C&C Group Annual Report 2008

FY2008 Annual Report · C&C Group

Loading PDF…

� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8
C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

C&C is a leading manufacturer, marketer and distributor
Operations Review - Cider
of cider, spirits and liqueurs; and a distributor of wines
and spirits.

C&C aims to generate shareholder returns by a
combination of solid medium term earnings growth and
a progressive dividend policy.

The Group will achieve growth through its skills in
marketing and brand management; focusing marketing
investment on a number of high margin growth
categories and markets; and the continuous pursuit of
efﬁciency improvements.

The Group’s commitment to a progressive dividend
policy will be supported by maintaining a high return
on capital employed and a disciplined approach to
investment.

Contents

1
Our brands
2
Chairman’s statement
4
Chief executive’s review
8
Operations review
14
Finance review
17
Corporate responsibility
20
Board of Directors
22
Directors’ report
Directors’ statement of corporate governance
25
Report of the remuneration committee on Directors’ remuneration 30
36
Statement of Directors’ responsibilities

Independent auditor’s report
Group income statement
Group statement of recognised income and expense
Group balance sheet
Group cash ﬂow statement
Company balance sheet
Company cash ﬂow statement
Company statement of changes in equity
Statement of accounting policies
Notes forming part of the ﬁnancial statements
Shareholder and other information

37
39
40
41
42
43
44
45
46
53
87

Our Brands

1
1

�����

������������������

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Chairman’s statement

Results
The year under review was most disappointing for your Board
and all Shareholders. A conﬂuence of events conspired
against us, notably atrocious weather and aggressive price
driven competition in Great Britain, and as a result proﬁtability
declined sharply.

Revenue for the year was €679 million,
representing a decline of 8.1% on the
previous year. Operating proﬁt before
exceptional items at €125.2 million, declined
by 37.3%. A share buy back programme
was put in place and 5.4% of the Group’s
shares were purchased for €139.9 million.

During the year, we completed the disposal
of our Soft drinks division for €246.6
million. This sale cleared the way for us
to concentrate our strategic focus on the
higher margin alcohol drinks brands, notably
Bulmers, Magners and Tullamore Dew.

Our brands are our most prized assets and
in the year under review our portfolio of
brands was fortiﬁed with a total marketing
investment of €101.2 million. A major capital
expansion programme for cider manufacture
was concluded during the year, providing
us with state of the art facilities as well as
capacity to meet future needs.

Part of management’s remit is to broaden the
geographic appeal of cider drinking. In this
regard, some positive pioneering work took
place in Spain and Germany and valuable
learnings were achieved for future action.

Dividend
It is proposed that we pay a ﬁnal dividend
of 15 cent per share, subject to shareholder
approval. If approved, this will bring the
Group’s full year dividend to 27 cent per
share, the same as last year. A scrip dividend
alternative will also be available.

Alcohol Misuse
Alcohol misuse continues to be a major
social issue in Ireland and other jurisdictions
despite concerted efforts by all interested
stakeholders. We continuously promote
sensible drinking in our consumer
communications and through our industry
representative bodies, MEAS and the Alcohol
Beverage Federation of Ireland. I share the
belief that a united and shared approach by
all stakeholders involved in this issue offers
the best long-term solution.

Board of Directors
We have a very dedicated and competent
Board of Directors who bring a mix of
expertise and independent judgement
to the Board table. I wish to express my
appreciation for their wholehearted support
and wise counsel during the past year.

Brendan Mc Guinness retired from the Board
on 1 May last, after thirty-seven years with
the Group. His contribution to the success
and achievements of C&C was exceptional.
Speciﬁcally, he transformed cider in Ireland
into being a respected, premium and growth
category. More recently in Great Britain, he
brought about a renaissance in the cider
category, creating in a short timeframe a
premium power brand, Magners. I thank him
and wish him well in his retirement.

James Muldowney retires from the Board
in July after nearly seven years with the
Group. He was the lead player and a major
contributor to the design of our overall
strategy and direction. His sharp mind and
astute judgement will be missed. I wish
James every success in the next phase of
his career.

John Holberry joined the Group on 18 March
last as Managing Director of Magners Great
Britain. He was co-opted to the Board on
the same day as an Executive Director. He
was previously with Coors Brewers Limited,
an established industry player his vast
experience will be of great beneﬁt to us.

As provided in the company’s Articles of
Association, John Holberry is proposed for
election at the Annual General Meeting on
11 July 2008. Also in accordance with the
Company’s Articles of Association and the
Combined Code on Corporate Governance,
each year at the AGM at least one third of the
Directors retire from the Board and submit for
re-election at the forthcoming AGM. This year
John Burgess, John Hogan, and Philip Lynch
will retire from the Board and seek re-election
at the Annual General Meeting.

I can conﬁrm that I have conducted a
formal evaluation of the performances of
all Directors and each of them continues to
perform effectively and to demonstrate
a high level of commitment to the role.
I therefore strongly recommend the re-
election of the above Directors.

People
Regrettably, the downturn in trading caused
us to embark on a redundancy and re-
organisation programme which resulted in
job losses. This down-sizing was a necessary
response to re-shape our cost base to reﬂect
the lower level of activity. I wish to record
the Board’s appreciation to our Group CEO,
Maurice Pratt, and all our employees for their
co-operation and loyalty during this testing
year.

Strategy and Outlook
The essence of our strategy for 2008/09 is
to exploit the opportunities for Magners in
Great Britain through signiﬁcant investment
in consumer media advertising: increased
emphasis on trade marketing; and
enhanced brand presence through widening
distribution. Also, we plan to maintain our
outperformance in the Irish LAD market
and we will continue with our test marketing
initiatives in Europe to broaden the brand’s
geographic reach and to achieve greater
internationalisation of Magners.
On the assumption of average summer
weather, coupled with the beneﬁts of the
rationalisation plan and a series of marketing
initiatives, we anticipate a return to growth in
2008/09.

Tony O’Brien
Chairman

strong

focus

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Chief executive’s review

leaner &
more committed
than ever

C&C Group faced into exceptionally strong headwinds
during 2007/08 and revenues and proﬁtability suffered as a
result. However, we responded promptly and effectively. We
continued our clear and strong focus on developing Magners,
our premium cider product, into a successful international
brand, while our whiskey brand, Tullamore Dew, enjoyed
another exceptionally good year. We ended the year wiser,
leaner and more committed than ever to growing our business
across a range of markets.

The effects of a number of factors combined
to make 2007/08 an extremely challenging
year for us. Great Britain and Ireland
endured exceptionally wet and cold weather
during the summer months, the peak sales
opportunity for Magners and Bulmers.
Our competition reacted aggressively to the
success of Magners since its launch in Great
Britain four years ago. The smoking ban in
pubs in Great Britain depressed the on-trade
and consumer conﬁdence and spending
began to weaken.

We responded promptly and effectively to
these developments. We implemented an
extensive re-organisation and cost reduction
programme that is expected to achieve
annualised savings of €10 million. More
fundamentally, we completely reconﬁgured
the way we are organised to do business,
integrating our head ofﬁce and cider
management structures and moving to a
supply and demand business model. This
approach sharpened our focus and delivery
in key areas of our business, including
marketing and support for our customers, as
well as establishing more effective linkages
between the demand and supply dimensions
of our business. Our new streamlined
leadership team includes two senior
appointments, Aidan Murphy as Managing
Director, Supply Chain and John Holberry as
Managing Director, Magners - Great Britain.

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Chief executive’s review
continued

Financial Results
Turning to the ﬁnancial outcomes, Group
Revenue declined by 8.1% to €679 million.
A decrease in the volume of sales of cider,
allied to an increase in costs, was the
main reason for a reduction in our overall
Operating Margin from 27% to 18.4%.
Operating Proﬁt before exceptional items
decreased by 37.3%, from €199.6 million
to €125.2 million.

In a clear signal of our intent, we maintained
our high marketing spend in Great Britain.
The brand was in the top three spenders
on consumer marketing within the LAD
market. Our overall marketing investment on
cider increased from €48.1 million to €67.9
million, an increase of 41%, and it is our
intention to maintain a high level of consumer
advertising to reinforce the consumer equity
the brand has attained.

Cider
Overall volume sales of cider declined
by 11%. As a result, cider Revenue on
a constant currency basis decreased by
8.2% to €470.5 million. Operating Proﬁt
in the division was down by 39.5% on a
constant currency basis while Operating
Margin declined to 22.8%.

Magners
Despite all the challenges, at the end of the
year Magners had consolidated a solid share
of the on-trade market for Long Alcoholic
Drinks (LAD) in Great Britain. We are now
moving to leverage the strong platform we
achieved for premium packaged cider into
the broader and larger market for draught
cider. In February 2008, we signed a ﬁve year
contract with Coors under which they will
keg, distribute and sell Magners draught to
the ontrade in Great Britain. We will provide
the brand expertise, marketing direction
and investment. This initiative considerably
widens our addressable market for cider in
Great Britain.

We continued to develop the presence we
have established for Magners in markets
in southern Germany and Catalonia,
in Spain, based around the cities of
Munich and Barcelona. This investment
has provided valuable insights. There is
deﬁnite consumer interest in the Magners
proposition and we are extending the
tests into a second year, with a greater
emphasis on consumer sampling and
targeted distribution building.

Bulmers
Bulmers achieved record volume share
in both the on-trade and off-trade in
Ireland in a year when the overall trading
environment was becoming more difﬁcult.
The on-trade volume decline in LAD
accelerated and the growth in the off-trade
slowed appreciably.

Bulmers increased its share of the
on-trade and off-trade. The brand
recovered very strongly after the bad
weather in the summer period. This
outcome underlines the maturity of the
Irish cider market and the brand’s inherent
strength and resilience.

Spirits & Liqueurs
Revenue, on a constant currency basis, in
our spirits & liqueurs business increased
by 12.3%, to €87.5 million, mainly driven
by the sales volume of Tullamore Dew,
which was up 22%. Higher investment in
marketing and an increase in raw materials
costs for Carolans Irish Cream reduced
Operating Proﬁt, on a constant currency
basis by 5.4%, to €15.8 million.

Tullamore Dew, our premium whiskey
brand, continued to go from strength to
strength and consolidated its clear position
as the number two Irish whiskey in the
world. We continued to invest strongly
in marketing this brand in a number of
opportunity markets. Up to now, we
have enjoyed considerable success in
markets right across Europe and now the
United States is beginning to respond
particularly well and the prospects there
look promising.

Distribution
Our distribution business throughout the
island of Ireland saw the loss of a number
of wine distribution agreements as a result
of Fosters acquisition of the Penfolds and
Rosemont brands. Consequently on a
constant currency basis Revenue declined
by 13% to €121 million. In Northern
Ireland, we distribute the Coors brands
and they have been performing very well.

Capital Investment
Supporting our continued drive for
expansion is our highly efﬁcient, state-
of-the-art and environmentally friendly
production and bottling complex at
Annerville, near Clonmel, Co. Tipperary.
Over the last two years, we have invested
approximately €170 million in modern
production capacity, increased storage
capacity as well as greatly augmented
bottling and packaging facilities. The
effect of our investment programme to
date has been a signiﬁcant increase in
our cider production capacity. This gives
us the headroom and freedom to grow
the international markets for cider in the
medium term and within a cost structure
that will readily translate volume growth
into proﬁt.

Workforce
2007/08 was a difﬁcult year for everyone
in C&C. We said farewell to many valued
employees in circumstances where the
business clearly had to take action to
make ourselves more efﬁcient, but our
actions were also important and necessary
to ensure we could continue to provide
valuable and secure employment. We
re-organised our business to lower costs
and sharpen our competitive focus and
we reduced total employee headcount
by 150. We incurred a once off cost of
€15.6 million before taxation to fund the
rationalisation and redundancy programme
which will deliver €10 million in annualised
savings, after taking account of sharply
rising input costs.

Soft Drinks
In August 2007, we completed the sale of
our soft drinks business to Britvic plc for a
consideration of €246.6 million, achieving
a full price. This sale underscored our
strategy of focussing on the higher
shareholder returns provided by cider and
spirits and liqueurs.

Balance Sheet Management
We re-ﬁnanced our debt at a very
advantageous time in the market as
part of our ongoing management of the
balance sheet. We actively manage the
ratio of debt to shareholders’ funds on
our balance sheet. In the early part of the
year we announced and commenced a
share buyback programme. However as
the trading environment became much
more challenging, we suspended the
programme as we deemed it inappropriate
in the circumstances. In aggregate we
expended €139.9 million in buying back
and cancelling 17.7 million shares (5.4% of
the Company’s share capital) at an average
price of €7.84. We will continue to monitor
the issue closely particularly in the light
of the ongoing uncertainties in ﬁnancial
markets worldwide.

Dividends
We have made a commitment to our
shareholders, subject to approval of the
ﬁnal dividend at the AGM, to pay a total
dividend of 27 cent in respect of the
2007/08 ﬁscal year. The payment also
reﬂects our conﬁdence in how our future
cash ﬂows will evolve.

Currency
As currency markets became more volatile
and the Euro strengthened appreciably
against Sterling and the Dollar, we
managed our currency exposure to ensure
we retained value in our translated Euro
earnings. As a result we are almost fully
hedged for the next ﬁscal year at overall
rates comparable to 2007/08. In closing
out surplus hedge contracts during
the 2007/08 ﬁscal year we made an
exceptional proﬁt of €9.1 million.

Outlook and Strategy
Our strategy is to continue to increase
Bulmers’ share of the LAD market in
Ireland. Outside of Ireland, we plan
to continue and deepen our focus on
establishing Magners as a premium cider
not only in Great Britain but in other
international markets as well. Even as the
LAD market in Great Britain was in decline
last year, the total cider market continued
to grow. Our belief is that with continued
high marketing investment, packaged
cider, in particular, will return to growth. We
are conﬁdent that the embedded nature
of the Magners brand in Great Britain
will allow us to exploit exciting growth
opportunities arising from our partnership
with Coors for draught Magners, together
with expansion into other products such as
Magners Light. On the basis of a return to
average summer weather, we expect the
premium cider category to return to growth
in 2008.

In spirits & liqueurs, we will continue to
pursue our successful strategy of investing
in marketing and distribution in selected
markets in Europe and North America,
leveraging the favourable connection that
consumers increasingly make between
quality whiskey and Ireland.

Aside from the exceptional market
headwinds we encountered last year, we
recognise that all consumer markets are
confronted by rapidly rising raw materials
costs and weakening consumer sentiment.
Taken together these conditions require us
to remain extremely vigilant in managing
our cost base and ensuring we deliver
shareholder value for money.

Maurice Pratt
Chief Executive Ofﬁcer

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Operations review
2007/08 Overview

C&C is reporting Revenue of €679.0 million and Operating Proﬁt before exceptional items of €125.2
million. The performance of each division is discussed in this review. Comparisons for both Revenue and
Operating Proﬁt for each division are shown at constant exchange rates for transactions in relation to the
Cider and Spirits & Liqueurs divisions and for translation in relation to the Group’s sterling denominated
subsidiaries by restating the prior year at 2007/08 effective rates.

Translation (Actual average rate)

Transaction (Effective rate) (i)

2007/08

2006/07

2007/08

2006/07

Euro: Stg
Euro: $

0.70
-

0.68
-

0.69
1.31

0.69
1.26

The impact of restating currency is as follows:

Revenue

Operating Proﬁt – before exceptional items

Previously
Reported
Year ended
28 Feb 2007
€m

Foreign
Currency
Translation
€m

Foreign

Year ended
28 Feb 2007
Currency Constant currency
comparative
€m

Transaction
€m

Previously
Reported
Year ended
28 Feb 2007
€m

Foreign
Currency
Translation
€m

Foreign

Year ended
28 Feb 2007
Currency Constant currency
comparative
€m

Transaction
€m

Cider
Spirits & Liqueurs
Distribution

Total

517.9
79.1
141.5

738.5

(0.7)
-
(2.4)

(3.1)

(4.7)
(1.2)
-

(5.9)

512.5
77.9
139.1

Cider
Spirits & Liqueurs
Distribution

729.5

Total

178.9
17.7
3.0

199.6

-
-
-

(1.2)
(1.0)
-

(2.2)

177.7
16.7
3.0

197.4

Cider

There was more to 2007/08 than headlines about the considerable challenges we faced in the British and
Irish markets. Despite those difﬁculties, Magners retained its ﬁrm foothold in the British LAD market, Bulmers
increased its share of the Irish LAD market and we started the process of developing new markets. We
completely re-organised how we structure our cider business. Our production facility in Annerville, Clonmel,
was transformed into a state-of-the-art environmentally friendly production and storage complex.

Revenue

Operating Proﬁt

Operating Margin %

Year ended
29 February
2008
€m
470.5

107.5

22.8

Year ended
28 February
2007
€m
517.9

178.9

34.5

Year ended
28 February
2007*
€m
512.5

177.7

34.7

Growth
Year-on-Year*

(8.2)

(39.5)

*constant currency

The effect on our business of the unusually
bad summer weather in Ireland and
Great Britain in the summer of 2007 has
been well documented. Volume sales of
Magners declined by 15%.

Nevertheless, our investment in marketing
and the awareness of the Magners
brand created in the British market over
the past four years stood to us as the
brand recorded a 1.6% MAT share of the
LAD ontrade market. This achievement
indicates that we are only seeing the
beginning of future potential for Magners.

Draught
We have built ourselves a robust platform
to widen our brand exposure in Great
Britain as we now move into draught and
begin to create a new category of premium
draught cider. We have signed a ﬁve year
contract with Coors under which they will
keg, distribute and sell Magners to the
ontrade in Great Britain. After several years
of establishing the Magners brand, we
believe the time is right to widen its appeal
into the draught market. To support this
initiative, we will continue an exceptionally
high level of marketing ‘spend’, retaining

Magners place among the top three
spending brands in the LAD market. To
further leverage the Magners brand, we
are launching Magners Light as a premium
packaged product into a range of selected
outlets.

Marketing
At the current stage of evolution of our
brands, seasonality is a factor that impacts
on the performance of Magners in Great
Britain. Broadening our product portfolio to
include draught and Light is a key part of
our response.

1 0

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Cider

Our experience of selling draught in the
Republic of Ireland and Northern Ireland
indicates that it is a less seasonal product.
In addition, although in 2007/08 we were
underperforming on our volume of sales, we
continued to invest in marketing at planned
levels. This decision to maintain marketing
‘spend’ was an unambiguous signal of our
clear intent on capitalising on the long term
opportunities we see in the British market.
In 2008/09 there will be a shift in emphasis
towards trade marketing. We are increasing
our investment in trade marketing to ensure
the closest possible relationship with our
key customers and make an impact on
consumers at their point of choice.

Sponsorships
Sponsorships, focused on activities that ﬁt
well with our brand, are a key element of our
marketing programmes. We sponsor three
main activities – rugby, golf and comedy.

We sponsor Edinburgh rugby because it
gives us a more personal contact point
with our consumers in a very different way
to our media advertising. London Wasps,
one of the leading teams in England, are
another of our sponsorships.

They are both teams of quality and stature
and our sponsorship demonstrates
our commitment to these markets. We
also, of course, sponsor the celebrated
Magners League for elite clubs in Scotland,
Wales and Ireland. Combined, these
sponsorships give quality exposure in all
our key markets. They position our brand
in association with: a growing, dynamic
sport which is hard but fair; has some Irish
tradition; and has an age proﬁle that ﬁts
well with our brand.

We sponsor club championships in golf
at the amateur level in Scotland, Wales
and Ireland. This has the practical effect of
getting brand presence in a wide network
of golf clubs.

Award
The British marketing industry has
recognised the quality and effectiveness
of our marketing programmes. The
Marketing Effectiveness Awards are run
in conjunction with the Marketing Institute
and are well respected. In the 2007
Awards, Magners won the overall Grand
Prix Award as well as best in category in
New Products and Drinks.

International
Magners is developing a presence in
European markets outside of Great Britain
and Northern Ireland. The popularity of the
brand both here and in Great Britain has
driven demand in European tourist markets
where people holiday. Similarly, sales of
Magners are developing in the United
States based mainly on people who have
emigrated there.

In March 2007, we began establishing
a presence in two important European
markets, Catalonia in Spain and Munich
in Germany. We have begun building
a good quality base in these markets
and we are encouraged by what we
have experienced so far. We believe
both markets have potential and we will
continue to invest in marketing support,
advertising, promotions, and tastings, as
well as putting country teams in place
on the ground. Our aim is to build brand
awareness and strengthen distribution.
From a strategic point of view, both
of these markets have the potential to
diversify our sources of revenue over the
medium term.

Cider Ireland
The extremely poor weather in the summer
of 2007 impacted negatively on sales of
Bulmers in the summer period. However,
the brand recovered in the second half
and, once again, Bulmers conﬁrmed its
status as one of the power consumer
brands in Ireland.

Comedy is an important part of our
sponsorships portfolio. It helps to lighten
the brand image and put us in touch with
a slightly different target consumer group.
In Glasgow and Dublin, we sponsor the
highly successful and popular International
Comedy Festivals.

The Irish licensed trade experienced mixed
fortunes in 2007/08. The off trade grew by
6% while the on-trade declined by 2.5%.
Our experience with Bulmers conﬁrmed
what we have long known about the brand
– its strength and resilience in a mature
market. Despite a 4% reduction in volume

of sales, we ended the year with a record
share, by volume and value, of the LAD
ontrade and off-trade in the Republic of
Ireland. Bulmers’ share of the Irish LAD
market increased slightly to 10.6%. This
was an exceptional outcome in what had
been a very difﬁcult year.

We do not take Bulmers’ pre-eminent
position for granted. We continued
to invest strongly in maintaining and
enhancing the brand through advertising,
sponsorships and promotions. In the
rapidly growing off-trade, we strengthened
our presence through the introduction
of new special packs and targeted
promotions.

Costs
Reﬂecting the high cost environment we
operate in, we are being hit by a 15%
increase in ingredients costs in 2008/09.
Part of this increase is accounted for by
growth in the cider category, which led to
heavier demand for apples in 2007. We have
increased our holdings of apple juice, which
will give us the beneﬁt of reduced apple
requirements in 2008/09.

Re-organisation
In the second half of the year, we
conducted a root and branch review of
our business. On 15 November 2007, we
announced a redundancy programme
across all levels of the company and, as a
result, there was a reduction of 150 in the
number of people employed, most of them
at the Group’s cider plant in Annerville,
Clonmel. Annualised savings to the Group
resulting from the reduction in the numbers
employed amounts to €10 million and
there was a once off cost of €15.6 million
in implementing the redundancies.

We are now a single management
structure within a Group Supply / Demand
model. As part of the overall restructuring
of our business, we strengthened our
management presence and leadership
in Great Britain through the appointment
of John Holberry as Managing Director,
Magners Great Britain. John has extensive
experience in the drinks industry in Great
Britain.

1 1

1 2

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Spirits & Liqueurs

Tullamore Dew enjoyed exceptional growth and showed exceptional potential for even further growth
in 2008/09. Worldwide, whiskey - especially Irish whiskey - is increasing rapidly in popularity and
Tullamore Dew has been moving faster and further than the overall category.

Revenue

Operating Proﬁt

Operating Margin %

Year ended
29 February
2008
€m

87.5

15.8

18.1

Year ended
28 February
2007
€m

79.1

17.7

22.4

Year ended
28 February
2007*
€m

77.9

16.7

21.4

Growth
Year-on-Year*

12.3

(5.4)

*constant currency

Carolans
The cream liqueur sector is doing well.
However, Carolans sales declined by 7%
last year largely because of the effects of
a price increase early in the year ahead of
competition. This increase was necessary
because the price of cream increased, as
part of the worldwide increase in the price
of dairy products.

Frangelico
Frangelico is a premium hazelnut liqueur.
It retained strong popularity in some
markets, like the United States, Spain and
the Canaries, and is growing strongly in
Australia, but overall volume of sales was
ﬂat compared with the previous year.

Irish Mist
Our Irish whiskey liqueur retained
popularity in its main markets - the United
States, Ireland and airport duty free.

Tullamore Dew
Tullamore Dew is a star brand. In 2007/08,
shipments volumes to the trade increased
by 22% and growth in depletions, or sales
into the market, is estimated at 19%. In
a strongly developing market for whiskey
worldwide, Tullamore Dew is growing even
more strongly. It has consolidated a clear
position as the number two Irish whiskey
globally and number one in Central Europe.

The continued liberalisations of
economies worldwide is leading to
increased prosperity in many parts of the
world outside our traditional markets.
The growing middle classes in newly
prospering countries are keen to adopt
Western ways and products, not least
whiskey. As a result, Tullamore Dew has
enjoyed exceptional growth in Central and
Eastern Europe.

There are many geographies where C&C
Spirits & Liqueurs is the market leader in
a particular category; for example, Irish
whiskey in many parts of Europe and
Frangelico in Spain. We believe there is
potential to move sales forward through
leveraging the success of our leading
brand or product in a particular geography
to encourage distributors to take on
and actively promote the other brands
in our portfolio, thus beneﬁting all of our
products.

Revenue in Spirits & liqueurs, at €87.5
million, represented a 12.3% increase
on 2007. Operating Proﬁt decreased by
5.4% to €15.8 million, while Operating
Margin declined by 3.3 percentage points
to 18.1%. The main factors inﬂuencing the
decline in Operating Margin were a higher
investment in marketing and an increase in
the cost of cream for producing Carolans.

Last year saw a big increase in depletions
in the United States where the volume of
sales has almost doubled and continued
strong growth is in prospect. Tullamore
Dew appeals to younger consumers who
value its smooth ﬂavour derived from being
a grain whiskey, with high malt content. In
the American market, the provenance of
whiskey is a signiﬁcant deciding factor in
consumer choice and in our advertising
and marketing we leveraged the positive
features of our Irish origin. For example,
in our outdoor and press advertising, we
used the catch line ‘Born in Ireland, raised
everywhere’.

1 3

1 4

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Finance review

Results for the year
C&C is reporting Operating Proﬁt of
€109.6 million and Basic Earnings per
Share of 73.1 cent. Before exceptional
items, Operating Proﬁt amounted to
€125.2 million, reﬂecting a decline of
37.3% on the previous period. This decline
reﬂects a reduction in sales volumes in the
Group’s Cider division; increased marketing
investment; and costs associated with the
increased cider manufacturing capacity.
These results are discussed in more detail
and analysed by business sector in the
Operations Review on pages 8 to 13.

As the Group has only a limited translation
exposure and has a policy of hedging a
large proportion of its Sterling and US
Dollar net exposures, the sharp decline
in the two currencies during 2007/08 did
not have a material impact on the Group’s
reported operating proﬁts. The average
hedged rates for 2007/08 were Stg£:euro
0.68:1 (2007: 0.69:1) and USD:euro 1.28:1
(2007: 1.26:1).

Exceptional items
The Group posted a net credit after tax of
€131.6 million in relation to a number of
non-recurring items that were classiﬁed as
exceptional items for reporting purposes.
These comprised:-

Disposal of Soft drinks
On 29 August 2007, the Group completed
the disposal of its Soft drinks business
and related assets to Britvic plc, for a
consideration of €246.6 million giving rise
to an exceptional gain after tax of
€137.4 million.

Reorganisation and cost reduction
programme
In November 2007, the Group announced
a reorganisation and cost reduction
programme resulting in a head count
reduction of 150 people across the Group
at an estimated cost of €15.6 million
before taxation.

Foreign exchange gain
A shortfall in expected Sterling revenues
resulted in surplus Sterling forward contracts
for 2007/08 and 2008/09, which were
effectively cancelled during the ﬁnancial year,
giving rise to a gain of €9.1 million.

Finance costs, income tax and
shareholder returns
The interest rate payable on debt, with the
beneﬁt of hedging, averaged 4% for the
year, which was in line with the average
interest rate achieved for the year ended
28 February 2007.

As a result of the improvement in the
Group’s credit standing and the favourable
conditions pertaining at the time in the
syndicated bank lending market, the
Group decided to reﬁnance its bank facility
during May 2007. The new debt facility is
a committed €600 million revolving loan
agreement, which is denominated in euro,
subject to variable Euribor interest rates
and is repayable on the ﬁfth anniversary
of the date of the agreement. The
unamortised issue costs relating to the
previous debt agreement of €1.9 million
were written off to the income statement
resulting in an increase of 2.7% to net
ﬁnancing costs before exceptional items.

The income tax charge in the year relating
to continuing activities amounted to €11.9
million giving an effective tax rate of 10.8%,
which compares with a corresponding rate
in 2007 of 11.3%. The bulk of the Group’s
taxable proﬁts arise in the Republic of
Ireland, which accounts for the lower
effective tax rate.

Retirement beneﬁt obligations
In compliance with IFRS, the net assets
and actuarial liabilities of the various
deﬁned beneﬁt pension schemes operated
by Group companies, computed in
accordance with IAS 19, have been
included on the face of the Group balance
sheet under retirement beneﬁt obligations.

At 29 February 2008, the retirement beneﬁt
obligations on the IAS 19 basis amounted
to €27.2 million gross and €24.3 million net
of deferred tax (2007: €51.5 million gross
and €42.8 million net of deferred tax).

The reduction in the retirement beneﬁt
obligations deﬁcit predominantly arises
as a result of the transferring of deﬁned
beneﬁt pension obligations to Britvic plc on
the disposal of the Soft drinks business.
The positive effect of the increase in bond
rates on the valuation of liabilities was
offset by lower than expected returns on
pension scheme assets and a revision in
mortality assumptions, reﬂecting improved
mortality rates.

During the year, the existing deﬁned beneﬁt
pension schemes were closed to all new
employees and a new hybrid pension
arrangement containing both deﬁned
beneﬁt and deﬁned contribution elements
was introduced with Union approval.

Subject to shareholder approval, the
proposed ﬁnal dividend of 15 cent per
share will be paid on 16 July 2008 to
ordinary shareholders registered at the
close of business on 23 May 2008. The
Group’s full year dividend will therefore
amount to 27 cent per share, which is
unchanged on the prior year. A scrip
dividend alternative will be available. The
dividend payout represents 84% of proﬁt
before tax.

The Group invested €139.9 million in an
on-market share buyback programme
during the course of the year. The
company purchased 17.7 million shares
at an average price of €7.84. All shares
acquired have been cancelled.

1 5

(i)

(ii)

(iii)

EBITDA: Earnings before exceptional items,
interest, tax, depreciation and amortisation
Operating proﬁt includes both continuing and
discontinued operations and excludes
exceptional items
Exceptional items paid comprises costs paid
on the reorganisation programme and cash
received on settlement of a portion of the
surplus Sterling forward contracts

Table 1 – Cash ﬂow summary

Inﬂows
Operating proﬁt (ii)
Depreciation

EBITDA (i)

Outﬂows
Working capital
Capital expenditure
Property disposals
Net ﬁnance costs
Tax paid
Exceptional items paid (iii)
Other

Free cash ﬂow

Proceeds on disposal of subsidiaries
Proceeds from exercise of share options
Shares purchased under share buyback programme
Dividends paid in cash

Reduction in net debt

Net debt at beginning of year
Translation adjustment
Non cash movement

Net debt at end of year

2008
€m

130.8
20.3

2007
€m

216.4
21.4

151.1

237.8

12.2
(102.9)
. -
(12.6)
(9.2)
(4.7)
(1.9)

(47.3)
(93.4)
14.0
(13.9)
(24.4)
. -
(1.7)

32.0

71.1

236.5
5.9
(139.9)
(81.1)

59.8
2.0
. -
(54.7)

53.4

78.2

305.4
2.1
2.1

383.1
. -
0.5

256.2

305.4

Cash generation
The Group generated Free Cash Flow
before the disposal of the Soft drinks
business of €32 million representing
21% of EBITDA(i) compared with 30% in
the prior year. This decrease reﬂects the
decline in Operating Proﬁt, and an increase
in net capital expenditure, partially offset by
a reduction in working capital. A summary
cash ﬂow statement is set out in Table 1.

The cash inﬂow from working capital
(excluding exceptional items) comprises
a €24.4 million inﬂow from continuing
operations and an €12.2 million outﬂow for
discontinued operations. The inﬂow from
continuing operations reﬂects the reduced

level of activity in the year. The outcome
includes a signiﬁcant reduction in ﬁnished
goods stocks partially offset by an increase
in the levels of apple juice stock.

Capital expenditure for the year was
€102.9 million. This expenditure included
a €97 million investment in the expansion
of cider manufacturing capacity in
Clonmel, which came on stream in May
2007. Following the expansion, the
Group reviewed the expected useful life
of production plant and machinery in light
of the high speciﬁcation of equipment
installed and the forecast utilisation levels.
The useful economic life of the majority

of the plant was increased from 10 to 13
years and the economic life of storage
tanks was increased from 20 to 30 years.
The effect of these changes on current
and future proﬁts is disclosed in note 12 to
these ﬁnancial statements.

Net proceeds from the disposal of the
soft drinks business amounted to €236.5
million.

Total dividends declared to ordinary
shareholders in the year amounted to
€87.3 million of which €81.1 million was
paid in cash while €6.2 million (7%) was
settled by the issue of new shares.

1 6

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Finance review
continued

Key liquidity indicators
Although the fall in EBITDA has resulted
in a reduction in some of the key liquidity
indicators used to measure the ﬁnancial
position of the Group as shown in Table 2
below, the Group remains in a very strong
position in relation to both its interest cover
and Net debt/EBITDA ratios.

Interest cover remains very comfortable
with the 2007/08 EBITDA/Net interest
ratio of 11.9 times being more than three
times the 3.5 times minimum provided in
the Group’s banking covenants; and the
Net debt/EBITDA ratio of 1.7 times being
signiﬁcantly lower than the 3.5 maximum
level speciﬁed in the aforementioned
banking covenants.

The increased net debt to market
capitalisation ratio is principally as a
result of the signiﬁcantly lower market
capitalisation of the Group. Net debt
reduced by €49.2 million to €256.2
million at the year end.

Table 2 – Key liquidity indicators

Amounts
Market capitalisation at year end

EBITDA*

Net interest paid

Net debt

Ratios
EBITDA /net interest

Net debt/EBITDA

Financial risk management
The ﬁnancial risks that the Group
is exposed to include interest rate
movements and foreign currency exchange
risks. The Board of Directors set the
treasury policies and objectives of the
Group, the implementation of which is
monitored by the Audit Committee. Details
of both the policies and control procedures
to manage the ﬁnancial risks involved are
set out in detail in note 22 to the ﬁnancial
statements.

Interest rate and debt management
The Group’s debt is denominated in euro
and is based on ﬂoating Euribor interest
rates. It is Group policy to hedge an
appropriate portion of this risk and at 29
February 2008 between 30% and 60% of
forecasted net debt for the next 4 years
had effectively been converted to ﬁxed
rates through the use of interest rate swap
agreements.

2008
€m

2007
€m

1,408

3,820

151.1

237.8

12.6

13.9

256.2

305.4

12.0

17.1

1.7

1.3

Net debt as percentage of market capitalisation

18.2%

8.0%

*EBITDA is before exceptional items

The Group ﬁnished the year in a very strong
ﬁnancial position with undrawn committed
facilities available to the Group amounting to
€310 million and existing drawn facilities not
maturing until May 2012. Under the terms
of the banking agreement approximately
€180 million, relating to the proceeds from
disposals of the Soft drinks business, will be
repaid and cancelled unless these proceeds
are invested before the end of August 2008,
twelve months from the date of disposal.

Also, with the cider capital expansion
programme completed, capital expenditure
is expected to be low for a number of
years which will have a positive impact on
free cash ﬂow.

Currency risk management
The Group has only a limited balance
sheet translation exposure to ﬂuctuations
in exchange rates as the bulk of its net
assets as well as its entire borrowings are
denominated in euro. It is Group policy
not to hedge this translation exposure.
Currency transaction exposures arise
mainly on Sterling and US Dollar revenue
and the Group policy is to hedge an
appropriate portion of this exposure for a
period of up to 2 years ahead.

At 29 February 2008, approximately 95% of
the forecasted net Sterling and approximately
86% of the forecasted US Dollar exposures
have been hedged for the following 16 and
12 months respectively. This substantially
insulates C&C from the adverse effect of
the deterioration in the Sterling/Euro and
USD/Euro exchange rates for the 2008/09
ﬁnancial year.

The Group seeks to apply the cashﬂow
hedge accounting model in accordance
with IAS 39 Financial Instruments:
Recognition and Measurement to all
interest rate swaps and forward currency
contracts. The fair value of all outstanding
derivatives at 29 February 2008 as
calculated by reference to current market
value amounted to a net asset of €27.4
million (2007: €1.8 million) and this has
been included on the face of the balance
sheet under “derivative ﬁnancial assets”
and “derivative ﬁnancial liabilities”. See
note 22 of the ﬁnancial statements for
further details.

Corporate Responsibility

1 7

Our facility at Annerville,
Clonmel, is the
most advanced and
integrated cider making
plant in the world.

Despite 2007/08 being a challenging year
for the Group, we continued to make
signiﬁcant progress in how we react
with our various internal and external
stakeholders, notably in moving signiﬁcantly
towards a more environmentally sustainable
way of operating, as well as strengthening
our health and safety culture. This approach
makes good business sense, even more so
at a time of challenges in our marketplace,
but it also underscores our long term
fundamental commitment to continuous
improvement in these areas of our activities.

People
Our production facility at Annerville,
Clonmel, is the most advanced and
integrated cider making plant in the world.
This achievement is down to our vision of
what our business should be and down
to the people who are making that vision
happen. Innovation is a key dimension of
how we do things. Across the extensive
site, we have excellent buildings, efﬁcient
layouts, good work ﬂows and great
systems. But its success as a facility
depends mostly on the quality of our
people.

Annerville is more than just a combination
of bricks, mortar and metal. The welfare of
the people who work here is paramount
as well. We have an extremely good track
record in reducing our rate of accidents and
injuries. Building on that, this year we were
accredited to the internationally recognised
health and safety standard, OHSAS 18001.
This certiﬁcation took us two years to
achieve. It involved not just installing new
systems, procedures and practices but
– just as importantly – creating a mindset
between workforce and managers that
constantly puts health and safety at the
centre of how we do our business.

Our policy is to achieve and maintain the
appropriate internationally recognised
standards governing all facets of our
business. We have already achieved and
are implementing the Quality Assurance
standard ISO 9001, the Food Safety
standard ISO 22000 and the Environmental
Management Systems standard ISO 14001.

2007/08 was a difﬁcult year for us on
the employment front because of the
circumstances we faced in the cider market.
Our headcount was reduced by 150 and

we said farewell to people who had been
with us for many years. We implemented
a comprehensive support system for all
of our employees to help them make the
transition and it is a compliment to the way
we work at Annerville that many of them
have indicated that, should the conditions in
the future allow it, they would be more than
happy to return to employment with us.

At the same time, while managing our
major rationalisation and redundancy
programme to equip us to deal with the
future challenges in our business, we
introduced measures to improve and reﬁne
our performance management system.
We resourced our new cider operations
in Barcelona and Munich. Our business
changed considerably during 2007/08 and
we are determined to continue to drive
change. We are on a journey to create
a portfolio of internationally recognised
alcoholic beverages and we are bringing
our people on board with us. Our strategy
is to attract the right people to work for us,
people with potential, equip them and give
them the support they need to perform and
provide an employment environment that
makes them wish to remain with us.

Environment
Caring for our environment in a
sustainable manner is common sense.
We aim to minimise our impact on the
wider environment by implementing
carefully planned policies and continuous
improvement initiatives. As an IPPC
–licensed site we regard compliance with
permitted emission levels as a minimum
performance indicator. Running our
business in ways that help the environment
also makes commercial sense because it
reduces medium term costs.

There in increasing awareness of the
importance of reducing carbon footprints
as part of a range of measures to counter
climate change. In 2007/08, with external
expertise, we measured our current
carbon footprint. This exercise has given a
base-line against which to plan to reduce
our carbon footprint into the future and
to help us develop a series of practical
plans to achieve this outcome, in areas
like orcharding, manufacturing, ofﬁces,
transport and distribution.

We export millions
of glass bottles of
Magners, our main
format being the
pint bottle.

1 8

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Corporate Responsibility
continued

Our development of the anaerobic
wastewater treatment plane at Annerville
exempliﬁes our innovative approach to
process improvements. We completed the
second part of this project in 2007/08. We
recover all the site’s wastewater to a single
location where it is treated biologically. The
resulting clean water eventually makes
its way back to the nearby River Suir and
an important by-product of the cleansing
process is methane biogas, which we
now use on site to fuel our boilers. This
has resulted in savings on the amount of
natural gas we need to purchase externally
and has reduced our carbon footprint.
Further beneﬁts of the anaerobic technology
are reduced operating energy costs and
signiﬁcantly less solid waste generation from
the process.

We continue to set and achieve ambitious
targets for reducing and recycling solid
waste from our manufacturing plant,
building on our previous success as a
leading national Repak award winner in this
sector.

We export millions of glass bottles of
Magners, our main format being the pint
bottle. In Ireland, our glass bottles have
been re-usable for many years, but this is
not the case in Great Britain. We looked at
ways of reducing the weight of bottles for
export and have begun the ﬁrst phase of a
programme to minimise glass weight while
retaining robustness. This initiative not only
reduces our own costs and carbon footprint
but also that of our suppliers by reducing
the raw material, energy and transport
costs.

Marketplace
Our marketplace in recent years has
become increasingly complex. We sell
considerable quantities of cider in diverse
export markets and Tullamore Dew is the
leading Irish whiskey in many overseas
markets. Our strategy is based on
reﬂecting consumers’ changing tastes
and needs and responding to these
through product innovation, new forms of
packaging and better marketing.

Cider making involves fermentation and CO2
is a by-product of this process. A signiﬁcant
investment has been made to recover the
CO2 and, this will ultimately be used to
carbonate our products. This has two gains:
it cuts our purchases of CO2 and reduces
our carbon footprint.

Energy usage reduction is a key element in
reducing our carbon footprint. To complete
the suite of world-class operational
standards that apply at Annerville, we
signed an agreement with Sustainable
Energy Ireland to work towards the
achievement of Energy Standard IS 393.
When we achieve this, we will be one of
a small number of companies in Ireland
certiﬁed to that level.

In November 2007, the Minister for the
Environment, John Gormley TD, leader of
the Green Party, was present at the ofﬁcial
opening of the world’s ﬁrst ever ‘cradle to
grave’ carbon neutral industrial building. Our
new bottling hall houses three state-of-the-
art bottling lines, capable of bottling ﬁfty
thousand bottles of cider every hour. The
envelope of the building was constructed
using carbon neutral materials, all of them
traceable from manufacture to end-use and
capable of being fully recycled whenever
the building is decommissioned. To achieve
full carbon neutrality, CO2 emissions used in
manufacturing the building materials were
offset by equivalent savings in renewable
energy and energy efﬁcient projects
elsewhere. These projects have social as
well as environmental beneﬁts for local
communities in developing countries.

Water is a natural resource, which needs
careful management so that supply and
quality is sustained into the future for use
by businesses and the wider community.
In 2007/08, we established a protection
programme for the water aquifers supplying
Annerville and the wider community. This
will help ensure future supply and quality
water to all users in the locality.

Reduction of water usage is a key target,
the achievement of which will be facilitated
by the investment made in 2007/08 in
equipment to track water usage throughout
operations. Signiﬁcant investment was also
made in best-practice water attenuation
systems designed to manage drainage of
storm-water from the site.

1 9

Our products are made from natural
ingredients, brewed or distilled with craft
and care and backed by a time honoured
heritage and tradition. Every time one of
our products is consumed it is judged on
its ﬁne taste. They are premium products
easily distinguishable by taste from their
competition. We, therefore, invest much
time and effort into product quality and
assurance systems and operate these to
world class standards.

Alcohol adds to the enjoyment of life when
consumed sensibly. We support a number
of public campaigns that encourage
drinkers to be sensible. We are members
of Mature Enjoyment of Alcohol in Society
(MEAS), an independent body that
campaigns on the issues of drink driving,
under age drinking and binge drinking.
We have long been members of the Cider
Industry Council, whose main aim is to
tackle under age drinking. We also worked
closely with the Irish Spirits Association to
create a marketing code of practice.

Community
At the moment many of our apples come
from County Armagh, in Northern Ireland,
and we continue to develop our concept
of sourcing as much as possible of our
apples from the island of Ireland. We do
this for sound marketing and business
reasons because it emphasises our cider’s
legitimate claim to naturalness, tradition
and a distinctive sense of being original
and Irish.

However, we are keen to increase
the numbers of apples grown in our
hinterland around the plant at Annerville.
To encourage local farmers, a few miles
from Clonmel, not far from the historic
mountain of Slievenamon, we have planted
45 hectares of new orchards at Killurney.
We have introduced a new technology for
growing apples, called a fruit wall. Instead
of using traditional trees, we grow the
apples like grapes on a vine. The initial
investment cost is higher but we get a
crop within three years, compared with the
traditional ten years.

Killurney is a way of showcasing to farmers
the relative ease with which apples may be
grown and harvested. We hope that more
farmers in our hinterland, whether full-time
or part-time will include apple growing
in their enterprises, and thus access the
good commercial returns that can be
made. We provide long term contracts for
growers that give them a greater degree of
commercial certainty. Increased growing
of apple trees is good for the environment
because it reduces our carbon footprint.
We are in discussion with the Department
of Agriculture, Fisheries and Food about
how we can progress this ambition further.

The loss of 140 jobs last year at Annerville
was a serious blow to Clonmel and its
environs. Bulmers, and increasingly
Magners, is synonymous with Clonmel and
south Tipperary and through our wage bill,
purchasing and payment of taxes we are
an enormous boost to the economy of the
area. We still are. And the decisive action
we took ensures that we will be into the
future.

Despite those events, there is still
enormous regional pride in our business
as well as loyalty. With local support, we
have put in place all the statutory planning
permissions we require for any future
developments under our Site Master
Plan. We have invested in ﬁnishing the
development works on our site to a very
high standard and our road frontage at
Annerville provides a striking introduction
to Clonmel on one of the main roads into
the town.

We continued our active involvement in
the local community. We support Clonmel
Chamber of Commerce, we donate to a
number of local charities and our Annerville
Awards are a popular and coveted
acknowledgment of sporting achievement
in County Tipperary.

2 0

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Board of Directors

Tony O’Brien*
Group Chairman
Tony O’Brien (71) became Group Chairman in January 2002,
having been Chief Executive of the Group for the previous 21
years. He is a former non-executive director of CRH plc and
is a former chairman of Anglo Irish Bank Corporation plc. He
is also a past president of the Irish Business and Employers
Confederation. He is currently Chairman of the Review Body on
Higher Remuneration in the Public Sector.

Maurice Pratt
Chief Executive Ofﬁcer
Maurice Pratt (52) was appointed Chief Executive Ofﬁcer in
January 2002. He joined the Group from Tesco (Ireland) Limited
where he had been Managing Director. He is a former non-
executive director of Eircom Group plc. He is a non-executive
director of Brown Thomas Group Limited and non-executive
chairman of Bank of Scotland (Ireland) Limited. He is also a past
president of the Irish Business and Employers Confederation.

Brendan Dwan
Group Finance Director
Brendan Dwan (61) was appointed Chief Financial Ofﬁcer
in 1980 and Group Finance Director in 1999. A chartered
accountant, he has worked for the Group since 1975.

John Holberry
Managing Director – Magners GB
John Holberry (49) joined the Group in March 2008 as
Managing Director, Magners GB. He joined the Group from
Coors Brewers Limited where he had been Managing Director
– Sales Operations. He had previously held a number of senior
positions at Coors Brewers, Bass and Courage Limited.

James Muldowney
Strategy & Development Director
James Muldowney (44) joined the Group in 2000 as Strategy
and Development Director. Prior to this, he worked for General
Electric Company in the US and McKinsey & Co. Inc.

2 1

John Burgess*
John Burgess (57) became a non-executive Director of the
Group in January 1999 following the leveraged buy-out of the
Group by funds advised by BC Partners, and was re-appointed
a non-executive director on ﬂotation in April 2004. He joined
BC Partners in 1986 as one of the founding partners and was
a partner there until his retirement in 2006. Previously, he
worked at Candover Investments, F&C Ventures and the Boston
Consulting Group.

Liam FitzGerald*
Liam FitzGerald (43) was appointed as a non-executive Director
of the Group in April 2004. He has been a director of United
Drug plc since 1996 and has served as its Chief Executive since
2000. Prior to this, he held senior marketing positions with
Dimension Marketing Limited and Jefferson Smurﬁt Group plc.

John Hogan*
John Hogan (67) was appointed as a non-executive Director of
the Group in April 2004. He was Managing Partner of Ernst &
Young in Ireland between 1994 and 2000 and was a member
of its global board. He is currently a non-executive director
of Abbey plc, Butterﬁeld, Umbrella Funds plc, Prudential
International Assurance plc, Sachsen LB Europe plc. and other
private companies.

Richard Holroyd*
Richard Holroyd (61) was appointed as a non-executive Director
of the Group in April 2004. He is currently a non-executive
director of Otto Weibel AG, Defence Support Group and is a
member of the UK Competition Commission. He was previously
the Managing Director of Colmans of Norwich and head of the
global marketing futures department of Shell International.

Philip Lynch*
Philip Lynch (62) was appointed as a non-executive Director
of the Group in April 2004. He is Chief Executive and an
executive director of One51 plc. He is also Chief Executive and
an executive director of The Irish Agricultural Wholesale Society
Limited, a non-executive director of Coillte Teoranta and FBD
Holdings plc and is Chairman of the Educate Through Sport
Foundation and Chairman of the National Paediatric Hospital
Development Board.

Breege O’Donoghue*
Breege O’Donoghue (64) was appointed as a non-executive
Director of the Group in April 2004. She is an executive director
of Penneys/Primark. She is a member of the Labour Relations
Commission; a member of the Outside Appointments Board of
the Code of Standards and Behaviour for the Civil Service; a
member of the foundation of the National University of Ireland,
Maynooth; and was previously a director of An Post and Aer
Rianta.

* non-executive

Board Committees
Audit Committee
John Hogan (Chairman)
Liam FitzGerald
(appointed 13 July 2007)
Richard Holroyd

Nomination Committee
Tony O’Brien (Chairman)
John Burgess
Philip Lynch
Breege O’Donoghue
(appointed 13 July 2007)

Remuneration Committee
Philip Lynch (Chairman)
Liam FitzGerald
Richard Holroyd

2 2

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Directors’ report

The Directors present their annual report and audited consolidated ﬁnancial statements of the Group for the year ended 29 February
2008.

Principal activities, business review and future developments
The Group’s principal trading activities are the production, marketing and distribution of cider, spirits & liqueurs and the distribution of
spirits and wine. It disposed of its soft drinks and Republic of Ireland wholesale businesses in August 2007.

The information to be included with respect to the review of the business and future developments as required by section 13 of the
Companies (Amendment) Act 1986 is contained in the Operations Review on pages 8 to 13.

Results
Gross revenue on a continuing basis at €679 million was 8.1% lower than 2007. Operating proﬁt before exceptional items amounted
to €125.2 million, a decrease of 37.3% on the previous year. Retained earnings for the year, including discontinued activities and
exceptional items, were €234.9 million, an increase of 12.8% on the previous year.

Basic earnings per share amounted to 73.1c compared with 63.8c in the previous year. Diluted earnings per share from continuing
operations amounted to 28.6c compared with 47.1c in the previous year.

The ﬁnancial statements for the year ended 29 February 2008 are set out on pages 39 to 86.

Dividends
An interim ordinary dividend of 12.0c per share (2007: 12.0c) was paid in December 2007. Subject to shareholder approval at the
Annual General Meeting, it is proposed to pay a ﬁnal ordinary dividend of 15.0c per share (2007: 15.0c) to shareholders who are
registered at close of business on 23 May 2008.

Directors, Secretary and their interests
Brendan McGuinness retired from the Board on 1 May 2008. James Muldowney retires from the Board on 11 July 2008.

John Holberry was appointed to the Board on 18 March 2008. He retires in accordance with the Articles of Association, and being
eligible, offers himself for election.

John Burgess, John Hogan and Philip Lynch retire by rotation in accordance with the Articles of Association, and being eligible, offer
themselves for re-election.

Information in relation to the beneﬁcial and non-beneﬁcial interests in the share capital of Group companies by the Directors and
Secretary who held ofﬁce at 29 February 2008 is contained within the Report of the Remuneration Committee on pages 30 to 35.

Research and development
Certain of the Company’s subsidiary undertakings are engaged in ongoing research and development aimed at improving processes
and expanding product ranges. Further information in relation to product development is contained in the Operations Review on pages
8 to 13.

Principal risks and uncertainties
Under Irish company law (Statutory Instrument 116.2005 European Communities (International Financial Reporting Standards and
Miscellaneous Amendments) Regulations 2005), the Group and Company are required to give a description of the principal risks and
uncertainties which they face.

These principal risks are set out below:-
•

The Group faces strong competition in its various markets and if it fails to compete successfully, market share and proﬁtability may
decline.

•

Consumer preferences may change and demand for existing products may decline (as a result of poor weather or otherwise) or be
replaced by other products which the Group does not produce, and as a result, sales volumes and proﬁtability may be volatile or
decline.

• The Group may be affected by changes in foreign currency exchange rates and interest rates.

•

The Group may not be able to fulﬁl the demand for its products due to circumstances such as the loss of a production or storage
facility or disruptions to its supply chain. This would adversely affect sales volumes and proﬁtability.

2 3

•

The Group may be adversely affected by government regulations including possible changes in excise duty on cider in the UK and
Ireland and restrictions on alcohol advertising.

•

The Group is subject to stringent environmental, health and safety and food safety laws and regulations which could result in
increased compliance or remediation costs which would adversely affect proﬁtability.

The Group could be subject to accidental, natural or malicious contamination of its products, which could result in the recall of the
Groups’ products, damage to its brands and falls in demand for its products.

Financial risk management
As required by Irish company law, (Statutory Instrument 765.2005) the ﬁnancial risk management objectives and policies of the
Company and the Group, including hedging activities and the exposure of the Company and the Group to ﬁnancial risk are set out in the
Finance Review on pages 14 to 16 and note 22 to the ﬁnancial statements.

Accounting records
The Directors believe that they have complied with the requirements of Section 202 of the Companies Act, 1990 with regard to books
of account by employing accounting personnel with appropriate expertise and by providing adequate resources to the ﬁnancial function.
The books of account of the Company are maintained at Group ofﬁces in Clonmel, Co. Tipperary.

Post balance sheet events
There were no signiﬁcant post balance sheet events.

Political donations
No political donations were made by the Group during the year which require disclosure in accordance with the Electoral Acts, 1997 to
2002.

Corporate governance
The Directors’ Statement on Corporate Governance is set out on pages 25 to 29. The Report of the Remuneration Committee on
Directors’ Remuneration is set out on pages 30 to 35.

Substantial holdings
As at 30 April 2008, the following shareholders have notiﬁed the Company as to their interest in 3% or more of the share capital of the
Company.

Name
Deutsche Bank AG
FMR Corporation/ Fidelity International Limited
Fundamental Investors Inc.
Invesco plc
Irish Life Investment Managers
Janus Capital Management LLC
Morgan Stanley Investment Management Limited
Sky Investment Counsel Inc.

%
3.21
5.21
5.11
5.08
3.02
7.67
9.81
3.11

As far as the Company is aware, other than as stated above, no other person or company has an interest of more than 3% in the share
capital of the Company.

Share price
The price range of the Company’s ordinary shares ranged between €3.67 and €12.72 during the year. The year-end share price was
€4.50 (2007: €10.50).

Auditor
In accordance with Section 160(2) of the Companies Act, 1963, the auditor, KPMG Chartered Accountants will continue in ofﬁce.

2 4

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Directors’ report continued

Purchase of own shares
At the Annual General Meetings held on 7 July 2006 and 13 July 2007, authority was granted to purchase up to 10% of the Company’s
ordinary shares. On 9 May 2007, the Company announced the introduction of a €150 million share buy back programme whereby any
shares purchased would be cancelled. During the year, 17,658,000 shares, representing approximately 5.4% of the issued share capital
of the Company, were re-purchased at a cost of €139.9 million and were immediately cancelled. The power to purchase a further 4.6%
will expire at the Annual General Meeting in 2008.

Special resolutions will be proposed at this year’s Annual General Meeting to renew the authority of the Company, or any of its
subsidiaries, to purchase up to 10% of the Company’s ordinary shares in issue at the date of the Annual General Meeting and in relation
to the maximum and minimum prices at which Treasury Shares (effectively shares purchased and not cancelled) may be re-issued
off-market by the Company. If granted, the authorities will expire on the earlier of the date of the Annual General Meeting in 2009 or 10
January 2010.

The minimum price which may be paid for shares purchased by the Company shall not be less than the nominal value of the shares and
the maximum price will be 105% of the average market price of such shares over the preceding ﬁve days. Options to subscribe for a
total of 4,571,365 Ordinary Shares are outstanding, representing 1.46% of the issued ordinary share capital. If the authority to purchase
ordinary shares was used in full, the options would represent 1.62%.

The Directors will only exercise the power to purchase shares if they consider it to be in the best interests of the Company and its
shareholders.

Takeover Bids Directive
Details of the Company’s capital structure can be found in note 23 to the ﬁnancial statements on page 82. Details of Employee Share
Schemes can be found in note 4 to the ﬁnancial statements on page 56. Details of agreements to which the Company is party to, and
which contain change of control provisions are contained in note 18, on page 67.

Annual General Meeting
Your attention is drawn to the letter to shareholders and the notice of meeting enclosed with this report which sets out details of the
matters which will be considered at the Annual General Meeting.

On behalf of the Board
T. O’Brien
Chairman

M. Pratt
Chief Executive Ofﬁcer

9 May 2008

2 5

Directors’ statement
of corporate governance

Corporate governance
The Directors are committed to maintaining the highest standards of corporate governance. This statement sets out how the principles
outlined in the 2006 Financial Reporting Council Combined Code on Corporate Governance (the “Code”) have been applied by the
Group.

Board of Directors
Role
The Board is responsible for the overall leadership and control of the Group. There is a formal schedule of matters reserved for the
Board. This includes approval of Group strategic plans, annual budgets, ﬁnancial statements, signiﬁcant capital expenditure items,
major acquisitions and disposals, changes to capital structure, Board appointments, review of the Group’s corporate governance
arrangements and system of internal control.

The roles of Chairman and Chief Executive are separate with a clear division of responsibility between them. The Board delegates
responsibility for the management of the Group through the Chief Executive to executive management. The Board also delegates some
of its responsibilities to Board Committees, details of which are set out below.

Individual Directors may seek independent professional advice at the Company’s expense, where they judge it necessary to discharge
their responsibilities as Directors.

The Group has a policy in place which indemniﬁes the Directors in respect of legal action taken against them.

Membership
At 29 February 2008, the Board comprised of eleven directors, four executive and seven non-executive directors (including the
Chairman). Since the year end, one executive director retired, and one executive director was appointed. Another executive director will
retire on 11 July 2008, leaving the Board to comprise of ten Directors, three executive directors and seven non-executive directors. The
Board considers that between them, the directors bring a range of skills, knowledge and experience necessary to lead the Group. Their
biographical details are set out on pages 20 to 21.

It is Board policy that at least half the Board, excluding the Chairman, shall consist of independent non-executive directors.

All of the Directors bring independent judgement to bear on issues of strategy, performance, resources, key appointments and
standards. The Board has determined that each of the non-executive Directors is independent. In reaching that conclusion, the Board
considered the principles relating to independence contained in the Combined Code and the guidance provided by a number of
shareholder voting agencies. Those principles and guidance address a number of factors that might appear to affect the independence
of Directors, including former service as an executive, extended service to the Board and cross-directorships. However, they also
make clear that a Director may be considered independent notwithstanding the presence of one or more of these factors. This reﬂects
the Board’s view that independence is determined by a Director’s character, objectivity and integrity. Where relevant, the Board took
account of these factors and in each case was satisﬁed that the Director’s independence was not compromised.

Chairman
Tony O’Brien has been Chairman of the Group since January 2002. The Chairman is responsible for the efﬁcient and effective working
of the Board. He is responsible for ensuring that the Board considers the key strategic issues facing the Group and that the Directors
receive accurate, timely, relevant and clear information. He also ensures that there is effective communication with shareholders.

Senior Independent Director
In accordance with best practice, the Board decided to rotate the position of Senior Independent Director. Therefore, on 13 July 2007,
Richard Holroyd replaced Philip Lynch as Senior Independent Director. He is available to shareholders who have concerns, for which
contact through the normal channels of Chairman, Chief Executive or Finance Director, has failed to resolve or for which such contact is
inappropriate. He is also available to meet major shareholders on request.

Company Secretary
The appointment and removal of the Company Secretary is a matter for the Board. All Directors have access to the Company Secretary
who is responsible to the Board for ensuring that Board procedures are complied with.

Terms of appointment
The non-executive Directors are engaged under the terms of a letter of appointment. Other than Tony O’Brien, each appointment is
for an initial period of three years with each non-executive director normally expected to serve two three year terms. The term of Tony
O’Brien’s contract is not ﬁxed but is terminable by the Company on twelve months’ notice. A copy of the standard letter of appointment
is available on request from the Company Secretary.

2 6

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Directors’ statement
of corporate governance continued

Retirement and re-election
At least one-third of Directors must retire at each annual general meeting and all Directors must submit themselves for re-election
at least every three years. Directors appointed by the Board must submit themselves for election at the ﬁrst annual general meeting
following their appointment.

Induction and development
All new directors are provided with extensive brieﬁng materials on the Group’s operations, management and governance structure.
These include visits to Group businesses and brieﬁngs with senior management as appropriate. Ongoing brieﬁngs are also provided to
all directors as required.

Meetings
It is Board policy to meet not less than six times a year. The Board will also meet at other times as it considers appropriate. The Board
makes at least one visit a year to one of the operating subsidiaries and the visit incorporates a scheduled Board meeting. In addition,
the Board spends one day a year reviewing the Group’s strategy. During the year under review, there were seven full meetings of the
Board, excluding the strategy meeting. Details of each Directors’ attendance at these meetings are set out in the table on page 29.
In addition, at least one meeting a year provides an opportunity for non-executive directors and the Chairman to meet without the
executive directors present, and a further one meeting a year provides an opportunity for the Senior Independent Director and the other
non-executive directors to meet without the Chairman being present.

The Chairman sets the agenda for each meeting in consultation with the Chief Executive and Company Secretary. The agenda and
Board papers, which provide the Directors with relevant information to enable them fully consider the agenda items in advance, are
circulated prior to each meeting. Directors are encouraged to debate and constructively challenge all issues.

Performance evaluation
The Board periodically reviews and appraises its own performance.

The Chairman conducts an annual review of corporate governance and the operation and performance of the Board and its
Committees. He also conducts one to one discussions each year with each Director to assess his/her individual performance.

The Senior Independent Director and the other non-executive directors review the Chairman’s performance each year.

Remuneration
Details of remuneration paid to directors (executive and non-executive) are set out in the Report of the Remuneration Committee on
pages 30 to 35.

Share ownership and dealing
Details of Directors’ shareholdings are set out on pages 34 to 35.

The Group has a policy on dealing in shares that applies to all Directors and senior management. This policy adopts the terms of the
Model Code as set out in the Listing Rules published by the UK Listing Authority and the Irish Stock Exchange.

Communications with shareholders
The Group attaches considerable importance to shareholder communication and has an established investor relations programme.

There has been regular dialogue with institutional investors and presentations at the time of the release of the preliminary and interim
results announcements. Results announcements are sent out promptly to shareholders. Trading Statements are issued in August and
February prior to each period end. Interim Management Statements are issued within the time frames speciﬁed under the Transparency
Directive and this year were issued in July and January. The Board is briefed regularly on the views and concerns of institutional
shareholders.

The Group’s website www.candcgroupplc.com provides the full text of the annual report and ﬁnancial statements and the interim report.
News releases are also made available immediately after release to the Stock Exchange.

The Company’s Annual General Meeting affords individual shareholders the opportunity to question the Chairman and the Board. The
annual report and the notice of annual general meeting are sent to shareholders at least 20 working days before the meeting. At the
meeting, after each resolution has been dealt with, details are given of the level of proxy votes lodged and the balance for and against
that resolution.

2 7

Committees
The Board has established three permanent committees to assist in the execution of its responsibilities. These are the Audit Committee,
the Nomination Committee and the Remuneration Committee. Ad-hoc committees are formed from time to time to deal with speciﬁc
matters.

Each of the permanent Board committees has terms of reference under which authority is delegated to them by the Board. These terms
of reference are available on request from the Company Secretary. Minutes of all Committee meetings are circulated to the entire Board.

The current membership of each committee is set out on page 21. Attendance at meetings held is set out in the table on page 29.

The Chairmen of each these committees attend the Annual General Meeting and are available to answer questions from shareholders.

Audit Committee
The Audit Committee comprises only non-executive Directors. It meets a minimum of four times a year. During the year under review, it
met ten times. Attendance at meetings held is set out in the table on page 29.

The Committee has determined that John Hogan is the Audit Committee ﬁnancial expert.

The Finance Director attends Committee meetings as appropriate, while the external auditor attends as required and has direct access
to the Committee Chairman.

The Committee’s responsibilities include:

•

monitoring the integrity and fairness of the ﬁnancial statements of the Group, including the annual report, interim report, preliminary
results and trading statements;

•

reviewing the effectiveness of the Group’s internal controls and risk management systems;

• maintaining and reviewing the effectiveness of the Group’s internal audit function;

• making recommendations to the Board in relation to the appointment and removal of the Group’s external auditor;

• evaluating the performance of the external auditor including their independence and objectivity;

•

reviewing the annual internal and external audit plans;

• ensuring compliance with the Group’s policy on the provision of non-audit services by the external auditor.

The Committee discharged its obligations during the year as follows:

•

the Committee reviewed the pre-close trading statements issued by the Company in August and February;

the Committee reviewed the Interim Results Report prior to its release in October;

the Committee reviewed the Interim Management Statements issued in July and January;

the Committee reviewed the external audit plan presented by the external auditor in advance of the audit;

the Committee reviewed the preliminary results announcement, and the annual report and ﬁnancial statements. It reviewed the post-
audit report from the external auditors identifying the key accounting and judgemental issues requiring its attention;

the Committee approved the annual internal audit plan;

the Committee received reports from the Head of Internal Audit.

the Committee considered whether or not to recommend the re-appointment of the external auditor.

The Group has a policy in place governing the conduct of non-audit work by the external auditors. Under this policy the auditor is
prohibited from performing services where the auditor:

• may be required to audit his/her own work;

• participate in activities that would normally be undertaken by management;

•

is remunerated through a “success fee” structure;

• acts in an advocacy role for the Group.

2 8

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Directors’ statement
of corporate governance continued

Other than the above, the Group does not impose an automatic ban on the external auditor undertaking non-audit work. The
engagement of the external auditor in non-audit work must be pre-approved by the Committee or entered into pursuant to pre-approval
policies and procedures established by the Committee.

Details of the amounts paid to the external auditor during the year for audit and other services are set out in note 2 to the ﬁnancial
statements on page 55.

Nomination Committee
The Nomination Committee is chaired by the Group Chairman and its constitution requires it to consist of a majority of non-executive
Directors. It meets a minimum of twice a year and has met twice in the period under review. Attendance at meetings held is set out in
the table on page 29.

The Committee’s responsibilities include:

•

reviewing the structure, size and composition (including the skills, knowledge and experience) required of the Board and making
recommendations regarding any changes in order to ensure that the composition of the Board and its Committees is appropriate to
the Group’s needs;

• overseeing succession planning for the Board and senior management;

• establishing processes for the identiﬁcation of suitable candidates for appointment to the Board; and

• making recommendations to the Board on membership of Board Committees.

The Committee is empowered to use the services of independent consultants to facilitate the search for suitable candidates for
appointment as non-executive Directors.

Remuneration Committee
The Remuneration Committee comprises solely of non-executive Directors. It meets at least twice a year and has met four times in the
period under review. Attendance at meetings held is set out in the table on page 29.

The Committee’s responsibilities include:

• making recommendations to the Board on the Group’s policy for executive remuneration;

• determining the remuneration of the executive Directors and senior management;

• monitoring the level and structure of remuneration for senior management and trends across the Group;

•

reviewing the design of all share incentive plans;

• approving any grant of options under the Executive Share Option Plan and the Long Term Incentive Plan; and

• overseeing the preparation of the Report of the Remuneration Committee on Directors’ Remuneration (see pages 30 to 35).

The Committee receives advice from leading independent ﬁrms of compensation and beneﬁts consultants when necessary. The
Chairman and Chief Executive are fully consulted about all remuneration proposals.

In the period under review, the Committee determined the salaries of the executive directors and senior management and the awards
under the annual and long-term incentive plans. It reviewed the remuneration of management across the Group. It also approved the
award of share options to the executive directors and management.

Corporate social responsibility
Corporate social responsibility is embedded throughout the Group. Group policies and activities are summarised on pages 17 to 19,
and are available on the Group’s website www.candcgroupplc.com.

Internal control
The Board has overall responsibility for the Group’s system of internal control, for reviewing its effectiveness and for conﬁrming that there
is a process for identifying, evaluating and managing the signiﬁcant risks for the achievement of the Group’s strategic objectives. This
system of internal control can only provide reasonable, and not absolute, assurance against material misstatement or loss. The process
which has been in place for the entire period accords with the Turnbull Guidance (revised guidance published in October 2005) and
involves the Board considering the following:

•

the nature and extent of the key risks facing the Group;

the likelihood of these risks occurring;

the impact on the Group should these risks occur; and

the actions being taken to manage these risks to the desired level.

2 9

The risks facing the Group are reviewed regularly by management and the Audit Committee of the Board whose terms of reference
require it to conduct an annual assessment of internal control.

In accordance with the process outlined above, the Board conﬁrms that it has conducted an annual review of the effectiveness of the
internal control systems in operation and it has approved the reporting lines to ensure the ongoing effectiveness of the internal controls
and reporting structures.

The key elements of the internal control system in operation are as follows:

• clearly deﬁned organisation structures and lines of authority;

•

corporate policies for ﬁnancial reporting, treasury and ﬁnancial risk management, information technology and security, project
appraisal and corporate governance;

• annual budgets and three year business plans for all operating units, identifying key risks and opportunities;

• monitoring of performance against budgets and reporting thereon to the Directors on a monthly basis;

• an internal audit function which reviews key business processes and controls; and

• an audit committee which approves plans and deals with signiﬁcant control issues raised by internal or external audit.

Compliance
The Group has complied with the Code during the period under review, save in the following respects:-

Brendan Dwan, who has been an employee of the Group for many years, has a service contract which pre-dates the Company’s
admission to listing in May 2004, and does not specify a notice period. It is therefore terminable on reasonable notice, which due to his
length of service could extend beyond one year. Brendan McGuinness’ contract speciﬁed a notice period of two years by the Company.

Going concern
After making enquiries, the directors have a reasonable expectation that the Company, and the Group as a whole, have adequate
resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern
basis in preparing the ﬁnancial statements.

Attendance at scheduled Board meetings and Board committee meetings during the period.

Tony O’Brien

John Burgess

Brendan Dwan

Liam FitzGerald

John Hogan

Richard Holroyd

Philip Lynch

Brendan McGuinness

James Muldowney

Breege O’Donoghue

Maurice Pratt

Board
B

Audit
Committee
B

Nomination
Committee
B

Remuneration
Committee
B

The ‘A’ columns represent the number of meetings held for which each individual director was entitled to attend, while the ‘B’ columns
represent the number of meetings attended by each director.

3 0

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Report of the remuneration committee
on Directors’ remuneration

The Remuneration Committee of the Board, whose membership is set out on page 21, consists solely of non-executive directors. Its
terms of reference include making recommendations to the Board in respect of the Group policy on executive and senior management
remuneration; and the consideration and determination of the remuneration of the executive directors and senior management. It also
oversees all employee share schemes. The Chairman and Chief Executive are fully consulted on remuneration proposals.

Remuneration policy
The main aim of the Group’s remuneration policy is to reward the Group’s executive directors and senior management competitively,
having regard to other comparable companies and the need to ensure that they are properly remunerated and motivated to perform in
the best interests of shareholders. Performance related rewards, based on measured and stretching targets, are therefore an important
component of remuneration packages.

The Remuneration Committee obtains external advice from independent ﬁrms of compensation and beneﬁt consultants when necessary.

The main elements of the remuneration package for executive directors and senior management are basic salary and beneﬁts,
performance related annual bonus, pension beneﬁts and share options. In addition, there are long-term incentive plans in place for
executive directors and senior management.

Basic salary and beneﬁts
The salaries for executive directors are reviewed annually in January having regard to the job size, responsibility levels, personal
performance and competitive market practice.

Beneﬁts include a company car (or car allowance) and health insurance costs. No fees are payable to executive directors.

Performance related annual bonus
The Group operates a performance related cash bonus scheme for executive directors and senior management. Payment of an annual
bonus depends on the achievement of operating proﬁt targets and personal goals. A percentage of the bonus is payable by reference
to proﬁt targets and the balance is payable by reference to individual performance criteria. The maximum annual bonus payable is up to
80% of basic salary for the Chief Executive and 70% for the other executive directors and senior management.

Pensions
Pensions for executive directors and senior management are calculated on basic salary only and no incentive or beneﬁt elements are included.

The executive directors participate in a deﬁned beneﬁt pension plan designed to provide a pension of two-thirds of pensionable salary
on retirement with full service. Normal retirement age is 65. In addition, contributions are made to a deﬁned contribution scheme on the
excess of basic salary over pensionable salary. The difference arises from the capping of salary increases for deﬁned beneﬁt pension
plan purposes to 5% per annum since 2005.

Executive share option scheme
An executive share option scheme was established in May 2004. It is policy to grant options under this scheme to key executives
across the Group to encourage identiﬁcation with shareholders’ interests. Options are granted solely at the discretion of the
Remuneration Committee. Under the scheme rules, options cannot be granted to non-executive directors. The initial grant of options
complied with institutional guidelines. In respect of grants since admission, the maximum grant that can normally be made to any
individual in any one year is an award of 150% of salary in that year.

Options will not normally be exercisable until three years after the date of grant and are subject to meeting a speciﬁc performance
target. This performance target requires the Group’s earnings per share (before exceptional items) to increase by 5% in excess of the
Irish Consumer Price Index over three years on a compound basis, in order for options to vest. If the performance target is not met after
the relevant three year period, the options lapse.

Details of Directors’ share options are set out on page 35.

The cost of the vesting of these awards is amortised over the vesting period to the extent that the Directors believe that the awards will vest.

Long term incentive plans
A share-based Long Term Incentive Plan for executive directors and senior management was established at the time of the Group’s
admission to listing in May 2004. The nature and level of incentives available and the relevant performance criteria were not speciﬁed at
the time, but following consultation with the Irish Association of Investment Managers (“IAIM”) a plan has been introduced, the terms of
which have met its approval.

3 1

Under the plan, awards of up to 60% of basic salary may be granted. Awards are in the form of nil-cost options over shares, based on
the closing share price on the day before the grant date. For the shares to vest fully, total shareholder return must be in the top quartile
of a comparator group over a three-year period. None of the award vests for below median performance. 30% of the award vests for
median performance with straight-line pro-rating between the median and upper quartile. In addition to the total shareholder return
condition, earnings per share growth (before exceptional items) must increase by 5% in excess of the Irish Consumer Price Index on
a compound basis over the same three-year period. If both these conditions are not met at the end of the relevant period, the options
lapse.

Details of Directors’ interests in share options granted under the Long Term Incentive Plan are set out on page 35.

The cost of the vesting of these awards is amortised over the vesting period to the extent that the Directors believe that the awards will vest.

The Committee introduced a special cash-based long-term incentive plan for Brendan McGuinness in October 2005 and consequently
he was not eligible to participate in the above share-based Long-Term Incentive Plan. While the Listing Rules generally require that any
long-term incentive plan is approved by shareholders before it is adopted, the plan for Brendan McGuinness met the criteria under
which this requirement did not apply. In addition, the IAIM was consulted regarding the principal terms of the plan.

The long-term incentive plan provided for a maximum €1 million cash payment, payable on meeting a performance condition based
on a very stretching operating proﬁt target for the Magners business in Great Britain for the period ended 29 February 2008. The
Committee believed that the target if reached, would beneﬁt all shareholders. Full payment would be made only if the target was
reached. There was also a minimum target below which no payment would be made. The payment was non-pensionable.

The operating proﬁt target set out under this long term incentive plan was met in the year ended 29 February 2008. Consequently, the plan
vested in full and was approved for payment by the Remuneration Committee. The cost of this plan was recognised over the vesting period.

Non-executive directors’ remuneration
The remuneration of the non-executive directors is determined by the Board of Directors as a whole. The Chairman is not involved in
determining his own remuneration.

The fees paid to non-executive directors are set at a level which aims to attract individuals with the necessary experience and ability to
make a signiﬁcant contribution to the Group.

Promoting all-employee share ownership
The Group entered into an agreement in 2001 with trade unions representing the majority of its employees, which provided for an initial
grant of free shares to eligible employees; the establishment of an approved save as you earn scheme; and the establishment of an
approved proﬁt sharing scheme, all after the completion of an initial public offering.

On admission, 9.4 million ordinary shares with an aggregate value of €21.3 million were issued to fulﬁl the Group’s obligations under the
free share arrangements. These shares were held by employee trusts approved by the Irish/UK Revenue but have now been distributed
to employees as the relevant holding periods have expired.

A discretionary scheme was put in place for the year ended 28 February 2007. Under this scheme, due to exceptional earnings per
share growth in that year, the Remuneration Committee and the Board have approved a share allocation of between 3% and 4% of
basic salary remuneration to employees subject to a minimum allocation of €1,000 per employee. The cost which was reﬂected in the
income statement for the year ended 28 February 2007 was €2.5 million. The Group purchased 189,061 shares during the current
ﬁnancial year and placed these shares in Irish/UK revenue approved employee trusts, where they are held for the beneﬁt of each
employee and where each employee has full voting rights and dividend entitlements. However employees face tax penalties should they
dispose of the shares before the expiry of the holding period.

Service contracts
Group policy is to ensure that all future contracts will have notice periods of less than one year. Other than the service contracts of
Brendan Dwan, whose contract has no speciﬁed notice period, and Brendan McGuinness, whose contract speciﬁed a two year notice
period, there are no service contracts with notice periods in excess of twelve months.

Directors’ remuneration and interest in share capital
Details of the overall Directors’ remuneration charged to the Group Income Statement is shown in note 27 on page 85. Individual
directors’ remuneration and pension beneﬁts for the year ended 29 February 2008 are given on page 33. Directors’ share options and
the interests of the Directors and Secretary in the share capital of the Company are shown on pages 34 to 35.

3 2

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Report of the remuneration committee
on Directors’ remuneration continued

Directors’ remuneration - 2007/08

Executive Directors
Brendan Dwan
Brendan McGuinness
James Muldowney
Maurice Pratt

Total

Average number of Executive Directors

Non-Executive Directors
John Burgess
Liam FitzGerald
John Hogan
Richard Holroyd
Philip Lynch
Tony O’Brien
Breege O’Donoghue

Total

Basic
Other
Salary Remuneration
€000
€000

Beneﬁts in
Kind
€000

Annual
Bonus
€000

378
408
292
731

1,809

-
-
-
30

28
47
26
18

119

-
-
-
-

Basic
Fees
€000

65
65
65
65
65
180
65

570

Average number of Non-Executive Directors

Amounts charged in respect of equity settled share based employee beneﬁts

Total Directors’ remuneration - 2007/08

Long Term
Incentive

Pension
Plan Contributions
€000
€000

-
1,000
-
-

130
140
103
258

Total
2008
€000

536
1,595
421
1,037

1,000

631

3,589

Other
Fees
€000

Beneﬁts in
Kind
€000

-
-
25
7
20
-
-

-
-
-
-
-
29
-

Total
2008
€000

65
65
90
72
85
209
65

651

480

4,720

Directors’ remuneration - 2006/07

Executive Directors
Brendan Dwan
Brendan McGuinness
James Muldowney
Maurice Pratt

Total

Average number of Executive Directors

Non-Executive Directors
John Burgess
Liam FitzGerald
John Hogan
Richard Holroyd
Philip Lynch
Tony O’Brien
Breege O’Donoghue

Total

3 3

Total
2007
€000

734
805
578
1,476

260
280
196
566

116
124
94
226

1,302

560

3,593

Other
Fees
€000

Beneﬁts in
Kind
€000

-
-
20

20
-
-

-
-
-
-
-
21
-

Total
2007
€000

60
60
80
60
80
197
60

597

677

4,867

Basic
Other
Salary Remuneration
€000
€000

Beneﬁts in
Kind
€000

Annual
Pension
Bonus Contributions
€000
€000

338
363
269
638

1,608

-
-
-
29

20
38
19
17

Basic
Fees
€000

60
60
60
60
60
176
60

536

Average number of Non-Executive Directors

Amounts charged in respect of equity settled share based employee beneﬁts

Total Directors’ remuneration - 2006/07

Executive directors’ remuneration for the year ended 28 February 2007 has been adjusted to reﬂect bonuses accrued for the year rather
than the bonuses paid in the year resulting in an increase of €140,000 in the amounts disclosed above.

3 4

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Report of the remuneration committee
on Directors’ remuneration continued

Executive Directors’ pension beneﬁts

Employer
Contributions 2008
DB Plan
€000

DC Plan
€000

Increase
in Accrued Pension
2007
2008
€000
€000

Transfer
Value of Increase
2007
€000

2008
€000

Total Accrued
Pension at Year End
2007
2008
€000
€000

Brendan Dwan
Brendan McGuinness
James Muldowney
Maurice Pratt

Total

22
25
10
28

108
115
93
230

546

8
9
5
13

7
8
5
13

150
159
55
211

575

150
160
49
91

450

197
234
38
79

548

182
217
31
63

493

Other fees paid to John Hogan, Richard Holroyd and Philip Lynch, represent fees paid as Chairman of the Audit Committee, Senior
Independent Director and Chairman of the Remuneration Committee respectively.

Directors and their interests
The interests of the Directors and Secretary in the share capital of Group companies at the beginning of the year (or date of
appointment, if later) and the end of the year were:

Interests in C&C Group plc
Ordinary shares of €0.01 each

Directors
John Burgess
Brendan Dwan
Liam FitzGerald
John Hogan
Richard Holroyd
Philip Lynch
Brendan McGuinness
James Muldowney
Tony O’Brien
Breege O’Donoghue
Maurice Pratt

Total

* 450,000 are held non-beneﬁcially at 28/02/2007 and 29/02/2008.

Company Secretary
Noreen O’Kelly

29-Feb
2008

28-Feb
2007

98,727
639,005*
13,100
9,901
3,105
60,572
1,209,146
313,142
1,700,000
53,357
1,013,718

-
639,005*
13,100
9,636
-
30,289
1,209,146
313,142
1,700,000
46,926
1,010,658

5,113,773

4,971,902

135,500

The Directors and Secretary have no beneﬁcial interests in any of the Group’s subsidiary undertakings.

Between 29 February 2008 and 30 April 2008, no transactions took place in the Directors’ and Company Secretary’s interests in the
share capital of the Company.

3 5

Interests in share options – Executive Share Option Scheme
Share options over ordinary shares of €0.01 each in C&C Group plc

Directors
Brendan Dwan
Brendan McGuinness
James Muldowney
Maurice Pratt

Company Secretary
Noreen O’Kelly

01-Mar-07

Granted
during Year

Weighted
Average
29-Feb-08 Option Price

403,100
486,200
343,600
1,493,600

-
35,100
-

403,100
521,300
343,600
94,200 1,587,800

2.52
3.59
2.51
3.39

210,900

2.56

Analysis of outstanding share options granted under Executive Share Option Scheme

Date of Grant
Exercise Price
Directors
Brendan Dwan
Brendan McGuinness
James Muldowney
Maurice Pratt

Company Secretary
Noreen O’Kelly

19-May-04
€2.26

20-Jun-05
€3.56

15-Jun-06
€6.52

13-Jun-07
€11.53

Total

322,200
340,800
277,000
1,104,500

80,900
85,400
66,600
246,400

-
60,000
-
142,700

-
35,100
-

403,100
521,300
343,600
94,200 1,587,800

2,044,500

479,300

202,700

129,300 2,855,800

162,300

48,600

210,900

Options granted at €2.26 in May 2004 are exercisable in the period from 15/05/2007 to 14/05/2011. Options granted at €3.56 in June 2005
are exercisable in the period from 20/06/2008 to 19/06/2012. Options granted at €6.52 in June 2006 are exercisable in the period from
16/06/2009 to 15/06/2013. Options granted at €11.53 in June 2007 are exercisable in the period 14/06/2010 to 13/06/2014.

Interests in share options – Long Term Incentive Plan
Share options over ordinary shares of €0.01 each in C&C Group plc

Directors
Brendan Dwan
James Muldowney
Maurice Pratt

Company Secretary
Noreen O’Kelly

Analysis of outstanding share options granted under Long Term Incentive Plan

Date of Grant
Share Price at Grant Date
Directors
Brendan Dwan
James Muldowney
Maurice Pratt

Company Secretary
Noreen O’ Kelly

01-Mar-07

Granted Share Price
during Year at Grant Date

30,400
24,400
82,465

19,500
15,100
25,100

€11.53
€11.53
€11.53

29-Feb-08

49,900
39,500
107,565

17,700

11,200

€11.53

28,900

12-Jan-06
€5.53

15-Jun-06
€6.52

13-Jun-07
€11.53

Total

-
-
44,365

30,400
24,400
38,100

19,500
15,100
25,100

49,900
39,500
107,565

44,365

92,900

59,700

196,965

17,700

11,200

28,900

The above are nil cost options and are exercisable in the period from 12/1/2009 to 13/06/2010.

The market price of the Company’s shares at 29 February 2008 was €4.50 and ranged during the year from €3.67 to €12.72.

3 6

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Statement of Directors’ responsibilities

The Directors are responsible for preparing the Annual Report and the Group and Company ﬁnancial statements, in accordance with
applicable law and regulations.

Company law requires the Directors to prepare Group and Company ﬁnancial statements for each ﬁnancial year. Under that law, the
directors are required to prepare the Group ﬁnancial statements in accordance with IFRSs as adopted by the EU and have elected
to prepare the Company ﬁnancial statements in accordance with IFRSs as adopted by the EU and as applied in accordance with the
provisions of the Companies Acts, 1963 to 2006.

The Group and Company ﬁnancial statements are required by law and IFRSs as adopted by the EU to present fairly the ﬁnancial position
and performance of the Group and Company; the Companies Acts, 1963 to 2006 provide in relation to such ﬁnancial statements
that references in the relevant part of that Act to ﬁnancial statements giving a true and fair view are references to their achieving a fair
presentation.

In preparing each of the Group and Company ﬁnancial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent; and
•

prepare the ﬁnancial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will
continue in business.

The Directors are responsible for keeping proper books of account that disclose with reasonable accuracy at any time the ﬁnancial
position of the Company and enable them to ensure that its ﬁnancial statements comply with the Companies Acts, 1963 to 2006. They
are also responsible for taking such steps as are reasonably open to them to safeguard the assets of the Group and Company and to
prevent and detect fraud and other irregularities.

Under applicable law and the requirements of the Listing Rules issued by the Irish Stock Exchange, the Directors are also responsible
for preparing a Directors’ Report and reports relating to directors’ remuneration and corporate governance that comply with that law
and those Rules. The Directors are responsible for the maintenance and integrity of the corporate and ﬁnancial information included
on the Company’s website. Legislation in Ireland governing the preparation and dissemination of ﬁnancial statements may differ from
legislation in other jurisdictions.

The Directors conﬁrm that, to the best of their knowledge and belief, that
•

the ﬁnancial statements, prepared in accordance with IFRS as adopted by the EU, give a true and fair view, in accordance with
IFRSs as adopted by the EU, of the state of the Group’s affairs as at 29 February 2008 and of its proﬁt for the year then ended; and
the Directors’ report includes a fair review of the development and performance of the business and the ﬁnancial position of the
Group, together with a description of the principal risks and uncertainties that it faces.

•

On behalf of the Board
T. O’Brien
Chairman

M. Pratt
Chief Executive Ofﬁcer

3 7

Independent auditor’s report
to the members of C&C Group plc

We have audited the Group and Company ﬁnancial statements (the ‘‘ﬁnancial statements’’) of C&C Group plc for the year ended 29
February 2008 which comprise the Group Income Statement, the Group Statement of Recognised Income and Expense, the Group
Balance Sheet, the Group Cash Flow Statement, the Company Balance Sheet, the Company Cash Flow Statement, the Company
Statement of Changes in Equity and the related notes. These ﬁnancial statements have been prepared under the accounting policies set
out therein.

This report is made solely to the Company’s members, as a body, in accordance with section 193 of the Companies Act, 1990. 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
The Directors’ responsibilities for preparing the Annual Report and the ﬁnancial statements in accordance with applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the EU are set out in the Statement of Directors’ Responsibilities on
page 36.

Our responsibility is to audit the ﬁnancial statements in accordance with relevant legal and regulatory requirements and International
Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the ﬁnancial statements give a true and fair view in accordance with IFRSs as adopted
by the EU and, in the case of the Company, as applied in accordance with the provisions of the Companies Acts, 1963 to 2006, and
have been properly prepared in accordance with the Companies Acts, 1963 to 2006 and Article 4 of the IAS Regulation. We also
report to you whether, in our opinion: proper books of account have been kept by the Company; at the balance sheet date, there
exists a ﬁnancial situation requiring the convening of an extraordinary general meeting of the Company; and the information given in
the Directors’ Report is consistent with the ﬁnancial statements. In addition, we state whether we have obtained all the information
and explanations necessary for the purposes of our audit, and whether the Company Balance Sheet is in agreement with the books of
account.

We also report to you if, in our opinion, any information speciﬁed by law or the Listing Rules of the Irish Stock Exchange regarding
directors’ remuneration and directors’ transactions is not disclosed and, where practicable, include such information in our report. We
review whether the Directors’ Statement of Corporate Governance, including the Report of the Remuneration Committee on Directors’
Remuneration, reﬂects the Company’s compliance with the nine provisions of the 2006 Financial Reporting Council Combined Code
speciﬁed for our review by the Listing Rules of the Irish Stock Exchange, and we report if it does not. We are not required to consider
whether the Board’s statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the Group’s
corporate governance procedures or its risk and control procedures. We read the other information contained in the Annual Report and
consider whether it is consistent with the audited ﬁnancial statements. The other information comprises only the Chairman’s Statement,
the Chief Executive’s Review, the Operations Review and the Finance Review. We consider the implications for our report if we become
aware of any apparent misstatements or material inconsistencies with the ﬁnancial statements. Our responsibilities do not extend to any
other information.

Basis of opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices
Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the ﬁnancial statements.
It also includes an assessment of the signiﬁcant estimates and judgments made by the Directors in the preparation of the ﬁnancial
statements, and of whether the accounting policies are appropriate to the Group’s and Company’s circumstances, consistently applied
and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to
provide us with sufﬁcient evidence to give reasonable assurance that the ﬁnancial statements are free from material misstatement,
whether caused by fraud or other irregularity or error. In forming our opinion, we also evaluated the overall adequacy of the presentation
of information in the ﬁnancial statements.

3 8

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Independent auditor’s report
to the members of C&C Group plc continued

Opinion
In our opinion:
•

the Group ﬁnancial statements give a true and fair view, in accordance with IFRSs as adopted by the EU, of the state of the Group’s
affairs as at 29 February 2008 and of its proﬁt for the year then ended;
the Company ﬁnancial statements give a true and fair view, in accordance with IFRSs as adopted by the EU and as applied in
accordance with the provisions of the Companies Acts, 1963 to 2006, of the state of the Company’s affairs as at 29 February 2008;
and
the ﬁnancial statements have been properly prepared in accordance with the Companies Acts, 1963 to 2006 and Article 4 of the
IAS Regulation.

•

We have obtained all the information and explanations which we consider necessary for the purposes of our audit. In our opinion,
proper books of account have been kept by the Company. The Company balance sheet is in agreement with the books of account.

In our opinion, the information given in the Directors’ report on pages 22 to 24 is consistent with the ﬁnancial statements.

The net assets of the Company, as stated in the Company balance sheet on page 43 are more than half of the amount of its called-up
share capital and, in our opinion, on that basis there did not exist at 29 February 2008 a ﬁnancial situation which under Section 40 (1) of
the Companies (Amendment) Act, 1983 would require the convening of an extraordinary general meeting of the Company.

Chartered Accountants
Registered Auditor
Dublin

9 May 2008

Group income statement

For the year ended 29 February 2008

3 9

Revenue

Operating costs

Operating proﬁt

Finance income
Finance expense

Proﬁt before tax

Income tax expense

Year ended 29 February 2008

Year ended 28 February 2007

Before
exceptional
items
€m

Exceptional
items
€m

Before
exceptional
items
€m

Exceptional

items
€m

Total
€m

Notes

Total
€m

6
6

679.0

. -

679.0

738.5

. -

738.5

(553.8)

(15.6)

(569.4)

(538.9)

(8.3)

(547.2)

125.2

(15.6)

109.6

199.6

(8.3)

191.3

2.1
(16.9)

9.1
. -

11.2
(16.9)

1.9
(16.3)

. -
. -

1.9
(16.3)

110.4

(6.5)

103.9

185.2

(8.3)

176.9

(11.9)

0.7

(11.2)

(20.9)

. -

(20.9)

Proﬁt from continuing activities

98.5

(5.8)

92.7

164.3

(8.3)

156.0

Discontinued operations
Proﬁt from discontinued operations

4.8

137.4

142.2

14.9

37.3

52.2

Proﬁt for the year attributable to equity shareholders

103.3

131.6

234.9

179.2

29.0

208.2

Basic earnings per share (cent)
Diluted earnings per share (cent)

Continuing operations
Basic earnings per share (cent)
Diluted earnings per share (cent)

10
10

73.1c
72.6c

28.9c
28.6c

63.8c
62.9c

47.8c
47.1c

On behalf of the Board
T. O’Brien
Chairman

M. Pratt
Chief Executive Ofﬁcer

4 0

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Group statement of recognised income and expense

For the year ended 29 February 2008

Notes

2008
€m

2007
€m

Income and expense recognised directly within equity:
Exchange difference arising on the net investment in foreign operations
Foreign currency reserve recycled to the income statement on disposal of foreign subsidiary
Net movement in cashﬂow hedge reserve
Deferred tax on cash ﬂow hedges
Actuarial gains on deﬁned beneﬁt pension obligations
Deferred tax on actuarial gains on deﬁned beneﬁt pension obligations

6
20
21
20

Total income and expense recognised directly in equity

Proﬁt for the year attributable to equity shareholders

Recognised income and expense for the year attributable to equity shareholders

(1.8)
(0.5)
16.9
(1.9)
2.0
(1.0)

13.7

0.2
. -
3.8
(0.4)
1.5
0.5

5.6

234.9

208.2

248.6

213.8

On behalf of the Board
T. O’Brien
Chairman

M. Pratt
Chief Executive Ofﬁcer

4 1

Notes

2008
€m

2007
€m

11
12
22
20

14
15
22

23
23
23
23

18
22
21
17
20

18
22
16
17

394.7
227.1
3.6
2.9

426.9
212.4
3.7
8.7

628.3

651.7

78.8
67.5
25.7
32.7

97.8
138.8
2.3
40.7

204.7

279.6

833.0

931.3

3.1
44.9
43.5
327.7

3.3
32.8
33.1
315.3

419.2

384.5

288.9
1.3
27.2
0.7
6.4

316.1
. -
51.5
1.3
5.0

324.5

373.9

. -
0.6
69.8
12.0
6.9

30.0
4.2
132.5
.-
6.2

89.3

172.9

413.8

546.8

833.0

931.3

Group balance sheet

As at 29 February 2008

ASSETS
Non-current assets
Goodwill
Property, plant & equipment
Derivative ﬁnancial assets
Deferred tax

Current assets
Inventories
Trade & other receivables
Derivative ﬁnancial assets
Cash & cash equivalents

TOTAL ASSETS

EQUITY
Equity share capital
Share premium
Other reserves
Retained income

Total equity

LIABILITIES
Non-current liabilities
Interest bearing loans & borrowings
Derivative ﬁnancial liabilities
Retirement beneﬁt obligations
Provisions
Deferred tax

Current liabilities
Interest bearing loans & borrowings
Derivative ﬁnancial liabilities
Trade & other payables
Provisions
Current income tax liabilities

Total liabilities

TOTAL EQUITY & LIABILITIES

On behalf of the Board
T. O’Brien
Chairman

M. Pratt
Chief Executive Ofﬁcer

4 2

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Group cash ﬂow statement

for the year ended 29 February 2008

CASH FLOWS FROM OPERATING ACTIVITIES
Proﬁt for the year attributable to equity shareholders
Finance income
Finance expense
Income tax expense
Depreciation of property, plant & equipment
Proﬁt on disposal of property, plant & equipment
Proﬁt on disposal of subsidiaries, net of tax
Goodwill impairment
Charge for share-based employee beneﬁts
Pension contributions paid less amount charged to income statement

Increase in inventories
Decrease / (increase) in trade & other receivables
Increase in provisions
(Decrease)/increase in trade & other payables

Interest received
Interest paid and similar costs
Settlement gain on derivative instruments (note 6)
Income tax paid

Net cash inﬂow from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant & equipment
Sale of property, plant & equipment
Proceeds on disposal of subsidiaries (note 8)

Net cash inﬂow/(outﬂow) from investing activities

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of share options
Bank loans repaid
New bank loans drawn down
Issue costs paid
Shares purchased under share buyback programme
Dividends paid

Net cash outﬂow from ﬁnancing activities

Net decrease in cash & cash equivalents

Cash & cash equivalents at beginning of year
Translation adjustment

Cash & cash equivalents at end of year

A reconciliation of cash & cash equivalents to net debt is presented in note 19 to the ﬁnancial statements.

On behalf of the Board
T. O’Brien
Chairman

M. Pratt
Chief Executive Ofﬁcer

2008
€m

2007
€m

234.9
(11.2)
16.9
12.0
20.3
. -
(137.4)
. -
1.2
(2.8)

208.2
(1.9)
16.3
23.0
21.4
(4.6)
(32.9)
8.3
4.3
(6.0)

133.9

236.1

(0.5)
16.8
6.4
(2.8)

(43.5)
(31.4)
. -
27.6

153.8

188.8

2.3
(14.9)
2.9
(9.2)

1.9
(15.8)
. -
(24.4)

134.9

150.5

(102.9)
. -
236.5

(93.4)
14.0
59.8

133.6

(19.6)

5.9
(598.0)
540.0
(1.3)
(139.9)
(81.1)

2.0
(82.0)
. -
. -
. -
(54.7)

(274.4)

(134.7)

(5.9)

(3.8)

40.7
(2.1)

32.7

44.5
. -

40.7

4 3

Notes

2008
€m

2007
€m

13
15
22
20

15
22

18
22

22
16

788.3
391.3
0.7
8.1

710.4
. -
. -
. -

1,188.4

710.4

. -
0.6

0.6

95.6
. -

95.6

1,189.0

806.0

3.1
746.8
2.7
145.2

3.3
734.7
5.5
62.3

897.8

805.8

288.9
1.3

290.2

0.6
0.4

1.0

291.2

. -
. -

. -

. -
0.2

0.2

1,189.0

806.0

Company balance sheet

As at 29 February 2008

ASSETS
Non-current assets
Financial assets
Trade & other receivables
Derivative ﬁnancial assets
Deferred tax asset

Current assets
Trade & other receivables
Derivative ﬁnancial assets

TOTAL ASSETS

EQUITY
Equity share capital
Share premium
Other reserves
Retained income

Total equity

LIABILITIES
Non-current liabilities
Interest bearing loans & borrowings
Derivative ﬁnancial liabilities

Current liabilities
Derivative ﬁnancial liabilities
Trade & other payables

Total liabilities

TOTAL EQUITY AND LIABILITIES

On behalf of the Board
T. O’Brien
Chairman

M. Pratt
Chief Executive Ofﬁcer

4 4

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Company cash ﬂow statement

For the year ended 29 February 2008

CASH FLOWS FROM OPERATING ACTIVITIES
Proﬁt for the year

Net cash inﬂow from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES
Funding of cash requirements of subsidiary undertakings

Net cash outﬂow from investing activities

CASH FLOWS FROM FINANCING ACTIVITIES
Movement in loans with subsidiary companies
Proceeds from exercise of share options
New bank loans drawn down
Bank loans repaid
Issue costs paid
Shares purchased under share buyback programme
Dividends paid

Net cash outﬂow from ﬁnancing activities

Net movement in cash & cash equivalents

Cash & cash equivalents at beginning and end of year

2008
€m

306.4

(290.0)

(90.0)
5.9
540.0
(250.0)
(1.3)
(139.9)
(81.1)

2007
€m

98.8

. -

(44.1)

. -
. -
. -
. -
(54.7)

(16.4)

(98.8)

. -

On behalf of the Board
T. O’Brien
Chairman

M. Pratt
Chief Executive Ofﬁcer

Company statement of changes in equity

For the year ended 29 February 2008

Share
Capital
€m

Capital
Share Redemption
Reserve
€m

Premium
€m

Cashﬂow Share-based
Payment
Hedging
Reserve
Reserve
€m
€m

Retained
Earnings
€m

4 5

Total
€m

757.4
98.8
(54.7)
. -
4.3

. -
. -
. -
. -
. -

. -

(0.5)
. -
. -
. -
. -
. -

1.7
. -
. -
(0.8)
4.3

29.6
98.8
(66.9)
0.8
. -

5.2

62.3

805.8

. -
. -
. -
. -
(3.7)
1.2

306.4
(87.3)
(139.9)
. -
3.7
. -

305.9
(81.1)
(139.9)
5.9
. -
1.2

(0.5)

2.7

145.2

897.8

Company
At 1 March 2006
Total recognised income and expense for the year
Dividend on ordinary shares
Transfer on exercise/lapse of share options
Equity settled share-based payments

3.3
. -
. -
. -
. -

722.5
. -
12.2
. -
. -

At 28 February 2007

3.3

734.7

Total recognised income and expense for the year
Dividend on ordinary shares
Own shares acquired (note 23)
Exercised share options
Transfer on exercise/lapse of share options
Equity settled share-based payments

. -
. -
(0.2)
. -
. -
. -

. -
6.2
. -
5.9
. -
. -

At 29 February 2008

3.1

746.8

0.3
. -
. -
. -
. -

0.3

. -
. -
0.2
. -
. -
. -

0.5

On behalf of the Board
T. O’Brien
Chairman

M. Pratt
Chief Executive Ofﬁcer

4 6

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Statement of accounting policies

Signiﬁcant accounting policies
C&C Group plc (the ‘Company’) is a company tax resident and incorporated in Ireland. The Group’s ﬁnancial statements for the year
ended 29 February 2008 consolidate the individual ﬁnancial statements of the Company and its subsidiaries (together referred to as “the
Group”).

The Company and Group ﬁnancial statements, together the “ﬁnancial statements”, were authorised for issue by the Directors on 9 May
2008.

The accounting policies applied in the preparation of the ﬁnancial statements for the year ended 29 February 2008 are set out below.
These have been applied consistently for all periods presented in these ﬁnancial statements.

Statement of compliance
As required by European Union (EU) law, the Group ﬁnancial statements have been prepared in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the EU, which comprise standards and interpretations approved by the International
Accounting Standards Board (IASB). The individual ﬁnancial statements of the Company have been prepared in accordance with IFRSs
as adopted by the EU and as applied in accordance with the Companies Acts 1963 to 2006 which permits a Company that publishes
its Company and Group ﬁnancial statements together to take advantage of the exemption in section 148(8) of the Companies Act, 1963
from presenting its Company Income Statement which forms part of the approved Company ﬁnancial statements.

IFRSs as adopted by the EU applied by the Company and Group in the preparation of these ﬁnancial statements are those that were
effective for accounting periods ending 29 February 2008. The following provides a brief outline of the likely impact on future ﬁnancial
statements of relevant IFRSs adopted by the EU, which are not yet effective and have not been early adopted in these ﬁnancial statements:

•

IFRS 8 Operating Segments, which is effective for annual periods beginning on or after 1 January 2009, sets out the requirements
for disclosure of ﬁnancial and descriptive information about an entity’s operating segments in the Group ﬁnancial statements, its
products and services, the geographical areas in which it operates, and its major customers and will replace IAS 14 Segment
Reporting. The impact of this standard has not yet been fully assessed.

Basis of preparation
The Group and individual ﬁnancial statements of the Company are prepared on the historical cost basis except for the measurement at
fair value of derivative ﬁnancial instruments. The accounting policies have been applied consistently by Group entities and for all periods
presented. The ﬁnancial statements are presented in euro millions to one decimal place.

The preparation of ﬁnancial statements in conformity with IFRSs as adopted by the EU requires the use of certain critical accounting
estimates. In addition, it requires management to exercise judgement in the process of applying the Group and Company’s accounting
policies. The areas involving a high degree of judgement or complexity, or areas where assumptions and estimates are signiﬁcant to the
ﬁnancial statements, relate primarily to accounting for deﬁned beneﬁt pension schemes (note 21), measurement of ﬁnancial instruments
(note 22), share-based payments (note 4) and goodwill impairment (note 11) and are documented in the relevant accounting policies
and notes as indicated. The estimates and associated assumptions are based on historical experience and various other factors that are
believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values
of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only
that period or in the period of the revision and future periods if the revision affects both current and future periods.

Basis of consolidation
The consolidated ﬁnancial statements include the ﬁnancial statements of the Company and all subsidiaries. The ﬁnancial year ends of all
entities in the Group are coterminous.

The ﬁnancial statements of subsidiaries are included in the consolidated ﬁnancial statements from the date on which control over the
operating and ﬁnancial decisions is obtained and cease to be consolidated from the date on which control is transferred out of the
Group. Control exists when the Company 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.

On 30 April 2004, the Group, previously headed by C&C Group International Holdings Limited, underwent a re-organisation by virtue of
which C&C Group International Holdings Limited’s shareholders in their entirety exchanged their shares for shares in C&C Group plc, a
newly formed company, which then became the ultimate parent company of the Group. Notwithstanding the change in the legal parent
of the Group, this transaction has been accounted for as a reverse acquisition and the consolidated ﬁnancial statements are prepared
on the basis of the new legal parent having been acquired by the existing Group.

4 7

All inter-company balances and transactions, including recognised gains arising from inter-group transactions, have been eliminated
in full. Unrealised losses are eliminated in the same manner as recognised gains, except to the extent that they provide evidence of
impairment.

Company Financial Statements
Investments in subsidiaries are carried at cost less provision for impairment. Dividend income is recognised when the right to receive
payment is established.

Revenue recognition
Revenue comprises the fair value of goods supplied to external customers exclusive of inter-company sales and value added tax, after
allowing for discounts and other allowances. Revenue is recognised to the extent that it is probable that the economic beneﬁts will ﬂow
to the Group, that it can be reliably measured, and that the signiﬁcant risks and rewards of ownership of the goods have passed to the
buyer. This is deemed to occur on delivery.

Excise duty
Excise duty is levied at the point of production in the case of the Group’s manufactured products and at the point of importation in the
case of imported products in the key jurisdictions in which the Group operates. The Group accounts for excise duties as a cost of the
business and separately discloses this cost in operating costs.

Exceptional items
The Group has adopted an accounting policy and income statement format which seeks to highlight signiﬁcant items of income and
expense within Group results for the year. The Directors believe that this presentation provides a more helpful analysis as it highlights
one off items. Such items may include signiﬁcant restructuring costs, proﬁts or losses on disposal or termination of operations, litigation
costs and settlements, proﬁt or loss on disposal of investments, signiﬁcant impairment of assets and unforeseen gains/losses arising
on derivative instruments. The Directors in assessing the particular items, which by virtue of their scale and nature are disclosed in the
income statement and related notes as exceptional items, uses judgement.

Research and development
Expenditure on research that is not related to speciﬁc product development is recognised in the income statement as incurred.

Expenditure on the development of new or substantially improved products or processes is capitalised if the product or process is
technically feasible and commercially viable.

Discontinued operations
A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area
of operations and has been disposed of or is held for sale. When an operation is classiﬁed as a discontinued operation, the comparative
income statement is restated as if the operation had been discontinued from the start of the earliest period presented.

Segment reporting
A segment is a distinguishable component of the Group that is engaged in providing products (business segment) or in providing
products within a particular economic environment (geographical segment), which is subject to risks and returns different to those
of other segments. Supported by the Group’s internal organisational and management structure and its system of internal ﬁnancial
reporting, segmentation by business is regarded as being the predominant source and nature of the risks and returns facing the Group
and is thus the primary segment under IAS14 Segment Reporting. Geographical segmentation is therefore the secondary segment.

The analysis by segment includes both items directly attributable to a segment and those, including central overheads that can be
allocated on a reasonable basis. Unallocated items comprise mainly retirement beneﬁt obligations, borrowings and certain exceptional
expense items.

Foreign currency translation
Items included in the ﬁnancial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (“the functional currency”). The consolidated ﬁnancial statements are presented in euro, which
is the presentation currency of the Group and the functional currency of the Company.

Transactions in foreign currencies are translated into the functional currency of the entity at the foreign exchange rate ruling at the
date of the transaction. Non-monetary assets carried at historic cost are not subsequently retranslated. Monetary assets and liabilities
denominated in foreign currencies at the balance sheet date are translated into functional currencies at the foreign exchange rate ruling
at that date. Foreign exchange movements arising on translation are recognised in the income statement.

4 8

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Statement of accounting policies continued

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated to
euro at the foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign operations are translated to
euro at the average exchange rate for the ﬁnancial period. Foreign exchange movements arising on translation of the net investment in
a foreign operation, including those arising on long term intra Group loans for which settlement is neither planned nor likely to happen in
the foreseeable future, are recognised directly in equity in the foreign currency translation reserve through the statement of recognised
income and expense.

Any movements that have arisen since 1 March 2004, the date of transition to IFRS, are recognised in the currency translation reserve
and are recycled through the income statement on disposal of the related business. Translation differences that arose before the date of
transition to IFRS as adopted by the EU in respect of all non-euro denominated operations are not presented separately.

Goodwill
Goodwill is the excess of the consideration paid over the fair value of the identiﬁable assets, liabilities and contingent liabilities in a
business combination and relates to the future economic beneﬁts arising from assets, which are not capable of being individually,
identiﬁed and separately recognised.

Goodwill arising on acquisitions prior to the date of transition to IFRS as adopted by the EU has been retained, with the previous Irish
GAAP amount being its deemed cost, subject to being tested for impairment. Goodwill written off to reserves under Irish GAAP prior to
1998 has not been reinstated and will not be included in determining any subsequent proﬁt or loss on disposal.

Goodwill on acquisitions is initially measured at cost being the excess of the cost of the business combination over the acquirer’s
interest in the net fair value of the identiﬁable assets, liabilities and contingent liabilities. Following initial recognition, goodwill is measured
at cost less any accumulated impairment losses. Goodwill is not amortised but is reviewed for impairment annually or more frequently if
events or changes in circumstances indicate that the carrying value may be impaired.

As at the acquisition date, any goodwill acquired is allocated to each of the cash-generating units expected to beneﬁt from the
combination’s synergies. Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the
goodwill relates.

Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated
with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the
operation. Goodwill disposed of in this circumstance is measured on the basis of the relative values of the operation disposed of and the
proportion of the cash-generating unit retained.

Property, plant & equipment
Items of property, plant and equipment are stated at cost or deemed cost less accumulated depreciation and impairment losses
except for land, which is not depreciated. Certain items of property, plant and equipment that had been valued at fair value prior to the
date of transition to IFRS as adopted by the EU are measured on the basis of deemed cost, being the revalued amount as at the date
the revaluation was performed. Subsequent costs are included in an asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic beneﬁts associated with the item will ﬂow to the Group.

Property, plant and equipment is depreciated over its expected useful economic life on a straight line basis at the following rates:
Buildings
Plant and machinery
Motor vehicles
Storage tanks
Other equipment, incl. returnable bottles, cases and kegs

2%
6-10%
15%
3.33%
5-25%

The residual value and useful lives of property, plant and equipment are reviewed and adjusted if appropriate at each balance sheet
date.

On disposal of property, plant and equipment the cost and related accumulated depreciation and impairments are removed from the
ﬁnancial statements and the net amount, less any proceeds, is taken to the income statement.

The carrying amounts of the Group’s property, plant and equipment are reviewed at each balance sheet date to determine whether
there is any indication of impairment. An impairment loss is recognised when the carrying amount of an asset or its cash generation unit
exceeds its recoverable amount (being the greater of fair value less costs of sale and value in use). Impairment losses are recognised in
the income statement.

4 9

Inventories
Inventories are stated at the lower of cost and net realisable value. Cost includes all expenditure incurred in acquiring the inventories and
bringing them to their present location and condition and is based on the ﬁrst-in ﬁrst-out principle.

In the case of ﬁnished goods and work in progress, cost includes direct production costs and the appropriate share of production
overheads plus excise duties where appropriate. Net realisable value is the estimated selling price in the ordinary course of business,
less estimated costs of completion and estimated costs necessary to complete the sale.

Provision is made for slow-moving or obsolete stock where appropriate.

Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event,
and it is probable that an outﬂow of economic beneﬁts will be required to settle the obligation. If the effect of the time value of money is
material, provisions are determined by discounting the expected future cash ﬂows at an appropriate rate.

Leases
Where the Group has entered into lease arrangements on land and buildings the lease payments are allocated between land and
buildings and each component is assessed separately to determine whether it is a ﬁnance or operating lease.

Finance leases, which transfer to the Group substantially all the risks and rewards to ownership of the leased asset, are recognised
at the inception of the lease at the fair value of the leased asset or, if lower, the present value of the minimum lease payments. The
corresponding liability to the lessor is included in the balance sheet as a ﬁnance lease obligation. Lease payments are apportioned
between ﬁnance charges and a reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of
the liability. Finance charges are charged to the income statement as part of ﬁnance costs.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

Leases where the lessor retains substantially all the risks and beneﬁts of ownership of the assets are classiﬁed as operating leases.
Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the lease term.

Retirement beneﬁt obligations
The Group operates a number of deﬁned contribution and deﬁned beneﬁt pension schemes.

Obligations to the deﬁned contribution pension schemes are recognised as an expense in the income statement as the related
employee service is received. Under these schemes, the Group has no obligation, either legal or constructive, to pay further
contributions in the event that the fund does not hold sufﬁcient assets to meet its beneﬁt commitments.

The liabilities and costs associated with the Group’s deﬁned beneﬁt pension schemes, all of which are funded and administered under
trusts which are separate from the Group, are assessed on the basis of the projected unit credit method by professionally qualiﬁed
actuaries and are arrived at using actuarial assumptions based on market expectations at the balance sheet date. The discount rates
employed in determining the present value of the schemes’ liabilities are determined by reference to market yields at the balance sheet
date on high-quality corporate bonds of a currency and term consistent with the currency and term of the associated post-employment
beneﬁt obligations. When the beneﬁts of a deﬁned beneﬁt scheme are improved, the portion of the increased beneﬁt relating to the past
service of employees is recognised as an expense in the income statement on a straight-line basis over the average period until the
beneﬁts become vested. To the extent that the enhanced beneﬁts vest immediately, the related expense is recognised immediately in
the income statement. The net surplus or deﬁcit arising on the Group’s deﬁned beneﬁt pension schemes is shown within either non-
current assets or non-current liabilities on the face of the Group Balance Sheet. The deferred tax liabilities and assets arising on pension
scheme surpluses and deﬁcits are disclosed separately within deferred tax assets or liabilities, as appropriate.

The expected increase in the present value of scheme liabilities arising from employee service in the current or prior periods is
recognised in arriving at operating proﬁt or loss together with the expected returns on the scheme assets and the increase during the
period in the present value of the scheme liabilities arising from the passage of time. Differences between the expected and the actual
return on plan assets, experience gains and losses on scheme liabilities, together with the effect of changes in the current or prior
assumptions underlying the liabilities are recognised in the statement of recognised income and expense.

The deﬁned beneﬁt pension asset or liability in the Group Balance Sheet comprises the total for each plan of the present value of the
deﬁned beneﬁt obligation (using a discount rate based on high-quality corporate bonds) less the fair value of plan assets (measured at
bid value) out of which the obligations are to be settled directly.

5 0

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Statement of accounting policies continued

Company
The Company has no direct employees and is not the sponsoring employer for any of the Group’s deﬁned beneﬁt pension schemes.
There is no stated policy within the Group in relation to the obligations of Group companies to contribute to scheme deﬁcits. Group
companies make contributions to the schemes as requested by the sponsoring employers.

Share-based payments
The Group operates both an equity settled executive Share Option Scheme and an equity settled share-based Long Term Incentive
Plan (the “LTIP”). Its policy in relation to the granting of share options together with the nature of the underlying market and non-market
performance and other vesting conditions is addressed in the Report on Directors’ Remuneration on pages 30 to 31 and in note 4 to
the ﬁnancial statements.

Equity settled share-based payment transactions
Group share schemes allow employees to acquire shares in the Company. The fair value of share entitlements granted is recognised as
an employee expense in the income statement with a corresponding increase in equity. Share options granted under the share option
scheme are subject to non-market vesting conditions. Share entitlements granted by the Company under the LTIP are subject to both
market and non-market vesting conditions. Market conditions are incorporated into the calculation of fair value at grant date. Non-
market vesting conditions are not taken into account when estimating the fair value of entitlements as at the grant date. The expense
for the share entitlements shown in the income statement is based on the fair value of the total number of entitlements expected to vest
and is allocated to accounting periods on a straight line basis over the vesting period. The cumulative charge to the income statement is
reversed only where entitlements do not vest because all non-market performance conditions have not been met or where an employee
in receipt of share entitlements leaves the Group before the end of the vesting period. No reversal is recorded for failure to vest as a
result of market conditions not being met.

The proceeds received by the Company on the vesting of share entitlements are credited to share capital and share premium when the
share entitlements are exercised. Amounts included in the share based payments reserve are transferred to retained earnings when
vested options are exercised, forfeited or lapse.

The Group has no exposure in respect of cash-settled share-based payment transactions and share-based payment transactions with
cash alternatives as deﬁned by IFRS 2 Share-Based Payment.

Tax
Current tax
Current tax expense represents the expected tax amount to be paid in respect of taxable income for the current year. Current tax for the
current and prior years, to the extent that it is unpaid, is recognised as a liability in the balance sheet.

Deferred tax
Deferred tax is provided on the basis of the balance sheet liability method on all temporary differences at the balance sheet date.
Temporary differences are deﬁned as the difference between the tax bases of assets and liabilities and their carrying amounts in the
ﬁnancial statements. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which
the asset is recognised or the liability is settled based on tax rates and tax laws that have been enacted or substantively enacted at the
balance sheet date.

Deferred tax assets and liabilities are recognised for all temporary differences except where they arise from: -
•

the initial recognition of goodwill or the initial recognition of an asset or a liability in a transaction that is not a business combination
and affects neither the accounting proﬁt or loss nor the taxable proﬁt or loss at the time of the transaction, or,
temporary differences associated with investments in subsidiaries where the timing of the reversal of the temporary difference is
subject to the Group’s control and it is probable that a reversal will not be recognised in the foreseeable future.

•

Deferred tax assets in respect of deductible temporary differences are recognised only to the extent that it is probable that taxable
proﬁts or taxable temporary differences will be available against which to offset these items. The carrying amounts of deferred tax
assets are subject to review at each balance sheet date and are reduced to the extent that future taxable proﬁts are considered to be
inadequate to allow all or part of the deferred tax asset to be utilised.

Deferred tax and current tax are recognised as a component of the tax expense in the income statement except to the extent that
they relate to items recognised directly in equity (for example, certain derivative ﬁnancial instruments and actuarial gains and losses on
deﬁned beneﬁt pension schemes), in which case the related tax is recognised in equity.

5 1

Financial instruments
Trade & other receivables
Trade receivables, are recognised and carried at original invoice amount less an allowance for incurred losses. Provision is made when
there is objective evidence that the Group will not be in a position to collect the associated debts. Bad debts are written off in the
income statement on identiﬁcation.

Cash & cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short term deposits with an original maturity of
three months or less. Bank overdrafts that are repayable on demand and form part of the Group’s cash management are included as a
component of cash and cash equivalents for the purpose of the statement of cash ﬂows.

Trade & other payables
Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
method, unless the maturity date is less than 6 months.

Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs and are subsequently measured at
amortised cost with any difference between the amount originally recognised and redemption value being recognised in the income
statement over the period of the borrowings on an effective interest rate basis. Where the reﬁnancing of a loan results in a signiﬁcant
change in the present value of the expected cashﬂows, the original loan is de-recognised and the replacement loan is recognised at fair
value.

Derivative ﬁnancial instruments
The Group uses derivative ﬁnancial instruments (principally interest rate swaps and forward foreign exchange contracts) to hedge its
exposure to foreign exchange and interest rate risks arising from operational and ﬁnancing activities. The Group does not enter into
speculative transactions.

Derivative ﬁnancial instruments are measured at fair value at each reporting date. The fair value of interest rate swaps is the estimated
amount that the Group would receive or pay to terminate the swap at the balance sheet date, taking into the account current interest
and currency exchange rates and the current creditworthiness of the swap counterparties. The fair value of forward exchange contracts
is calculated by reference to current forward exchange rates for contracts with similar maturity proﬁles and equates to the quoted
market price at the balance sheet date.

Gains or losses on re-measurement to fair value are recognised immediately in the income statement except where derivatives are
designated and qualify for hedge accounting in which case recognition of any resultant gain or loss depends on the nature of the item
being hedged.

Derivative ﬁnancial instruments entered into by the Group are for the purposes of hedge accounting classiﬁed as cash ﬂow hedges
which hedge exposure to ﬂuctuations in future cash ﬂows derived from a particular risk associated with a recognised asset, liability, a
ﬁrm commitment or a highly probable forecast transaction.

Where a derivative ﬁnancial instrument is designated as a hedge of the variability in cash ﬂows of a recognised liability, a ﬁrm
commitment or a highly probable forecasted transaction, the effective part of any gain or loss on the derivative ﬁnancial instrument is
recognised as a separate component of equity with the ineffective portion being reported in the income statement. The associated
gains or losses that had previously been recognised in equity are transferred to the income statement contemporaneously with the
materialisation of the hedged transaction, except when a ﬁrm commitment or forecast transaction results in the recognition of a non-
ﬁnancial asset or a non-ﬁnancial liability, in which case the cumulative gain or loss is removed from equity and included in the initial
measurement of the asset or liability.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualiﬁes for
special hedge accounting. At that point in time, if the hedged transaction is still probable, any cumulative gain or loss on the hedging
instrument recognised as a separate component of equity is kept in equity until the forecast transaction occurs with future changes in
fair value recognised in the income statement. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss
recognised in equity is transferred to the income statement in the period.

Share capital
Ordinary shares are classiﬁed as equity instruments. Incremental costs directly attributable to the issuance of new shares are shown in
equity as a deduction from the gross proceeds.

5 2

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Statement of accounting policies continued

Own shares
The cost of ordinary shares purchased by the Company on market is recorded as a deduction from retained earnings on the face
of the Group and Company Balance Sheet. An amount equal to the nominal value of shares cancelled is included within the capital
redemption reserve fund.

Dividends
Final dividends on ordinary shares are recognised as a liability in the ﬁnancial statements only after they have been approved at an
annual general meeting of the Company. Interim dividends on ordinary shares are recognised when they are paid.

Company ﬁnancial assets
The change in legal parent of the Group on 30 April 2004 as disclosed in detail in that year’s annual report was accounted for as a
reverse acquisition. This transaction gave rise to a ﬁnancial asset in the Company’s accounts, which relates to the value of its investment
in subsidiaries. Financial assets are reviewed for impairment if there are any indications that the carrying value may not be recoverable.

Share options granted to employees of subsidiary companies are accounted for as an increase in the carrying value of the investment in
subsidiaries and the share-based payment reserve.

Notes

forming part of the ﬁnancial statements

5 3

1 Segment reporting

Segmental revenue and operating proﬁt information is presented below in respect of the Group’s continuing business and
geographical segments while the relevant information in relation to the Group’s discontinued Soft drinks and Snacks business is
set out in note 8. Segmental assets and liabilities for the full Group as at each year end are presented below. The primary format,
business segments, is based on the Group’s management and internal reporting structure and reﬂects the dominant source and
nature of risks and returns arising from the Group’s business.

The Group analyses its business into three main segments as follows: -

(i) Cider

This segment includes the Group’s cider products, with Bulmers in the Republic of Ireland and Magners in all other markets
being the two main brands involved.

(ii) Spirits & liqueurs

This segment consists of four brands; Tullamore Dew, Carolans Irish Cream, Frangelico Liqueur and Irish Mist Liqueur, all of
which are owned by the Group and are marketed internationally.

(iii) Distribution

This segment relates to the distribution of wine and spirits and agency products in both the Republic of Ireland and Northern
Ireland, and wholesaling to the licensed trade in Northern Ireland.

The analysis by segment includes both items directly attributable to a segment and those, including central overheads, that can
be allocated on a reasonable basis. Unallocated items comprise mainly retirement beneﬁt obligations, interest bearing loans &
borrowings, derivative ﬁnancial assets / liabilities, current income tax, deferred tax and certain exceptional expense items.

Class of business analysis

2008

Revenue
€m

Operating
proﬁt
€m

Assets
€m

Liabilities
€m

Revenue
€m

2007

Operating
proﬁt
€m

Assets
€m

Liabilities
€m

Cider

Spirits & liqueurs
Soft drinks
Distribution

470.5
87.5
. -
121.0

107.5
15.8
. -
1.9

664.5
74.1
. -
29.5

(55.4)
(15.7)
. -
(11.4)

517.9
79.1

178.9
17.7

141.5

3.0

633.2
72.2
123.1
47.4

(68.2)
(17.4)
(31.6)
(16.6)

Total before unallocated items

679.0

125.2

768.1

(82.5)

738.5

199.6

875.9

(133.8)

Unallocated items:
Exceptional items (note 5)
Deferred tax

Current income tax

Derivative ﬁnancial assets / (liabilities)
Retirement beneﬁt obligations

Group net borrowings

. -
. -
. -
. -
. -
. -

(15.6)
. -
. -
. -
. -
. -

. -
2.9
. -
29.3
. -
32.7

. -
(6.4)
(6.9)
(1.9)
(27.2)
(288.9)

. -
. -
. -
. -
. -
. -

(8.3)
. -
. -
. -
. -
. -

. -
8.7
. -
6.0
. -
40.7

. -
(5.0)
(6.2)
(4.2)
(51.5)
(346.1)

679.0

109.6

833.0

(413.8)

738.5

191.3

931.3

(546.8)

5 4

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Notes continued

forming part of the ﬁnancial statements

1 Segment reporting (continued)
Geographical analysis of revenue, assets and liabilities by country of operation

Republic of Ireland
Rest of the world

Revenue
€m

583.4
95.6

2008
Assets
€m

749.3
18.8

Liabilities
€m

Revenue
€m

2007
Assets
€m

Liabilities
€m

(70.8)
(11.7)

638.4
100.1

841.1
34.8

(121.1)
(12.7)

Total before unallocated items

679.0

768.1

(82.5)

738.5

875.9

(133.8)

Geographical analysis of revenue by country of destination

Republic of Ireland
UK
Rest of Europe
North America

Rest of the world

Total

Other segment information by class of business

Cider

Spirits & liqueurs
Distribution
Discontinued operations

Other segment information by country of operation

Republic of Ireland
Rest of the world

2008
€m

245.5
336.4
54.0
35.8
7.3

2007
€m

268.2
381.6
45.6
35.1
8.0

679.0

738.5

2008

2007

Capital

expenditure Depreciation
€m

€m

expenditure Depreciation
€m

€m

Goodwill
impairment
€m

89.2
1.1
. -
2.0

14.8
0.8
0.1
4.6

91.2
1.0
0.2
8.2

10.5
0.7
0.2
10.0

92.3

20.3

100.6

21.4

. -
. -
8.3
. -

8.3

2008

2007

Capital

expenditure Depreciation
€m

€m

expenditure Depreciation
€m

€m

Goodwill
impairment
€m

92.0
0.3

19.8
0.5

99.6
1.0

20.3
1.1

92.3

20.3

100.6

21.4

8.3
. -

8.3

2 Operating costs

Raw material cost of goods sold
Inventory write-down
Excise duties
Employee remuneration (note 3)
Direct brand marketing

Other operating, selling and administration costs

Depreciation

Goodwill impairment charge

Research and development costs
Auditor remuneration:
. - audit services
. - non audit services
Operating lease rentals:
. - plant and machinery
. - other

Before
exceptional
items
€m

2008

Exceptional
items
€m

289.4
2.4
124.1
85.4
101.2
51.5
20.3
. -
0.4

0.4
0.1

1.2
2.6

. -
. -
. -
15.6
. -
. -
. -
. -
. -

. -
. -

Before
exceptional
items
€m

2007

Exceptional
items
€m

370.1
. -
139.8
105.3
82.5
67.0
21.4
. -
0.6

0.4
0.1

1.3
4.3

. -
. -
. -
. -
. -
. -
. -
8.3
. -

. -
. -

Total
€m

289.4
2.4
124.1
101.0
101.2
51.5
20.3
. -
0.4

0.4
0.1

1.2
2.6

5 5

Total
€m

370.1
. -
139.8
105.3
82.5
67.0
21.4
8.3
0.6

0.4
0.1

1.3
4.3

Allocated to discontinued operations

(125.2)

. -

(125.2)

(253.9)

. -

(253.9)

Total relating to continuing operations

553.8

15.6

569.4

538.9

8.3

547.2

679.0

15.6

694.6

792.8

8.3

801.1

3 Employee numbers & remuneration costs

The average number of persons employed by the Group (including executive directors) during the year, analysed by category, was
as follows:

Production
Sales & marketing
Distribution
Administration

Total

The actual number of persons employed by the Group as at 29 February 2008 was 821 (2007: 1,723).

The aggregate remuneration costs of these employees were:

Wages, salaries and other short term employee beneﬁts

Severance costs (note 5)
Social welfare costs
Retirement beneﬁt obligations – deﬁned beneﬁt schemes (note 21)
Retirement beneﬁt obligations – deﬁned contribution schemes
Equity settled share-based payments (note 4)

Charged to the income statement

Actuarial gain on deﬁned beneﬁt pension schemes (note 21)

Total employee beneﬁts

2008

Number

2007
Number

465
316
297
138

573
459
519
180

1,216

1,731

2008
€m

70.6
15.6
7.0
5.8
0.8
1.2

2007
€m

83.3
0.7
7.9
8.6
0.5
4.3

101.0

105.3

(2.0)

(1.5)

99.0

103.8

5 6

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Notes continued

forming part of the ﬁnancial statements

4 Share-based payments

In May 2004, the Group established an equity settled executive share option scheme under which options to purchase shares in
C&C Group plc are granted to certain executive directors and senior management. Under the terms of the scheme, the options are
exercisable at the market price prevailing at the date of the grant of the option. The maximum grant that can normally be made to
any individual in any one year is an award of 150% of salary in that year. Options were granted in May 2004, June 2005, June 2006
and June 2007 under this scheme.

Options will not normally be exercisable until three years after the date of grant and are subject to meeting a speciﬁc performance
target. This performance target requires the Group’s earnings per share (before exceptional items) to increase by 5% in excess of
the Irish Consumer Price Index over three years on a compound basis, in order for options to vest. If after the relevant three-year
period the performance target is not met the options lapse.

In January 2006, the Group established a Long Term Incentive Plan (LTIP) under the terms of which options to purchase shares
in C&C Group plc are granted at nil cost to certain key executive employees. Options under this scheme were granted in January
2006, June 2006 and June 2007.

Under this plan, awards of up to 60% of basic salary may be granted. For the shares to vest fully, total shareholder return (TSR)
must be in the top quartile of a comparator group over a three-year period. None of the award vests for below median performance.
30% of the award vests for median performance with straight-line pro-rating between the median and upper quartile. In addition to
the total shareholder return condition, earnings per share growth (before exceptional items) must increase by 5% in excess of the
Irish Consumer Price Index on a compound basis over the same three-year period. If at the end of the relevant period both these
conditions are not met the options lapse.

The fair value assigned to the options granted were computed in accordance with the trinomial valuation methodology and the fair
value of the LTIP options granted were computed in accordance with the stochastic model. As per IFRS 2 Share-based Payment
market based vesting conditions, such as the LTIP TSR condition, have been taken into account in establishing the fair value of
equity instruments granted, other non-market or performance related conditions were not taken into account in establishing the fair
value of equity instruments granted, instead these non-market vesting conditions are taken into account by adjusting the number
of equity instruments included in the measurement of the transaction amount so that, ultimately the amount recognised for services
received as consideration for the equity instruments granted is based on the number of equity instruments that eventually vest. The
main assumptions used in the valuations were as follows: -

LTIP options
granted

Options LTIP options
granted
granted

Options
granted

June 2007

June 2006

June 2006 January 2006

June 2005

May 2004

Exercise price
Risk free interest rate
Expected volatility
Expected life
Dividend yield

€0.00
n/a
30.2%
3.5 years
2.5%

€11.53
4.33%
25%

€0.00
n/a
23.4%
7 years 3.5 years
2.5%

2.5%

€6.52
3.15%
25%

€0.00
n/a
24%
7 years 3.5 years
5%

2.5%

€3.56
3.0%
25%
7 years
5%

€2.26
3.9%
27%
7 years
5%

Expected volatility was based to the extent possible on an analysis of the historic volatility of C&C Group plc shares since listing
on 30 April 2004 and other quoted companies on the Irish and London Stock Exchanges, reﬂecting the short trading history of the
Group. Further details of the terms applicable to these option schemes are outlined in the report of the Remuneration Committee on
pages 30 to 35.

4 Share-based payments (continued)

Details of the shares and share options granted under these schemes are as follows:

Grant
Date

13 May 2004
20 June 2005
12 Jan 2006 (LTIP)
15 June 2006
15 June 2006 (LTIP)
13 June 2007
13 June 2007 (LTIP)

Number

Vesting
period

of options Outstanding
at 29 Feb 08

granted

3 years 4,914,900 2,379,800
3 years 1,708,200 1,055,000
44,365
44,365
3 years
564,000
846,900
3 years
127,600
127,600
3 years
318,500
318,500
3 years
82,100
82,100
3 years

8,042,565 4,571,365

Fair
Market
value
value
Grant
price at grant date at grant date
€
0.49
0.72
4.63
1.24
4.48
2.76
5.26

€
2.26
3.56
5.53
6.52
6.52
11.53
11.53

€
2.26
3.56
. -
6.52
. -
11.53
. -

APSS Scheme

189,061

. -

11.39

Total

8,231,626 4,571,365

5 7

Expense in
Income Statement
2008
€m
0.1
0.3
0.1
0.5
0.2
. -
. -

2007
€m
0.8
0.5
0.1
0.3
0.1
. -
. -

1.2

. -

1.2

1.8

2.5

4.3

The amount charged to the income statement in respect of the above option grants assumes that all outstanding options granted
during 2004, 2005 and 2006 will vest and all qualifying conditions will be achieved. Given that, in order for options to vest, the
non-market performance target requires the Group’s earnings per share (before exceptional items) to increase by 5% in excess of
the Irish Consumer Price Index over three years on a compound basis, and that adjusted basic EPS for the year ended 29 February
2008 fell by 42% the Directors consider the likelihood of achieving the non-market vesting conditions for the 2007 options and LTIPs
as remote and therefore it is currently assumed that no options granted during 2007 will vest.

The amount charged to the income statement includes an accelerated charge of €0.2m (2007: €0.1m in relation to the Snacks
business) in relation to employees leaving the Group on the disposal of the Soft drinks business to Britvic plc. These employees
were deemed ‘good leavers’ under the terms of the scheme, with all share options granted deemed to have vested and the exercise
period reduced from 4 years to 6 months.

A summary of activity under the Group’s share option schemes together with the weighted average exercise price of the share
options is as follows:

Outstanding at beginning of year

Granted

Exercised
Forfeited / lapsed

Outstanding at end of year

2008

2007

Weighted
average
exercise
price
€m

Number of
options

6,787,265

3.02 6,667,465

400,600
(2,354,900)
(261,600)

9.17
2.53
6.52

974,500
(772,700)
(82,000)

4,571,365

3.61 6,787,265

Weighted
average
exercise
price
€m

2.58

5.67
2.59
2.70

3.02

The number of share options exercisable at 29 February 2008 was 2,379,800 (2007: nil).

The unvested options outstanding at 29 February 2008 have a weighted average vesting period outstanding of 1.2 years. The
weighted average contractual life of vested and unvested share options is 4.1 years.

The weighted average share price at date of exercise of all options exercised during the period was €8.84 (2007: €9.16).

In 2001, the Group entered into an agreement with trade unions representing the majority of its employees, which provided for the
establishment of an approved save as you earn scheme and of an approved proﬁt sharing scheme. A discretionary scheme was
put in place for the year ended 28 February 2007. Under this scheme, due to exceptional earnings per share growth in that year,
the Remuneration Committee and the Board approved and granted to employees shares to the value of between 3% and 4% of
basic salary remuneration to employees subject to a minimum allocation of €1,000 per employee. The cost, which was reﬂected in
the income statement in 2006/07, was €2.5m. The Group purchased 189,061 shares during the current ﬁnancial year and placed
these shares in Irish/UK Revenue approved employee trusts where they are held in trust on behalf of each employee and where each
employee has full voting rights and dividend entitlements. However, tax penalties apply should the employees sell the shares before
the vesting period expires. There is no allocation of shares under this scheme proposed for the current ﬁnancial year. Participating
employees to whom shares are awarded are entitled to all dividends declared and have full voting rights while the shares are held in
the trusts.

5 8

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Notes continued

forming part of the ﬁnancial statements

5 Exceptional items

Severance costs associated with Group restructuring
Gain on mark to market of derivative ﬁnancial instruments

(Proﬁt) on disposal of property, plant & equipment
(Proﬁt) on disposal of subsidiary undertakings, net of tax
Impairment of goodwill

Total
Allocated to discontinued operations

Total relating to continuing operations

2008
€m

15.6
(9.1)
. -
(137.4)
. -

(130.9)
137.4

2007
€m

. -
. -
(4.6)
(32.9)
8.3

(29.2)
37.5

6.5

8.3

(a) Severance costs associated with Group restructuring

In November 2007, the Group announced a reorganisation and cost reduction programme with the objective of: reducing
operating costs by realigning the cost structure to the current sales volumes base; strengthening the Great Britain commercial
team; and streamlining the Group’s organisational structure. This involved a head count reduction in the region of 150 people
across the Group. The programme comprising severance and other employee related costs resulted in an exceptional cost
before taxation of €15.6m.

(b) Gain on mark to market of derivative ﬁnancial instruments

A shortfall in expected Sterling revenues resulted in surplus Sterling hedges in 2007/08 and 2008/09 that were effectively
cancelled during the ﬁnancial year giving rise to a gain of €9.1m. The gain was classiﬁed within exceptional items on the basis of
its materiality and the unforeseen circumstances giving rise to it, (see note 6 for further details).

The proﬁt on disposal of property, plant & equipment in the prior year related to the disposal of property in the Snacks business.

(d) Proﬁt on disposal of subsidiary

On 29 August 2007, the Group completed the disposal of its Soft drinks division and related assets (Republic of Ireland
Wholesaling) to Britvic plc, for a consideration of €246.6m, realising a proﬁt after tax of €137.4m. During the prior year, the
Group completed the disposal of its Snacks division for a gross consideration of €62.3m, realising a proﬁt after tax of €32.9m
(see note 8 for further details).

(e) Impairment of goodwill

The loss of distribution rights to the Fosters wine brands during the prior ﬁnancial year, coupled with weaker demand for
premium wines, and a reduced margin on Long Alcohol Drinks (LAD) agency brands, resulted in an impairment of goodwill in the
Distribution segment and consequently the write off of €8.3m of the carrying value of goodwill attributed to this division.

The taxation implication of the exceptional items is: a credit of €0.7m to continuing activities in relation to both the gain on mark
to market of the derivative ﬁnancial instruments and the reorganisation costs associated with the Group restructuring; and a
charge of €4.5m to discontinued operations in relation to Capital Gains Tax charged on the transfer of brands to Britvic plc on
disposal of the Soft drinks business. The reported proﬁt on disposal is net of this charge (2007: €0.2m included as a charge
within discontinued operations relating to the disposal of property arising in the Snacks business).

6 Finance income and expense

Recognised in income statement

Finance income:
Interest income on bank deposits

Gain on mark to market of derivative ﬁnancial instruments arising on surplus sterling hedges (note 22)

Total ﬁnance income

Finance expenses:
Interest expense on interest bearing borrowings
Issue costs written off on reﬁnancing of debt
(Income)/expense arising on interest rate swaps designated as cash
ﬂow hedges against interest exposure
Ineffective portion of change in fair value of cash ﬂow hedges

Total ﬁnance costs

Net ﬁnance expense

Recognised directly in equity

Effective portion of changes in fair value of cash ﬂow hedge
Fair value of cash ﬂow hedges transferred to income statement
Fair value of cash ﬂow hedges transferred to ﬁnance expenses
on discontinuance of hedge accounting (note 22)
Foreign currency translation differences for foreign operations

Net ﬁnance income recognised directly in equity

Income tax expense

(a) Analysis of charge in year recognised in income statement
Current income tax expense:

Irish corporation tax
Foreign corporation tax
Adjustment in respect of previous years

Total current income tax

Deferred tax expense:
Irish
Foreign

Total deferred tax

Total income tax expense recognised in income statement
Allocated to discontinued operations

Total relating to continuing operations

The tax assessed for the year is lower than that calculated at the standard rate of corporation tax in
the Republic of Ireland as explained below.

Proﬁt before tax
Proﬁt from discontinued operations
Proﬁt on disposal of Soft drinks/Snacks business

5 9

2008
€m

2007
€m

(2.1)
(9.1)

(11.2)

17.2
1.9

(2.0)
(0.2)

16.9

5.7

15.0
1.4

0.5
(1.8)

15.1

(1.9)
. -

(1.9)

15.6
. -

0.6
0.1

16.3

14.4

6.6
(2.8)

. -
0.2

4.0

2008
€m

2007
€m

9.0
2.6
(0.7)

10.9

1.2
(0.1)

1.1

20.0
2.5
0.7

23.2

(0.5)
0.3

(0.2)

12.0
(0.8)

23.0
(2.1)

11.2

20.9

2008
€m

103.9
5.6
141.9

2007
€m

176.9
21.4
32.9

251.4

231.2

6 0

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Notes continued

forming part of the ﬁnancial statements

Income tax expense (continued)

Tax at standard rate of corporation tax in the Republic of Ireland of 12.5%
Actual tax charge is affected by the following:
Expenses not deductible for tax purposes
Adjustments in respect of prior years
Differences in effective tax rates on overseas earnings

Manufacturing relief
Non taxable income (incl. disposal of subsidiary undertakings)
Other differences

Total income tax expense

(b) Deferred tax liability/(asset) recognised directly in equity

Deferred tax arising on movement in deﬁned beneﬁt pension obligations
Deferred tax arising on movement in derivatives designated as cashﬂow hedges

(c) Factors that may affect future charges
Manufacturing relief in Republic of Ireland is due to expire on 31 December 2010.

2008
€m

2007
€m

31.4

28.9

1.0
(0.7)
0.9
(2.4)
(17.7)
(0.5)

1.6
0.7
1.6
(5.1)
(4.1)
(0.6)

12.0

23.0

1.0
1.9

2.9

(0.5)
0.4

(0.1)

8 Discontinued operations

On 15 August 2007, the Group received unconditional approval from the Irish Competition Authority to sell its Soft drinks business
to Britvic plc. The business was deemed to be ‘held for sale’ from this date. The sale was completed on 29 August 2007. In the
prior year, on 21 September 2006, the Group completed the disposal of its Snacks business. In line with IFRS 5 Non-current Assets
Held for Sale and Discontinued Operations, depreciation was not charged on property, plant & equipment held in these businesses
from the date the assets were classiﬁed as ‘held for sale’ and the businesses are presented as discontinued operations for all
periods presented and are shown separately from continuing operations.

Results of discontinued operations

Revenue
Expenses
Exceptional items

Results from discontinued operations before tax
Income tax expense

Results from discontinued operations
Gain on sale of discontinued operations
Capital gains tax arising on sale of discontinued operations

Proﬁt from discontinued operations (net of income tax)

Discontinued operations – exceptional items

(Proﬁt) on disposal of property, plant & equipment
Taxation effect on exceptional items

Soft drinks
Date of
Disposal
€m

Soft drinks
& Snacks
28 February
2007
€m

130.8
(125.2)
. -

270.7
(253.9)
4.6

5.6
(0.8)

4.8
141.9
(4.5)

142.2

2008
€m

. -
. -

. -

21.4
(2.1)

19.3
32.9
. -

52.2

2007
€m

(4.6)
0.2

(4.4)

8 Discontinued operations (continued)
Cash ﬂows from discontinued operations

Net cash from operating activities
Net cash from investing activities
Net cash from ﬁnancing activities

Net cash inﬂow from discontinued operations

Depreciation

Capital expenditure

Effect of disposal on ﬁnancial position of the Group

Property, plant & equipment

Goodwill

Inventories
Trade & other receivables
Deferred tax assets/(liabilities)
Trade & other payables
Provisions
Retirement beneﬁt obligations
Foreign currency reserve de-recognised on disposal

Net assets and liabilities disposed of

Consideration receivable
Costs of disposal payable

Net proceeds receivable

Proﬁt arising on disposal before tax
Tax payable

Proﬁt arising on disposal after tax

6 1

2008
€m

(0.8)
234.5
(20.0)

2007
€m

34.0
4.3
(23.0)

213.7

15.3

4.6
(2.0)

10.0
(8.2)

Soft drinks

Snacks

2008
€m

57.1
32.2
18.5
52.2
3.0
(50.3)
(0.6)
(19.0)
(0.5)

2007
€m

0.9
26.7
0.9
6.4
(0.1)
(7.3)
(0.6)
. -
. -

92.6

26.9

246.6
(12.1)

234.5

141.9
(4.5)

137.4

62.3
(2.5)

59.8

32.9
. -

32.9

Costs of disposal payable shown above includes an allowance for costs not yet paid relating principally to work to be completed on
property assets transferred.

9 Dividends

Dividends paid

Final: paid 15.0c per ordinary share in July 2007 (2007: 8.5c paid in July 2006)
Interim: paid 12.0c per ordinary share in December 2007 (2007: 12.0c paid in December 2006)

Total equity dividends

Settled as follows:
Paid in cash
Scrip dividend

2008
€m

49.2
38.1

87.3

81.1
6.2

87.3

2007
€m

27.7
39.2

66.9

54.7
12.2

66.9

The Directors have proposed a ﬁnal dividend of 15.0 cent per share (2007: 15.0 cent), which is subject to shareholder approval at
the AGM, giving a total dividend for the year of 27.0 cent per share (2007: 27.0 cent).

Dividends declared after the balance sheet date are not recognised as a liability at the balance sheet date.

6 2

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Notes continued

forming part of the ﬁnancial statements

10 Earnings per ordinary share

Earnings as reported
Adjustments for exceptional items net of tax (note 5)

Earnings as adjusted for exceptional items net of tax

Number of shares at beginning of year

Shares issued in lieu of dividend
Shares issued in respect of options exercised

Own shares purchased and cancelled

Number of shares at end of year

Weighted average number of ordinary shares (basic)
Adjustment for the effect of conversion of options

Weighted average number of ordinary shares, including options (diluted)

Basic earnings per share
Basic earnings per share
Adjusted basic earnings per share

Diluted earnings per share
Diluted earnings per share
Adjusted diluted earnings per share

Continuing operations

Earnings from continuing operations as reported
Adjustments for exceptional items net of tax (note 5)

2008
€m

2007
€m

234.9
(131.6)

208.2
(29.0)

103.3

179.2

Number
‘000

327,569
727
2,355
(17,658)

325,204
1,592
773
-

312,993

327,569

321,229
2,361

326,517
4,609

323,590

331,126

Cent
73.1
32.2

72.6
31.9

€m
92.7
5.8

Cent
63.8
54.9

62.9
54.1

€m
156.0
8.3

Earnings from continuing operations as adjusted for exceptional items net of tax

98.5

164.3

Basic earnings per share
Basic earnings per share
Adjusted basic earnings per share

Diluted earnings per share
Diluted earnings per share
Adjusted diluted earnings per share

Discontinued operations

Earnings from discontinued operations as reported
Adjustments for exceptional items net of tax (note 5)

Cent
28.9
30.7

28.6
30.4

€m
142.2
(137.4)

Cent
47.8
50.3

47.1
49.6

€m
52.2
(37.3)

Earnings from discontinued operations as adjusted for exceptional items net of tax

4.8

14.9

Basic earnings per share
Basic earnings per share
Adjusted basic earnings per share

Diluted earnings per share
Diluted earnings per share
Adjusted diluted earnings per share

Cent
44.2
1.5

44.0
1.5

Cent
16.0
4.6

15.8
4.5

6 3

10 Earnings per ordinary share (continued)

The average market value of the Company’s shares for purposes of calculating the dilutive effect of share options was based on
quoted market prices for the period of the year that the options were outstanding.

The issue of certain shares in respect of employee share options is contingent upon the satisfaction of speciﬁed performance
conditions in addition to the passage of time. In accordance with IAS 33 Earnings per Share, these contingently issuable shares
(totalling 400,600 at 29 February 2008 and nil at 28 February 2007) are excluded from the computation of diluted earnings per share
where the vesting conditions would not have been satisﬁed as at the end of the reporting period.

11 Goodwill
Goodwill is analysed by business segment as follows:-

Spirits Soft drinks/

Cider
€m

& liqueurs
€m

Snacks Distribution
€m

€m

Total
€m

Cost

At 1 March 2006
Impairment charge recognised in the year
Disposal of Snacks business (note 8)

At 28 February 2007
Disposal of Soft drinks business (note 8)

345.1
. -
. -

345.1
. -

49.6
. -
. -

49.6
. -

58.9
. -
(26.7)

32.2
(32.2)

At 29 February 2008

345.1

49.6

. -

8.3
(8.3)
. -

. -
. -

. -

461.9
(8.3)
(26.7)

426.9
(32.2)

394.7

The goodwill within each business segment is further allocated to a number of individual cash generating units (CGUs) for
the purposes of impairment testing. Goodwill is subject to impairment testing on an annual basis. No impairment losses were
recognised by the Group in the current ﬁnancial year.

Impairment testing is carried out for each CGU by comparing the carrying value of goodwill to its recoverable amount (generally its
current value-in-use).

The cash ﬂow forecasts employed for the value-in-use computations are based on budgeted ﬁgures for the ﬁrst year, and cash ﬂow
is then projected forward for the following fourteen years based on assumed growth for each business averaging 3% per annum.

The discount factors applied to future cash ﬂows of each CGU ranged from 9% to 12% as deemed appropriate.

The disposal of the Soft drinks business in August 2007 resulted in de-recognition of goodwill of €32.2m. In the prior year, the
disposal of the Snacks business in September 2006 resulted in de-recognition of goodwill of €26.7m and the loss of the distribution
rights to the Fosters wine brands, together with a reduced margin on Long Alcohol Drinks (LAD) agency brands resulted in the de-
recognition of the €8.3m carrying value of goodwill attributed to this segment.

The impairment testing carried out on the remaining goodwill in the balance sheet at 29 February 2008 relating to both the Cider
and Spirits & liqueurs businesses identiﬁed very signiﬁcant headroom in the recoverable amount of the related CGUs as compared
to their carrying value. No reasonable adjustments to the assumptions underlying the impairment testing models applied would
result in any foreseeable risk of an impairment charge arising.

6 4

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Notes continued

forming part of the ﬁnancial statements

12 Property, plant & equipment

Group
Cost

At 1 March 2006
Additions
Reclassiﬁcation
Disposals
Disposal of Snacks business

At 28 February 2007

Additions

Currency retranslation

Disposal of Soft drinks business

Land &
buildings
€m

Plant &
machinery
€m

Motor vehicles
& other
equipment
€m

56.3
14.0
(11.8)
. -
(0.2)

117.4
80.2
11.8
. -
(0.1)

77.6
6.4
. -
(0.2)
(2.6)

Total
€m

251.3
100.6
. -
(0.2)
(2.9)

58.3

209.3

81.2

348.8

19.7
(0.1)
(28.7)

69.2
. -
(56.1)

3.4
(0.1)
(54.6)

92.3
(0.2)
(139.4)

At 29 February 2008

49.2

222.4

29.9

301.5

Depreciation

At 1 March 2006
Charge for the year

Disposals
Disposal of Snacks business

At 28 February 2007

Charge for the year

Disposal of Soft drinks business

At 29 February 2008

Net book value

At 29 February 2008

At 28 February 2007

4.5
1.1
. -
. -

5.6

57.2
13.1
. -
(0.1)

55.5
7.2
(0.2)
(1.9)

117.2
21.4
(0.2)
(2.0)

70.2

60.6

136.4

1.1
(4.1)

14.3
(34.8)

4.9
(43.4)

20.3
(82.3)

2.6

49.7

22.1

74.4

46.6

172.7

7.8

227.1

52.7

139.1

20.6

212.4

No depreciation is charged on land, which had with a book value of €2.6m at 29 February 2008 (28 February 2007: €3.9m).

Change in classiﬁcation

During the previous ﬁnancial year, the Group reclassiﬁed assets that were under construction at 28 February 2006 more
appropriately as Plant & Machinery.

Change in estimates

During the year, the Group’s investment in the expansion of its cider manufacturing capacity came on stream. Following the
expansion, the Group reviewed its expected pattern of consumption of the future economic beneﬁts embodied in these assets
in light of the high speciﬁcation of equipment installed and forecast utilisation levels. This review resulted in an increase in the
estimation of the expected useful economic life of the manufacturing plant, some processing equipment and juice storage tanks to
better reﬂect the consumption of future economic beneﬁts.

The useful economic lives of the manufacturing plant and storage tanks was increased from 10 to 13 years, and 20 to 30 years
respectively.

The Group also assessed the carrying value of its assets for indications of impairment and concluded that the recoverable value of
all assets is in excess of their carrying amounts.

6 5

12 Property, plant & equipment (continued)

The effect of these changes in useful economic lives on depreciation expense in relation to assets in use at 1 March 2007 in the
current and future periods is as follows: -

Manufacturing plant and storage tanks depreciation reduction / (increase)

2.0

2008
€m

2009
€m

2.0

yrs 3-10
€m

yrs 10-15
€m

later
€m

7.1

(4.5)

(6.6)

13 Financial assets

Company

Equity investment in subsidiary undertakings at cost

At beginning of year

Capital contribution impact of interest free funding loans
Capital contribution in respect of share options granted to employees of subsidiary companies (note 4)

At end of year

2008
€m

2007
€m

710.4
76.7
1.2

706.1
. -
4.3

788.3

710.4

The fair value adjustment to amounts receivable from subsidiary companies and represents the value of notional interest arising on
interest free loans. This amount has been accounted for as an increase in the value of ﬁnancial assets.

The total expense of €1.2m attributable to employee share options granted to employees of subsidiary undertakings has been
included as a capital contribution in ﬁnancial assets.

In the opinion of the Directors, the shares in the subsidiary undertakings are worth at least the amounts at which they are stated in
the balance sheet. Details of subsidiaries are set out in note 28.

14 Inventories

Group

Raw materials and consumables
Finished goods & goods for resale

Total inventories at lower of cost and net realisable value

2008
€m

55.1
23.7

78.8

2007
€m

47.4
50.4

97.8

During the year, inventory write-down recognised as an expense within operating costs amounted to €2.4m (2007: €nil). This
principally represented ﬁnished goods damaged in a third party warehouse.

15 Trade & other receivables

Group

Company

Amounts falling due within one year
Trade receivables
Prepayments
VAT recoverable
Amounts due from Group undertakings

Amounts falling due after one year
Amounts due from Group undertakings

2007
€m

2008
€m

56.5
11.0
. -
. -

118.5
18.0
2.3
. -

67.5

138.8

2007
€m

. -
. -
. -
95.6

95.6

. -
. -
. -
. -

. -

391.3

. -

67.5

138.8

391.3

95.6

6 6

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Notes continued

forming part of the ﬁnancial statements

15 Trade & other receivables (continued)

The aged analysis of trade receivables analysed between amounts that were neither past due nor impaired and amounts past due
at 29 February 2008 and 28 February 2007 were as follows:-

Group

Gross
2008
€m

Impairment
2008
€m

Gross
2007
€m

Impairment
2007
€m

Neither past due nor impaired

49.2

. -

94.5

. -

Past due
Past due 0-30 days
Past due 31-120 days

More than one year

4.7
3.9
0.3

(0.1)
(1.2)
(0.3)

12.6
12.6
0.6

58.1

(1.6)

120.3

. -
(1.2)
(0.6)

(1.8)

Trade receivables are on average receivable within 45 days of the balance sheet date, are unsecured and are not interest-bearing.
The movement in the allowance for impairment in respect of trade receivables during the year was as follows:-

Group

At beginning of year
Recovered during the year
Provided during the year
De-recognised on disposal
Written off during the year

At end of year

Company

2008
€m

1.8
(0.4)
1.0
(0.1)
(0.7)

1.6

2007
€m

1.5
. -
0.9
(0.1)
(0.5)

1.8

The Company has guaranteed the liabilities of all its subsidiary companies incorporated in the Republic of Ireland. As at 29 February
2008, the Directors consider these to be in the nature of insurance contracts and do not consider it probable that the Company will
have to make a payment under these guarantees and as such accounts for them as a contingent liability (note 26).

16 Trade & other payables

Trade payables
Payroll taxes & social security
VAT
Excise duty
Accruals

Group

Company

2008
€m

26.8
1.3
1.3
6.5
33.9

2007
€m

53.6
1.2
. -
9.2
68.5

69.8

132.5

2008
€m

. -
. -
. -
. -
0.4

0.4

2007
€m

. -
. -
. -
. -
0.2

0.2

The Group’s exposure to currency and liquidity risk related to trade & other payables is disclosed in note 22.

17 Provisions

At beginning of year
Provided during the year
Utilised during the year
Disposal of Soft drinks / Snacks business

At end of year

Current
Non-current

6 7

2007
€m

1.9
0.2
(0.2)
(0.6)

1.3

.-
1.3

1.3

Group

2008
€m

1.3
12.1
(0.1)
(0.6)

12.7

12.0
0.7

12.7

During the year ended 29 February 2008, the Group has provided against severance costs arising from the Group reorganisation,
dilapidation costs on the properties disposed of as part of the disposal of the Soft drinks business and waste management costs
arising from its sales of Magners in the UK market, together with the Group’s exposure to employee and third party insurance
claims. Under the terms of employer’s and public liability insurance policies, the Group bears a portion of the cost of each claim up
to the speciﬁed excess. The provision is calculated based on the expected portion of settlement costs to be borne by the Group in
respect of speciﬁc claims arising before the balance sheet date.

18 Details of borrowings
Maturity analysis
Group and Company

Non-current
3-4 years

Group

Current
0-1 year

Non-current
1-2 years
3-4 years

Repayable
Payable by other than by
instalment
instalment
2008
2008
€m
€m

Total
2008
€m

. -

288.9

. -

288.9

Repayable
Payable by other than by
instalment
instalment
2007
2007
€m
€m

Total
2007
€m

30.0

. -

. -
286.1

30.0
286.1

30.0

30.0
. -

Unamortised issue costs of €1.1m (2007: €1.9m) have been netted against outstanding bank loans and are being amortised to the
income statement on an effective interest rate basis.

The Company had no borrowings as at 28 February 2007.

30.0

286.1

316.1

60.0

286.1

346.1

6 8

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Notes continued

forming part of the ﬁnancial statements

18 Details of borrowings (continued)
Borrowing facilities

The Group manages its borrowing ability by entering into committed borrowing agreements. During the ﬁnancial year, the Group
re-negotiated its debt facility and repaid all amounts owing under the previous bank facility. The new debt facility is a committed
revolving loan agreement, which is denominated in euro, repayable on the ﬁfth anniversary of the date of the agreement (8 May
2012) and is subject to variable Euribor interest rates. The debt is guaranteed by a number of the Group’s subsidiary undertakings
as outlined in note 28. During the year, unamortised issue costs of €1.9m relating to the previous debt facility were written off to
the income statement. The Group’s banking facilities allow it to repay debt early without incurring additional charges or penalties.
This facility is repayable in full on change of control of the Group. The undrawn committed facilities available to the Group as at 29
February 2008 amounted to €310m.

Further information about the Group’s exposure to interest rate, foreign currency and liquidity risk is disclosed in note 22.

19 Analysis of net debt

Group

Interest bearing loans & borrowings

Cash & cash equivalents

Interest rate swaps (note 22)

Group

Interest bearing loans & borrowings

Cash & cash equivalents

Interest rate swaps (note 22)

28 February
2007
€m

Translation
adjustment
€m

Cash
ﬂow
€m

Non-cash
changes
€m

29 February

2008
€m

288.9
(32.7)

256.2
0.6

(59.3)
5.9

(53.4)
(2.2)

2.1
. -

2.1
6.0

(55.6)

8.1

256.8

346.1
(40.7)

305.4
(3.2)

302.2

. -
2.1

2.1
. -

2.1

28 February
2006
€m

Cash ﬂow
€m

Non-cash
changes
€m

28 February
2007
€m

427.6
(44.5)

383.1
0.3

(82.0)
3.8

(78.2)
(0.7)

0.5
. -

0.5
(2.8)

346.1
(40.7)

305.4
(3.2)

383.4

(78.9)

(2.3)

302.2

The non-cash changes relate to the amortisation of issue costs and movements in the fair value of interest rate swaps.

6 9

20 Recognised deferred tax assets and liabilities

Group

Property, plant & equipment
Deﬁned beneﬁt pension schemes
Derivative ﬁnancial instruments

Tax assets/(liabilities)

Company
Derivative ﬁnancial instruments
Interest free loans fair value adjustment

Analysis of movement in net deferred tax asset/liability

Group

Property, plant & equipment
Deﬁned beneﬁt pension schemes
Derivative ﬁnancial instruments

Other items

2008

2007

Assets
€m

Liabilities
€m

Net assets/
liabilities
€m

Assets
€m

Liabilities
€m

Net assets/
liabilities
€m

. -
2.9
. -

2.9

(4.3)
. -
(2.1)

(4.3)
2.9
(2.1)

(6.4)

(3.5)

. -
8.7
. -

8.7

(4.8)
. -
(0.2)

(5.0)

(4.8)
8.7
(0.2)

3.7

2008

2007

Assets
€m

Liabilities
€m

Net assets/
liabilities
€m

Assets
€m

Liabilities
€m

Net assets/
liabilities
€m

0.1
8.0

8.1

. -
. -

. -

0.1
8.0

8.1

. -
. -

. -

. -
. -

. -

. -
. -

. -

Recognised

Foreign

1 March
2007
€m

in income De-recognised
on disposal
statement
€m
€m

currency Recognised 29 February
2008
in equity
€m
€m

movement
€m

(4.8)
8.7
(0.2)

(1.0)
(0.1)
. -

1.5
(4.5)
. -

. -
(0.2)
. -

. -
(1.0)
(1.9)

3.7

(1.1)

(3.0)

(0.2)

(2.9)

(4.3)
2.9
(2.1)

(3.5)

Recognised

1 March
2006
€m

in income Recognised
in equity
statement
€m
€m

28 February
2007
€m

(5.7)
8.8
0.2
0.1

0.9
(0.6)
. -
(0.1)

. -
0.5
(0.4)
. -

3.4

0.2

0.1

(4.8)
8.7
(0.2)
. -

3.7

Company

Derivative ﬁnancial instruments
Interest free loans

There are no unrecognised deferred tax assets or liabilities.

1 March
2007
€m

. -
.-
.-

Fair value Recognised in Recognised in
equity
€m

adjustment
€m

income
€m

29 February
2008
€m

. -
8.0
8.0

. -
.-
.-

0.1
.-
0.1

0.1
8.0
8.1

7 0

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Notes continued

forming part of the ﬁnancial statements

21 Retirement beneﬁt obligations

The Group operates a number of deﬁned beneﬁt pension schemes for employees in the Republic of Ireland, all of which provide
pension beneﬁts based on ﬁnal salary and the assets of which are held in separate trustee administered funds. The Group is
committed to provide a comparable pension scheme for employees in Northern Ireland.

The pension scheme assets are held in separate trustee administered funds to meet long-term pension liabilities to past and present
employees. The trustees of the funds are required to act in the best interest of the funds’ beneﬁciaries. The appointment of trustees
to the funds is determined by the schemes’ trust documentation. The Group has a policy in relation to its principal staff pension fund
that members of the fund should nominate half of all fund trustees.

Following discussions with union representatives it was agreed that the existing scheme be closed to all new employees with effect
from 1 April 2007 and a new hybrid pension arrangement be introduced for those employees. The new pension arrangements will
contain both deﬁned beneﬁt and deﬁned contribution elements and will be provided, funded and governed through new categories
within the existing schemes. New employees will become members of the deﬁned contribution element of the new scheme for the
ﬁrst ﬁve years and on completion will be given the option to transfer onto the deﬁned beneﬁt element.

On disposal of the Soft drinks business to Britvic plc, it was agreed that by a date no later than 12 months after the date of
completion of the sale: -

an amount equal to the actuarial value of the aggregate beneﬁts payable under the deﬁned beneﬁt pension scheme to and in
respect of the Republic of Ireland transferring employees be transferred out of the C&C deﬁned beneﬁt pension schemes, and
that,

the Northern Ireland deﬁned beneﬁt pension scheme would transfer to Britvic plc with Britvic plc agreeing to transfer an amount
equal to the actuarial value of the aggregate beneﬁts payable to the remaining C&C employees under the Northern Ireland
deﬁned beneﬁt pension scheme to a new pension scheme which will be salary-related contracted-out scheme for the purposes
of the Pension Schemes Act 1993, and a registered pension scheme for the purposes of Part 4 of the Finance Act 2004.

The accounting treatment reﬂects the de-recognition of the assets and liabilities attributed to employees transferring to Britvic plc
valued at best estimates by the Group’s actuaries, Mercer Human Resource Consulting.

Actuarial valuations – funding requirements
Independent actuarial valuations of the deﬁned beneﬁt schemes are carried out on a triennial basis using the projected unit credit
method. The funding requirements in relation to the Group’s deﬁned beneﬁt schemes are assessed at each valuation date and are
implemented in accordance with the advice of the actuaries. The most recently completed actuarial valuations of the main schemes
were carried out on 1 January 2006. The actuarial valuations are not available for public inspection, however the results of the
valuations are advised to members of the various schemes.

Independent actuaries, Mercer Human Resource Consulting, have employed the projected unit credit method to determine the
present value of the deﬁned beneﬁt obligations arising, the related current service cost and the funding requirements.

Assumptions
The ﬁnancial assumptions that have the most signiﬁcant impact on the results of the actuarial valuations are those relating to the
long term rate of return on investments, the rate of increase in salaries and pensions and the discount rate used to convert future
pension liabilities to current values. These and other assumptions used are set out below.

The mortality assumptions employed in determining the present value of scheme liabilities under IAS 19 have been based on the
most up-to-date mortality tables, which in the case of Non Pensioners are 85% PA92(C=2030) medium cohort and in the case of
Pensioners are 85% PA92(C=2015) medium cohort. These tables conform to best practice. Based on these tables, the assumed life
expectations on retirement are:

Future life expectations at age 65

Current retirees – no allowance for future improvements

Male
Female

Current retirees – with allowance for future improvements Male
Female

Future retirements – with allowance for future improvements Male
Female

No of years
18.5
21.5

20.7
23.8

21.8
24.8

7 1

21 Retirement beneﬁt obligations (continued)

Scheme liabilities:
The principal long-term ﬁnancial assumptions used by the Group’s actuaries in the computation of the deﬁned beneﬁt liabilities
arising on pension schemes as at 29 February 2008 and the previous 3 ﬁnancial years are as follows:

2008

2007

2006

2005

ROI

Salary increases
4.25%
Increases to pensions in payment 3.00%
Discount rate
5.45%
Inﬂation rate
2.50%

4.50%
2.50%
6.00%
3.50%

4.25%
3.00%
4.60%
2.50%

4.00%
2.50%
4.90%
3.20%

3.50%
3.00%
4.50%
2.25%

3.60%
2.60%
4.70%
2.60%

3.50%
3.00%
4.75%
2.25%

4.00%
2.50%
5.25%
2.50%

Scheme assets:
The long-term rates of return expected at 29 February 2008 and 28 February 2007, determined in conjunction with the Group’s
actuaries, analysed by the class of investments in which the schemes assets are invested, are as follows:

Equity
Bonds
Property

Other

a. Impact on Group Income Statement

Analysis of deﬁned beneﬁt expense:

Current service cost

Interest on scheme liabilities
Expected return on scheme assets

2008
ROI

7.9%
3.8%
6.1%
2.5%

2007

ROI

7.50%
4.00%
6.10%
2.25%

7.50%
4.50%
5.25%
5.25%

ROI
€m

7.6
8.8
(11.3)

2008
UK
€m

0.5
1.0
(0.8)

Total
€m

ROI
€m

8.1
9.8
(12.1)

9.4
9.6
(11.7)

2007
UK
€m

1.0
1.6
(1.3)

Total
€m

10.4
11.2
(13.0)

Total expense recognised in operating costs

5.1

0.7

5.8

7.3

1.3

8.6

Analysis of amount recognised in Statement of recognised income & expense (SORIE)

ROI
€m

2008
UK
€m

Total
€m

ROI
€m

2007
UK
€m

Total
€m

ROI
€m

2006
UK
€m

Total
€m

ROI
€m

2005
UK
€m

Total
€m

Actual return less
expected return on
scheme assets
Experience gains
and losses on
scheme liabilities
Effect of changes
in assumptions on
value of liabilities
Total pension cost
recognised in SORIE

(26.9)

(1.1)

(28.0)

3.8

. -

3.8

21.3

2.6

23.9

4.7

0.5

5.2

4.4

(0.4)

4.0

(2.7)

. -

(2.7)

7.0

(1.0)

6.0

(0.8)

. -

(0.8)

22.6

3.4

26.0

3.6

(3.2)

0.4

(30.3)

(5.7)

(36.0)

(16.2)

. -

(16.2)

0.1

1.9

2.0

4.7

(3.2)

1.5

(2.0)

(4.1)

(6.1)

(12.3)

0.5

(11.8)

Scheme assets
Scheme liabilities

123.8
(150.6)

3.3 127.1 182.7
(3.7) (154.3) (216.6)

22.4 205.1 178.7
(40.0) (256.6) (223.1)

20.1 198.8 145.5
(34.6) (257.7) (187.9)

15.4 160.9
(26.0) (213.9)

The cumulative actuarial loss recognised to date in the SORIE is €14.4m (2007: €16.4m).
The effect of changes in assumptions on the value of liabilities is made up of a reduction in liabilities due to changes in bond
yields (ROI; €29.9m, NI;€3.4m) and an increase in the value of liabilities due to a revision in mortality assumptions (ROI; €7.3m,
NI; nil).

7 2

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Notes continued

forming part of the ﬁnancial statements

21 Retirement beneﬁt obligations (continued)

b. Impact on Group balance sheet

The net pension liability at 29 February 2008 is analysed as follows:

Analysis of net pension deﬁcit

Bid value of assets at year end:
Equity (i)
Bonds
Property

Other

Attributed to disposal of Soft drinks business (ii)

ROI
€m

111.9
13.5
18.9
25.8

170.1
(46.3)

2008
UK
€m

. -
. -
. -
. -

. -
3.3

Total
€m

111.9
13.5
18.9
25.8

170.1
(43.0)

ROI
€m

144.2
19.9
13.4
5.2

182.7
. -

2007
UK
€m

18.0
2.5
0.2
1.7

22.4
. -

Total
€m

162.2
22.4
13.6
6.9

205.1
. -

123.8

3.3

127.1

182.7

22.4

205.1

Actuarial value of scheme liabilities

(150.6)

(3.7)

(154.3)

(216.6)

(40.0)

(256.6)

Deﬁcit in the scheme

(26.8)

(0.4)

(27.2)

(33.9)

(17.6)

(51.5)

Related deferred tax asset

2.7

0.2

2.9

3.4

5.3

8.7

Net pension liabilities

(24.1)

(0.2)

(24.3)

(30.5)

(12.3)

(42.8)

(i) including a direct investment in C&C Group plc as at the year end of €nil (2007: €0.4m).
(ii) Assets of €46.3m are held in trust for the beneﬁt of employees in the Republic of Ireland who transferred to Britvic plc and

will be transferred to a comparable scheme to be established by Britvic plc in 2008/09. Assets of €3.3m are currently held in
trust by Britvic plc for employees of the Group in Northern Ireland.

Reconciliation of scheme assets (bid values)

ROI
€m

2008
UK
€m

Total
€m

ROI
€m

2007
UK
€m

Total
€m

Assets at beginning of year

182.7

22.4

205.1

178.7

20.1

198.8

Movement in year

Translation adjustment
Expected return on assets
Actuarial gains
Employer contributions
Member contributions
Beneﬁt payments

. -
11.3
(26.9)
6.2
1.2
(4.4)

(0.1)
0.8
(1.1)
2.4
. -
(0.3)

(0.1)
12.1
(28.0)
8.6
1.2
(4.7)

. -
11.7
3.8
13.1
1.8
(5.4)

0.3
1.3
. -
1.4
. -
(0.7)

0.3
13.0
3.8
14.5
1.8
(6.1)

170.1

24.1

194.2

203.7

22.4

226.1

Disposal of Soft drinks / Snacks businesses

(46.3)

(20.8)

(67.1)

(21.0)

. -

(21.0)

Assets at end of year

123.8

3.3

127.1

182.7

22.4

205.1

Anticipated employer contributions to deﬁned beneﬁt schemes payable in the ﬁnancial year ending 28 February 2009 amount to

€5.6m.

7 3

21 Retirement beneﬁt obligations (continued)

b. Impact on Group balance sheet (continued)

The scheme assets had the following investment proﬁle at the year end:

Equities
Bonds
Property

Other

ROI

67.0%
11.0%
8.0%
14.0%

2008
Total

67.0%
11.0%
8.0%
14.0%

ROI

79.5%
11.0%
7.0%
2.5%

2007
UK

81.0%
11.0%
7.0%
1.0%

Total

80.0%
11.0%
7.0%
2.0%

100.0%

Reconciliation of actuarial value of liabilities

ROI
€m

2008
UK
€m

Total
€m

ROI
€m

2007
UK
€m

Total
€m

Liabilities at beginning of year

216.6

40.0

256.6

223.1

34.6

257.7

Movement in year

Translation adjustment

Current service cost

Interest cost on scheme liabilities

Member contributions

Actuarial (gain)/loss immediately recognised in equity
Beneﬁt payments

. -
7.6
8.8
1.2
(27.0)
(4.4)

(0.6)
0.5
1.0
. -
(3.0)
(0.3)

(0.6)
8.1
9.8
1.2
(30.0)
(4.7)

. -
9.4
9.6
1.8
(0.9)
(5.4)

0.3
1.0
1.6
. -
3.2
(0.7)

0.3
10.4
11.2
1.8
2.3
(6.1)

202.8

37.6

240.4

237.6

40.0

277.6

Disposal of Soft drinks / Snacks businesses

(52.2)

(33.9)

(86.1)

(21.0)

. -

(21.0)

Liabilities at end of year

150.6

3.7

154.3

216.6

40.0

256.6

7 4

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Notes continued

forming part of the ﬁnancial statements

22 Financial instruments and ﬁnancial risk management

(a) Overview of risk exposures and risk management strategy

The Group’s multinational operations expose it to various ﬁnancial risks in the ordinary course of business that include credit risk,
liquidity risk, currency risk and interest rate risk. The most signiﬁcant exposures relate to changes in foreign exchange rates and
interest rates as well as the creditworthiness of its counterparties. The Group has a risk management programme in place that
seeks to limit the impact of these risks on the ﬁnancial performance of the Group and it is the policy of the Group to manage
these risks in a non-speculative manner.

The Board of Directors has the overall responsibility for the establishment and oversight of the Group’s risk management
framework. This is executed through various committees to whom the Board has delegated appropriate levels of authority as
discussed further in the Corporate Governance section of this report on pages 25 to 29.

The Board, through its Committees, has reviewed the process for identifying and evaluating the signiﬁcant risks affecting the
business and the policies and procedures by which these risks will be managed effectively. The Board has embedded these
structures and procedures throughout the Group and considers these to be a robust and efﬁcient mechanism for creating a
culture of risk awareness at every level of management.

The Group’s overall risk management programme seeks to minimise potential adverse effects on the Group’s ﬁnancial
performance from ﬂuctuations in ﬁnancial markets. The Group manages its risk exposures in part through the use of derivative
ﬁnancial instruments, where appropriate. All derivative contracts entered into are in liquid markets with credit rated parties. The
treasury function operates within strict terms of reference that have been approved by the Board.

This note presents information about the Group’s exposure to each of the ﬁnancial risks to which the Group is exposed, the
Groups’ objectives, policies and processes for measuring and managing these risks and the Groups’ management of liquid
resources.

(b) Financial assets and liabilities

The carrying and fair values of ﬁnancial assets and liabilities by category were as follows:

Group

29 February 2008

Financial assets

Cash & cash equivalents
Derivative ﬁnancial assets
Trade receivables

Financial liabilities
Interest bearing loans & borrowings
Derivative ﬁnancial liabilities
Trade payables and accruals
Provisions

Fair value
through
income
statement
€m

Cashﬂow
hedges
€m

Loans &
receivables
€m

Liabilities at
amortised
cost
€m

Total
carrying
value
€m

. -
23.1
. -

. -
(1.9)
. -
. -

. -
6.2
. -

. -

. -
. -

32.7
. -
56.5

. -
. -
. -

32.7
29.3
56.5

. -
. -
. -
. -

(288.9)
. -
(60.7)
(12.7)

(288.9)
(1.9)
(60.7)
(12.7)

(245.5)
(1.9)
(60.7)
(12.7)

21.2

6.2

89.2

(362.3)

(245.7)

(202.3)

Fair

value
€m

32.7
29.3
56.5

22 Financial instruments and ﬁnancial risk management (continued)

(b) Financial assets and liabilities (continued)
Group

28 February 2007

Financial assets

Cash & cash equivalents
Derivative ﬁnancial assets
Trade receivables

Financial liabilities
Interest bearing loans & borrowings
Derivative ﬁnancial liabilities
Trade payables and accruals
Provisions

Company

29 February 2008

Financial assets
Derivative ﬁnancial assets
Amounts due from Group undertakings

Financial liabilities
Interest bearing loans & borrowings
Derivative ﬁnancial liabilities
Accruals

28 February 2007
Financial assets
Amounts due from Group undertakings

Financial liabilities
Accruals

7 5

Cashﬂow
hedges
€m

Loans &
receivables
€m

Liabilities at
amortised
cost
€m

Total
carrying
value
€m

Fair

value
€m

. -
6.0
. -

. -
(4.2)
. -
. -

40.7
. -
118.5

. -
. -
. -

40.7
6.0
118.5

. -
. -
. -
. -

(346.1)
. -
(122.1)
(1.3)

(346.1)
(4.2)
(122.1)
(1.3)

1.8

159.2

(469.5)

(308.5)

Cashﬂow
hedges
€m

Loans &
receivables
€m

Liabilities at
amortised
cost
€m

Total
carrying
value
€m

Fair
value
€m

1.3
. -

. -
391.3

. -
. -

1.3
391.3

. -
(1.9)
. -

. -
. -
. -

(288.9)
. -
(0.4)

(288.9)
(1.9)
(0.4)

(245.5)
(1.9)
(0.4)

(0.6)

391.3

(289.3)

101.4

144.8

. -

95.6

. -

95.6

. -

(0.2)

95.6

(0.2)

95.4

Estimation of fair values
Set out below are the major methods and assumptions used in estimating the fair values of the ﬁnancial assets and liabilities.
There is no material difference between the fair value of these assets and liabilities and their carrying amount.

Short term bank deposits and cash & cash equivalents
The nominal amount of all short-term bank deposits and cash & cash equivalents is deemed to reﬂect fair value at the Balance
Sheet date.

Trade & other receivables/payables
The nominal amount of all trade & other receivables/payables after provision for impairment is deemed to reﬂect fair value at the
Balance Sheet date.

Derivatives (interest rate swaps and forward currency contracts)
The fair values of forward currency contracts and interest rate swaps are based on market prices and calculations supplied by
the ﬁnancial institutions, which are the counterparties to the contracts.

7 6

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Notes continued

forming part of the ﬁnancial statements

22 Financial instruments and ﬁnancial risk management (continued)

(b) Financial assets and liabilities (continued)

Interest bearing loans & borrowings
The fair value of all interest bearing loans & borrowings has been calculated by discounting all future cashﬂows to their present
value using a market rate reﬂecting the Group’s cost of borrowing at the Balance Sheet date. All loans bear interest at ﬂoating
rates.

Group

Financial assets: current
Interest rate swaps
Forward exchange contracts

Financial assets: non-current
Interest rate swaps
Forward exchange contracts

Financial liabilities: current
Interest rate swaps
Forward exchange contracts

Financial liabilities: non-current
Interest rate swaps
Forward exchange contracts

Group

Company

2008
€m

2007
€m

2008
€m

2007
€m

0.6
25.1

25.7

0.7
2.9

3.6

1.3
1.0

2.3

1.9
1.8

3.7

0.6
. -

0.6

0.7
. -

0.7

(0.6)
. -

. -
(4.2)

(0.6)
. -

(0.6)

(4.2)

(0.6)

(1.3)
. -

(1.3)

. -
. -

. -

(1.3)
. -

(1.3)

. -
. -

. -

. -
. -

. -

. -
. -

. -

. -
. -

. -

Derivatives are initially recorded at fair value on the date the contract is entered into and subsequently, re-measured to fair
value at reporting dates. The gain or loss arising on re-measurement is recognised in the income statement except where the
instrument is a designated hedging instrument under the cashﬂow hedging model.

In order to qualify for hedge accounting, the Group is required to document the relationship between the item being hedged and
the hedging instrument and demonstrate, at inception, that the hedge relationship will be highly effective on an ongoing basis.
The hedge relationship must also be tested for effectiveness retrospectively and prospectively on subsequent reporting dates.

Gains and losses on cash ﬂow hedges that are determined to be highly effective are recognised in a cashﬂow hedging reserve
within equity to the extent that they are actually effective. When the forecasted transaction occurs, the gains or losses deferred
in equity are released to the income statement. Ineffective portions of the gain or loss on the hedging instrument are recognised
in the income statement.

All interest rate swaps entered into by the Group and Company are designated as cashﬂow hedges in accordance with IAS 39
Financial Instruments: Recognition and Measurement. The Group has tested these hedging relationships and determined them
to be highly effective, both prospectively and retrospectively. The actual level of ineffectiveness arising in such relationships is not
material.

7 7

22 Financial instruments and ﬁnancial risk management (continued)
(c) Accounting for derivatives and hedging activities (continued)

The Group ordinarily seeks to apply the hedge accounting model to all forward currency contracts. These contracts are
generally entered into to sell forward a portion of the Group’s highly probable Sterling, US and CAN dollar revenues in respect
of which it has no natural hedge. A shortfall identiﬁed in expected Sterling revenues in 2007/08 and 2008/09 compared to the
forecast transactions originally hedged resulted in the Group having surplus contracts to sell Sterling. These positions were
effectively cancelled by entering into offsetting contracts to purchase Sterling at maturity dates corresponding to the surplus
sell contracts. The Group ceased the application of hedge accounting in respect of the surplus contracts once the hedged
forecast transactions could no longer be regarded as highly probable. All gains and losses arising on these contracts together
with those arising on the offsetting Sterling purchase contracts are recognised in the income statement from that point onwards.
In addition, gains and losses deferred in the cashﬂow hedge reserve were immediately recycled to the income statement to the
extent that the original forecast transactions are no longer expected to occur. The impact of this has resulted in a gain of €9.1m
being recognised within ﬁnance income in the income statement.

At 29 February 2008, the effective portion of gains and losses arising on derivative contracts have been deferred in equity only
to the extent that they relate to highly probable forecast transactions and where all the hedge accounting criteria in IAS 39 have
been met.

(d) Credit risk

Credit risk is the risk of ﬁnancial loss to the Group if a customer or counterparty to a ﬁnancial instrument fails to meet its
contractual obligations, and arises principally from the Group’s receivables from customers and deposits and derivative
contracts with banks. In the context of the Group’s operations, credit risk is mainly inﬂuenced by the individual characteristics of
each counterparty and is not deemed signiﬁcant.

The Group has detailed procedures for monitoring and managing the credit risk related to its trade receivables based on
experience, customer track records and historic default rates. Generally, individual ‘risk limits’ are set by customer and risk is
only accepted above such limits in deﬁned circumstances. A strict credit assessment is made of all new applicants who request
credit-trading terms. The utilisation and revision, where appropriate, of credit limits is regularly monitored. Impairment provision
accounts are used to record impairment losses unless the Group is satisﬁed that no recovery of the amount owing is possible.
At that point, the amount is considered irrecoverable and is written off directly against the trade receivable.

From time to time, the Group holds signiﬁcant cash balances, which are invested on a short-term basis and disclosed under
cash and cash equivalents in the Balance Sheet. It is Group policy to restrict the investment of these funds to banks with high
credit ratings.

The Company also bears credit risk in relation to amounts owed by Group undertakings and from guarantees provided in
respect of the liabilities of wholly owned subsidiaries as disclosed in note 16.

The carrying amount of ﬁnancial assets, net of impairment provisions represents the maximum credit exposure. The maximum
exposure to credit risk at the reporting date was:-

Trade & other receivables
Cash & cash equivalents

Interest rate swaps used for hedging
Forward exchange contracts

Group

Company

2008
€m

56.5
32.7
1.3
28.0

2007
€m

118.5
40.7
3.2
2.8

2008
€m

391.3
. -
1.3
. -

118.5

165.2

392.6

2007
€m

95.6
. -
. -
. -

95.6

The ageing of trade receivables and an analysis of movement in the Group impairment provisions against trade receivables are
disclosed in note 15. The Group does not have any signiﬁcant concentrations of risk.

7 8

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Notes continued

forming part of the ﬁnancial statements

22 Financial instruments and ﬁnancial risk management (continued)

(e) Liquidity risk

Liquidity risk is the risk that the Group or Company will not be able to meet its ﬁnancial obligations as they fall due. Liquid
resources are deﬁned as the total of cash & cash equivalents. The Group’s main liquidity risk relates to maturing debt. The
Group’s policy is to ensure that sufﬁcient resources are available either from cash balances, cash ﬂows or committed bank
facilities to meet all debt obligations as they fall due. To achieve this the Group (a) maintains adequate cash or cash equivalent
balances; (b) prepares detailed 3 year cash projections; and (c) keeps reﬁnancing options under review with a view to replacing
all debt facilities in advance of their maturity dates. In addition, the Group maintains an overdraft facility that is unsecured.
Undrawn borrowings available to the Group at the Balance Sheet date amounted to €310m.

The following are the contractual maturities of ﬁnancial liabilities, including interest payments and derivatives excluding the
impact of netting arrangements:-

Group

2008

Interest bearing loans & borrowings
Interest rate swaps – net cash outﬂows
FX forward contracts – gross cash outﬂows
FX forward contracts – gross cash inﬂows
Trade payables and accruals
Provisions

Carrying Contractual

amount
€m

cash ﬂows
€m

288.9
0.6
(28.0)
. -
60.7
12.7

(348.1)
2.7
(194.1)
240.1
(60.7)
(12.7)

6 mths

or less
€m

(7.0)
0.6
(61.1)
94.7
(60.7)
. -

6-12

mths
€m

(6.9)
0.6
(85.8)
96.0
. -
(12.0)

1-2 yrs
€m

2-5 yrs
€m

(13.7)
1.2
(47.2)
49.4
. -
(0.7)

(320.5)
0.3
. -
. -
. -

Total contracted outﬂows

334.9

(372.8)

(33.5)

(8.1)

(11.0)

(320.2)

2007
Interest bearing loans & borrowings
Interest rate swaps – net cash outﬂows
FX forward contracts – gross cash outﬂows
FX forward contracts – gross cash inﬂows
Trade payables and accruals
Provisions

348.0
(3.2)
1.4

122.1
1.3

(384.2)
3.4
(531.4)
523.2
(122.1)
(1.3)

(23.0)
0.7
(139.6)
137.4
(122.1)
. -

(22.5)
0.7
(191.3)
187.5
. -
. -

(44.1)
0.9
(200.5)
198.3
. -
(1.3)

(294.6)
1.1
. -
. -
. -
. -

Total contracted outﬂows

469.6

(512.4)

(146.6)

(25.6)

(46.7)

(293.5)

Company
2008

Interest bearing loans & borrowings
Interest rate swaps – net cash outﬂows
Trade payables and accruals

Carrying Contractual

amount
€m

cash ﬂows
€m

288.9
0.6
0.4

(348.1)
2.7
(0.4)

6 mths

or less
€m

(7.0)
0.6
(0.4)

6-12

mths
€m

(6.9)
0.6
.-

1-2 yrs
€m

2-5 yrs
€m

(13.7)
1.2
.-

(320.5)
0.3
.-

Total contracted outﬂows

289.9

(345.8)

(6.8)

(6.3)

(12.5)

320.2

2007
Trade payables and accruals

Total contracted outﬂows

(f) Market risk

0.2

(0.2)

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the Group’s
income or the value of its holdings of ﬁnancial instruments. The objective of market risk management is to manage and control
market risk exposures within acceptable parameters, while optimising the return on risk.

The Group enters into derivatives to mitigate risks arising in the ordinary course of business, and also incurs ﬁnancial liabilities, in
order to manage market risks. The Group carries out all such transactions within the Treasury policy as set down by the Board
of Directors. Generally the Group seeks to apply hedge accounting in order to manage volatility in proﬁt or loss.

7 9

22 Financial instruments and ﬁnancial risk management (continued)

(f) Market risk (continued)
Currency risk

The Group’s main currency exposure relates to sales transactions in foreign currencies, as it has signiﬁcant net receivables in
Sterling and US$ relating to its export sales.

A limited amount of inputs purchased are denominated in currencies other than euro, relating principally to direct brand
marketing activities in export markets and purchases of certain raw materials. The Group and Company debt is all denominated
in euro.

The euro is used for planning and budgetary purposes and as the presentation currency for ﬁnancial reporting. Group treasury
manages currency exposures for the entire Group centrally. Forward foreign currency contracts are used to reduce exposures
to ﬂuctuations in foreign exchange rates. Group policy is to limit the short-term exposures to ﬂuctuations in foreign currencies by
hedging a signiﬁcant portion of the projected non-euro forecast sales revenue up to a maximum of two years ahead. The Group
does not enter into derivative ﬁnancial instruments for speculative purposes. All derivative contracts entered into are in liquid
markets with credit-approved parties. The treasury function operates within strict terms of reference that have been approved by
our Board.

The Group’s operations are predominately located in the eurozone, consequently, the Group has only limited exposure to
exchange risk related to the translation of foreign operations. Given the low level of exposure, it is Group policy not to hedge this
balance sheet risk.

The net currency gains and losses on transactional currency exposures are recognised in the income statement.

The currency proﬁle of the Group’s ﬁnancial instruments as at 29 February 2008 is as follows: -

Cash & cash equivalents

Trade receivables
Derivative ﬁnancial assets and liabilities
Interest bearing bank loans
Trade payables and accruals
Provisions

Euro
€m

. -
. -
. -
. -
(0.1)
. -

Sterling
€m

USD/CAD
€m

Not at risk
€m

Total
€m

1.2
15.6
26.8
. -
(2.2)
. -

2.8
5.0
1.2
. -
(0.9)
. -

28.7
35.9
(0.6)
(288.9)
(57.5)
(12.7)

32.7
56.5
27.4
(288.9)
(60.7)
(12.7)

Total

(0.1)

41.4

8.1

(295.1)

(245.7)

The Company has no currency risk as all its assets and liabilities are denominated in euro.

Foreign currency contracts in place at 29 February 2008 to sell ﬁxed amounts of the currencies below for contracted euro
amounts can be summarised as follows:-

Stg£
Stg£m Avg fwd rate

US$
US$m Avg fwd rate

CAN$

CAN$m Avg fwd rate

Year ending 28 February 2009
Year ending 28 February 2010

112.0
36.0

0.69
0.73

24.0
. -

1.41
. -

6.0
. -

1.45
. -

A 10% strengthening in the euro against Sterling and the US Dollar, based on outstanding ﬁnancial assets and liabilities at 29
February 2008, would have a €1.9m negative impact on the income statement and a €19m positive impact on the equity
reserve. A 10% weakening in the Euro against Sterling and the US Dollar would have a €2.4m positive effect on the income
statement and a €23.3m negative impact on the equity reserve. This analysis assumes that all other variables, in particular
interest rates remain constant.

8 0

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Notes continued

forming part of the ﬁnancial statements

22 Financial instruments and ﬁnancial risk management (continued)

(f) Market risk (continued)

Interest rate risk
The interest rate proﬁle of the Group and Company’s interest-bearing ﬁnancial instruments at the reporting date is summarised
as follows:

Variable rate instruments
Interest bearing loans & borrowings

Cash & cash equivalents

Derivative assets
Derivative liabilities

Group

Company

2008
€m

2007
€m

2008
€m

2007
€m

(290.0)
32.7
1.3
(1.9)

(348.0)
40.7
3.2
. -

(290.0)
. -
1.3
(1.9)

(257.9)

(304.1)

(290.6)

. -

. -
. -

. -

The Group and Company’s exposure to market risk for changes in interest rates arises principally from its long-term debt
obligations. Group treasury, using interest rate swaps to give the desired mix of ﬁxed and ﬂoating rate debt, manages interest
cost and exposure to market risk centrally. The Group policy is to ﬁx interest rates on between 50% and 60% of Group debt.
With the objective of managing this mix in a cost-efﬁcient manner, the Group and Company enters into interest rate swaps
under which the Group contracts to exchange, at predetermined intervals, the difference between ﬁxed and variable interest
amounts calculated by reference to a pre-agreed notional principal. These swaps are designated under IAS 39 as cashﬂow
hedges to hedge the exposure to variability in cashﬂow arising from the changes in benchmark interest rates.

Interest rate swap contracts in place at 29 February 2008 have the effect of converting up to €150m (2007: €200m) of Group
and Company debt from ﬂoating rates to ﬁxed rates. The level of cover in place in summarised as follows:-

Year ending 28 February 2009
Year ending 28 February 2010
Year ending 28 February 2011
Year ending 28 February 2012
Period ending 31 August 2012

Weighted

average
amount ﬁxed
€m
150.0
150.0
100.0
50.0
50.0

Fixed
interest

Rate
3.60%
3.60%
4.01%
4.57%
4.57%

Based on the level and composition of year-end debt, a change in average interest rates of one percent per annum would
change the interest charge by €1.4m (2007: €1.5m).

The following table indicates the periods in which cash ﬂows associated with derivatives that are cash ﬂow hedges are expected
to occur

Group

29 February 2008

Interest rate swaps
- assets
- liabilities

Forward exchange contracts
- assets
- liabilities

Carrying
amount
€m

Expected
cash ﬂows
€m

6 months
or less
€m

6-12
months
€m

1-2
years
€m

More than
2 years
€m

1.3
(1.9)

2.9
(0.2)

0.6
. -

28.0
. -

46.0
. -

33.6
. -

10.2
. -

27.4

48.7

34.2

10.8

1.2
. -

2.2
. -

3.4

0.5
(0.2)

. -
. -

0.3

8 1

22 Financial instruments and ﬁnancial risk management (continued)

(f) Market risk (continued)
Group

28 February 2007

Interest rate swaps
- assets
- liabilities

Forward exchange contracts
- assets
- liabilities

Carrying
amount
€m

Expected
cash ﬂows
€m

6 months
or less
€m

6-12
months
€m

1-2
years
€m

More than
2 years
€m

3.2
. -

2.8
(4.2)

3.4
. -

(1.0)
(7.2)

0.7
. -

0.7
(2.9)

0.7
. -

(0.4)
(3.4)

0.9
. -

(1.3)
(0.9)

1.1
. -

. -
. -

1.8

(4.8)

(1.5)

(3.1)

(1.3)

1.1

The following table indicates the periods in which cash ﬂows associated with derivatives that are cash ﬂow hedges are expected
to impact proﬁt or loss:

Group

29 February 2008

Interest rate swaps
- assets
- liabilities

Forward exchange contracts
- assets
- liabilities

28 February 2007

Interest rate swaps
- assets
- liabilities

Forward exchange contracts
- assets
- liabilities

Carrying
amount
€m

Expected
cash ﬂows
€m

6 months
or less
€m

6-12
months
€m

1-2
years
€m

More than
2 years
€m

1.3
(1.9)

2.9
(0.2)

0.6
. -

28.0
. -

40.5
. -

29.7
. -

27.4

43.2

30.3

3.2
. -

2.8
(4.2)

3.4
. -

(1.0)
(7.2)

0.7
. -

0.5
(3.0)

0.6
. -

9.1
. -

9.7

0.7
. -

(0.4)
(3.4)

1.2
. -

1.7
. -

2.9

0.9
. -

(1.1)
(0.8)

0.5
(0.2)

. -
. -

0.3

1.1
. -

. -
. -

1.8

(4.8)

(1.8)

(3.1)

(1.0)

1.1

The following table indicates the periods in which cash ﬂows associated with derivatives that are cash ﬂow hedges are expected
to occur:

Company

29 February 2008

Interest rate swaps
- assets
- liabilities

Carrying
amount
€m

Expected
cash ﬂows
€m

6 months
or less
€m

6-12
months
€m

1-2
years
€m

More than
2 years
€m

1.3
(1.9)

(0.6)

2.9
(0.2)

2.7

0.6
. -

0.6

0.6
. -

0.6

1.2
. -

1.2

0.5
(0.2)

0.3

The cashﬂows associated with derivatives that are cash ﬂow hedges are expected to impact proﬁt or loss in the same periods.

8 2

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Notes continued

forming part of the ﬁnancial statements

23 Share capital and Reserves

Share capital

At 29 February 2008

Ordinary shares of €0.01 each

At 28 February 2007

Ordinary shares of €0.01 each

At 28 February 2006

Ordinary shares of €0.01 each

All shares in issue carry equal voting and dividend rights.

Reserves
Group

Authorised
number

Allotted,
called up and
fully paid
number

Allotted,
called up and
fully paid
€m

Authorised
€m

800,000,000

312,992,836

8.0

3.1

800,000,000

327,568,577

8.0

3.3

800,000,000

325,204,207

8.0

3.3

Capital
Share Redemption

Capital Hedging Payments Translation Retained
Capital Premium Reserve Reserve Reserve Reserve Reserve Earnings
€m

€m

Cashﬂow

Share-
based Currency

Total
€m

219.1
213.8
(54.7)
2.0
. -
4.3

At 1 March 2006
Total recognised income and expense for the year
Dividend on ordinary shares
Exercised share options
Transfer on exercise/lapse of share options
Equity settled share based payments

3.3

18.6

. -
. -
. -
. -

12.2
2.0
. -
. -

0.3
. -
. -
. -
. -
. -

24.9
. -
. -
. -
. -
. -

(1.5)
3.4
. -
. -
. -
. -

1.7
. -
. -
. -
(0.8)
4.3

0.6
0.2
. -
. -
. -
. -

171.2
210.2
(66.9)
. -
0.8
. -

At 28 February 2007

3.3

32.8

0.3

24.9

1.9

5.2

0.8

315.3

384.5

Total recognised income and expense for the year
Dividend on ordinary shares
Exercised share options
Transfer on exercise/lapse of share options

Own shares acquired

Equity settled share based payments

. -
. -
. -
. -
(0.2)
. -

. -
6.2
5.9
. -
. -
. -

. -
. -
. -
. -
0.2
. -

. -
. -
. -
. -
. -
. -

15.0
. -
. -
. -
. -
. -

. -

. -
(3.7)
. -
1.2

(2.3) 235.9
(87.3)
. -
3.7
(139.9)
. -

. -
. -
. -
. -
. -

248.6
(81.1)
5.9
. -
(139.9)
1.2

At 29 February 2008

3.1

44.9

0.5

24.9

16.9

2.7

(1.5) 327.7

419.2

(i) Movements in the year ended 28 February 2007

In July 2006, 1,235,939 ordinary shares were issued to the holders of ordinary shares who elected to receive additional ordinary
shares at a price of €6.38 per share, instead of part or all the cash element of their year ended 28 February 2006 ﬁnal dividend. In
December 2006, 355,731 ordinary shares were issued to the holders of ordinary shares who elected to receive additional ordinary
shares at a price of €12.22 per share, instead of part or all the cash element of their year ended 28 February 2007 interim dividend.

In addition, 772,700 ordinary shares were issued on the exercise of share options during the year for consideration of €2.0m.

(ii) Movements in the year ended 29 February 2008

In July 2007, 327,238 ordinary shares were issued to the holders of ordinary shares who elected to receive additional ordinary
shares at a price of €12.50 per share, instead of part or all the cash element of their year ended 28 February 2007 ﬁnal dividend. In
December 2007, 400,121 ordinary shares were issued to the holders of ordinary shares who elected to receive additional ordinary
shares at a price of €5.39 per share, instead of part or all the cash element of their year ended 29 February 2008 interim dividend.

Also, during the ﬁnancial year, 2,354,900 ordinary shares were issued on the exercise of share options for a consideration of
€5.9m and 17,658,000 shares were repurchased for a total consideration of €139.9m.

Details of directors’ shareholdings and employee share ownership plans are set out in the Report of the Remuneration
Committee on pages 30 to 35.

8 3

23 Share capital and Reserves (continued)
Company Proﬁt and Loss account

In accordance with Section 148(8) of the Companies (Amendment) Act, 1963, the income statement of the Company has not
been presented separately in these consolidated ﬁnancial statements. A proﬁt of €305.9m (2007: €98.8m) was recognised in the
individual Company income statement of C&C Group plc.

Share premium
The share premium, as stated in the Company balance sheet, represents the premium recognised on shares issued and amounts to
€746.8m as at 29 February 2008 (2007: €734.7m). The movement in the current year relates to the exercise of share options and
the issuance of a scrip dividend to those who elected to receive additional ordinary shares in place of a cash dividend.
The change in legal parent of the Group on 30 April 2004 as disclosed in detail in that year’s annual report was accounted for as
a reverse acquisition. This transaction gave rise to a reserve of €703.9m, which, for presentation purposes in the Group ﬁnancial
statements, has been netted against the share premium in the consolidated balance sheet.

Capital redemption reserve and capital reserves

These reserves initially arose on the conversion of preference shares into share capital of the Company and other changes and
reorganisations of the Group’s capital structure. The movement in the current year relates to the purchase of 17.7m shares with a
nominal value of €0.01 per share under the Group’s share buyback programme, which was approved by shareholders at the 2006
Annual General Meeting. These reserves are not distributable.

Cashﬂow hedging reserve

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash ﬂow hedging instruments
related to hedged transactions that have not yet occurred as set out in note 22 together with any deferred gains or losses on
hedging contracts where hedge accounting was discontinued but the forecast transaction is still anticipated to occur.

Share-based payment reserve
The reserve comprises amount expensed in the income statement in connection with share option grants falling within the scope of
IFRS 2 Share-based Payment less any exercises or lapses of such share options, as set out in note 4.

Currency translation reserve

The translation reserve comprises all foreign exchange differences from 1 March 2004, arising from the translation of the net assets
of the Group’s non-euro denominated operations, including the translation of the proﬁts of such operations from the average
exchange rate for the year to the exchange rate at the balance sheet date.

Capital management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market conﬁdence and to sustain
future development of the business through the optimisation of the debt and equity balance. The Board considers capital to
comprise long term debt and equity.

The Board periodically reviews the capital structure of the Group, considering the cost of capital and the risks associated with each
class of capital. The Board approves any material adjustments to the capital structure in terms of the relative proportions of debt
and equity. Shareholders granted the Company authority to make market purchases of up to 10% of its own shares at the AGM.

As part of the Group’s capital management strategy, a share buyback programme was implemented during the ﬁnancial year. This
was designed to increase the proportion of debt in the Group’s capital structure, which had declined over the previous two years as
a result of growth of the business and the disposal of the Group’s Snacks and Soft drinks divisions in 2006 and 2007 respectively.
The Company invested €139.9m as part of this on-market share buyback programme, purchasing 17.7m shares at an average
price of €7.84. The Company’s Irish stockbrokers, Davy, conducted the share repurchase programme. All shares acquired as part
of the share buyback programme were cancelled immediately on acquisition.

The level of debt in the capital structure is measured by the ratio of Debt:EBITDA before exceptional items. In the period, this ratio
increased from 1.3 at 28 February 2007 to 1.9 at 29 February 2008.

8 4

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Notes continued

forming part of the ﬁnancial statements

24 Capital commitments

At the year end, the following capital commitments authorised by the Board had not been provided for in the ﬁnancial statements:

Contracted
Not contracted

2008
€m

7.6
8.7

16.3

2007
€m

47.3
37.8

85.1

The capital commitments primarily relate to the ﬁnalisation of the expansion of the Cider production facility. It is expected that these
commitments will be settled in the following ﬁnancial year.

25 Commitments under operating leases

Future minimum rentals payable under non-cancellable operating leases at the year end are as follows:

Payable within one year
Payable in 2 to 5 years
Payable in over 5 years

2008

2007

Land &
buildings
€m

. -
. -
. -

. -

Other
€m

1.7
3.7
. -

5.4

Land &
buildings
€m

2.6
10.1
28.9

41.6

Other
€m

2.6
6.4
. -

9.0

As at 28 February 2007, the Group was party to a number of lease agreements for the provision of warehousing facilities, which
were classiﬁed as operating leases. These leases were transferred to Britvic plc on disposal of the Soft drinks business.

26 Guarantees

Where the Company enters into ﬁnancial guarantee contracts to guarantee the indebtedness of companies within the Group, the
Company considers these to be insurance arrangements and accounts for them as such. The Company treats the guarantee
contract as a contingent liability until such time as it becomes probable that the Company will be required to make a payment under
the guarantee.

In the prior year, the Company had given letters of guarantee to secure obligations of subsidiary undertakings in respect of bank
loans, these loans were repaid during the ﬁnancial year and new debt drawn down in the Company’s own name. The Company,
together with a number of its subsidiaries as outlined in note 28, has given a letter of guarantee to secure its obligations in respect
of bank loans. The actual loans outstanding at 29 February 2008 amounted to €290m (2007: €348m).

Under the terms of the Sale Purchase Agreement with respect to the disposal of the Soft drinks business to Britvic plc, the Group
has a maximum exposure of €249.2m in relation to warranties undertaken. All claims with respect to these warranties must be
presented in writing to the Group within 2 years following completion of the sale, except for claim relating to tax where the time limit
is 4 years.

Pursuant to the provisions of Section 17 of the Companies (Amendment) Act, 1986, the Company has guaranteed the liabilities of
all its subsidiary companies incorporated in the Republic of Ireland for the ﬁnancial year to 29 February 2008 and as a result such
subsidiaries are exempt from the ﬁling provisions of Section 7, Companies (Amendment) Act, 1986 (note 28).

8 5

27 Related party transactions

(a) Group

Identity of related parties
The principal related party relationships requiring disclosure in the consolidated ﬁnancial statements of the Group under IAS 24
Related Party Disclosures, pertain to the existence of subsidiaries, transactions with these entities entered into by the Group and
the identiﬁcation and compensation of key management personnel.

Subsidiary undertakings
The consolidated ﬁnancial statements include the ﬁnancial statements of the Company and its subsidiaries. A listing of all
subsidiaries is provided in note 28. Sales to and purchases from, together with outstanding payables and receivables are
eliminated in the preparation of the consolidated ﬁnancial statements in accordance with IAS 27 Consolidated Financial
Statements.

Key management personnel
For the purposes of the disclosure requirements of IAS 24, the Group has deﬁned the term ‘key management personnel’, as its
executive and non-executive directors. In addition to their salaries, the Group also provides non-cash beneﬁts to directors and
executive ofﬁcers, and contributes to a post-employment deﬁned beneﬁt plan on their behalf. Executive ofﬁcers also participate
in the Group’s share option programme (note 4).

Details of key management remuneration are as follows:

Number of individuals

Salaries and other short term employee beneﬁts
Post employment beneﬁts
Termination payments
Equity settled share based payments
Cash settled long term incentive plan

Charged to the income statement

Actuarial loss recognised on deﬁned beneﬁt pension schemes

Total

2008
Number

€m
2.6
0.6
1.9
0.5
0.4

6.0
0.2

6.2

2007
Number

€m
3.6
0.6
. -
0.7
0.3

5.2
0.1

5.3

Provision has been made for termination payments in respect of Directors leaving ofﬁce in the year ending 28 February 2009.

Details of transactions with executive and non-executive directors are set out in the Report of the Remuneration Committee on
pages 30 to 35.

(b) Company

The Company has a related party relationship with its subsidiaries. Details of the transactions in the year between the Company
and its subsidiaries are as follows:

Dividends received from subsidiaries
Expenses paid by subsidiaries on behalf of the Company
Equity settled share based payments

Movement in loans with subsidiary undertakings

Funding of cash requirements of subsidiary undertakings

€m

300.5
(13.2)
1.2
(90.0)
(290.0)

Nature of business

Class of shares held (100%)

8 6

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Notes continued

forming part of the ﬁnancial statements

28 Subsidiary undertakings

Name
Trading subsidiaries
*^ Bulmers Limited
*^ C&C (Holdings) Limited
#*^ C&C Group International Holdings Limited
*^ C&C Group Irish Holdings Limited
*^ C&C International Limited
* C&C Management Services (2007)

Limited

~ Hollywood & Donnelly Limited
~ Quinns of Cookstown (1964) Limited
* Vinitrading Limited
*^ Wm. Magner Limited
Wm. Magner, Inc

Other subsidiaries

Cider
Holding company
Holding company
Holding company
Spirits & liqueurs

Provision of management
services
Cider, wine & spirits distribution
Soft drinks/beer distribution
Wine & spirits distribution
Cider
Cider

* Bestormel Limited
* Bouchel Limited
* C&C Agencies Limited
* C&C (Investments) Limited
* C&C Group Pension Trust (No. 2) Limited
* C&C Group Pension Trust Limited
~ C&C Logistics (NI) Limited
~ C&C Northern Ireland Limited
~ C&C Proﬁt Sharing Trustee (NI) Limited
* C&C Proﬁt Sharing Trustee Limited
Cantrell & Cochrane BV.
* Cantrell & Cochrane Limited
* Cravenby Limited
* Edward and John Burke (1968) Limited
* Findlater (Wine Merchants) Limited
* Fruit of the Vine Limited
* Grants of Ireland Limited
*
* Lough Corrib Mineral Water Company Limited
* Magners Irish Cider Limited
* M O’Sullivan & Sons Limited
~ Reihill McKeown Limited
* Showerings (Ireland) Limited
* Thwaites Limited
* TJ Carolan & Son Limited
* Tullamore Dew Company Limited
* Vandamin Limited

Irish Mist Liqueur Company Limited

Holding company
Holding company
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Holding company
Non-trading
Patent company
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Holding company
Non-trading
Non-trading
Non-trading

Ordinary
Ordinary
Ordinary
Ordinary
Ordinary

Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary

Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary*
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary

All the above subsidiary companies are registered in the Republic of Ireland and have their registered ofﬁce at 3rd ﬂoor, Block 71,
The Plaza, Parkwest Business Park, Dublin 12, with the exception of Cantrell & Cochrane B.V. which has its registered ofﬁce at A.J.
Ernststraat 595 H, 1082 LD, Amsterdam, Wm Magner, Inc. which has its registered ofﬁce at 1114 Avenue of the Americas, New
York 10036-7703 and those marked “~” which have their registered ofﬁces at 468-472 Castlereagh Road, Belfast.

* Companies covered by Section 17 guarantees (note 26)
^ Original guarantors in respect of bank loans
#

Immediate subsidiaries of C&C Group plc.

29 Approval of ﬁnancial statements

These ﬁnancial statements were approved by the Directors on 9 May 2008.

Shareholder and other information

8 7

C&C Group plc is an Irish registered company. Its ordinary shares are quoted on the Irish and London Stock Exchanges. C&C also has
a Level 1 American Depository Receipts (ADR) programme for which Deutsche Bank acts as depository (symbol CCGGY). Each ADR
share represents three C&C ordinary shares.

Financial Calendar
Annual general meeting
Payment date for final dividend
Interim results
Interim results announcement
Interim dividend payment
Financial year-end

Date
11 July 2008
16 July 2008

October 2008
December 2008
28 February 2009

Website
Further information on C&C Group plc is available at www.candcgroupplc.com

Secretary and Registered
Office
Noreen O’Kelly
C&C Group plc
3rd ﬂoor, Block 71,
The Plaza,
Parkwest Business Park,
Dublin 12
Tel:
Fax:

+353 1 616 1100
+353 1 625 1580

Investor Relations
K Capital Source
8 Raglan Road, Dublin 4

Registrars
Shareholders/investors with queries concerning their
holdings, dividend information or administrative matters
should contact our registrars:

Capita Registrars
Unit 5, Manor Street Business Park
Manor Street, Dublin 7
Tel:
+353 1 810 2400
Fax: +353 1 810 2422
Email: enquiries@capitacorporateregistrars.ie

Principal bankers
AIB Bank
Bank of Ireland

Solicitors
McCann FitzGerald
Riverside One,
Sir John Rogerson’s Quay,
Dublin 2

Stockbrokers
Citigroup
Davy Stockbrokers

Auditor
KPMG
Chartered Accountants
1 Stokes Place
St. Stephen’s Green, Dublin 2

Dividend Payments
An interim dividend of 12c per ordinary share was paid on 12 December 2007.

A final dividend of 15c, if approved, will be paid in respect of ordinary shares on 16 July 2008. A scrip alternative will be offered to
shareholders.

Dividend Withholding Tax (‘DWT’) must be deducted from dividends paid by an Irish resident company, unless a shareholder is entitled
to an exemption and has submitted a properly completed exemption form to the Company’s Registrars. DWT applies to dividends
paid by way of cash or by way of shares under a scrip dividend scheme and is deducted at the standard rate of income tax (currently
20%). Non-resident shareholders and certain Irish companies, trusts, pension schemes, investment undertakings and charities may be
entitled to claim exemption from DWT and have been sent the relevant form. Further copies of the form may be obtained from Capita
Registrars. Shareholders should note that DWT will be deducted from dividends in cases where a properly completed form has not
been received by the relevant record date. Individuals who are resident in Ireland for tax purposes are not entitled to an exemption.

Shareholders who wish to have their dividend paid direct to a bank account, by electronic funds transfer, should contact Capita
Registrars to obtain a mandate form. Tax vouchers will be sent to the shareholder’s registered address under this arrangement.

Dividends are paid in euro. In order to avoid costs to shareholders, dividends are paid in sterling to shareholders resident in the UK
unless they require otherwise.

CREST
Transfer of the Company’s shares takes place through the CREST settlement system. Shareholders have the choice of holding their
shares in electronic form or in the form of share certificates.

8 8

C & C G R O U P P L C - A N N U A L R E P O R T & A C C O U N T S 2 0 0 8

Notes

e
i
.
n
g
s
e
d
e
c
r
u
o
s
.
w
w
w

3rd ﬂoor, Block 71, The Plaza,
� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �
Parkwest Business Park, Dublin 12
www.candcgroupplc.com