Triumph Bancorp Inc Annual Report 2008

FY2008 Annual Report · Triumph Bancorp Inc
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No Ordinary Designer Label

1998-2008

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Contents

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63

64

67

Chairman’s Statement

Business Review

Financial Review

Risks

Board of Directors

Directors’ Report

Corporate Governance Statements

Directors’ Remuneration Report

Statement of Directors’ Responsibilities 

Independent Auditors’ Report to the Members of Ted Baker PLC

Group Income Statement

Group Statement of Changes in Equity

Company Statement of Changes in Equity

Group and Company Balance Sheet

Group and Company Cash Flow Statement

Notes to the Financial Statements

Five Year Summary

Notice of Meeting

Form of Proxy

Ted’s advisers

Registered Ofﬁce: The Ugly Brown Building, 6a St Pancras Way, London NW1 OTB
Secretary: Charles Anderson ACMA
Financial Advisers and Stockbrokers: Investec Investment Banking, 2 Gresham Street, London EC2V 7QP
Solicitors: Jones Day, 21 Tudor Street, London EC4Y ODJ
Auditors: KPMG Audit Plc, 8 Salisbury Square, London EC4Y 8BB
Bankers: The Royal Bank of Scotland PLC, 62-63 Threadneedle Street, London EC2R 8LA
Registrars: Capita Registrars, 34 Beckenham Road, Beckenham, Kent BR3 4TU

Ted Baker PLC - Registered in England No: 3393836

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Chairman’s Statement

I am delighted to report another successful year for Ted Baker. Through our proven multi-channel distribution strategy we 
carefully continue to expand our business both in the UK and internationally. 

Our retail and licence divisions have once again delivered an excellent performance with retail sales increasing by 15.5% 
and licence income increasing by 32.5%.

Wholesale sales rose by 7.5%, which was ahead of our expectations and we have been pleased by growth in certain areas 
of our wholesale business. However, market conditions still provide challenges for some of our wholesale customers and 
we continue to monitor the proﬁle of our wholesale customers to ensure it remains appropriate for our brand.

I would like to take this opportunity to thank all the team at Ted Baker for their hard work, passion and dedication during 
the year.  

Results 
Group revenue increased by 13.2% to £142.2m (2007: £125.6m) for the 52 weeks ended 26 January 2008. Operating proﬁt 
increased by 10.4% to £22.1m (2007: £20.0m) and proﬁt before tax increased by 10.0% to £22.1m (2007: £20.1m). Basic 
earnings per share increased by 6.5% to 36.1p per share (2007: 33.9p per share).

Dividends 
The Board is pleased to recommend a ﬁnal dividend of 11.4p per share (2007: 10.3p per share) making a total for the year of 
16.4p per share (2007: 14.6p per share) an increase of 12.3% on the previous year.  This reﬂects our more progressive dividend 
policy as previously announced. The ﬁnal dividend will be payable on 20 June 2008 to those shareholders on the register on 
16 May 2008.

Share Buy-back 
In line with market practice, the Company will seek to renew the authority from shareholders to buy back up to 10% of the 
ordinary issued share capital of the Company in the next twelve months.  As the exercise of such authority could give rise to 
an obligation on the part of Ray Kelvin, Founder and Chief Executive of the Company, to make a mandatory offer under Rule 9 
of The City Code on Takeovers and Mergers, such authority will also be conditional on the Panel on Takeovers and Mergers 
agreeing to grant a dispensation from that obligation. Further details of this will be sent out in a letter accompanying the 
Notice of Meeting.

Current Trading and Outlook 
The reaction to our Spring Summer 2008 collection has been encouraging with total retail sales ahead by 16.1% for the ﬁrst 
seven weeks, compared with the same period last year.  Retail square footage was some 9.9% higher during this period 
compared to last year. This performance has beneﬁted from three stores which were closed for refurbishment last year being 
open for the seven week period this year. 

We plan to open seven stores this year and expect retail square footage to increase by some 30,000 square feet in total by 
the end of the year. New store locations will include Heathrow Terminal 5, Cheapside in the City of London, Belfast, Cambridge, 
Bristol and White City, London. We will also open a store in South Molton Street, London featuring our Langley Court 
Womenswear collection. 

Wholesale sales were 21.6% below the same period last year for the ﬁrst seven weeks, in part due to the phasing of deliveries.
We anticipate that conditions will remain challenging for some of our wholesale customers and we will continue to take action 
in respect of those customers who are no longer appropriate for our brand. As a result, we expect wholesale sales for 2008 to 
be below the level achieved for the period to 26 January 2008.  

We have made a satisfactory start to the year and consider that the strength of our brand and our robust business model 
mean we are well placed to navigate the current uncertain economic outlook. 

At this early stage, we look forward to another year of growth and development of the Ted Baker brand.

Robert Breare 
Non-Executive Chairman 

7

8

Business Review

Our Business
Ted Baker is a leading designer brand that operates through three main distribution channels: retail; wholesale; and licensing. 
We offer a wide range of collections including: Menswear; Womenswear; Global; Phormal; Endurance; Accessories; Lingerie 
and Underwear; Childrenswear; Fragrance and Skinwear; Footwear; Eyewear and Watches.

The brand has grown steadily from its origins as a single shirt specialist store in Glasgow to the global business it is today. We 
distribute through our own and licensed retail outlets, leading department stores and selected independents in Europe, the US 
and the Middle East and Asia.

Our strategy is to become a leading global designer brand, based on three main elements:

(cid:85)(cid:202)(cid:202)(cid:202)(cid:86)(cid:156)(cid:152)(cid:195)(cid:136)(cid:96)(cid:105)(cid:192)(cid:105)(cid:96)(cid:202)(cid:105)(cid:221)(cid:171)(cid:62)(cid:152)(cid:195)(cid:136)(cid:156)(cid:152)(cid:202)(cid:156)(cid:118)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:47)(cid:105)(cid:96)(cid:202)(cid:9)(cid:62)(cid:142)(cid:105)(cid:192)(cid:202)(cid:86)(cid:156)(cid:143)(cid:143)(cid:105)(cid:86)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:176)(cid:202)(cid:55)(cid:105)(cid:202)(cid:192)(cid:105)(cid:219)(cid:136)(cid:105)(cid:220)(cid:202)(cid:156)(cid:213)(cid:192)(cid:202)(cid:86)(cid:156)(cid:143)(cid:143)(cid:105)(cid:86)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202)(cid:86)(cid:156)(cid:152)(cid:204)(cid:136)(cid:152)(cid:213)(cid:62)(cid:143)(cid:143)(cid:222)(cid:202)(cid:204)(cid:156)(cid:202)(cid:105)(cid:152)(cid:195)(cid:213)(cid:192)(cid:105)(cid:202)(cid:220)(cid:105)(cid:202)(cid:192)(cid:105)(cid:62)(cid:86)(cid:204)(cid:202)(cid:204)(cid:156)(cid:202)(cid:204)(cid:192)(cid:105)(cid:152)(cid:96)(cid:195)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)
     meet our customers expectations. In addition, we look for opportunities to extend the breadth of collections and enhance 
     our offer;

(cid:85)(cid:202)(cid:202)(cid:202)(cid:86)(cid:156)(cid:152)(cid:204)(cid:192)(cid:156)(cid:143)(cid:143)(cid:105)(cid:96)(cid:202)(cid:96)(cid:136)(cid:195)(cid:204)(cid:192)(cid:136)(cid:76)(cid:213)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202)(cid:204)(cid:133)(cid:192)(cid:156)(cid:213)(cid:125)(cid:133)(cid:202)(cid:204)(cid:133)(cid:192)(cid:105)(cid:105)(cid:202)(cid:147)(cid:62)(cid:136)(cid:152)(cid:202)(cid:86)(cid:133)(cid:62)(cid:152)(cid:152)(cid:105)(cid:143)(cid:195)(cid:92)(cid:202)(cid:192)(cid:105)(cid:204)(cid:62)(cid:136)(cid:143)(cid:198)(cid:202)(cid:220)(cid:133)(cid:156)(cid:143)(cid:105)(cid:195)(cid:62)(cid:143)(cid:105)(cid:198)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:143)(cid:136)(cid:86)(cid:105)(cid:152)(cid:195)(cid:136)(cid:152)(cid:125)(cid:176)(cid:202)(cid:55)(cid:105)(cid:202)(cid:86)(cid:156)(cid:152)(cid:195)(cid:136)(cid:96)(cid:105)(cid:192)(cid:202)(cid:105)(cid:62)(cid:86)(cid:133)(cid:202)(cid:152)(cid:105)(cid:220)(cid:202)(cid:156)(cid:171)(cid:171)(cid:156)(cid:192)(cid:204)(cid:213)(cid:152)(cid:136)(cid:204)(cid:222)(cid:202)(cid:204)(cid:156)(cid:202)
     ensure it is right for the brand and will deliver margin led growth; and

(cid:85)(cid:202)(cid:202)(cid:202)(cid:86)(cid:62)(cid:192)(cid:105)(cid:118)(cid:213)(cid:143)(cid:143)(cid:222)(cid:202)(cid:147)(cid:62)(cid:152)(cid:62)(cid:125)(cid:105)(cid:96)(cid:202)(cid:96)(cid:105)(cid:219)(cid:105)(cid:143)(cid:156)(cid:171)(cid:147)(cid:105)(cid:152)(cid:204)(cid:202)(cid:156)(cid:118)(cid:202)(cid:156)(cid:219)(cid:105)(cid:192)(cid:195)(cid:105)(cid:62)(cid:195)(cid:202)(cid:147)(cid:62)(cid:192)(cid:142)(cid:105)(cid:204)(cid:195)(cid:176)(cid:202)(cid:55)(cid:105)(cid:202)(cid:86)(cid:156)(cid:152)(cid:204)(cid:136)(cid:152)(cid:213)(cid:105)(cid:202)(cid:204)(cid:156)(cid:202)(cid:147)(cid:62)(cid:152)(cid:62)(cid:125)(cid:105)(cid:202)(cid:125)(cid:192)(cid:156)(cid:220)(cid:204)(cid:133)(cid:202)(cid:136)(cid:152)(cid:202)(cid:105)(cid:221)(cid:136)(cid:195)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202)(cid:204)(cid:105)(cid:192)(cid:192)(cid:136)(cid:204)(cid:156)(cid:192)(cid:136)(cid:105)(cid:195)(cid:202)(cid:220)(cid:133)(cid:136)(cid:143)(cid:105)(cid:202)
     considering new territories for expansion.

Underlying our strategy is an emphasis on design, product quality and attention to detail, which is delivered by the passion, 
commitment and dedication of our teams, licence partners and wholesale customers (trustees).

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10

Global Group Performance

Retail
The retail division performed very strongly during the year with sales growth up 15.5% to £103.0m (2007: £89.2m). Average 
retail square footage rose by 5.8% over the period to 156,428 sq.ft. (2007: 147,861 sq.ft.). At 26 January 2008, total retail 
square footage was 166,761 sq.ft. (2007: 152,937 sq.ft.), representing an increase of 9.0%. As newer space and overseas 
stores continue to mature, retail sales per square foot increased by 9.1% from £603 to £658.

Wholesale
Wholesale sales for the year were 7.5% ahead of last year at £39.2m (2007: £36.5m), which exceeded our expectations. 

Whilst we have seen a reduction in wholesale sales to some traditional customers and the transfer of some wholesale 
accounts to retail concessions has continued, other areas of our wholesale business have performed well. Conditions 
remain difﬁcult for some of our wholesale customers and we have continued to take action in respect of those who are 
no longer appropriate for our brand. 

The reduction was offset by the growth in products supplied to our licence partners, albeit at lower margins.

Licence income 
Ted Baker operates two types of licences: territorial licences covering North America, the Middle East, Asia, Australia and 
New Zealand; and product licences covering perfume & fragrance, watches, footwear, eyewear, childrenswear, lingerie 
and branded mobile phones.

Licence income for the year was up 32.5% to £5.3m (2007: £4.0m) including a ﬁrst full year from the retail licence agreements 
signed in 2006 with RSH Limited and Li and Fung Group of Companies. Our other territorial licences have continued to perform 
in line with our expectations.

Good performances were delivered across our product licences with our perfume and fragrance license delivering particularly 
strong growth. 

Product licence income for the period included a contribution from our collaboration with The Carphone Warehouse Group to 
launch two Ted Baker branded mobile phones and a contribution from our new licensed childrenswear collection exclusive to 
Debenhams called Baker by Ted Baker, which complements our well established premium Childrenswear collection and we 
have been particularly pleased with progress to date.

We also signed a global watch licence (excluding the UK) with the Advanced Watch Company Limited which trades as the 
Geneva Watch Group (“Geneva”). Geneva will also acquire the rights to the UK on expiry of our existing licence with Zeon 
Limited. Geneva is one of the largest designers, manufacturers and marketers of watches in the world and we are 
delighted with its commitment to develop the Ted Baker watch business globally. The licence, which runs for an initial term 
of ﬁve years is subject to minimum guarantees and may be renewed for a further ﬁve years subject to achieving certain 
sales targets. 

We would like to thank the team at Zeon for its hard work and dedication in establishing the Ted Baker watch brand in the UK.

Collections
Ted Baker Menswear enjoyed good growth in the period with sales up 11.1% to £79.3m (2007: £71.4m). Menswear represented 
55.8% of total sales (2007: 56.4%).

Ted Baker Womenswear enjoyed excellent growth in the period with sales up 16.8% to £57.2m (2007: £48.9m). 
Womenswear represented 40.2% of total sales (2007: 39.6%) reﬂecting the growing strength of our Womenswear collections.

Sales of other collections, comprising Childrenswear and Footwear were up 7.4% at £5.7m (2007: £5.3m) and these collections 
represented 4.0% of our total sales (2007: 4.0%).

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Geographic Performance

United Kingdom and Europe
Our UK and Europe retail division delivered a strong performance for the year with sales up 16.7% to £93.3m (2007: £80.0m). 

Average square footage rose by 4.6% over the period to 131,085 sq ft (2007: 125,333 sq ft). At 26 January 2008, total retail 
square footage was 138,838 sq ft (2007: 128,481 sq ft) representing an increase of 8.1%. Retail sales per square foot 
increased from £638 to £712. 

During the year we were delighted to announce the opening of a new store in Dublin on Grafton Street which has traded 
ahead of our expectations. We also opened stores in Brighton and Gatwick North and have been pleased by their 
performance to date. 

We were also delighted to announce the launch of our standalone store dedicated purely to Womenswear in Langley Court, 
Covent Garden. As well as our Womenswear collections, the store houses an exclusive range of new premium, limited edition 
Womenswear products, called the Langley Collection, as well as lingerie, footwear and accessories, showcasing the breadth 
and depth of our growing Womenswear collection. We have been pleased with the performance of the store and will continue 
to assess opportunities to open further standalone Womenswear stores, as and when appropriate. 

At 26 January 2008 we operated 24 stores (2007: 21), 85 concessions (2007: 78) and 10 outlet stores (2007: 8).

US
Our US retail division has delivered a strong performance for the period. Sales increased by 13.8% to $19.5m against $17.1m 
last year which in sterling was equivalent to sales up 5.6% to £9.7m (2007: £9.2m). 

During the period we were delighted to announce the opening of a store in Aventura Mall, Florida. We now have 8 stores 
across the United States and will continue to review suitable opportunities to further our presence here, as and when they arise.

Average square footage rose by 9.9% over the period to 24,764 sq ft (2007: 22,528 sq ft). At 26 January 2008, total retail 
square footage was 26,423 sq ft (2007: 24,456 sq ft).  Retail sales per square foot increased from $760 to $787. 

Hartmarx Corporation, our US wholesale licencee, continues to make progress in developing our brand in North America. 

Middle East , Asia and Australasia
We have continued with the careful expansion of the Ted Baker brand across the Middle East and Asia through our territorial 
licence partners RSH Limited and Li and Fung Group of Companies.  We work closely with them to ensure that the visual 
merchandising of the stores and the training of the teams reﬂect the Ted Baker ethos and culture. 

During the period we opened a further 7 stores through these licence partners, in Dubai, Malyasia (3), Taiwan, Singapore and 
Hong Kong and three concessions in Taiwan (2) and Thailand. At the year end the total number of stores and concessions in 
these territories was 17.

In October 2007 we were also pleased to announce the opening of our ﬁrst store in Melbourne Australia, through a joint 
venture with our licence partner in the territory and we have been pleased with its performance to date. 

13

14

Financial Review

Gross Margin
Retail gross margins were in line with last year at 64.9% (2007: 65.0%). The wholesale gross margin was down at 40.3% 
(2007: 42.9%), largely as a result of increased sales to our licence partners in the Middle East and Asia at lower than average
margins. The composite gross margin was 58.1% (2007: 58.6%) mainly reﬂecting the reduction in the wholesale margin.

Operating Expenses
Operating expenses rose by 14.0% to £66.2m (2007: £58.0m).  Distribution costs, which include the costs of retail stores, 
outlets and concessions increased by 16.7% to £48.3m (2007: £41.4m), which was above the 5.8% increase in average retail 
selling space due to continued investment in our distribution centres, store refurbishments, higher turnover rents due to 
performance and above average increases in rates. Administration expenses increased by 7.2% to £17.8m (2007: £16.6m), 
reﬂecting the increased activity of our business and expansion in the UK, Middle East and Asia.

Finance Income and Expenses
The net interest payable during the year of £0.2m, against net interest receivable in the prior year (2007: £0.1m), reﬂected 
the effect of purchase of own shares and increased capital expenditure on cash resources.

Taxation
The tax charge for the year was £6.8m (2007: £5.6m), an effective tax rate of 30.9% (2007: 28.1%). The effective rate was 
higher than last year as the 2007 rate reﬂected a deferred tax adjustment on the recognition of tax losses in overseas 
subsidiaries. Excluding this, our underlying effective rate in 2007 was 30.9 %.

Cash Flow and Working Capital
We continued to focus on strong cash management and net cash generated from operations was £19.5m (2007: £13.9m), 
which reﬂected a small increase in working capital requirements and lower tax payable during the year. 

Inventory levels increased by £1.5m or 5.4% which was below the growth of the business during the year.

Capital expenditure was £8.8m (2007: £4.9m) and largely comprised investment in new retail stores. Some £1.9m of capital 
expenditure related to stores that will open in the early part of 2008.

Shareholder Return
Basic earnings per share increased by 6.5% to 36.1p per share (2007: 33.9p per share), which is lower than the increase in 
proﬁt before tax due to the effect of a higher tax charge in 2008. Excluding the impact of these, basic earnings per share 
would show an underlying increase of 10.7%.

The proposed ﬁnal dividend per share has increased by 10.7% from 10.3p to 11.4p. Free cash ﬂow per share, which is calculated 
using the net cash generated from operating activities and interest received, increased by 39.3% from 32.6p to 45.4p primarily 
reﬂecting the higher cash generated from operating activities.

15

16

Risks

There are a number of risks and uncertainties that face the Group, which are monitored by the Risk Committee. Although not 
exhaustive, the following list highlights some of the main issues:

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:62)(cid:195)(cid:202)(cid:220)(cid:136)(cid:204)(cid:133)(cid:202)(cid:62)(cid:143)(cid:143)(cid:202)(cid:118)(cid:62)(cid:195)(cid:133)(cid:136)(cid:156)(cid:152)(cid:202)(cid:76)(cid:192)(cid:62)(cid:152)(cid:96)(cid:195)(cid:93)(cid:202)(cid:156)(cid:213)(cid:192)(cid:202)(cid:204)(cid:105)(cid:62)(cid:147)(cid:195)(cid:202)(cid:62)(cid:192)(cid:105)(cid:202)(cid:86)(cid:156)(cid:152)(cid:195)(cid:204)(cid:62)(cid:152)(cid:204)(cid:143)(cid:222)(cid:202)(cid:195)(cid:204)(cid:192)(cid:136)(cid:219)(cid:136)(cid:152)(cid:125)(cid:202)(cid:204)(cid:156)(cid:202)(cid:105)(cid:152)(cid:195)(cid:213)(cid:192)(cid:105)(cid:202)(cid:204)(cid:133)(cid:62)(cid:204)(cid:202)(cid:156)(cid:213)(cid:192)(cid:202)(cid:156)(cid:118)(cid:118)(cid:105)(cid:192)(cid:202)(cid:136)(cid:195)(cid:202)(cid:118)(cid:62)(cid:195)(cid:133)(cid:136)(cid:156)(cid:152)(cid:62)(cid:76)(cid:143)(cid:105)(cid:198)

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:220)(cid:105)(cid:202)(cid:192)(cid:105)(cid:143)(cid:222)(cid:202)(cid:156)(cid:152)(cid:202)(cid:156)(cid:213)(cid:192)(cid:202)(cid:204)(cid:105)(cid:62)(cid:147)(cid:195)(cid:93)(cid:202)(cid:204)(cid:192)(cid:213)(cid:195)(cid:204)(cid:105)(cid:105)(cid:195)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:171)(cid:62)(cid:192)(cid:204)(cid:152)(cid:105)(cid:192)(cid:195)(cid:202)(cid:204)(cid:156)(cid:202)(cid:171)(cid:192)(cid:156)(cid:204)(cid:105)(cid:86)(cid:204)(cid:202)(cid:156)(cid:213)(cid:192)(cid:202)(cid:76)(cid:192)(cid:62)(cid:152)(cid:96)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:105)(cid:152)(cid:195)(cid:213)(cid:192)(cid:105)(cid:202)(cid:204)(cid:133)(cid:62)(cid:204)(cid:202)(cid:136)(cid:204)(cid:202)(cid:136)(cid:195)(cid:202)(cid:171)(cid:192)(cid:105)(cid:195)(cid:105)(cid:152)(cid:204)(cid:105)(cid:96)(cid:202)(cid:136)(cid:152)(cid:202)(cid:62)(cid:152)(cid:202)(cid:62)(cid:171)(cid:171)(cid:192)(cid:156)(cid:171)(cid:192)(cid:136)(cid:62)(cid:204)(cid:105)(cid:202)(cid:220)(cid:62)(cid:222)(cid:176)

This risk is minimised by careful consideration of each new opportunity and each partner with whom we do business;

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:220)(cid:105)(cid:202)(cid:147)(cid:62)(cid:222)(cid:202)(cid:118)(cid:62)(cid:86)(cid:105)(cid:202)(cid:136)(cid:152)(cid:86)(cid:192)(cid:105)(cid:62)(cid:195)(cid:105)(cid:195)(cid:202)(cid:136)(cid:152)(cid:202)(cid:156)(cid:213)(cid:192)(cid:202)(cid:156)(cid:171)(cid:105)(cid:192)(cid:62)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202)(cid:86)(cid:156)(cid:195)(cid:204)(cid:195)(cid:202)(cid:96)(cid:213)(cid:105)(cid:202)(cid:204)(cid:156)(cid:202)(cid:125)(cid:192)(cid:156)(cid:220)(cid:204)(cid:133)(cid:202)(cid:136)(cid:152)(cid:202)(cid:171)(cid:62)(cid:222)(cid:192)(cid:156)(cid:143)(cid:143)(cid:93)(cid:202)(cid:171)(cid:192)(cid:156)(cid:171)(cid:105)(cid:192)(cid:204)(cid:222)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:156)(cid:204)(cid:133)(cid:105)(cid:192)(cid:202)(cid:86)(cid:156)(cid:195)(cid:204)(cid:195)(cid:93)(cid:202)(cid:195)(cid:156)(cid:147)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)(cid:220)(cid:133)(cid:136)(cid:86)(cid:133)(cid:202)(cid:147)(cid:62)(cid:222)(cid:202)(cid:76)(cid:105)(cid:202)(cid:202)(cid:202)
      outside the scope of our control;

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:192)(cid:136)(cid:195)(cid:142)(cid:195)(cid:202)(cid:62)(cid:192)(cid:136)(cid:195)(cid:136)(cid:152)(cid:125)(cid:202)(cid:118)(cid:192)(cid:156)(cid:147)(cid:202)(cid:105)(cid:221)(cid:86)(cid:133)(cid:62)(cid:152)(cid:125)(cid:105)(cid:202)(cid:192)(cid:62)(cid:204)(cid:105)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:136)(cid:152)(cid:204)(cid:105)(cid:192)(cid:105)(cid:195)(cid:204)(cid:202)(cid:192)(cid:62)(cid:204)(cid:105)(cid:202)(cid:121)(cid:213)(cid:86)(cid:204)(cid:213)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:93)(cid:202)(cid:62)(cid:143)(cid:204)(cid:133)(cid:156)(cid:213)(cid:125)(cid:133)(cid:202)(cid:204)(cid:133)(cid:105)(cid:195)(cid:105)(cid:202)(cid:62)(cid:192)(cid:105)(cid:202)(cid:147)(cid:136)(cid:152)(cid:136)(cid:147)(cid:136)(cid:195)(cid:105)(cid:96)(cid:202)(cid:204)(cid:133)(cid:192)(cid:156)(cid:213)(cid:125)(cid:133)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:213)(cid:195)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)(cid:202)
      ﬁnancial instruments;

(cid:202)

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:156)(cid:171)(cid:105)(cid:192)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:62)(cid:143)(cid:202)(cid:171)(cid:192)(cid:156)(cid:76)(cid:143)(cid:105)(cid:147)(cid:195)(cid:202)(cid:136)(cid:152)(cid:86)(cid:143)(cid:213)(cid:96)(cid:136)(cid:152)(cid:125)(cid:202)(cid:96)(cid:136)(cid:195)(cid:192)(cid:213)(cid:171)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202)(cid:204)(cid:156)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:136)(cid:152)(cid:118)(cid:192)(cid:62)(cid:195)(cid:204)(cid:192)(cid:213)(cid:86)(cid:204)(cid:213)(cid:192)(cid:105)(cid:202)(cid:204)(cid:133)(cid:62)(cid:204)(cid:202)(cid:195)(cid:213)(cid:171)(cid:171)(cid:156)(cid:192)(cid:204)(cid:195)(cid:202)(cid:156)(cid:213)(cid:192)(cid:202)(cid:76)(cid:213)(cid:195)(cid:136)(cid:152)(cid:105)(cid:195)(cid:195)(cid:198)(cid:202)(cid:62)(cid:152)(cid:96)

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:220)(cid:105)(cid:202)(cid:192)(cid:105)(cid:86)(cid:156)(cid:125)(cid:152)(cid:136)(cid:195)(cid:105)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:136)(cid:147)(cid:171)(cid:156)(cid:192)(cid:204)(cid:62)(cid:152)(cid:86)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)(cid:156)(cid:213)(cid:192)(cid:202)(cid:204)(cid:105)(cid:62)(cid:147)(cid:195)(cid:202)(cid:220)(cid:136)(cid:204)(cid:133)(cid:136)(cid:152)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:76)(cid:213)(cid:195)(cid:136)(cid:152)(cid:105)(cid:195)(cid:195)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:133)(cid:62)(cid:219)(cid:105)(cid:202)(cid:171)(cid:213)(cid:204)(cid:202)(cid:136)(cid:152)(cid:202)(cid:171)(cid:143)(cid:62)(cid:86)(cid:105)(cid:202)(cid:62)(cid:202)(cid:195)(cid:204)(cid:192)(cid:213)(cid:86)(cid:204)(cid:213)(cid:192)(cid:105)(cid:202)(cid:204)(cid:133)(cid:62)(cid:204)(cid:202)(cid:147)(cid:136)(cid:152)(cid:136)(cid:147)(cid:136)(cid:195)(cid:105)(cid:195)(cid:202)(cid:192)(cid:105)(cid:143)(cid:136)(cid:62)(cid:152)(cid:86)(cid:105)(cid:202)
      on key individuals.

The role of the Risk Committee is summarised in more detail in the Internal Control section on page 24.

17

Board Of Directors

Robert Breare – Non-Executive Chairman (55) 
Robert has extensive experience of consumer facing businesses and was formerly a director of Arcadian International Plc. 
Robert is chairman of Individual Restaurant Company plc, chief executive of Merchant Inns Plc and holds a number of 
non-executive positions. He is chairman of the audit committee and the nomination committee and a member of the 
remuneration committee. Robert is an independent director.

Raymond Stuart Kelvin – Chief Executive (52) (‘Closest Man To Ted’)
Ray, the founder of Ted Baker, has worked in the fashion industry for over 35 years. In 1973 he founded PC Clothing Limited, a 
supplier of womenswear to high street retailers. In 1987 Ray developed the Ted Baker brand and has been chief executive of 
Ted Baker since its launch in 1988.

Lindsay Dennis Page, MA, ACA – Finance Director (49)
Lindsay joined Ted Baker as ﬁnance director in February 1997. He joined Binder Hamlyn in 1981, became a founder member 
ofthe corporate ﬁnance department in 1986 and a partner in 1990. Binder Hamlyn subsequently merged with Arthur 
Andersen in 1994. 

David Alan Bernstein – Non-Executive (64)
David is non-executive chairman of Blacks Leisure plc, Frank Thomas Limited and Sports and Leisure Group Ltd and a 
non-executive director of Wembley National Stadium Limited and Carluccios plc. Previously he was joint managing director 
of Pentland Group Plc and chairman of French Connection plc and Manchester City plc. He is a member of the remuneration, 
audit and nomination committees. David is an independent director.

David Bruce Hewitt – Non-Executive (75)
David spent the major part of his career with Thorn EMI and became managing director of its Ferguson division in 1982.  
In 1985 he joined Comet PLC as its chairman. He has held a number of non-executive positions. He is chairman of the 
remuneration committee and a member of the audit and nomination committees. David is an independent director and 
the senior non-executive director.

18

Directors’ Report

The directors present their annual report on the affairs of the Group, together with the accounts and auditors’ report, for the 
52 weeks ended 26 January 2008. The comparative period is for the 52 weeks ended 27 January 2007.

Principal Activities
Ted Baker is a leading designer brand and the principal activities of the Group comprise the design, wholesale and retail of 
menswear, womenswear, childrenswear and related accessories. The subsidiary undertakings principally affecting the proﬁts 
and net assets of the Group in the period are listed in note 12 to the accounts. The Group also has a branch operating in 
Ireland while the Danish branch stopped trading during the year.

Business Review and Future Prospects
A commentary on the Group’s progress during the period, it’s future prospects and a description of principal risks and
uncertainties are set out in the Chairman’s Statement and Business Review on pages 7 to 17.

Results and Dividends
The audited accounts for the 52 weeks ended 26 January 2008 are set out on pages 33 to 62. The Group proﬁt for the 52 
weeks, after taxation, was £15,242,000 (2007: £14,416,000). The directors recommend a ﬁnal dividend of 11.4p per ordinary 
share (2007: 10.3p) payable on 20 June 2008 to ordinary shareholders on the register on 16 May 2008 which, together with 
the interim dividend of 5.0p per share (2007: 4.3p per share) paid on 30 November 2007, makes a total of 16.4p per share 
for the period (2007: 14.6p per share).

Directors
Details of the directors’ beneﬁcial interests in the shares of the Company and their options are given in the Directors’
Remuneration Report. Brief details of the career of each director are set out on page 18.

Mr L. D. Page, Mr R. Breare and Mr D. B. Hewitt will retire by rotation at the next annual general meeting and, being eligible, 
will offer themselves for re-election. Mr D. B. Hewitt faces annual re-election due to his length of service as a non-executive 
Director of the Company.

Substantial Shareholdings
On 18 March 2008, the Company had been notiﬁed, in accordance with the Disclosure Rules and Transparency Rules (DTR5), 
of the following interests in the ordinary share capital of the Company:

Name Of Holder
R S Kelvin
Schroder Investment Management Ltd
Credit Suisse Asset Management Ltd 
FMR Corp
Lloyds TSB Group
British Coal Staff Superannuation Scheme
Mineworkers Pension Scheme
Legal & General Group Plc

Number
16,537,276
3,867,391
3,390,792
1,960,048
1,400,346
1,362,177
1,312,600
1,302,952

% Held
39.3
9.2
8.1
4.7
3.3
3.2
3.1
3.1

Share Capital and Control
As at 26 January 2008, the Company’s authorised share capital was 80,000,000 ordinary shares of 5 pence each (in nominal 
value). Details of the Company’s share capital are shown in note 20 to the consolidated ﬁnancial statements on page 54. 
On 26 January 2008 there were 43,198,033 ordinary shares in issue. The Company holds 1,230,979 ordinary shares in 
treasury. The Company may not exercise any rights (such as voting rights) in respect of the treasury shares and the treasury 
shares carry no right to receive dividends or other distributions of assets.

The rules about the appointment and replacement of directors are contained in the Company’s Articles of Association. 
Speciﬁc rules regarding the re-election of directors are referred to in the Corporate Governance Statements report. Changes 
to the Articles of Association must be approved by the shareholders in accordance with the legislation in force from time to time. 
The powers of the directors are determined by legislation and the Memorandum and Articles of Association of the Company 
in force from time to time. Powers relating to the issuing and buying back of shares are included in the Company’s Articles of 
Association and such authorities are renewed by shareholders each year at the annual general meeting.

19

There are a number of agreements that take effect, alter or terminate upon a change of control of the Company following a 
takeover bid, such as commercial contracts, bank loan agreements and employee share schemes. None of these is deemed 
to be signiﬁcant in terms of its potential impact on the business of the Company.

The Company does not have agreements with any director or employee that would provide compensation for loss of ofﬁce or 
employment resulting from a takeover, save that the Company’s share schemes contain provisions which may cause options 
and awards granted to employees to vest on a takeover.

Directors’ Interests
The directors who held ofﬁce at 26 January 2008 had the following interests in the shares of Ted Baker PLC:

R S Kelvin
L D Page

% of share capital

39.3%

26 January 
2008
Beneﬁcial

16,537,276
303,837

27 January 
2007
Beneﬁcial

16,537,276
293,837

No changes took place in the interests of directors between 26 January 2008 and 18 March 2008. 

Purchase of Own Shares
The Board exercised the authority approved by shareholders at the time of the last annual general meeting to buy back its own 
shares in the market.

In March 2007, the Company purchased a total of 830,807 ordinary 5p shares at a price of 590p per share, which represented 
1.9% of the issued share capital. At 26 January 2008, 1,230,979 shares were held in treasury.

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

Creditor Payment Policy
The Company’s policy, in relation to all of its suppliers, is to settle the terms of payment when agreeing the terms of the transaction 
and to abide by those terms provided that it is satisﬁed that the supplier has provided the goods or services in accordance with 
the agreed terms and conditions. The Company does not follow any code or statement on payment practice. The number of 
days’ purchases outstanding for payment by the Group at the end of the year was 52 days (2007: 52 days). At the year end the 
Company had no trade creditors.

Donations
There were no donations during the period (2007: £Nil).

Disabled Employees
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant 
concerned. In the event of members of staff becoming disabled every effort is made to ensure that their employment with the 
Group continues and that appropriate training is arranged. It is the policy of the Group that the training, career development 
and promotion of disabled persons should, as far as possible, be identical with that of other employees.

Employee Practices   
The Group places considerable value on the involvement of its employees and continues to keep them informed on matters 
affecting them as employees and on the signiﬁcant factors affecting the performance of the Group. This is achieved through 
formal and informal meetings and employee representatives are consulted regularly on a wide range of matters affecting 
employees current and future interests. Employees are encouraged to join the Group’s Save as you Earn scheme and are 
informed of the Group’s ﬁnancial performance regularly during the ﬁnancial year as well being given the ﬁnancial and 
economic reasons behind the Group performance. The Group operates a bi-annual performance review system with each 
employee to discuss personal and career development.

The Group believes in respecting individuals and their rights in the workplace. With this in mind, speciﬁc policies are in place 
covering harassment and bullying, whistle blowing, equal opportunities and data protection. 

20

Social Responsibility
The Board has identiﬁed and assessed the signiﬁcant risk to the Group’s short term and long term value arising from social, 
environmental and ethical (’SEE’) matters and the formal schedule of matters reserved to the Board takes account of SEE matters. 
L D Page, Finance Director, has been given speciﬁc responsibility for overseeing the formulation of the Group’s policies and 
procedures for managing risks arising from SEE matters. 

The Group is continually reviewing systems to reduce the effect on the environment of waste generated at the Group’s sites and 
continues to recycle waste where possible, including paper, cans, plastic and cardboard. The Group complies with the Producer 
Responsibility Obligation (Packaging Waste) Regulations 1997 and is a member of the Wastepak Compliance Scheme. The Group 
is committed to energy efﬁciency and has an ongoing programme to seek improvements in this area.

Health and Safety
The Group remains committed to ensuring a safe place to work and shop for all employees and customers. Annual risk 
assessments are carried out at all locations and a committee, comprised of representatives within the business and an 
external adviser, continue to review and resolve any health and safety issues. 

Risk Management
The Company’s policies on currency and interest rate risk are outlined in Note 23 of the Financial Statements.

Directors’ Statement Regarding Disclosure of Information to Auditors
The directors who held ofﬁce at the date of approval of this Directors’ Report comﬁrm that, so far as they are aware, there is no
relevant audit information of which the Company’s auditors are unaware. Further, each director has taken all the steps that he
ought to have taken as a director to ensure the Board is aware of any relevant audit information and to establish that the 
Company’s auditors are aware of any such information. 

Auditors
The directors will place a resolution before the annual general meeting to re-appoint KPMG Audit Plc as auditors for the ensuing year.

The report was approved by the Board of Directors on 18 March 2008 and signed on its behalf by:

C F Anderson, Secretary, 
Registered ofﬁce - The Ugly Brown Building, 6a St Pancras Way, London NW1 OTB

21

Corporate Governance Statements

Statement of compliance with the Combined Code
The Company has complied throughout the year with all of the provisions of the Combined Code on Corporate Governance 
issued in June 2006 (‘the Combined Code’).

Statement about applying the principles of Good Governance
The Company has applied the principles of Good Governance set out in section 1 of the Combined Code by complying with the 
Code of Best Practice as reported above. Further explanation of how the principles have been applied is set out below and, in 
connection with directors’ remuneration, in the Directors’ Remuneration Report.

The Board
The Board currently comprises a non-executive chairman, a chief executive, one other executive director and two non-executive 
directors. Biographies of these directors appear on page 18.

David Hewitt has held the position of non-executive director since 1997 and has been conﬁrmed by the Board as the Company’s 
senior independent director. The Board recognises that he has served as a non-executive for 11 years, but remains satisﬁed that 
he is independent. All the non-executive directors are considered by the Board to be independent of management and free of 
any relationship that could materially interfere with the exercise of their independent judgement.

The Board meets regularly throughout the year. It considers all issues relating to the strategy, direction and future development 
of the Group. The Board has a schedule of matters reserved to it for decision that is regularly updated. The requirement for 
Board approval on these matters is understood and communicated widely throughout the Group. The non-executive directors 
meet with the chairman separately during the year. In addition the non-executive directors meet without the chairman present to 
appraise the chairman’s performance.  

Operational decision making, operational performance and the formulation of strategic proposals to the Board are controlled 
by an executive committee that comprises the chief executive, the ﬁnance director and subsidiary directors. The executive 
committee meets regularly throughout the year.

To enable the Board to function effectively and the directors to discharge their responsibilities, full and timely access is provided 
to all relevant information. There is an agreed procedure for directors to take independent professional advice, if necessary, 
at the Company’s expense. This is in addition to the access every director has to the Company Secretary. 

Board and committee attendance
The following table details the number of Board and committee meetings held during the 52 weeks ended 26 January 2008 
and the attendance record of each director.

Board
meetings

Audit
committee

Remuneration
committee

Number of meetings held in year

Robert Breare
David A Bernstein
David B Hewitt
Raymond S Kelvin
Lindsay D Page

2

2
 1  
2

-
-

3

3
3
3

-
-

11

11
10
10

10
11

22

Audit Committee
During the period, Robert Breare was chairman of the Audit Committee and the other committee members were David 
Bernstein and David Hewitt. The Board considers the chairman to be independent because he was independent on 
appointment. All the committee members are non-executive directors and meet at least twice a year to review and approve 
the interim and annual ﬁnancial statements, before submission for approval by the Board and consider any matters raised 
by the auditors. The committee will consider signiﬁcant ﬁnancial reporting judgements contained in the ﬁnancial statements, 
including accounting policies and compliance, areas of management judgements and estimates and the effectiveness of 
ﬁnancial reporting and controls. The Board considers all members to have relevant ﬁnancial experience.

The Audit Committee oversees the Company’s relationship with the external auditors and makes recommendations to 
the Board in relation to their appointment, re-appointment and removal and approves their remuneration and terms of 
engagement. The Board and committee also review the independence of the external auditors and consider the 
engagement of the external auditors to supply non-audit services.

The committee is responsible for the review of the Company’s procedures for responding to the allegations of whistleblowers 
and the arrangements by which staff may, in conﬁdence, raise concerns about possible ﬁnancial reporting irregularities.

Nomination Committee
During the period, Robert Breare was chairman of the Nomination Committee and the other committee members were 
David Bernstein and David Hewitt. The Board considers the chairman to be independent because he was independent 
on appointment. All the committee members are non-executive directors. The committee is responsible for nominating 
candidates for appointment to the Board. There were no meetings during the period and no board appointments.

All non-executive directors are advised of the time commitment considered necessary to enable them to fulﬁl their 
responsibilities prior to appointment.

Appointments to the Board
Newly appointed directors are given training appropriate to the level of their previous experience. Non-executive directors 
meet regularly with members of the executive committee and other personnel within the organisation. In addition, site visits 
ensure that the non-executive directors gain ﬁrst hand experience of developments within the Group.

Any director appointed during the year is required, under the provisions of the Company’s Articles of Association, to retire 
and seek re-election by the shareholders at the next Annual General Meeting.

The Company’s Articles of Association require those directors who have been in ofﬁce for at least two years from the date 
of their original appointment (or from the date of their latest re-election if later) to retire from ofﬁce.

Communication with Shareholders
The Group attaches considerable importance to the effectiveness of its communication with its shareholders. The full 
report and accounts are sent to all shareholders and further copies are distributed to others with potential interest in the 
Group’s performance.

The directors seek to build on a mutual understanding of objectives between the Company and its institutional shareholders 
by making general presentations after the interim and preliminary results; meeting shareholders to discuss long-term issues 
and gather feedback; and communicating regularly throughout the year. All shareholders have access to these presentations, 
as well as to the annual report and accounts and to other information about the Company, through the website at 
www.tedbaker.com They may also attend the Company’s Annual General Meeting at which they have the opportunity to 
ask questions.

Non-executive directors are kept informed of the views of shareholders by the executive directors and are provided with 
independent feedback from investor meetings.

23

Internal Control
The Board is ultimately responsible for the Group’s system of internal control and for reviewing its effectiveness. 
However, such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives, 
and can provide only reasonable and not absolute assurance against material misstatement or loss.

Following publication of guidance for directors on internal control “Internal Control: Guidance for Directors on the Combined 
Code” (’the Turnbull guidance’), the Board conﬁrms that there is an ongoing process for identifying, evaluating and managing 
the signiﬁcant risks faced by the Group, that has been in place for the year under review and up to the date of approval of the 
annual report and accounts, and that this process is regularly reviewed by the Board and accords with the Turnbull guidance.

The Board has reviewed the effectiveness of the system of internal control. In particular, it has reviewed and updated the 
process for identifying and evaluating the signiﬁcant risks affecting the business and the policies and procedures by which 
these risks are managed. Management is responsible for the identiﬁcation and evaluation of signiﬁcant risks applicable to 
their areas of the business together with the design and operation of suitable internal controls. These risks are assessed on a 
continual basis and may be associated with a variety of internal or external sources including control breakdowns, disruption 
in information systems, competition, natural catastrophe and regulatory requirements.

The Group has an independent internal audit function whose ﬁndings are regularly reviewed by the executive committee and 
the Board. The Audit Committee monitors and reviews the effectiveness of the internal audit activities.

Management reports regularly on its review of risks and how they are managed to the Risk Committee, whose main role is to 
review, on behalf of the Board, the key risks inherent in the business and the system of control necessary to manage such risks, 
and to present their ﬁndings to the Board. 

The Chief Executive reports to the Board on behalf of the executive committee on signiﬁcant changes in the business and the 
external environment which affects signiﬁcant risks. The Finance Director provides the Board with monthly ﬁnancial information 
which includes key performance indicators. Where areas for improvement in the system are identiﬁed, the Board considers the 
recommendations made by the Risk Committee and the Audit Committee.

The Risk Committee includes the Finance Director and various heads of department. It reviews, on a twice yearly basis, the risk 
management and control process and considers:

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:62)(cid:213)(cid:204)(cid:133)(cid:156)(cid:192)(cid:136)(cid:204)(cid:222)(cid:93)(cid:202)(cid:192)(cid:105)(cid:195)(cid:156)(cid:213)(cid:192)(cid:86)(cid:105)(cid:195)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:86)(cid:156)(cid:135)(cid:156)(cid:192)(cid:96)(cid:136)(cid:152)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202)(cid:156)(cid:118)(cid:202)(cid:204)(cid:133)(cid:156)(cid:195)(cid:105)(cid:202)(cid:136)(cid:152)(cid:219)(cid:156)(cid:143)(cid:219)(cid:105)(cid:96)(cid:202)(cid:136)(cid:152)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:136)(cid:96)(cid:105)(cid:152)(cid:204)(cid:136)(cid:119)(cid:86)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:93)(cid:202)(cid:62)(cid:195)(cid:195)(cid:105)(cid:195)(cid:195)(cid:147)(cid:105)(cid:152)(cid:204)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:147)(cid:62)(cid:152)(cid:62)(cid:125)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:202)(cid:156)(cid:118)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:202)
      signiﬁcant risks faced by the Group;

(cid:202)

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:192)(cid:105)(cid:195)(cid:171)(cid:156)(cid:152)(cid:195)(cid:105)(cid:202)(cid:204)(cid:156)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:195)(cid:136)(cid:125)(cid:152)(cid:136)(cid:119)(cid:86)(cid:62)(cid:152)(cid:204)(cid:202)(cid:192)(cid:136)(cid:195)(cid:142)(cid:195)(cid:202)(cid:220)(cid:133)(cid:136)(cid:86)(cid:133)(cid:202)(cid:133)(cid:62)(cid:219)(cid:105)(cid:202)(cid:76)(cid:105)(cid:105)(cid:152)(cid:202)(cid:136)(cid:96)(cid:105)(cid:152)(cid:204)(cid:136)(cid:119)(cid:105)(cid:96)(cid:202)(cid:76)(cid:222)(cid:202)(cid:147)(cid:62)(cid:152)(cid:62)(cid:125)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:156)(cid:204)(cid:133)(cid:105)(cid:192)(cid:195)(cid:198)(cid:202)

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:147)(cid:62)(cid:136)(cid:152)(cid:204)(cid:105)(cid:152)(cid:62)(cid:152)(cid:86)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)(cid:62)(cid:202)(cid:86)(cid:156)(cid:152)(cid:204)(cid:192)(cid:156)(cid:143)(cid:202)(cid:105)(cid:152)(cid:219)(cid:136)(cid:192)(cid:156)(cid:152)(cid:147)(cid:105)(cid:152)(cid:204)(cid:202)(cid:96)(cid:136)(cid:192)(cid:105)(cid:86)(cid:204)(cid:105)(cid:96)(cid:202)(cid:204)(cid:156)(cid:220)(cid:62)(cid:192)(cid:96)(cid:195)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:171)(cid:192)(cid:156)(cid:171)(cid:105)(cid:192)(cid:202)(cid:147)(cid:62)(cid:152)(cid:62)(cid:125)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:202)(cid:156)(cid:118)(cid:202)(cid:192)(cid:136)(cid:195)(cid:142)(cid:198)(cid:202)(cid:62)(cid:152)(cid:96)

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:62)(cid:152)(cid:152)(cid:213)(cid:62)(cid:143)(cid:202)(cid:192)(cid:105)(cid:171)(cid:156)(cid:192)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202)(cid:171)(cid:192)(cid:156)(cid:86)(cid:105)(cid:96)(cid:213)(cid:192)(cid:105)(cid:195)(cid:176)

Additionally, the Risk Committee keeps abreast of all changes made to the systems and follows up on areas that require 
improvement. It reports to the Board at twice yearly intervals or more frequently should the need arise.

24

Directors’ Remuneration Report

As well as complying with the Provisions of the Code, as disclosed in the Company’s corporate governance statements, the 
Board has applied the Principles of Good Governance relating to directors’ remuneration and the Directors’ Remuneration 
Report Regulations 2002 contained in schedule 7A to CA85 as described below.

Procedures for Developing Policy and Fixing Remuneration
David Hewitt was the chairman of the remuneration committee during the 52 weeks to 26 January 2008 with David Bernstein 
and Robert Breare as the other committee members. The Board has shown its commitment to formal and transparent procedures 
for developing a remuneration policy, ﬁxing executive remuneration and ensuring that no director is involved in deciding his or 
her own remuneration by consulting the Monk Partnership (an associate ﬁrm of PriceWaterhouseCoopers which also provided 
tax and accounting services to the Group in the year) on executive directors’ pay trends. This policy is expected to continue in 
forthcoming years.

Statement of Remuneration Policy
The Board does not pay more than is necessary to attract and retain the directors required to run the Company successfully. 
The aim of the Company’s remuneration policy is to attract, motivate and retain high quality management and to incentivise 
them to achieve growth in earnings per share which delivers value to the shareholders.

The total size of the remuneration package is judged by comparison with the value of packages of similar companies, 
having regard to:

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:195)(cid:136)(cid:226)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:10)(cid:156)(cid:147)(cid:171)(cid:62)(cid:152)(cid:222)(cid:93)(cid:202)(cid:136)(cid:204)(cid:195)(cid:202)(cid:204)(cid:213)(cid:192)(cid:152)(cid:156)(cid:219)(cid:105)(cid:192)(cid:93)(cid:202)(cid:171)(cid:192)(cid:156)(cid:119)(cid:204)(cid:195)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:152)(cid:213)(cid:147)(cid:76)(cid:105)(cid:192)(cid:202)(cid:156)(cid:118)(cid:202)(cid:171)(cid:105)(cid:156)(cid:171)(cid:143)(cid:105)(cid:202)(cid:105)(cid:147)(cid:171)(cid:143)(cid:156)(cid:222)(cid:105)(cid:96)(cid:198)

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:96)(cid:136)(cid:219)(cid:105)(cid:192)(cid:195)(cid:136)(cid:204)(cid:222)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:86)(cid:156)(cid:147)(cid:171)(cid:143)(cid:105)(cid:221)(cid:136)(cid:204)(cid:222)(cid:202)(cid:156)(cid:118)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:76)(cid:213)(cid:195)(cid:136)(cid:152)(cid:105)(cid:195)(cid:195)(cid:198)

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:125)(cid:105)(cid:156)(cid:125)(cid:192)(cid:62)(cid:171)(cid:133)(cid:136)(cid:86)(cid:62)(cid:143)(cid:202)(cid:195)(cid:171)(cid:192)(cid:105)(cid:62)(cid:96)(cid:202)(cid:156)(cid:118)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:76)(cid:213)(cid:195)(cid:136)(cid:152)(cid:105)(cid:195)(cid:195)(cid:198)(cid:202)(cid:62)(cid:152)(cid:96)

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:125)(cid:192)(cid:156)(cid:220)(cid:204)(cid:133)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:105)(cid:221)(cid:171)(cid:62)(cid:152)(cid:195)(cid:136)(cid:156)(cid:152)(cid:202)(cid:171)(cid:192)(cid:156)(cid:119)(cid:143)(cid:105)(cid:176)

The remuneration policy is as follows:

Basic Salary
This is reviewed annually by the Remuneration Committee having regard to competitive market practice and each director’s 
contribution to the business, thus allowing for individual performance.

Annual Bonus
The annual grant of bonuses is conditional upon achievement of targets by reference to agreed ﬁnancial performance measures 
and external expectations, namely proﬁt before tax and growth in earnings per share. These are designed to provide a direct link
between the rewards of executives and returns to shareholders. Bonuses are capped at 100 per cent of basic salary. This scheme 
is applicable to Mr R S Kelvin and Mr L D Page. Amounts received in the year may be found on page 28.

Benefits
Taxable beneﬁts include such items as company cars, fuel and medical expense insurance. Life assurance is provided as a 
non-taxable beneﬁt.

Pensions
The Company operates a money purchase scheme with a Company contribution of 12.5 per cent of basic salary for executive 
directors apart from Mr R S Kelvin. 

Long Term Incentive Plans and Share Options
The Company believes that share ownership by executive directors and senior executives strengthens the link between their 
personal interests and those of the shareholders. Earnings per share growth is the chosen performance criterion because it 
is seen as a key driver of shareholder value.

The Company’s Executive Share Option Scheme and Performance Share Plan impose an aggregate individual limit on the 
market value of shares, which may be subject to options or awards of ten times that individual’s annual remuneration. 
The Remuneration Committee’s policy is usually to grant share options every three to ﬁve years, with each grant based on 
between one and four times an individual’s basic salary, and to grant conditional awards annually based on one times an 
individual’s basic salary.

25

The following schemes are in operation for the beneﬁt of directors:

The 1997 Executive Share Option Scheme
Under this scheme, options may be granted to subscribe for new shares and to acquire shares from the Ted Baker Group 
Employee Beneﬁt Trust. The exercise of options is subject to earnings per share growth over three accounting periods, the ﬁrst 
being the one in which the grant is made. If compound earnings per share growth is at least 10 per cent per annum, then 25 
per cent of the options will be exercisable rising on a straight line basis to the maximum if compound growth of 15 per cent per 
annum is achieved. Currently, there are no options granted under this scheme.

In establishing the performance conditions of the share scheme, the Remuneration Committee has reviewed the standards 
used by similar sized companies within the retail industry and has established challenging criteria that are required to be met 
in order to permit admission into the scheme.

The Ted Baker Performance Share Plan
Under this plan, both conditional awards and share options may be granted:

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:47)(cid:133)(cid:105)(cid:202)(cid:62)(cid:220)(cid:62)(cid:192)(cid:96)(cid:202)(cid:156)(cid:118)(cid:202)(cid:195)(cid:133)(cid:62)(cid:192)(cid:105)(cid:195)(cid:202)(cid:136)(cid:195)(cid:202)(cid:195)(cid:213)(cid:76)(cid:141)(cid:105)(cid:86)(cid:204)(cid:202)(cid:204)(cid:156)(cid:202)(cid:105)(cid:62)(cid:192)(cid:152)(cid:136)(cid:152)(cid:125)(cid:195)(cid:202)(cid:171)(cid:105)(cid:192)(cid:202)(cid:195)(cid:133)(cid:62)(cid:192)(cid:105)(cid:202)(cid:125)(cid:192)(cid:156)(cid:220)(cid:204)(cid:133)(cid:202)(cid:156)(cid:219)(cid:105)(cid:192)(cid:202)(cid:204)(cid:133)(cid:192)(cid:105)(cid:105)(cid:202)(cid:62)(cid:86)(cid:86)(cid:156)(cid:213)(cid:152)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202)(cid:171)(cid:105)(cid:192)(cid:136)(cid:156)(cid:96)(cid:195)(cid:93)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:119)(cid:192)(cid:195)(cid:204)(cid:202)(cid:76)(cid:105)(cid:136)(cid:152)(cid:125)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:156)(cid:152)(cid:105)(cid:202)(cid:136)(cid:152)(cid:202)(cid:220)(cid:133)(cid:136)(cid:86)(cid:133)(cid:202)(cid:202)(cid:202)
      the grant is made. If compound earnings per share growth is at least 10 per cent per annum, then 25 per cent of the award  
      will vest rising on a straight line basis to  the maximum if compound growth of 15 per cent per annum is achieved. Shares
      awarded will normally be received in two equal tranches, one following the end of the three-year performance period and 
      the second tranche one year later. Mr R S Kelvin and Mr L D Page have received awards under this plan.

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:47)(cid:133)(cid:105)(cid:202)(cid:105)(cid:221)(cid:105)(cid:192)(cid:86)(cid:136)(cid:195)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)(cid:195)(cid:133)(cid:62)(cid:192)(cid:105)(cid:202)(cid:156)(cid:171)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202)(cid:136)(cid:195)(cid:202)(cid:195)(cid:213)(cid:76)(cid:141)(cid:105)(cid:86)(cid:204)(cid:202)(cid:204)(cid:156)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:195)(cid:62)(cid:147)(cid:105)(cid:202)(cid:171)(cid:105)(cid:192)(cid:118)(cid:156)(cid:192)(cid:147)(cid:62)(cid:152)(cid:86)(cid:105)(cid:202)(cid:86)(cid:156)(cid:152)(cid:96)(cid:136)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202)(cid:62)(cid:195)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:163)(cid:153)(cid:153)(cid:199)(cid:202)(cid:13)(cid:221)(cid:105)(cid:86)(cid:213)(cid:204)(cid:136)(cid:219)(cid:105)(cid:202)(cid:45)(cid:133)(cid:62)(cid:192)(cid:105)(cid:202)(cid:34)(cid:171)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202)(cid:45)(cid:86)(cid:133)(cid:105)(cid:147)(cid:105)(cid:176)(cid:202)

The Ted Baker Sharesave Scheme
Under this scheme, options are made available to all employees to encourage share ownership. The exercise of options 
is not subject to performance conditions. Mr R S Kelvin and Mr L D Page have been granted options under this scheme.

Contracts of Service
Each executive director has a service contract with a notice period of 12 months subject to retirement, normally at the age of 65. 
The Board sets non-executive directors’ fees. 

Robert Breare
David A Bernstein
David B Hewitt
Raymond S Kelvin
Lindsay D Page

Date of service
contract

1 November 2001
24 January 2003
17 July 1997
17 July 1997
17 July 1997

Un-expired term

Notice period

Provision for 
compensation

6 months
6 months
6 months
12 months
12 months

6 months
6 months
6 months
12 months
12 months

None
None
None
None
None

26

Total shareholder value
The following charts the total cumulative shareholder return of the Company since February 2003  
to January 2008.

27

Audited Information
The auditors are required to report on the individual aspects of remuneration, which may be found in the following section of 
this report. 

Directors’ remuneration, interests and transactions

Emoluments
Money purchase pension contributions

Directors’ emoluments

52 weeks ended 
26 January 
2008

£’000
605
29
 634

52 weeks ended 
27 January 
2007

£’000
886
27
913

Executive
R S Kelvin
L D Page

Non-executive
R Breare
D A Bernstein
D B Hewitt

Fees / basic
salary

Beneﬁts

Performance
related bonus

52 weeks ended 
26 January 
2008

52 weeks ended 
27 January 
2007

£’000

£’000

£’000

£’000

£’000

256
236

40
30
30

592

11
2

-
-
-

13

-
-

-
-
-

-

267
238

40
30
30

605

420
366

40
30
30

886

Performance related bonuses are determined by the Remuneration Committee based on achievement of targets by reference to 
agreed ﬁnancial performance measures and external expectations, namely proﬁt before tax and growth in earnings per share. 
Bonuses are capped at 100% of basic salary.

Options granted to directors under the SAYE share option scheme were as follows:

27 January 
2007
No. of shares

Options
(exercised)
or granted
No. of shares

26 January 
2008
No. of shares

Option
price p

Earliest date of 
exercise

Expiry Date

L D Page
R S Kelvin

5,354
5,354

-
-

5,354
5,354

296.0
296.0

1 February 2009
1 February 2009

1 August 2009
1 August 2009

Since 26 January 2008 the Remuneration Committee has recommended further share options to Mr R S Kelvin and Mr L D Page, 
however, the Trustees of the Ted Baker Group Employees Trust had not made these awards as at 18 March 2008.

28

Directors’ long term incentive schemes
The Company operates the Ted Baker Performance Share Plan (‘the Plan’) which was approved in an Extraordinary General 
Meeting held on 10 November 1998. 

Share price at
award date

No. of shares
awarded

Share price at ﬁrst 
vesting date

No. of shares 
vested

R S Kelvin
L D Page

437.0p
437.0p

51,487
38,902

612.0p
612.0p

49,942
37,735

On 27 April 2004, the Trustees of the Ted Baker 1998 Employee Beneﬁt Trust made the share awards set out above under the 
Plan for the three years ended 27 January 2007. Awards under the Plan were subject to the growth of the Company’s earnings 
per share over a three-year period, details of which may be found on page 26. Diluted earnings per share rose by a compound 
rate of 14.8% during the three years resulting in 97 per cent of the total award vesting. 50 percent of the shares vesting under 
the plan were distributed in the year ended 26 January 2008. The remaining balance will be distributed in the year ending 
31 January 2009.

On 31 July 2006, the Trustees of the Ted Baker 1998 Employee Beneﬁt Trust made the share awards set out below under the 
plan for the three years ending 31 January 2009. Awards under the plan are subject to the growth of the Company’s earnings 
per share over a three year period, details of which may be found on page 26.

Share price at
award date

No. of shares
awarded

Share price at ﬁrst
vesting date

No. of shares 
vested

R S Kelvin
L D Page

499.6p
499.6p

50,025
44,022

-
-

-
-

On 23 March 2007, the Trustees of the Ted Baker 1998 Employee Beneﬁt Trust made the share awards set out below under the 
plan for the three years ending 30 January 2010. Awards under the plan are subject to the growth of the Company’s earnings 
per share over a three year period, details of which may be found on page 26.

Share price at
award date

No. of shares
awarded

Share price at ﬁrst
vesting date

No. of shares 
vested

R S Kelvin
L D Page

611.5p
611.5p

43,793
38,537

-
-

-
-

Since 26 January 2008 the Remuneration Committee has recommended further share awards to Mr R S Kelvin and Mr L D Page, 
however, the Trustees of the Ted Baker 1998 Employee Beneﬁt Trust had not made these awards as at 18 March 2008.

Directors’ pensions

L D Page

David Hewitt, Chairman of the Remuneration Committee

52 weeks ended 
52 weeks ended 
26 January 
26 January 
2008
2008

52 weeks ended 
52 weeks ended 
27 January 
27 January 
2007
2007

£’000
29

£’000
27

29

Statement of Directors’ Responsibilities

The directors are responsible for preparing the Annual Report and the group and parent company ﬁnancial statements in 
accordance with applicable law and regulations.

Company law requires the directors to prepare group and parent company ﬁnancial statements for each ﬁnancial year. 
Under that law they are required to prepare the group ﬁnancial statements in accordance with IFRSs, as adopted by the EU 
and applicable law, and they have also elected to prepare the parent company ﬁnancial statements on the same basis.  

The group and parent company ﬁnancial statements are required by law and IFRSs, as adopted by the EU, to present fairly 
the ﬁnancial position of the group and the parent company and the performance for that period; the Companies Act 1985 
provides in relation to such ﬁnancial statements that references in the relevant part of that Act to ﬁnancial statements giving 
a true and fair view are references to their achieving a fair presentation.  

In preparing each of the group and parent company ﬁnancial statements, the directors are required to: 

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:195)(cid:105)(cid:143)(cid:105)(cid:86)(cid:204)(cid:202)(cid:195)(cid:213)(cid:136)(cid:204)(cid:62)(cid:76)(cid:143)(cid:105)(cid:202)(cid:62)(cid:86)(cid:86)(cid:156)(cid:213)(cid:152)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202)(cid:171)(cid:156)(cid:143)(cid:136)(cid:86)(cid:136)(cid:105)(cid:195)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:204)(cid:133)(cid:105)(cid:152)(cid:202)(cid:62)(cid:171)(cid:171)(cid:143)(cid:222)(cid:202)(cid:204)(cid:133)(cid:105)(cid:147)(cid:202)(cid:86)(cid:156)(cid:152)(cid:195)(cid:136)(cid:195)(cid:204)(cid:105)(cid:152)(cid:204)(cid:143)(cid:222)(cid:198)

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:147)(cid:62)(cid:142)(cid:105)(cid:202)(cid:141)(cid:213)(cid:96)(cid:125)(cid:147)(cid:105)(cid:152)(cid:204)(cid:195)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:105)(cid:195)(cid:204)(cid:136)(cid:147)(cid:62)(cid:204)(cid:105)(cid:195)(cid:202)(cid:204)(cid:133)(cid:62)(cid:204)(cid:202)(cid:62)(cid:192)(cid:105)(cid:202)(cid:192)(cid:105)(cid:62)(cid:195)(cid:156)(cid:152)(cid:62)(cid:76)(cid:143)(cid:105)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:171)(cid:192)(cid:213)(cid:96)(cid:105)(cid:152)(cid:204)(cid:198)

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:195)(cid:204)(cid:62)(cid:204)(cid:105)(cid:202)(cid:220)(cid:133)(cid:105)(cid:204)(cid:133)(cid:105)(cid:192)(cid:202)(cid:204)(cid:133)(cid:105)(cid:222)(cid:202)(cid:133)(cid:62)(cid:219)(cid:105)(cid:202)(cid:76)(cid:105)(cid:105)(cid:152)(cid:202)(cid:171)(cid:192)(cid:105)(cid:171)(cid:62)(cid:192)(cid:105)(cid:96)(cid:202)(cid:136)(cid:152)(cid:202)(cid:62)(cid:86)(cid:86)(cid:156)(cid:192)(cid:96)(cid:62)(cid:152)(cid:86)(cid:105)(cid:202)(cid:220)(cid:136)(cid:204)(cid:133)(cid:202)(cid:22)(cid:19)(cid:44)(cid:45)(cid:195)(cid:202)(cid:62)(cid:195)(cid:202)(cid:62)(cid:96)(cid:156)(cid:171)(cid:204)(cid:105)(cid:96)(cid:202)(cid:76)(cid:222)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:13)(cid:49)(cid:198)(cid:202)(cid:62)(cid:152)(cid:96)

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:171)(cid:192)(cid:105)(cid:171)(cid:62)(cid:192)(cid:105)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:119)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202)(cid:195)(cid:204)(cid:62)(cid:204)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:195)(cid:202)(cid:156)(cid:152)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:125)(cid:156)(cid:136)(cid:152)(cid:125)(cid:202)(cid:86)(cid:156)(cid:152)(cid:86)(cid:105)(cid:192)(cid:152)(cid:202)(cid:76)(cid:62)(cid:195)(cid:136)(cid:195)(cid:202)(cid:213)(cid:152)(cid:143)(cid:105)(cid:195)(cid:195)(cid:202)(cid:136)(cid:204)(cid:202)(cid:136)(cid:195)(cid:202)(cid:136)(cid:152)(cid:62)(cid:171)(cid:171)(cid:192)(cid:156)(cid:171)(cid:192)(cid:136)(cid:62)(cid:204)(cid:105)(cid:202)(cid:204)(cid:156)(cid:202)(cid:171)(cid:192)(cid:105)(cid:195)(cid:213)(cid:147)(cid:105)(cid:202)
      that the group and the parent company will continue in business.  

The directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time 
the ﬁnancial position of the parent company and enable them to ensure that its ﬁnancial statements comply with the 
Companies Act 1985. They have general responsibility for taking such steps as are reasonably open to them to safeguard 
the assets of the Group and to detect and prevent fraud and other irregularities.  

Under applicable law and regulations, the directors are also responsible for preparing the Directors’ Report, Directors’ 
Remuneration Report and the Corporate Governance Statement that comply with that law and those regulations. 

The directors are responsible for the maintenance and integrity of the corporate and ﬁnancial information included on the 
Company’s website. Legislation in the UK governing the preparation and dissemination of ﬁnancial statements may differ 
from legislation in other jurisdictions.

Responsibility statement of the directors in respect of the Annual Report

We, the directors of the Company, conﬁrm that to the best of our knowledge:

(a)  the ﬁnancial statements have been prepared in accordance with IFRS’s as adopted by the EU and give a true and fair 
      view of the assets, liabilities, ﬁnancial position and proﬁt or loss of the Group; and

(b)  the Directors’ Report includes a fair review of the development and performance of the business and the position of the 
      Group, together with a description of the principal risks and uncertainties that face the Group.

By order of the Board

R S Kelvin  
Chief Executive 

18 March 2008 

L D Page
Finance Director

18 March 2008

30

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Independent Auditors’ Report to the Members of 
Ted Baker PLC 

We have audited the group and parent company ﬁnancial statements (the ‘’ﬁnancial statements’’) of Ted Baker PLC for the 52 
weeks ended 26 January 2008 which comprise the Group Income Statement, the Group and Parent Company Balance Sheets, 
the Group and Parent Company Cash Flow Statements, the Group and Parent Company Statements of Changes in Equity, and 
the related notes. These ﬁnancial statements have been prepared under the accounting policies set out therein. We have also 
audited the information in the Directors’ Remuneration Report that is described as having been audited.

This report is made solely to the company’s members, as a body, in accordance with section 235 of the Companies Act 1985. 
Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state 
to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume 
responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, 
or for the opinions we have formed.

Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the Annual Report, the Directors’ Remuneration Report and the ﬁnancial statements 
in accordance with applicable law and International Financial Reporting Standards (IFRSs) as adopted by the EU are set out in 
the Statement of Directors’ Responsibilities on page 30.

Our responsibility is to audit the ﬁnancial statements and the part of the Directors’ Remuneration Report to be audited in 
accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the ﬁnancial statements give a true and fair view and whether the ﬁnancial 
statements and the part of the Directors’ Remuneration Report to be audited have been properly prepared in accordance with 
the Companies Act 1985 and, as regards the group ﬁnancial statements, Article 4 of the IAS Regulation. We also report to you 
whether in our opinion the information given in the Directors’ Report is consistent with the ﬁnancial statements. The information 
given in the Directors’ Report includes that speciﬁc information presented in the Chairman’s statement, Chief Executive’s Review 
and Finance Director’s report that is cross referred from the Business Review section of the Directors’ Report.

In addition we report to you if, in our opinion, the company has not kept proper accounting records, if we have not received all 
the information and explanations we require for our audit, or if information speciﬁed by law regarding directors’ remuneration 
and other transactions is not disclosed. 

We review whether the Corporate Governance Statement reﬂects the company’s compliance with the nine provisions of the 
2006 Combined Code speciﬁed for our review by the Listing Rules of the Financial Services Authority, and we report if it does 
not. We are not required to consider whether the board’s statements on internal control cover all risks and controls, or form 
an opinion on the effectiveness of the group’s corporate governance procedures or its risk and control procedures.

We read the other information contained in the Annual Report and consider whether it is consistent with the audited ﬁnancial 
statements. We consider the implications for our report if we become aware of any apparent misstatements or material 
inconsistencies with the ﬁnancial statements. Our responsibilities do not extend to any other information.

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

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

31

Opinion
In our opinion:

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:125)(cid:192)(cid:156)(cid:213)(cid:171)(cid:202)(cid:119)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202)(cid:195)(cid:204)(cid:62)(cid:204)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:195)(cid:202)(cid:125)(cid:136)(cid:219)(cid:105)(cid:202)(cid:62)(cid:202)(cid:204)(cid:192)(cid:213)(cid:105)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:118)(cid:62)(cid:136)(cid:192)(cid:202)(cid:219)(cid:136)(cid:105)(cid:220)(cid:93)(cid:202)(cid:136)(cid:152)(cid:202)(cid:62)(cid:86)(cid:86)(cid:156)(cid:192)(cid:96)(cid:62)(cid:152)(cid:86)(cid:105)(cid:202)(cid:220)(cid:136)(cid:204)(cid:133)(cid:202)(cid:22)(cid:19)(cid:44)(cid:45)(cid:195)(cid:202)(cid:62)(cid:195)(cid:202)(cid:62)(cid:96)(cid:156)(cid:171)(cid:204)(cid:105)(cid:96)(cid:202)(cid:76)(cid:222)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:13)(cid:49)(cid:93)(cid:202)(cid:156)(cid:118)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:195)(cid:204)(cid:62)(cid:204)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:202)(cid:202)
      group’s affairs as at 26 January 2008 and of its proﬁt for the 52 weeks then ended; 

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:171)(cid:62)(cid:192)(cid:105)(cid:152)(cid:204)(cid:202)(cid:86)(cid:156)(cid:147)(cid:171)(cid:62)(cid:152)(cid:222)(cid:202)(cid:119)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202)(cid:195)(cid:204)(cid:62)(cid:204)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:195)(cid:202)(cid:125)(cid:136)(cid:219)(cid:105)(cid:202)(cid:62)(cid:202)(cid:204)(cid:192)(cid:213)(cid:105)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:118)(cid:62)(cid:136)(cid:192)(cid:202)(cid:219)(cid:136)(cid:105)(cid:220)(cid:93)(cid:202)(cid:136)(cid:152)(cid:202)(cid:62)(cid:86)(cid:86)(cid:156)(cid:192)(cid:96)(cid:62)(cid:152)(cid:86)(cid:105)(cid:202)(cid:220)(cid:136)(cid:204)(cid:133)(cid:202)(cid:22)(cid:19)(cid:44)(cid:45)(cid:195)(cid:202)(cid:62)(cid:195)(cid:202)(cid:62)(cid:96)(cid:156)(cid:171)(cid:204)(cid:105)(cid:96)(cid:202)(cid:76)(cid:222)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:13)(cid:49)(cid:202)(cid:62)(cid:195)(cid:202)(cid:202)(cid:202)(cid:202)(cid:202)(cid:202)
      applied in accordance with the provisions of the Companies Act 1985, of the state of the  parent company’s affairs as 
      at 26 January 2008;

(cid:202)(cid:202)(cid:202)(cid:202)(cid:202)(cid:202)(cid:202)

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:119)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202)(cid:195)(cid:204)(cid:62)(cid:204)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:195)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:171)(cid:62)(cid:192)(cid:204)(cid:202)(cid:156)(cid:118)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:12)(cid:136)(cid:192)(cid:105)(cid:86)(cid:204)(cid:156)(cid:192)(cid:195)(cid:189)(cid:202)(cid:44)(cid:105)(cid:147)(cid:213)(cid:152)(cid:105)(cid:192)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202)(cid:44)(cid:105)(cid:171)(cid:156)(cid:192)(cid:204)(cid:202)(cid:204)(cid:156)(cid:202)(cid:76)(cid:105)(cid:202)(cid:62)(cid:213)(cid:96)(cid:136)(cid:204)(cid:105)(cid:96)(cid:202)(cid:133)(cid:62)(cid:219)(cid:105)(cid:202)(cid:76)(cid:105)(cid:105)(cid:152)(cid:202)(cid:171)(cid:192)(cid:156)(cid:171)(cid:105)(cid:192)(cid:143)(cid:222)(cid:202)(cid:171)(cid:192)(cid:105)(cid:171)(cid:62)(cid:192)(cid:105)(cid:96)(cid:202)(cid:136)(cid:152)(cid:202)(cid:202)(cid:202)
      accordance with the Companies Act 1985 and, as regards the group ﬁnancial statements, Article 4 of the IAS Regulation; and

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:136)(cid:152)(cid:118)(cid:156)(cid:192)(cid:147)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202)(cid:125)(cid:136)(cid:219)(cid:105)(cid:152)(cid:202)(cid:136)(cid:152)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:12)(cid:136)(cid:192)(cid:105)(cid:86)(cid:204)(cid:156)(cid:192)(cid:195)(cid:189)(cid:202)(cid:44)(cid:105)(cid:171)(cid:156)(cid:192)(cid:204)(cid:202)(cid:136)(cid:195)(cid:202)(cid:86)(cid:156)(cid:152)(cid:195)(cid:136)(cid:195)(cid:204)(cid:105)(cid:152)(cid:204)(cid:202)(cid:220)(cid:136)(cid:204)(cid:133)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:119)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202)(cid:195)(cid:204)(cid:62)(cid:204)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:195)(cid:176)

KPMG Audit Plc
Chartered Accountants
Registered Auditor
8 Salisbury Square, London, EC4Y 8BB
18 March 2008

32

Group Income Statement
For the 52 weeks ended 26 January 2008

Revenue
Cost of sales

Gross proﬁt

Distribution costs
Administrative expenses
Other operating income

Operating proﬁt
Finance income
Finance expenses
Share of proﬁt of jointly controlled entity, net of tax

Proﬁt before tax
Income tax expense

Proﬁt for the period

Attributable to:
Equity shareholders of the parent company
Minority interests

Proﬁt for the period

Earnings per share
Basic
Diluted

 The Income statement relates to continuing operations.

52 weeks ended 
52 weeks ended 
26 January 
26 January
2008
2008

52 weeks ended 
52 weeks ended 
27 January 
27 January
2007
2007

£’000

142,231
(59,560)

82,671

(48,320)
(17,844)
5,635

22,142
292
(387)
10

22,057
(6,815)

15,242

15,196
46

15,242

36.1p
35.9p

£’000

125,648
(51,986)

73,662

(41,404)
(16,645)
4,436

20,049
192
(191)
-

20,050
(5,634)

14,416

14,421
(5)

14,416

33.9p
33.6p       

Note
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e
d
r
e
h
t
r
u

f

r
o
F

*

:

t

e
o
n
o
o
F

t

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Group and Company Balance Sheet
At 26 January 2008

Note

Group
26 January 
2008

Company
26 January 
2008

*

Restated
Group
27 January 
2007

*

Restated
Company
27 January   
2007

Non-current assets
Intangible assets
Property, plant and equipment
Investments in subsidiary **
Investments in equity accounted investee
Deferred tax assets
Prepayments

10
11
12 / 1a
12
13

Current assets
Inventories
Trade and other receivables
Amount due from equity accounted investee
Derivative ﬁnancial assets
Cash and cash equivalents

Current liabilities
Trade and other payables *
Income tax payable *
Derivative ﬁnancial liabilities

Non-current liabilities
Deferred tax liabilities

Total liabilities
Net assets

Equity
Share capital
Share premium account *
Other reserves **
Translation reserve
Retained earnings *

Total equity attributable to equity 
shareholders of the parent company

Minority interests

Total equity

14
15
12
16
17

18

16

13

20
20
    20
20
20

£’000

543
23,061
-
10
336
849

£’000

-
-
16,800
-
-
-

£’000

482
19,209
-
-
525
-

24,799

16,800

20,216

29,315
14,128
178
603
13,105

57,329

(21,777)
(3,418)
(378)

(25,573)

(843)

(843)
(26,416)
55,712

2,160
9,137
251
(520)
44,695

55,723

(11)

55,712

-
8,710
-
-
982

9,692

(1)
-
-

(1)

-

-
(1)
26,491

2,160
9,137
14,711
-
483

26,491

-

26,491

27,825
11,843
-
216
13,513

53,397

*
*

(20,274)
(1,708)
(307)

(22,289)

(43)

(43)
(22,332)
51,281

2,160
9,052
             (90)
(493)
40,709

*

*

51,338

(57)

51,281

**

£’000

-
-
16,592
-
-
-

16,592

-
9,760
-
-
2,584

12,344

(4)
(1)
-

(5)

-

-
(5)
28,931

2,160
9,052
14,503    
-
3,216

*
**

*

28,931

-

28,931

These ﬁnancial statements were approved by the Board of Directors on 18 March 2008 and were signed on its behalf by:

L D Page
Director    

Footnote:
*    For further details see note 25. These reclassiﬁcations did not result in a change in either chareholders funds or net assets at 27 January 2007.
**  Restated following ﬁrst time adoption of IFRIC 8 “Scope of IFRS 2”. For further details see note 1a.

37

 
 
Group and Company Cash Flow Statement 
For the 52 weeks ended 26 January 2008

Cash generated from operations
Proﬁt for the period
Adjusted for:
Income tax expense
Depreciation

Loss on disposal of property, plant & equipment
Share option charge

Net ﬁnance gains / (losses)
Net change in cash ﬂow hedges
Share of proﬁt in joint venture
Increase in non-current prepayments
Increase in inventories
(Increase) / decrease in trade and other receivables
other receivables
Increase / (decrease) in trade and other payables
other payables
Interest paid
Income taxes paid
Net cash generated from operating activities

Cash ﬂow from investing activities
Purchases of property, plant & equipment
Proceeds from sale of property, 
plant & equipment
Interest received

Net cash from investing activities

Cash ﬂow from ﬁnancing activities
Own shares acquired

Proceeds from option holders for exercise of options
Increase in intercompany balances 
Loan repayment
Dividends paid

Net cash from ﬁnancing activities

Group
52 weeks 
ended
26 January 
2008

Company
52 weeks 
ended
26 January 
2008

*

Restated
Group
52 weeks 
ended
27 January 
2007

*

Restated
Company
52 weeks 
ended
27 January 
2007

£’000

£’000

£’000

£’000

15,242

8,605

14,416

4,527

6,815
4,807
184
234

217
341
(10)
(789)
(1,449)

(3,050)

1,324
(344)
(4,068)
19,454

(8,709)

-

171

(8,538)

(4,936)

(78
-
-
(6,421)

(11,279)

-
-
-
26

(73)
-
-
-
-

1,051

(3)
-
(1)
9,605

-

-
72

72

(4,936)

78
-
-
(6,421)

(11,279)

5,634
3,981
63
332

(125)
(83)
-
-
(4,714)

903

(554)
(64)
(5,873)
13,916

(4,970)

26
164

(4,780)

4
-
-
55

(70)
-
-
-
-

(1,471)

(4)
(27)
(6)
3,008

-

-
97

97

*

(3,438)

3,921
-
(750)
(5,335)

(5,602)

*
*

(3,438)

3,921
4,053
(750)
(5,335)

(1,549)

Net increase in cash and cash equivalents

(363)

(1,602)

3,534

1,556

Cash and cash equivalents at 
27 January 2007 / 28 January 2006*
Exchange rate movement
Cash and cash equivalents 
at 26 January 2008 / 27 January 2007

13,513
(45)

13,105

2,584
-

*

10,818
(839)

1,028
-

982

13,513

2,584

Footnote:
* For further details see note 25.  These restatements did not result in a change in net increase in cash and cash equivalents at 27 January 2007. 

38

Notes to the Financial Statements

1) Summary of significant accounting policies

The principal accounting policies applied in the preparation of these consolidated and parent ﬁnancial statements are set out 
below. These policies have been consistently applied to all the years presented, unless otherwise stated.

a) Basis of preparation
Both the parent company ﬁnancial statements and the Group ﬁnancial statements have been prepared and approved by the 
directors in accordance with International Financial Reporting Standards as adopted by the EU (‘Adopted IFRS’s’). On publishing 
the parent company ﬁnancial statements here together with the Group ﬁnancial statements, the Company is taking advantage 
of the exemption in s230 of the Companies Act 1985 not to present its individual income statement and related notes that form 
a part of these approved ﬁnancial statements. 

The consolidated and parent ﬁnancial statements have been prepared under the historical cost convention, except for 
available-for-sale ﬁnancial assets, and ﬁnancial assets and ﬁnancial liabilities (including derivative instruments), which are 
held at fair value.

The preparation of ﬁnancial statements in conformity with adopted IFRS’s requires management to make judgements, 
estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and 
expenses. The estimates and associated assumptions are based on historical experience and various other factors that are 
believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying 
values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the 
period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods 
if the revision affects both current and future periods. The Group’s signiﬁcant judgement areas relate to inventory provisions and 
impairment of assets.

In these ﬁnancial statements the following adopted IFRS’s which are effective for the ﬁrst time, has had a material effect on the 
ﬁnancial statements and so comparatives have been restated accordingly:

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:22)(cid:19)(cid:44)(cid:45)(cid:202)(cid:199)(cid:202)(cid:188)(cid:19)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202)(cid:22)(cid:152)(cid:195)(cid:204)(cid:192)(cid:213)(cid:147)(cid:105)(cid:152)(cid:204)(cid:195)(cid:92)(cid:202)(cid:12)(cid:136)(cid:195)(cid:86)(cid:143)(cid:156)(cid:195)(cid:213)(cid:192)(cid:105)(cid:195)(cid:189)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:192)(cid:105)(cid:143)(cid:62)(cid:204)(cid:105)(cid:96)(cid:202)(cid:62)(cid:147)(cid:105)(cid:152)(cid:96)(cid:147)(cid:105)(cid:152)(cid:204)(cid:202)(cid:204)(cid:156)(cid:202)(cid:22)(cid:1)(cid:45)(cid:202)(cid:163)(cid:202)(cid:188)(cid:42)(cid:192)(cid:105)(cid:195)(cid:105)(cid:152)(cid:204)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202)(cid:156)(cid:118)(cid:202)(cid:19)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202)(cid:45)(cid:204)(cid:62)(cid:204)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:195)(cid:189)(cid:202)(cid:136)(cid:152)(cid:202)
      relation to capital disclosures

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:22)(cid:19)(cid:44)(cid:22)(cid:10)(cid:202)(cid:110)(cid:202)(cid:188)(cid:45)(cid:86)(cid:156)(cid:171)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)(cid:22)(cid:19)(cid:44)(cid:45)(cid:202)(cid:211)(cid:202)(cid:195)(cid:133)(cid:62)(cid:192)(cid:105)(cid:135)(cid:76)(cid:62)(cid:195)(cid:105)(cid:96)(cid:202)(cid:171)(cid:62)(cid:222)(cid:147)(cid:105)(cid:152)(cid:204)(cid:189)

b) Change in accounting policy
The Company has adopted IFRIC 8 for the ﬁrst time in its ﬁnancial statements for the period ended 26 January 2008 and 
retrospectively restated its comparatives per the requirements of IAS 8. The impact of this change in accounting policy in the 
company ﬁnancial statements increased the ‘cost of investment’ in its subsidiary ‘No Ordinary Designer Label Ltd’ by 
£1,503,000 for the period ended 27 January 2007 with an equivalent credit to ‘other reserves’ in equity. 

The impact of the adoption has further increased the cost of investment by £208,000 in its subsidiary No Ordinary Designer 
Label Limited for the period ended 26 January 2008 with an equivalent credit to other reserves in equity. The adoption of IFRIC 8 
has had no impact on the consolidated ﬁnancial statements.

c) Basis of consolidation
The consolidated accounts include the accounts of the Company and its subsidiary undertakings made up to 26 January 2008. 
Unless otherwise stated, the acquisition method of accounting has been adopted. Under this method, the results of subsidiary 
undertakings acquired or disposed of in the year are included in the consolidated ﬁnancial statements from the date of 
acquisition or up to the date of disposal.

Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. 
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. 
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted 
by the Group.

Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern 
the ﬁnancial and operating policies of an entity so as to obtain beneﬁts from its activities. In assessing control, potential voting
rights that presently are exercisable or convertible are taken into account. 

39

The ﬁnancial statements of subsidiaries are included in the consolidated ﬁnancial statements from the date that control 
commences until the date that control ceases.Jointly controlled entities are those entities over whose activities the Group has 
joint control, established by contractual agreement and requiring the venturers’ unanimous consent for strategic ﬁnancial and 
operating decisions. Jointly controlled entities are accounted for using the equity method (equity accounted investees) and are 
initially recognised at cost. 

The consolidated ﬁnancial statements include the Group’s share of the total recognised income and expense and equity 
movements of equity accounted investees, from the date that signiﬁcant inﬂuence or joint control commences until the date that 
signiﬁcant inﬂuence or control ceases. When the Group’s share of losses exceeds its interest in an equity accounted investee, the 
Group’s carrying amount is reduced to nil and recognition of further losses is discounted except to the extent that the Group has 
incurred legal or constructive obligations or made payments on behalf of an investee. 

d) Foreign currency
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the foreign 
exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the 
balance sheet date are translated to functional currency at the foreign exchange rate ruling at that date. Foreign exchange 
differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities denominated in 
foreign currencies that are stated at fair value are translated to functional currency at foreign exchange rates ruling at the dates 
the values were determined.

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, 
are translated to sterling at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign 
operations are translated to sterling at average foreign exchange rates ruling at the dates of the transactions. Foreign exchange
differences arising on retranslation since the transition date are recognised directly in a separate component of equity. 
When a foreign operation is disposed of, in part or in full, the relevant amount in the foreign currency translation reserve is 
transferred to proﬁt or loss.

e) Revenue recognition
Revenue represents amounts receivable for goods and services provided in the normal course of business, net of trade 
discounts, VAT and other sales related taxes. Retail revenue is recognised when a Group entity sells a product to the customer. 
Wholesale revenue is recognised when goods are delivered and title has passed. Licence income is recognised on an 
accruals basis in accordance with the risks and rewards of the relevant agreements. Licence income is classiﬁed as other 
operating income.

f) Leases
Rentals under operating leases are charged as incurred, unless there are pre-determined rental increases in the lease, in 
which case they are recognised on a straight-line basis over the lease term. Leasehold incentives received are recognised 
as an integral part of total lease expense, over the term of the lease. 

Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease 
when the contingency no longer exists and the lease adjustment is known.

g) Pension costs
Contributions payable to deﬁned contribution schemes in respect of pension costs and other post retirement beneﬁts are 
charged to the consolidated income statement in the period to which they relate. Differences between contributions payable 
in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet.

h) Share based payments
The Group operates an equity settled share based compensation plan. Share based payments are measured at fair value at 
the date of grant using the Black-Scholes pricing model, taking into account the terms and conditions of the options vesting. 
The fair value is expensed on a straight line basis over the vesting period based on an estimate of shares that will eventually 
vest. Shares of Ted Baker PLC held by the company for the purpose of ﬁlling obligations in respect of employee share plans are 
deducted from equity in the balance sheet. Any surplus or deﬁcit arising on the sale of the Ted Baker PLC shares held by the 
company is included as an adjustment to reserves.

Transactions of the Company-sponsored Employee Beneﬁt Trust (EBT) are treated as being those of the Company and are 
therefore reﬂected on the parent company and group ﬁnancial statements. In particular, the trust’s purchases and sales of 
shares in the Company are debited and credited directly to equity. 

Where the Company grants options over its own shares to the employees of its subsidiaries, it recognises, in its individual 
ﬁnancial statements an increase in the cost of investment in its subsidiaries equivalent to the equity-settled share-based payment 
charge recognised in its consolidated ﬁnancial statements with the corresponding credit being recognised directly in equity.

40

i) Derivatives
The Group holds derivative ﬁnancial instruments to hedge its foreign currency exposure. Derivatives are recognised initially 
at fair value; attributable transaction costs are recognised in proﬁt or loss when incurred. Subsequent to initial recognition,
derivatives are measured at fair value, and changes therein are accounted for as described below. 

Cash flow hedges
Changes in the fair value of the derivative hedging instrument designated as a cash ﬂow hedge are recognised directly in 
equity to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair value are recognised 
in proﬁt or loss.

If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, 
then hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognised in equity remains 
there until the forecast transaction occurs. When the hedged item is a non-ﬁnancial asset, the amount recognised in equity 
is transferred to the carrying amount of the asset when it is recognised. In other cases the amount recognised in equity is 
transferred to proﬁt or loss in the same period that the hedged item affects proﬁt or loss

j) Taxation
Corporation tax payable is recognised on taxable proﬁts using tax rates enacted or substantively enacted at the balance 
sheet date. Deferred tax is recognised in full, using the balance sheet liability method, on temporary differences arising 
between the tax bases of assets and liabilities and their carrying amounts in the consolidated ﬁnancial statements. However, 
if the deferred tax arises from initial recognition of an asset or liability in a transaction other than a business combination 
that at the time of the transaction affects neither accounting nor taxable proﬁt or loss, it is not accounted for. Deferred tax is 
determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are 
expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

Deferred tax is not recognised for temporary differences relating to investments in subsidiaries to the extent they will not 
reverse in the foreseeable future.

Deferred tax assets are recognised to the extent that it is probable that future taxable proﬁt will be available against which 
the temporary differences can be utilised.

Income tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, 
in which case it is recognised in equity. Income tax comprises current and deferred tax.

k) Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the Group and Company ﬁnancial statements 
in the period in which they are declared.

l) Intangible assets
Intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and impairment losses. 
Amortisation is charged to the income statement on a straight line basis over the estimated useful lives of intangible assets 
unless such lives are indeﬁnite.

m) Property, plant and equipment
Property, plant and equipment are stated at cost, net of accumulated depreciation and impairment losses. Depreciation is 
provided on all property, plant and equipment at rates calculated to write off the cost, less estimated residual value, of each 
asset over its expected useful life, on the following bases:

Leasehold improvements:  
Fixtures, ﬁttings and ofﬁce equipment:   

Motor vehicles:  

Straight line over the period of the lease.
20% to 25% per annum on a straight-line basis apart 
from computer equipment, which is 33% per annum 
on a straight-line basis.
25% per annum on a straight-line basis. 

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An 
asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater 
than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount and are 
included in the income statement.

41

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
n) Investments
Investments in subsidiaries by the Company are shown at cost less accumulated impairment losses which are recognised in 
the income statement.

Other equity ﬁnancial instruments held by the Group are classiﬁed as being available-for-sale and are stated at fair value, 
with any resultant gain or loss being recognised directly in equity, except for impairment losses. When these investments 
are derecognised, the cumulative gain or loss previously recognised directly in equity is recognised in the income statement. 
Where these investments are interest-bearing, interest calculated using the effective interest method is recognised in the 
income statement.

The fair value of ﬁnancial instruments classiﬁed as available-for-sale is their quoted bid price at the balance sheet date.

o) Impairment of property, plant and equipment and indefinite life intangible assets
Assets that have an indeﬁnite useful life are not subject to amortisation and are tested annually for impairment. Assets that are 
subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying 
amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount 
exceeds its estimated recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and 
value in use. In assessing value in use, the estimated future cash ﬂows are discounted to their present value using a pre-tax 
discount rate that reﬂects current market assessments of the time value of money.

Impairment losses are recognised in the income. For the purposes of assessing impairment, assets are grouped at the 
lowest levels for which there are separately identiﬁable cash ﬂows (cash-generating units). Where an impairment loss 
subsequently reverses, the carrying amount of the asset is increased to the revised estimate of the recoverable amount, but 
so that the increased carrying value does not exceed the carrying value that would have been determined if no impairment 
loss had been recognised for the asset in prior years. A reversal of an impairment loss is recognised in income immediately.

p) Inventories
Inventories and work in progress are stated at the lower of cost and net realisable value. Cost includes materials, direct labour 
and inward transportation costs. Net realisable value is based on estimated selling price, less further costs expected to be 
incurred to completion and disposal. Provision is made for obsolete, slow moving or defective items where appropriate.

q) Cash and cash equivalents
Cash and cash equivalents comprises cash balances and call deposits. Bank overdrafts that are repayable on demand and 
form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the 
purpose of the statement of cash ﬂows.

r) Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial
recognition, interest bearing borrowings are stated at amortised cost with any difference between cost and redemption 
value being recognised in the income statement over the period of the borrowings on an effective interest basis.

s) Finance income and expenses
Net ﬁnancing costs comprise interest payable on borrowings calculated using the effective interest rate method, interest 
receivable on funds invested, dividend income, foreign exchange gains and losses, and gains and losses on hedging 
instruments that are recognised in the income statement.

Interest income is recognised in the income statement as it accrues, using the effective interest method. Dividend income 
is recognised in the income statement on the date the entity’s right to receive payments is established which in the case of 
quoted securities is usually the ex-dividend date.

t) Segment reporting
A segment is a distinguishable component of the Group that is engaged in providing products or services (business segment), 
or in providing products or services within a particular economic environment (geographical segment), which is subject to risks 
and rewards that are different from those of other segments.

42

u) Financial guarantee contracts
Where the Company enters into ﬁnancial guarantee contracts to guarantee the indebtedness of other companies within its 
group, the Company considers these to be insurance arrangements, and accounts for them as such. In this respect, the 
Company treats the guarantee contract as a contingent liability until such time as it becomes probable that the Company 
will be required to make a payment under the guarantee.

v) 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.  

Where any group company purchases the company’s equity share capital (treasury shares), the consideration paid, including 
any directly incremental costs (net of income taxes) is deducted from retained earnings in equity attributable to the company’s 
equity holders until the shares are cancelled or reissued. Where such shares are subsequently reissued, any consideration 
received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity 
attributable to the company’s equity holders.

w) Accounting standards issued but not adopted
The following adopted IFRS’s were available for early application but have not been applied in the ﬁnancial statements. 
Their adoption is not expected to have a material effect on the ﬁnancial statements unless otherwise indicated.

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:22)(cid:19)(cid:44)(cid:45)(cid:202)(cid:110)(cid:202)(cid:188)(cid:34)(cid:171)(cid:105)(cid:192)(cid:62)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202)(cid:45)(cid:105)(cid:125)(cid:147)(cid:105)(cid:152)(cid:204)(cid:195)(cid:189)(cid:202)(cid:173)(cid:147)(cid:62)(cid:152)(cid:96)(cid:62)(cid:204)(cid:156)(cid:192)(cid:222)(cid:202)(cid:118)(cid:156)(cid:192)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:222)(cid:105)(cid:62)(cid:192)(cid:202)(cid:86)(cid:156)(cid:147)(cid:147)(cid:105)(cid:152)(cid:86)(cid:136)(cid:152)(cid:125)(cid:202)(cid:156)(cid:152)(cid:202)(cid:156)(cid:192)(cid:202)(cid:62)(cid:118)(cid:204)(cid:105)(cid:192)(cid:202)(cid:163)(cid:202)(cid:27)(cid:62)(cid:152)(cid:213)(cid:62)(cid:192)(cid:222)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:174)(cid:176)(cid:202)(cid:47)(cid:133)(cid:136)(cid:195)(cid:202)(cid:136)(cid:195)(cid:202)(cid:152)(cid:156)(cid:204)(cid:202)(cid:105)(cid:221)(cid:171)(cid:105)(cid:86)(cid:204)(cid:105)(cid:96)(cid:202)(cid:204)(cid:156)(cid:202)(cid:133)(cid:62)(cid:219)(cid:105)(cid:202)(cid:202)(cid:202)(cid:202)(cid:202)
      any signiﬁcant impact on the consolidated ﬁnancial statements.

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)(cid:22)(cid:19)(cid:44)(cid:22)(cid:10)(cid:202)(cid:163)(cid:163)(cid:202)(cid:188)(cid:22)(cid:19)(cid:44)(cid:45)(cid:202)(cid:211)(cid:202)(cid:135)(cid:202)(cid:20)(cid:192)(cid:156)(cid:213)(cid:171)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:47)(cid:192)(cid:105)(cid:62)(cid:195)(cid:213)(cid:192)(cid:222)(cid:202)(cid:45)(cid:133)(cid:62)(cid:192)(cid:105)(cid:202)(cid:47)(cid:192)(cid:62)(cid:152)(cid:195)(cid:62)(cid:86)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:189)(cid:202)(cid:173)(cid:147)(cid:62)(cid:152)(cid:96)(cid:62)(cid:204)(cid:156)(cid:192)(cid:222)(cid:202)(cid:118)(cid:156)(cid:192)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:222)(cid:105)(cid:62)(cid:192)(cid:202)(cid:86)(cid:156)(cid:147)(cid:147)(cid:105)(cid:152)(cid:86)(cid:136)(cid:152)(cid:125)(cid:202)(cid:156)(cid:152)(cid:202)(cid:156)(cid:192)(cid:202)(cid:62)(cid:118)(cid:204)(cid:105)(cid:192)(cid:202)(cid:163)(cid:202)(cid:31)(cid:62)(cid:192)(cid:86)(cid:133)(cid:202)(cid:211)(cid:228)(cid:228)(cid:199)(cid:174)(cid:176)(cid:202)
      This is not expected to have a signiﬁcant impact on the ﬁnancial statements. 

43

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2) Segment information

The revenue and proﬁt before taxation are attributable to the Group’s principal activities, the design and contracted manufacture 
of high quality fashion clothing and related accessories for wholesale and retail customers.

a) Analysis of revenue by brand

52 weeks ended 
26 January 
2008

52 weeks ended 
27 January 
2007

Menswear
Womenswear
Other

b) Primary reporting format – divisional segments

52 weeks ended 26 January 2008

Revenue
Cost of sales
Gross proﬁt
Operating costs
Operating proﬁt before other operating income
Other operating income
Operating proﬁt
Net ﬁnance expense
Share of proﬁt of jointly controlled entity net of tax
Proﬁt before taxation
Income tax expense
Proﬁt for the period

Segment assets
Investment in Equity Accounted investee
Amounts due from Equity Accounted investee
Deferred tax assets
Total assets

Segment liabilities
Deferred tax liabilities and income tax payable
Total liabilities

Net assets

Capital expenditure
Depreciation

£’000
79,312
57,181
5,738
142,231

Wholesale
£’000

39,195
(23,392)
15,803
(10,323)
5,480

Retail
£’000

103,036
(36,168)
66,868
(55,841)
11,027

60,581

21,023

(16,050)

(6,105)

8,375
4,579

460
228

£’000
71,359
48,947
5,342
125,648

Total
£’000

142,231
(59,560)
82,671
(66,164)
16,507
5,635
22,142
(95)
10
22,057
(6,815)
15,242

81,604
10
178
336
82,128

(22,155)
(4,261)
(26,416)

55,712

8,835
4,807

44

52 weeks ended 27 January 2007

Revenue
Cost of sales
Gross proﬁt
Operating costs
Operating proﬁt before other operating income
Other operating income
Operating proﬁt
Net ﬁnance income
Proﬁt before taxation
Income tax expense
Proﬁt for the period

Segment assets *
Deferred tax assets *
Total assets

Segment liabilities *
Deferred tax liabilities and income tax payable *
Total liabilities

Net assets

Capital expenditure
Depreciation

*

Restated
Retail
£’000

89,187
(31,173)
58,014
(48,054)
9,960

*

Restated
Wholesale
£’000

36,461
(20,813)
15,648
(9,995)
5,653

52,722

*

20,366

*

(14,609)

*

(5,972)

*

4,603
3,724

318
257

Total

£’000

125,648
(51,986)
73,662
(58,049)
15,613
4,436
20,049
1
20,050
(5,634)
14,416

73,088
525

73,613

(20,581)   
(1,751)
(22,332)

51,281

4,921
3,981

Wholesale sales are shown after the elimination of inter-company sales of £4,855,000 (2007: £2,801,000).The majority of other 
operating income relates to licence income for both 2008 and 2007.

(cid:73)(cid:202)(cid:22)(cid:152)(cid:202)(cid:62)(cid:86)(cid:86)(cid:156)(cid:192)(cid:96)(cid:62)(cid:152)(cid:86)(cid:105)(cid:202)(cid:220)(cid:136)(cid:204)(cid:133)(cid:202)(cid:22)(cid:1)(cid:45)(cid:202)(cid:163)(cid:123)(cid:202)(cid:188)(cid:45)(cid:105)(cid:125)(cid:147)(cid:105)(cid:152)(cid:204)(cid:202)(cid:44)(cid:105)(cid:171)(cid:156)(cid:192)(cid:204)(cid:136)(cid:152)(cid:125)(cid:189)(cid:93)(cid:202)(cid:195)(cid:105)(cid:125)(cid:147)(cid:105)(cid:152)(cid:204)(cid:202)(cid:62)(cid:195)(cid:195)(cid:105)(cid:204)(cid:195)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:143)(cid:136)(cid:62)(cid:76)(cid:136)(cid:143)(cid:136)(cid:204)(cid:136)(cid:105)(cid:195)(cid:202)(cid:96)(cid:156)(cid:202)(cid:152)(cid:156)(cid:204)(cid:202)(cid:136)(cid:152)(cid:86)(cid:143)(cid:213)(cid:96)(cid:105)(cid:202)(cid:86)(cid:213)(cid:192)(cid:192)(cid:105)(cid:152)(cid:204)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:96)(cid:105)(cid:118)(cid:105)(cid:192)(cid:192)(cid:105)(cid:96)(cid:202)(cid:204)(cid:62)(cid:221)(cid:202)(cid:76)(cid:62)(cid:143)(cid:62)(cid:152)(cid:86)(cid:105)(cid:195)(cid:176)(cid:202)(cid:42)(cid:192)(cid:136)(cid:156)(cid:192)(cid:202)(cid:222)(cid:105)(cid:62)(cid:192)(cid:202)(cid:86)(cid:156)(cid:147)(cid:171)(cid:62)(cid:192)(cid:62)(cid:204)(cid:136)(cid:219)(cid:105)(cid:195)(cid:202)(cid:133)(cid:62)(cid:219)(cid:105)(cid:202)(cid:76)(cid:105)(cid:105)(cid:152)(cid:202)
restated accordlingly.

c) Secondary reporting format – geographical segments by origin

52 weeks ended 26 January 2008

Revenue
Cost of sales

Gross proﬁt
Operating costs
Operating proﬁt before other operating income
Other operating income
Operating proﬁt 
Net ﬁnance income
Share of proﬁt of jointly controlled entity net of tax
Proﬁt before taxation
Income tax expense
Proﬁt for the period

Segment assets
Investment in Equity Accounted investee
Amounts due from Equity Accounted investee
Deferred tax assets
Total assets

Segment liabilities
Amounts due from Equity Accounted investee
Total liabilities

Net assets
Capital expenditure 
Depreciation

United
Kingdom
£’000

127,901
(53,638)

74,263
(58,558)
15,705

Other
£’000

14,330
(5,922)

8,408
(7,606)
802

  67,553

14,051

(20,335)

(1,820)

6,589
4,083

45

2,246
724

Total
£’000

142,231
(59,560)

82,671
(66,164)
16,507
5,635
22,142
(95)
10
22,057
(6,815)
15,242

81,604
10
178
336
82,128

(22,155)
(4,261)
(26,416)

55,712
8,835
4,807

52 weeks ended 27 January 2007

Revenue
Cost of sales
Gross proﬁt
Operating costs

Operating proﬁt before other operating income
Other operating income
Operating proﬁt 
Net ﬁnance income
Proﬁt before taxation
Income tax expense
Proﬁt for the period

Segment assets*
Deferred tax assets*
Total assets

Segment liabilities*
Deferred tax liabilities and income tax payable*
Total liabilities

Net assets

 Capital expenditure
 Depreciation

*

Restated
United
Kingdom

£’000

114,293
(47,387)
66,906
(51,436)

15,470

*

Restated
Other

£’000

11,355
(4,599)
6,756
(6,613)

143

  62,284

*

*
                   10,804 

 (19,509)

*

                  (1,072)

*

4,019
3,285

902
696

Total

£’000

125,648
(51,986)
73,662
(58,049)

15,613
4,436
20,049
1
20,050
(5,634)
14,416

73,088
525
73,613

(20,581)
(1,751)
(22,332)

51,281

4,921
3,981

*

*

United Kingdom sales are shown after the elimination of inter-company sales of £4,855,000 (2007: £2,801,000).

Other includes sales arising mainly in the United States. Revenue by destination is not materially different from revenue by 
geographic origin.

(cid:73)(cid:202)(cid:22)(cid:152)(cid:202)(cid:62)(cid:86)(cid:86)(cid:156)(cid:192)(cid:96)(cid:62)(cid:152)(cid:86)(cid:105)(cid:202)(cid:220)(cid:136)(cid:204)(cid:133)(cid:202)(cid:22)(cid:1)(cid:45)(cid:202)(cid:163)(cid:123)(cid:202)(cid:188)(cid:45)(cid:105)(cid:125)(cid:147)(cid:105)(cid:152)(cid:204)(cid:202)(cid:44)(cid:105)(cid:171)(cid:156)(cid:192)(cid:204)(cid:136)(cid:152)(cid:125)(cid:189)(cid:93)(cid:202)(cid:195)(cid:105)(cid:125)(cid:147)(cid:105)(cid:152)(cid:204)(cid:202)(cid:62)(cid:195)(cid:195)(cid:105)(cid:204)(cid:195)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:143)(cid:136)(cid:62)(cid:76)(cid:136)(cid:143)(cid:136)(cid:204)(cid:136)(cid:105)(cid:195)(cid:202)(cid:96)(cid:156)(cid:202)(cid:152)(cid:156)(cid:204)(cid:202)(cid:136)(cid:152)(cid:86)(cid:143)(cid:213)(cid:96)(cid:105)(cid:202)(cid:86)(cid:213)(cid:192)(cid:192)(cid:105)(cid:152)(cid:204)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:96)(cid:105)(cid:118)(cid:105)(cid:192)(cid:192)(cid:105)(cid:96)(cid:202)(cid:204)(cid:62)(cid:221)(cid:202)(cid:76)(cid:62)(cid:143)(cid:62)(cid:152)(cid:86)(cid:105)(cid:195)(cid:176)(cid:202)(cid:42)(cid:192)(cid:136)(cid:156)(cid:192)(cid:202)(cid:222)(cid:105)(cid:62)(cid:192)(cid:202)(cid:86)(cid:156)(cid:147)(cid:171)(cid:62)(cid:192)(cid:62)(cid:204)(cid:136)(cid:219)(cid:105)(cid:195)(cid:202)(cid:133)(cid:62)(cid:219)(cid:105)(cid:202)(cid:76)(cid:105)(cid:105)(cid:152)(cid:202)
restated accordlingly.

46

3) Profit before taxation

Proﬁt before taxation is stated after charging:
Proﬁt before taxation is stated after charging:

Depreciation
Operating lease rentals
Fees payable to the Company’s auditor for the audit of the 
Company’s annual accounts
Fees payable to the Company’s auditor and associates for the audit 
of the Company’s subsidiaries, pursuant to legislation
Fees payable to the Company’s auditor for other services 
supplied, pursuant to legislation
Other services provided by the Company’s auditor 
Loss on sale of property, plant & equipment

4) Finance income and expenses

Finance income
- Interest receivable
- Foreign exchange transactions gains

Finance expenses
- Interest payable
- Foreign exchange transactions losses

5) Staff numbers and costs

The average number of employees (including executive directors) was:

Sales
Design
Administration

Their aggregate remuneration comprised:
Wages and salaries
Share based payments
Social security costs
Pension costs

52 weeks ended 
52 weeks ended 
26 January 
26 January 
2008
2008
£’000
4,807
10,132

6

67

17
1
184

52 weeks ended 
52 weeks ended 
26 January 
26 January
2008
2008

£’000

170
122
292

(387)
-
(387)

52 weeks ended 
52 weeks ended 
27 January 
27 January 
2007
2007
£’000
3,981
9,238
6

48

16
 35
63

52 weeks ended 
52 weeks ended 
27 January 
27 January
2007
2007

£’000

192
-
192

(67)
(124)
(191)

52 weeks ended 
52 weeks ended 
26 January 
26 January
2008
2008

52 weeks ended 
52 weeks ended 
27 January 
27 January 
2007
2007

No.
1,328
33
159
1,520

£’000
24,539
234
2,255
369
27,397

No.
1,176
33
146
1,355

£’000
21,398
332
2,026
314
24,070

The ﬁgures stated above are Group staff costs and as such include the costs for Mr R S Kelvin, who is the only salaried employee 
of the parent company. Further details of his remuneration may be found in the Directors’ Remuneration Report on page 25.

47

6) Income tax expense

a) The tax charge comprises

Current tax
Deferred tax 
Prior year over provision

b) Deferred tax by type

Property, plant & equipment
Share based payments
Overseas losses
Inventory
Other*

*For further details please refer to note 13.

52 weeks ended 
26 January 
2008

52 weeks ended 
27 January 
2007

£’000
6,912
39
(136)
6,815

£’000
5,952
232
(550)
5,634

52 weeks ended 
26 January 
2008

52 weeks ended 
27 January 
2007

£’000
(189)
88
418
(160)
(118)
39

£’000
105
127
-
-
-
232

c) Factors affecting the tax charge for the period
The tax assessed for the period is higher than the tax calculated at domestic rates applicable to proﬁts in the respective countries. 
The differences are explained below.

Proﬁt before tax

Proﬁt multiplied by the standard rate in the UK (30%)
Effects of:
Expenses not deductible for tax purposes 
Overseas losses not previously recognised
Statutory deductions for share options
Prior year corporation tax items
Prior year deferred tax items
Recognition of overseas losses
Effect of rate change on deferred tax
Difference due to overseas tax rates
Utilisation of previously unrecognised tax losses

Total income tax expense

52 weeks ended 
26 January 
2008

£’000
22,057

52 weeks ended 
27 January 
2007

£’000
20,050

6,617

430
-
2
(894)
758
-
(63)
22
(57)

6,815

6,015

46
4
127
55
(52)
(553)
-
-
(8)

5,634

48

d) Deferred and current tax recognised directly in equity

Deferred tax credit on share options
Current tax on share options

7) Profit attributable to Ted Baker PLC

52 weeks ended 
26 January 
2008

52 weeks ended 
27 January 
2007

£’000
192
(112)
80

£’000
1,405
(1,382)
23

The proﬁt after taxation dealt with in the accounts of Ted Baker PLC was £8,605,000 (2007: £4,527,000). The directors have 
approved the income statement for the parent company.

8) Dividends per share

Final dividend paid for prior year of 10.3p per ordinary share (2007: 8.2p)
Interim dividend paid of 5.0p per ordinary share (2007: 4.3p)

52 weeks ended 
26 January 
2008

52 weeks ended 
27 January 
2007

£’000

4,322
2,099
6,421

£’000

3,501
1,834
5,335

A ﬁnal dividend in respect of 2008 of 11.4p per share, amounting to a dividend payable of £4,784,244 is to be proposed at the 
Annual General Meeting on 10 June 2008.                  . 

9) Earnings per share

Number of shares:
Weighted number of ordinary shares outstanding
Effect of dilutive options
Weighted number of ordinary shares outstanding – diluted

Earnings:
Proﬁt for the period basic and diluted

Basic earnings per share
Diluted earnings per share

52 weeks ended 
26 January 
2008

52 weeks ended 
27 January 
2007

No.
42,066,481
254,711
42,321,192

£’000
15,196

36.1p
35.9p

No.
42,594,516
320,881
42,915,397

£’000
14,421

33.9p
33.6p

Own shares held by the Ted Baker Group Employee Beneﬁt Trust and the Ted Baker 1998 Employee Beneﬁt Trust have been 
eliminated from the weighted average number of ordinary shares. The options exercised during the year and long-term incentive 
scheme awards distributed were covered by shares held by these Trusts.

Diluted earnings per share have been calculated using additional ordinary shares of 5p each available under the 1997 
Unapproved Share Option Scheme, the 1997 Executive Share Option Scheme and the Ted Baker Performance Share Plan.

There were no share related events after the balance sheet date that may affect earnings per share. 

49

10) Intangible assets

Cost and net book value
At 27 January 2007
Exchange rate movement
At 26 January 2008

Cost and net book value
At 28 January 2006
Exchange rate movement
At 27 January 2007

Intangible assets

£’000

482
61
543

Intangible assets

£’000

501
(19)
482

The intangible asset relates to the right to have the leased premises which has a guaranteed residual value. The guaranteed 
value arises because the next tenant based on current market conditions will pay this amount to the Group. Due to the likelihood 
that the money will be recoverable, the asset is not amortised.

11) Property, plant and equipment

Motor
vehicles

£’000

Asset under
construction

£’000

Total

£’000

39,032
8,835
(514)
68
47,421

19,823
4,807
(318)
48
24,360

-
1,912
-
-
1,912

-
-
-
-
-

-
1,912

19,209
23,061

139
-
-
-
139

53
32
-
-
85

86
54

Leasehold
Improvements

Fixtures, ﬁttings & 
ofﬁce equipment

Cost
At 27 January 2007
Additions
Disposals
Exchange rate movement
At 26 January 2008

Depreciation
At 27 January 2007
Charge for the year
Disposals
Exchange rate movement
At 26 January 2008

Net book value
At 27 January 2007
At 26 January 2008

£’000

18,762
3,296
-
(29)
22,029

7,455
1,579
-
1
9,035

11,307
12,994

£’000

20,131
3,627
(514)
97
23,341

12,315
3,196
(318)
47
15,240

7,816
8,101

50

Leasehold
Improvements

Fixtures ﬁttings  &
 ofﬁce equipment

£’000

17,883
1,128
-
(249)
18,762

6,087
1,420
-
(52)
7,455

11,796
11,307

£’000

16,797
3,755
(225)
(196)
20,131

10,023
2,529
(153)
(84)
12,315

6,774
7,816

Motor
vehicles

£’000

Asset under
construction

£’000

128
38
(25)
(2)
139

31
32
(9)
(1)
53

97
86

-
-
-
-
-

-
-
-
-
-

-
-

Total

£’000

34,808
4,921
(250)
(447)
39,032

16,141
3,981
(162)
(137)
19,823

18,667
19,209

Cost
At 28 January 2006
Additions
Disposals
Exchange rate movement
At 27 January 2007

Depreciation
At 28 January 2006
Charge for the year
Disposals
Exchange rate movement
At 27 January 2007

Net book value
At 28 January 2006
At 27 January 2007

12) Investments (Company)

a) Subsidiary undertakings
The Company and Group have shares in the following subsidiary undertakings. All of the subsidiaries have been included in the 
consolidated accounts (*held directly by Ted Baker PLC).

Subsidiary undertaking

Country of incorporation 
& operation

Principal activity

No Ordinary Designer Label Ltd 
(formerly Ted Baker Limited)*

Ted Baker Investments (Jersey) Ltd*

Ted Baker Limited

Ted Baker (New York) Inc

Ted Baker (France) SARL

UK

Jersey

US

US

France

Design, wholesale & retail of 
designer clothing & accessories 
Investment
holding company
Retail of designer clothing 
& accessories
Retail of designer clothing 
& accessories
Retail of designer clothing 
& accessories

b) Subsidiary undertakings - cost and net book value

At 26 January 2008
At 27 January 2007 (restated) * 

* Restated following ﬁrst time adoption of IFRIC 8 “Scope of IFRS 2”. For further details see note 1a. 

Holding
Ordinary 
Shares

100%

100%

100%

66%

100%

Company

£’000
16,800
16,592

51

c) Interest in Joint Venture
The Group has a 50% interest in a joint venture with Flair Industries Pty Ltd which is represented by a single store in 
Melbourne Australia.

Investment in Joint Venture

26 January 
26 January 
2008
2008

£’000

10

27 January 
27 January 
2007
2007

£’000

-

The above carrying value represents the initial cost of the investment undertaken, as well as any subsequent change in net 
assets of the venture as at 26 January 2008.

Amounts due from Equity Accounted investee

26 January
26 January
2008
2008

£’000

178

27 January
27 January
2007
2007

£’000

-

There are no contingent liabilities relating to the Group’s interest in the joint venture, and no contingent liabilities of the venture 
itself. The joint venture’s assets, liabilities and proﬁt or loss on 26 January 2008 are as follows:

Non-current assets
Current assets
Non-current liabilities
Current liabilities

Net assets

Income
Expense

Proﬁt, net of tax

13)  Deferred tax assets and liabilities

Assets
Share based payments

Liabilities
Property, plant & equipment
Other *
Net deferred tax liability

Deferred tax asset on foreign operations arising from:
Foreign losses
Inventory
Property, plant & equipment

26 January 
26 January 
2008
2008

27 January 
27 January 
2007
2007

£’000
270
28
-
(278)

20

388
(368)
20

£’000
-
-
-
-

-

-
-
-

26 January 
26 January 
2008
2008

27 January 
27 January 
2007
2007

£’000

278

(603)
(518)
(843)

11
160
165
336

£’000

558

(601)
-
(43)

525
-
-
525

Recognition of deferred tax assets is based on the generation of future taxable proﬁts that will allow utilisation of losses. 
Deferred tax assets are only recognised on the foreign losses when these businesses pass their development phase, and 
as management consider it probable that future taxable proﬁts will be available against which they can be utilised. 

The amount of unused cumulative tax losses for which no deferred tax asset has been recognised in the Balance Sheet is 
£412,000 (2007: £443,000).
* Deferred tax liability recognised for UK tax payable on US operations for which no double tax relief will be available.

52

14) Inventories

Raw materials and packaging
Work in progress
Finished goods and goods for resale

Cost of inventories recognised as an expense
Inventories written down and recognised as an expense in the period

15) Trade and other receivables

26 January 
2008

27 January 
2007

£’000
1,445
1,259
26,611
29,315

58,070
748

£’000
1,615
1,064
25,146
27,825

50,468
517

Group
26 January 
2008

Company
26 January 
2008

Group
27 January 
2007

Company
27 January 
2007

£’000
10,217
-
-
3,911
14,128

£’000
-
8,710
-
-
8,710

£’000
8,543
-
-
3,300
11,843

£’000
-
9,757
3
-
9,760

Trade receivables
Amounts owed by Group undertakings
Other receivables
Prepayments and accrued income

16) Derivative financial instruments

Forward foreign exchange contracts

Assets
26 January
2008
£’000
603

Liabilities
26 January
2008
£’000
378

Assets
27 January
2007
£’000
216

Liabilities
27 January
2007
£’000
307

Derivative ﬁnancial instruments are used to hedge exposure to ﬂuctuations in foreign exchange rates that arise on the normal 
course of the Group’s business. 

The ineffective portion recognised in the income statement that arises from cash ﬂow hedges amounts to a loss 
of £nil (2007: £nil).   

Gains and losses in equity of forward exchange contracts at 26 January 2008 will be released to the income statement at 
various dates within 12 months of the balance sheet date, as the hedged forecast transactions occur. 

17)  Reconciliation of cash and cash equivalents per balance sheet to cash flow statement

Group
52 weeks ended
26 January 
2008

Company
52 weeks ended 
26 January 
2008

Group
52 weeks ended 
27 January 
2007

Company
52 weeks ended 
27 January 
2007

£’000

13,105

£’000

982

£’000

13,513

£’000

2,584

Cash and cash equivalents per cash 
ﬂow statement / balance sheet

53

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
18) Trade and other payables

Trade payables
Accruals and deferred income
Other taxes and social security *

* For further details see note 25.

19) Borrowings

Group
26 January 
2008

Company
26 January 
2008

£’000
13,361
4,264
4,152
21,777

£’000
-
1
-
1

Restated
Group
27 January 
2007

£’000
11,770
4,944
3,560
20,274

Company
27 January 
2007

£’000
-
4
-
4

Commited borrowing facilities of £13,000,000 (2007: £9,000,000) and a loan facility of £Nil (2007: £2,000,000) were available 
to the Group at 26 January 2008 in respect of which all conditions precedent have been met.

At 26 January 2008, the borrowing facilities were unutilised (2007: unutilised) and the loan was unutilised (2007: £ unutilised). 
The borrowing facility reduces to £10,000,000 on 1 February 2008 and expires on 30 August 2008.

20)  Capital and reserves

Authorised – 80,000,000 ordinary shares of 5p each
Allotted, called up and fully paid – 43,198,033 
ordinary shares of 5p each (2007: 43,198,033)

26 January 
2008

27 January 
2007

£’000
4,000

2,160

£’000
4,000

2,160

At 26 January 2008, the Ted Baker Group Employee Beneﬁt Trust (“Employee Trust”) and the Ted Baker 1998 Employee Beneﬁt 
Trust (“1998 Trust”) did not hold any ordinary shares in Ted Baker PLC (2007: “Employee Trust”- £Nil, “1998 Trust”- £Nil).

The Company acquired 830,807 treasury shares, (2007: 700,000) and disposed of 149,828 treasury shares (2007: £1,160,000) 
in the 52 weeks ended 26 January 2008.

The Company held 1,230,979 shares in treasury at 26 January 2008 (2007: 550,000).

Other Reserves and retained earnings
Other Reserves and retained earnings include the following reserve accounts:

Available for sale reserve
Financial instruments classiﬁed as being available for sale are stated at fair value, with any resultant gain or loss being 
recognised in equity. At 26 January 2008, the fair value of for sale ﬁnancial instruments held by the Group was £Nil (2007: £Nil) 

Hedging reserve
The effective portion of ﬁnancial instruments that are designated as hedging instruments and are documented as part of an 
effective hedge of future cash ﬂows are recognised directly in equity and recycled to the income statement when the underlying 
cash ﬂows occur, or are no longer expected to occur. At 26 January 2008, the value of ﬁnancial instruments that are designated 
as hedging instruments recorded in equity was £251,000 (2007: £90,000).

Translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the Group’s ﬁnancial 
statements of foreign operations, as well as from the translation of liabilities post transition to IFRS.

54

Other reserves - Company
This reserve relates to the premium on equity consideration used in the acquisition of a subsidiary, No Ordinary Designer Label 
Limited, by Ted Baker PLC in 1997, which is classiﬁed within Other Reserves under section 133 Companies Act 1985. This reserve 
also includes share options granted to subsidiary employees as required under IFRIC 8 (see note 1h).

21) Share based payments

Equity settled awards are granted to employees in the form of share options or share awards. Share options are granted at an 
option price equal to the company share price at the grant date, or at a discount of up to 20% in the case of SAYE share options. 
No consideration is payable where share awards vest. The vesting period is generally between three and ﬁve years and the 
share options expire between three and ten years after grant. Awards will also expire if the employee leaves the Group prior 
to the vesting date. 

Movements in the number of share options and awards outstanding and their related weighted average exercise prices are
as follows:

At beginning of period
Granted during the period
Exercised during the period
Lapsed during the period
Outstanding at the end of period

Weighted average 
exercise price 
2008

Number of 
options
2008

54.5p
-
52.1p
207.6p
35.0p

757,010
139,515
(149,828)
(43,684)
703,013

Weighted 
average
exercise price 
2007
196.9p
-
214.3p
345.1p
54.5p

Number of 
options
2007

2,163,289
379,841
(1,769,750)
(16,370)
757,010

Exercisable at end of period

-

120,085

7.3p

257,347

The charge for the year to the income statement amounted to £233,753 (2007: £332,479).Included in the charge for the year is 
an amount in respect to R S Kelvin who is employed by the Company, amounting to £25,828 (2007: £55,438).

The weighted average share price at the date of exercise of share options exercised duing the year was 613.3p (2007: 508.8p). 

Share options and awards outstanding at the end of the period were as follows:

Grant Date

Expiry date

Exercise price

Fair value at 
grant date

Number of options 
/ awards 
 at 26 January 
2008

Number of options 
/ awards 
at 27 January 
2007

25 March 2003
10 December 2003
22 April 2004
17 November 2004
17 November 2005
18 April 2006
31 July 2006
23 March 2007

31 January 2010
*
31 January 2011
31 January 2012
*
*
*

193.5p
296.0p
-
361.0p
334.0p
-
-
-

42.0p
91.0p
397.0p
141.5p
160.0p
443.5p
458.8p
551.5p

 -
19,700
120,085
26,699
27,268
212,198
157,548
139,515
703,013

9,750
45,470
247,597
39,032
35,320
 212,198
167,643
-
757,010

 * Share awards outstanding at the end of the period do not have an expiry date, but vest by reference to performance over the preceeding three ﬁnancial years.

The fair value of employee share options and awards were calculated using a Black-Scholes model. 

55

The range of inputs into the Black-Scholes model were as follows:

Weighted average share price
Weighted average exercise price
Risk free interest rate
Expected life of options
Share price volatility
Dividend yield

At 26 January 
2008
480.0p
35.0p
4.26% - 5.29%
3-5 years
19.1% - 32.1%
2.24% - 3.19%

At 27 January 
2007
641.5p
54.5p
4.26% - 4.77%
3-5 years
19.1% - 32.1%
2.24% - 3.8%

The share price volatility was determined by calculating the historic volatility of the Group’s share price over a time period 
matching the expected life of the option.

22) Financial commitments

a) Capital commitments
The Group has capital commitments of £3,800,000 at 26 January 2008 (2007: £nil) which were not provided in the 
ﬁnancial statements.

b) Operating leases
Total of future lease payments under non-cancellable operating leases are as follows:

Within one year
Between one and ﬁve years
Later than ﬁve years

26 January 
2008

£’000
10,588
39,504
34,582
84,674

27 January 
2007

£’000
8,533
32,369
34,394
75,296

The Group leases a number of stores, warehouses and head ofﬁce facilities under operating leases. The leases are of varied 
length with the longest lease running until 2029.

Leases of land and buildings are typically subject to rent reviews at speciﬁed intervals and provide for the lessee to pay all 
insurance, maintenance and repair costs.

Some lease payments are contingent upon levels of revenue above minimum thresholds. The total amount paid under this 
contingent element in the year was £10,155,000 (2007: £8,306,000).

c) Pension arrangements
The Group operates a number of deﬁned contribution schemes for senior management and a stakeholder pension scheme for 
employees, for which the pension cost charge for the period amounted to £ 368,000 (2007: £314,000). Contributions totalling 
£18,763 (2007: £18,904) are included in other receivables at the year end. 

56

23) Financial instruments and risk management

a) Financial assets and liabilities
The ﬁnancial assets and liabilities of the Group are as follows:

Trade receivables
Derivative ﬁnancial assets
Cash and cash equivalents
Trade and other payables
Derivative ﬁnancial liabilities

26 January 
2008

£’000

10,217
603
13,105
(21,777)
(378)

27 January 
2007

£’000

8,543
216
13,513
(20,274)
(307)

Financial assets and liabilities - Company
The Company holds ﬁnancial assets of £9,692,000 at the 26 January 2008 (2007: £12,344,000). The Company does not have 
any signiﬁcant ﬁnancial liabilities at 26 January 2008 (2007: £Nil).

b) Market risk 
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect 
the Group’s income or the value of its holdings of ﬁnancial instruments. At the balance sheet date, the only signiﬁcant market 
risk to the Group arises from foreign currency risk. 

The Group operates internationally and is therefore exposed to foreign currency risk primarily on purchases denominated in 
US dollar and Euro. 

The Board reviews and agrees policies for managing exchange rate risks on a regular basis. Where appropriate, the Group 
uses ﬁnancial instruments to mitigate these risks. All transactions in derivatives, principally forward exchange contracts, are 
taken solely to manage these risks. No transactions of a speculative nature are entered into. Foreign exchange risk arises 
when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the entity’s 
functional currency.

The Group’s policy is to hedge substantially all the risks of such currency ﬂuctuations by using forward contracts taking into 
account forecast foreign currency cash inﬂows and outﬂows. 

The Group’s risk management policy is to hedge the vast majority of anticipated cash ﬂows (mainly import and purchases of 
inventory) in each major foreign currency for the subsequent 12 months. The vast majority of projected purchases in each 
major currency qualify as ‘highly probable’ forecast transactions for hedge accounting purposes.

57

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
i) The Group’s exposure to foreign currency risk is summarised below.

Net monetary assets and liabilities that are not denominated in the Group’s functional currency are as follows:

Currency assets and liabilities 

26 January 2008
Trade receivables
Trade payables

Gross balance sheet exposure

Estimated forecast sales
Estimated forecast purchases
Total Balance Sheet exposure
Forward exchange contracts

Net exposure

Euros

£’000

(609)
2,484

1,875

(5,195)
10,517

7,197
(5,195)

2,002

US Dollar

£’000

(1,313)
1,771

458

(6,877)
19,342
12,923
(12,481)

442

Other

£’000

-
201

201

-
-
201
-

201

The following exchange rates were applied: 

US Dollar
Euro

Average rate
2.003
1.450

Mid-spot rate
1.979
1.348

Sensitivity analysis:
The Group has used a sensitivity analysis technique that measures the estimated change to the income statement and equity 
of a 10% strengthening or weakening in sterling against all other currencies, from the rates applicable at 26 January 2008. 
This analysis assumes that all other variables, in particular, interest rates, remain constant. The analysis is performed on the 
same basis for 2007.

The amounts generated from the sensistivity analysis are estimates of the impact of market risk assuming that speciﬁed 
changes occur.

A 10 percent strengthening of the sterling against the following currencies at the 26th January 2008 would have increased 
(decreased) equity and proﬁt or loss by the amounts shown below.   

A 10 percent weakening of the sterling against the above currencies at the 26 January 2008 would have had the equal but 
opposite effect on the above currencies to the amounts shown below, on the basis that all other variables remain constant.

Sensitivity analysis

Euros

US Dollar

Test of 10% strengthening in sterling against other currencies

Equity                  £’000
Proﬁt or loss        £’000

(58)
(26)

(84)

85
(32)

53

58

 
 
 
 
 
 
Currency assets and liabilities

27 January 2007
Trade receivables
Trade payables

Gross balance sheet exposure

Estimated forecast sales
Estimated forecast purchases

Total balance sheet exposure
Forward exchange contracts

Net exposure

The following exchange rates were applied: 

US Dollar
Euro

Sensitivity analysis
Test of 10% strengthening
in sterling against other currencies

Equity                    £’000
Proﬁt or loss          £’000

Euros

£’000

(406)
1,508

1,102

-
5,531
6,633
(3,951)

2,682

US Dollar

£’000

Other

£’000

(631)
1,537

906

(4,150)
14,491
11,247
(11,921)

(674)

-
113

113

-
-

113
-

113

Average rate
1.858
1.470

Mid-spot rate
1.960
1.519

(30)
(39)

(69)

101
(1)

100

ii) Exposure to interest rate risk
The interest rate proﬁle of the ﬁnancial assets and liabilities of the Group are as follows:

Financial assets subject to interest rate risk
Financial assets subject to interest rate risk

Sterling
US Dollar
Euro
Other

26 January 
26 January
2008
2008

£’000

27 January 
27 January
2007
2007

£’000

10,177
1,531
1,336
20
13,064

10,623
2,588
126
137
13,474

There were no ﬁxed rate ﬁnancial assets at 26 January 2008 or 27 January 2007. Financial assets on which no interest is received 
are due on demand. Floating rate ﬁnancial assets attract interest based on local base interest rates. There were no ﬁnancial 
liabilities subject to interest rate risk at 26 January 2008 and 27 January 2007.

59

c) Credit risk:
Credit risk arises on credit exposure to wholesale customers including outstanding receivables and committed transactions. 
However, this risk is substantially mitigated by insurance being taken out up to the amount of the credit limit. 

All new wholesale customers are checked against appropriate trade references and detail such as frequency/delinquency.  
The limits applied to each customer are set in conjunction with our credit insurer’s advice. Monitoring of credit limits is 
undertaken on a daily basis.

No credit limits were exceeded in the reporting period and management does not expect any future losses from 
non-performance to arise.

d) 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. Due to the dynamic 
nature of the underlying businesses, Group treasury maintains ﬂexibility in funding by maintaining availability under 
committed credit lines.

Management monitors rolling forecasts of the Group’s liquidity reserve (comprises undrawn borrowing facility and cash and 
cash equivalents) on the basis of expected cash ﬂow. This is generally carried out at entity level in the operating companies of 
the Group in accordance with practice and limits set by the Group. In addition, the Group’s liquidity management policy involves 
projecting cash ﬂows in major currencies and considering the level of liquid assets necessary to meet these; monitoring 
balance sheet liquidity ratios against internal and external regulatory requirements. The Group does not anticipate any 
reﬁnancing issues.

The table below analyses the Group’s ﬁnancial liabilities and net - settled derivative ﬁnancial liabilities 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. Balances due within 12 months equal their carrying balances as the 
impact of discounting is not signiﬁcant.

Less than 
1 year

Between
1-2 years

Between
2 -5 years

Over
5 years

At 26 January 2008
Derivative ﬁnancial instruments
Trade and other payables

Forward foreign exchange contracts 
-cash ﬂow hedges
Outﬂows
Inﬂows

At 27 January 2007
Derivative ﬁnancial instruments
Trade and other payables

Forward foreign exchange contracts 
-cash ﬂow hedges
Outﬂows
Inﬂows

378
21,656

17,676
-

307
20,170

14,872
-

-
93

-
-

-
80

-
-

-
28

-
-

-
24

-
-

-
-

-
-

-
-

-
-

e) Capital management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market conﬁdence and to sustain 
future development of the business. 

From time to time the Group purchases its own shares on the market; the timing of these purchases depends on market prices. 
Primarily the shares are intended to be used for issuing shares under the Group’s share option programme. Buy and sell 
decisions are made on a speciﬁc transaction basis by the Board, the Group does not have a deﬁned share buy-back plan.

There were no changes in the Group’s approach to capital management during the year.

Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.

60

 
 
f) Fair Values: 

Trade receivables
Derivative ﬁnancial assets 
Derivative ﬁnancial liabilities
Cash and cash equivalents
Trade and other payables

26 January
2008
carrying amount

26 January
2008
fair value

26 January 
2007
carrying amount

26 January 
2007
fair value

10,217
603
(378)
13,105
(21,777)
1,770

10,217
603
(378)
13,105
(21,777)
1,770

8,543
216
(307)
13,513
(20,274)
1,691

8,543
216
(307)
13,513
(20,274)
1,691

The following summarises the signiﬁcant methods and assumptions used in estimating the fair values of ﬁnancial instruments 
reﬂected in the table above.   

Derivatives 
The fair values of forward exchange contracts are based on their listed market price. 

Non-derivative financial liabilities
The carrying amount of the Group’s current liabilities are assumed to approximate their fair values. 

Trade and other receivables 
The carrying amounts less impairments are assumed to approximate the fair values. 

Trade and other payables  
The carrying amounts less impairments are assumed to approximate the fair values.

24) Related Parties

The Company has a related party relationship with its directors and executive ofﬁcers.

Directors of the Company and their immediate relatives control 39 per cent of the voting shares of the Company.  

At the 26 January 2008, the main trading company owed the parent company £8,710,000 (2007: £9,757,000). The main 
trading company was owed £12,921,000 (2007: £10,779,000) from the other subsidiaries within the Group.

Transactions between subsidiaries were priced on an arms length basis.

The Group has a 50% interest in a joint venture. As at 26 January 2008, the joint venture owed £178,000 to the main trading 
company (2007: £nil). The value of sales made to the joint venture by the Group was £252,000 in the period 26 January 2008.

The Group considers the Board of executive directors as key management. Further details are provided in the 
Remuneration Report.

61

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
25) Prior year restatements
Statement of changes in equity – Group and Company
The following presentational changes have been made within the 2008 Group and Company’s statements of changes in 
equity, 2007 comparatives have been restated accordingly. Amounts previously shown as ‘movements in respect of treasury 
shares’, ‘movements in respect of own shares’ and ‘disposal of own shares’ have been reclassiﬁed under the following 3 lines:

(cid:85)    Own shares acquired, 

(cid:85)    Transfer of treasury shares from Ted Baker PLC to the Employee Beneﬁt Trust (“EBT”) and;

(cid:85)    Disposal of own shares

Section 162F of the Companies Act 1985 requires amounts received for treasury shares that are in excess of the cost to be 
recognised as share premium. Although the amounts received by the group on the sale of these shares in satisfaction of 
share options exercised in the year ended 27 January 2007 were less than the original cost of the treasury shares, the transfer 
of shares between Ted Baker Plc and the Employee Beneﬁt Trust was at an amount greater than the original cost and therefore 
resulted in share premium arising. An amount of £1,024,000 has therefore been reclassiﬁed from retained earnings to 
share premium.

These reclassiﬁcations did not result in a change in shareholders funds at 27 January 2007.

Group and Company Balance Sheets
The presentation of the Group and the Company balance sheets within the 2007/2008 ﬁnancial statements is consistent 
with the one presented in the 2006/2007 ﬁnancial statements except where noted below. Prior year comparatives have been 
restated accordingly:

(cid:85)(cid:202)(cid:202)(cid:202)(cid:202)An amount of £3,560,000 in respect of ‘other taxes and social security’ has been reclassiﬁed from ‘income tax payable’ to    
      ‘trade and other payables’ for the year ended 27 January 2007 in accordance with IAS 1.

(cid:85)    An amount of £1,024,000 has been reclassiﬁed from ‘retained earnings’ to ‘share premium account’ for the year ended 27  
      January 2007 as explained above.

These reclassiﬁcations did not result in a change to either net assets or shareholders funds at 27 January 2007.

Group and Company Cash Flow Statements
The presentation of the Group and the Company cash ﬂow statements within the 2007/2008 ﬁnancial statements is consistent 
with the one presented in the 2006/2007 ﬁnancial statements except where noted below. Prior year comparatives have been 
restated accordingly:

(cid:85)    Amounts previously shown as ‘proceeds from issue of ordinary shares’ ‘sale of own shares’, ‘shares vested and 
      disposal of own shares’ have been reclassiﬁed as “‘proceeds from option holders for exercise of options” and “
      increase in inter-company balances’” in accordance with IAS 7.

(cid:85)    An amount of £750,000 previously separately presented as ‘loan repayment’ in the movement of cash and cash equivalents
      between the year ended 28 January 2006 and 27 January 2007 has now been aggregated with the brought forward balance 
      as this amount was the opening balance of long term borrowings at 27January 2007 and was incorrectly netted off against 
      cash and cash equivalents.

The restatements above did not result in a change in the “net cash movement” for the period as disclosed in the cash ﬂow 
statement on 27 January 2007.

62

Five Year Summary

Results
Revenue
Operating proﬁt
Proﬁt before tax
Proﬁt for the period

Assets Employed

Property, plant and equipment
Non-current assets
Net current assets / (liabilities)
Non-current liabilities
Provisions for liabilities and charges

Net Assets
Financed by
Shareholders’ funds
Minority interest

Key Statistics
Basic earnings per share
Diluted earnings per share
Dividends per share
Dividend cover
Return on capital employed

Restated
Restated
UK GAAP 
UK GAAP
53 weeks
53 weeks 
ended
ended
31 January
31 January 
2004
2004

£’000

88,842
14,260
13,909
9,579

14,410
-
14,540
(4,000)
(480)

IFRS
IFRS
52 weeks
52 weeks 
ended 29
ended 29 
January
January 
2005
2005

£’000

105,753
16,405
16,252
11,368

17,346
1,073
19,161
(750)
-

IFRS
IFRS
52 weeks
52 weeks 
ended 28
ended 28 
January
January 
2006
2006

£’000

117,832
18,334
18,354
12,919

18,667
2,220
22,035
(750)
-

IFRS
IFRS
52 weeks
52 weeks 
ended 27
ended 27 
January
January 
2007
2007

£’000

125,648
20,049
20,050
14,416

19,209
1,007
31,108
(43)
-

IFRS
IFRS
52 weeks
52 weeks 
ended 26
ended 26 
January
January 
2008
2008

£’000

142,231
22,142
22,057
15,242

23,061
1,738
31,756
(843)
-

24,470

36,830

42,172

51,281

55,712

24,531
(61)
24,470

22.7p
22.2p
9.6p
2.4 times
74.3%

36,870
(40)
36,830

26.8p
26.2p
10.8p
2.5 times
59.9%

42,224
(52)
42,172

30.6p
29.7p
12.1p
2.5 times
60.0%

51,338
(57)
51,281

55,723
(11)
55,712

33.9p
33.6p
14.6p
2.3 times
53.8%

36.1p
35.9p
16.4p
2.2 times
51.2%

63

Notice of Meeting

Notice is hereby given that the 2008 Annual General Meeting of Ted Baker PLC will be held at The Ugly Brown Building, 6a St. 
Pancras Way, London, NW1 0TB on 10 June 2008 at 11.00 a.m. when the following business will be transacted:

Ordinary Business
1.    To receive, and if thought ﬁt, to adopt the directors’ report and accounts for the 52 weeks ended 26 January  
      2008 with the report of the auditors thereon.
2.   To approve the remuneration report of the directors set out in the report and accounts for the 
      52 weeks ended 26 January 2008.
3.   To declare a ﬁnal dividend on the Ordinary Shares.
4.   To re-elect Mr L.D.Page as a director of the Company.
5.   To re-elect Mr R.Breare as a director of the Company.
6.   To re-elect M D.Hewitt as a director of the Company.
7.    Allotment of shares: To consider, and if thought ﬁt, pass the following resolution as an Ordinary Resolution:  
       “That the directors be and are hereby authorised in accordance with and subject to the terms of Article 5 of the  
       Company’s Articles of Association to allot relevant securities up to an aggregate nominal amount of £719,967.”
8.   To re-appoint KPMG Audit Plc as auditors to the Company.
9.   To authorise the directors to determine the auditors’ remuneration.
10. Disapplication of pre-emption rights: To consider, and if thought ﬁt, pass the following resolution as 
      a Special Resolution:

      “That subject to Resolution 7 set out in the Notice of Annual General Meeting convening this meeting being passed and 
      pursuant to and in accordance with the authority thereby granted, the directors be and are hereby empowered pursuant to 
      Section 95 of the authority and sell relevant shares (as deﬁned in Section 94 of the Act) held by the Company as treasury 
      shares (as deﬁned in Section 162A of the Act) for cash, as if Section 89(1) of the Act did not apply to any such allotment or sale 
      provided that this power shall be limited:

      (A) 

to the allotment of equity securities and the sale of treasury shares in connection with rights issues, open offers or other 
pre-emptive offers in favour of holders of equity securities in proportion (as nearly as may be praticable) to their 
respective holdings of such securities or in accordance with the rights attaching here to (but with such exclusions or 
other arrangements as the directors may deem necessary or expedient to deal with fractional entitlements, record    
dates or other legal problems under the laws of, or any requirements of, any recognised regulatory body or any stock 
exchange, in any territory or as regards shares held by an approved depository or in issue in uncertiﬁcated form or    
otherwise howsoever); and

      (B) 

to the allotment of equity securities and the sale of treasury shares (otherwise than pursuant to sub-paragraph (A)  
above) up to an aggregate nominal value of £107,995;

      Such power shall expire at the conclusion of the next Annual General Meeting of the Company held after the passing of this 
      resolution save that the Company may before such expiry make any offer or agreement which would or might require equity   
      securities to be allotted or treasury shares to be sold after such expiry and the directors may allot equity securities or sell  
      treasury shares in pursuance of such offer or agreement as if the power conferred hereby had not expired.”

      By order of the Board – C.F. Anderson - Secretary, 7 May 2008. 
      Registered Ofﬁce – The Ugly Brown Building, 6a St. Pancras Way, London, NW1 0TB.

64

 
 
 
 
 
 
 
Notes:

1.     Only holders of Ordinary Shares, or their duly appointed representatives, are entitled to attend and vote at the Annual 
       General Meeting. A member so entitled may appoint one or more proxies to attend and vote instead of him. 
       A proxy need not be a member of the Company.

2.    A form of proxy is enclosed with this notice for use in connection with the business set out above. To be valid, the form 
       of proxy and any power of attorney or other authority under which it is signed must be lodged with the Company’s registrars,   
       Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU not less than 48 hours before the time  
       appointed for the holding of the Meeting.

3.    Completion and return of a proxy does not preclude a member from attending and voting at the meeting.

4.    Pursuant to Regulation 41 of The Uncertiﬁcated Securities Regulations 2001, the Company speciﬁes that only those shareholders  
       registered in the Register of Members of the Company as at 5.00 p.m. on 8 June 2008 shall be entitled to attend or vote at the  
       above Annual General Meeting in respect of the number of shares registered in their name at the time.Changes to entries on 
       the  Register of Members after that time will be disregarded in determining the rights of the person to attend or vote at 
       the meeting.

5.    The amount of relevant securities for which authority to allot is sought under Resolution 7 represents 33.3 per cent. of the total 
       ordinary share capital in issue of the Company and the amount of equity securities for which disapplication of pre-emption 
       rights is sought under resolution 10 (B) represents 5 per cent. of the total ordinary share capital in issue of the Company.

6.    A shareholder may appoint more than one proxy in relation to the Annual General Meeting provided that each proxy is  
       appointed to exercise the rights attached to a different share or shares held by him. To appoint more than one proxy you may 
       photocopy this form. Please indicate the proxy holder’s name and the number of shares in relation to which they are    
       authorised to act as your proxy (which, in aggregate, should not exceed the number of shares held by you). Please also  
       indicate if the proxy instruction is one of multiple instructions being given. All forms must be signed and should be returned 
       together in the same envelope. A failure to specify the number of shares each proxy appointment relates to or specifying a 
       number in excess of those held by you may result in the appointment being invalid.

7.    In order to facilitate voting by corporate representatives at the Annual General Meeting, arrangements will be put in place at 
       the Annual General Meeting so that:

      (a)

       (b)

if a corporate member has appointed the Chairman of the Annual General Meeting as its corporate representative with 
instructions to vote on a poll in accordance with the directions of all the other corporate representatives for that member 
at the Annual General Meeting, then, on a poll, those corporate representatives will give voting directions to the Chairman 
and the Chairman will vote or withhold a vote as corporate representative in accordance with those directions; and

if more than one corporate representative for the same corporate member attends the Annual General Meeting but the 
corporate member has not appointed the Chairman of the Annual General Meeting as its corporate representative, a 
designated corporate representative will be nominated, from those corporate representatives who attend, who will vote on
a poll and the other corporate representatives will give voting directions to that designated corporate representative.

       Corporate members are referred to the guidance issued by the Institute of Chartered Secretaries and Administrators on 
       proxies and corporate representatives - www.icsa.org.uk - for further details of this procedure. The guidance includes a 
       sample form of representation letter to appoint the Chairman as a corporate representative as described in (a) above.  The 
       Institute of Chartered Secretaries and Administrators recommends the use of multiple proxies wherever possible in favour of 
       corporate representatives. 

8.    CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by  
       using the procedures described in the CREST Manual.  CREST personal members or other CREST sponsored members and those 
       CREST members who have  appointed  voting service provider(s), should refer to their CREST sponsor or voting service provider(s) 
       who will be able to take the appropriate action on their behalf.

       In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a  
       “CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s (formerly CRESTCo’s) 
       speciﬁcations and must contain the information required for such instructions, as described in the CREST Manual.  The message, 
       regardless of whether it constitutes the appointment of a proxy or an amendment to the instruction given to a previously  
       appointed proxy, must in order to be valid, be transmitted so as to be received by Capita Registrars (ID RA 10) by no later than 

65

11.00 a.m. on 8 June 2008.  No such message received through the CREST network after this time will be accepted. 
For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message 
by the CREST Applications Host) from which the registrars are able to retrieve the message by enquiry to CREST in the 
manner prescribed by CREST.  After this time, any change of instructions to proxies appointed through CREST should be 
communicated to the appointee through other means.

CREST members and, where applicable, their CREST sponsors or voting service provider(s) should note that Euroclear UK & 
Ireland Limited does not make available special procedures in CREST for any particular message. Normal system timings 
and limitations will therefore apply in relation to the input of CREST Proxy Instructions. Is it the responsibility of the CREST 
member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed 
a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be 
necessary to ensure that a message is transmitted by means of the CREST system by any particular time.  In this connection, 
CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those 
sections of the CREST Manual concerning practical limitations of the CREST system and timings.

The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the 
Uncertiﬁcated Securities Regulations 2001.

66

Form of Proxy

I/We ....................................................................................................................................................................................................................

Of ........................................................................................................................................................................................................................

being (a) member(s) of Ted Baker PLC HEREBY APPOINT the Chairman of the meeting or (see note 2)

 ...........................................................................................................................................................................................................................

as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held at The Ugly 
Brown Building, 6a St Pancras Way, London, NW1 OTB on 10 June 2008 at 11.00 a.m. and at any adjournment thereof.

SIGNED ..................................................................................................................................................................................................... 2008

Name in full (BLOCK CAPITALS) .......................................................................................................................................................................

Initials and surnames of joint holders (if any) 

Name .......................................................... Name ..........................................................................................................................................
...

Name .......................................................... Name ..........................................................................................................................................
...
Please indicate with an X in the space below how you wish your votes to be cast. On receipt of this form duly signed, but 
without speciﬁc directions and in respect of any other motion (including a motion to adjourn), the proxy will exercise his 
discretion as to how he votes and as to whether or not he abstains from voting.

For

Against

Resolution 1
Resolution 2
Resolution 3
Resolution 4
Resolution 5
Resolution 6
Resolution 7
Resolution 8
Resolution 9
Resolution 10 

–
–
–
–
–
–
–
–
–
–

To approve the report and accounts
To approve the remuneration report
To declare a ﬁnal dividend
To re-elect Mr L.D. Page as a director
To re-elect Mr R.Breare as a director
To re-elect Mr D.Hewitt as a director
To authorise the directors to allot relevant securities
To re-appoint KPMG Audit Plc as auditors
To authorise the directors to determine the auditors’ remuneration
To disapply the statutory pre-emption rights

67

Notes:

1.   To be effective this form of proxy and the power of attorney or other authority (if any) under which it is signed must be lodged  
      at the ofﬁce of the registrars of the Company (Capita Registrars, at the address printed below) not later than 48 hours  
      before the meeting or any adjournment there of. Completion and return of this form of  proxy will not prevent you from
      attending and voting at the meeting in person, should you so wish.

2.   The Chairman of the meeting has been inserted as willing to act as proxy for members unable to be present in person, but 
     the form may be used for the appointment of any other person by deleting the Chairman of the meeting and inserting the  
     name and address of the person whom it is desired to appoint in the space provided. A proxy need not be a member.

3.   Any alteration in this form of proxy should be initialled.

4.   If the appointor is a corporation this form of proxy must be under its common seal, or under the hand of any  
      ofﬁcer or attorney duly authorised on its behalf.

5.   In the case of joint holders, the signature of the ﬁrst named on the Register of Members will be accepted to the exclusion of    
      the directions or votes of the other joint holder(s). If you wish to vote by proxy ﬁll in this form, fold it up, put it into an envelope, 
      then post back to the following address so as to be received by the latest time permitted above: Capita Registrars, 
     The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU.

6.   A shareholder may appoint more than one proxy in relation to the Annual General Meeting provided that each proxy is
      appointed to exercise the rights attached to a different share or shares held by him. To appoint more than one proxy you 
      may photocopy this form. Please indicate the proxy holder’s name and the number of shares in relation to which they are    
      authorised to act as your proxy (which, in aggregate, should not exceed the number of shares held by you). Please also  
      indicate if the proxy instruction is one of multiple instructions being given. All forms must be signed and should be returned 
      together in the same envelope. A failure to specify the number of shares each proxy appointment relates to or specifying a 
      number in excess of those held by you may result in the appointment being invalid.

7.   CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do  
      so by using the procedures described in the CREST Manual.  In order for a proxy appointment or instruction made using 
      the CREST service to be valid, the appropriate CREST message, regardless of whether it constitutes the appointment of a 
      proxy of an amendment to the instruction given to a previously appointed proxy, must, in order to be valid, be transmitted so 
      as to be received by Capita Registrars (ID RA 10) by no later than 11:00 a.m. on 8 June 2008.  Please refer to the notes of the   
      notice of the meetings for further information on proxy appointments through CREST. 

68

 
        
        
70

71