J D Wetherspoon

JJ  DD  WWeetthheerrssppoooonn  ppllcc

ANNUAL REPORT AND ACCOUNTS 2011

Wetherspoon owns
and operates pubs
throughout the UK.
The company aims 
to provide customers
with good-quality
food and drinks,
served by well-trained
and friendly staff, at
reasonable prices.
The pubs are

individually designed,
and the company aims
to maintain them in
excellent condition.

In order to facilitate the reading of the annual
report and accounts, the document has been split
into two sections. Section 1 contains the main
financial information for the financial year,
including the chairman’s statement the income
statement and other key documents. Section 2
contains the rest of the documents, including the
directors’ and remuneration reports, as well as
remaining reports and documentation.

Contents

SECTION 1

Financial highlights
Chairman’s statement and operating review
Finance review
Income statement
Statement of comprehensive income 
Cash flow statement

2
3
6
8
8
9
10 Balance sheet
11 Statement of changes in shareholders’ equity
12 Notes to the financial statements
33 Financial record

SECTION 2

36 Authorisation of financial statements and
statement of compliance with IFRSs

37 Accounting policies
42 Principal risks and uncertainties

facing the company

44 Independent auditors’ report
45 Corporate social responsibility report
48 Directors, officers and advisers
49 Directors’ report
54 Directors’ remuneration report
60 Corporate governance
65 Information for shareholders
67 Notice of annual general meeting

Financial calendar

Annual general meeting
3 November 2011

Interim report for 2012
March 2012

Year end
29 July 2012

Preliminary announcement for 2012
September 2012

Report and accounts for 2012
October 2012

SECTION 1

FINANCIAL HIGHLIGHTS

Revenue up 7.6% 
to £1,072m

Like-for-like sales up 2.1% 
and profit down 1.2%

Operating profit before
exceptional items* up 2.3%
to £102.3m

Operating profit up
8.3% to £96.9m

Operating margin before
exceptional items* 9.5% 
(last year: 10.0%)

Operating margin 9.0% 
(last year: 9.0%)

Profit before tax and
exceptional items* down
5.9% to £66.8m

Profit before tax up 
1.5% to £61.4m

Earnings per share 
before exceptional items*
down 1.9% to 35.3p 

Basic earnings per share up 
17.2% to 35.4p

Free cash flow per share
59.7p (last year: 52.9p)

50 pubs opened, 2 sold,
creating a total of 823

*Exceptional items as disclosed in account note 3.

2

J D WETHERSPOON PLC

CHAIRMAN’S STATEMENT AND OPERATING REVIEW

‘
Record sales and operating profit’

I am pleased to report a year of further
progress for the company, with record sales
and operating profit, although profit before
tax was lower than last year, as a result of
higher interest charges. The company was
founded in 1979 – and this is the 28th year
since incorporation in 1983. The table below
outlines some key indicators of our
performance during that period. As this
demonstrates, since our flotation in 1992,
earnings per share have grown by an
average of 16.8% per annum and free cash
flow per share by an average of 19.2%.

Summary accounts for the years ended July 1984 to 2011

‘
Operating profit 
before exceptional
items increased 
by 2.3% to 
£102.3 million…’

Financial year

Total sales

£000

818

1,890

2,197

3,357

3,709

5,584

7,047

13,192

21,380

30,800

46,600

68,536

100,480

139,444

188,515

269,699

369,628

483,968

601,295

730,913

787,126

809,861

847,516

888,473

907,500

955,119

996,327

1,072,014

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Profit before
tax and
exceptional items
£000

Earnings 
per share before
exceptional items
pence

Free cash flow

Free cash flow 
per share

£000

pence

(7)

185

219

382

248

789

603

1,098

2,020

4,171

6,477

9,713

15,200

17,566

20,165

26,214

36,052

44,317

53,568

56,139

54,074

47,177

58,388

62,024

58,228

66,155

71,015

66,781

0.0

0.2

0.2

0.3

0.3

0.6

0.4

0.8

1.9

3.3

3.6

4.9

7.8

8.7

9.9

12.9

11.8

14.2

16.6

17.0

17.7

16.9

24.1

28.1

27.6

32.6

36.0

35.3

915

732

1,236

3,563

5,079

8,284

13,506

20,972

28,027

28,448

40,088

49,296

61,197

71,370

83,097

73,477

68,774

69,712

52,379

71,411

99,494

71,344

78,818

0.4

0.4

0.6

2.1

3.9

5.1

7.4

11.2

14.4

14.5

20.3

24.2

29.1

33.5

38.8

36.7

37.1

42.1

35.6

50.6

71.7

52.9

59.7

Notes
Adjustments to statutory numbers 
1. Where appropriate, the EPS, as disclosed in the statutory accounts, have
been recalculated to take account of share splits, the issue of new shares and
capitalisation issues.
2. Free cash flow per share excludes dividends paid which were included in the
free cash flow calculations in the reported accounts for the years 1995–2000.

3. The weighted average number of shares, EPS and free cash flow per share
have been adjusted for 2010 and 2011, to exclude treasury shares held in
trust for employee share schemes. 
4. Before 2005, the accounts were prepared under UKGAAP. All accounts
from 2005 to date have been prepared under IFRS.
5. The above table has not been audited.

ANNUAL REPORT AND ACCOUNTS 2011

3

CHAIRMAN’S STATEMENT AND OPERATING REVIEW

Like-for-like sales in the year under review increased by
2.1%, with total sales, including new pubs, increasing 
by £75.7 million to £1,072.0 million, a rise of 7.6% 
(2010: 4.3%). Like-for-like bar sales increased by 1.7%
(2010: decreased by 0.8%), like-for-like food sales
increased by 4.2% (2010: increased by 0.1%) and
machine sales decreased by 3.9% (2010: increased 
by 12.1%).

Operating profit before exceptional items increased by
2.3% to £102.3 million (2010: £100.0 million) and, after
exceptional items, increased by 8.3% to £96.9 million
(2010: £89.5 million). The operating margin, before
exceptional items, decreased to 9.5% (2010: 10.0%),
mainly as a result of increases in bar and food costs,
labour and utilities. The operating margin after
exceptional items was 9.0% (2010: 9.0%).

Profit before tax and exceptional items decreased by
5.9% to £66.8 million (2010: £71.0 million) and, after
exceptional items, increased by 1.5% to £61.4 million
(2010: £60.5 million). Earnings per share before
exceptional items decreased by 1.9% to 35.3p 
(2010: 36.0p), while basic earnings after exceptional
items increased by 17.2% to 35.4p (2010: 30.2p).

Net interest was covered 2.9 times by operating profit
before exceptional items (2010: 3.4 times) and 2.7 times
by operating profit after exceptional items (2010: 3.1 times).
Total capital investment was £126.0 million in the period
(2010: £81.8 million), with £87.6 million on new pub
openings (2010: £57.7 million) and £38.4 million on existing
pubs (2010: £24.1 million). The proportion of freehold pubs
within new openings increased as did the number of
conversions from unlicensed premises, which increased the
average cost per new pub. At existing pubs, costs also
increased, as we completed the installation of a new EPOS
system and accelerated the number of refurbishments.

Exceptional items before tax totalled £5.4 million 
(2010: £10.6 million). The exceptional items relate to 
the impairment of trading pub assets of £4.4 million 
(2010: £10.6 million), an insurance excess payment 
(in respect of a pub which suffered a fire) of £0.3 million
and a loss on the disposal of two undeveloped properties
of £0.7 million. The total impairment provision is now 
£22.9 million on our asset base of £1.4 billion. 

Free cash flow, after capital investment of £38.4 million on
existing pubs (2010: £24.1 million), £5.8 million in respect
of share purchases for employees under the company’s
share-based payment schemes (2010: £6.1 million) and
payments of tax and interest, increased by £7.5 million to
£78.8 million (2010: £71.3 million). Free cash flow per
share was 59.7p (2010: 52.9p). 

4

J D WETHERSPOON PLC

Property
The company opened 50 pubs during the year, 34 of
which were freehold, and closed two others, resulting in
a total estate of 823 pubs at the financial year end. The
average development cost for a new pub (excluding the
cost of freeholds), in the financial year under review, was
£1.21 million, compared with £0.86 million a year ago,
mainly as a result of an increased number of conversions
from unlicensed premises. The full-year depreciation
charge was £44.4 million (2010: £43.7 million).

We currently intend to open an approximately similar
number of pubs in the year ending July 2012 as opened
in the year under review.

Taxation
The overall tax charge (including deferred tax) on 
pre-exceptional items before taking into account the
effect of the tax-rate change on deferred tax is 30.2%
(2010: 31.6%). The UK standard weighted average tax
rate for the period is 27.3% (2010: 28%). The difference
between that rate and the company tax is 2.9% 
(2010: 3.6%), due primarily to the level of non-qualifying
depreciation (depreciation which does not qualify for tax
relief); this is partially offset by the deduction available for
share-based payments for employees.

The current tax rate (excluding deferred tax) has fallen to
28.7% (2010: 30.6%). This is due mainly to the decrease
in the UK standard average tax rate for the period by
0.7% and also the increase in qualifying capital
expenditure during the period.

Financing
As at 24 July 2011, the company’s total net bank
borrowings (excluding finance leases and derivatives)
were £429.8 million (2010: £379.5 million), an increase
of £50.3 million. Net debt including finance leases 
(but excluding derivatives) was £437.7 million 
(2010: £388.4 million), an increase of £49.3 million. 
Net debt excluding derivatives has increased, owing to 
50 new pub openings costing £87.6 million, reinvestment
of £38.4 million, share buybacks of £32.8 million and the
dividend payments of £5.2 million. Year-end net-debt-to-
EBITDA was 2.98 times (2010: 2.70 times).

As at 24 July 2011, the company had £120.2 million
(2010: £170.5 million) of unutilised banking facilities and
cash balances, with total facilities of £550.0 million
(2010: £550.0 million). Following the year end, the
company concluded an amendment and restatement of
its existing banking facility. The new non-amortising
£555-million four-year-and-eight-month facility, expiring
in March 2016, was put in place, with a syndicate of nine
existing lenders. Total facilities now available, including an
overdraft, are £575.0 million. The company’s existing
swap arrangements remain in place.

Dividends and return of capital
The board proposes, subject to shareholders’ consent, to
pay a final dividend of 8.0p per share, on 23 November
2011, to those shareholders on the register on 21 October
2011, giving a total dividend for the year of 12.0p per
share (2010: 12.0p dividend per share and 7.0p special
dividend per share paid, giving a total dividend of 
19.0p per share). The dividend is covered 3.0 times 
(2010: 2.9 times, excluding special dividend and
exceptional items) by earnings.

During the year, 7,585,000 shares (representing
approximately 5.0% of the issued share capital) were
purchased by the company for cancellation, at a total 
cost of £32.8 million, representing an average cost per
share of 428p.

Further progress
We continue to try to make improvements in all areas of
the business and have created approximately 2,800
directly employed jobs in the year, with many additional
jobs created, in the process, by our many suppliers.

The company held over 1,000 separate training courses in
2010/11, attended by over 11,000 delegates, and promoted
over 2,200 staff to shift leader or management positions. 

Bonuses paid to employees in the year totalled £22.6 million
(2010: £22.5 million), 98% of which were paid to
employees below board level, with 87% paid to
employees working in our pubs. 

Local authorities have created a ‘Scores on the Doors’
system which awards between zero and five stars,
according to the cleanliness and safety standards found 
in pubs and catering establishments. Our average score
(www.scoresonthedoors.org.uk) is 4.27 which is, we
believe, the highest of any substantial pub company. 
Of our pubs, 86% now have scores of four or five stars –
and we aim to continue to improve in this important area.

For many years, Wetherspoon has been the main
corporate sponsor of the charity CLIC Sargent (caring for
children with cancer and their families). We raised
£1,080,612 in the year, bringing our total raised for the
charity to approximately £4.6 million.

General taxation and regulation
In the period under review, Wetherspoon made a profit
after tax of £46.8 million, but total taxes paid to the
government were over £453.1 million, including VAT of
£204.8 million, excise duty of £120.2 million, PAYE and
National Insurance of £65.2 million, property taxes of
£41.7 million and corporation tax of £21.2 million.

CHAIRMAN’S STATEMENT AND OPERATING REVIEW

‘
..like-for-like sales  
increased by 0.4%, 
and total sales increased 
by 6.7%.’

We believe that the current level of tax levied on the pub
industry is unsustainable and is directly leading to the
closure of many pubs, which have become uncompetitive
in relation to neighbouring countries and to supermarkets.
Supermarkets pay no VAT on food sales, whereas pubs
pay 20%, creating a tax disparity between supermarkets
and pubs. In addition, the cash tax per pint of beer paid
by supermarkets is far less than that paid by pubs. This tax
disadvantage has inevitably led to an increase in beer sales
from supermarkets and a consequent decline in pubs’ beer
sales. In addition, British pubs and restaurants now suffer
a huge competitive disadvantage, compared with those of
our nearest major neighbour France, which levies far lower
levels of excise duty and VAT. We also pay far higher levels
of VAT in pubs than is the case for Ireland. Both France
and Ireland have recently reduced their VAT levels and,
paradoxically, have had considerable success in generating
jobs and taxes, as a result.

Current trading and outlook
As indicated above, the biggest danger to the pub
industry is the tax disparity between supermarkets and
pubs, creating a serious and unsustainable competitive
disadvantage. In addition, our pubs pay far higher VAT
than those of our nearest neighbours, Ireland and France,
as well as having the second highest rates of excise duty
on beer and wine in Europe. 

In the six weeks to 4 September 2011, like-for-like sales
increased by 0.4%, and total sales increased by 6.7%. 

The well-documented increases in areas such as utilities
and bar and food supplies, combined with ongoing
pressure on consumers’ income continue to make this a
tough trading environment. Nonetheless, given our
resilient sales, profit and cash flow, together with the
potential to open further new pubs, the board is aiming
for a reasonable outcome in the current financial year. 

Tim Martin
Chairman
9 September 2011

ANNUAL REPORT AND ACCOUNTS 2011

5

FINANCE REVIEW for the 52 weeks ended 24 July 2011

Financial performance
The chairman’s statement and operating review on pages 3
to 5 cover a comprehensive review of the financial results
for the year just ended. Bar sales grew marginally in the first
half of the year and continued to improve in the second
half of the year, following a variety of marketing initiatives.
By comparison, food sales were strong in the first half of
the year, owing to a new menu launch and 7am opening.
However, the second half of the year saw sales soften as we
traded over strong comparatives from the previous year. 

Business review
The key issues facing the company are covered in the
chairman’s statement and operating review. The key
performance indicators (KPIs), which the company uses to
monitor its overall financial position, can be summarised
as follows:

+8.3%

+2.3%

Reported results
+7.6%
+2.1%

Financial highlights
(cid:2) Revenue £1,072.0m (2010: £996.3m)
(cid:2) Like-for-like sales
(cid:2) Operating profit before exceptional
items £102.3m (2010: £100.0m)
(cid:2) Operating profit after exceptional
items £96.9m (2010: £89.5m)
(cid:2) Operating margin before exceptional
items 9.5% (2010: 10.0%)
(cid:2) Operating margin after exceptional
items 9.0% (2010: 9.0%)
(cid:2) Profit before tax before exceptional
items £66.8m (2010: £71.0m)
(cid:2) Profit before tax after exceptional
items £61.4m (2010: £60.5m)
(cid:2) Earnings per share before exceptional
items 35.3p (2010: 36.0p)
(cid:2) Basic earnings per share after exceptional
items 35.4p (2010: 30.2p)
+17.2%
(cid:2) Free cash flow per share 59.7p (2010: 52.9p) +12.9%

+1.5%

–0.5%

–5.9%

–1.9%

0.0%

The non-financial KPIs monitored by the company can be
divided into two components, being general standards
(including environmental matters) and people. 

The KPIs applied by the business in each of these areas
are in line with previous years and are as follows: 

General standards
(cid:2) Mystery visitors programme
(cid:2) Food-quality audits
(cid:2) Food-delivery-times-monitoring
(cid:2) General business audit and standards review
(cid:2) Level of customer complaints
(cid:2) External environmental audits

People
(cid:2) Employee turnover levels
(cid:2) Annual employee satisfaction survey
(cid:2) Regular employee liaison groups
(cid:2) Level of sickness and absence

6

J D WETHERSPOON PLC

It is not appropriate to report actual statistics on these
indicators, owing to commercial sensitivity. 

Finance costs
The net finance costs during the year increased from
£29.0 million to £35.5 million (excluding the fair value
gain on financial derivatives). The increase in finance costs
is driven primarily by the full-year impact of the bank deal
which was signed in March 2010. The bank facility from
March 2010 attracted a higher bank margin on the
company’s debt. The finance costs (excluding the fair value
gain on derivatives) in the income statement were covered
2.9 times, compared with 3.4 times in the previous year,
on a pre-exceptional basis. Fixed-charge cover (net finance
costs and net rent) was 1.6 times (2010: 1.7 times).
Excluding depreciation, amortisation, fair value gain on
derivatives and lease premiums’ amortisation, fixed-charge
cover (net finance costs and net rent), on a cash basis, was
2.1 times (2010: 2.1 times). 

Taxation
A full analysis of the taxation charge for the year is set out
in note 6 to the accounts.

2011*
%
28.7
1.5

2011
%
31.2
1.6

2010*
%
30.6
1.0

2010
%
35.9
1.2

30.2

32.8

31.6

37.1

(8.3)
21.9

(9.0)
23.8

(3.9)
27.7

(4.6)
32.5

Corporation tax
Deferred tax
Total tax before impact 
of tax-rate change
Deferred tax – impact 
of tax-rate change
Total tax

*Excluding exceptional items.

The overall tax charge (including deferred tax) on 
pre-exceptional items, before taking into account the
effect of the tax-rate change on deferred tax, is 30.2% 
(2010: 31.6%). The UK standard weighted average tax
rate for the period is 27.3% (2010: 28%), and the
difference between that rate and the company tax is 2.9%
(2010: 3.6%), owing primarily to the level of non-qualifying
depreciation (depreciation which does not qualify for tax
relief); this is partially offset by the deduction available for
share-based payments for employees. 

The current tax rate (excluding deferred tax) has fallen to
28.7% (2010: 30.6%). This is due mainly to the decrease
in the UK standard average tax rate for the period by
0.7% and also the increase in qualifying capital
expenditure during the period. 

Shareholders’ return 
Earnings per share decreased by 1.9% to 35.3p (excluding
exceptional items), with underlying free cash flow per
share up 12.9% to 59.7p. 

The middle-market quotation of the company’s ordinary
shares at the end of the financial year was 434.5p. The

FINANCE REVIEW

highest price during the year was 473.0p, while the lowest
was 389.1p. The company’s market capitalisation at 
24 July 2011 was £571.8 million.

future interest rates, in order to hedge the appropriate
level of borrowings by entering into fixed- and floating-
rate agreements, as appropriate. 

Financial position
Net debt excluding derivatives at the year end amounted
to £437.7 million. The key ratio of net debt compared
with earnings before interest, tax, depreciation and
amortisation (EBITDA) is 2.98 times, compared with 2.70
times last year and at a level which allows the company
significant operational flexibility. 

At the balance sheet date, the company had entered 
into fixed interest-rate swap agreements which fixed 
£400 million of these borrowings at rates of between
5.40% and 5.67%. The effective weighted average
interest rate of the swap agreements entered into is
5.47% (2010: 5.47%), fixed for a weighted average
period of 3.9 years (2010: 4.9 years). 

The company monitors its cash resources through short-,
medium- and long-term cash-forecasting. Surplus cash 
is pooled into an interest-bearing account or placed on
short-term deposit for periods of between one and 
two weeks.

The company monitors its overall level of financial gearing
weekly. Short- and medium-term forecasts show
underlying levels of gearing which remain within the
company’s targets. 

Further information on other financial matters, including
the directors’ review of regulatory risks, health and safety,
the economic outlook, cost increases and other matters
can be found in section 2. 

Kirk Davis
Finance Director
9 September 2011

At the balance sheet date, the company had £120.2
million of unutilised banking facilities and cash balances.
This level of unutilised facilities, coupled with the
continuing strong cash generation, provides a significant
cushion against any future changes in the expected cash
flow position of the company and allows for future
expansion and ongoing payment of a dividend. 

The company’s overall facilities at the balance sheet date
are as follows: 

(cid:2) UK banking facility £530 million

(cid:2)(cid:2) Matures March 2014
(cid:2)(cid:2) 11 participating lenders
(cid:2)(cid:2) £250-million floating- to fixed-rate swap
expiring in 2014
(cid:2)(cid:2) £150-million floating- to fixed-rate swap
expiring in 2016
(cid:2)(cid:2) Average interest cost of swaps was 5.47%
excluding the banks’ margin

(cid:2) Overdraft facility of £20 million 

(cid:2) Total facilities £550 million (including overdraft)

(cid:2) Following the year end, the company concluded an
amendment and restatement of its existing banking
facility. The new non-amortising £555-million four-year-
and-eight-month facility, expiring in March 2016, was put
in place, with a syndicate of nine existing lenders. Total
facilities now available, including an overdraft, are
£575.0 million.

Financial risks and treasury policies
The company’s main treasury risks relate to the availability
of funds to meet its future requirements and fluctuations
in interest rates. The treasury policy of the company is
determined and monitored by the board.

The company has seen no significant foreign currency risk
and has no trading requirements in any foreign currency.
The overall treasury policy in this area is to ensure that
there are minimum currency risks attached to any part of
the business. 

The company’s interest-rate risk policy is to monitor and
review anticipated levels of expansion and expectations on

ANNUAL REPORT AND ACCOUNTS 2011

7

INCOME STATEMENT for the 52 weeks ended 24 July 2011

J D Wetherspoon plc, company number: 1709784

Notes

52 weeks
ended
24 July 2011
Before
exceptional
items
Total
£000

52 weeks 
ended
24 July 2011
Exceptional
items
(note 3)
Total
£000

52 weeks
ended
24 July 2011
After
exceptional
items
Total
£000

52 weeks
ended
25 July 2010
Before
exceptional
items
Total
£000

52 weeks 
ended 
25 July 2010
Exceptional
items
(note 3)
Total
£000

52 weeks
ended
25 July 2010
After 
exceptional
items
Total
£000

Revenue
Operating costs

Operating profit
Finance income
Finance costs

Profit before taxation
Income tax expense

1

2

5

5

6

1,072,014
(969,705)

–
(5,389)

1,072,014
(975,094)

996,327
(896,314)

–
(10,557)

996,327
(906,871)

102,309
36
(35,564)

66,781
(14,600)

(5,389)
–
–

(5,389)
–

96,920
36
(35,564)

61,392
(14,600)

100,013
16
(29,014)

71,015
(19,680)

(10,557)
–
–

(10,557)
–

89,456
16 
(29,014)

60,458
(19,680)

Profit for the year

52,181

(5,389)

46,792

51,335

(10,557)

40,778

Earnings per ordinary share

7

35.3p

35.4p

36.0p

30.2p

STATEMENT OF COMPREHENSIVE INCOME for the 52 weeks ended 24 July 2011

Interest-rate swaps: income (loss) taken to equity
Tax on items taken directly to equity

Net gain/(loss) recognised directly in equity
Profit for the year

Total comprehensive income for the year

Notes

20

6

52 weeks 
ended
24 July 2011
£000

52 weeks 
ended
25 July 2010
£000

3,511
(2,466)

1,045
46,792

(25,393)
6,856

(18,537)
40,778

47,837

22,241

8

J D WETHERSPOON PLC

CASH FLOW STATEMENT for the 52 weeks ended 24 July 2011

J D Wetherspoon plc, company number: 1709784

Cash flows from operating activities
Cash generated from operations
Interest received
Interest paid
Corporation tax paid
Gaming machine VAT receipt
Purchase of own shares for share-based payments 

Notes

8

52 weeks 
ended
24 July 2011
£000

52 weeks 
ended
24 July 2011
£000

52 weeks 
ended
25 July 2010
£000

52 weeks 
ended
25 July 2010
£000

178,197
39
(34,020)
(21,215)
–
(5,783)

178,197
39
(34,020)
(21,215)

(5,783)

153,405
9
(30,252)
(21,617)
14,941
(6,129)

153,405
9
(30,252)
(21,617)

(6,129)

Net cash inflow from operating activities

117,218

117,218

110,357

95,416

Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds on sale of property, plant and equipment
Investment in new pubs and pub extensions
Purchase of lease premiums

(31,787)
(6,613)

(31,787)
(6,613)
1,100
(86,793)
(825)

(21,778)
(2,294)
170
(53,804)
(3,935)

(21,778)
(2,294)

Net cash outflow from investing activities

(124,918)

(38,400)

(81,641)

(24,072)

Cash flows from financing activities
Equity dividends paid
Proceeds from issue of ordinary shares
Purchase of own shares
Advances under bank loans
Repayment of US private placement
Advances under finance leases
Finance costs on new loan
Finance lease principal payments

Net cash inflow/(outflow) from financing activities 

Net increase in cash and cash equivalents

Opening cash and cash equivalents
Closing cash and cash equivalents

Free cash flow

Free cash flow per ordinary share

(5,211)
225
(32,759)
49,962
–
–
–
(2,908)

9,309

1,609

26,081
27,690

10

24

9

9

9

9

17

17

7

7

(26,174)
523
–
87,586
(86,742)
9,092
(7,626)
(2,898)

(26,239)

2,477

23,604
26,081

78,818

59.7p

71,344

52.9p

ANNUAL REPORT AND ACCOUNTS 2011

9

BALANCE SHEET as at 24 July 2011

J D Wetherspoon plc, company number: 1709784

Assets
Non-current assets
Property, plant and equipment
Intangible assets
Deferred tax assets
Other non-current assets

Total non-current assets

Current assets
Inventories
Other receivables
Assets held for sale
Cash and cash equivalents

Total current assets

Total assets

Liabilities
Current liabilities
Trade and other payables
Financial liabilities
Current income tax liabilities

Total current liabilities 

Non-current liabilities
Financial liabilities 
Derivative financial instruments
Deferred tax liabilities
Other liabilities

Total non-current liabilities

Net assets

Shareholders’ equity
Ordinary shares
Share premium account
Capital redemption reserve
Hedging reserve
Retained earnings

Total shareholders’ equity

Notes

24 July 2011
£000

25 July 2010
£000

11

12

6

13

14

15

16

17

18

19

19

20

6

21

24

881,271
11,525
15,569
10,520

810,714
6,700
17,597
10,001

918,885

845,012

21,488
21,623
70
27,690

19,911
19,727
–
26,081

70,871

65,719

989,756

910,731

(189,777)
(3,129)
(9,457)

(162,553)
(2,829)
(11,501)

(202,363)

(176,883)

(462,254)
(57,880)
(71,448)
(24,766)

(411,643)
(61,391)
(75,579)
(23,094)

(616,348)

(571,707)

171,045

162,141

2,632
143,199
1,798
(43,410)
66,826

2,783
142,975
1,646
(44,821)
59,558

171,045

162,141

The notes on pages 12 to 32 form an integral part of these financial statements. 

The financial statements, on pages 8 to 41, approved by the board of directors and authorised for issue on 
9 September 2011, are signed on its behalf by:

John Hutson
Director

Kirk Davis
Director

10

J D WETHERSPOON PLC

STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

J D Wetherspoon plc, company number: 1709784

Notes

Called-up
share capital
£000

Share premium Capital redemption
reserve
£000

account
£000

Hedging
reserve
£000

Retained
earnings
£000

Total

£000

At 26 July 2009

2,779

142,456

1,646

(26,284)

47,096

167,693

Profit for the year
Interest-rate swaps: 
loss taken to equity
Tax on items taken 
directly to equity

Total comprehensive profit

Exercise of options
Share-based payments
Purchase of shares held 
in trust
Dividends

At 25 July 2010 

Profit for the year
Interest-rate swaps: 
profit taken to equity
Tax on items taken 
directly to equity

Total comprehensive profit

Exercise of options
Repurchase of shares
Share-based payments
Purchase of shares held 
in trust
Dividends

20

6

24

4

10

20

6

24

4

10

4

519

40,778

40,778

(25,393)

6,856

(25,393)

6,856

(18,537)

40,778

22,241

3,987

523
3,987

(6,129)
(26,174)

(6,129)
(26,174)

2,783

142,975

1,646

(44,821)

59,558

162,141

1
(152)

224

152

46,792

46,792

3,511

3,511

(2,100)

(366)

(2,466)

1,411

46,426

47,837

(32,759)
4,595

(5,783)
(5,211)

225
(32,759)
4,595

(5,783)
(5,211)

At 24 July 2011

2,632

143,199

1,798

(43,410)

66,826

171,045

The balance classified as share capital includes those proceeds arising on issue of the company’s equity share capital,
comprising 2p ordinary shares and the cancellation of shares repurchased by the company.

The capital redemption reserve arose from the purchase of the company’s share capital.

Shares acquired in relation to the employee Share Incentive Plan and the 2005 Deferred Bonus Scheme are held in trust,
until such time as the awards vest. At 24 July 2011, the number of shares held in trust was 5,038,173 (2010: 4,556,097),
with a nominal value of £100,800 (2010: £91,000) and a market value of £21,890,862 (2010: £19,518,320) which are
accounted for as treasury shares.

Hedging gain/loss arises from the movement of fair value in the company’s financial derivative instruments, in line with the
accounting policy disclosed in section 2.

Tax on items taken directly to equity includes an adjustment of £366,000 to accurately reflect the deferred tax position on
interest-rate swaps. 

As at 24 July 2011, the company had distributable reserves of £23.4 million (2010: £14.7 million).

ANNUAL REPORT AND ACCOUNTS 2011

11

NOTES TO THE FINANCIAL STATEMENTS at 24 July 2011

1 Revenue

Revenue disclosed in the income statement is analysed as follows:

52 weeks
ended
24 July 2011
£000

52 weeks 
ended
25 July 2010
£000

Sales of food, beverages, hotel rooms and machine income

1,072,014

996,327

2 Operating profit before exceptional items – analysis of costs by nature

This is stated after charging/(crediting):

Operating lease payments
Repairs and maintenance
Rent receivable
Depreciation of property, plant and equipment (note 11)
Amortisation of intangible assets (note 12)
Amortisation of non-current assets (note 13)
Share-based charges (note 4)

Auditors’ remuneration
Audit services:
– audit fees
– other services supplied pursuant to relevant legislation
– other services

Total auditors’ fees

Analysis of continuing operations

Revenue
Cost of sales

Gross profit
Administration costs
– head-office costs

Operating profit before exceptional items 

Exceptional items (note 3)

Operating profit after exceptional items

12

J D WETHERSPOON PLC

52 weeks
ended
24 July 2011
£000

52 weeks 
ended
25 July 2010
£000

64,463
36,241
(565)
42,866
1,223
306
4,595

150
28
105

283

62,341
34,233
(392)
42,620
811
268
3,987

152
26
10

188

52 weeks
ended
24 July 2011
£000

52 weeks 
ended
25 July 2010
£000

1,072,014
(927,045)

996,327
(856,908)

144,969

139,419

(42,660)

(39,406)

102,309

100,013

(5,389)

(10,557)

96,920

89,456

3 Exceptional items

Operating items
Property impairment
Insurance excess
Loss on disposal of property, plant and equipment

Operating exceptional items

NOTES TO THE FINANCIAL STATEMENTS

52 weeks 
ended
24 July 2011
£000

52 weeks
ended
25 July 2010
£000

4,410
250
729

10,557
–
–

5,389

10,557

During the year under review, an exceptional charge of £4,410,000 (2010: £10,557,000) relates to the impairment of
property and fixed assets, following a review of the company’s assets, as required under IAS 36. 

Under the impairment review, each cash-generating unit (CGU) is reviewed for its recoverable amount, determined as
being the higher of its fair value less costs to sell and its value in use. 

Property-related disposals and write-offs are in respect of the loss on disposal of two sites, together with an insurance 
excess paid in respect of one site damaged by fire. 

ANNUAL REPORT AND ACCOUNTS 2011

13

NOTES TO THE FINANCIAL STATEMENTS

4 Employee benefits expense

Wages and salaries
Social Security costs
Pension costs
Share-based charges (note 25)

Included in the table above is compensation paid to directors for loss of office of £367,000. 

The average number of people directly employed in the business, including directors, 
was as follows:

Full-time equivalents
Managerial/administration
Hourly paid staff

Total employees
Managerial/administration
Hourly paid staff

Directors’ emoluments

Aggregate emoluments (excluding share-based payments)
Contributions to a defined contribution scheme

52 weeks 
ended
24 July 2011
£000

52 weeks
ended
25 July 2010
£000

273,685
18,609
1,668
4,595

250,261
16,649
1,598
3,987

298,557

272,495

2011
Number

2010
Number

3,454
9,557

3,342
8,617

13,011

11,959

2011
Number

2010
Number 

3,828
20,239

3,709
17,468

24,067

21,177

2011
£000

1,478
95

2010
£000

1,918
126

1,573

2,044

Retirement benefits are accruing to 3 (2010: 4) directors under a defined contribution scheme. 

Details of directors’ emoluments are disclosed in the remuneration report on pages 54 to 59; these form part of these
financial statements.

14

J D WETHERSPOON PLC

5 Finance income and costs

Finance costs
Interest payable on bank loans and overdrafts
Interest payable on US senior loan notes
Amortisation of bank loan issue costs
Interest payable on obligations under finance leases

Total finance costs

Bank interest receivable

Total finance income

Total net finance costs

Further details are provided in account note 20.

Analysis of finance income and costs in categories in accordance with IAS 39
Loans and receivables
Financial liabilities carried at amortised cost
Financial derivatives
Other financial expenses

Total net finance costs

NOTES TO THE FINANCIAL STATEMENTS

52 weeks 
ended
24 July 2011
£000

52 weeks
ended
25 July 2010
£000

33,143
–
1,948
473

26,789
437
1,227
561

35,564

29,014

(36)

(36)

(16)

(16)

35,528

28,998

52 weeks 
ended
24 July 2011
£000

52 weeks
ended
25 July 2010
£000

(36)
16,136
18,751
677

(16)
9,327
18,983
704

35,528

28,998

ANNUAL REPORT AND ACCOUNTS 2011

15

NOTES TO THE FINANCIAL STATEMENTS

6 Income tax expense

(a) Tax on profit on ordinary activities

Tax charged in the income statement

Current income tax:
Current income tax charge

Total current income tax

Deferred tax:
Origination and reversal of temporary differences
Impact of change in UK tax rate

Total deferred tax

Tax charge in the income statement

Tax relating to items charged or credited to equity
Deferred tax:
Tax charge (credit) on interest-rate swaps

Tax charge (credit) in the statement of comprehensive income 

52 weeks
ended
24 July 2011
£000

52 weeks
ended
25 July 2010
£000

19,169

21,709

19,169

21,709

980
(5,549)

746
(2,775)

(4,569)

(2,029)

14,600

19,680

2,100

(6,856)

2,100

(6,856)

Exceptional items had no effect on the tax charge in the income statement for the current or previous financial year. 

16

J D WETHERSPOON PLC

NOTES TO THE FINANCIAL STATEMENTS

6 Income tax expense continued

(b) Reconciliation of the total tax charge
The tax expense after exceptional items in the income statement for the year is lower (2010: higher) than the standard rate
of corporation tax in the UK of 27.3% (2010: 28%). The differences are reconciled below.

52 weeks 
ended
24 July 2011
Before 
exceptional 
items
£000

52 weeks
ended
24 July 2011
After 
exceptional
items
£000

52 weeks
ended
25 July 2010
Before
exceptional
items
£000

52 weeks
ended
25 July 2010
After
exceptional
items
£000

Profit before income tax

66,781

61,392

71,015

60,458

Profit multiplied by the UK standard rate of 
corporation tax of 27.3% (2010: 28%)
Abortive acquisition costs and disposals
Other disallowables
Other allowable deductions
Non-qualifying depreciation
Deduction for share options and SIPs
Deferred tax on balance-sheet-only items
Adjustment in respect of change in tax rate

18,253
309
95
(92)
2,849
(338)
(927)
(5,549)

16,780
309
95
(92)
4,322
(338)
(927)
(5,549)

19,884
156
120
(57)
3,459
(1,139)
32
(2,775)

16,928
156
120
(57)
6,415
(1,139)
32
(2,775)

Total tax expense reported in the income statement

14,600

14,600

19,680

19,680

The main factor which causes the company’s tax rate to be higher than the UK standard rate of corporation tax 
is non-qualifying depreciation.

On 1 April 2012, the UK standard rate of corporation tax is set to fall to 25%. 

ANNUAL REPORT AND ACCOUNTS 2011

17

NOTES TO THE FINANCIAL STATEMENTS

6 Income tax expense continued

(c) Deferred tax
The deferred tax in the balance sheet is as follows:

Deferred tax liabilities

At 26 July 2009
Credited to the income statement

At 25 July 2010
Credited to the income statement

Accelerated
tax
depreciation
£000

Revaluation of 
land and
buildings
£000

Other 
temporary
differences
£000

66,827
(744)

66,083
(3,253)

3,298
(314)

2,984
(355)

7,508
(996)

6,512
(523)

Total

£000

77,633
(2,054)

75,579
(4,131)

At 24 July 2011

62,830

2,629

5,989

71,448

Deferred tax assets

At 26 July 2009
Credited to the income statement
Charged to other comprehensive income

At 25 July 2010
Credited to the income statement
Charged to other comprehensive income

Capital losses 
carried 
forward
£000

685
(24)
–

661
438
–

Basic
swap

£000

10,080
–
6,856

16,936
–
(2,466)

Total

£000

10,765
(24)
6,856

17,597
438
(2,466)

At 24 July 2011

1,099

14,470

15,569

The Finance (No.3) Bill 2010–11 received royal assent before the balance sheet date of 24 July 2011. It included legislation 
to reduce the main rate of corporation tax to 25%, with effect from 1 April 2012. The lower rate of 25% has been used 
to determine the overall net deferred tax liability, as the temporary differences are expected to reverse at the lower rate. 

The March 2011 budget announced a further 1% reduction in the main rate of corporation tax. A lower rate of 26% from 
1 April 2011 was enacted in July 2011, with the intention remaining for the rate to reduce further, by 1% per annum,
to 23% by 1 April 2014. These further proposed rate reductions to 24% and 23% had not been substantively enacted
at the balance sheet date and are, therefore, not included in the financial statements. The proposed reductions in the
rate are expected to be enacted separately each year. The impact of the further changes in rate, from 25% to 23%,
would be a £4.4 million increase in profits for the year. The overall effect of the changes applied to the deferred tax 
balances at 24 July 2011 would be to increase profits for the year by £5.6 million (being £2.8 million in July 2012 and 
£2.8 million in July 2013) and increase other comprehensive losses by £1.2 million (being £0.6 million in July 2012 and 
£0.6 million in July 2013). 

18

J D WETHERSPOON PLC

NOTES TO THE FINANCIAL STATEMENTS

7 Earnings and cash flow per share

Basic earnings per share has been calculated by dividing the profit attributable to equity holders, of £46,792,000 
(2010: £40,778,000), by the weighted average number of shares in issue during the year, of 132,019,936 (2010: 134,902,108). 

The weighted average number of shares has been adjusted to exclude treasury shares held in respect of the employee 
Share Incentive Plan and the 2005 Deferred Bonus Scheme. 

Earnings before exceptional items per share has been calculated before exceptional items detailed in note 3 and takes account 
of 23,250 (2010: 59,032) potential dilutive shares under option, giving a weighted average number of ordinary shares, adjusted
for the effect of dilution, of 132,043,186 (2010: 134,961,140).

Adjusted earnings excludes an adjustment of £5,549,000 (2010: £2,775,000), in respect of the corporation tax-rate change and
exceptional items.

Earnings per share

Earnings
52 weeks
ended
24 July 2011

Earnings
52 weeks 
ended
25 July 2010

£000

£000

Earnings
per share
52 weeks
ended
24 July 2011
pence

Earnings
per share
52 weeks
ended
25 July 2010
pence

Basic earnings/diluted earnings

46,792

40,778

Adjusted earnings before exceptional items

46,632

48,560

Adjusted earnings after exceptional items

41,243

38,003

35.4

35.3

31.2

30.2

36.0

28.2

Free cash flow per share
The calculation of free cash flow per share is based on the net cash generated by business activities and available 
for investment in new pub developments and extensions to current pubs, after funding interest, corporation tax, 
all other reinvestment in pubs open at the start of the period and the purchase of own shares under the employee 
Share Incentive Plan (‘free cash flow’). It is calculated before taking account of proceeds from property disposals, 
inflows and outflows of financing from outside sources and dividend payments and is based on the same number 
of shares in issue as that for the calculation of basic earnings per share. 

Free cash flow per share

Free cash flow (£000)
Free cash flow per share 

52 weeks 
ended
24 July 2011

52 weeks 
ended
25 July 2010

78,818
59.7p

71,344
52.9p

ANNUAL REPORT AND ACCOUNTS 2011

19

NOTES TO THE FINANCIAL STATEMENTS

8 Cash generated from operations

Profit attributable to shareholders
Adjusted for:
Tax
Impairment charge
Loss on disposal of property, plant and equipment
Amortisation of intangible assets
Depreciation of property, plant and equipment
Lease premium amortisation
Share-based charges
Interest receivable
Amortisation of bank loan issue costs
Interest payable

Change in inventories
Change in receivables
Change in payables

Net cash inflow from operating activities

9 Analysis of changes in net debt

Cash in hand
Debt due after one year (note 20)

Bank borrowing
Finance lease creditor – due less than one year
Finance lease creditor – due after one year

Net borrowings
Derivative – interest-rate swaps (note 20)

52 weeks 
ended
24 July 2011
£000

52 weeks 
ended
25 July 2010
£000

46,792

40,778

14,600
4,410
979
1,223
42,866
306
4,595
(36)
1,948
33,616

19,680
10,557
–
811
42,620
268
3,987
(16)
1,227
27,787

151,299
(1,577)
(1,896)
30,371

147,699
(1,957)
(3,401)
11,064

178,197

153,405

At 
25 July 2010
£000

Cash flows

£000

Non-cash 
movement
£000

At
24 July 2011
£000

26,081
(405,612)

(379,531)
(2,829)
(6,031)

(388,391)
(61,391)

1,609
(49,962)

(48,353)
2,908
–

(45,445)
–

–
(1,948)

(1,948)
(3,208)
1,299

(3,857)
3,511

27,690
(457,522)

(429,832)
(3,129)
(4,732)

(437,693)
(57,880)

Net debt

(449,782)

(45,445)

(346)

(495,573)

20

J D WETHERSPOON PLC

10 Dividends paid and proposed

Declared and paid during the year:
Dividends on ordinary shares:
– interim for 2010/11: 4.0p (2009/10: 19.0p)

Dividends paid

Proposed for approval by shareholders at the AGM:
– final dividend for 2010/11: 8.0p (2009/10: 0.0p)

NOTES TO THE FINANCIAL STATEMENTS

52 weeks
ended
24 July 2011
£000

52 weeks 
ended
25 July 2010
£000

5,211

26,174

5,211

26,174

10,402

–

As detailed in the interim accounts, the board declared and paid an interim dividend of 4.0p for the financial year ending
24 July 2011. 

11 Property, plant and equipment

Cost:
At 26 July 2009
Additions
Transfers
Transfer from assets held for sale
Disposals

At 25 July 2010
Additions
Transfers
Transfer to assets held for sale
Disposals

Freehold and
long-leasehold
property
£000

Short-
leasehold
property
£000

Equipment,
fixtures
and fittings
£000

Expenditure on
unopened 
properties
£000

Total

£000

526,390
6,566
20,839
–
(96)

553,699
15,167
58,728
–
(2,848)

362,313
2,633
20,169
–
(2,469)

382,646
3,401
6,791
–
(1,387)

288,502
16,576
13,348
–
(2,364)

316,062
28,655
13,431
–
(2,185)

18,100
62,174
(54,356)
3,038
(279)

28,677
75,485
(78,950)
(611)
(1,496)

1,195,305
87,949
–
3,038
(5,208)

1,281,084
122,708
–
(611)
(7,916)

At 24 July 2011

624,746

391,451

355,963

23,105

1,395,265

Depreciation and impairment:
At 26 July 2009
Provided during the period
Impairment loss and depreciation adjustment
Disposals
Transfer from assets held for sale

At 25 July 2010
Provided during the period
Impairment loss
Disposals
Reclassification

75,978
10,204
1,674
(7)
–

87,849
12,118
2,231
(395)
1,503

130,024
12,375
6,775
(2,294)
–

146,880
9,906
2,031
(798)
(1,503)

215,400
20,041
992
(2,012)
–

234,421
20,842
148
(1,639)
–

–
–
–
–
1,220

1,220
–
–
(820)
–

421,402
42,620
9,441
(4,313)
1,220

470,370
42,866
4,410
(3,652)
–

At 24 July 2011

103,306

156,516

253,772

400

513,994

Net book amount at 24 July 2011

521,440

234,935

102,191

22,705

881,271

Net book amount at 25 July 2010

465,850

235,766

81,641

27,457

810,714

Net book amount at 26 July 2009

450,412

232,289

73,102

18,100

773,903

ANNUAL REPORT AND ACCOUNTS 2011

21

NOTES TO THE FINANCIAL STATEMENTS

11 Property, plant and equipment continued

Impairment of property, plant and equipment
The company considers each trading outlet to be a separate cash-generating unit (CGU), with each CGU reviewed annually
for indicators of impairment.

In assessing whether an asset has been impaired, the carrying amount of the CGU is compared with its recoverable amount.
The recoverable amount is the higher of its fair value less costs to sell and its value in use. In the absence of any information
about the fair value of a CGU, the recoverable amount is deemed to be its value in use.

The company estimates value in use using a discounted cash flow model, based on the expected future trading performance
anticipated by management. There is a significant number of interconnected assumptions which underpins the value-in-use
calculations. However, the underlying basis for the impairment model involves each CGU’s projected cash flow for the 
52 weeks ending 22 July 2012, extrapolated to incorporate individual assumptions, in respect of sales growth, gross margin
and cost-savings for that specific CGU. The pre-tax discount rate employed by the company this year was 10% (2010: 10%). 

The board approved the discount rate, considering it to be prudent, yet reflective of the current economic climate.

As a result of this exercise, an impairment loss of £4,410,000 (2010: £10,557,000) was charged to operating costs in the
income statement.

Of the previous year’s charge, £9,441,000 is reflected in the table above, while £1,117,000 relates to other non-current
assets, as described in note 13.

Management believes that a reasonable change in any of the key assumptions, for example the discount rate applied to each
CGU, could cause the carrying value of the CGU to exceed its recoverable amount, but that the change would be immaterial. 

Finance leases
The carrying value of fixed assets held under finance leases at 24 July 2011, included within equipment, fixtures and fittings,
was as follows: 

Cost
Accumulated depreciation

Net book amount

2011
£000

2010
£000

13,399
(7,862)

13,915
(5,456)

5,537

8,459

22

J D WETHERSPOON PLC

12 Intangible assets

Cost:
At 26 July 2009
Additions

At 25 July 2010
Additions
Disposals

At 24 July 2011

Amortisation
At 26 July 2009
Amortisation during the period

At 25 July 2010
Amortisation during the period
Disposals

At 24 July 2011

Net book amount at 24 July 2011

Net book amount at 25 July 2010

Net book amount at 26 July 2009

NOTES TO THE FINANCIAL STATEMENTS

IT software costs
£000

14,334
2,653

16,987
6,049
(49)

22,987

9,476
811

10,287
1,223
(48)

11,462

11,525

6,700

4,858

Amortisation of £1,223,000 (2010: £811,000) is included in the cost of sales in the income statement.

Included within the intangible assets is £5,819,000 of assets in the course of development (2010: £903,000). 

Finance lease
The carrying value of fixed assets held under finance leases at 24 July 2011, included within intangible assets, was as follows:

Cost
Accumulated depreciation

Net book amount

2011
£000

1,909
–

1,909

2010
£000

–
–

–

The company has entered into a contract for the design and implementation of an ERP system. Commitments in terms of 
this agreement total £2.3m.

ANNUAL REPORT AND ACCOUNTS 2011

23

NOTES TO THE FINANCIAL STATEMENTS

13 Other non-current assets

Cost:
At 26 July 2009
Additions
Disposals

At 25 July 2010
Additions

At 24 July 2011

Amortisation
At 26 July 2009
Amortisation during the period
Impairment charge (note 11)

At 25 July 2010
Amortisation during the period

At 24 July 2011

Net book amount at 24 July 2011

Net book amount at 25 July 2010

Net book amount at 26 July 2009

14 Inventories

Goods for resale at cost

15 Other receivables

Other receivables
Prepayments and accrued income

Lease premiums
£000

9,746
3,636
(219)

13,163
825

13,988

1,777
268
1,117

3,162
306

3,468

10,520

10,001

7,969

2011
£000

2010
£000

21,488

19,911

2011
£000

4,429
17,194

2010
£000

5,936
13,791

21,623

19,727

At the balance sheet date, the company was exposed to a maximum credit risk of £4.4 million, of which £198,000 was
overdue. The company holds no collateral for these receivables, and no impairment to receivables was deemed necessary 
at the balance sheet date. 

24

J D WETHERSPOON PLC

NOTES TO THE FINANCIAL STATEMENTS

16 Assets held for resale

As at 24 July 2011, one unit was classified as held for sale (2010: 0 units).

The major classes of assets held, comprising the unit classified as held for sale, were as follows:

Property, plant and equipment

2011
£000

70

2010
£000

–

A total loss of £541,000, in writing this asset down to fair value less costs to sell, has been included within exceptional 
items (note 3). 

It is expected that this unit will be disposed of by public auction early in the new financial year. 

17 Cash and cash equivalents

Cash at bank and in hand

Cash at bank earns interest at floating rates, based on daily bank deposit rates. 
There is no difference between the fair value and book value of cash and cash equivalents.

18 Trade and other payables

Trade payables
Other payables
Other tax and Social Security
Accruals and deferred income

2011
£000

2010
£000

27,690

26,081

2011
£000

94,713
5,878
30,099
59,087

2010
£000

87,757
5,737
21,999
47,060

189,777

162,553

ANNUAL REPORT AND ACCOUNTS 2011

25

NOTES TO THE FINANCIAL STATEMENTS

19 Financial liabilities

Current
Finance lease obligations

Non-current
Bank loans
Variable-rate facility 
Other
Finance lease obligations 

Total non-current financial liabilities

2011
£000

2010
£000

3,129

2,829

457,522

405,612

4,732

6,031

462,254

411,643

26

J D WETHERSPOON PLC

NOTES TO THE FINANCIAL STATEMENTS

20 Financial instruments

For a discussion on capital risk management, please refer to section 2 on page 42. Also discussed in section 2 on page 43 
are the financial risks associated with financial instruments, including credit risk and liquidity risk.

The table below analyses the company’s financial liabilities which will be settled on a net basis into relevant maturity
groupings, based on the remaining period at the balance sheet date to the contractual maturity date. The amounts 
disclosed in the table are the contractual undiscounted cash flows.

Maturity profile of financial liabilities

Within
1 year
£000

1–2 years
£000

2–3 years
£000

3–4 years
£000

4–5 years
£000

As at 24 July 2011
15,397
Bank loans
729
Other long-term payables
Finance lease obligations
3,480
Trade and other payables 159,678
18,553
Derivatives

15,397
698
2,856
–
18,553

489,703
698
2,171
–
18,553

–
698
–
–
10,248

–
698
–
–
6,986

Within 
1 year
£000

1–2 years
£000

2–3 years
£000

3–4 years
£000

4–5 years
£000

At 25 July 2010
12,969
Bank loans
641
Other long-term payables
Finance lease obligations
3,281
Trade and other payables 140,554
18,884
Derivatives

12,969
642
2,817
–
18,884

12,969
642
2,193
–
18,884

423,208
642
1,678
–
18,884

–
642
–
–
10,246

More than
5 years
£000

–
5,215
–
–
115

More than 
5 years
£000

–
4,741
–
–
7,247

Total
£000

520,497
8,736
8,507
159,678
73,008

Total
£000

462,115
7,950
9,969
140,554
93,029

At the balance sheet date, the company had total UK committed loan facilities of £550 million (2010: £550 million) which
comprised a £530-million unsecured-term revolving-loan facility and an overdraft facility of £20 million, maturing in March
2014. All UK-committed loan facilities are at floating rates, based on LIBOR. The company has entered into swap agreements
which fix £400 million. The effective weighted average of all of the swap agreements entered into is 5.47% (2010: 5.47%),
fixed for a weighted average period of 3.9 years (2010: 4.9 years). 

At the balance sheet date, £480 million (2010: £415 million) was drawn down under the £530-million unsecured-term
revolving-loan facility, with interest rates set for periods of between one and six months, at which points monies are repaid
and, if appropriate, redrawn. 

Interest-rate and currency risks of financial liabilities
An analysis of the interest-rate profile of the financial liabilities, after taking account of all interest-rate swaps, is set out in
the following table.

Analysis of interest-rate profile of the financial liabilities
Floating-rate borrowings
Fixed-rate borrowings:
– bank loans
– finance lease obligations 

2011
£000

2010
£000

57,522

5,612

400,000
7,861

400,000
8,860

465,383

414,472

The floating-rate borrowings are interest-bearing borrowings at rates based on LIBOR, fixed for periods of up to six months.

ANNUAL REPORT AND ACCOUNTS 2011

27

NOTES TO THE FINANCIAL STATEMENTS

20 Financial instruments continued

Obligations under finance leases
The minimum lease payments under finance leases fall due as follows:

Within one year
In the second to fifth year, inclusive

Less future finance charges

Present value of lease obligations

Less amount due for settlement within one year

2011
£000

3,481
5,026

2010
£000

3,281
6,688

8,507

9,969

(646)

(1,109)

7,861

8,860

(3,480)

(2,829)

Amount due for settlement during the second to fifth year, inclusive

4,381

6,031

All finance lease obligations are in respect of various equipment and software used in the business. No escalation clauses are
included in the agreements. 

Fair values
Set out below is a comparison by category of carrying amounts and fair values of all of the financial instruments carried in
the financial statements.

2011
Book value
£000

2011
Fair value
£000

2010
Book value
£000

2010
Fair value
£000

Financial assets 

Loans and receivables 
Cash and cash equivalents
Other receivables

Financial liabilities
Other financial liabilities
Trade and other payables
Finance lease obligations
Long-term borrowings

27,690
4,429

27,690
4,429

26,081
5,936

26,081
5,936

(159,678)
(7,861)
(457,522)

(159,678)
(8,328)
(495,060)

(140,554)
(8,860)
(405,612)

(140,554)
(9,334)
(416,969)

Derivatives
Interest-rate, currency and basis swaps

(57,880)

(57,880)

(61,391)

(61,391)

The fair value of finance leases has been calculated by discounting the expected cash flows at the year end’s prevailing
interest rates.

The fair value of derivatives has been calculated by discounting all future cash flows by the market yield curve at the
balance sheet date. 

The fair value of borrowings has been calculated by discounting the expected future cash flows at the year end’s prevailing
interest rates.

28

J D WETHERSPOON PLC

NOTES TO THE FINANCIAL STATEMENTS

20 Financial instruments continued

Interest-rate swaps
At 24 July 2011, the company had fixed-rate swaps designated as hedges of floating-rate borrowings. The floating-rate
borrowings are interest-bearing borrowings at rates based on LIBOR, fixed for periods of up to six months.

The interest-rate swaps of the floating-rate borrowings were assessed to be effective; a cumulative loss of £57,880,000 
(2010: a loss of £61,391,000), with a deferred tax credit of £14,470,000 (2010: a credit of £16,570,000), relating to the
hedging instrument, is included in equity. A gain of £3,511,000 for the year (2010: loss of £25,395,000) is reflected in equity. 

Fair value of financial assets and liabilities
Effective from 27 July 2009, the company adopted the amendment to IFRS 7 for financial instruments which are measured
in the balance sheet at fair value. This requires disclosure of fair value measurements by level, using the following fair value
measurement hierarchy:

– Quoted prices in active markets for identical assets or liabilities (level 1)
–

Inputs other than quoted prices included in level 1 which are observable for the asset or liability,
either directly or indirectly (level 2)
Inputs for the asset or liability which are not based on observable market data (level 3) 

–

The fair value of the cash flow hedge of £57.9 million is considered to be level 2. All other financial assets and liabilities are
measured in the balance sheet at amortised cost. 

21 Other liabilities 

Operating lease incentives and provisions
Amount held in respect of gaming machine settlement under appeal by HMRC

2011
£000

9,819
14,947

2010
£000

8,153
14,941

24,766

23,094

Included in other liabilities are lease incentives on leases where the lessor retains substantially all of the risks and benefits of
ownership of the asset. The lease incentives are recognised as a reduction in rent paid over the lease term, resulting in
deferred income recognised on the balance sheet.

The weighted average period to maturity of operating lease incentives is 16.1 years (2010: 16.3 years). 

Also included is an amount held in respect of the company’s gaming machine VAT claim. A decision was released during the
previous financial year in respect of Rank plc’s gaming claim, and this latest ruling fell in the taxpayer’s favour. As a result, 
the company was able to further pursue its own gaming claim which was submitted in January 2006. HMRC made a
repayment of the existing claim, subject to the company providing a guarantee to HMRC that, in the event that the existing
decision be overturned in a higher court, the amount will be repayable in full. HMRC lodged an appeal with the European
Court of Justice in respect of Rank plc’s decision and this was heard on 30 June 2011; a decision is expected by the end of
the calendar year. The company is holding the repayment amount of £14,947,000 as a liability, until the Rank plc case has
reached its final conclusion.

ANNUAL REPORT AND ACCOUNTS 2011

29

NOTES TO THE FINANCIAL STATEMENTS

22 Financial commitments

The company has entered into commercial leases on certain properties. The terms of the leases vary; however, on inception, 
a property lease will be for a period of up to 30 years. Most property leases have upwards-only rent reviews, based on 
open-market rent at the time of the review.

The minimum contractual operating lease commitments fall due as follows:

Land and building

Within one year
Between one and five years
After five years

2011
£000

2010
£000

60,736
228,286
916,432

59,030
224,132
952,502

1,205,454

1,235,664

The company has operating lease commitments, with rentals determined in relation to sales. An estimate of the future
minimum rental payments under such leases of £58 million (2010: £52 million) is included above. 

23 Related-party disclosures

No transactions have been entered into with related parties during the year. 

As required by IAS 24, the following information is disclosed about key management compensation.

Key management compensation 

Salaries and short-term employee benefits
Post-employment pension benefits
Termination benefits
Share-based charges

2011
£000

2,578
154
366
350

2010
£000

3,357
199
–
420

3,448

3,976

For additional information about directors’ emoluments, please refer to the directors’ remuneration report. 

Directors’ interests in employee share plans
Details of the shares held by executive members of the board of directors are included in the remuneration report on
pages 54 to 59 which forms part of these financial statements.

30

J D WETHERSPOON PLC

24 Share capital

At 26 July 2009
Allotments

At 25 July 2010
Allotments
Repurchase of shares

At 24 July 2011

NOTES TO THE FINANCIAL STATEMENTS

Number of
shares
000s

138,974
151

139,125
68
(7,585)

Share
capital
£000

2,779
4

2,783
1
(152)

131,608

2,632

The total authorised number of 2p ordinary shares is 500 million (2010: 500 million). All issued shares are fully paid.
Proceeds from the issuance of shares amounted to £225,000 (2010: £523,000).

During the year, 7,585,000 shares (representing approximately 5% of the issued share capital) were repurchased by the
company for cancellation, at a cost of £32.6 million, excluding stamp duty, representing an average cost per share of 428p.

The effect of the buyback programme is to enhance the earnings per share in the current and future years. 

While the memorandum and articles of association allow for preferred, deferred or special rights to attach to ordinary shares,
no shares carried such rights at the balance sheet date. 

25 Share-based payments 

Movements in the year
The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, each
category of share options, during the year. The significance of options granted before 7 November 2002 is that they have
been excluded from the IFRS 2 share-based payment charge, on the basis of their date of grant. No options were granted
after 7 November 2002. 

(a) New Discretionary Share Option Scheme (NDSO)

Outstanding at the beginning of the year
Lapsed in the year
Exercised in the year
Outstanding at the end of the year

2011
Number

67,296
(5,568)
(48,238)
13,490

Weighted average contractual life remaining for share options 
outstanding at the year end
Exercise price for options outstanding at the year end

0.1 year
339.0p

(b) 2001 Executive Scheme (2001 scheme)

Outstanding at the beginning of the year
Lapsed in the year
Exercised in the year
Outstanding at the end of the year

2011
Number

60,110
(2,960)
(19,695)
37,455

Weighted average contractual life remaining for share options 
outstanding at the year end
Exercise price for options outstanding at the year end

1.1 years
301.5p

2010
WAEP

350.1
352.9
353.3
343.7

2010
WAEP

301.5
301.5
301.5
301.5

2011
WAEP

339.0
339.0
339.0
339.0

2011
WAEP

301.5
301.5
301.5
301.5

2010
Number

203,805
(4,617)
(131,892)
67,296

0.8 year
339.0p

2010
Number

82,405
(2,991)
(19,304)
60,110

2.1 years
301.5p

ANNUAL REPORT AND ACCOUNTS 2011

31

NOTES TO THE FINANCIAL STATEMENTS

25 Share-based payments continued

At 24 July 2011, there were 26 members of the NDSO scheme, with average shareholdings of 519; there were 
176 members of the 2001 scheme, with average option-holdings of 213.

The exercise of an option under the NDSO and 2001 scheme will, in accordance with institutional shareholder guidelines, 
be conditional on the achievement of performance conditions. In respect of the NDSO and 2001 scheme, options are
exercisable three years after they have been granted and only if the company’s normalised earnings per share (excluding
exceptional items), over any three-year period, have exceeded the growth in the RPI by an average of at least 3% per annum. 

Fair value of share-based payments is determined with reference to market prices. 

26 Events after the balance sheet date

Following the year end, the company concluded an amendment and restatement of its existing banking facility. The new
non-amortising £555-million four-year-and-eight-month facility, expiring in March 2016, was put in place, with a syndicate
of nine existing lenders. Total facilities now available, including an overdraft, are £575.0 million. 

32

J D WETHERSPOON PLC

FINANCIAL RECORD for the five years ended 24 July 2011

Sales and results
Revenue from continuing operations

Operating profit before exceptional items
Exceptional items
Finance income
Finance costs
Fair value loss on financial derivatives

Profit on ordinary activities before taxation
Taxation

2007
£000

2008
£000

2009
£000

2010
£000

2011
£000

888,473

907,500

955,119

996,327

1,072,014

91,113
–
206
(29,295)
–

62,024
(15,190)

90,457
(3,275)
337
(32,566)
(794)

54,159
(18,624)

97,001
(21,920)
336
(31,182)
794

45,029
(19,730)

100,013
(10,557)
16
(29,014)
–

102,309
(5,389)
36
(35,564)
–

60,458
(19,680)

61,392
(14,600)

Profit for the year

46,834

35,535

25,299

40,778

46,792

Net assets employed
Non-current assets
Net current liabilities
Non-current liabilities
Deferred tax and other liabilities 

793,495
(78,731)
(456,567)
(85,590)

805,017
(80,806)
(458,732)
(84,932)

797,496
(199,468)
(346,259)
(84,076)

845,012
(111,164)
(473,034)
(98,673)

918,885
(131,492)
(520,134)
(96,214)

Shareholders’ funds

172,607

180,547

167,693

162,141

171,045

Ratios
Operating margin (excluding exceptional items)
Basic earnings per share (excluding exceptional items)
Free cash flow per share
Dividends per share (interim and final)

10.3%
28.1p
35.6p
12.0p

10.0%
27.6p
50.6p
12.0p

10.2%
32.6p
71.7p
0p

10.0%
36.0p*
52.9p
19.0p

9.5%
35.3p*
59.7p
12.0p

Notes to the financial record
(a) The summary of accounts has been extracted from the annual audited financial statements 
of the company for the five years shown.

*The weighted average number of shares has been adjusted to exclude treasury shares held in respect of the employee
Share Incentive Plan and the 2005 Deferred Bonus Scheme. 

ANNUAL REPORT AND ACCOUNTS 2011

33

SECTION 2

AUTHORISATION OF FINANCIAL STATEMENTS AND
STATEMENT OF COMPLIANCE WITH IFRSs

The financial statements of J D Wetherspoon plc 
(the ‘Company’) for the year ended 24 July 2011 were
authorised for issue by the board of directors on 
9 September 2011, and the balance sheet was signed 
on the board’s behalf by J Hutson and K Davis. 
J D Wetherspoon plc is a public limited company,
incorporated and domiciled in England and Wales. 
The Company’s ordinary shares are traded on the 
London Stock Exchange. 

The Company’s financial statements have been prepared
in accordance with the EU-endorsed IFRSs and IFRIC
interpretations as adopted by the EU and as applied in
accordance with the provisions of the Companies Act
2006. The principal accounting policies adopted by the
Company are set out on pages 37 to 41.

36

J D WETHERSPOON PLC

ACCOUNTING POLICIES

Basis of preparation
The financial statements of the Company have been
prepared in accordance with IFRSs as adopted by the 
EU, IFRIC interpretations and the Companies Act 2006
applicable to companies reporting under IFRS. The
financial statements have been prepared under the
historical cost convention, except for the revaluation of
financial instruments and share-based payments.

The Company’s financial statements are presented in
sterling, with all values rounded to the nearest thousand
pounds (£000), except where otherwise indicated. The
accounting policies which follow set out those policies
which apply in preparing the financial statements for 
the year ended 24 July 2011; they have been 
consistently applied. 

Critical accounting estimates and judgements 
The preparation of financial statements in conformity 
with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its
judgement in the process of applying the Company’s
accounting policies. The estimates and judgements are
based on historical experience and other factors,
including expectations of future events which are 
believed to be reasonable and constitute management’s
best judgement at the date of the financial statements. 
In the future, actual experience could differ from those
estimates. The areas involving a higher degree of
judgement or complexity or where assumptions and
estimates are significant to the financial statements are
disclosed below.

Insurance provision
A provision for public liability insurance is made for the
estimated exposure of the Company to claims. This has
been based on experience of historical claims.

Impairment of property, plant and equipment
The Company determines whether property, plant and
equipment is impaired by estimating a unit’s value in use
and fair value less costs to sell, to determine the
recoverable amounts of cash-generating units (CGUs). 

Fair value less costs to sell is determined using external
and internal estimates of the value of the Company’s
CGUs. The value in use is calculated using the estimated
earnings and cash flows derived by management
estimates and applying a suitable pre-tax discount rate to
these cash flows.

Any changes in the level of forecast earnings or cash
flows, the discount rate applied or the estimate in fair
value less costs to sell could give rise to an additional
impairment provision.

Hedging
The Company applies assumptions on future transactions
which could have an impact on those future borrowings

which are critical in the effectiveness calculations of its
interest-rate swaps. If these transactions were not to
occur, it may result in all or part of the cumulative gain 
or loss which was originally reported in equity being
transferred to the income statement.

Taxation
Significant judgement is required to determine the
provision for taxes, as the tax treatment for some
transactions cannot be fully determined, until a formal
resolution has been reached with the tax authorities. 
Tax benefits are not recognised until it is probable that
the benefit will be obtained.

Deferred tax
Deferred tax assets and liabilities require management’s
judgement in determining the amounts to be recognised.
In particular, significant judgement is used when assessing
the extent to which deferred tax assets and liabilities
should be recognised, with consideration given to the
timing and level of future taxable income and any future
tax-planning strategies. 

Segmental reporting
The Company reports in one business segment (that of
public houses) and one geographical segment (being the
United Kingdom). Given the immaterial size of the
Company’s hotel business, this has not been separately
disclosed as a business segment.

Exceptional items
The Company presents, on the face of the income
statement, those material items of income and expense
which, because of the nature and expected infrequency
of the event giving rise to them, merit separate
presentation, to allow shareholders to better understand
the elements of financial performance in the year, so as
to facilitate comparison with previous periods and to
better assess trends in financial performance. 

Property, plant and equipment
Property, plant and equipment are stated at cost or
deemed cost, less accumulated depreciation and any
impairment in value. Cost of assets includes acquisition
costs, as well as other directly attributable costs in
bringing the asset into a working condition.

Depreciation is calculated on a straight-line basis, over 
the estimated useful life of the asset as follows:

Freehold land is not depreciated. 

Freehold buildings are depreciated to their estimated
residual values over periods of 50 years.

Short-leasehold buildings are depreciated over the 
lease period.

Equipment, fixtures and fittings are depreciated over 
three to 10 years. 

ANNUAL REPORT AND ACCOUNTS 2011

37

ACCOUNTING POLICIES

Unopened properties are not depreciated until such time
as economic benefits are derived.

As required by IAS 16, property, plant and equipment’s
expected useful life and residual values are 
reviewed annually. 

The carrying values of property, plant and equipment are
reviewed for impairment, if events or changes in
circumstances indicate that their carrying values may not
be recoverable. Any impairment in the value of property,
plant and equipment is charged to the income statement. 

Intangible assets
Intangible assets are carried at cost, less accumulated
amortisation and accumulated impairment losses.

Intangible assets with a finite life are amortised on a
straight-line basis over their expected useful life, as follows:

Computer software – 3 to 10 years

The carrying value of intangible assets is reviewed for
impairment whenever events or changes in circumstances
indicate that the carrying value may not be recoverable. 

Profits and losses on disposal of property, plant and
equipment reflect the difference between the net selling
price and the carrying amount at the date of disposal and
are recognised in the income statement.

Impairment
At each reporting date, the Company assesses whether
there is an indication that an asset may be impaired. If
any such indication exists, or when annual impairment
testing for an asset is required, the Company makes an
estimate of the asset’s recoverable amount. An asset’s
recoverable amount is the higher of an asset or CGU’s 
fair value less costs to sell and its value in use; this is
determined for an individual asset, unless the asset does
not generate cash inflows which are largely independent
of those from other assets or groups of assets. Where the
carrying amount of an asset exceeds its recoverable
amount, the asset is considered impaired and is written
down to its recoverable amount. In assessing value in use,
the estimated future cash flows are discounted to their
present value using a pre-tax discount rate which reflects
current market assessments of the time value of money
and the risks specific to the asset. Impairment losses of
continuing operations are recognised in the income
statement in those expense categories consistent with the
function of the impaired asset.

An assessment is made at each reporting date about
whether there is any indication that previously recognised
impairment losses may no longer exist or may have
decreased. If such indication exists, the recoverable
amount is estimated. A previously recognised impairment
loss is reversed only if there has been a change in the
estimates used to determine the asset’s recoverable
amount since the last impairment loss was recognised.
If that is the case, the carrying amount of the asset is
increased to its recoverable amount. That increased
amount cannot exceed the carrying amount which would
have been determined, net of depreciation, had no
impairment loss been recognised for the asset in previous
years. Such reversal is recognised in the income
statement. After such a reversal, the depreciation charge
is adjusted in future periods, to allocate the asset’s revised
carrying amount, less any residual value, on a systematic
basis, over its remaining useful life.

Lease premiums
Payments made on entering into or acquiring leaseholds
which are accounted for as operating leases represent
prepaid lease payments. These are amortised on a
straight-line basis, over the lease term. Lease premiums
are disclosed as other non-current assets.

Assets held for sale
Where the value of an asset will be recovered through a
sale transaction, rather than continuing use, the asset is
classified as held for sale. Assets held for sale are valued
at the lower of book value and fair value, less any costs
of disposal, and are no longer depreciated. 

Inventories
Inventories are stated at the lower of cost and net
realisable value. The cost of finished goods includes
appropriate overheads. Cost is calculated on the basis of
‘first in, first out’, with net realisable value being the
estimated selling price, less any costs of disposal. 

Provisions
Provisions are recognised when the Company has a
present legal or constructive obligation as a result of a
past event and it is probable that an outflow of resources
will be required to settle the obligation and a reliable
estimate can be made of the obligation’s amount.

Revenue recognition
Revenue is the value of goods and services sold to third
parties as part of the Company’s trading activities, after
deducting discounts and sales-based taxes. 

Revenue is recognised when the significant risks and
rewards of ownership are transferred. Revenue represents
amounts derived principally from the sale of goods (drink
and food sales: recognised at the point at which the
goods are provided) and the rendering of services.
Machine revenue is recognised after deducting sales-
based taxes. All costs in relation to machine sales are
included in cost of sales.  

Leases
Leases where the Company assumes substantially all of
the risks and rewards of ownership are classified as
finance leases. Assets acquired under finance leases are

38

J D WETHERSPOON PLC

capitalised at the lower of their fair value and the present
value of future lease payments. The corresponding liability
is included in the balance sheet as a finance lease
payable. Lease payments are apportioned between
finance charges and reduction of the lease payable, so as
to obtain a constant rate of interest on the remaining
balance of the liability. Finance charges are charged as an
expense to the income statement, and the asset
depreciation is charged in line with the accounting policy
for property, plant and equipment. 

Leases where the lessor retains substantially all of the risks
and benefits of ownership of the asset are classified as
operating leases. Rental payments in respect of operating
leases are charged against operating profit, on a straight-
line basis, over the period of the lease. 

The Company also has contingent rentals payable, based
on turnover. These are charged to operating profit at the
higher of minimum contractual obligations under the
agreements or based as a percentage of turnover. 

Lease incentives
Lease incentives are recognised as a reduction of rental
expense to the break clause.

Borrowing costs
Borrowing costs are recognised as an expense in the
period in which they are incurred, unless the requirements
under IAS 23, for the capitalisation of borrowing costs
relating to assets, are met. 

Income taxes
Current tax assets and liabilities are measured at the
amount expected to be recovered from, or paid to, the
taxation authorities, based on tax rates and laws which are
enacted or substantively enacted at the balance sheet date.

Deferred income tax is recognised on all temporary
differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial
statements, with the following exceptions:

(cid:2) Where the temporary difference arises from an asset or
liability in a transaction which, at the time of the
transaction, affects neither accounting nor taxable profit
or loss.

(cid:2) Deferred income tax assets are recognised only to the
extent that it is probable that taxable profit will be
available against which the deductible temporary
differences, carried-forward tax credits or tax losses can
be utilised.

Deferred income tax assets and liabilities are measured on
an undiscounted basis at the tax rates which are expected
to apply when the related asset is realised or liability
settled, based on tax rates and laws enacted or
substantively enacted at the balance sheet date.

ACCOUNTING POLICIES

Income tax is charged or credited directly to equity, if it
relates to items which are credited or charged to equity.
Otherwise, income tax is recognised in the 
income statement. 

Free cash flow
The calculation of free cash flow is based on the net cash
generated by business activities after funding interest,
corporation tax, all other reinvestment in current pubs at
the start of the period and the purchase of own shares
under the employee share-based plan. 

Financial instruments
Financial assets and liabilities are recognised on the date
on which the Company becomes party to the contractual
provisions of the instrument giving rise to the asset 
or liability.

Financial assets
The Company classifies its financial assets in the following
categories: at fair value through profit or loss and loans
and receivables. The classification depends on the
purpose for which the financial assets were acquired.

a) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are
financial assets held for trading. A financial asset is
classified in this category, if acquired principally for the
purpose of selling in the short term. 

Gains and losses arising from changes in the fair value of
the ‘financial assets at fair value through profit or loss’
category are presented in the income statement within
‘fair value gain/loss on financial derivatives’ in the period
in which they arise.

b) Loans and receivables
Loans and receivables are non-derivative financial assets
with fixed or determinable payments which are not
quoted in an active market. They are included in current
assets, except for maturities greater than 12 months after
the balance sheet date. These are classified as non-
current assets. Loans and receivables are classified as
‘other receivables’ on the balance sheet.

Other receivables
Other receivables are initially recognised at fair value and
carried at amortised cost less an allowance for any
uncollectible amounts. An estimate for doubtful debts is
made, when collection of the full amount is no longer
probable. Bad debts are written off, when identified.

Cash and cash equivalents
Cash and short-term deposits in the balance sheet
comprise cash at bank and in hand and short-term
deposits with an original maturity of one month or under.
For the purpose of the cash flow statement, cash and
cash equivalents comprise cash and short-term deposits
as defined above. Bank overdrafts are shown within
current financial liabilities on the balance sheet.

ANNUAL REPORT AND ACCOUNTS 2011

39

ACCOUNTING POLICIES

Financial liabilities
The Company classifies its financial liabilities in the
following categories: at fair value through profit or loss and
other financial liabilities. The classification depends on the
purpose for which the financial liabilities were acquired.

a) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss are
financial liabilities held for trading. A financial liability is
classified in this category, if acquired principally for the
purpose of selling in the short term. Financial liabilities
with a designated hedge may also be categorised as
financial liabilities at fair value through profit or loss. They
are included in current liabilities, except for maturities
greater than 12 months after the balance sheet date.

b) Other financial liabilities
Other financial liabilities are measured at fair value on
initial recognition and subsequently measured at
amortised cost, using the effective-interest method.

Trade and other payables
Trade and other payables are initially recognised at 
fair value and subsequently at amortised cost, 
using the effective-interest method.

Bank loans and loan notes
Interest-bearing bank loans and loan notes are recorded
initially at fair value of consideration received net of direct
issue costs. Borrowings are subsequently recorded at
amortised cost, with any difference between the amount
initially recorded and the redemption value recognised in
the income statement over the period of the bank loans,
using the effective-interest method.

Bank loans and loan notes are classified as current
liabilities, unless the Company has an unconditional right
to defer settlement of the liability for at least 12 months
after the balance sheet date.

Derivative financial instruments and 
hedging activities
Derivative financial instruments used by the Company 
are stated at fair value on initial recognition and at
subsequent balance sheet dates. 

Hedge accounting is used only where, at the inception of
the hedge, there is formal designation and
documentation of the hedging relationship, it meets the
Company’s risk-management objective strategy for
undertaking the hedge and is expected to be highly
effective. The Company designates certain derivatives as
one of the following:

Interest-rate swaps
Hedges are classified as Interest-rate swaps where they
hedge exposure to cash flow variability which is
attributable to either a particular risk associated with a
recognised asset or liability or a forecast transaction. 

40

J D WETHERSPOON PLC

For interest-rate swaps, the effective portion of the gain
or loss on the hedging instrument is recognised directly in
equity, while the ineffective portion is recognised in the
income statement within ‘fair value gain/loss on financial
derivatives’. Amounts taken to equity are transferred to
the income statement when the hedged transaction
affects profit or loss, such as when a forecast sale or
purchase occurs. Where the hedged item is the cost of a
non-financial asset or liability, the amounts taken to
equity are transferred to the initial carrying amount of the
non-financial asset or liability. 

If a forecast transaction is no longer expected to occur,
amounts previously recognised in equity are transferred to
the income statement. If the hedging instrument expires
or is sold, terminated or exercised without replacement or
roll-over or if its designation as a hedge is revoked,
amounts previously recognised in equity remain in equity
until the forecast transaction occurs and are transferred to
the income statement or to the initial carrying amount of
a non-financial asset or liability, as above. If the related
transaction is not expected to occur, the amount is taken
to the income statement.

Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the
proceeds.

Foreign currencies
Transactions denominated in foreign currencies are
recorded at the rates of exchange prevailing at the date
of transaction. Monetary assets and liabilities are
translated at the year-end exchange rates, with the
resulting exchange differences taken to the income
statement, except where hedge accounting is applied. 

Retirement benefits
Contributions to personal pension schemes are
recognised in the income statement in the period in
which they fall due. All contributions are in respect of a
defined contribution scheme.

Dividends
Dividends recommended by the board, but unpaid at
each period end, are not recognised in the financial
statements until they are paid (in the case of the interim
dividend) or approved by shareholders at the annual
general meeting (in the case of the final dividend). 

Changes in net debt
Changes in net debt are both the cash and non-cash
movements of the year, including movements in derivative
financial instruments, of finance leases, borrowings, cash
and cash equivalents.

Share-based charges
The Company has an employee share incentive plan
which awards shares to qualifying employees; there is also
a deferred bonus scheme which awards shares to
directors and senior managers, subject to specific
performance criteria. 

The cost of equity-settled transactions with employees is
measured by reference to the fair value at the date at
which they are granted and is recognised as an expense
over the vesting period, which ends on the date on which
the relevant employees become fully entitled to the award.
In valuing equity-settled transactions, no account is taken
of any vesting conditions, other than market conditions
linked to the price of the shares of the Company. 

No expense is recognised for awards which do not
ultimately vest, except for awards where vesting is
conditional on a market condition. These are treated as
vesting, irrespective of whether or not the market
condition is satisfied, provided that all other performance
conditions are satisfied. At each balance sheet date
before vesting, the cumulative expense is calculated,
representing the extent to which the vesting period has
expired, being management’s best estimate of the
achievement or otherwise of non-market conditions and
of the number of equity instruments which will ultimately
vest or, in the case of an instrument subject to a market
condition, be treated as vesting as described previously.
The movement in cumulative expense since the previous
balance sheet date is recognised in the income statement,
with a corresponding entry in equity.

Where an equity-settled award is cancelled, it is treated as
if it had vested on the date of cancellation, with any cost
not yet recognised in the income statement for the award
being treated as an expense immediately. Any
compensation paid, up to the fair value of the award at
the cancellation or settlement date, is deducted from
equity, with any excess over fair value being treated as an
expense in the income statement. 

New standards, amendments and interpretations
effective in the current year:

Annual improvements 2009: This is a collection of
amendments to 12 standards as part of the IASB
programme of annual improvements. The standards
affected are:

(cid:2) IFRS 2 – ‘Share-based payments’
(cid:2) IFRS 5 – ‘Non-current assets held for sale and
discontinued operations’
(cid:2) IFRS 8 – ‘Operating segments’
(cid:2) IAS 1 – ‘Presentation of financial statements’
(cid:2) IAS 7 – ‘Statement of cash flows’
(cid:2) IAS 17 – ‘Leases’
(cid:2) IAS 18 – ‘Revenue’

ACCOUNTING POLICIES

(cid:2) IAS 36 – ‘Impairment of assets’
(cid:2) IAS 38 – ‘Intangible assets’
(cid:2) IAS 39 – ‘Financial instruments: Recognition 
and measurement’
(cid:2) IFRIC 9 – ‘Reassessment of embedded derivatives’
(cid:2) IFRIC 16 – ‘Hedges of a net investment in 
foreign operation’

The adoption of these amendments had no impact on the
Company’s results or financial position.

Standards, amendments and interpretations effective
in the current year, but not relevant to the Company:

Amendment to IAS 32: ‘Financial instruments:
Presentation on classification or rights issues’ 

Amendments to IFRS 2: ‘Share-based payments’ 
on group cash-settled transactions 

IFRIC 19: ‘Extinguishing financial liabilities with 
equity instruments’

Standards and interpretations which are not yet
effective and have not been early adopted by 
the Company:

IFRS 7: Financial instruments: Disclosures on derecognising

Amendment to IAS 12: ‘Income taxes’ 

Amendment to IAS 19: ‘Employee Benefits’

IFRS 13: ‘Fair value measurement’

IAS 24 (revised): ‘Related-party disclosures’

Annual improvements 2010

IFRS 9: ‘Financial instruments’, on ‘Classification and
measurement’

The above standards and interpretations are not expected
to have significant impact on the Company’s results or
financial position.

ANNUAL REPORT AND ACCOUNTS 2011

41

PRINCIPAL RISKS AND UNCERTAINTIES FACING 
THE COMPANY 

In the course of normal business, the Company
continually assesses significant risks faced and takes
action to mitigate the potential impacts.

The following risks, while not intended to be a
comprehensive analysis, constitute (in the opinion of the
board) the principal risks and uncertainties currently
facing the Company:

Regulatory risks
Regulation of the sale of alcohol
As a result of the high level of regulation in the industry
in which the Company operates, any changes to
regulation may have an impact on the business. In
particular, owing to the regulatory authority’s intention to
increase alcohol duties over the foreseeable future, there
is a risk that the Company’s sales and margins may face
increasing pressure. These are, however, risks faced by the
entire industry in which the Company operates.

Health and safety
It is important to provide a safe environment in which the
Company’s employees work, as well as safe facilities for
patrons to enjoy. Therefore, the Company has policies to
ensure that all reasonable standards of health and safety
are met. These include a process by which risks are
identified in a timely manner and remedied accordingly,
including a comprehensive training programme to assist
employees in this regard.

Economic and market conditions
Economic outlook
Since the Company operates in the retail sector, any
continued period of weak economic growth may affect
the Company’s performance. It is for this reason that the
Company continually assesses its customer offering, to
ensure that it delivers quality products at good value, in a
welcoming environment. In achieving this, the Company
will ensure that it remains competitively placed in the
market in which it operates.

Property values have been affected by the economic
downturn; this, consequently, can have an impact on the
value of the Company’s assets. However, given that the
Company has not revalued freehold sites since 1999, we
do not believe that there is a material difference between
the current market values and the book values held on
the balance sheet. The Company’s primary focus is to
trade from its estate successfully and to maximise the
profitability of its pubs. The continuing weak property
market provides the Company with further opportunities
to add to its estate portfolio. This year, the Company has
opened 50 pubs, with a lower development cost per
square foot than the Company’s historic average.

Cost increases
Inflationary pressures on the Company’s inputs pose a risk
to margins. The Company seeks to minimise the potential
effects of this risk by continuing to foster mutually
beneficial and long-term relationships with its suppliers,
while working hard across the business to continue to
drive down costs in all areas and achieve productivity
gains, so as to minimise the effect of any price increases.

Operational risks
Reputational risk
The Company is aware that, in operating in a consumer-
facing business, its business reputation, built over many
years, can be damaged in a significantly shorter
timeframe. As such, there is an ever-present focus on
improving controls to ensure that the Company operates
its business model through focus on delivering
consistently high-quality service and products, within a
well-maintained environment.

Supply-chain risks
Food and drink sales account for a significant proportion
of sales; therefore, it is fundamental to our operations
that we should be able to supply our pubs with the
required goods and services to operate. As a company,
we work closely with our third-party suppliers, producers
and supply-chain partners to ensure that our relationships
with them are positive, at all times. 

Head office and distribution centre
Any disasters at the Company’s head office (in Watford)
or its distribution centre (in Daventry) could seriously
disrupt its day-to-day operations. Various measures have
been undertaken by the Company, including a
comprehensive disaster-recovery plan, seeking to minimise
the potential impact of any such incidents.

Information technology
The Company’s daily operations are increasingly reliant on
its information technology systems. Any prolonged or
significant failure of these systems could pose a risk to
trading. The Company seeks to minimise this risk by
ensuring that there are policies and procedures to ensure
protection of hardware, software and information, by
various means, including a disaster-recovery plan, a
system of backups and external hardware and software.

Capital risk management
When managing capital, the Company’s objectives are to
safeguard its ability to continue as a going concern, in
order to provide returns for shareholders and benefits for
other stakeholders and to maintain an optimal capital
structure to reduce the cost of capital.

In order to maintain or adjust debt and equity levels
(together referred to as capital), the Company may adjust
the amount of dividends paid to shareholders, return capital

42

J D WETHERSPOON PLC

PRINCIPAL RISKS AND UNCERTAINTIES FACING THE COMPANY 

from change in the ‘mark to market’ valuation of the
interest-rate swaps into which the Company has entered,
calculated by a 1% shift of the market yield curve. The
Company considers that a 1% movement in interest rates
represents a reasonable sensitivity to potential changes.
However, this analysis is for illustrative purposes only.

b) Credit risk
Credit risk arises from cash and cash equivalents,
derivative financial instruments and deposits with banks
and financial institutions, as well as credit exposure to
receivables, principally on income received from sublets
and sundry income. The Company does not have
significant concentration of credit risk, as significantly the
majority of revenue is cash-based. 

At the balance sheet date, the Company was exposed to
a maximum credit risk of £4.4 million, of which £198,000
was overdue. The Company holds no collateral for these
receivables, and no impairment to receivables was
deemed necessary at the balance sheet date.

Where there are risks, the Company’s policies are aimed
at minimising losses. Cash deposits with financial
institutions and derivative transactions are permitted with
investment-grade financial institutions only. On income
received from sublets, the Company seeks to offer leases
to tenants who can demonstrate an appropriate payment
history and suitable credit-worthiness. Sundry income is
predominantly derived from the Company’s current
suppliers; so, any potential credit risks are mitigated by
offsetting against the liability with the supplier.

c) Liquidity risk
Prudent liquidity risk management implies maintaining
sufficient cash and marketable securities, the availability
of funding through an adequate amount of committed
credit facilities and the ability to close out market
positions. Owing to the dynamic nature of the underlying
business, the Company aims to maintain flexibility in
funding by keeping committed credit lines available.

Management monitors rolling forecasts on the Company’s
liquidity reserve, on the basis of expected cash flow,
through an assessment of short-, medium- and long-term
forecasts. In monitoring the cash flow, a key management
priority is to ensure that there are enough funds to meet
creditors, while monitoring that the Company is within its
banking covenants.

to shareholders, issue new shares, adjust the investment in
new properties and sell assets to reduce debt.

The Company considers its capital to be its allotted share
capital and its reserves (which are disclosed on the
statement of changes in shareholders’ equity on page
11) and monitors its capital on the basis of free cash
flow per share (which is disclosed in the cash flow
statement on page 9). In generating free cash flow, 
the Company uses the cash to provide returns for
shareholders by investing in new acquisitions, to buy
back shares, to pay dividends or to reduce the
Company’s debt, while ensuring that the Company has
enough funds to meet its working capital requirements
and to comply with its banking covenants. All covenants
were complied with during the year under review.

Financial risks
The Company’s activities expose it to a variety of financial
risks: market risk (including foreign exchange risk and
interest-rate risk), credit risk and liquidity risk. The
Company’s overall risk-management programme focuses
on the unpredictability of financial markets and seeks to
minimise potentially adverse effects on the Company’s
financial performance. The Company uses derivative
financial instruments to hedge certain risk exposure.

a) Market risk
i) Foreign-exchange risk
The Company operates only in the UK, so substantially 
all transactions are denominated in sterling; therefore, 
the Company does not suffer from significant 
foreign-exchange risk.

ii) Interest-rate risk
The Company’s policy is to manage its cost of borrowings
by using predominantly fixed rates, in order that the
Company not be exposed to cash flow interest-rate risks.

The Company manages its cash flow interest-rate risk by
using floating-to-fixed interest-rate swaps. Such interest-
rate swaps have the economic effect of converting
borrowings from floating rates to fixed rates. The
Company raises long-term borrowings at floating rates
and swaps them into fixed rates which are lower than
those available if the Company had borrowed at the fixed
rates directly. Under the interest-rate swaps, the Company
agrees with other parties to exchange, at specified
intervals, the difference between fixed contract rates and
floating-rate interest amounts, calculated by reference to
the agreed notional amounts.

During the year ended 24 July 2011, if the interest rates
on UK-denominated borrowings had been 1% higher,
with all other variables constant, pre-tax profit for the
year would have been reduced by £490,000 and equity
increased by £15,039,000. The movement in equity arises

ANNUAL REPORT AND ACCOUNTS 2011

43

INDEPENDENT AUDITORS’ REPORT to the members of J D Wetherspoon plc

We have audited the financial statements of 
J D Wetherspoon plc for the 52-week period ended 
24 July 2011 which comprise the Income Statement, the
Cash Flow Statement, the Balance Sheet, the Statement
of Changes in Shareholders’ Equity and the related notes.
The financial reporting framework that has been applied
in their preparation is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the
European Union.

Respective responsibilities of directors and auditors
As explained more fully in the Statement of Directors’
Responsibilities set out on page 50, the directors are
responsible for the preparation of the financial statements
and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on
the financial statements in accordance with applicable law
and International Standards on Auditing (UK and Ireland).
Those standards require us to comply with the Auditing
Practices Board’s Ethical Standards for Auditors.

This report, including the opinions, has been prepared for
and only for the company’s members as a body in
accordance with Chapter 3 of Part 16 of the Companies
Act 2006 and for no other purpose. We do not, in giving
these opinions, accept or assume responsibility for any
other purpose or to any other person to whom this report
is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.

Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts
and disclosures in the financial statements sufficient to
give reasonable assurance that the financial statements
are free from material misstatement, whether caused by
fraud or error. This includes an assessment of: whether
the accounting policies are appropriate to the company’s
circumstances and have been consistently applied and
adequately disclosed; the reasonableness of significant
accounting estimates made by the directors; and the
overall presentation of the financial statements. In
addition, we read all the financial and non-financial
information in the Annual Report and Accounts 2011 to
identify material inconsistencies with the audited financial
statements. If we become aware of any apparent material
misstatements or inconsistencies we consider the
implications for our report.

Opinion on financial statements
In our opinion the financial statements:

(cid:2) have been prepared in accordance with the
requirements of the Companies Act 2006.

Opinion on other matters prescribed by the
Companies Act 2006
In our opinion:

(cid:2) the part of the Directors’ Remuneration Report to be
audited has been properly prepared in accordance with
the Companies Act 2006;
(cid:2) the information given in the Directors’ Report for the
financial year for which the financial statements are
prepared is consistent with the financial statements; and
(cid:2) the information given in the Corporate Governance
Statement set out on pages 60 to 64 with respect to
internal control and risk management systems and about
share capital structures is consistent with the financial
statements.

Matters on which we are required to report 
by exception
We have nothing to report in respect of the following:

Under the Companies Act 2006 we are required to report
to you if, in our opinion:

(cid:2) adequate accounting records have not been kept, or
returns adequate for our audit have not been received
from branches not visited by us; or
(cid:2) the financial statements and the part of the Directors’
Remuneration Report to be audited are not in agreement
with the accounting records and returns; or
(cid:2) certain disclosures of directors’ remuneration specified
by law are not made; or
(cid:2) we have not received all the information and
explanations we require for our audit; or
(cid:2) a corporate governance statement has not been
prepared by the company.

Under the Listing Rules we are required to review:

(cid:2) the directors’ statement, set out on page 51, in relation
to going concern;
(cid:2) the parts of the Corporate Governance Statement
relating to the company’s compliance with the nine
provisions of the UK Corporate Governance Code
specified for our review; and
(cid:2) certain elements of the report to shareholders by the
Board on directors’ remuneration.

(cid:2) give a true and fair view of the state of the company’s
affairs as at 24 July 2011 and of its profit and cash flows
for the 52 week period then ended;
(cid:2) have been properly prepared in accordance with IFRSs
as adopted by the European Union; and

Andrew Paynter (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
9 September 2011

44

J D WETHERSPOON PLC

CORPORATE SOCIAL RESPONSIBILITY REPORT

The Company aims to be an important part of the local
communities in which it trades, managing its
responsibilities from both corporate and social
perspectives. The Company’s corporate social responsibility
plan identifies four areas: people; responsible retailing;
community and charity; the environment. 

The Company has also been recognised as an ‘Age
Positive’ employer, by the Department for Work and
Pensions. It has also been recognised by the Corporate
Research Foundation, in association with The Guardian
newspaper, as one of ‘Britain’s Top Employers’, for eight
consecutive years, including 2011. 

People

The Company aims to be a highly regarded employer,
through its investment in training and development,
policies on equality, a competitive remuneration package
and the encouragement of employees to participate
actively in business strategy. 

The Company created over 2,800 new jobs in 2010/11
and is working with government agencies to offer jobs to
the long-term unemployed. We placed 121 candidates
into permanent employment, helping to save substantial
amounts in benefits. 

The Company regularly benchmarks its remuneration
packages. In addition to competitive pay rates, the
Company has created a bonus scheme for all employees.
In this connection, the Company awarded bonuses and
shares (SIPs) for employees of £22.6 million in the year, an
increase of 0.5% (2010: £22.5 million). Of the payments,
98% were made to employees below board level, with
approximately 87% of payments made to employees
working in our pubs. In addition to this, all employees are
able to join the Company health plan and pension plan,
as well as obtain tax-efficient childcare vouchers. 

Responsible retailing 

In relation to training, the Company held over 1,000
separate training courses in 2010/11, attended by over
11,000 delegates, and promoted over 2,200 staff to 
shift leader or management positions. 

Responsible drinks retailing 
The Company supports practices which promote sensible
drinking and has established a ‘code of conduct for
responsible retailing’, outlining its approach in this area. 

In addition, the professional diploma in leisure retail
management, run in conjunction with Leeds Metropolitan
University, is offered to all pub managers and area
managers. We believe this diploma to have been the first
in-house programme in the licensed trade which allows
employees to gain a professional qualification while
working. The programme was extended to include a
‘degree top-up’, also in conjunction with the university. 

The quality and volume of the Company’s training courses
help to create motivation and to provide employees with
the necessary skills to carry out their jobs to a consistently
high standard. All employees are now able to participate
in e-learning, through a dedicated employee Web site. 

The Company has increased the range of nationally
recognised qualifications available to employees. As well
as the apprenticeship programme, employees can also
gain access to three new qualifications: a level 2 NVQ
diploma in beverage services, a level 2 NVQ diploma in
kitchen services and a level 2 apprenticeship in customer
service, developed specifically for 16- to 17-year-olds.

The Company is committed to equal opportunities and
the elimination of discrimination, harassment and
victimisation of employees. Of our workforce, 51% is
female and 49% male.

We also seek to develop partnerships with local
authorities and the police. All pubs are requested to
become a member of the local pubwatch (a scheme to
promote a safe and responsible drinking environment). 
In a number of locations, a Company pub manager chairs
the scheme and, where there is no pubwatch, we try to
work with the local police and council to establish one. 
A Company representative sits on the National Pubwatch
committee – and the business financially supports the
Drinkaware Trust and the British Institute of Innkeeping. 

The Company was the inaugural winner of the
‘Responsible Drinks Retailing Award’, jointly sponsored by
the Home Office and Morning Advertiser. In 2009, the
Company won the award for the second time. 

We encourage our pubs to enter the ‘Best Bar None’
schemes (run by local authorities and the police, to
encourage good behaviour in town centres), promoting
a safe and secure environment. 

Food information and quality 
The Company aims to improve the quality of its food
offering continually and to provide customers with the
required information about our product range, to allow
them to make informed decisions about their food
consumption. This includes nutritional information 
for all dishes, via our Web site and a printed leaflet,
available in pubs. 

ANNUAL REPORT AND ACCOUNTS 2011

45

CORPORATE SOCIAL RESPONSIBILITY REPORT

The Company endeavours to ensure strict specifications
for all of its products, so that high standards of quality
are met. For example, the sausages which the Company
sources from the Welsh Sausage Company contain only
British pork, with no artificial colours or flavours; the
Company uses only dolphin-friendly tuna; the haddock,
cod and salmon in our dishes are sourced from
recognised, sustainable fisheries; all fishcakes are made
with oak-smoked, line-caught, sustainable haddock; we
use only British Lion Quality free-range eggs and cook
with virtually trans-fat-free oil. 

All of the Company’s food suppliers are accredited by the
British Retail Consortium. 

The Company is working with the Food Standards Agency
(FSA) and its suppliers to reduce the salt, saturated fats
and sugar levels in its menu offering, in line with the
latest FSA guidelines.

Working with suppliers 
The Company usually seeks to promote long-term
relationships with its suppliers and supports UK farming,
using British chips and British beef in its beef burgers,
lasagne, chilli con carne, steak & kidney pudding and
beef & Abbot Ale pie.

Where practicable, the Company works with suppliers,
contractors and partners to minimise environmental
impact and encourage sustainable sourcing. 

The Company supports brewers of all sizes, across the UK
and Ireland, so that customers can enjoy a diverse range
of real ales. Wetherspoon has supported the revival of
microbrewers through real-ale festivals, exhibitions, meet-
the-brewer events and the promotion and stocking of
their beers. Every pub endeavours to have at least four
ales available at all times, of which two are locally
sourced. There are 239 Wetherspoon pubs listed in the
CAMRA Good Beer Guide 2012 (2011: 235) – a larger
proportion than any other pub company. 

The Company seeks to carry out its business honestly,
ethically and with respect for the rights and interests of
all of those involved. The Company endeavours to ensure
that relations with customers, suppliers and business
partners are mutually beneficial and expects its business
practices and standards to be upheld. 

Health and safety 
The Company seeks to promote high standards of safety,
throughout the business, by endeavouring to ensure that
employees attend appropriate training. Pubs are regularly
assessed for risks, with relevant solutions identified to
address them. Pubs are also regularly audited for safety.
Of our pubs, 86% now have scores of four or five stars,

for the ‘Scores on the Doors’ system which awards
between zero and five stars – a local authority scheme to
measure good practice in these areas.

We have signed a Primary Authority Partnership (under
the Local Business Regulation Office scheme) for Health &
Safety, Food Safety and Trading Standards, with Reading
Borough Council. 

Community 

Historically, pubs have always been a focal point of any
community and we aim to continue that tradition by
supporting and building relationships with the local
community, through employment and the provision of
services and investment in the local area. We aim to ensure
that we provide full access for those with disabilities. 

The Company is the largest single corporate fund-raiser
for the CLIC Sargent charity (caring for children with
cancer and their families), a partnership now in its eighth
consecutive year, raising over £4.6 million to date, with a
pledge to raise a further £1 million annually. During the
past financial year, we have raised £1,080,612.

Environment

The environment
The Company encourages measures which promote
recycling and reduced energy consumption. It is the
Company’s policy to:
(cid:2) minimise the extent of the environmental impact,
where reasonably practicable.
(cid:2) conserve energy through minimising consumption and
maximising efficiency.
(cid:2) promote efficient purchasing which will both minimise
waste and allow materials to be recycled.
(cid:2) adopt efficient waste-management strategies which
reduce the amount of waste going to landfill or other
disposal sites.
(cid:2) seek to minimise any emissions or effluents which may
cause environmental damage.

Over the past 12 months, the Company has
complemented its policy with several initiatives, including
areas around energy-efficiency, recycling, ethical working
and health & safety.

Energy-efficiency
The Company recognises that energy consumption is
unavoidable, but understands that we have a
responsibility for those resources which we use and that
good environmental management is an essential part of
being a responsible business. 

46

J D WETHERSPOON PLC

CORPORATE SOCIAL RESPONSIBILITY REPORT

In addition, the business has a dedicated supply chain for
its food, bottled drinks and non-consumable products, so
that material can be returned to the Company’s recycling
operation, reducing the required number of road miles. 
In 2009, the Company was awarded a Certificate of
Environmental Achievement by Daventry District Council,
in recognition of the excellent waste-minimisation
progress achieved to date.

Anaerobic waste-recycling 
We are trialling an anaerobic digestion solution in 30 of
our pubs, with the aim of reducing, by 85%, the amount
of their food waste going to landfill. This will be
introduced nationally, if the trial proves to be a success.

Su Cacioppo
Personnel and Legal Director
9 September 2011

In the last year, we have been working with Carbon
Statement to measure each pub’s carbon footprint.
Carbon Statement produces a weekly carbon emissions
report for each pub, detailing the amount of carbon
dioxide (CO2) emitted by each pub, through energy usage
and waste disposal, as well as the CO2 emission reduction
through recycling. Carbon Statement has also assisted us
in ensuring that we comply with the government’s
Carbon Reduction Commitment (CRC) Energy Efficiency
Scheme, which started in April 2010.

The Company also aims to ensure that, when new pubs
are developed or current ones upgraded, equipment and
processes are introduced to minimise ongoing energy
consumption. 

Sustainability – reduce, reuse, recycle 
The Company aims to reduce the amount of waste going
to landfill and other disposal sites, through a combination
of packaging reduction, reusing packaging and the
recycling of waste products. 

Reduce
The Company continues to work with suppliers, to reduce
packaging materials brought into the pubs. This leads 
to fewer deliveries and reduces the required number of
road miles.

Reuse
Old uniforms and personal protective equipment are sent
to The Fire Fighters Charity, where they are reused either
in the UK or internationally.

Where possible, some electrical equipment is transferred
among pubs, by our distribution fleet, to help to 
reuse equipment.

Recycle
During the financial year 2010/11, the Company recycled
7,470 tonnes of waste, an increase of 15% on the
previous year. This included 42 tonnes of aluminium,
4,457 tonnes of cardboard and paper, 2,460 tonnes of
cooking oil, 391 tonnes of plastic and 120 tonnes of steel.

Glass-recycling will continue to be a major focus for the
current year. The business generates over 15,000 tonnes
of glass per annum and we have joined forces with Biffa,
our waste-disposal partner, to roll out glass-recycling
across the estate. The Company successfully recycled
10,447 tonnes of glass in this financial year and aims to
increase this to 90% of the glass supplied to pubs. We
have recently commenced a glass-crushing trial, in an
effort to improve this area further.

ANNUAL REPORT AND ACCOUNTS 2011

47

DIRECTORS, OFFICERS AND ADVISERS

Registered office
Wetherspoon House
Central Park
Reeds Crescent
Watford 
WD24 4QL

Company number 
1709784

Registrars
Computershare Investor Services plc
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS99 7NH

Independent auditors
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory
Auditors
1 Embankment Place
London 
WC2N 5RH

Solicitors
Macfarlanes LLP 
20 Cursitor Street
London 
EC4A 1LT

Bankers
Abbey National Treasury Services plc 
Bank of Tokyo-Mitsubishi UFJ
Barclays Bank plc
BNP Paribas
Crédit Industriel et Commercial
HSBC Bank plc
Lloyds TSB Bank plc
Svenska Handelsbanken AB
The Royal Bank of Scotland plc

Financial advisers
Investec Securities

Stockbrokers
Investec Securities

Tim Martin Chairman, aged 56

Founded the business in 1979, having previously studied law at Nottingham University and
qualified as a barrister. He became chairman in 1983.

John Hutson Chief Executive Officer, aged 46

Joined the Company in 1991 and was appointed to the board in 1996. 
He is a graduate of Exeter University and previously worked with Allied Domecq.

Kirk Davis Finance Director and Company Secretary, aged 40

Joined the Company in 2008 as deputy finance director and was appointed as company
secretary in October 2010 and became finance director in March 2011. He previously
worked for Tesco plc and qualified as a chartered management accountant in 2004.

Su Cacioppo Personnel and Legal Director, aged 44

Joined the Company in 1991 and was appointed to the board in 2008. 
She is a graduate of South Bank University and London Guildhall University 
and previously worked for Courage Ltd and Allied Leisure.

She worked in several operational roles in the Company, before being appointed 
as personnel director in 1999 and personnel and legal director in 2006. 

John Herring Senior Non-Executive Director, aged 53

Appointed to the board in 1997 and is chairman of the audit and nomination committees
and a member of the remuneration committee. He qualified as a chartered accountant
with Deloittes in the early 1980s and subsequently became a director within the corporate
finance division of Kleinwort Benson. He is a non-executive director of Workplace Systems
plc, Edinburgh Woollen Mills Limited and several other private companies.

Elizabeth McMeikan Non-Executive Director, aged 49

Appointed to the board in 2005 and is a member of the audit, remuneration and
nomination committees. She is a graduate of Cambridge University. She is a non-executive
director of several privately owned companies and chairs the Membership Selection Panel
for Network Rail. She also holds several independent positions in government and Whitehall. 

Elizabeth previously worked for Tesco plc for 12 years, in a wide variety of commercial and
operational roles, both in the UK and overseas.

Debra van Gene Non-Executive Director, aged 56

Appointed to the board in 2006 and is the remuneration committee chair and a member
of the audit and nomination committees. She is a graduate of Oxford University. She spent
17 years in the advertising industry, ending as deputy managing director of Butterfield Day
Devito Hockney. Since then, she has worked in the executive search industry. She was a
partner at Heidrick and Struggles and now runs her own company, Debra van Gene
Associates Ltd, of which she is managing director. 

Sir Richard Beckett Non-Executive Director, aged 67

Appointed to the board in 2009 and is a member of the audit, remuneration and
nomination committees.

He was called to the bar in 1965 and took silk in 1987. He was one of the pre-eminent
practitioners in regulatory and licensing matters. He is also a non-executive director of
Mercantile Investment Trust plc.

Management board
The management board comprises John Hutson, Kirk Davis, Su Cacioppo and the following:

David Capstick IT and Property Director, aged 50

Joined the Company in 1998 and is a graduate of the University of Surrey. He previously
worked for Allied Domecq, as well as having worked in other areas of the hospitality
industry, such as hotels and outside catering companies. 

He was appointed to the management board in 2003. 

Martin Geoghegan Operations Director, aged 42

Joined the Company in May 1994, having previously worked for Safeway plc. He worked
in several operational roles, before being appointed as operations director in 2004.

Rebecca Payton Marketing and Catering Director, aged 40

Joined the Company in 1997. She is a graduate of Brighton University and previously
worked for Gardener Merchant (now Sodexho).

She worked in several operational roles and headed up the catering team, before being
appointed as marketing and catering director in 2007.

48

J D WETHERSPOON PLC

DIRECTORS’ REPORT for the 52 weeks ended 24 July 2011

The directors present their report and audited accounts
for the 52 weeks ended 24 July 2011.

Principal activities, business review and 
future developments
The principal activities of the Company are the
development and management of public houses. 
Details of progress and future developments are given 
on pages 3 to 5.

Results and dividends
The profit on ordinary activities for the year, after
taxation, was £46,792,000 or 35.4p per share. 

The board proposes, subject to shareholders’ 
consent, to pay a final dividend of 8.0p per share, 
on 23 November 2011, to those shareholders on the
register on 21 October 2011, giving a total dividend 
for the year of 12.0p per share. 

Return of capital 
At the annual general meeting of the Company, held on
4 November 2010, the Company was given authority to
make market purchases of up to 20,854,868 of its own
shares. During the year to 24 July 2011, 7,585,000 shares
were purchased, with a nominal value of £151,700 for a
total consideration of £32.6 million excluding stamp duty.
This represented 5% of the called-up share capital.

Land
In the opinion of the directors, the market value of land
and buildings is not significantly different from the 
book value. 

Principal risks and uncertainties
A review of the Company’s financial risks and treasury
policies has been included in the finance review on 
page 7. A further discussion of the risks and uncertainties
facing the Company is included in section 2 on pages 42
and 43. 

The financial and non-financial 
key performance indicators (KPIs)
A review of the business, using financial and non-financial
KPIs, has been included in the finance review on 
pages 6 and 7.

Significant contractual or other arrangements
The only contractual arrangement regarded by the
Company as essential to its business is with DHL which
provides logistic services at the Company’s distribution
centre in Daventry.

Directors
The directors listed on page 48, other than Kirk Davis,
served throughout the financial year and up to the date

of signing the financial statements. Mr Davis was
appointed as a director on 11 March 2011 and served
from that date until the end of the financial year and up
to the date of signing the financial statements. 

In accordance with the Company’s articles of association:
(i) Kirk Davis, who was appointed to the board since the
last annual general meeting, is required to retire and (ii)
Su Cacioppo and Debra van Gene are required to retire
by rotation. However, pursuant to the terms of the UK
Corporate Governance Code, all of the directors of the
Company are to be subject to election by shareholders
every year. Accordingly, all members of the board, other
than John Herring (and not just those required to do so
by the Company’s articles of association) will retire and
seek re-election at this year’s AGM. John Herring has
decided to retire from the board and will not seek 
re-election at the AGM. 

Details of the terms under which the directors, who were
in office during the year, serve and their remuneration,
together with their interests in the shares of the
Company, are given in the directors’ remuneration report
on pages 54 to 59.

All appointments to the board are recommended by the
nominations committee and are made in accordance with
the provisions of the articles of association.

Third-party indemnity insurance, against the liabilities of
directors and officers of the Company, was in place
throughout the year, in respect of their duties as directors
and officers of the Company. Third-party indemnity
insurance was in place at the date of approval of the
financial statements. 

Interest in contracts
No director has any material interest in any contractual
agreement, other than an employment contract,
subsisting during or at the end of the year, which is or
may be significant to the Company.

Company’s shareholders
Details of the Company’s shareholders, including those
beneficial interests notified to the Company as accounting
for over 3% of the issued share capital, are given on 
page 65.

Takeover directive disclosures
The Company has an authorised share capital comprising
500 million ordinary shares of 2p each. As at 24 July 2011,
total issued share capital comprised 131,608,138 fully
paid-up shares of 2p each. The rights to these shares are
set out in the Company’s articles of association. There are
no restrictions on the transfer of these shares or their
attached voting rights.

ANNUAL REPORT AND ACCOUNTS 2011

49

DIRECTORS’ REPORT 

Details of significant shareholdings are given on page 65.

No person holds shares with specific rights regarding
control of the Company.

The Company operates an employee share incentive plan.
However, no specific rights with respect to the control of
the Company are attached to these shares. In addition,
the Company operates a deferred bonus scheme,
whereby, should a takeover occur, all shares held in trust
would be transferred to the employee immediately. 

The Company is not aware of any agreements among
holders of securities known to the Company which may
result in restrictions on the transfer of securities or 
voting rights.

The Company has the power to issue and buy back shares
as a result of resolutions passed at the annual general
meeting in 2010. It is the Company’s intention to renew
these powers; the resolutions approving them are found in
the notice of the annual general meeting for 2011.

In the event of a change of control, the Company is
obliged to notify its main bank lenders. The lenders shall
not be obliged to fund any new borrowing requests;
facilities will lapse 10 days after the change of control, if
the terms on which they can continue have not been
agreed on. Any borrowings, including accrued interest,
will become immediately repayable upon such lapse. 

(cid:2) select suitable accounting policies and then apply 
them consistently.
(cid:2) make judgements and accounting estimates which are
reasonable and prudent.
(cid:2) state whether applicable IFRSs, as adopted by the
European Union, have been followed, subject to any
material departures disclosed and explained in the
financial statements.
(cid:2) prepare the financial statements on the going-concern
basis, unless it is inappropriate to presume that the
Company will continue in business.

The directors are responsible for keeping adequate
accounting records which are sufficient to show and
explain the Company’s transactions and which disclose,
with reasonable accuracy, the financial position of the
Company, at any time, and enable them to ensure that
the financial statements and the directors’ remuneration
report comply with the Companies Act 2006 and, with
regard to the company financial statements, with Article 4
of the IAS regulation. They are also responsible for
safeguarding the assets of the Company and hence for
taking reasonable steps for the prevention and detection
of fraud and other irregularities.

The directors are responsible for the maintenance and
integrity of the Company’s Web site. Legislation in the
United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.  

There are no other significant agreements to which the
Company is party which may be subject to change of
control provisions.

Each of the directors, whose names and functions are
listed in the section ‘directors, officers and advisers’,
confirms that, to the best of his or her knowledge:

There are no agreements among the Company’s directors
or employees which provide for compensation for loss of
office or employment which occurs because of a
takeover bid.

Statement of directors’ responsibilities
The directors are responsible for preparing the annual
report, the directors’ remuneration report and the
financial statements, in accordance with applicable law
and regulations.

Company law requires the directors to prepare financial
statements for each financial year. Under that law, the
directors have prepared the company financial statements
in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union.
Under company law, the directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for
that period. In preparing these financial statements, the
directors are required to:

(cid:2) the company financial statements, which have been
prepared in accordance with IFRSs as adopted by the EU,
give a true and fair view of the assets, liabilities, financial
position and profit of the Company.
(cid:2) the directors’ report includes a fair review of the
development and performance of the business and the
position of the Company, together with a description of
the principal risks and uncertainties which it faces.
(cid:2) so far as each of the directors is aware, there is no
relevant audit information of which the Company’s
auditors are unaware.
(cid:2) each of the directors has taken all of the steps which he
or she ought to have taken as a director, in order to make
himself/herself aware of any relevant audit information
and to establish that the Company’s auditors are aware of
that information.

Statement of disclosure of information to auditors
In accordance with Section 418 of the Companies Act
2006, the directors report that, so far as they are aware,
all relevant audit information has been disclosed to the

50

J D WETHERSPOON PLC

Company’s auditors. The directors have taken all of the
steps which they ought to have taken as directors, in
order to establish that the Company’s auditors are aware
of that information. 

Going concern
The directors have made enquiries into the adequacy of
the Company’s financial resources, through a review of
the Company’s budget and medium-term financial plan,
including capital expenditure plans and cash flow
forecasts; they have satisfied themselves that the
Company will continue in operational existence for the
foreseeable future. For this reason, they continue to
adopt the going-concern basis in preparing the
Company’s financial statements.

Employment policies
Only through the skill and commitment of the Company’s
employees will its objectives be met. All staff are
encouraged to make a real commitment to the
Company’s success and to progress to more senior roles
as they, themselves, develop.

A heavy emphasis is placed on training programmes for
all levels of staff; this highlights the importance placed 
by the Company on providing a high level of service to 
its customers.

In selecting, training and promoting staff, the Company
has to take account of the physically demanding nature
of much of its work. The Company is committed to
equality of opportunity and to the elimination of
discrimination in employment. The Company aims to
create and maintain a working environment, terms and
conditions of employment and personnel and
management practices which ensure that no individual
receives less favourable treatment on the grounds of his
or her race, religion, nationality, ethnic origin, age,
disability, gender, sexual orientation or marital status.
Employees who become disabled will be retained, where
possible, and retrained, where necessary.

The Company has established a range of policies,
covering issues such as diversity, employees’ well-being
and equal opportunities, aimed at ensuring that all
employees are treated fairly and consistently.

Internal communications seek to ensure that staff are
well informed about the Company’s progress, through
the use of regular newsletters and briefings at staff
meetings, at which employees’ views are discussed and
taken into account. 

All pub staff participate in incentive bonus schemes
related to sales, profits and/or service standards.

DIRECTORS’ REPORT 

Policy on payment of suppliers
The Company agrees on terms and conditions with all
suppliers before business takes place and has a policy of
paying agreed invoices in accordance with the terms of
payment. Trade creditors at the year end represented 56
(2010: 56) days’ purchases. 

Political and charitable contributions
At pub level, the Company supports local community
initiatives and charitable causes through the appropriate
use of marketing investment. The Company also supports
CLIC Sargent (caring for children with cancer and their
families) and has helped to raise £1,080,612 in the
current year. It also provides advice and marketing
support to the charity, at no cost. The Company has not
made any political or charitable donations in the year. 

Business at the annual general meeting 
On pages 67 to 69 is a notice convening the annual
general meeting of the Company for 3 November 2011,
at which shareholders will be asked, as items of special
business, to give power to the directors to allot shares, to
give power to the directors to disapply the pre-emption
requirements of section 561 of the Companies Act 2006,
to give power to the directors to make market purchases of
ordinary shares in the capital of the Company, subject to
certain conditions, and to retain the ability to hold general
meetings on 14 clear days’ notice. The notice also sets out
details of the ordinary business to be conducted at the
annual general meeting. Set out below is an explanation of
the effect and purpose of the resolutions proposed. 

Resolution 1: Receive and adopt the audited accounts
The directors recommend that the Company adopt the
reports of the directors and the auditors and the audited
accounts of the Company for the year ended 24 July 2011.

Resolution 2: Approval of the directors’
remuneration report
Resolution 2 in the notice of annual general meeting,
which will be proposed as an ordinary resolution, asks
shareholders to approve the directors’ remuneration
report, set out on pages 54 to 59. 

Resolutions 3–8: Re-election of Mr Martin, 
Mr Hutson, Ms Cacioppo, Ms van Gene, 
Ms McMeikan and Sir Richard Beckett as directors 
The Company’s articles of association require one-third of
the directors to retire from office at each annual general
meeting. In addition, any director who has, at the annual
general meeting, been in office for more than three years
since his or her last appointment or reappointment should
also retire and may offer him or herself for re-election. 

However, the UK Corporate Governance Code now
provides that all directors of FTSE 350 companies should

ANNUAL REPORT AND ACCOUNTS 2011

51

DIRECTORS’ REPORT 

be subject to annual election by shareholders.
Accordingly, all members of the board, other than John
Herring (and not just those required to do so pursuant to
the Company’s articles of association) will retire and seek
re-election at this year’s annual general meeting. John
Herring has decided to retire from the board, after serving
as a director for 14 years, and will not seek re-election at
the AGM. 

Brief biographical details of each of the directors standing
for re-election may be found on page 48 and on the
Company’s Web site. The re-election resolutions are set
out as resolutions 3, 4, 5, 6, 7 and 8 in the notice of
annual general meeting.

Mr Martin, Mr Hutson, Ms Cacioppo, Ms van Gene, 
Ms McMeikan and Sir Richard Beckett all have extensive
experience of the Company or in business generally,
allowing them, subject to their re-election to the board,
to contribute to the Company’s development. The
chairman confirms that, following performance
evaluation, the directors’ performance continues to be
effective and demonstrates commitment to their
respective roles, including time commitments for board
and committee meetings. The board is therefore of the
opinion that Mr Martin, Mr Hutson, Ms Cacioppo, 
Ms van Gene, Ms McMeikan and Sir Richard Beckett
should be re-elected at the annual general meeting.

Resolution 9: Election of Mr Kirk Davis as director
Mr Davis was appointed as a new director of the
Company on 11 March 2011. Under the Company’s
articles of association, when the board appoints a new
director, that director must stand for election at the next
annual general meeting. Mr Davis will therefore stand for
election at this year’s annual general meeting. 

Brief biographical details of Mr Davis can be found on page
48 and on the Company’s Web site. The election resolution
will be proposed as an ordinary resolution and is set out as
resolution 9 in the notice of annual general meeting. 

Mr Davis has extensive experience of the Company and in
business generally, allowing him, subject to his re-election
to the board, to contribute to the Company’s development.
The board is therefore of the opinion that Mr Davis should
be elected at the annual general meeting.

Resolution 10: Reappointment of
PricewaterhouseCoopers LLP as auditors
Resolution 10, set out in the notice of annual general
meeting, proposes that PricewaterhouseCoopers LLP be
reappointed as the Company’s auditors and authorises the
directors to determine their remuneration. 

Resolution 11: Authority to allot
The Companies Act 2006 prevents directors of a public
company from allotting unissued shares, other than
pursuant to an employee share scheme, without the
authority of shareholders in a general meeting. In certain
circumstances, this could be unduly restrictive. The
general authority previously given to the directors to allot
‘relevant securities’ will expire at the end of the annual
general meeting convened for 3 November 2011.

Accordingly, resolution 11 in the notice of the annual
general meeting will be proposed as an ordinary
resolution to authorise the directors (pursuant to section
551 of the Companies Act 2006) to allot ordinary shares
in the capital of the Company:

(A) up to an aggregate nominal amount of £876,510,
representing approximately 33.3% of the nominal value
of the ordinary shares currently in issue.

(B) up to a further aggregate nominal amount of
£876,510, representing approximately 33.3% of the
nominal value of the ordinary shares currently in issue,
provided that they are offered by way of a rights issue in
favour of ordinary shareholders.

The authority (unless previously varied, revoked or
renewed) will expire on the earlier of 15 months from the
date of passing the resolution and the conclusion of the
next annual general meeting of the Company.

The Association of British Insurers revised its guidelines on
share allotments, in 2010, following a report of the Rights
Issue Review Group. Based on the guidelines, the limit on
the directors’ authority to allot shares under section 551 of
the Companies Act 2006 may be increased from one-third
to two-thirds of the Company’s issued share capital. The
guidelines provide that the amount of any authority above
one-third must be applied to fully pre-emptive rights issues
only and should be valid for one year only. If the Company
makes an allotment pursuant to such additional authority,
the ABI will expect that all directors will stand for re-
election at the next annual general meeting following the
decision to make the allotment in question. 

The directors will exercise such authority to allot shares
only when satisfied that it is in the interests of the
Company to do so. They have no present intention,
however, of exercising the authority, except in connection
with the issue of shares under the Company’s share
option schemes.

Resolution 12: Disapplication of pre-emption rights
The provisions of section 561 of the Companies Act 2006
(which confer on shareholders rights of pre-emption in

52

J D WETHERSPOON PLC

DIRECTORS’ REPORT 

Resolution 14: 14 days’ notice for general meetings
Changes made to the Companies Act 2006 by the
Shareholders’ Rights Regulations increase the notice
period required for general meetings of the Company to
21 clear days, unless shareholders approve a shorter
notice period, which cannot, however, be less than 14
clear days. Resolution 14 seeks such approval. The
approval will be effective until the Company’s next annual
general meeting, when it is intended that a similar
resolution will be proposed. 

Note that the changes to the Companies Act 2006 mean
that, in order to be able to call a general meeting on less
than 21 clear days’ notice, the Company must make a
means of electronic voting available to all shareholders for
that meeting.

The shorter notice period would not be used as a matter
of routine for such meetings, but only where the flexibility
is merited by the business of the meeting and is thought
to be to the advantage of shareholders as a whole. 

Annual general meetings will continue to be held on at
least 21 clear days’ notice.

Recommendation
The directors believe that the resolutions which are to be
proposed at the annual general meeting are in the best
interests of the Company and its shareholders as a whole
and recommend all shareholders to vote in favour of
them, as each of the directors intends to do, in respect of
his or her own beneficial holding. 

By order of the board

Kirk Davis 
Company Secretary
9 September 2011

respect of the allotment of ‘equity securities’ which are,
or are to be, paid up in cash, other than by way of
allotment to employees under an employee share scheme)
apply to the unissued ordinary shares of the Company to
the extent that they are not disapplied, pursuant to
sections 570 and 573 of the Companies Act 2006.

The current disapplication of these statutory pre-emption
rights will expire at the end of the annual general
meeting convened for 3 November 2011. Accordingly,
resolution 13, as set out in the notice of annual general
meeting, will be proposed as a special resolution to
permit directors to allot shares without the application of
these statutory pre-emption rights: first, in relation to
offers of equity securities by way of rights issue, open
offer or similar arrangements (save that, in the case of an
allotment pursuant to the authority in paragraph (B) of
resolution 11, such allotment shall be by way of rights
issue only); second, in relation to the allotment of equity
securities for cash, up to a maximum aggregate nominal
amount of £131,608 (representing approximately 5% of
the nominal value of the ordinary shares of the Company
currently in issue).

The authority (unless previously varied, revoked or
renewed) will expire on the earlier of 15 months from the
date of passing the resolution and the conclusion of the
next annual general meeting of the Company.

Resolution 13: Purchase of ordinary shares
In common with many other listed companies, the
Company proposes, once again, to seek an authority from
shareholders to permit it to purchase its own shares.
Accordingly, resolution 13 will be proposed as a special
resolution to authorise the Company to make market
purchases of up to 19,728,060 shares, just under 15% of
the Company’s current issued ordinary share capital, at
prices not less than the nominal value of an ordinary share
and not exceeding 105% of the average of the middle-
market quotations for an ordinary share for the five
business days before each purchase (exclusive of expenses).
The authority will last until the earlier of 15 months from
the date of passing the resolution and the conclusion of
the next annual general meeting of the Company. 

The directors envisage that purchases would be made
only after considering the effects on earnings per share
and the benefits for shareholders generally.

As at 24 July 2011, there were outstanding options over
50,945 ordinary shares, representing 0.04% of the
Company’s issued ordinary share capital. If the authority
under resolution 13 were to be exercised in full, this
would increase to 0.05%.

ANNUAL REPORT AND ACCOUNTS 2011

53

DIRECTORS’ REMUNERATION REPORT for the 52 weeks ended 24 July 2011

This report outlines the Company’s policy on executive
remuneration and gives details of directors’ pay and
pensions for 2011, the interest of directors in the
Company’s shares and the fees of the non-executive
directors. This report has been drawn up in accordance
with, among other things, the UK Corporate Governance
Code 2010 (the ‘Code’). This report will be put to an
advisory vote of the Company’s shareholders at the
annual general meeting on 3 November 2011.

Composition and role of the remuneration committee
The remuneration committee is appointed by the board
and comprises Debra van Gene (chair), Elizabeth
McMeikan, John Herring and Sir Richard Beckett. 

The committee meets throughout the year and performs
an annual review, covering elements of executive
directors’ remuneration. In addition, it approves all
contractual and other compensation arrangements for the
executive directors. The remuneration committee also
approves any grant of share options and annual
performance-related payments (whether in shares or cash)
for executive directors. In the year ended 24 July 2011,
the committee met five times.

No member of the committee has any personal financial
interest, other than as a shareholder, in the matters to be
decided by the committee. None of the executive
directors attended a meeting on matters relating to his or
her own remuneration. 

The committee has access to advice from external
consultants, as appropriate. No external advice was
sought during the year.

Remuneration policy
The aim of the Company’s remuneration policy is to: 
(cid:2) provide those packages required to attract, retain and
motivate directors and senior executives of high quality. 
(cid:2) align directors and senior executives’ long-term interests
with those of shareholders.
(cid:2) incentivise directors and senior executives to perform
to a high level.

Packages within the leisure retailing industry (and in those
markets from which the Company recruits) are monitored,
to ensure that remuneration remains competitive and
encourages appropriate behaviour and performance levels.

In fixing remuneration, note is also taken of the
remuneration structure throughout the organisation. For
example, the Company awarded bonuses and shares for
employees of £22.6 million in the year, 98% of which
were made to employees below board level. This amount
is included in total wages and salaries in note 4 to these
financial statements.

Overall reward levels are subject to the discretion of the
remuneration committee and depend partly on the
achievement of corporate performance targets and partly
on the performance of the individual. The Company
measures the performance of the executive directors in
respect of several main areas, including: 

(cid:2) Annual growth in profits before tax
(cid:2) Annual growth in owners’ earnings (cash profits) 
per share
(cid:2) Standards of service and amenity in the pubs
(cid:2) The number and quality of pub calls carried out by 
each executive director

The following comprises the components of the
remuneration of all executive directors:

Salary
Salaries and other benefits are determined annually in
September. The remuneration committee aims to take a
fair and commonsense approach, following a review of
the individual’s performance and by reference to the
industry and consideration of other comparisons and
reports. The review in September 2010 concluded that
there would be an increase of 3% in base salary for
executive directors.

Annual performance-related payments
It is the policy of the Company to operate bonus
arrangements, at all staff levels, which are performance-
related, the primary performance measures being sales,
profitability and operating standards. 

The executive directors participate in a management
bonus scheme, designed to incentivise business
performance. This is based on profitability and operating
standards, as well as personal contribution to annual
strategic company priorities. Company priorities in the year
to 24 July 2011 focused on the successful expansion of
the company estate as well as reinvestment in current
properties, retention of key staff and maintenance of
morale and performance through a difficult trading period.

The financial targets are based on annual growth in
profits before tax, excluding unrealised exceptional items,
multiplied by a factor of 1.5. This bonus is paid in cash
after the end of the financial year to which it relates. The
maximum bonus attainable represents 50% of salary for
the year. Unrealised exceptional items usually represent
asset write-downs, such as impairment, which become
realised only at the point when a pub is closed or when
land is legally sold. 

As annual profits before tax, excluding unrealised
exceptional items, in the year ending 24 July 2011, were
lower than the previous year, no element of the bonus
based on profitability was awarded. Company employees

54

J D WETHERSPOON PLC

from all levels received annual bonuses of between 5%
and 12% based on operating standards, and executive
directors received 12%, following the successful opening
of 50 new pubs, a programme of £38.4 million
refurbishment, maintenance of all key service levels and
retention of staff. 

The executive directors also receive bonuses in shares
under the Share Incentive Plan and the 2005 Deferred
Bonus Scheme, as described below.

Pension provision
The Company makes contributions to personal pension
schemes on behalf of all staff who opt to participate in
these schemes, including executive directors and senior
executives. It does not operate any defined benefit
pension schemes.

Share schemes

Share Incentive Plan
The Company’s policy on share incentives under its
various employee share schemes has been, and continues
to be, to distribute them widely across the Company’s
pub staff and head-office employees. In this way, the
Company seeks to encourage and motivate those key
employees involved at all levels of the Company, including
bar and kitchen staff. The Company established a share
incentive plan (incorporating an HM Revenue & Customs
(HMRC)-approved element), with effect from 1 August
2003, as a replacement for previous share option
schemes. This approved plan is an ‘all-employee plan’,
providing qualifying employees, including executive
directors (usually those who have given at least 18
months’ service), with bonuses in the form of shares in
the Company, twice each year. 

Shares will not vest for at least three years under this plan.
The HMRC-approved element of this plan allows for tax-
free returns, if held for over five years, thus providing a
long-term incentive for employees. The cost of the shares
will be reflected in the Company’s income statement for
financial years over the period in which they vest. 

As an additional incentive, the Company offers extra SIPs
under this scheme to higher grades of employee. Pub
managers receive an extra 5% annual award, head-office
staff 10–15% and directors and senior managers 20%.
Extra SIPs do not qualify for the same tax benefits as
those under the approved scheme. Awards to directors in
the year ended 24 July 2011 were 25% of annual salary.

In addition to the above, in November 2009, the
Company commenced offering partnership shares under
the Share Incentive Plan. The scheme allows all employees
(including directors) to use their pre-tax salary to buy
shares in the Company, on a monthly basis, using up to

DIRECTORS’ REMUNERATION REPORT 

10% (with a maximum of £1,500 a year) of their pre-tax
pay. The shares will not vest for at least three years and, if
held for over five years, allow for tax-free returns. 

2005 Deferred Bonus Scheme
In addition to the current Share Incentive Plan available to
all employees, the Company introduced a deferred bonus
scheme, with a view to incentivising and promoting share
ownership by key senior managers, including executive
directors, following shareholders’ approval at the annual
general meeting held on 10 November 2005. The
remuneration committee believes that this incentive
encourages consistent long-term performance, rather
than reliance on more narrowly based targets.

Bonus awards are made under the scheme annually, at
the discretion of the remuneration committee, to
executive directors, general managers and certain other
senior employees. 

Under the scheme, bonus awards are based on the
increase in owners’ earnings (cash profits) per share, over
the previous financial year. Participants are entitled to an
amount up to 3% of their annual base salary for every
1% increase in owners’ earnings per share. The Company
has focused on owners’ earnings as a key performance
measurement, over recent years, and believes that linking
incentives for senior managers to the growth in cash
profits will align the interests of shareholders generally
with those of executives in the Company. The maximum
bonus to be earned under this scheme is capped at
100% of annual base salary.

Owners’ earnings are calculated as follows:

Profit before tax (excluding unrealised exceptional items)
Depreciation and amortisation
Add: 
Cash reinvestment in current properties
Less:
Less:
Cash tax
Equals: Owners’ earnings

Owners’ earnings per share are calculated on the
weighted average number of shares in issue.

Bonus awards are satisfied in shares. One-third of a
participant’s shares will vest to the participant on
calculation of the amount of the award, one-third will
vest after one year and the remaining third will vest to
the participant after two years (in each case, subject to
the participant’s being employed at the release date).

The shares required under the scheme are purchased 
in the market by an employee benefit trust funded by 
the Company.

In the year ended 24 July 2011, because of higher cash
reinvestment in current properties and lower profits,

ANNUAL REPORT AND ACCOUNTS 2011

55

DIRECTORS’ REMUNERATION REPORT 

owners’ earnings per share did not increase and therefore
no award was made.

industry practice. The commencement dates for the
executive directors’ service contracts were as follows:

Benefits in kind
A range of taxable benefits is available to executive
directors. These benefits comprise principally the provision
of a company car allowance, life assurance and private
medical insurance.

Tim Martin
John Hutson
Su Cacioppo 
Kirk Davis 

–
–
–
–

20 October 1992
2 February 1998
10 March 2008
11 March 2011 

Chairman and directors’ service contracts
The executive directors are employed on rolling contracts,
requiring the Company to give up to one year’s notice of
termination, while the director may give six months’ notice.
In the event of termination of employment with the
Company, without the requisite period of notice, executive
directors’ service contracts provide for the payment of a
sum equivalent to the net value of salary and benefits to
which the executive would have been entitled during the
notice period. The executive is required to mitigate his or
her loss, and such mitigation may be taken into account in
any payment made. The Company’s policies on the
duration of directors’ service contracts, notice periods and
termination payments are all in accordance with best

Non-executive directors
The non-executive directors hold their positions, pursuant
to letters of appointment dated 1 November 2010, with a
term of 12 months. 

The non-executive directors are entitled to the fees to
which they would have been entitled up to the end of
their term, if their appointment is terminated early, and
do not participate in the Company’s bonus or share
schemes. Their fees are determined by the executive
directors, following consultation with professional
advisers, as appropriate.

External appointments
The Company has not released any executive directors to
serve as a non-executive director elsewhere.

Directors’ remuneration
Audited information:
The table below shows a breakdown of the various elements of directors’ remuneration for the year ended 24 July 2011.

Performance
bonus –
cash

Salary/fees

Taxable 
benefits

Taxable 
allowances

Pension
Sub-
total contributions

Performance
bonus –
2005
Deferred
Bonus
Scheme – 
shares

Share
Incentive
Plan – 
shares

324

24

27

–

375

–

–

Chairman
T R Martin

Executive 
directors
J Hutson
K Davis (3)
S Cacioppo 
K Down (1) 
P Harbottle (2)

Non-executive 
directors
J Herring 
E McMeikan
D van Gene 
R Beckett 

Total

2010

1,302

115

1,538

288

56

J D WETHERSPOON PLC

411
74
195
64
54

67
37
39
37

51
9
25
3
3

–
–
–
–

1
1
1
–
–

–
–
–
–

30

29

13
5
11
1
1

–
–
–
–

476
89
232
68
58

67
37
39
37

49
9
23
8
6

–
–
–
–

103
19
49
16
13

–
–
–
–

31

1,478

95

200

63

1,918

126

264

Total
2011
£000

Total
2010
£000

375

394

628
117
304
92
77

67
37
39
37

1,773

656
–
319
415
351

65
36
36 
36

–

–

2,308

–

–
–
–
–
–

–
–
–
–

–

–

DIRECTORS’ REMUNERATION REPORT 

Taxable benefits include the provision of a company car allowance and health cover. Directors may opt for a taxable allowance,
in lieu of a company car, shown above under taxable allowances.

The Company’s Share Incentive Plan and 2005 Deferred Bonus Scheme (described on page 55) include the full-year value of
bonuses paid in shares, subject to forfeiture on cessation of employment, in certain circumstances. These shares are also
included in each relevant director’s interest shown in the table below.

The amount included with respect to the Share Incentive Plan reflects the value of the shares issued to the directors during 
the year. 

The pension contributions are made in respect of defined contribution pension arrangements. 

(1) Keith Down ceased to be a director on 31 October 2010. In addition to his basic salary above, he received a payment
under the terms of his contract of £197,122, with total emoluments for the year ended 24 July 2011 being £289,093.

(2) Paul Harbottle ceased to be a director on 31 October 2010. In addition to his basic salary above, he received a payment
under the terms of his contract of £169,509, with total emoluments for the year ended 24 July 2011 being £246,916.

(3) Kirk Davis was appointed a director on 11 March 2011. 

Directors and connected persons’ interests in shares – non-audited information:

The interests of the directors in the shares of the Company, as at 24 July 2011, were as follows: 

Ordinary shares of 2p each, held beneficially

2011

2010

T R Martin
J Hutson
J Hutson – Share Incentive Plan
J Hutson – 2005 Deferred Bonus Scheme
K Davis
K Davis – Share Incentive Plan
K Davis – 2005 Deferred Bonus Scheme
S Cacioppo
S Cacioppo – Share Incentive Plan
S Cacioppo – 2005 Deferred Bonus Scheme
J Herring
E McMeikan
D van Gene
R Beckett

There have been no changes to these interests since 24 July 2011.

32,815,473
34,801
76,116
8,375
–
17,790
2,526
36,809
37,836
3,973
6,000
1,000
1,000
2,000

32,815,473
60,548
75,344
8,375
–
–
2,526
40,137
39,934
3,973
6,000
1,000
1,000
2,000

ANNUAL REPORT AND ACCOUNTS 2011

57

DIRECTORS’ REMUNERATION REPORT 

Directors’ interests in share options:
There were no share options outstanding for directors during the year. 

Share Incentive Plan – audited information
In addition to the interest in shares disclosed above, the following awards have been made of shares, during the year, 
under the Share Incentive Plan: 

Name

John Hutson

Kirk Davis

Su Cacioppo

Award date

Shares held 
in trust at 
25 July 2010

Granted in 
the year

Vested in
the year

Shares remaining 
in trust at
24 July 2011

26/03/04
08/10/04
30/09/05
29/09/06
17/09/07
31/03/08
17/09/08
31/03/09
24/09/09
31/03/10
23/09/10
31/03/11
Partnership shares*

31/03/09
24/09/09
31/03/10
23/09/10
31/03/11

26/03/04
08/10/04
30/03/05
30/09/05
31/03/06
29/09/06
17/09/07
31/03/08
17/09/08
31/03/09
24/09/09
31/03/10
23/09/10
31/03/11

990
1,214
1,022
590
6,044
17,474
16,188
12,180
10,085
9,557

3,384
3,277
3,225

881
598
594
926
75
590
2,556
11,185
7,432
5,768
4,790
4,539

5,526
17,474

2,038
11,185

11,658
11,764
350

3,934
3,970

5,537
5,588

990
1,214
1,022
590
518
–
16,188
12,180
10,085
9,557
11,658
11,764
350

3,384
3,277
3,225
3,934
3,970

881
598
594
926
75
590
518
–
7,432
5,768
4,790
4,539
5,537
5,588

The market price of the shares awarded on 23 September 2010 was 428.87p.
The market price of the shares awarded on 31 March 2011 was 435.65p.

*

The market price of shares which vested on 17 September 2010 was 425.83p.
The market price of shares which vested on 31 March 2011 was 420.19p. 

John Hutson is a participant in the Partnership Share scheme and acquired 350 shares between August 2010 and July 2011.
The market price of the shares awarded ranged from 395.2p to 450.0p. 

‘Vested in the year’ indicates the transfer of the beneficial ownership of the shares from the trust to the director.

During the year, the executive directors received shares which vested under the Share Incentive Plan. The value of the shares,
calculated on the mid-market price on the date of the award maturity, was £152,632.

58

J D WETHERSPOON PLC

DIRECTORS’ REMUNERATION REPORT 

2005 Deferred Bonus Scheme
The first award of shares under the 2005 Deferred Bonus Scheme was made in September 2006. As set out on page 55, 
one-third of the total award vests immediately, with the other two-thirds vesting over the following two years. 

The overall position is as follows:

September 2009 Award – Tranche 3

J Hutson

K Davis

S Cacioppo

Total 
awarded

Previously 
vested

Vested

Sold

Shares 
retained

Remaining 
in trust

25,121

16,746

7,576

5,050

11,915

7,942

–

–

–

–

–

–

–

–

–

8,375

2,526

3,973

The above are due to vest on 17 September 2011.

Performance graph
Non-audited information:
This graph shows the total shareholder return (with
dividends reinvested) of a holding of the Company’s
shares against a hypothetical holding of shares in the
FTSE All Share Travel & Leisure sector index for each of
the last five financial years. The directors selected this
index, as it contains most of the Company’s competitors
and is considered to be the most appropriate index for
the Company. 

Growth in the value of a hypothetical £100 holding
since July 2005, based on 30-trading-day average values

)
£
(

i

g
n
d
o
h

l

0
0
1
£

l
a
c
i
t
e
h
t
o
p
y
h

f
o

l

e
u
a
V

220.0

200.0

180.0

160.0

140.0

120.0

100.0

80.0

60.0

Jul 05

Jul 06

Jul 07

Jul 08

Jul 09

Jul 10

Jul 11

J D Wetherspoon plc

FTSE All Share Travel & Leisure

On behalf of the board:
Debra van Gene
Chair of the Remuneration Committee

9 September 2011

ANNUAL REPORT AND ACCOUNTS 2011

59

 
 
 
 
 
CORPORATE GOVERNANCE

Introduction
Effective governance is at the core of the Company’s
ability to operate successfully in 823 pubs in England,
Northern Ireland, Scotland and Wales. The Company’s
established governance framework is overseen by the
board of directors, which is ultimately answerable to the
Company’s shareholders.

Statement of compliance
The Company is committed to high standards of
corporate governance, as set out in the UK Corporate
Governance Code 2010 (the ‘Code’). The board believes
that the Company has been compliant throughout the
year ended 24 July 2011, with the following exceptions:

John Herring has served more than 14 years on the board
and so may not be considered independent under the
Code (Section B.1.1). The board considers that his
performance as a non-executive director continues to be
effective. He contributes significantly as a director
through his individual skills, considerable knowledge and
experience of the Company and relevant financial
expertise. He also continues to demonstrate strong
independence in the manner in which he discharges his
responsibilities as a director. Consequently, the board has
concluded that, despite his length of tenure, there is no
association with management which could compromise
his independence. 

A full version of the UK Corporate Governance Code
2010 is available on the official Web site of the Financial
Reporting Council (www.frc.org.uk). 

The board of directors
The primary responsibility of the board is to ensure that
the Company’s strategy is appropriate and implemented
effectively. Those matters reserved for the board and the
authorities delegated to management are contained in
the ‘matters reserved for the board’ schedule, as well as
in the various policies covering such matters as treasury
management, capital expenditure approvals, legal
matters, internal audit and risk management. 

The board comprises the following members:
(cid:2) Tim Martin, chairman
(cid:2) John Hutson, chief executive officer
(cid:2) Kirk Davis, finance director and company secretary
(cid:2) Su Cacioppo, personnel and legal director
(cid:2) John Herring, non-executive deputy chairman and
senior non-executive director
(cid:2) Elizabeth McMeikan, non-executive director 
(cid:2) Debra van Gene, non-executive director
(cid:2) Sir Richard Beckett, non-executive director

John Herring informed the Company on 8 September
2011 of his decision not to seek re-election as a director
at the annual general meeting. John Herring currently
serves as senior independent director and will continue in
this role until the annual general meeting. The board will
consider the appointment of an additional non-executive
director to replace Mr Herring. The board will also
appoint one of the non-executive directors to be the
senior independent director, following Mr Herring’s
retirement from the board, although no decision has yet
been taken. 

The role of the senior independent director is to provide
an additional contact point for shareholders, in particular
where any concerns of shareholders are unable to be
resolved through normal channels or when such channels
are inappropriate. The senior independent director also
monitors the performance of the chairman, on behalf of
the board.

Biographies of all non-executive and executive directors
are provided on page 48 and can be viewed on the
Company’s Web site: www.jdwetherspoon.co.uk 

On appointment to the board, every director is provided
with a comprehensive induction programme, covering all
aspects of the Company’s operations. Regular discussions
and meetings take place regarding the performance of
the board – and the performance of individual executive
directors is discussed regularly by the chairman and the
non-executive directors. Site visits are arranged regularly
to enable non-executive directors to see the operations of
the business, at first hand. 

All directors are provided with comprehensive papers, in
advance of all board meetings, and attend key meetings
regularly in the organisation. In addition, directors attend
impromptu meetings with senior managers in the business.

There is a clear and documented division of
responsibilities between the chairman and the chief
executive officer. The division is set out below. 

60

J D WETHERSPOON PLC

CORPORATE GOVERNANCE

Chairman’s responsibility

Chief executive’s responsibility

The chairman is responsible for the smooth running of the 
board and ensuring that all directors are fully informed 
of matters relevant to their roles

The chief executive is responsible for the smooth daily
running of the business

Delegated responsibility of authority from the Company to
exchange of contracts within controlled procedures

Developing and maintaining effective management
controls, planning and performance measurements

Providing support, advice and feedback to the 
chief executive

Maintaining and developing an effective 
organisational structure

Supporting the Company strategy and encouraging the 
chief executive with development of that strategy

External and internal communications, in conjunction
with the chairman, on any issues facing the Company

Chairing general meetings, board meetings, operational 
meetings and agreeing on board agendas and ensuring that 
adequate time is available for discussion of agenda items

Management of chief executive’s contract, appraisal and
remuneration, by way of making recommendations to the
remuneration committee

Implementing and monitoring compliance with 
board policies

Timely and accurate reporting of the above to the board

Providing support to executive directors and senior 
managers of the Company

Recruiting and managing senior managers in 
the business

Providing the ‘ethos’ and ‘vision’ of the Company

Providing operational presence across the estate

Making directors aware of shareholders’ concerns

Ensuring that a culture of openness and debate exists 
in the Company

Leadership of the board and setting its agenda

Developing and maintaining effective risk-management
and regulatory controls

Maintaining primary relationships with shareholders 
and investors

Chairing the management board responsible for
implementing the Company strategy

All directors are provided with, and have full and timely
access to, information which enables them to make
informed decisions on corporate and business issues,
including operational and financial performance. 
In particular, the board receives monthly information 
on the financial trading performance of the Company 
and a comprehensive finance report, including
operational highlights. 

The articles require that one-third of the directors retire 
by rotation, subject to the requirement that each director
seek re-election every three years. However, in line with
the Code, all of the directors of the Company are to be
subject to election by shareholders every year.
Accordingly, all members of the board, other than 
John Herring (and not just those required to do so by 
the Company’s articles of association) will retire and seek 
re-election at this year’s AGM. John Herring has decided

to retire from the board and will not seek re-election 
at the AGM. 

During the year ended 24 July 2011, non-executive
directors met without the chairman and provided
feedback to the chairman following their meetings.
The overall effectiveness of the board was the primary
topic, although succession-planning and the provision
of information to the board were also discussed. The
directors concluded that the board and its committees
continue to work effectively.

In accordance with the Code and corporate governance
best practice, the board has several established
committees as set out below. The board met eight times
during the year ended 24 July 2011; attendance of the
directors and non-executives, where appropriate, is
shown on page 62.

ANNUAL REPORT AND ACCOUNTS 2011

61

CORPORATE GOVERNANCE

Number of meetings held in the year

Board 
8

Audit 
4

Remuneration Nomination
5

4

Tim Martin
John Hutson**
Kirk Davis*
Su Cacioppo* **
John Herring
Elizabeth McMeikan
Debra van Gene
Sir Richard Beckett
Keith Down*
Paul Harbottle

7
8
7
8
7
7
7
7
1
1

N/A
N/A
3
4
4
4
4
3
1
N/A

N/A
1
N/A
1
5
5
5
4
N/A
N/A

N/A
N/A
N/A
N/A
4
4
4
4
N/A
N/A

*Kirk Davis and Keith Down (in their role of finance director) and Su Cacioppo (in her role as personnel and legal director)
attended audit committee meetings by invitation, to provide additional detail on any relevant matters. Keith Down attended
only one meeting during the year under review. 

**John Hutson and Su Cacioppo were invited to attend one remuneration meeting during the year. 

Matters reserved for the board
The following matters are reserved for the board:

(cid:2) Board and management

(cid:2)(cid:2) Structure and senior management responsibilities
(cid:2)(cid:2) Nomination of directors
(cid:2)(cid:2) Appointment of chairman and company secretary

(cid:2) Strategic matters

(cid:2)(cid:2) Strategic, financing or adoption of new business
plans, in respect of any material aspect of the Company

(cid:2) Business control

(cid:2)(cid:2) Agreement of code of ethics and business practice
(cid:2)(cid:2) Internal audit
(cid:2)(cid:2) Authority limits for heads of department

(cid:2) Operating budgets

(cid:2)(cid:2) The entry into finance and operating leases of a
certain capital value
(cid:2)(cid:2) Investments and capital projects exceeding set value
(cid:2)(cid:2) Changes in major supply contracts

(cid:2) Finance

(cid:2)(cid:2) Raising new capital and confirmation of
major facilities
(cid:2)(cid:2) Specific risk-management policies, including
insurance, hedging and borrowing limits
(cid:2)(cid:2) Final approval of annual and interim accounts and
accounting policies
(cid:2)(cid:2) Appointment of external auditors

(cid:2) Legal matters

(cid:2)(cid:2) Consideration of regular reports on material issues
relating to any litigation affecting the Company
(cid:2)(cid:2) Institution of legal proceedings where costs exceed
certain values

(cid:2) Secretarial

(cid:2)(cid:2) Call of all shareholder meetings
(cid:2)(cid:2) Delegation of board powers
(cid:2)(cid:2) Disclosure of directors’ interests

(cid:2) General

(cid:2)(cid:2) Board framework of executive remuneration
and costs
(cid:2)(cid:2) Any other matters not within the terms of reference
of any committee of the board
(cid:2)(cid:2) Any other matter as determined from time to time
by the board

Board committees
Audit committee
The committee is chaired by John Herring and comprises
Elizabeth McMeikan, Debra van Gene and Sir Richard
Beckett. Representatives of the Company’s external
auditors, PricewaterhouseCoopers LLP, attend audit
committee meetings at the half year and year end. Under
the terms of the Code, one of the members of the
committee was not independent.

In respect of the role of the audit committee, it effectively
performs the following:

(cid:2) Assumes direct responsibility for the appointment,
compensation, resignation, dismissal and overseeing of
the independent external auditors, including review of the
external audit, its cost and effectiveness
(cid:2) Reviews the scope and nature of the work to be
performed by the external auditors, before audit
commences
(cid:2) Reviews the half-year and annual financial statements

62

J D WETHERSPOON PLC

(cid:2) Ensures compliance with accounting standards
(cid:2) Ensures compliance with stock exchange, legal and
regulatory requirements
(cid:2) Monitors the integrity of the financial statements and
formal announcements relating to the financial
performance of the Company
(cid:2) Considers the findings of the internal audit report and
management responses at the half year and year end
(cid:2) Reviews the effectiveness of internal control systems
(cid:2) Final review of the Company’s statement on internal
control systems, before endorsement by the board
(cid:2) Reviews any aspect of the accounts or the Company’s
control and audit procedures, the interim and final audits
and any other matters which the auditors may consider
(cid:2) Ensures that all matters, if appropriate, were raised and
brought to the attention of the board
(cid:2) Reviews all risk-management systems adopted and
implemented by the Company

The minutes of all meetings of the committee are
circulated by the secretary of the committee to all
members of the board. At the annual general meeting of
the Company, the audit committee’s chairman, John
Herring, is available to answer questions on financial
control and reporting.

The audit committee is aware of the Company’s process
regarding whistle-blowing and has reviewed its
effectiveness.

During the year, the Company made limited use of
specialist teams from PricewaterhouseCoopers LLP, relating
to accounting and tax services. The fees paid to
PricewaterhouseCoopers LLP for non-audit services were
£132,000 (2010: £36,000). The use of
PricewaterhouseCoopers LLP for non-audit work is
monitored regularly, to achieve the necessary independence
and objectivity of the auditors. Where the auditors provide
non-audit services, their objectivity and independence are
safeguarded by the use of different teams.

Following a review by the audit committee, the board
agreed, in September 2011, to recommend to shareholders,
at the annual general meeting, the reappointment of the
external auditors for a period of one year.

The audit committee assesses the ongoing effectiveness
of the external auditors and audit process, on the basis of
meetings and internal review with finance and other
senior executives. In reviewing the independence of the
external auditors, the audit committee considers several
factors. These include the standing, experience and
tenure of the external auditors, the nature and level of
services provided and confirmation from the external
auditors that they have complied with relevant UK
independence standards.

CORPORATE GOVERNANCE

The terms of reference of the audit committee are
available on request.

Remuneration committee
The Company’s remuneration committee is chaired by
Debra van Gene and comprises John Herring, Elizabeth
McMeikan and Sir Richard Beckett. The directors’ report
on remuneration is set out on pages 54 to 59. Under the
terms of the Code, one of the members of the committee
was not independent. 

The terms of reference of the remuneration committee
are available on request.

Nomination committee
The non-executive directors John Herring, Debra van Gene,
Elizabeth McMeikan and Sir Richard Beckett meet regularly
and consider, amongst other matters, board appointments
and the re-election of directors. No director is involved in
any decision about his or her own re-appointment. In
carrying out these activities, the non-executive directors
follow the guidelines of the Institute of Chartered
Secretaries Association (ICSA) and comply with the UK
Corporate Governance Code 2010.

Company secretary 
All directors have access to the advice of the company
secretary, responsible to the board for ensuring that
procedures are followed. The appointment and removal of
the company secretary are reserved for consideration by the
board as a whole. Procedures are in place for seeking
independent professional advice, at the Company’s expense.

Relations with shareholders
The board takes considerable measures to ensure that all
board members are kept aware of both the views of
major shareholders and changes in the major
shareholdings of the Company. Efforts made to
accomplish effective communication include:
(cid:2) Annual general meeting, considered to be an important
forum for shareholders to raise questions with the board
(cid:2) Regular feedback from the Company’s stockbrokers
(cid:2) Interim, full and ongoing announcements circulated 
to shareholders
(cid:2) Any significant changes in shareholder movement 
being notified to the board by the company secretary,
when necessary
(cid:2) The company secretary maintaining procedures and
agreements for all announcements to the City
(cid:2) A programme of regular meetings between investors
and directors of the Company, including the senior
independent director, as appropriate 
(cid:2) The capital structure of the Company is described in
note 24 to the accounts

ANNUAL REPORT AND ACCOUNTS 2011

63

The Company has an internal audit function which is
discharged as follows:

(cid:2) Regular audits of the Company stock
(cid:2) Unannounced visits to retail units
(cid:2) Monitoring systems which control the Company’s cash
(cid:2) Health & safety visits, ensuring compliance with
Company procedures
(cid:2) Reviewing and assessing the impact of legislative and
regulatory change
(cid:2) Annually reviewing the Company’s strategy 
(cid:2) Risk-management process, identifying key risks facing
the business

The Company has key controls, as follows:

(cid:2) Clearly defined authority limits and controls over 
cash-handling, purchasing commitments and capital
expenditure
(cid:2) Comprehensive budgeting process, with a detailed 
12-month operating plan and a mid-term financial plan,
both approved by the board
(cid:2) Business results are reported weekly, with a
comprehensive report compared with budget and the
previous year
(cid:2) Forecasts are prepared regularly throughout the year,
for review by the board
(cid:2) Complex treasury instruments are not used; decisions
on treasury matters are reserved by the board
(cid:2) Regular reviews of the amount of external insurance
which it obtains, bearing in mind the availability of such
cover, its costs and the likelihood of the risks involved
(cid:2) Regular evaluation of processes and controls in relation
to the Company’s financial reporting requirements 

The directors confirm that they have reviewed the
effectiveness of the system of internal control.
Directors’ insurance cover is maintained.

Kirk Davis
Company Secretary
9 September 2011

CORPORATE GOVERNANCE

Risk management 
The board is responsible for the Company’s 
risk-management process. 

The internal audit department, in conjunction with the
management of the business functions, produces a risk
register annually. This register has been compiled by the
business following feedback from senior management
from the key business functions.

The identified risks are assessed based on the likelihood
of a risk occurring and the potential impact to the
business, should the risk occur. The head of internal audit
determines and reviews the risk assessment process and
will communicate the timetable annually.

The risk register is presented to the audit committee
every six months, with a schedule of audit work agreed
on, on a rolling basis. The purpose of this work is to
review, on behalf of the Company and board, those key
risks and the systems of control necessary to manage
such risks. The results of this work are reported back to
relevant senior management and the audit committee.
Where recommendations are made for changes in
systems or processes to reduce risk, internal audit will
follow up regularly to ensure that the recommendations
are implemented.

A summary of the financial risks and treasury policies can
be found on page 7. A more comprehensive list of risks
and uncertainties is on pages 42 and 43. 

Board diversity
In line with the Davies report, released earlier in the year,
recommending a minimum representation of 25%
females on FTSE 350 boards by 2015, the board confirms
that it is meeting best practice. 

Internal control
During the year, the Company and the board continued
to support and invest in resource to provide an internal
audit and risk-management function. The system of
internal control and risk mitigation is deeply embedded in
the operations and the Company culture. The board is
responsible for maintaining a sound system of internal
control and reviewing its effectiveness. The function can
only manage, rather than entirely eliminate, the risk of
failure to achieve business objectives. It can provide only
reasonable and not absolute assurance against material
misstatement or loss. Ongoing reviews, assessments and
management of significant risks took place throughout
the year under review and up to the date of the approval
of the annual report and accord with the Turnbull
Guidance (Guidance on Internal Control).

64

J D WETHERSPOON PLC

INFORMATION FOR SHAREHOLDERS

Ordinary shareholdings at 24 July 2011 

Shares of 2p each

Up to 2,500
2,501–10,000
10,001–250,000
250,001–500,000
500,001–1,000,000
Over 1,000,000

Number of 
shareholders

% of total 
shareholders

Number

% of total 
shares held

4,888
309
180
21
10
18

5,426

2,305,965
90.09
1,424,825
5.69
10,182,074
3.32
7,994,125
0.39
0.18
7,820,288
0.33 101,880,861

1.76
1.08
7.74
6.07
5.94
77.41

100 131,608,138

100

Substantial shareholdings 
In addition to the directors’ shareholdings set out on page 57, the Company has been notified of the following substantial
holdings in the share capital of the Company at 9 September 2011:

Number of
ordinary shares

% of
share capital 

18,462,384
13,384,175
9,853,498
7,000,000

14.03
10.17
7.49
5.32

428.4p
389.1p
473.0p
434.5p

Sanderson Asset Management Ltd
Threadneedle
Schroders
OppenheimerFunds Inc

Share prices
25 July 2010
Low
High
24 July 2011

Shareholders’ enquiries
The Company’s registrars, Computershare Investor Services plc, keep the Company’s register 
of shareholders up to date, distribute statutory documents and administer the payment of 
dividends. If you have a query regarding your shareholding, please contact the registrars 
directly, either online or by telephone: 0870 707 1091

Computershare’s investor centre gives access to view your holdings online. To register, 
click on ‘investor centre’ on the Computershare home page and follow the instructions:
www.uk.computershare.com/investor

You will be able to:
(cid:2) view all of your holding details for companies registered with Computershare.
(cid:2) view the market value of your portfolio.
(cid:2) update your contact address and personal details.
(cid:2) access current and historical market prices.
(cid:2) access trading graphs.
(cid:2) add additional shareholdings to your portfolio.

ANNUAL REPORT AND ACCOUNTS 2011

65

INFORMATION FOR SHAREHOLDERS

Electronic communications
The Company has introduced innovative ways of communicating with shareholders electronically via eTree, 
an environmental incentive programme. We actively encourage you to play your part in reducing our impact 
on the environment and elect to be notified by e-mail when your communications are available online. 
Sign up to receive e-communications using eTree and we will donate £1 on your behalf to the Woodland Trust, 
the UK’s leading woodland conservation charity, for its ‘Tree for All’ programme. 

By providing your e-mail address, you will no longer receive paper copies of this annual report or any other
shareholders’ communications which are available electronically. Instead, you will receive e-mails advising you 
when and how to access online documents. 

Please submit your e-mail address by visiting the eTree Web site: www.etreeuk.com/jdwetherspoon

Annual reports
If you do require further paper copies of this annual report, these are available from the company secretary, 
at the registered office. Telephone requests can be made: 01923 477777

This annual report is also available on the Company’s Web site: www.jdwetherspoon.co.uk/investors

If you would like to contact us: 

J D Wetherspoon plc, Wetherspoon House, Central Park, Reeds Crescent, Watford, WD24 4QL 

Telephone: 01923 477777

E-mail: investorqueries@jdwetherspoon.co.uk 

66

J D WETHERSPOON PLC

NOTICE OF ANNUAL GENERAL MEETING

This information is important and requires 
your immediate attention.

If you are in any doubt as to what action to take, you
should consult your stockbroker, solicitor, accountant or
other appropriate independent professional adviser
authorised under the Financial Services and Markets Act
2000. If you have sold or otherwise transferred all of your
shares in J D Wetherspoon plc, please forward this
document and the accompanying documents to the
person through whom the sale or transfer was effected,
for transmission to the purchaser or transferee.

Notice is hereby given that the annual general meeting of
J D Wetherspoon plc (the ‘Company’) will be held at 
The Crosse Keys, 9 Gracechurch Street, London, 
EC3V 0DR on Thursday 3 November 2011 at 10am 
for the following purposes:

Ordinary business
To resolve as ordinary resolutions:

1 To receive and adopt the reports of the directors and
the auditors and the audited accounts of the Company
for the year ended 24 July 2011.

2 To receive and approve the directors’ remuneration
report for the year ended 24 July 2011.

3 To re-elect Tim Martin as a director.

4 To re-elect John Hutson as a director.

5 To re-elect Su Cacioppo as a director.

6 To re-elect Debra van Gene as a director.

7 To re-elect Elizabeth McMeikan as a director.

8 To re-elect Sir Richard Beckett as a director.

9 To elect Kirk Davis as a director.

10 To reappoint PricewaterhouseCoopers LLP as the
auditors of the Company and to authorise the directors 
to fix their remuneration.

Special business
To consider and, if thought fit, to pass the following
resolutions; in the case of the resolution numbered 11 as
an ordinary resolution and, in the case of the resolutions
numbered 12, 13 and 14, as special resolutions.

11 THAT:
in place of all existing authorities, the directors be
generally and unconditionally authorised, pursuant to
section 551 of the Companies Act 2006 (the ‘Act’), to
exercise all the powers of the Company:

(A) to allot shares in the Company and to grant rights to
subscribe for, or to convert any security into, shares in the
Company (‘Relevant Securities’), up to a maximum
aggregate nominal amount of £876,510; and further

(B) to allot Relevant Securities comprising equity securities
(within the meaning of section 560(1) of the Act) up to
an aggregate nominal amount of £876,510 in connection
with an offer by way of a rights issue in favour of holders
of ordinary shares in the capital of the Company in
proportion (as nearly as may be practicable) to their
existing holdings of ordinary shares, but subject to such
exclusions or other arrangements as the directors deem
necessary or expedient in relation to fractional
entitlements or any legal, regulatory or practical problems
under the laws of any territory or the requirements of any
regulatory body or stock exchange;

for a period expiring (unless previously revoked, varied or
renewed) on the date which is 15 months from the date
of the passing of this resolution or, if sooner, the end of
the next annual general meeting of the Company, but the
Company may, before such expiry, make an offer or
agreement which would or might require Relevant
Securities to be allotted after this authority expires and the
directors may allot Relevant Securities in pursuance of such
offer or agreement as if this authority had not expired.

12 THAT: 
subject to the passing of resolution 11 above and in place
of all existing powers, the directors be generally
empowered, pursuant to sections 570 and 573 of the
Act, to allot equity securities (within the meaning of
section 560 of the Act) for cash, pursuant to the authority
conferred by resolution 11 as if section 561(1) of the Act
did not apply to such allotment, provided that this power
shall expire on the date which is 15 months from the date
of the passing of this resolution or, if sooner, the end of
the next annual general meeting of the Company. This
power shall be limited to the allotment of equity
securities:

(i) in connection with an offer of equity securities
(including, without limitation, under a rights issue, open
offer or similar arrangement, save that, in the case of an
allotment pursuant to the authority conferred by

ANNUAL REPORT AND ACCOUNTS 2011

67

NOTICE OF ANNUAL GENERAL MEETING

14 THAT:
general meetings (other than any annual general
meeting) of the Company may be called on not less than
14 clear days’ notice.

By order of the board

Kirk Davis
Company Secretary
9 September 2011

Registered office:

Wetherspoon House
Central Park
Reeds Crescent
Watford
WD24 4QL

Notes:
1 A member entitled to attend and vote at the annual
general meeting is entitled to appoint one or more proxies
to attend, speak and vote, instead of him or her, provided
that each proxy is appointed to exercise the rights
attached to a different share or shares held by that
member. A proxy need not be a member of the Company.

2 A form of proxy is enclosed which members are invited
to complete and return in the envelope provided.
Completion and return of the form of proxy, in
accordance with the instructions on it, will not prevent
such members from attending and voting at the annual
general meeting in person, should they so wish.

3 To be valid for the annual general meeting, the form 
of proxy and the power of attorney or other authority 
(if any) under which it is executed or a notarised copy 
of such authority must be deposited at the offices of the
Company’s registrars, Computershare Investor Services plc,
PO Box 82, The Pavilions, Bridgwater Road, Bristol, 
BS99 7NH or at the following electronic address
www.eproxyappointment.com not later than 10am on 
1 November 2011, being 48 hours before the time
appointed for holding the annual general meeting.

4 Any person to whom this notice is sent who is a person
nominated under section 146 of the Act to enjoy
information rights (a ‘Nominated Person’) may, under an
agreement between him or her and the member by
whom he or she was nominated, have a right to be
appointed (or to have someone else appointed) as a proxy
for the annual general meeting. If a Nominated Person
has no such proxy appointment right or does not wish to
exercise it, he or she may, under any such agreement,

paragraph (B) of resolution 11, such offer shall be by way
of rights issue only) in favour of holders of ordinary shares
in the capital of the Company in proportion (as nearly as
may be practicable) to their existing holdings of ordinary
shares, but subject to such exclusions or other
arrangements as the directors deem necessary or
expedient in relation to fractional entitlements or any
legal, regulatory or practical problems under the laws of
any territory or the requirements of any regulatory body
or stock exchange; and 

(ii) otherwise than pursuant to sub-paragraph (i) above up
to an aggregate nominal amount of £131,608, but the
Company may, before such expiry, make an offer or
agreement which would or might require equity securities
to be allotted after this power expires and the directors
may allot equity securities in pursuance of such offer or
agreement as if this power had not expired.

This power applies in relation to a sale of shares which is
an allotment of equity securities by virtue of section
560(2)(b) of the Act as if, in the first paragraph of this
resolution, the words ‘pursuant to the authority conferred
by resolution 11’ were omitted. 

13 THAT: 
the Company be and is hereby authorised, pursuant to
section 701 of the Act, to make market purchases (as
defined by section 693(4) of the Act) of ordinary shares in
the capital of the Company, on such terms and in such
manner as the directors of the Company shall determine,
subject to the following conditions:

(i) the maximum number of ordinary shares which may be
purchased is 19,728,060. 

(ii) the price at which ordinary shares may be purchased
shall not exceed 105% of the average of the middle-
market quotations for the ordinary shares (as derived
from the Stock Exchange Daily Official List) for the five
business days preceding the date of purchase and shall
not be less than the nominal value, from time to time, of
an ordinary share, in both cases exclusive of expenses. 

(iii) this authority (unless previously revoked, varied or
renewed) will expire at the earlier of 15 months from the
date of passing of this resolution and the conclusion of
the next annual general meeting of the Company, except
that the Company may, before such authority expires,
enter into a contract of purchase under which such
purchase may be completed or executed wholly or partly
after the expiry of the authority.

68

J D WETHERSPOON PLC

NOTICE OF ANNUAL GENERAL MEETING

at the place of the annual general meeting from at least 15
minutes beforehand and until the conclusion of the annual
general meeting, copies of the non-executive directors’
letters of appointment to the Company.

11 Only those members registered on the register of
members of the Company as at 10am on 1 November
2011 (or, in the case of any adjournment, 48 hours
before the time of the adjourned meeting) shall be
entitled to attend or vote at the annual general meeting
in respect of the number of ordinary shares registered in
their name at that time. Changes to entries on the
register of members after that time will be disregarded in
determining the right of any person to attend or vote at
the meeting. 

12 You may not use any electronic address provided in
this notice of annual general meeting for communicating
with the Company for any purposes other than those
expressly stated.

have a right to give instructions to the member as to the
exercise of voting rights. 

5 The statement of the rights of members in relation to
the appointment of proxies in notes 1, 2 and 3 above
does not apply to Nominated Persons. The rights
described in those notes can be exercised only by
members of the Company.

6 Any corporation which is a member may appoint one or
more corporate representatives who may exercise on its
behalf all of its powers as a member, provided that they
do not do so in relation to the same shares.

7 Under section 527 of the Act, members meeting the
threshold requirements set out in that section have the
right to require the Company to publish on a Web site a
statement setting out any matter relating to: (i) the audit
of the Company’s accounts (including the auditors’ report
and the conduct of the audit) which is to be laid before
the annual general meeting; or (ii) any circumstance
connected with an auditor of the Company ceasing to
hold office since the previous meeting at which annual
accounts and reports were laid in accordance with section
437 of the Act. The Company may not require the
members requesting any such Web site publication to pay
its expenses in complying with sections 527 or 528 of the
Act. Where the Company is required to place a statement
on a Web site, under section 527 of the Act, it must
forward the statement to the Company’s auditors not
later than the time when it makes the statement available
on the Web site. The business which may be dealt with at
the annual general meeting includes any statement which
the Company has been required, under section 527 of
the Act, to publish on a Web site.

8 A copy of this notice, and other information required by
section 311A of the Act, can be found on the Company’s
Web site: www.jdwetherspoon.co.uk

9 Any member attending the meeting has the right to ask
questions. The Company must cause to be answered any
such question relating to the business being dealt with at
the meeting, but no answer to any such question need be
given if (a) to do so would interfere unduly with the
preparation for the meeting or involve the disclosure of
confidential information, (b) the answer has already been
given on a Web site in the form of an answer to a
question or (c) it is undesirable in the interests of the
Company or the good order of the meeting that the
question be answered.

10 There are available for inspection at Macfarlanes LLP, 
20 Cursitor Street, London, EC4A 1LT during usual business
hours on any weekday (Saturdays, Sundays and public
holidays excepted) and there will be available for inspection

ANNUAL REPORT AND ACCOUNTS 2011

69

J D Wetherspoon plc
Wetherspoon House, Central Park 
Reeds Crescent, Watford, WD24 4QL

01923 477777
www.jdwetherspoon.co.uk

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