businesses that are
acquired by the Group are immediately integrated. This means the new business is providing timely and accurate information to the central Treasury
department, so they can produce group reports on key financial risks that reflect the ultimate position of the Group at that time.
Further details on financial risks are provided within the Our Risks section on page 49 and 50.
PAGE 87 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
29
FINANCIAL INSTRUMENTS CONTINUED
Market risk
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Group enters into
a variety of derivative financial instruments to manage its exposure to interest rate and foreign currency risk, including:
• Forward foreign exchange contracts to hedge the exchange rate risk arising on revenues and purchases in foreign currencies.
• Interest rate swaps to mitigate the risk of rising interest rates.
Market risk exposures are supplemented by sensitivity analysis. There has been no change to the Group’s exposure to market risks or the manner in
which it manages and measures the risk.
Foreign currency risk management
Foreign currency risk management occurs at a transactional level on revenues and purchases in foreign currencies and at a translational level in
relation to the translation of overseas operations. Board policy is for Group Treasury to hedge a rolling 12 month forecast of transactional exposures
using forward foreign exchange contracts and foreign exchange options. The Group monitors foreign exchange rates to assess the potential impact on
group profits if exchange rates move significantly and a summary of hedges in place are reported monthly to the Board of Directors.
The Group’s main foreign exchange risk is to the Euro and US dollar.
During the 52 week period to 29 December 2012, the Euro weakened against Sterling by 2.1%, with the closing rate at €1.2219 compared to
€1.1972 at the prior period end. The average rate for the 52 week period to 29 December 2012 was €1.2335, a weakening of the Euro of 7.0%
versus prior year.
In the same period the US dollar, weakened against Sterling by 4.0%, with the closing rate at $1.6155 compared to $1.5541 at the prior period end.
The average rate for the period to 29 December 2012 was $1.5851, a 1.2% strengthening of the US dollar versus the prior year.
The net foreign exchange impact on profit from transactions is a gain of £0.4 million (2011: loss of £0.3 million).
Foreign currency sensitivity analysis
A sensitivity analysis has been performed on the financial assets and liabilities to a sensitivity of 10% increase/decrease in the exchange rates.
A 10% increase/decrease has been used, and represents management’s assessment of the reasonably possible change in foreign exchange rates.
The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a
10% change in foreign currency rates. The sensitivity analysis includes external loans as well as loans to foreign operations within the Group where
the denomination of the loan is in a currency other than the currency of the lender or the borrower. A positive number below indicates an increase in
profit where Sterling strengthens 10% against the relevant currency.
Profit or (loss)
Profit or (loss)
10% Strengthening 10% Weakening
29 December 31 December 29 December 31 December
£m 2012 2011 2012 2011
Euro (1.4) (1.1) 1.8 1.2
USD (1.3) (1.0) 1.6 1.1
RMB (0.1) 0.1 0.1 (0.1)
ZAR (0.2) (0.2) 0.2 0.2
PAGE 88 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
29
FINANCIAL INSTRUMENTS CONTINUED
Foreign currency risk management continued
Forward foreign exchange contracts
It is the policy of the Group to enter into forward foreign exchange contracts to cover specific foreign currency payments and receipts. The Group
also enters into forward foreign exchange contracts to manage the risk associated with anticipated sales and purchase transactions to minimise the
exposure generated.
The following table details the Sterling forward foreign currency contracts outstanding as at 29 December 2012:
Average Foreign Contract Fair
exchange currency value value
rate (m) (£m) (£m)
Outstanding contracts 2012 2011 2012 2011 2012 2011 2012 2011
Buy Euros:
Less than 3 months 1.24 1.16 26.0 16.4 21.0 14.2 0.2 (0.5)
3 to 6 months 1.25 1.17 12.0 16.5 9.6 14.2 0.1 (0.3)
6 to 12 months 1.25 1.17 3.5 9.0 2.8 7.7 – (0.1)
Buy US Dollars:
Less than 3 months 1.59 1.56 2.9 6.8 1.8 5.9 (0.1) (0.1)
3 to 6 months 1.59 1.59 1.1 2.0 0.7 1.2 – 0.1
6 to 12 months 1.59 1.58 1.5 1.4 1.0 0.9 – –
36.9 44.1 0.2 (0.9)
The following table details the Euro forward foreign currency contracts outstanding as at 29 December 2012:
Average Foreign Contract Fair Fair
exchange currency value value value
rate (m) (€m) (€m) (£m)
Outstanding contracts 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011
Buy US Dollars:
Less than 3 months – 1.37 – 0.5 – 0.4 – – – –
3 to 6 months 1.26 – 1.6 – 2.0 – 0.1 – – –
6 to 12 months 1.25 1.38 6.4 10.4 8.0 7.5 0.3 (0.5) 0.3 (0.5)
10.0 7.9 0.4 (0.5) 0.3 (0.5)
The following table details the South African Rand (ZAR) forward foreign currency contracts outstanding as at 29 December 2012:
Average Foreign Contract Fair Fair
exchange currency value value value
rate (m) (ZARm) (ZARm) (£m)
Outstanding contracts 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011
Buy Sterling:
Less than 3 months 13.04 12.72 0.2 0.2 2.0 2.8 (2.8) (1.6) (0.2) (0.1)
3 to 6 months 13.68 12.93 0.2 0.1 3.0 1.0 (2.8) (0.4) (0.2) (0.1)
6 to 12 months 13.63 – 0.2 – 2.5 – (2.0) – (0.1) –
7.5 3.8 (7.6) (2.0) (0.5) (0.2)
Interest rate risk management
The Group is exposed to interest rate risk on borrowings. The risk is managed by maintaining an appropriate mix between fixed and floating rate
borrowings. Interest rate risk management balances debt financing as a tool to improve the returns through leverage in the capital structure with the
potential for an increase in interest rates to impact profits negatively. The Group also uses derivative financial instruments such as interest rate swaps
to minimise the risk associated with variable interest rates. As a result of this policy, at the year end 8.4% of the Group’s borrowings were covered by
interest rate swaps and collars (2011: 48%). The Group has in issue £350 million of 8.25% fixed rate Senior Secured Notes that are listed on the Irish
Stock Exchange (see note 23). Board approval is required for the use of any interest rate derivative. Further information on interest rate risk is provided
in the Our Risks section on page 49 and 50.
PAGE 89 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
29
FINANCIAL INSTRUMENTS CONTINUED
Interest rate risk management continued
Interest rate sensitivity analysis
Interest rate sensitivity analysis has been performed on the financial assets and liabilities to illustrate the impact on Group profits and equity if interest
rates increased/decreased. This analysis assumes the liabilities outstanding at the period end were outstanding for the whole period. A 100 basis
points increase or decrease has been used, comprising management’s assessment of reasonably possible changes in interest rates.
Profit/(loss) Profit/(loss)
29 December 31 December
£m 2012 2011
Effects of 100 basis points increase in interest rate (1.9) (0.7)
Effects of 100 basis points decrease in interest rate 1.9 0.7
It is assumed that all other variables remained the same when preparing the interest rate sensitivity analysis.
Interest rate swaps
Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest amounts calculated on
agreed notional principal amounts. Such contracts enable the Group to mitigate the risk of changing interest rates on the fair value of issued fixed
rate borrowings held and the cash flow exposures on the issued variable rate borrowings held. The fair value of interest rate swaps at the reporting
date is determined by discounting the future cash flows using the yield curves at the reporting date and the credit risk inherent in the contract, and is
disclosed below. The average interest rate is based on the outstanding balances at the end of the financial year.
The following table details the notional principal amounts and remaining terms of interest rate swap contracts and collars outstanding as at
29 December 2012:
Average contract fixed
Notional
interest rate principal amount Fair value
2012 2011 2012 2011 2012 2011
% % £m £m £m £m
Interest rate swaps
0 to 1 years – 5.03 – 150.0 – (4.4)
1 to 5 years 4.90 – 50.0 – (9.5) –
Over 5 years – 4.90 – 50.0 – (9.9)
Collars
0 to 1 years – 4.37 – 100.0 – (1.6)
50.0 300.0 (9.5) (15.9)
The interest rate swaps settle on a quarterly basis. The floating rate on the interest rate swaps is 3 months LIBOR. The Group will settle the difference
between fixed and floating interest rates on a net basis.
Credit risk management
Credit risk refers to the risk of financial loss to the Group if a counterparty defaults on its contractual obligations of the loans and receivables at
amortised cost held in the balance sheet.
The Group’s main credit risk is attributable to its trade receivables. The Group’s top five customers, all leading UK retailers, continue to represent more
than 80% (2011: 80%) of the Group’s revenue. These customers hold favourable credit ratings and consequently reduce the credit risk for the Group’s
overall trade receivables.
The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with good credit ratings assigned by
international credit rating agencies. Group policy dictates that Group deposits are shared between banks to spread the risk. Currently Group deposits
are shared between banks that are counterparties in the Group’s secured committed bank facilities. Bakkavor Finance (2) plc current bank credit limit
consists of a £260 million Term loan, of which £25 million has been repaid and a £90 million RCF facility, through a bank syndicate. Barclays Capital is
the syndicate agent of this facility and they manage the syndicate and participation with other counterparties.
Processes are in place to manage receivables and overdue debt and to ensure that appropriate action is taken to resolve issues on a timely basis.
Credit control operating procedures are in place to review all new customers. Existing customers are reviewed as management become aware of
changes of circumstances for specific customers. The amounts presented in the statement of financial position are net of appropriate allowance for
doubtful trade receivables, specific customer risk and assessment of the current economic environment. The carrying amount of financial assets
recorded in the financial statements, which is net of impairment losses, represents the Group’s maximum exposure to credit risk.
PAGE 90 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
29
FINANCIAL INSTRUMENTS CONTINUED
Commodity risk management
The Group acquires substantial amounts of raw materials for its operations, including dairy, wheat and rapeseed oil. The Group is exposed to
commodity price and supply risks for these raw materials. The Group takes actions to reduce overall material costs and exposure to price fluctuations.
This is done in a number of ways. For example, the Group buys raw materials from suppliers all over the world, thereby decreasing geographic risk
and frequently tenders to benchmark market prices. In general our requirements are managed using contracts for periods of between three to twelve
months forward. The Group also manage any local currency exposure in line with agreed contracts.
Liquidity risk management
Liquidity risk refers to the risk that the Group may not be able to fund the day to day running of the Group. Liquidity risk is reviewed by the Board of
Directors on a monthly basis. The Group manages liquidity risk by monitoring actual and forecast cash flows and matching the maturity profiles of
financial assets and liabilities. The Group also monitors the drawdown of borrowings against the available banking facilities and reviews the level of
reserves. Liquidity risk management ensures sufficient borrowings funding is available for the Group’s day to day needs. Board policy is to maintain
reasonable headroom of unused committed bank facilities in a range of maturities at least 12 months beyond the period end.
Maturity profile of financial liabilities
The following table illustrates the Group’s remaining contractual maturity for its financial liabilities when they fall due.
29 December 31 December
£m 2012 2011
Due within one year:
Trade payables 190.6 197.1
Deferred consideration 0.1 0.2
Other payables 30.5 31.2
Derivative financial instruments 10.1 17.9
Borrowings 21.0 19.5
Finance leases 0.1 0.9
Interest on borrowings 57.7 65.6
Total due within one year 310.1 332.4
In the second to fifth years inclusive:
Other payables 0.1 0.2
Deferred consideration – 0.1
Borrowings 220.9 247.6
Finance leases 0.3 2.3
Interest on borrowings 126.0 136.2
Total due in the second to fifth years 347.3 386.4
Due after five years:
Borrowings 350.0 350.0
Interest on borrowings 13.8 43.2
Total due after five years 363.8 393.2
The weighted average interest rates for the Group’s borrowings are found in note 23 and in note 26 for Finance leases.
PAGE 91 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
30Issued and fully paid:
55,258 (2011: 53,258) Ordinary shares of £1 each 0.1 0.1
SHARE CAPITAL AND RESERVES
Share capital
29 December 31 December
£m 2012 2011
Shares issued in the period:
2,000 (2011: 53,258) Ordinary shares of £1 each – –
During the period, the Company has issued £2,000 of share capital. The share issues were made in September and December 2012, each amounting
to £1,000. The proceeds from the share issue have been used to repay bank borrowings during the period.
Share premium
As a result of the share issue, £4,605,427 and £8,201,142 of share premium was created in September and December 2012 respectively. The
proceeds from the share issue have been used to repay bank borrowings during the period. In the prior period, £302.4 million of share premium was
created of which £96.6 million was in relation to the acquisition of Bakkavor Finance (3) Limited and £205.8 million a related party loan, which was
capitalised.
Merger reserve
The incorporation of Bakkavor Finance (2) plc as an intermediate holding Company of the Group in 2011 was accounted for using the principles of
merger accounting.
Capital reserve
The capital reserve of £4.0 million arose in 2009 following the capitalisation of an inter-Company balance between Bakkavor London Limited and
Bakkavor Group ehf.
Translation reserve
The translation reserve represents foreign exchange rate differences arising on the consolidation of the Group’s foreign operations. The assets and
liabilities of the Group’s foreign operations are translated at exchange rates prevailing on the balance sheet date. Income and expense items are
translated at the average exchange rates for the period. Exchange differences arising, if any, are recognised in the translation reserve.
31
DISPOSAL OF SUBSIDIARIES
In February 2012, the Group received a final payment of £0.1 million relating to the disposal of Bakkavor Traiteur SAS on 7 September 2011.
In March 2012, Creative Foods a 100% owned subsidiary of Bakkavor Finance (2) plc based in China, disposed of its 80% interest in Yantai
Longshun Foods for a cash consideration of RMB 16.0 million (£1.5 million), of which RMB 1.0 million (£0.1 million) is outstanding at 29 December
2012. This transaction resulted in a profit on disposal of £0.3 million being recorded in the income statement. Cash of £0.1 million was disposed of
with the business.
2011
On 7 September 2011 the Group disposed of its interest in Bakkavor Traiteur SAS for a cash consideration of €1.9 million (£1.6 million), resulting in a
loss on disposal of £1.0 million, net of £0.1 million of disposal costs. The loss on disposal includes £0.4 million of foreign currency translation gains
recycled from the translation reserve to the income statement on disposal.
The net effect of the disposal was as follows:
£m
Net assets 2.9
Disposal costs 0.1
Recycle net foreign exchange gains (0.4)
Loss on disposal (1.0)
Total consideration 1.6
PAGE 92 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
32
The net effect of the transaction was as follows:
£m
Carrying value of 35% investment in English Village Salads 0.3
Cost of additional 35% investment in English Village Salads –
Amount recognised within equity attributable to equity holders of the parent 0.3
ACQUISITION OF BUSINESSES
On 31 March 2012 the Group acquired the remaining 35% of English Village Salads Limited to increase the Group’s ownership to 100% for a total
cash consideration of £40,000, prior to the closure of the business. This transaction has been accounted for as an equity transaction as the Group has
increased its stake in an existing subsidiary without any changes in control.
2011
On 21 December 2011 the Group acquired 52% of Gastro Primo Limited in Hong Kong, to increase its ownership to 100%, for a cash consideration
of US$1.0 million (£0.6 million) and deferred consideration of US$0.4 million (£0.3 million). Gastro Primo held £0.4 million of cash at the date of
acquisition. This has resulted in goodwill of £1.2 million being recognised and also a loss on disposal of an associate of £1.6 million being recorded in
the income statement.
The net effect of the acquisition was as follows:
£m
Fair value of 100% of Gastro Primo 1.7
Book value and fair value of net assets acquired (0.5)
Goodwill on acquisition 1.2
The loss on disposal of an associate was as follows:
£m
Carrying value of original 48% investment in Gastro Primo 2.4
Fair value of 48% investment in Gastro Primo 0.8
Loss on disposal of an associate (1.6)
On 3 November 2011 the Group acquired the remaining 20% of Bakkavor China Limited that it did not own for a cash consideration of US$30,000,
which resulted in the recognition of £0.8 million negative goodwill. This negative goodwill was recognised in the income statement.
PAGE 93 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
33
NOTES TO THE STATEMENT OF CASH FLOWS
29 December 31 December
£m 2012 2011
Operating profit/(loss) – continuing operations 56.8 (2.8)
– discontinued operations 1.9 (15.5)
58.7 (18.3)
Adjustments for:
Share of results of associates (0.9) (1.1)
Depreciation of property, plant and equipment 42.6 43.9
Amortisation of intangible assets 8.7 9.4
Loss on disposal of property, plant and equipment 1.3 0.3
(Profit)/loss on disposal of subsidiary (note 31) (0.4) 1.0
Loss on disposal of associate (note 32) – 1.6
Impairment of assets 1.0 76.9
Net retirement benefits charge less contributions (4.6) (16.4)
Operating cash flows before movements in working capital 106.4 97.3
Increase in inventories (2.2) (5.9)
(Increase)/decrease in receivables (10.8) 0.5
Increase in payables 11.9 13.3
(Decrease)/increase in exceptional creditor (1.6) 1.5
Decrease in provisions (1.5) (3.0)
Cash generated by operations 102.2 103.7
Income taxes paid (1.0) (3.4)
Interest paid (60.5) (64.5)
Net cash from operating activities 40.7 35.8
34
CONTINGENT LIABILITIES AND COMMITMENTS
The Group may from time to time, and in the normal course of business, be subject to claims from customers and counterparties. The Group regularly
reviews all of these claims to determine any possible financial loss to the Group. No provision was considered necessary in the consolidated financial
statements. In addition, there are a number of legal claims or potential claims against the Group, the outcome of which cannot at present be foreseen.
Provision has been made for all probable liabilities.
As at 29 December 2012 the Group had purchase commitments for the next 12 months to guarantee supply and price of raw materials of
£117.5 million (2011: £51.6 million).
PAGE 94 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
35
OPERATING LEASE ARRANGEMENTS
The Group as lessee
52 weeks 52 weeks
ended ended
29 December 31 December
£m 2012 2011
Continuing operations
Minimum lease payments under operating leases recognised as an expense in the period 10.8 9.6
Discontinued operations
Minimum lease payments under operating leases recognised as an expense in the period 0.7 0.8
At the statement of financial position date, the Group had outstanding commitments for future minimum lease payments under non-cancellable
operating leases, which fall due as follows:
Land and buildings
Other
29 December 31 December 29 December 31 December
£m 2012 2011 2012 2011
Operating leases which expire:
Within one year 6.1 6.1 4.3 3.9
Within two to five years 23.8 20.3 6.4 5.6
After five years 42.2 44.7 2.1 –
72.1 71.1 12.8 9.5
The Group leases various offices and operational facilities under non-cancellable operating lease arrangements. The leases have various terms,
escalation clauses and renewal rights. The Group also leases plant and machinery under non-cancellable operating lease agreements.
36
RETIREMENT BENEFIT SCHEMES
The Group operates a number of pension schemes in the UK and overseas. These schemes are either trust or contract based and have been set up in
accordance with appropriate legislation. The assets of each of the pension schemes are held separately from the assets of the Company.
In the UK, the two main schemes are a defined contribution scheme which is open to all UK employees joining the Group (full or part time) and the
other a funded defined benefit scheme which was closed for future accrual in March 2011.
Pension (credits)/costs charged in arriving at profit on ordinary activities before taxation were:
52 weeks 52 weeks
ended ended
29 December 31 December
£m 2012 2011
UK defined benefit scheme net credit (1.8) (1.6)
UK defined benefit scheme exceptional credit – (12.0)
UK defined contribution scheme net charge 4.3 3.2
Overseas net charge 0.3 0.3
Total charge/(credit) 2.8 (10.1)
During the prior period, an exceptional credit arose due to the defined benefit scheme closing to future accrual in March 2011.
Defined contribution schemes
The total cost charged to income of £4.6 million (2011: £3.5 million) represents contributions payable to these schemes by the Group at rates specified
in the rules of the plans. No amounts were owing at the period end for the defined contribution schemes (2011: £nil)
PAGE 95 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
36
RETIREMENT BENEFIT SCHEMES CONTINUED
Defined benefit schemes
A full actuarial valuation of plan assets and the present value of the defined benefit obligation for funding purposes was carried out at 31 March 2010
and was updated for IAS 19 purposes to 29 December 2012 by a qualified independent actuary. The projected unit cost method was used to value the
liabilities and was conducted by a qualified independent actuary with Towers Watson Limited.
The major assumptions used in this IAS 19 valuation were:
29 December 31 December
2012 2011
Expected rate of salary increases – –
Future pension increases 2.90% 2.95%
Expected return on scheme assets 5.80% 6.25%
Discount rate applied to scheme liabilities 4.60% 5.00%
Inflation assumption (CPI) 1.95% 2.00%
The mortality table is based on scheme specific postcode fitted SAPS tables with a 102% multiplier for male members and 108% multiplier for female
members. Long cohort improvements are applied from 2002 to 2010. Future improvements are in line with CMIB improvements with a 1.0% pa long
term trend, giving life expectancies as follows:
Males expected Males expected Females expected Females expected
future lifetime future lifetime future lifetime future lifetime
2012 2011 2012 2011
Member aged 45 in 2010 41.7 41.6 44.0 43.9
Member aged 65 in 2010 22.2 22.1 24.1 24.1
The sensitivities regarding the principal assumptions used to measure the scheme liabilities are set out below:
Approximate impact
Assumption Change in assumption on scheme liabilities
Discount rate Increase/decrease by 0.1% Decrease/increase by 1.5% – 2.0%
Rate of inflation Increase/decrease by 0.1% Increase/decrease by 0.5% – 1.5%
Rate of salary growth N/A N/A
Rate of mortality Increase by 1 year Increase by 3%
Amounts recognised in income in respect of these defined benefit schemes are as follows:
52 weeks 52 weeks
ended ended
29 December 31 December
£m 2012 2011
Current service cost – (1.1)
Interest cost (7.9) (9.0)
Expected return on scheme assets 9.7 11.7
Gain from curtailments – 12.0
Total credit 1.8 13.6
All of the credits for each period presented have been included in total administrative expenses, except for the gain from curtailments recorded in
2011, which is shown within exceptional items. Actuarial gains and losses have been reported in other comprehensive income. At 31 March 2011 the
scheme closed to future accrual and this has been allowed for in the liability calculations. The closure of the scheme led to a £12.0 million credit to the
income statement in the prior period and is disclosed within exceptional items.
The actual return on scheme assets was a £18.4 million gain (2011: £4.8 million loss).
Cumulative amount of actuarial gains and losses recognised in other comprehensive income since the date of IFRS transition is £49.1 million loss
(2011: £45.2 million loss).
PAGE 96 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
36
RETIREMENT BENEFIT SCHEMES CONTINUED
The amount included in the statement of financial position arising from the Group’s obligations in respect of its defined benefit retirement benefit
schemes is as follows:
29 December 31 December
£m 2012 2011
Fair value of scheme assets 185.8 170.6
Present value of defined benefit obligations (175.8) (161.3)
Surplus in scheme 10.0 9.3
Related deferred taxation liability (2.3) (2.3)
7.7 7.0
The assumptions used by the actuary are the best estimates chosen from a range of possible actuarial assumptions which, due to the timescale
covered, may not necessarily be borne out in practice.
Movements in the present value of defined benefit obligations were as follows:
29 December 31 December
£m 2012 2011
Opening balance (161.3) (167.9)
Current service cost – (1.1)
Interest cost (7.9) (9.0)
Contributions from scheme members – (0.8)
Benefits paid 6.0 7.9
Loss on change of assumptions (12.6) (1.5)
Experience loss – (0.9)
Gain from curtailments – 12.0
Closing balance (175.8) (161.3)
Movements in the fair value of scheme assets were as follows:
29 December 31 December
£m 2012 2011
Opening balance 170.6 179.7
Expected return on scheme assets 9.7 11.7
Experience gain/(loss) 8.7 (16.5)
Contributions from the sponsoring Companies 2.8 2.8
Contributions from scheme members – 0.8
Benefits paid (6.0) (7.9)
Closing balance 185.8 170.6
PAGE 97 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
36
RETIREMENT BENEFIT SCHEMES CONTINUED
The analysis of the scheme assets and the expected rate of return at the statement of financial position date was as follows:
Expected return
Fair value of assets
29 December 31 December 29 December 31 December
2012 2011 2012 2011
% % £m £m
UK equities 7.15 6.90 61.8 56.2
Overseas equities 7.15 6.90 24.0 57.5
Corporate bonds 3.60 4.20 37.3 35.9
High yield bonds 4.75 – 42.2 –
UK government bonds 2.30 2.50 12.4 12.0
Property 5.30 5.60 7.2 8.7
Cash – – 0.9 0.3
185.8 170.6
29 December 31 December 1 January 2 January 27 December
£m 2012 2011 2011 2010 2008
Fair value of scheme assets 185.8 170.6 179.7 156.4 127.9
Present value of defined benefit obligations (175.8) (161.3) (167.9) (169.6) (127.5)
Surplus/(deficit) in the scheme 10.0 9.3 11.8 (13.2) 0.4
Experience (losses)/gains adjustments on scheme liabilities:
Amount – (0.9) (5.6) 3.5 4.9
Percentage of scheme liabilities (%) – (0.56) (3.34) 2.06 3.84
Experience gains/(losses) on scheme assets:
Amount 8.7 (16.5) 12.8 21.6 (51.3)
Percentage of scheme assets (%) 4.68 (9.67) 7.12 13.81 (40.11)
The actual amount of contributions expected to be paid to the pension scheme during 2013 is £4.2 million. Employer contributions, except for deficit
reduction contributions, ceased in March 2011 when the scheme closed to future accrual.
The next triennial valuation is scheduled to be carried out as at 31 March 2013.
The deficit reduction contributions have been agreed between the Group and the trustees. These are paid over a five year recovery period ending on
31 March 2016. The recovery contributions are paid monthly and the agreed rates were £2 million in the first year, £3 million in the second year and
£4.5 million in the following three years.
The Group estimate the scheme liabilities on average fall due over 20 years.
The Trustees currently adopt a policy of 70% return seeking assets (equities) and 30% liability matching assets (bonds/property) which will be
reviewed periodically. A review of the investment strategy is currently underway following the closure of the scheme to future accrual.
The Group and the Trustees work closely together in matters concerning the Bakkavor Pension Scheme. Regular meetings and correspondence
on matters concerning the scheme are shared in an open manner between both parties.
PAGE 98 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
37
RELATED PARTY TRANSACTIONS
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this
note. Transactions between the Group and its associates are disclosed below. Transactions between the Company and its subsidiaries and associates
are disclosed in the Company’s separate financial statements.
Trading transactions
During the period, Group companies entered into the following transactions with related parties who are not members of the Group:
Bakkavor Group
management
Sale of goods Purchase of goods Interest charge charge
£m 2012 2011 2012 2011 2012 2011 2012 2011
Associates – 0.2 – 0.1 – – – –
Bakkavor Group ehf. – – – – – 0.7 0.5 1.2
Amounts owed from Amounts owed to
related parties
related parties
£m 2012 2011 2012 2011
Bakkavor Group ehf. 0.1 – 0.1 0.1
Associates – – – 0.3
The amount owed from Bakkavor Group ehf of £0.1 million (2011: £0.1 million) is included within the current assets section under Trade and other
receivables. Amounts owed to Bakkavor Group ehf of £0.1 million (2011: £0.1 million) are included in the current liabilities section within Trade and
other payables.
Loans between the Group and related parties are all based on varying terms of interest. Related party loans are repayable between one and five years
and incur interest based on the three month libor rate plus 3%.
The amounts outstanding are unsecured. No guarantees have been given or received. No provisions have been made for doubtful debts in respect of
the amounts owed by related parties.
Remuneration of key management personnel
The remuneration of the Directors and senior management, who are the key management personnel of the Company, is set out below in aggregate
for each of the categories specified in IAS 24 Related Party Disclosures.
29 December 31 December
£m 2012 2011
Short-term employee benefits 5.5 6.1
Post – employment benefits 0.4 0.7
5.9 6.8
38
39
EVENTS AFTER THE STATEMENT OF FINANCIAL POSITION DATE
There were no significant events after the statement of financial position date.
CONTROLLING PARTY
On 27 September 2012, Bakkavor Group Limited (formerly Bakkavor Holdings Limited) became the parent company of the Bakkavor Group following
a shareholder meeting of Bakkavor Group ehf (EHF) where it was agreed to implement a decrease in the share capital of EHF and to effect the
distribution of EHF’s shares in Bakkavor Group Limited to EHF’s shareholders.
The company name of Bakkavor Holdings Limited was formally changed to Bakkavor Group Limited to reflect its status as parent of the Bakkavor
Group.
The Company’s ultimate parent company and ultimate controlling party is Bakkavor Group Limited, a Company registered in the United Kingdom.
The largest Group in which the results of the Group are consolidated is that headed by Bakkavor Group Limited. It has included this Group in its group
financial statements, copies of which are available from West Marsh Road, Spalding, Lincolnshire, PE11 2BB, United Kingdom.
The Company’s immediate parent Company is Bakkavor Finance (1) Limited.
PAGE 99 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
company income statement
52 WEEKS ENDED 29 DECEMBER 2012
52 weeks 50 weeks
ended ended
29 December 31 December
£m Notes 2012 2011
Continuing operations
Finance costs 4 (55.0) (46.2)
Loss before tax (55.0) (46.2)
Tax 5 55.0 12.2
Loss and total comprehensive income for the period – (34.0)
The accompanying notes are an integral part of this income statement.
The Company has no recognised gains and losses other than the loss above, and therefore no separate statement of comprehensive income
is presented.
company statement of changes in equity
52 WEEKS ENDED 29 DECEMBER 2012
Share Share Retained Total
£m capital premium earnings equity
New shares issued 0.1 302.4 – 302.5
Loss for the period – – (34.0) (34.0)
Balance at 31 December 2011 0.1 302.4 (34.0) 268.5
New shares issued – 12.8 – 12.8
Balance at 29 December 2012 0.1 315.2 (34.0) 281.3
PAGE 100 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
company statement of financial position
29 DECEMBER 2012
£m Notes 29 December 2012 31 December 2011
Non-current assets
Investment in subsidiaries 7 929.4 929.4
Current assets
Amounts due from other group companies 11 55.0 12.2
Current liabilities
Borrowings 6 (57.8) (35.7)
Amounts due to other group companies 11 (83.1) (51.6)
Other payables – (0.1)
(140.9) (87.4)
Non-current liabilities
Borrowings 6 (562.2) (585.7)
Net assets 281.3 268.5
Equity
Share capital 10 0.1 0.1
Share premium 10 315.2 302.4
Retained earnings (34.0) (34.0)
Total equity 281.3 268.5
The financial statements of Bakkavor Finance (2) plc, company number 7501697, and the accompanying notes, which form an integral part of the
Company financial statements, were approved by the Board of Directors on 20 February 2013. They were signed on behalf of the Board of Directors by:
A Gudmundsson
Director
PAGE 101 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
company statement of cash flows
52 WEEKS ENDED 29 DECEMBER 2012
52 weeks 50 weeks
ended ended
29 December 31 December
£m 2012 2011
Increase in payables 40.5 50.4
Cash generated by operations 40.5 50.4
Interest paid (51.6) (43.1)
Net cash (used in)/generated from operating activities (11.1) 7.3
Investing activities:
Acquisition of subsidiary – (627.1)
Net cash used in investing activities – (627.1)
Financing activities:
Issue of shares 12.8 0.1
Increase in borrowings 23.0 654.7
Repayment of borrowings (24.7) (35.0)
Net cash generated from financing activities 11.1 619.8
Net increase in cash and cash equivalents – –
Cash and cash equivalents at beginning of period – –
Cash and cash equivalents at end of period – –
PAGE 102 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the company financial statements
52 WEEKS ENDED 29 DECEMBER 2012
1
GENERAL INFORMATION
Bakkavor Finance (2) plc (the ‘Company’) is a Public Limited Company whose ultimate parent company and controlling party is Bakkavor Group Limited
(formerly Bakkavor Holdings Limited), a company registered in the United Kingdom.
As the Company was incorporated and registered as a Public Limited Company during the prior period, the comparative Company financial statements
are for the 50 week period to 31 December 2011.
2
SIGNIFICANT ACCOUNTING POLICIES
The separate financial statements of the Company are presented as required by the Companies Act 2006. As permitted by that Act, the separate
financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as issued by the International
Accounting Standards Board (IASB). The financial statements have also been prepared in accordance with IFRSs adopted by the European Union.
The financial statements have been prepared on the historical cost basis, except for the revaluation of financial instruments. The principal accounting
policies adopted are the same as those set out in note 2 to the consolidated financial statements except as set out below.
Investments in subsidiaries are stated at cost less, where appropriate, provisions for impairment.
Going concern for the Company has been considered along with the Group, by the Directors. This consideration is set out in note 3 to the
consolidated financial statements.
3
EMPLOYEES, DIRECTORS AND AUDIT REMUNERATION
Audit fees of £70,000 (2011: £85,000) for the period ended 29 December 2012 have been borne by fellow Group Company Bakkavor Foods Limited.
The Company has no employees and payments to Directors for the period ended 29 December 2012 (2011: £nil) have been borne by fellow Group
Company Bakkavor Foods Limited.
4
FINANCE COSTS
52 weeks 50 weeks
ended ended
29 December 31 December
£m 2012 2011
Interest on borrowings 45.0 41.1
Amortisation of refinancing costs 6.9 3.8
Interest on loans from other group companies 3.1 1.3
55.0 46.2
PAGE 103 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the company financial statements
continued
5
TAX
The credit for the period can be reconciled to the loss per the income statement as follows:
52 weeks 50 weeks
ended
ended
29 December 31 December
2012 2011
£m % £m %
Loss before tax (55.0) (100.0) (46.2) (100.0)
Group relief surrendered at tax rate of 100% (2011: 26.5%) 55.0 100.0 12.2 26.5
Tax credit and effective tax rate for the period 55.0 100.0 12.2 26.5
6
BORROWINGS
29 December 31 December
£m 2012 2011
Bank overdraft 32.6 9.7
Bank loans 235.0 259.7
8.25% senior secured notes 352.4 352.0
620.0 621.4
Borrowings repayable as follows:
On demand or within one year 57.8 35.7
In the second year 217.4 16.0
In the third to fifth years inclusive 344.8 569.7
620.0 621.4
Analysed as:
Amount due for settlement within 12 months (shown within current liabilities) 57.8 35.7
Amount due for settlement after 12 months 562.2 585.7
620.0 621.4
All borrowings are denominated in Pounds Sterling.
7
INVESTMENTS IN SUBSIDIARIES
Investment
in Group
£m Companies
Balance at 29 December 2012 and 31 December 2011 929.4
PAGE 104 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the company financial statements
continued
8
SUBSIDIARIES
As at 29 December 2012, Bakkavor Finance (2) plc held investments in the share capital in the following Companies (ownership in dormant Companies
have not been listed):
Place of registration
Name and operation Principal activity Interest
Directly held investments:
Bakkavor Finance (3) Limited United Kingdom Holding Company 100%
Indirectly held investments:
Bakkavor Foods Limited United Kingdom Preparation and marketing of fresh prepared foods 100%
Heli Food Fresh AS Czech Republic Preparation and marketing of fresh prepared foods 100%
Anglia Crown Limited United Kingdom Preparation and marketing of fresh prepared foods 100%
Bakkavor Fresh Cook Limited United Kingdom Preparation and marketing of fresh prepared foods 100%
Bakkavor Overseas Limited United Kingdom Importer and exporter of machinery and equipment 100%
Vaco BV Belgium Preparation and marketing of fresh prepared foods 100%
Bakkavor (SA) (Pty) Limited South Africa Preparation and marketing of fresh prepared foods 100%
Creative Food Group Limited
(includes 12 further subsidiaries within Hong Kong and China) Hong Kong Produce and manufactures salad products 100%
Italpizza Srl Italy Manufacture of branded and private label pizza products 100%
Two Chefs on a Roll Inc USA Manufacture of custom and private label savoury and bakery products 100%
Bakkavor Foods Canada Inc Canada Preparation and marketing of fresh prepared foods 100%
Bakkavor Estates Limited United Kingdom Property management 100%
Bakkavor Finance Limited United Kingdom Group management services 100%
Bakkavor Iberica S.A. Spain Distribution 100%
Bakkavor Central Finance Limited United Kingdom Customer Invoicing 100%
Bakkavor London Limited United Kingdom Holding Company 100%
Bakkavor Acquisitions (2008) Limited United Kingdom Holding Company 100%
Bakkavor USA Inc USA Holding Company 100%
Bakkavor USA Limited United Kingdom Holding Company 100%
Bakkavor (Acquisitions) Limited United Kingdom Holding Company 100%
Bakkavor Limited United Kingdom Holding Company 100%
Bakkavor Foods France United Kingdom Holding Company 100%
Bakkavor European Marketing BV Netherlands Holding Company 100%
Bakkavor China Limited United Kingdom Holding Company 100%
Bakkavor Asia Limited United Kingdom Holding Company 100%
Bakkavor Invest Limited United Kingdom Holding Company 100%
Bakkavor Pension Trustees Limited United Kingdom Holding Company 100%
Bakkavor London ehf Iceland Non-trading 100%
English Village Salads Limited United Kingdom Non-trading 100%
Notsallow 256 Limited United Kingdom Non-trading 100%
Exotic Farm Prepared Limited United Kingdom Non-trading 100%
Cucina Sano Limited United Kingdom Non-trading 100%
Butterdean Products Limited United Kingdom Non-trading 100%
Bakkavor Overseas Holdings Limited United Kingdom Non-trading 100%
Exotic Farm Produce Limited United Kingdom Non-trading 100%
Bakkavor Maroc Morocco Non-trading 100%
As at 29 December 2012, the Group still held indirect investments in the following companies. However, these are subject to a sale agreement and
are therefore regarded as discontinued operations in the consolidated income statement and consolidated statement of comprehensive income and
classified as assets held for sale in the consolidated statement of financial position.
Place of registration
Name and operation Principal activity Interest
Cinquime Saison SAS Group (includes 2 further subsidiaries) France Preparation and marketing of fresh prepared foods 100%
Crudi SAS France Preparation and marketing of fresh prepared foods 100%
Sogesol SA Spain Preparation and marketing of fresh prepared foods 100%
PAGE 105 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the company financial statements
continued
9
FINANCIAL INSTRUMENTS
Foreign currency risk
The Company is not exposed to any foreign currency risk as its borrowings are all in Pounds Sterling.
Interest rate risk management
The Company is exposed to interest rate risk on borrowings. The risk is managed by maintaining an appropriate mix between fixed and floating rate
borrowings. The Group uses derivative financial instruments such as interest rate swaps to minimise the risk associated with variable interest rates.
Interest rate sensitivity analysis
Interest rate sensitivity analysis has been performed on Company borrowings of £351.2 million (2011: £324.3 million) to illustrate the impact on
profits and equity if interest rates increased/decreased. This analysis assumes the liabilities outstanding at the period end were outstanding for the
whole period. A 100 basis points increase or decrease has been used, comprising management’s assessment of reasonably possible changes in
interest rates.
29 December 31 December
2012 2011
£’000 Profit/(loss) Profit/(loss)
Effects of 100 basis points increase in interest rate (3.5) (3.2)
Effects of 100 basis points decrease in interest rate 3.5 3.2
29 December 31 December
£m 2012 2011
Financial assets
Loans and receivables at amortised cost:
Amounts due from other group companies 55.0 12.2
Financial liabilities
Other Financial liabilities at amortised cost:
Amounts due to other group companies 83.1 51.6
Other payables – 0.1
Borrowings 620.0 621.4
703.1 673.1
All Company borrowings are denominated in Sterling.
10
SHARE CAPITAL AND RESERVES
29 December 2012 31 December 2011
Number £m Number £m
Issued and fully paid:
Ordinary shares of £1 each 55,258 0.1 53,258 0.1
Shares issued in the period:
Ordinary shares of £1 each 2,000 – 53,258 0.1
During the period, the Company has issued £2,000 of share capital. The share issues were made in September and December 2012, each amounting
to £1,000. The proceeds from the share issue have been used to repay bank borrowings during the period.
Share premium
As a result of the share issue, £4,605,427 and £8,201,142 of share premium was created in September and December 2012 respectively. The
proceeds from the share issue have been used to repay bank borrowings during the period. In the prior period, £302.4 million of share premium was
created of which £96.6 million was in relation to the acquisition of Bakkavor Finance (3) Limited and £205.8 million a related party loan, which was
capitalised.
PAGE 106 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the company financial statements
continued
11
RELATED PARTY TRANSACTIONS
Transactions
During the period, the Company entered into the following transactions with related parties.
Amounts owed by
Amounts owed to
related parties
related parties
£m 2012 2011 2012 2011
Group Companies 55.0 12.2 83.1 51.6
£82.7 million (2011: £51.6 million) is a corporate loan owed to Bakkavor London Limited with a further £0.4 million (2011: nil) owed to another group
company, Bakkavor European Marketing Limited. £55.0 million (2011: £12.2 million) is tax Group relief owed to Bakkavor Finance (2) plc by various
other Group Companies.
These amounts are unsecured and will be settled in cash. No guarantees have been given or received. No provisions have been made for doubtful
debts in respect of the amounts owed by related parties.
Amounts are denominated in Sterling. All related party payables and receivables are held at amortised cost.
12
13
EVENTS AFTER THE STATEMENT OF FINANCIAL POSITION DATE
There were no significant events after the statement of financial position date.
CONTROLLING PARTY
On 27 September 2012, Bakkavor Group Limited (formerly Bakkavor Holdings Limited) became the parent company of the Bakkavor Group following
a shareholder meeting of Bakkavor Group ehf (EHF) where it was agreed to implement a decrease in the share capital of EHF and to effect the
distribution of EHF’s shares in Bakkavor Group Limited to EHF’s shareholders.
The company name of Bakkavor Holdings Limited was formally changed to Bakkavor Group Limited to reflect its status as parent of the Bakkavor Group.
The Company’s ultimate parent company and ultimate controlling party is Bakkavor Group Limited, a Company registered in the United Kingdom.
The largest Group in which the results of the Company are consolidated is that headed by Bakkavor Group Limited and has included the Company
in its group financial statements. The smallest Group into which the accounts are consolidated is Bakkavor Finance (2) plc.
Copies of both the Bakkavor Group Limited and Bakkavor Finance (2) plc financial statements are available from West Marsh Road, Spalding,
Lincolnshire, PE11 2BB, United Kingdom.
The immediate parent of the Company is Bakkavor Finance (1) Limited.
PAGE 107 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
appendix: reconciliation of continuing and
discontinued activities to total group trading
52 weeks ended 29 December 2012 52 weeks ended 31 December 2011
Discontinued Continuing Discontinued Continuing
£m Total group operations operations Total group operations operations
Continuing operations
Revenue 1,694.2 105.6 1,588.6 1,677.7 111.9 1,565.8
Cost of sales (1,236.3) (75.7) (1,160.6) (1,239.8) (81.6) (1,158.2)
Gross profit 457.9 29.9 428.0 437.9 30.3 407.6
Distribution costs (87.4) (9.4) (78.0) (85.5) (10.3) (75.2)
Other administrative costs (308.0) (19.4) (288.6) (298.3) (22.1) (276.2)
Exceptional items (net) (3.6) 0.8 (4.4) 7.2 (0.2) 7.4
Bakkavor Group ehf management charge (0.5) – (0.5) (1.2) – (1.2)
Impairment of assets (1.0) – (1.0) (76.9) (13.2) (63.7)
Total administrative costs (313.1) (18.6) (294.5) (369.2) (35.5) (333.7)
Profit/(loss) on disposal of subsidiary 0.4 – 0.4 (1.0) – (1.0)
Loss on disposal of associate – – – (1.6) – (1.6)
Share of results of associates after tax 0.9 – 0.9 1.1 – 1.1
Operating profit/(loss) 58.7 1.9 56.8 (18.3) (15.5) (2.8)
Investment revenue 0.1 – 0.1 0.1 – 0.1
Finance costs (61.5) (0.3) (61.2) (65.2) (0.2) (65.0)
Other gains (net) 8.4 – 8.4 6.0 – 6.0
Profit/(loss) before tax 5.7 1.6 4.1 (77.4) (15.7) (61.7)
Tax (3.6) (0.8) (2.8) 2.4 (0.1) 2.5
Profit/(loss) for the period from continuing operations 2.1 0.8 1.3 (75.0) (15.8) (59.2)
Discontinued operations
Profit/(loss) for the period from discontinued operations – (0.8) 0.8 – 15.8 (15.8)
Profit/(loss) for the period 2.1 – 2.1 (75.0) – (75.0)
PAGE 108 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
corporate information
Directors
A Gudmundsson
L Gudmundsson
A Thoroddsen (resigned 25 September 2012)
B Bjarnason
H Lúðvígsson
G Sigurdsson (appointed 25 September 2012)
Secretary
S Witham (appointed 1 February 2012)
J Stansbury (resigned 1 February 2012)
Registered Office
West Marsh Road
Spalding
Lincolnshire
PE11 2BB
Bankers
Barclays Bank PLC
10 Hall Place
Spalding
Lincolnshire
PE11 1SR
Auditor
Deloitte LLP
Four Brindleyplace
Birmingham
B1 2HZ
PAGE 109 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM

Designed and produced by JohnstonWorks
www.johnstonworks.com