Young & Co.'s Brewery plc Annual Report 2016

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FY2016 Annual Report · Young & Co.'s Brewery plc

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CONTENTS

STRATEGIC REPORT

CHAIRMAN’S STATEMENT

CHIEF EXECUTIVE’S REVIEW

PRINCIPAL RISKS AND UNCERTAINTIES

FINANCIAL STATEMENTS

INDEPENDENT AUDITOR’S REPORT

GROUP INCOME STATEMENT

STATEMENTS OF COMPREHENSIVE INCOME 25

BUSINESS AND FINANCIAL REVIEW

BALANCE SHEETS

DIRECTORS’ REPORT

OUR BOARD

COMMITTEES

OTHER DISCLOSURES

PREPARATION AND DISCLAIMER

STATEMENTS OF CASH FLOW

GROUP STATEMENT OF CHANGES
IN EQUITY

PARENT COMPANY STATEMENT
OF CHANGES IN EQUITY

NOTES TO THE FINANCIAL STATEMENTS

FIVE YEAR REVIEW

SHAREHOLDER INFORMATION

NOTICE OF MEETING

EXPLANATORY NOTES TO THE NOTICE
OF MEETING

YOUNG’S PUBS AND HOTELS

SENIOR PERSONNEL, COMMITTEES
AND ADVISERS

SHAREHOLDER INFORMATION

FINANCIAL HIGHLIGHTS

Strategic report
Directors’ report
Financial statements
Shareholder information

2016
£m

2015
£m

CHANGE

Revenue

245.9

227.0

Adjusted operating profit(1)

Operating profit

Adjusted profit before tax(1)

Profit before tax

41.0

38.9

35.4

33.3

+8.3

+9.6

-6.3

37.4

41.5

32.0

+10.6

36.1

-7.8

Adjusted basic earnings per share(1)

57.20p

50.62p

+13.0

Basic earnings per share

55.76p

55.17p

Dividend per share
(interim and recommended final)

17.45p

16.46p

+1.1

+6.0

Net assets per share(2)

£9.37

£8.40

+11.5

All of the results above are from continuing operations.

(1) Reference to an “adjusted” item means that item has been adjusted to exclude exceptional items (see notes 9 and 10).

(2) Net assets per share are the group’s net assets divided by the shares in issue at the period end.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Filip – General Manager at the Clockhouse

In 2010 I started working for Young’s as a kitchen porter. My General
Manager and Operations Manager noticed my potential and provided
me with the support I needed to become a deputy manager, a Guidance
Guru and a Draught Master. My hard work has recently been rewarded
with my first appointment as a General Manager.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

CHAIRMAN’S STATEMENT

Nicholas Bryan
Chairman

8.3%
Revenue

5.6%
Managed house
like-for-like revenue

10.6%
Adjusted profit
before tax

Strategic report
Directors’ report
Financial statements
Shareholder information

operation, the acquisition of Geronimo
at the end of 2010, the development of
a significant hotels operation and the
revitalisation of the tenanted division
under the Ram Pub Company brand.

In Patrick Dardis, we have a very well
qualified successor to Steve as Chief
Executive. Patrick has spent his whole
career in the pubs and brewing industry.
He joined Young’s in 2002 and was
appointed to the Board in 2003,
since which time he has had overall
responsibility for the Young’s managed
estate. In July last year he also took over
responsibility for Geronimo Inns. He
knows our business inside out and is
very well respected both at Young’s and
throughout the industry. This therefore
represents a smooth and effective
succession and I have every confidence
that the business is well set to deliver
further profitable growth and attractive
shareholder returns.

On the back of our strong results for
the year just ended, and our confidence
in our future prospects, the Board is
recommending a 6.0% increase in the
final dividend to 9.07 pence, resulting
in a total dividend for the year of 17.45
pence (2015: 16.46 pence). If approved
by shareholders, this is expected to be
paid on 7 July 2016 to shareholders
on the register at the close of business
on 10 June 2016, and would be the
nineteenth consecutive year of
dividend growth.

Young’s is a business with a tremendous
heritage, a very high quality and
well-invested estate of premium pubs
and hotels, a clear growth strategy,
experienced management and a very
bright future. On behalf of the Board,
I thank everyone who has contributed
to this success.

N I C H O L AS B RYAN
Chairman
18 May 2016

This has been another
highly successful year
for Young’s.

Total revenue grew by 8.3%, as our core
managed estate continued to thrive.
Profit before tax was £33.3 million and
once adjusted to exclude exceptional
items increased by 10.6% on last
year to £35.4 million. Importantly, as
it demonstrates the strength of our
underlying business, we have extended
our record of strong like-for-like
performances in our managed estate,
this year generating growth of 5.6%.

Our success depends largely on the
quality of our people – our pub teams
and those in head office – and they
continue to serve both customers
and shareholders very well. We also
continue to benefit from the consistently
high quality of our pub estate. During
the course of the year we invested
£41.9 million in our managed pubs
and hotels and opened eight managed
houses. Our total estate now comprises
251 pubs of which 171 (including 22
hotels) are managed houses, and 80 are
within our tenanted division, the Ram
Pub Company.

The majority of this year’s acquisitions
and investments have been funded
by the business’s impressive cash
generation. Our balance sheet remains
robust, underpinned by our large
portfolio of freehold property, which
is predominantly in London.

In March, we announced some
significant Board changes. After 13 years
as Chief Executive Steve Goodyear will
be stepping down from this role at the
AGM in July, but I am delighted that
he will continue his involvement with
Young’s by remaining on the Board
as a Non-Executive Director.

Steve joined Young’s over twenty years
ago and during his tenure has overseen
substantial changes to the business. These
included the sale of the Ram Brewery in
2008, our subsequent exit from brewing
altogether in 2011, the transformation of
Young’s into a premium managed house

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Andy – Operations Manager

Having achieved great results at pub level
assisted by a great deal of support from
Young’s I realised my goal of becoming an
Operations Manager. I like to challenge
myself; I have done a couple of marathons
and recently completed the Young’s
sponsored Halow bike ride – 250 miles
in 48 hours for charity.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

CHIEF EXECUTIVE’S REVIEW

Strategic report
Directors’ report
Financial statements
Shareholder information

In this, my final review
as Chief Executive, I am
delighted to report that
revenue was up 8.3%
to £245.9 million.

This impressive revenue growth
when combined with a further
improvement in adjusted operating
margin to 16.7% (2015: 16.5%),
this resulted in a 10.6% increase
in adjusted profit before tax to
£35.4 million. Profit before tax
was however down 7.8% to £33.3
million. Last year’s profit before tax
principally benefited from a large
non-cash exceptional item relating
to a favourable property revaluation
and this year did not benefit to the
same extent.

Adjusted basic earnings per share
increased by 13.0% to 57.20 pence
and over the past five years has
more than doubled.

Our strong performance was further
evidenced by the improvement made
in all our key performance indicators
(see page 6).

Established, expanding,
highly consistent
Our estate comprises 251 pubs,
breaking through the 250 milestone
for the first time. Of these, our
managed division runs over two
thirds, 171 pubs (including 22 hotels),
whilst 80 are run under our tenanted
division, the Ram Pub Company. We
have added eight new pubs this year,
all within our managed house division.
Our strong performance is the result of
good execution of our strategy, recent

investments in our existing estate and
through carefully selected acquisitions
which complement and enhance
our proposition.

Over recent years we have delivered
consistently robust growth from our
existing estate. This is the result of
effective operating disciplines, the
dedication of our teams across the
business and a number of transformative
developments, including the expansion
of our premium hotel offer. Over the
past year we have invested £44.5 million
on acquisitions and in our existing estate.

In the first half of the year we opened
three pubs acquired in earlier years
following refurbishments: the Bull
and Gate (Kentish Town), the Nine
Elms Tavern and the Trafalgar Arms
(Tooting). Also, in the first half we
acquired the Canonbury (Islington)
and the Grocer (Spitalfields Market),
whilst in the second half we opened
the Guard House (Woolwich Arsenal)
and the Leman Street Tavern (Aldgate),
and in late February, we acquired the
historic Old Brewery (Greenwich),
set within the grounds of the Old
Royal Naval College. This charming
and characterful building features an
extensive outdoor terrace and is in an
excellent location; the perfect spot for
a refreshing summer drink and a bite
to eat. The majority of these pubs can
be found in north or east London, areas
we have targeted in order to increase
our customer reach. We have continued
to expand in the new financial year.
We have purchased the Woolpack
(Bermondsey) and exchanged contracts
on the Blue Boar (Chipping Norton),
our second Cotswolds pub.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Stephen Goodyear
Chief Executive

131

(2015: 129)

(2015: 37)

CYAN

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COLOUR PROFILE
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ARTWORK
VERSION No.

Young’s
Gill McLaren
YOU145/05
Ram Pub Company
Full Colour
SL/GH
Christie Nelson
Illustrator CS5.1
jkr-operations (FOGRA39)
13/05/14

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HOW WE PERFORMED

We measure the development, performance and position of our business against a number of key indicators.

Revenue £m
This is our total group revenue,
including both managed and tenanted
businesses.

245.9

227.0

210.8

Like for like revenue %
This is our revenue growth for this
period compared with the previous
period for our managed pubs and
hotels that traded throughout
both periods.

6.7

6.5

5.6

RevPAR £
This is our revenue per available
bedroom; it is the average room rate
achieved multiplied by the occupancy
percentage.

52.02

60.01

56.82

2014

2015

2016

2014

2015

2016

2014

2015

2016

Adjusted EBITDA £m
This is our adjusted earnings before
interest, taxes, depreciation and
amortisation.

Adjusted profit before tax £m
This is our profit before tax on
continuing operations only, adjusted
to exclude any exceptional items for
the group.

Adjusted earnings per share (pence)
This is our adjusted profit before tax,
but after tax has been deducted,
divided by the weighted average
number of ordinary shares in issue.

58.4

52.2

45.7

35.4

32.0

27.2

57.20

50.62

42.88

2014

2015

2016

2014

2015

2016

2014

2015

2016

Gearing %
This is our net debt divided by our net
assets (expressed as a percentage).

Interest cover (times)
This is our adjusted operating profit
divided by our finance costs.

Recycling (tonnes)
This is the amount of waste we recycle
and divert from landfill.

29.5

31.7

28.6

7.7

7.2

5.6

5,803

4,481

6,000

5,000

4,000

3,000

2,000

3,065

2014

2015

2016

2014

2015

2016

2014

2015

2016

250

240

230

220

210

200

190

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Strategic report
Directors’ report
Financial statements
Shareholder information

Jo – The Lamb Tavern
Young’s Manager of the Year

I love the way Young’s gives
General Managers the freedom
and autonomy to be truly creative.

My goal for the next five years is to
work in senior management roles
within the company and one day
become an Operations Director.

Financial strength,
predominantly freehold,
progressive dividend policy
The group has again generated
strong cash flow which has funded
the majority of this year’s acquisitions
and investments. Operating cash flow
was up 19.4% to £60.4 million and
net debt increased slightly to £130.2
million, representing a 2.2 multiple
of adjusted EBITDA. We remain well
placed to continue our expansion
strategy with long term debt facilities
of £175 million in place, repayable
between 2018 and 2023 and of which
76.8% is on fixed interest rates.

Our balance sheet is underpinned
by our portfolio of freehold property
which is predominantly in London.
The value of this property has increased
to £665.8 million (2015: £617.3 million).
Our estate provides the firm foundations
for future growth as we continue to
expand our reach, taking our premium
offer to a wider customer base whilst
aiming to make our pubs the first choice
for discerning customers.

Our commitment to generating
shareholder value is unequivocal,
combined with strong cash flow and
record earnings this enables us to
once more recommend increasing the

final dividend, for the nineteenth year in
succession. This time, we are increasing
the final dividend by 6.0% to 9.07 pence,
resulting in a total dividend for the year
of 17.45 pence (2015: 16.46 pence). If
approved, this is expected to be paid on
7 July 2016 to shareholders on the register
at the close of business on 10 June 2016.

STE P H E N G O O DYE AR
Chief Executive
18 May 2016

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks and uncertainties facing the group are listed below. It is not an exhaustive list of all significant risks
and uncertainties; some may currently be unknown and others currently regarded as immaterial could turn out to be
material. Further information on the group’s financial risk management objectives and policies are set out in note 22,
starting on page 49.

RISK/UNCERTAINTY

POTENTIAL IMPACT

MITIGATION

D
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Our revenue is largely dependent
on consumer spending in our
managed houses. A consumer’s
decision to spend his or her money
can be affected by a broad range of
matters (including confidence in the
economy, the weather, fears of terrorist
activity and improved awareness of the
potential adverse health consequences
associated with alcohol), all set against
a background of an ever-increasing
choice of where to go and what
to do.

Various factors may result in the
amount we pay for our key supplies
(including food, drink, gas and
electricity) and labour being increased.
In July 2015 the Government announced
the introduction of a National Living Wage
of £7.20 effective from April 2016 with
annual stepped increases to follow.
Increased costs could potentially
make our offer less attractive to
consumers if they are passed on.

The pub industry is subject to a
variety of taxes, including business
taxes, duty on alcoholic beverages
and property rates. Property rates on
our estate are due to be revised upwards
in April 2017 (based on a revaluation of
our properties). The new rates would
be impacted by any changes to the
business rates regime (for example
increased rates or reduced
reliefs for large businesses).

We operate a defined benefit
pension scheme, the Young
& Co.’s Brewery, P.L.C. Pension
Scheme, which has to be funded to
meet agreed benefit payments. The
value of the scheme, and therefore its
funding, is subject to changes in life
expectancy assumptions, lower than
anticipated performances of the
stock market and by reduced
bond yields.

Our financial structure involves
bank borrowings. The business
therefore needs to generate sufficient
cash to repay these debts with accrued
interest. Interest rates are also subject
to change.

A reduction in our
revenue could lead to
lower profits.

A reduction in revenue and/
or increased costs will have an
impact on our margins and
result in lower profits.

Our pubs and hotels are spread throughout
southern England, albeit the majority are within
the M25. Through them we provide a hospitable
and welcoming home from home, often at the
heart of the local community. They benefit from
customer-focussed designs, high service standards,
quality food and market-leading drinks, all things
that matter to the discerning consumer. By having a
mix of excellent riverside, garden and city pubs and
hotels, we seek to address the impact of seasonality
and changes in consumers’ spending habits.

Fixed-price arrangements are in place with some of
our food and drink suppliers. Regarding utilities, we
continually look at ways of reducing our levels of
consumption; we also regularly review our energy
needs and price changes in the market, and, where
appropriate, we make forward purchases.

Increased wages may result in consumers having
greater capacity to absorb increased prices but any
shortfall will need to be mitigated through greater
labour and other efficiency gains.

The introduction of new
taxes and/or increases in the
rates of existing taxes will
result in lower profits.

Through our membership of the British
Beer and Pub Association, we seek to
ensure that appropriate action is taken
to minimise this risk.

Variations in the difference
in value between the assets
of the scheme and its liabilities
may increase the amount we are
required to pay into it in order to
account for past service benefit
deficits and future service
benefit accruals.

Our ability to trade as a
going concern depends on
generating sufficient cash to
meet these repayments.

The scheme was closed to new entrants in
2003 and we make additional contributions
over and above regular service contributions
in order to address any funding deficit.
We also maintain a close dialogue with the
scheme’s trustee. To further limit the potential
exposure, future service benefits accruing
to remaining active members have been
reduced from April 2016, with member
contributions being increased in tandem.

The board ensures the group’s debt profile is
long dated, facilities are committed and debt is
carefully managed within financial covenants. A
mix of debt at fixed and variable interest rates is
also maintained with interest rate swaps used to
manage this exposure.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Strategic report
Directors’ report
Financial statements
Shareholder information

S
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RISK/UNCERTAINTY

POTENTIAL IMPACT

MITIGATION

We rely on a number of key
suppliers to provide our pubs and
hotels with food and drink.

Supply disruption could
affect customer satisfaction,
leading to a reduction in our
revenue and possibly lower
growth rates.

Food and drink is sourced from a number
of suppliers. Informal arrangements are
also in place such that substitute suppliers
or products could be used if required. We
regularly review our choice of suppliers.

We, and particularly our managed
estate, are reliant on information
systems and technology for many
aspects of our business (including
communication, sales transaction
recording, stock management,
purchasing, accounting and reporting
and many of our internal controls).

Any failure of such systems or
technology would cause some
disruption, and any extended
period of downtime, loss of
backed up information or delay
in recovering information could
impact significantly on our
ability to do business.

Firewalls and anti-virus software are installed to
protect our networks. Information is routinely
backed up and arrangements are in place with a
third party provider to assist with data recovery.
An off-site disaster recovery facility is also available
if anything major happens at our head office
or to our systems. The IT needs of the business
are regularly monitored and we invest in new
technology and services as necessary.

We are dependent on having
the right people throughout our
organisation, whether that is in
our pubs and hotels or in our
head office.

Our ability to achieve our
strategic and operational
objectives could be affected if
we are unable to attract and
retain the right people with the
right capabilities.

We look to recruit and retain the best. The
remuneration and reward packages we offer
are competitive and designed to retain and
motivate staff. We have training and development
programmes in place intended to ensure that our
people have the right skills to perform their jobs
successfully and achieve their full potential.

Part of our growth plan is built
around us acquiring or developing
more pubs and hotel rooms.

If we do not acquire the right
opportunities when planned,
or at all, our desired future
rate of growth will be delayed
or reduced.

We have relationships with a variety of third parties to
ensure, as far as possible, that we are made aware of
acquisition opportunities as and when they come up.
We have provided a number of agents and landlords
with details of our preferred site profile.

We are required to meet a range
of ever-increasing health and safety
obligations in the operation of our
business (including in the areas of food
and fire safety).

The Government will be introducing
a statutory code to govern the
relationship between tenants and large
pub companies (owning more than 500
pubs). With 251 pubs, the code will
not apply to us.

A failure to comply could
result in an accident or incident
occurring involving injury,
illness or even loss of life. This
could damage our reputation,
possibly leading to a reduction
in our revenue and lower
growth rates. Increases in the
cost of compliance will have
an impact on our margins and
result in lower profits.

The imposition on us of a
statutory code (if things were
to change) could increase the
running costs of our tenanted
business and reduce our revenue
from it. Any increase in costs will
result in lower profits and any
reduction in revenue could lead
to lower growth rates.

Training programmes, processes and audits
designed to promote and achieve compliance with
health and safety legislation are in place. These
audits are undertaken by a third party who also
works with us to ensure changes in health and
safety practices and procedures are incorporated
into our business and reviewed on a regular
basis. Insurance cover to help with any financial
compensation that may be payable as a result of
an accident or incident has been taken out.

We have in place and follow a fully-accredited
legally-binding code which meets the
latest requirements of the UK pub industry
framework code of practice on how tied
agreements should operate in the pub trade;
this is different from a statutory code.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

BUSINESS AND FINANCIAL REVIEW

Managed houses

Our managed estate comprises 131
Young’s pubs (including 22 hotels) and
40 Geronimo pubs. These pubs are
designed to be community-led, well-
invested with market leading products
and high levels of customer service.

The successful implementation of this
strategy has resulted in a prolonged
period of growth. In the past five
years our managed house like-for-like
performance has been consistently
impressive at 6.0%, 4.6%, 6.7%,
6.5% and, this year, 5.6%. We met
the challenge of last year’s tough
comparative trading results and
embraced the excitement generated
from the Rugby World Cup, held in
our London heartland last autumn.
Our highly motivated team delivered
revenue and profit growth. Total
revenue was up 8.7%, underpinned
by the like-for-like performance, and
adjusted operating profit grew by 6.4%
to £53.3 million.

Revenue and profits
We achieved like-for-like revenue
growth across our three main product
categories, with drink (5.2%), food
(6.5%) and accommodation (8.0%)
all performing well.

During the first half, the drinks category
performed well despite some tough
comparatives, while mild but wet
weather in the second half was balanced
by both the Rugby World Cup and
excellent Christmas trading. Draught
beer sales are on an upward trend, with
sales up 7.5%, driven almost evenly
between volume, price and mix. Our
high-end estate provides the perfect
setting for our premium product portfolio
and we enjoy the challenge of constantly
refreshing our offer while still harbouring
old favourites such as Young’s Bitter and
Young’s Special. Following the success of
Young’s London Stout we are delighted
to have launched Young’s London IPA,
an authentic English IPA with a new
world twist.

Wine sales have performed strongly.
The trend to sparkling is not showing
any signs of going flat with sales up over
25% for the third year in a row. Building

on this solid base, we consolidated a
number of suppliers. In partnership with
Berkmann Wine Cellars we have created
a truly special and premium wine offer
for Young’s and Geronimo, including
many exclusive private labels. This new
handpicked list will provide plenty of
variety for our customers to discover and
explore and will complement our ever
growing food offer. We have recently
completed a comprehensive training
programme across our pubs to launch
this exciting new range of world
class wines.

Spirits have become very popular over
recent years, with gin in particular
selling well, up 76.3% over the last
two years. We are now harnessing this
trend with the introduction of a number
of small craft whisky producers from
Kyoto to New York to appeal to a new,
curious whisky drinker. 130 whisky
tasting experiences were held with our
customers in our pubs from January to
March, driving whisky sales up 10.2%
year-on-year.

Food remains an essential part of
our business and sales this year have
grown by 8.8%. This growth has
been the result of our successful food
strategy and recent investments to
increase our pubs’ emphasis on food,
which has in turn increased drink sales.
Our food strategy remains focused on
freshly prepared, seasonal British pub
food, serving best-in-class classics and
the ultimate Sunday roasts. We are,
however, mindful that food trends are
ever evolving and that, in order to stay
ahead of the competition, innovation
has to be a key part of our approach.
This year we opened six ‘BurgerShacks’
within our pubs and in April 2016
we transformed our Firestables pub
into the BurgerShack & Bar. This
standalone site, in the heart of
Wimbledon Village, features an
enlarged menu and provides a
stepping stone for extending this
brand. We have also created a
standalone website for the brand,
www.burgershack.co.uk. Our maiden
BurgerShack, at the Windmill (Clapham),
was the proud winner of the Top 50
Gastro Pubs Innovation Award.

Integral to this success is our chefs’
ability to create and deliver high
quality food to our customers. We
have expanded our Chef Academy to
ensure we continue to retain, recruit
and train highly skilled chefs and to
combat the ongoing competition for this
same talent. Those enrolled undertake
a series of master classes, hosted by
our in-house qualified team, to gain
accreditation at intermediate (NVQ
level 2 in professional cookery) and
advanced (NVQ level 3 in hospitality
management) levels. These courses
are engaging, promote recipe creativity
and give staff the right ingredients
to succeed.

We are delighted that the quality of our
managed food operation was recognised
by our peers at the 25th anniversary of
the Publican Awards, where we were
judged to have the Best Food Offer in
the 51+ sites category.

Our burgeoning hotel business,
comprising 475 bedrooms, of which
229 (48%) are of boutique standard,
surpassed the £10 million mark for
accommodation sales for the first time
this year, up 11.6% on last year. During
the past year, we have upgraded
another 54 rooms, spread across the
Lamb Inn (Hindon), Red Lion (Radlett)
and the Crown (Chertsey). These
boutique rooms command an average
room rate of £98.91 compared with
£63.44 for our classic rooms. We also
benefitted from the first full year of trade
from the hotel operations at the Bell
(Stow on the Wold), the Fox and Anchor
(Smithfield Market), and the Lamb
Inn. In total, RevPAR was up by 5.6%
to £60.01, benefitting from a £3.48
improvement in room rates.

We value customer feedback and
use a variety of internal and external
sources to gauge our performance. The
Windmill was ranked in the Top 25
Best Hotels in UK in the TripAdvisor
Awards 2016 based on hotel guest
comments, a fantastic achievement
which only adds to our growing
reputation for providing excellence.

Young’s managed revenue growth
was 10.5% in absolute terms and

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YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

7.7% on a like-for-like basis, another
very strong performance. Our smaller
Geronimo estate grew by 3.2%, with the
shortfall from the loss of the Tin Goose
(Heathrow Terminal 1) in October of
the prior year being offset by four new
pubs as well as the full year benefit of
the Fellow (King’s Cross) and Owl and
Pussycat (Shoreditch).

Adjusted operating profit in managed
houses grew by 6.4% to £53.3 million
but there was a small deterioration
in operating margin to 22.9% (2015:
23.4%). This margin decline is due to
the increasing prominence and quality
of our food offer which has higher
labour costs attached, short term
operational expenses during the initial
bedding in phase for new openings
and acquisitions and the increased
depreciation charges given recent
investment. There has been no dilution
in like-for-like operating margin.

Investment
During the course of the year we
invested £41.9 million in our managed
estate.

We invested £25.4 million in Young’s
pubs, with the acquisition of the
Canonbury (Islington) and the Old
Brewery (Greenwich). We also opened
the much anticipated Bull and Gate
(Kentish Town) and the Nine Elms
Tavern. Major development work
was carried out at the Albion (City of
London), Dirty Dicks (City of London),
Duke of Cambridge (Battersea),
Founder’s Arms (Southwark), Grange
(Ealing), Lock Keeper (Keynsham),
Old Ship (Richmond), Penny Black
(Leatherhead), Swan (Walton-on-
Thames), Weyside (Guildford) and
the Wood House (Dulwich). The Bull
(Streatham) was built in 1768 and
its transformational redevelopment
has added style and finesse while still
retaining elements of its proud history.

Our hotels benefitted from £3.5
million of investment as we upgraded
rooms and bar space at the Bear Inn
(Esher), Bell at Stow (Stow on the
Wold), Brewers Inn (Wandsworth),
Bulls Head (Chislehurst) and the Lamb
Inn (Hindon). Just after the year-end
we added an extra 12 bedrooms at

the Hand & Spear (Weybridge) which
completed its transformation from
pub to hotel, offering customers a
comfortable stay within 45 minutes of
London Waterloo.

A further £13.0 million was invested
in the Geronimo estate, including the
purchase of the Grocer (Spitalfields)
and the Leman Street Tavern (Aldgate).
The Trafalgar (Tooting) and the
Guard House (Woolwich) served
their first pints following their recent
redevelopments. Major projects
were also completed at the Castle
(Islington), Crown (Bow), Kings Arms
(Chelsea), Northcote (Battersea), Owl
and Pussycat (Shoreditch) and Prince
Albert (Battersea). At the Clarence
(Whitehall) we have created the new
“Tin Belly” dining room named after
its nearby neighbours; the Blues and
Royals. The “Tin Belly” offers the ideal
place to gather the troops and feast
on a right royal dinner.

Customer engagement
As our discerning customers’
demands evolve we remain focused
on ensuring the offer we provide
meets or exceeds their expectations.
This involves ensuring that we have
an interesting and wide ranging food
and drink portfolio, that our pubs
have comfortable and stylish interiors
and, increasingly, the quality and the
convenience of the service we offer.

The clever use of technology is vital
in attracting trade and meeting
customers’ needs. The vast majority
of our pubs now have responsive
websites allowing our customers
to find their favourite pubs, view
menus and book a table all from
their preferred digital device. Our
e-marketing platform’s database has
exceeded 1,000,000 for the first time,
and we have targeted our customers
with over 30,000,000 emails over
the last 12 months. This is amplified
by the sophisticated use of social
media which provides an important
marketing platform to communicate
with thousands of our customers on
a regular and targeted basis. We now
have over 500,000 followers across
our social media profiles.

Strategic report
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Shareholder information

As part of our “you stay there while
we look after you” proposition, tablets
are now installed in over half of our
pubs and typically account for over
16.5% of our trade, with some pubs
experiencing sales via tablet in excess
of 50% of total trade. The Leman
Street Tavern became our first pub
to open entirely based around tablet
service, with no floor tills installed.
Faster payments are important for our
customers’ experience and they are
increasingly and efficiently facilitated
through contactless cards.

While technology plays an
increasingly important role
throughout our estate, it is the
people that run our pubs and the
vital part that they play in their
local communities that is what
makes us stand out. Our teams
across the business are dedicated
to ensuring that we are continually
developing new ideas to engage with,
communicate with, meet and harness
the aspirations of our communities
and customers alike.

The Ram Pub Company

The success of the Ram Pub Company
is, as ever, based on our ability to
forge close partnerships with our
tenants, and we continually strive to
provide them better support year
after year. We have established a
diverse and evolving product range
designed to exceed our customers’
expectations. The long-term success
of the Ram Pub Company is based
on the tenants themselves being
able to benefit from a reliable and
sustainable income. Our experienced
team provide practical business advice,
sophisticated marketing and property
expertise to all our partners where
needed. This long-term approach has
further improved the fortunes of this
division in recent years.

Revenue and profits
The Ram Pub Company has 80 pubs
and accounts for 5.2% of our group
revenue (2015: 5.5%) and 7.8% of group
adjusted operating profit at outlet level
(2015: 7.9%). At the start of the year
we transferred the Lord Palmerston

YOUNG & CO.’S BREWERY, P.L.C. ANNUAL REPORT 2016 11

BUSINESS AND FINANCIAL REVIEW

Continued

Ramon – Assistant Manager
at the Paternoster

At Young’s you never stop learning new things.
I am now a Draught Master and a member of
the Wine Connoisseur Club which allows me
to share my enthusiasm of beer and wine with
customers and new members of staff.

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YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Carlos – Head Chef at the Fox & Anchor

When I joined Young’s, my Operations Manager gave a
motivational speech that reinforced my passion for food
and my desire to learn more about it. With the company’s
support I became Head Chef. I love working for Young’s,
a company that cares about its employees and knows
how to reward them.

In my spare time I have a passion for making music,
which I believe is very similar to cooking, it’s all about
finding the right ingredients to create something special.

(Tufnell Park) from Geronimo and at
the end of the year transferred the
Rose and Crown (Farnborough) from
our Young’s managed houses. These
replaced the New Town (Sutton), which
was sold in July, and the Sekforde Arms
(Clerkenwell), where we terminated our
lease in August. This continual estate
management has helped fulfil our
strategic objective to improve the quality
of our tenanted estate.

Revenue grew by 1.0% on a like-for-like
basis and 1.6% in total. This growth was
mostly driven by increased barrelage
and changes in mix to more premium
products, with price increases kept to a
minimum. Operating efficiencies, largely
through better buying, have improved
margins. The increased revenue and
improved margin has resulted in the
division’s adjusted operating profit
rising by 4.7% to £4.5 million and
by 2.1% on a like-for-like basis.

Investment
We invested £2.6 million in our
tenanted business, with major
developments at the Bristol Ram,
Calthorpe Arms (Bloomsbury),
Fountain Inn (Plumpton Green),
Grey Horse (Kingston), Old Inn
(Congresbury), Railway Telegraph
(Thornton Heath) and the Waggon
& Horses (Surbiton). The Rose and
Crown transferred from Young’s
managed on the penultimate
day of the year following a major
refurbishment.

Tenant engagement
The Ram Pub Company operates
a portfolio of traditional tenancy
agreements designed to attract and
harness the entrepreneurial flair of
today’s business partners. Our tenants
pay a competitive, market rent,
whilst benefitting from only limited
responsibility for repairs and decoration
to the pub. The Ram Pub Company
provides agreements with plenty of
choice, marketing and operational
support as well as financial backing
for trade-building initiatives. The Ram
Pub Company also grants some leases
instead of tenancies. In these cases the
lessee assumes responsibility for all
repairs and decorations to the pub. These
leases can be for terms up to 20 years.

We are beginning to enjoy the benefits
of last year’s re-branding and new
website, www.rampubcompany.co.uk,
and are continuing to roll-out a package
of distinctive signage. This captures
the essence of the division, with the
strapline “Everyone’s local”.

Property, treasury,
retirement benefits,
exceptional items and tax

Property
At the year-end, in common with
recent years, CBRE, an independent
and leading commercial property and
real estate services adviser, revalued
20% of our estate, with the remaining
80% revalued internally. The internal
review was led by Andrew Cox, MRICS,
our Director of Property and Tenancies.
It used updated trading results together
with management’s knowledge of each
pub. This approach is in accordance
with International Financial Reporting
Standards (“IFRS”) and is common
with other listed pub groups.

The total estate is now valued
at £665.8 million, a net upward
revaluation of £23.3 million, which is
the result of increasing demand for
pubs in our London and south east
heartland. In accordance with IFRS,
individual movements in value, totalling
£23.8 million (2015: £23.1 million), are
reflected in the revaluation reserve in
the balance sheet unless the valuation
is below historic cost, in which case it
is accounted for through the income
statement. This year’s movement in
the income statement classified as an
exceptional charge totalled £0.5 million
(2015: £4.2 million credit). All these
adjustments are non-cash items.

Treasury
Once more this has been a year of record
cash generation of £60.4 million, which
has enabled us to invest £45.1 million
in the business. Net debt increased by
£1.2 million to £130.2 million but all of
our important treasury measures have
improved: gearing fell to 28.6% (2015:
31.7%), net debt to EBITDA is 2.2 times
(2015: 2.5 times) and interest is covered
7.7 times (2015: 7.2 times) by adjusted
operating profit. We have long term
debt facilities of £175 million with the

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Royal Bank of Scotland and Barclays,
repayable between 2018 and 2023.
All this provides us with the necessary
financial firepower to invest as and when
attractive opportunities become available.
Given these committed facilities, our
freehold-backed balance sheet and the
conservative financial ratios above, we
have prepared these financial statements
on a going concern basis.

We have interest rate swaps in place to
provide some protection from adverse
movements in interest rates. In February
we entered into a new £20 million
swap, and as a consequence we now
have interest rates fixed on £100 million
of our £130.2 million net debt. These
swaps, together with the bank’s margin
and other costs, result in a blended
cost of fixed interest debt of just below
4.5%. These swaps have maturities that
match the underlying liabilities and have
been designated as cash flow hedges
for accounting purposes.

Retirement benefits
The deficit on our defined benefit
pension scheme has reduced by
£6.8 million to £6.3 million. This
scheme was closed to new entrants
in 2003, and also provides certain
post-retirement medical cover. Gross
liabilities fell by £10.7 million to £118.1
million, benefitting from both lower
inflationary expectations and higher
long-dated corporate bond yields. Our
actuary uses these yields to determine
the rate at which our liabilities are
discounted. The assets decreased by
£3.9 million to £111.8 million in value,
mainly the result of unfavourable
returns during this challenging
year for investments offsetting the
additional contributions made
by Young’s.

Exceptional Items
Last year benefited from a £4.1
million exceptional profit, by contrast,
this year we had an exceptional
charge of £2.1 million. Most of the
movements in exceptional items relate
to property revaluations, acquisitions
and disposals. This year we also had
restructuring costs relating to the
reorganisation of the group’s head
office which were made up largely of
severance costs and consultancy fees.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 13

BUSINESS AND FINANCIAL REVIEW

Continued

Tax
Our effective corporation tax rate
for the year, adjusted for exceptional
items, was 21.5% (2015: 23.4%). The
corporation tax charge for the year
was £6.2 million. The lower effective
rate arises from a lower standard rate
of UK corporation tax.

Corporate and social
responsibility

Our pubs play an integral role in
their individual neighbourhoods;
together we put great emphasis on
running sustainable businesses that our
communities can be proud of. This is
about creating value that benefits not
just our shareholders but the wider
stakeholder group. This means on a
global scale, aggressively reducing
our carbon footprint year after year,
while on a local one working with
charities, making life better for
the less advantaged members
of our community.

In terms of addressing our
environmental impact, our recycling
efforts have increased to 5,803
tonnes (2015: 4,481 tonnes) with
only 1.4% of waste (2015: 2.0%)
going to landfill. Thus, we avoided
sending 117,949 cubic metres of
waste to landfill, enough to fill over
1,000 double decker buses. All of our
managed pubs now use LED lighting;
this alone has prevented 1,601 tonnes
of CO2 emissions being released
into the atmosphere. Our Geronimo
operation has again been recognised
for its commitment to sustainability
as it once more received a three star
award, the highest available, from the
Sustainable Restaurant Association.

Last summer, leading up to the
Rugby World Cup 2015, we teamed
up with Wooden Spoon, the children’s
charity of rugby that has helped
over 1,000,000 disadvantaged and
disabled under 25 year olds. Through
various rugby-themed fund raising
activities hosted by our pubs and
staff, including serving 58,000 pints
of specially brewed Wooden Spoon
ale and 18 “Players at the Pumps”
events, we raised over £130,000

Agnes – Team Finance

I joined Young’s in 2009 as a waitress in one of
our busiest hotels. In 2013, I moved to head office
where I’ve experienced many roles within finance
and I’m now on the graduate scheme studying
for my professional qualification. I enjoy working
in Team Finance; it’s the department where
everybody counts.

for the charity. These donations are
already being put to good effect by
Wooden Spoon through both the
Premiership Rugby HITZ programme
and the Oasis project. The multi
award-winning HITZ programme
based in South London uses rugby
to increase young people’s resilience,
self-reliance and confidence and
gives them the skills to get back
into education, apprenticeships and
employment. Our staff took an active
role in this programme.

Shareholder returns

The execution of our long-established
strategy continues to deliver shareholder
value through strong revenue and
earnings growth which in turn allow
us to pay a growing dividend. This
year’s revenue growth of 8.3%, together
with an extra 0.2% points added to
our adjusted operating margin, has
resulted in an increase in adjusted
profit before tax of 10.6%. Earnings
per share increased by 1.1% to 55.76
pence and our adjusted EPS was up
13.0% at 57.20 pence.

Our dividend policy is designed to
deliver year-on-year growth whilst
allowing us to retain sufficient profits
in the business to enable us to make
the investments on which our long-
term record depends. This year we
are recommending increasing the final
dividend, the nineteenth consecutive
rise, by 6.0% to 9.07 pence, resulting,
if approved by shareholders, in a total
dividend for the year of 17.45 pence
(2015: 16.46 pence). The dividend is
covered 3.3 times by our adjusted
earnings per share.

We believe that together our robust
balance sheet and growing profitability
provide an excellent platform to
continue to expand the business in the
years ahead.

Outlook

Managed house revenue in the first
seven weeks of the new financial year
was up 8.1% in total and up 5.3% on
a like-for-like basis. Looking at trading
for the last 13 weeks which takes
account both of the timing of Easter
and of the University Boat Race, and

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YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Strategic report
Directors’ report
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Eddie – Head Chef at the
Founder’s Arms

Working for Young’s is like a new
and exciting world. I quickly became
Head Chef and have reached Chef
Academy Level 3. I am always calm
in the kitchen because I know I have
a great team behind me.

this year’s inclement spring, managed
house revenue was up 8.0% in total
and up 5.1% on a like-for-like basis.

The new financial year will benefit
from two recent acquisitions. The
Woolpack (Bermondsey), a tenancy,
was acquired on the first day of
the new financial year and we have
exchanged contracts on the Blue
Boar (Chipping Norton), which will
be added shortly to our managed
portfolio. In addition we will enjoy
the full year benefit of the eight
pubs opened in 2015 along with the
momentum of the investments made
in the existing estate.

We have embraced the newly
introduced National Living Wage and
shown commitment to our employees
by extending this to everyone over
the age of 18. As reported before, we
estimate that the additional annual cost
of implementing the living wage will
be c. £2 million, although our recent
head office restructuring and additional
consolidation of suppliers has helped
mitigate some of this impact.

Europe will be centre stage next
month. A good performance from the
home nations in football’s European
Championships may boost demand,
but we are too experienced to rely
on this. Neither will we judge the
outcome of the EU referendum,
although it could deliver a strong
night of trade on 23 June.

The Queen’s 90th birthday, a
remarkable milestone, should set
London alight with celebrations
in June. With pubs having been
granted extended hours for
three consecutive nights, we are
organising parties and preparing
a special commemorative brew.

Our trading environment continues to
benefit from high employment levels,
improving wages, and a period of
longer than expected low inflation
and interest rates. As a result we remain
confident that by remaining resolutely
focused on the execution of our long-
term strategy, empowering the talent,
commitment and passion of our teams

across the business, and maintaining
our strong financial profile, we are
well positioned to deliver an excellent
proposition to our customers as well as
superior returns for our shareholders.

In July, it will be last orders for
me as Chief Executive, but I am
delighted that I will be continuing my
involvement with Young’s as a non-
executive director. The energy and
enthusiasm of our people has been the
driving force behind the success we
have achieved over the last decade and
there is no one who better exemplifies
these qualities than Patrick, who has
been an integral part of our success. I
have every confidence that Young’s will
continue to thrive under his leadership.

On behalf of the board

STE P H E N G O O DY EA R
Chief Executive
18 May 2016

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 15

DIRECTORS’ REPORT

For the 52 weeks ended 28 March 2016

Welcome to our board of directors. All served throughout the period. No other person was a director during the
period apart from Rupert Clevely, David Page and Ed Turner who stepped down from the board and left the company
on 27 April, 7 July and 24 July 2015 respectively.

Nicholas Bryan, B.A., F.C.A.
NON-EXECUTIVE CHAIRMAN

Appointed to the board in 2006 and as non-executive
chairman in 2011. Chairman of the company’s
remuneration committee, as well as a member of the
company’s audit committee. Co-founder and chief
executive of the Innserve Group. Has particular expertise
in the hospitality, property and brewing sectors gained
through various positions within Courage (including
managing director of Courage UK (1992-95)). Has
held other chairman and non-executive director roles
while a management committee member of Investcorp
(1995-2001). Began his career in finance as a chartered
accountant and with positions at Lonrho and Hanson.
Aged 63.

Stephen Goodyear
CHIEF EXECUTIVE

Joined in 1995 as sales director. Appointed
to the board in 1996 as sales and marketing
director. Appointed chief executive in 2003.
Will be stepping down as chief executive
and become a non-executive director at
the end of the company’s AGM in July.
Previously worked for Courage Ltd (1974-
95) in a number of senior roles. Was recently
the Master of the Brewers’ Company, one of
the oldest Livery Companies in the City of
London. Aged 60.

Torquil Sligo-Young
INFORMATION RESOURCES

Joined in 1985. Held a number of senior
positions in different areas of the company
before being appointed to the board in 1997.
Has overall responsibility for the group’s
technological needs and for health and safety.
Previously worked for stockbrokers, Bell,
Lawrie, Macgregor & Co. Aged 56.

Peter Whitehead, F.C.A.
FINANCE

Joined the company and the board as
finance director in 1997. Qualified as
a chartered accountant with KPMG in
1988, becoming a fellow of the Institute of
Chartered Accountants in 1998. Previously
worked for Fuller, Smith & Turner P.L.C.
(1990-97). Aged 54.

Patrick Dardis
RETAIL

Joined in 2002 and appointed to the
board in 2003. Has overall responsibility
for the operation of the managed estate
(Young’s and Geronimo), as well as
for managed house pub acquisitions
and developments. Will be taking
over as chief executive at the end of
the company’s AGM in July. Previous
positions have included director of retail
operations at Wolverhampton & Dudley
Breweries PLC (now Marston’s PLC),
business development with Guinness
Brewing and retail management with
Whitbread PLC and Courage Ltd.
Aged 57.

Roger Lambert, M.A.
NON-EXECUTIVE AND
SENIOR INDEPENDENT

Appointed to the board in 2008 and as senior independent
director in 2011. Chairman of the company’s audit committee,
as well as a member of the company’s remuneration
committee. Chairman of Corporate Broking, Canaccord
Genuity since 2010. Previously worked for 26 years in
corporate finance at J.P. Morgan Cazenove where he was a
senior managing director with responsibilities for corporate
client coverage of the consumer sector. Having acted for
more than 25 companies in the sector, has a wealth of
relevant expertise in brewing, drinks and hospitality. Aged 57.

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YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Trish Corzine
NON-EXECUTIVE

Appointed to the board in 2015. Having spent the
majority of her career in the restaurant industry,
has wide-ranging knowledge of the hospitality
and leisure sector. Before her retirement from the
board of The Restaurant Group plc in 2013, she
spent 20 years with them, almost half of it as an
executive director responsible for their concessions
business. Aged 58.

Strategic report
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Financial statements
Shareholder information

In this report reference to the “company” or to “Young’s” is to Young & Co.’s Brewery, P.L.C., and reference to the “group”
is to the group of companies of which Young’s is the parent company.

Corporate governance
The board is committed to good corporate governance in the management and operation of the group’s business.
Summarised below are its current corporate governance arrangements; no particular corporate governance code has
been adopted.

The role of the board
The board is collectively responsible for the business
and management of the group. Its role includes:

• approving and monitoring the group’s long-term

objectives, commercial strategy, major acquisitions and
disposals and the group’s annual operating and capital
expenditure budgets;

• ensuring a sound system of internal control and risk

management; and

• overseeing the group’s operations, ensuring competent
and prudent management, sound planning, adequate
accounting and other records, and compliance with
statutory and regulatory obligations.

Board composition
The board is made up of:

• a non-executive chairman: Nicholas Bryan;

• four executive directors: Stephen Goodyear, Torquil
Sligo-Young, Peter Whitehead and Patrick Dardis; and

• two further non-executive directors: Roger Lambert and

Trish Corzine.

Their roles and brief biographical details appear opposite.

How the board works
The board governs through its executive management and via committees.

The board has a formal written schedule of matters reserved for its review and approval; this includes those matters
described above as well as major financial and key operational issues.

The board meets every two months, with additional meetings arranged as required; it met seven times during the year. Formal
agendas and reports are provided to the board on a timely basis, along with other information to enable it to discharge its
duties. Each of the executive directors and the company secretary updates the board at each meeting on matters for which
they are responsible. This flow of information is in addition to information exchanged between and prior to board meetings,
and regular meetings of non-executives with one or more of the executive directors outside of board meetings.

The board has a procedure in place such that it can consider and, if it sees fit, authorise situations where a director has an
interest that conflicts, or may possibly conflict, with the interests of the company.

The board’s committees
The board has four standing or permanent committees: executive, audit, remuneration and disclosure. The latter three committees
have specific terms of reference which can be found in the investors section of www.youngs.co.uk.

Executive committee
Chairman: Stephen Goodyear

Members: Executive directors

It is responsible for the daily running of the group and the execution of approved
policies and the business plan. It usually meets on a weekly basis, with members
of the group’s senior management being invited to attend as appropriate. Patrick
Dardis will become chairman of the committee when he takes over from Stephen
Goodyear as chief executive at the end of the company’s AGM in July.

Remuneration committee
Chairman: Nicholas Bryan

Members: Roger Lambert

Trish Corzine

Its primary function is to determine, on behalf of the board, the remuneration
packages of the executive directors (see the Remuneration: executive directors
box on page 19).

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 17

DIRECTORS’ REPORT

Continued

Audit committee
Chairman: Roger Lambert

Members: Nicholas Bryan
Trish Corzine

It assists the board in fulfilling its oversight responsibilities, with its primary
functions being monitoring the integrity of the company’s financial statements
and internal control systems (including risk management), overseeing the
company’s relationship with its external auditor and reviewing the effectiveness
of the audit process. The finance director usually attends the committee’s
meetings, as do the external audit partner and audit manager when the business
of the meeting relates to the full-year and half-year results. The committee
meets separately with the group’s business risk assurance manager and with
the external audit partner and audit manager without any other member of
the group’s management present to give them the opportunity to raise any
concerns they may have and any issues arising from their work. The committee
has a meeting planner which sets out the basic items to be covered at its
regular meetings. At its meeting in May, the committee reviews the company’s
preliminary announcement, the report and accounts and the performance of the
group’s external auditor; it also assesses whether the auditor continues to show
the required level of independence. The focus of the November meeting is on
reviewing the interim report and agreeing the scope for the next external audit,
the audit plan and related fees. At each of its meetings there is an internal audit
report from the group’s business risk assurance manager.

Disclosure committee
Chairman: Peter Whitehead

Members: Executive directors

It assists the company in making timely and accurate disclosure of any information
required to be disclosed in order to meet legal and regulatory obligations.

Other committees are established from time to time depending on the needs of the business.

Balance of the board
There is a clear division of responsibility between the chairman and the chief executive. The former is responsible for the
effective running of the board; the latter has overall responsibility for the running of the business.

Each of the executive directors has specific roles and responsibilities, and all of the non-executives are experienced business
people who bring a wide range of skills and experiences to the board. In their roles the non-executive directors are
required, amongst other things, to constructively challenge and contribute to the development of strategy, to scrutinise the
performance of management in meeting agreed goals and objectives and to monitor the reporting of performance.

Roger Lambert is the senior independent director. In his current role as chairman of Corporate Broking at Canaccord
Genuity, he attends and advises at board meetings of corporate clients. Coupling this with his many years working in
corporate finance at J.P. Morgan Cazenove, where he was a senior managing director with responsibilities for corporate
client coverage of the consumer sector, including brewing, drinks and hospitality, he is able to provide knowledge, support
and advice to the chairman and to the other members of the board.

The directors consider that the board is a well-balanced one that has the right number of members for the size of the group.

Board nominations and appointments
In practice the chairman and the chief executive lead on the board nomination and appointment process. They consider
the balance of skills, knowledge and experience on the board and make appropriate recommendations for consideration
by it. This formal but unwritten process has been used effectively for a number of years and has led the board to remain
of the view that it should continue to operate in this way rather than through a more formal nomination committee.

Once appointed, the company’s articles of association ensure that any new board member is subject to re-appointment
by the company’s voting shareholders at the first AGM after their appointment – this doesn’t apply to any director at this
year’s AGM. They are then subject to a further re-appointment vote every third AGM after that – this applies to Nicholas
Bryan, Stephen Goodyear and Patrick Dardis at this year’s AGM (and each of them is seeking re-appointment and their
brief biographical details are on page 16). Stephen Goodyear will become a non-executive director if re-appointed.

18
18

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Strategic report
Directors’ report
Financial statements
Shareholder information

Subject to shareholder re-appointment, each of the executive directors has been appointed for an indefinite period and is
generally entitled to not less than one year’s notice from the company if it wishes to terminate his appointment. In return,
each of Stephen Goodyear, Torquil Sligo-Young and Peter Whitehead has to give not less than six months’ notice if he
wishes to leave, and Patrick Dardis has to give at least one year’s notice.

The non-executives have been appointed for fixed terms which are terminable earlier by them or the company giving
notice and they are likewise subject to shareholder re-appointment. The expiry dates of their current fixed terms and their
minimum periods of notice are as follows: Nicholas Bryan (11 July 2017 and three months), Roger Lambert (31 July 2017
and six months) and Trish Corzine (11 January 2018 and six months).

The executive directors are expected to devote substantially the whole of their time, attention and ability to their duties,
whereas, as one would expect, the non-executives have a lesser time commitment. Apart from the chairman, who has
agreed to spend 30-50 days a year on work for the company, it is anticipated that each of the non-executives will dedicate
15 days a year.

Copies of the executive directors’ service contracts and copies of the letters of appointment of the non-executive directors
are available for inspection at the company’s registered office.

Advice for the board
Subject to certain limitations, all of the directors are entitled to obtain independent professional advice at the company’s
expense; they also have access to the advice and services of the company secretary.

Keeping up to date generally and particularly with the market
From time to time the directors attend training courses and/or industry forums. They also attend relevant specialist
briefings, some of which form part of board or executive committee meetings.

The directors, executive and non-executive, regularly spend time out in the trade with fellow directors, colleagues and
friends. This helps to keep them up to date with the group’s operations, developments in the market and the competition.

Liability insurance cover for directors and officers
The company maintains, at its own expense, insurance cover in respect of legal action against its directors and officers.

Remuneration: executive directors
The remuneration of the executive directors is determined by the remuneration committee in the context of the
company’s reward policy, the principal objective of which is the recruitment and retention of officers with appropriate
skills and qualities to drive the company’s strategy and deliver value for shareholders. Against this background, the
remuneration committee has decided that total remuneration levels for the executive directors should be in line
with the market for the performance achieved, with the variable element included in the total remuneration varying
according to achievement of key performance measures.

This variable element is currently delivered via deferred annual bonus awards which are dependent on certain
performance targets being achieved. The terms of the awards are such that if any bonus is paid, half of it has to be
settled in shares, with the other half being paid in cash except to the extent that the director elects to receive all or
part of it in shares instead. For every share taken in place of cash, the director is allowed to subscribe at nominal
value for one ‘matching’ share. None of the directors are generally free to sell any of the shares before the end of a
restricted period which ordinarily will end three years after the shares have been acquired or, if earlier, the date on
which their employment terminates by reason of illness, disability or redundancy. The ‘matching’ shares are subject
to satisfaction of a further condition relating to the increase over a set period in the group’s adjusted earnings per
ordinary share in respect of the group’s continuing operations. Any of the shares acquired, whether ‘matching’ or
otherwise, are liable to forfeiture in certain circumstances.

The remuneration committee believes that the company’s remuneration policy is consistent with the group’s risk
management policy as it does not encourage inappropriate risks to be taken to achieve the performance targets; the
focus is very much on a long-term remuneration model.

Details of the remuneration of each executive director appear in note 8 on page 37. None of them are involved in
deciding their own remuneration.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 19

DIRECTORS’ REPORT

Continued

Remuneration: non-executives
The remuneration of the non-executives is determined by the executive committee, with the intention being that the fees
paid are not out of line with the market and go some way towards rewarding the non-executives for the time they commit
to their various roles. Accordingly all non-executive directors receive a basic fee; they do not participate in bonus schemes or
share options and none of them are members of any group pension scheme other than for the purposes of complying with
pensions auto-enrolment legislation. The non-executives are entitled to be reimbursed for certain business-related expenses.

Details of the remuneration of each non-executive director appear in note 8 on page 37.

Risk and internal control
The board has overall responsibility for the group’s internal control system and for reviewing its effectiveness. The
executive directors implement and maintain the risk management and internal control system, and the audit committee
assists the board in fulfilling its oversight responsibilities by monitoring the system’s integrity.

The system is designed to manage risk; it cannot eliminate it and therefore provides reasonable, not absolute,
assurance against material misstatement or loss. As part of the system, the board regularly reviews its financial controls
memorandum; this lengthy and detailed document seeks to:

• mitigate risks which might cause the failure of business objectives;

• help safeguard assets against unauthorised use or disposal;

• ensure the maintenance and reliability of proper accounting records and financial information used within the business

or for publication; and

• help achieve compliance with applicable laws and regulations.

The group’s business risk assurance manager regularly tests controls contained in the financial controls memorandum in order to
assess their effectiveness. The results of his work are shared with the executive directors concerned and with the audit committee.
With the approval of that committee, changes, as appropriate, are then made to the financial controls memorandum.

The group, through its business risk assurance manager, carries out internal reviews of financial areas according to a programme
set by the audit committee following input from the finance director, the head of finance and the group’s external auditor. The
business risk assurance manager reports to the company secretary and is independent of the areas which he reviews. His reports,
the management responses and the recommended actions are presented to the audit committee on a regular basis. Management
may from time to time supplement the internal resource for these reviews with specialist external resources.

The group also employs an in-house team of retail auditors who monitor the controls in place in the group’s managed pubs and
hotels, in particular those covering stock and cash. This team reports to the finance director.

The group has business continuity arrangements in place with third parties. It also has, and reviews annually, business continuity
plans for each of the departments within the group’s head office.

The group has a whistleblowing policy. This is overseen by the audit committee and allows staff to raise any concerns in confidence
directly with the chairman of the audit committee, the company secretary or the group’s business risk assurance manager.

Relations with shareholders
Copies of the annual report and the interim report are sent to all shareholders and copies can be downloaded from the
investors section of www.youngs.co.uk. Other information for shareholders and interested parties is also provided on that
website. Written or e-mailed enquiries are handled by the company secretary.

The company has an on-going programme of individual meetings with institutional shareholders and analysts following
the preliminary and half-year results presentations to the City. These meetings allow the chief executive and the finance
director to update shareholders on strategy and the group’s performance. Additional meetings with institutional investors
and/or analysts are arranged from time to time. All members of the board receive copies of feedback reports from the City
presentations and meetings, thus keeping them in touch with shareholder opinion.

Shareholders are given the opportunity to ask questions and raise issues at the AGM; this can be done formally during the
meeting or informally with the directors after it.

20
20

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Strategic report
Directors’ report
Financial statements
Shareholder information

Directors’ holdings and interests
The holdings and interests of the directors who held office at the period end (and their immediate families) in the share
capital of the company are shown in the table below; these are in addition to the interests shown in notes 8(d) and 8(e)
on pages 38 and 39.

Nicholas Bryan

Beneficial and family

Stephen Goodyear (i), (ii)

Beneficial and family

Torquil Sligo-Young (i), (ii), (iii)

Beneficial and family

Trustee

Peter Whitehead (i), (ii)

Beneficial and family

Patrick Dardis (i), (ii)

Roger Lambert

Trish Corzine

Beneficial and family

As at

28 March 2016
30 March 2015

28 March 2016
30 March 2015
28 March 2016
30 March 2015

28 March 2016
30 March 2015

A shares

8,505
8,505

231,796
196,283

268,462
253,153
4,154,340
4,154,340

115,845
95,363

49,257
39,891

5,250
5,250

1,000
–

Non-voting
shares

–
–

–
3,000
649,914
649,914

–
–

5,000
5,000

5,000
–

(i) Also interested in 554,077 (2015: 635,064) A shares held in trust by RBT II Trustees Limited – see note 29 on page 58.
(ii) Also interested in 337,067 (2015: 387,541) A shares held in trust by Young’s Pension Trustees Limited – see note 29 on page 58.
(iii) Torquil Sligo-Young and various members of his immediate family are discretionary beneficiaries under trusts holding 836,368 (2015: 836,368)
of the A shares and 553,866 (2015: 553,866) of the non-voting shares in respect of which Torquil Sligo-Young is shown as trustee in the above table.

Qualifying indemnity provisions
The company’s articles of association contains an indemnity provision for the benefit of the directors; this provision, which is
a qualifying third party indemnity provision, is in force at the date of this report and was also in force during the period for the
benefit of those who were then directors of the company. Additional indemnity provisions for the benefit of Rupert Clevely, who
stood down from the board and left the company during the period, are in force at the date of this report and were in force during
the period; these provisions, which are qualifying third party indemnity provisions, are described in note 29 on page 58.

AIM
The company’s shares are traded on AIM. There are no other exchanges or trading platforms on which the company has applied
or agreed to have its shares admitted or traded.

Profit and dividends
The profit for the period attributable to shareholders was £27.1 million. The directors recommend a final dividend for the period
of 9.07 pence per share. Subject to approval at the AGM, this is expected to be paid on 7 July 2016 to shareholders on the
register at the close of business on 10 June 2016. When added to the interim dividend of 8.38 pence per share, this will produce
a total dividend for the period of 17.45 pence per share.

AGM
Notice convening the AGM and an explanation of the resolutions being proposed are set out on pages 61 to 64.

Important events since the end of the period and likely future developments
As permitted under section 414C(11) of the Companies Act 2006, the directors have chosen to include in the strategic report
(on pages 1 to 15) particulars of important events affecting the group which have occurred since the end of the period and an
indication of likely future developments in the group’s business.

Financial instruments and related matters
Included in note 22, starting on page 49, are the group’s financial risk management objectives and policies and an indication
of the group’s exposure to certain risks.

Employees
Considerable importance is placed on communications with employees and so, within the limitation of commercial confidentiality
and security, Young’s provided them with information concerning trading, development and other appropriate matters. It did this at
many levels throughout the business, both formally and informally, including through management presentations. It also consulted

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 21

DIRECTORS’ REPORT

Continued

Strategic report
Directors’ report
Financial statements
Shareholder information

regularly with employees and their representatives thereby enabling the board to have regard to their views when making decisions
likely to affect their interests; in connection with this, Young’s continued to operate an information and consultation committee
with its members being drawn from departments based at its head office in Wandsworth. The company’s integrated appraisal and
development process, designed to improve communications and company performance, remained in place, and the company
continued to operate a bonus scheme for eligible employees. To encourage further involvement in the group’s performance, the
company invited all employees of the group who had been continuously employed on and from 31 March 2013 to join the group’s
savings-related share option scheme for 2015. After saving for a three-year period (through deductions from net salary), scheme
members can then buy A shares in the company if they choose to do so at 1,013 pence per share, being a discount of about 20%
to the market price at the time the invitations were issued. Young’s maintained its policy of giving full and fair consideration to all
applications for employment, including those made by disabled people, taking account of the applicant’s particular aptitude and
ability; of seeking to continue to employ anyone who becomes disabled while employed by the company and arranging training
in a role appropriate to the person’s changed circumstances; and of giving all employees, including disabled employees, equal
opportunities for training, career development and promotion.

Notifications of major holdings of voting rights
As at 28 March 2016 the company had been notified of the following holdings of 3% or more of the voting rights in
the company:
Torquil Sligo-Young
James Young
Caroline Chelton
Lindsell Train Limited

BlackRock Investment Management (UK) Ltd
Octopus Investments Nominees Ltd
Helena Young

14.82%
13.81%
11.70%
5.28%

<5.00%
4.01%
3.12%

No changes in those holdings, and no other holdings of 3% or more of the voting rights in the company, had been
notified to the company between 29 March 2016 and 18 May 2016, both dates inclusive.

Statement of certain responsibilities in relation to the financial statements and otherwise
For each financial period the directors are required to prepare an annual report (made up of a strategic report and a directors’
report) and a set of financial statements. The latter must be prepared in accordance with International Financial Reporting Standards
as adopted by the European Union (“IFRS”) and applicable law, and must present fairly the financial position of the group and
the financial performance and cash flows of the group for the relevant period. As regards the company’s financial statements
(as opposed to the ones for the group), the directors have chosen to prepare them under IFRS too. In preparing the financial
statements the directors make judgements and accounting estimates that are reasonable and prudent, select suitable accounting
policies and then apply them consistently, and information, including accounting policies, must be presented in a manner that
provides relevant, reliable and comparable information. There also has to be included a note that the group has complied with
IFRS, subject to any material departures disclosed and explained in the financial statements. Under the Companies Act 2006, the
directors are responsible for keeping accounting records which disclose with reasonable accuracy, at any time, the financial position
of the group and the company at that time and are such to enable them to ensure that the financial statements comply with that
Act. They are also responsible for safeguarding the assets of the group and the company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.

Disclosure of information to the auditor
Each person who was a director at the time when this report was approved has confirmed that (a) so far as he or she was aware,
there was no information needed by the company’s auditor in connection with preparing its report of which the company’s auditor
was unaware; and (b) he or she had taken all the steps that he or she ought to have taken as a director to make himself or herself
aware of any such information and to establish that the company’s auditor was aware of it. This paragraph is to be interpreted in
accordance with section 418 of the Companies Act 2006.

Preparation and disclaimer
This annual report, together with the strategic report (on pages 1 to 15) and the financial statements for the period ended
28 March 2016, have been drawn up and presented for the purpose of complying with English law. Any liability arising out
of or in connection with them will also be determined in accordance with English law.

By order of the board

ANTH O NY S C H RO E D E R
Company Secretary
18 May 2016

22
22

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

INDEPENDENT AUDITOR’S REPORT

For the 52 weeks ended 28 March 2016

Strategic report
Directors’ report
Financial statements
Shareholder information

Independent auditor’s report to the members of Young & Co.’s Brewery, P.L.C.

We have audited the financial statements of Young & Co.’s Brewery, P.L.C. for the 52 week period ended 28 March 2016 which comprise the
Group Income Statement, the Group and Parent Company Statements of Comprehensive Income, the Group and Parent Company Balance
Sheets, the Group and Parent Company Statements of Cash Flow, the Group and Parent Company Statement of Changes in Equity and the
related notes 1 to 32. The financial reporting framework that has been applied in their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union and, as regards the parent company financial statements, as applied in accordance
with the provisions of the Companies Act 2006.

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit
work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report
and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company
and the company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditor
As explained more fully in the Directors’ Responsibilities Statement set out on page 22, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial
statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with
the Auditing Practices Board’s Ethical Standards for Auditors.

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

Opinion on financial statements
In our opinion:

• the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 28 March 2016 and of the

group’s profit for the 52 week period then ended;

• the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;

• the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as

applied in accordance with the provisions of the Companies Act 2006; and

• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements are

prepared is consistent with the financial statements.

Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from

branches not visited by us; or

• the parent company financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

Andy Glover (Senior Statutory Auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
18 May 2016

Notes:
1. The maintenance and integrity of the Young & Co.’s Brewery, P.L.C. website is the responsibility of the directors; the work carried out by the auditor does not involve
consideration of these matters and, accordingly, the auditor accepts no responsibility for any changes that may have occurred to the financial statements since they
were initially presented on the website.

2. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 23

GROUP INCOME STATEMENT

For the 52 weeks ended 28 March 2016

Revenue
Operating costs before exceptional items

Operating profit before exceptional items
Operating exceptional items

Operating profit

Finance costs
Other finance charges

Profit before tax
Taxation

Profit for the period attributable to shareholders of the parent company

Earnings per 12.5p ordinary share
Basic
Diluted

Strategic report
Directors’ report
Financial statements
Shareholder information

Notes

6
7

11
24

2016
£m

245.9
(204.9)

41.0
(2.1)

38.9

(5.3)
(0.3)

33.3
(6.2)

27.1

2015
£m

227.0
(189.6)

37.4
4.1

41.5

(5.2)
(0.2)

36.1
(9.4)

26.7

Pence

15
15

55.76
55.73

55.17
55.09

All of the results above are from continuing operations.

The notes on pages 30 to 59 form part of these financial statements.
The independent auditor’s report is set out on page 23.

24
24

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

STATEMENTS OF COMPREHENSIVE INCOME

For the 52 weeks ended 28 March 2016

Strategic report
Directors’ report
Financial statements
Shareholder information

Profit for the period

Other comprehensive income

Group

Company

Notes

2016
£m

27.1

2015
£m

26.7

2016
£m

24.3

2015
£m

22.9

Items that will not be reclassified subsequently to profit or loss:
Unrealised gain on revaluation of property
Remeasurement of retirement benefit schemes
Tax on above components of other comprehensive income

17
24

Items that will be reclassified subsequently to profit or loss:
Fair value movement of interest rate swaps
Tax on fair value movement of interest rate swaps

23.8
4.2
0.2

–
(0.2)

28.0

19.6
(9.1)
(0.7)

(3.6)
0.7

6.9

23.1
4.2
(0.1)

–
(0.2)

27.0

17.6
(9.1)
(0.4)

(3.6)
0.7

5.2

Total comprehensive income for shareholders of the parent company

55.1

33.6

51.3

28.1

All of the results above are from continuing operations.

The notes on pages 30 to 59 form part of these financial statements.
The independent auditor’s report is set out on page 23.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 25

Strategic report
Directors’ report
Financial statements
Shareholder information

Group

Company

2016
£m

20.6
665.8
–
6.2

692.6

2.6
6.4
13.2

22.2

2015
£m

20.9
617.3
–
7.7

645.9

2.7
5.5
0.2

8.4

2016
£m

–
594.4
31.3
6.1

631.8

1.9
28.8
11.8

42.5

2015
£m

–
546.3
31.3
7.6

585.2

2.0
27.6
0.2

29.8

714.8

654.3

674.3

615.0

–
(3.1)
(35.5)
(3.2)

(41.8)

(143.4)
(9.0)
(57.4)
(6.3)
(1.0)

(217.1)

(258.9)

455.9

6.1
4.1
1.8
(9.8)
234.5
219.2

455.9

(5.0)
(2.5)
(29.2)
(4.0)

(40.7)

(124.2)
(9.5)
(59.8)
(13.1)
–

(206.6)

(247.3)

407.0

6.1
2.7
1.8
(9.6)
209.6
196.4

407.0

–
(3.1)
(38.2)
(2.2)

(43.5)

(143.4)
(9.0)
(50.5)
(6.3)
(1.0)

(210.2)

(253.7)

420.6

6.1
4.1
1.8
(9.8)
225.6
192.8

420.6

(6.0)
(2.5)
(27.9)
(3.7)

(40.1)

(124.2)
(9.5)
(52.6)
(13.1)
–

(199.4)

(239.5)

375.5

6.1
2.7
1.8
(9.6)
201.7
172.8

375.5

Notes

16
17
18
23

19
20

22
22
21

22
22
23
24
25

BALANCE SHEET

At 28 March 2016

Non-current assets
Goodwill
Property and equipment
Investment in subsidiaries
Deferred tax assets

Current assets
Inventories
Trade and other receivables
Cash

Total assets

Current liabilities
Borrowings
Derivative financial instruments
Trade and other payables
Income tax payable

Non-current liabilities
Borrowings
Derivative financial instruments
Deferred tax liabilities
Retirement benefit schemes
Provisions

Total liabilities

Net assets

Capital and reserves
Share capital
Share premium
Capital redemption reserve
Hedging reserve
Revaluation reserve
Retained earnings

Total equity

Approved by the board of directors and signed on its behalf by:

Nicholas Bryan
Peter Whitehead
18 May 2016

Chairman
Finance Director

The notes on pages 30 to 59 form part of these financial statements.
The independent auditor’s report is set out on page 23.

26
26

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

STATEMENTS OF CASH FLOW

For the 52 weeks ended 28 March 2016

Operating activities

Net cash generated from operations
Interest received
Tax paid

Net cash flow from operating activities

Investing activities
Sale of property and equipment
Purchases of property and equipment
Business combinations, net of cash acquired
Acquisition of subsidiaries, net of cash acquired

Net cash used in investing activities

Financing activities
Interest paid
Issued equity
Equity dividends paid
Increase in borrowings
(Decrease)/increase in short term borrowings

Net cash flow used in financing activities

Increase/(decrease) in cash
Cash at the beginning of the period

Cash at the end of the period

Notes

17
13
18

Strategic report
Directors’ report
Financial statements
Shareholder information

Group

Company

2016
£m

2015
£m

2016
£m

2015
£m

60.4
–
(7.8)

52.6

3.6
(41.6)
(3.5)
–

(41.5)

(4.4)
0.5
(8.2)
19.0
(5.0)

1.9

13.0
0.2

13.2

50.6
–
(7.1)

43.5

3.3
(32.4)
(18.5)
–

(47.6)

(4.9)
–
(7.7)
9.5
5.0

1.9

(2.2)
2.4

0.2

55.4
0.5
(6.4)

49.5

3.5
(38.8)
(3.5)
–

(38.8)

(4.4)
0.5
(8.2)
19.0
(6.0)

0.9

11.6
0.2

11.8

40.0
1.0
(4.7)

36.3

3.3
(30.1)
(6.6)
(7.0)

(40.4)

(4.8)
–
(7.7)
9.5
6.0

3.0

(1.1)
1.3

0.2

The notes on pages 30 to 59 form part of these financial statements.
The independent auditor’s report is set out on page 23.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 27

GROUP STATEMENT OF CHANGES IN EQUITY

At 28 March 2016

Strategic report
Directors’ report
Financial statements
Shareholder information

At 31 March 2014

7.7

1.8

(6.7)

193.1

183.8

379.7

Capital
Share redemption
capital (1)
reserve
£m
£m

Notes

Hedging Revaluation
reserve
£m

reserve
£m

Retained
earnings
£m

Total
equity
£m

Total comprehensive income
Profit for the period

Other comprehensive income
Unrealised gain on revaluation of property
Remeasurement of retirement benefit schemes
Fair value movement of interest rate swaps
Tax on above components of other comprehensive income

Total comprehensive income

Transactions with owners recorded directly in equity
Share capital issued
Dividends paid on equity shares
Revaluation reserve realised on disposal of properties
Share based payments
Tax on share based payments

At 30 March 2015

Total comprehensive income
Profit for the period

Total comprehensive income

–

–
–
–
–

–

1.1
–
–
–
–

1.1

8.8

–

–
–
–
–

–

1.4
–
–
–
–

1.4

17
24
22
12

27
23

17
24
22
12

27
23

–

–
–
–
–

–

–
–
–
–
–

–

26.7

–
–
(3.6)
0.7

(2.9)

–
–
–
–
–

–

19.6
–
–
(2.5)

17.1

–
–
(0.6)
–
–

(0.6)

–
(9.1)
–
1.8

(7.3)

19.4

–
(7.7)
0.6
0.2
0.1

(6.8)

19.6
(9.1)
(3.6)
–

6.9

33.6

1.1
(7.7)
–
0.2
0.1

(6.3)

1.8

(9.6)

209.6

196.4

407.0

–

–
–
–
–

–

–
–
–
–
–

–

27.1

–
–
–
(0.2)

(0.2)

–
–
–
–
–

–

23.8
–
–
1.6

25.4

–
–
(0.5)
–
–

(0.5)

–
4.2
–
(1.4)

2.8

29.9

–
(8.2)
0.5
0.5
0.1

(7.1)

23.8
4.2
–
–

28.0

55.1

1.4
(8.2)
–
0.5
0.1

(6.2)

At 28 March 2016

10.2

1.8

(9.8)

234.5

219.2

455.9

(1) Total share capital comprises the share capital issued and fully paid of £6.1 million (2015: £6.1 million) and the share premium account of £4.1 million
(2015: £2.7 million). Share capital issued in the period comprises the nominal value of £nil million (2015: £0.1 million) and share premium of £1.4 million
(2015: £1.0 million).

The notes on pages 30 to 59 form part of these financial statements.
The independent auditor’s report is set out on page 23.

28
28

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY

At 28 March 2016

Strategic report
Directors’ report
Financial statements
Shareholder information

At 31 March 2014

7.7

1.8

(6.7)

186.9

164.0

353.7

Capital
Share redemption
capital (1)
reserve
£m
£m

Notes

Hedging Revaluation
reserve
£m

reserve
£m

Retained
earnings
£m

Total
equity
£m

Total comprehensive income
Profit for the period

Total comprehensive income

At 30 March 2015

Total comprehensive income
Profit for the period

Total comprehensive income

–

–
–
–
–

–

1.1
–
–
–
–

1.1

8.8

–

–
–
–
–

–

1.4
–
–
–
–

1.4

17
24
22
23

27
23

17
24
22
23

27
23

–

–
–
–
–

–

–
–
–
–
–

–

22.9

–
–
(3.6)
0.7

(2.9)

–
–
–
–
–

–

17.6
–
–
(2.2)

15.4

–
–
(0.6)
–
–

(0.6)

–
(9.1)
–
1.8

(7.3)

15.6

–
(7.7)
0.6
0.2
0.1

(6.8)

17.6
(9.1)
(3.6)
0.3

5.2

28.1

1.1
(7.7)
–
0.2
0.1

(6.3)

1.8

(9.6)

201.7

172.8

375.5

–

–
–
–
–

–

–
–
–
–
–

–

24.3

–
–
–
(0.2)

(0.2)

23.1
–
–
1.3

24.4

–
4.2
–
(1.4)

2.8

23.1
4.2
–
(0.3)

27.0

(0.2)

24.4

27.1

51.3

–
–
–
–
–

–

–
–
(0.5)
–
–

(0.5)

–
(8.2)
0.5
0.5
0.1

(7.1)

1.4
(8.2)
–
0.5
0.1

(6.2)

At 28 March 2016

10.2

1.8

(9.8)

225.6

192.8

420.6

The notes on pages 30 to 59 form part of these financial statements.
The independent auditor’s report is set out on page 23.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 29

NOTES TO THE FINANCIAL STATEMENTS

For the 52 weeks ended 28 March 2016

1. G ENERAL IN FORMATI ON
The group and parent company financial statements of Young & Co.’s Brewery, P.L.C. for the period ended 28 March 2016 were authorised for
issue by the board of directors on 18 May 2016. Young & Co.’s Brewery, P.L.C. is a public limited company incorporated and domiciled in England
and Wales. The company’s shares are listed on the Alternative Investment Market of the London Stock Exchange. The nature of the group’s
operations and its principal activities are set out in note 5 and in the strategic report on pages 1 to 15.

The current period and prior period relate to the 52 weeks ended 28 March 2016 and 30 March 2015 respectively.

The financial statements are presented in pounds sterling and all values are rounded to the nearest hundred thousand (£0.1 million) except where
otherwise indicated.

2. BASIS OF PR EPARATION
The consolidated financial statements of the group have been prepared in accordance with International Financial Reporting Standards (IFRS)
as adopted for use in the European Union. IFRS includes the application of International Financial Reporting Standards including International
Accounting Standards (IAS) and related Interpretations of the International Financial Reporting Interpretations Committee (IFRIC) and Interpretations
of the Standing Interpretations Committee (SIC). During the period, new IFRS and amendments to existing IFRS were issued by the International
Accounting Standards Board (IASB). The impact and, if applicable, the adoption of these standards is described below in “New Accounting Standards,
Amendments and Interpretations”.

No separate income statement is presented for the company, as permitted by section 408(3) of the Companies Act 2006. The company’s profit after
tax for the period was £24.3 million (2015: £22.9 million).

New Accounting Standards, Amendments and Interpretations
The group has adopted the following new accounting standard during the period.

IAS 19: Defined Benefit Plans: Employee Contributions (Amendments): clarifies the treatment of employee and third party contributions which are
independent of the number of years of service. The amendment was effective for the full period ended 28 March 2016 but has had no impact.

The group has also applied, for the first time, the Annual Improvements to IFRSs: 2010–2012 Cycle and 2011–2013 Cycle. These improvements did
not have any impact on the current period, prior period or expected to affect future periods.

The directors also intend to adopt the Standards, Amendments and Interpretations listed in the table below when they become effective. The directors
do not expect that adoption in future periods will have a material impact except the following:

IFRS 9: Financial instruments: replaces IAS 39 and introduces new requirements for classifying and measuring financial instruments. The standard
introduces a new hedge accounting model designed to be more closely aligned with how entities undertake risk management activities when hedging
financial and non-financial risk exposures. Early adoption is permitted. The group is yet to assess the full impact of the new standard.

IFRS 16: Leases: replaces IAS 17 and requires lessees to recognise a lease liability reflecting future lease payments and a right-of-use-asset in respect
of virtually all leases currently classified as operating leases. The balance sheet will affectively be ‘grossed up’ but with no impact to net assets at the
inception of each lease. The income statement impact will be a new interest charge and a decrease in the amount charged to operating costs. Early
adoption is permitted. The group is yet to assess the full impact of the new standard.

IAS 1

Disclosure Initiative (Amendment)

IAS 16 and IAS 38

Clarification of Acceptable Methods of Depreciation
and Amortisation (Amendments)

IAS 19

IAS 34

IFRS 5

IFRS 7

IFRS 15

IFRS 9

IFRS 16

Employee Benefits

Interim Financial Reporting

Non-Current Assets Held for Sale and Discontinued Operations

Financial Instruments: Disclosures

Revenue from Contracts with Customers

Financial Instruments

Leases

Effective date

1 January 2016

1 January 2018

1 January 2019

30
30

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Strategic report
Directors’ report
Financial statements
Shareholder information

3. SUMMARY OF S I GN I FI CA N T A C C OUNT ING POL ICI ES
The significant accounting policies adopted are set out below and, except as noted above, have been applied consistently in presenting the group and
parent company financial information.

(a) Basis of consolidation
The group’s financial statements consolidate the financial statements of Young & Co.’s Brewery, P.L.C. with the entities it controls, its subsidiaries and
a special purpose entity, drawn up to the period end. An investor controls an investee when it is exposed, or has rights, to variable returns from
its involvement with the investee and has the ability to affect those returns through its power over the investee. The special purpose entity is Ram
Brewery Trust II, an Employee Share Ownership Plan (ESOP) Trust.

The results of subsidiaries acquired or disposed of during the period are included in the group income statement from the effective date of
acquisition or up to the effective date of disposal, as appropriate.

The financial statements of the subsidiaries and special purpose entity are consolidated on a comparable period basis, using consistent accounting
policies. All inter company balances and transactions, including unrealised profits arising on them, are eliminated.

(b) The parent company’s investments in subsidiaries
In its separate financial statements, the parent company recognises its investments in its subsidiaries on the basis of the direct equity interest method.
Investments are therefore held at cost less provision for impairment. Income is recognised from these investments in relation to distributions received.

(c) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the group and the revenue can be reliably measured.

Revenue is measured at the fair value of the consideration received, excluding discounts, rebates and VAT.

The following criteria must also be met before revenue is recognised:

Sale of goods
Revenue from sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.

Rental income
Rental income arising from operating leases on properties is accounted for on a straight line basis over the lease term.

Interest income
Revenue is recognised as interest accrues (using the effective interest method).

(d) Exceptional items
Exceptional items are items which due to their material and non-recurring nature have been classified separately in order to draw them to the attention
of the reader of the financial statements. They are included in the adjustments that, in management’s judgement, are required in order to show more
accurately the business performance of the group in a consistent manner and to reflect how the business is managed and measured on a day to day basis.

(e) Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration
transferred and the amount of any non-controlling interest in the acquiree. The consideration transferred is measured at acquisition date fair value.
The non-controlling interest is measured as the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are expensed
and included in operating exceptional items.

Goodwill arising on acquisition represents the excess of the cost of acquisition over the fair value of the net identifiable assets acquired and liabilities
assumed at the date of acquisition. On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss
on disposal.

(f) Property and equipment
Properties, including land and buildings, and fixtures, fittings and equipment are held at fair value and are revalued by qualified valuers on a sufficiently regular
basis using open market values so that the carrying value of an asset does not differ significantly from its fair value at the balance sheet date. The valuation is
assessed on the basis of the highest and best use. When the necessary requirements have been met in respect of assets identified for disposal and revalued
immediately prior to transfer to non-current assets held for sale, the highest and best use for a market participant may reflect an alternative use for the asset.

Surpluses which arise from the revaluation exercise are included within other comprehensive income (in the revaluation reserve) unless they are reversing a
revaluation adjustment which has been recognised in the income statement previously. Where the revaluation exercise gives rise to a deficit, this is reflected
directly in other comprehensive income (in the revaluation reserve) to the extent that a surplus exists against the same asset. Any further decrease in value is
recognised in the income statement as an exceptional expense.

The carrying amount of an asset, less any residual value, is depreciated on a straight line basis over the asset’s useful life or lease term if shorter. The residual
value, useful life and depreciation method applied to each asset are reviewed annually. The group does not depreciate freehold land and the residual value of its
freehold and long leasehold buildings.

Useful lives:

Freehold and long leasehold buildings
Short leasehold buildings
Fixtures, fittings and equipment

50 years
Shorter of the estimated useful life and the lease term
3-10 years

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 (note 3(g)).

The gain arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount
of the asset, and is recognised in the income statement. Pub fixtures, fittings and equipment are treated as disposals in the period following
completion of their write down.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 31

NOTES TO THE FINANCIAL STATEMENTS

Continued

3 . S U M M A RY O F S I G N I F I C A N T AC C O U N T I N G P O L I C I E S (C O NTI N U E D)

(g) Impairment of assets
The carrying values of investments, property and equipment are reviewed for impairment if events or changes in circumstances indicate the carrying
value may not be recoverable. Goodwill is mandatorily assessed for impairment on an annual basis or more frequently if there are indications that the
carrying value may be impaired.

Impairment is assessed on the basis of either each individual asset, each individual cash generating unit (an individual pub), or, in the case of goodwill,
the group of cash generating units associated with it. For the purpose of impairment testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the group’s cash generating units (or groups of cash generating units) that are expected to benefit from the combination.

An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher
of an asset’s fair value less costs to sell and the value in use, and is determined for an individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets. Value in use is assessed by reference to the estimated future cash flows which are
discounted to present value using an appropriate pre-tax discount rate. Impairment losses are recognised in the income statement.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount,
but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised
for the asset in prior periods. A reversal of an impairment loss is recognised immediately in the group income statement unless the impairment loss relates
to goodwill in which case it is not reversed.

(h) Leases
(1) Where the group is the lessee

Assets held under finance leases, which transfer to the group substantially all the risks and benefits incidental to ownership of the leased item, are
capitalised at the inception of the lease, with a corresponding liability being recognised for the lower of the fair value of the leased asset and the present
value of the minimum lease payments.

Lease payments are apportioned between the reduction of the lease liability and finance charges in the income statement so as to achieve a constant
rate of interest on the remaining balance of the liability.

Leases where the lessor retains a significant portion of the risks and benefits of ownership of the asset are classified as operating leases and rentals
payable are charged in the income statement on a straight line basis over the lease term.

(2) Where the group is the lessor

Assets leased out under operating leases are included in property and equipment and depreciated over their estimated useful lives. Rental income,
including the effect of lease incentives, is recognised on a straight line basis over the lease term.

(i) Inventories
Inventories are valued at the lower of cost and net realisable value. Cost includes all costs of purchase, costs of conversion and other costs incurred
in bringing the inventories to their present location and condition. The cost formula used is equivalent to a ‘First in, First out’ method.

(j) Cash
Cash in the balance sheet comprises cash at banks and in hand. For the purpose of the group and parent company cash flow statements, cash is net
of outstanding bank overdrafts. Cash and cash equivalents include only deposits which mature in less than three months.

(k) Trade and other payables
Trade and other payables are recognised initially at fair value and subsequently at amortised cost. When applicable, trade and other payables are
analysed between current and non-current liabilities on the face of the balance sheet, depending on when the obligation to settle will crystallise.

(l) Interest bearing loans and borrowings
All loans and borrowings are recognised initially at fair value. Directly attributable transaction costs are capitalised and amortised over the life of the
facility using the effective interest method through finance expense.

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.

(m) Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.

The current tax payable is based on taxable profit for the period. Taxable profit differs from profit before tax as reported in the income statement
because the former excludes items of income or expense that are taxable or deductible in other years and also excludes items that are never taxable
or deductible. The group’s liability for current tax is calculated using UK tax rates that have been enacted under UK law and that are applicable to
the period.

The current tax expense is recognised in the income statement unless it relates to items that are credited or charged to equity, in which case it is
credited or charged directly to equity.

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

• where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination

and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss;

• in respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of the temporary differences

can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future; and

• deferred income tax assets are recognised only to the extent that it is probable that taxable profits will be available against which the deductible

temporary differences, carried forward tax credits or tax losses can be utilised.

32
32

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Strategic report
Directors’ report
Financial statements
Shareholder information

Where capital gains have been rolled over for tax purposes, a deferred tax liability is recorded on the rolled over gain to reflect the tax that may
be due on this amount at a future date.

Where there has been an upward revaluation of an asset and the asset is expected to be realised through disposal, a deferred tax liability is
recorded based on the difference between the indexed cost of the asset less any capital gains which have been rolled over against the asset
and the revalued amount.

Deferred tax is measured on an undiscounted basis at the UK tax rates that are expected to apply on reversal of the underlying temporary differences,
based on tax rates and laws enacted or substantively enacted at the balance sheet date.

(n) Accounting for the ESOP Trust
The capital gains tax liability that may arise on the allocated shares in the Ram Brewery Trust II when they are transferred to employees on retirement is
recognised as a provision in the financial statements under trade and other payables.

(o) Derivative financial instruments and hedging
The group uses derivative financial instruments such as interest rate swaps to hedge its risk associated with interest rate fluctuations. Derivative financial
instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair
value. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.

The fair value of interest rate swap contracts is determined by reference to market values for similar instruments.

For those derivatives designated as hedges and for which hedge accounting is desired, the hedging relationship is documented at its inception.
This documentation identifies the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how its effectiveness
will be measured throughout its duration. Such hedges are expected at inception to be highly effective.

Where cash flow hedge accounting is not applied, the movement in the fair value of the derivative is recognised immediately in the income statement.
Where cash flow hedge accounting is applied, as in the case of the interest rate swaps held by the group, the effective portion of the gain or loss on
the hedging instrument is recognised in the statement of comprehensive income, while the ineffective portion is recognised in the income statement.

If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked,
amounts previously recognised in equity remain in equity until the forecast transaction occurs, at which point they are immediately expensed. If the
related transaction is not expected to occur, the amount held in equity is immediately expensed.

(p) Pensions and other post retirement benefits
The company operates one defined benefit pension scheme, namely the Young & Co.’s Brewery, P.L.C. Pension Scheme, a defined contribution
pension scheme and a post retirement health care scheme.

Contributions to the defined contribution scheme are recognised in the income statement in the period in which they become due.

For the defined benefit scheme, the actuarial cost charged to the income statement in the period consists of the current service cost, net interest
on the net defined benefit liability or asset, past service cost and the impact of any settlements or curtailments.

Remeasurements of defined benefit pension and post retirement health care schemes are recognised in full in the statement of comprehensive
income in the period in which they occur.

The net defined benefit pension liability or asset in the balance sheet comprises the present value of the defined benefit obligations less the fair value
of scheme assets out of which the obligations are to be settled directly. Fair value is based on market price information and in the case of quoted
securities is the published bid price. The value of a net pension benefit asset is restricted to the sum of the present value of any amount the group
expects to recover by way of refunds from the scheme or reductions in the future contributions.

Post retirement health care benefits are provided for certain employees and certain directors. Entry to the scheme is on a discretionary basis. The
annual premium for providing cover is determined by BUPA. This information is taken by qualified actuaries who then assess the reserve required
to provide this benefit for participants’ future lifetimes, using IAS 19 assumptions. The liability for new entrants is recognised through the income
statement in the period in which the benefit is granted. Remeasurements of health care benefits are recognised in full directly in the statement of
comprehensive income.

(q) Trade and other receivables
Trade receivables are recognised and carried at the lower of their original invoice value and recoverable amount. A provision for impairment is
made when there is objective evidence (such as the probability of insolvency or significant financial difficulties of the debtor) that the group will
not be able to collect all of the amounts due under the original terms of the invoice. The carrying amount of the receivable is reduced through
use of an impairment provision. Impaired debts are derecognised when they are assessed as irrecoverable.

(r) Share based-payments
The group operates two types of share based payment arrangements: a senior management deferred bonus scheme (“DBS”) and a Save-As-You-
Earn (“SAYE”) scheme.

Under the DBS scheme directors and senior management are encouraged to receive bonus payments in the form of shares instead of cash.
Directors and senior management are encouraged to do this by being offered ‘Matching’ shares (see note 27). The ‘Matching’ shares constitute
shares with non-market performance based vesting conditions over three years. The group has used the "grant date model" as its valuation model
for recording the fair value of these equity instruments at the date when it was originally granted. The fair value of equity represents the market
value of the shares at grant date, less the nominal value which the employees will pay.

Under the SAYE scheme, eligible employees are allowed to purchase shares at a discount (see note 27). The group uses the “Black-Scholes model”
as its valuation model for valuing awards at fair value.

The fair value cost of both schemes is expensed to the income statement with a corresponding credit in equity on a straight line basis over the
vesting period. The cumulative expense also takes account the group’s estimate of the number of shares that will ultimately vest.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 33

NOTES TO THE FINANCIAL STATEMENTS

Continued

3. S UM MARY O F S I G N I F I CA N T AC C O U N TI N G PO L I C I E S (C O NTI N U E D)

(s) Use of estimates
The preparation of financial information in conformity with IFRS requires management to make certain judgements, estimates and assumptions
that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Although these estimates are based on
management’s best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised
and in any future period affected.

The areas involving a higher degree of judgement or complexity, or where the most sensitive estimates and assumptions are significant to the financial
statements, are set out in note 4.

4. K EY AC C O U N TI N G E S TI MAT E S AN D J U D G E M E NTS

The following are the key estimates and judgements that management have made in the process of applying the group’s accounting policies and that
have the most significant effect on the amounts presented in the financial statements.

(a) Valuation of property and equipment
The group is required to value property and equipment on a sufficiently regular basis using open market values to ensure the current carrying value
does not differ significantly from the fair value. The valuation, performed by qualified valuers, is based on market observations and estimates on the
selling price in an arms’ length transaction, and includes estimates of future income levels and trading potential for each pub, as well as taking into
account other factors such as location, tenure and current income levels. See note 17.

(b) Impairment of goodwill
The group considers annually whether goodwill has suffered any impairment in accordance with the accounting policy set out in note 3(g).
The recoverable amounts of cash generating units have been determined based on value in use calculations. This calculation requires the use
of estimates including growth rates, capital maintenance expenditure and pre-tax discount rates. See notes 3(g) and 16.

(c) Business combinations
When assets are acquired, management determines whether the assets form a business combination. A fair value exercise of both the consideration
and the net assets acquired is performed once it is determined that a business combination has taken place. If the fair value of the consideration is in
excess of the fair value of the net assets acquired, the difference is recognised as goodwill. If the opposite occurs, the difference is recognised in the
income statement. The group makes judgements and estimates in relation to the fair value of the consideration, the net assets acquired and whether
the purchase represents a business combination. See notes 3(e), 13, 16 and 17.

(d) Depreciation
Depreciation is provided so as to write down the assets to their residual values over the estimated useful lives. The selection of these residual values
and estimated lives requires the exercise of management’s judgement. See notes 3(f) and 17.

(e) Defined benefit pension obligations
Measurement of defined benefit pension obligations requires an estimate of future changes in salaries and inflation, as well as mortality rates, the
expected return on assets and the selection of a suitable discount rate. These have been determined on advice from an independent qualified actuary.
See notes 3(p) and 24.

(f) Taxation
The group reviews potential tax liabilities and benefits to assess the appropriate accounting treatment. Tax provisions are made if it is probable that
a liability will arise. Tax benefits are not recognised unless it is probable that they will be recovered. Assessing the outcome of uncertain tax positions
requires judgements to be made based on past experience and the current tax environment. See notes 3(m), 12 and 23.

34
34

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Strategic report
Directors’ report
Financial statements
Shareholder information

5. S EGMENTAL REPORTIN G
The group is organised into the reporting segments referred to below. These segments are based on the different resources and risks involved in the
running of the group. The executive board of the group internally reviews each reporting segment’s operating profit or loss before exceptional items for
the purpose of deciding on the allocation of resources and assessing performance.

The group has three operating segments: Young’s managed houses, Geronimo managed houses and the Ram Pub Company. Both Young’s and
Geronimo managed houses operate pubs. Revenue is derived from sales of drink, food and the provision of accommodation. Due to common economic
characteristics, similar product offerings and customers, the Young’s managed houses and Geronimo managed houses operating segments have been
reported below as a single reportable segment, managed houses. The Ram Pub Company consists of pubs owned or leased by the company and leased
or sub leased to third parties. Revenue is derived from rents payable by, and sales of drink made to, tenants. Unallocated relates to head office costs.

Total segment revenue is derived externally with no intersegment revenues between the segments in either period. The group’s revenue is derived
entirely from the UK.

Income statement

2016

Total segment revenue

Operating profit/(loss) before exceptional items
Operating exceptional items

Operating profit/(loss)

2015

Total segment revenue

Operating profit/(loss) before exceptional items
Operating exceptional items

Operating profit/(loss)

Managed
houses
£m

232.9

Ram Pub
Company
£m

Segments
total
£m

12.7

245.6

53.3
0.1

53.4

214.2

50.1
3.4

53.5

4.5
(1.2)

3.3

12.5

4.3
0.7

5.0

57.8
(1.1)

56.7

226.7

54.4
4.1

58.5

The following is a reconciliation of the operating profit to the profit before tax:

Unallocated

Total

£m

0.3

(16.8)
(1.0)

(17.8)

0.3

(17.0)
–

(17.0)

2016
£m

38.9
(5.3)
(0.3)

33.3

£m

245.9

41.0
(2.1)

38.9

227.0

37.4
4.1

41.5

2015
£m

41.5
(5.2)
(0.2)

36.1

Operating profit
Finance costs
Other finance charges

Profit before tax

Balance sheet

2016

Segment assets
Deferred tax assets
Cash

Total assets

Other segmental information
Depreciation
Additions to non-current assets
Net downwards movements in property valuation (note 17)

2015

Segment assets
Deferred tax assets
Cash

Total assets

Other segmental information
Depreciation
Additions to non-current assets
Net upward movements in property valuation (note 17)

Managed
houses
£m

625.8
–
–

625.8

(15.7)
41.9
0.5

581.3
–
–

581.3

(13.3)
48.5
3.5

Ram Pub
Company
£m

62.3
–
–

62.3

(1.4)
2.6
(1.0)

57.7
–
–

57.7

(1.2)
2.1
0.7

Segments
total
£m

688.1
–
–

688.1

(17.1)
44.5
(0.5)

639.0
–
–

639.0

(14.5)
50.6
4.2

Unallocated

Total

£m

7.3
6.2
13.2

26.7

(0.3)
0.6
–

7.4
7.7
0.2

15.3

(0.3)
0.3
–

£m

695.4
6.2
13.2

714.8

(17.4)
45.1
(0.5)

646.4
7.7
0.2

654.3

(14.8)
50.9
4.2

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 35

NOTES TO THE FINANCIAL STATEMENTS

Continued

6. R EV ENUE

Sales of goods
Rental income

Revenue

Revenue shown above is from continuing operations.

7. O PERATING COS TS BEFORE E XC EP TION AL IT EMS

Changes in inventories of finished goods and raw materials
Raw materials, consumables and finished goods used
Employment costs (note 8(a))
Depreciation (note 17)
Other operating costs

Other operating costs include:

Operating lease rentals:

minimum lease payments
sublease payments

Auditor’s remuneration to main group auditor: audit of the group financial statements

audit of subsidiaries’ accounts
audit related assurance services
taxation advisory services
all other services

8. EM PLO YMENT

(a) Costs and employee numbers

Wages and salaries
Social security
Pension and health care schemes

Employment costs before exceptional items

Employment costs in exceptional items: capital gains tax on ESOP Trust allocated shares
Share-based payments (note 27)

The average monthly number of employees was 3,735 (2015: 3,496).

36
36

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

2016
£m

231.6
14.3

245.9

2016
£m

0.1
61.8
76.1
17.4
49.5

2015
£m

214.0
13.0

227.0

2015
£m

(0.1)
58.7
71.3
14.8
44.9

204.9

189.6

5.8
0.6

6.4

0.2
–
–
–
–

0.2

2016
£m

69.8
5.0
1.3

76.1

–
0.5

76.6

5.5
0.6

6.1

0.2
–
–
–
–

0.2

2015
£m

65.1
5.1
1.1

71.3

0.2
0.2

71.7

Strategic report
Directors’ report
Financial statements
Shareholder information

8. E M PLOYM E NT ( C O NT I N U E D )

(b) Directors’ emoluments

Nicholas Bryan

Stephen Goodyear (iii)

Torquil Sligo–Young (iii)

Peter Whitehead (iii)

Patrick Dardis (iii), (vi)

Edward Turner (left 24 July 2015) (iii), (iv)

Roger Lambert

David Page (left 7 July 2015)

Rupert Clevely (left 27 April 2015) (v)

Trish Corzine

Total 2016

Total 2015

Basic salary
and fees
£

Benefits (i)
£

Bonus (ii), (vi)
£

Total
excluding
pension
costs
2016
£

87,432

321,198

129,072

234,779

245,040

57,463

39,825

10,722

2,929

39,063

–

18,947

28,148

5,907

2,218

3,311

–

618

–

87,432

267,501

607,646

125,667

282,887

179,366

420,052

226,720

473,978

–

60,774

39,825

10,722

3,547

39,063

Total
excluding
pension
costs
2015
£

85,300

623,254

269,153

431,050

428,250

315,745

39,253

48,363

8,764

1,167,523

59,149

799,254

2,025,926

1,304,773

74,268

909,344

2,288,385

(i) These relate primarily to the provision of private medical insurance and car-related benefits.

(ii) Bonuses were receivable by the executive directors in connection with performance targets set during the period. At the outset, it was agreed that if
any bonus were to be paid, half of it would be settled in shares, with the other half being paid in cash except to the extent that the director elected
to receive all or part of it in shares instead. The values of these parts of the bonus awards were capped at 100% of the directors’ basic annual
salaries (but for these purposes the basic annual salaries of certain directors were adjusted). For every share taken in place of cash, the director would
be allowed to subscribe at nominal value for one ‘matching’ share. Each of Stephen Goodyear, Torquil Sligo-Young, Peter Whitehead and Patrick
Dardis has elected to take his cash element in shares and is therefore entitled to subscribe for ‘matching’ shares. None of the directors are generally
free to sell any of the shares before the end of a restricted period which ordinarily will end three years after the shares have been acquired or, if
earlier, the date on which his employment terminates by reason of illness, disability or redundancy. The ‘matching’ shares are subject to satisfaction
of a further condition relating to the extent to which the group’s adjusted earnings per ordinary share in respect of the group’s continuing
operations for the financial period ending on or around 31 March 2019 exceeds the same measure for the financial period ended 30 March 2015.
Any of the shares acquired, whether ‘matching’ or otherwise, are liable to forfeiture in certain circumstances. The number of shares to be issued
to each director in order to fulfil his entitlement will be calculated with reference to the market price of the company’s A ordinary shares as shown
in the Financial Times (online version) published on the date on which the issue is made (which is expected to be mid-June 2016). The amounts
shown in the Bonus column reflect the cash value of the bonuses receivable by the directors, excluding the cash value of any ‘matching’ shares.
The cash value of the ‘matching’ shares to be awarded to Stephen Goodyear is £133,750 (2015: £143,658), to Torquil Sligo-Young is £62,833
(2015: £57,459), to Peter Whitehead is £89,683 (2015: £96,284) and to Patrick Dardis is £93,360 (2015: £nil).

(iii) Note 8(e) on page 38 sets out the gains made on the exercise of share options.

(iv) Ed Turner also received £226,337 by way of compensation for loss of office. Of this, £7,470 was paid into a defined contribution scheme operated

by the company and £3,000 was paid to the law firm that advised him in connection with the cessation of his directorship and employment.

(v) Rupert Clevely also received a further £326. This arose because Rupert’s non-executive director fee for the month of April 2015 was processed for
payment before he stepped down from the board on 27 April 2015, and both he and the company agreed that neither would insist on the notice
period under his letter of appointment having to be worked.

(vi) Included within the bonus total for Patrick Dardis is the sum of £40,000. This was an ex gratia payment falling outside of the bonus plan referred

to in (ii) and was in respect of the additional responsibility taken on by him following Ed Turner leaving the group.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 37

NOTES TO THE FINANCIAL STATEMENTS

Continued

8. E M PLOYM E NT ( C O NT I N U E D )

(c) Retirement benefits
Defined benefit pension scheme
The company operates a defined benefit pension scheme, namely the Young & Co.’s Brewery, P.L.C. Pension Scheme. All active members in this
pension scheme contribute to it, with contributions (for the year ended 28 March 2016) being at the rate of 5.0% of pensionable earnings. With effect
from 6 April 2016, member contribution rates were increased to 6% or 7% of pensionable earnings, dependent on each member’s accrual rate. This
pension scheme invests largely in managed funds.

As at 28 March 2016, only one director, Patrick Dardis, was accruing benefits under the defined benefit pension scheme in respect of qualifying
service. His pension entitlement (being that which would be paid annually on retirement under the terms of his service agreement based on service to
28 March 2016) is £43,582 (2015: £39,741) and his normal retirement date will be reached when he is 60. Net of member contributions, the value
of the increase in his accrued pension during the year to 28 March 2016 was £59,809 (2015: £42,710) – this value was calculated using appropriate
methodology prescribed under relevant legislation: for example, this included applying a factor of 20 to the increase in accrued pension over the year
(net of the required allowance for inflation). This method of valuation is different from using the scheme’s normal cash equivalent transfer value basis.

The company accounts for retirement benefits in accordance with IAS 19 and detailed disclosures covering this are set out in note 24.

As at 1 April 2015, defined benefit accrual had ceased for each of Stephen Goodyear, Torquil Sligo-Young and Peter Whitehead. Since the year end,
future pension accrual has also ceased for Patrick Dardis.

Defined contribution pension scheme
The company also operates a defined contribution pension scheme.

As at 28 March 2016, the three directors that stepped down during the year (i.e. Ed Turner, David Page and Rupert Clevely) were in such a scheme. For
the year ended 28 March 2016 the company paid contributions of £2,730 (2015: £7,290), £88 (2015: £335) and £28 (2015: £323) respectively into a
defined contribution pension arrangement for them in respect of qualifying service. An additional contribution of £7,470 was paid by the company in
respect of Ed Turner during the year (see note 8b(iv)) – this was not in respect of qualifying service and is not therefore included in the preceding figure.

Post retirement health care
In addition, the company bears the cost of post retirement health care premia for certain employees and ex-employees.

(d) Profit sharing schemes
Share allocations made up to and including those for the company’s financial period that ended on 2 April 2005, which were based on a member’s
individual entitlement after deductions of income tax and national insurance, are held in the Ram Brewery Trust II. On retirement, members receive
the market value of their accrued entitlement to shares, in the form of cash or shares as the company determines. If they leave the company’s
employment before reaching normal retirement age, they continue to receive the income accruing to them by virtue of their membership of the
scheme prior to them leaving, and their allocation to the date of leaving is held on their behalf until normal retirement age.

The accrued entitlement to A shares under the scheme of each of the directors who served during the period is as follows (and there is no further
accrual): Stephen Goodyear (22,680), Torquil Sligo-Young (31,412), Peter Whitehead (20,816) and Patrick Dardis (6,696). None of the other directors
who served during the period have an accrued entitlement under the scheme.

(e) Savings-related share option scheme
The company operates a savings-related share option scheme. From year to year eligible employees of the group are invited to join the scheme and
be granted options to buy shares in the company. Employees must normally have been employed throughout the two years preceding the financial
year in which they are invited to join, and they must agree to save a fixed monthly amount with a savings institution through deductions from net
salary and usually over a three-year period. The amount to be saved determines the number of shares over which an option is granted. If the board
chooses, options are granted at a discount of up to 20% of the market price of a share at the time invitations are sent out to join the scheme for that
year. There are no performance conditions other than continued employment.

The entitlement to A shares under the scheme of each of the directors who served during the period is as follows:

Stephen Goodyear

Torquil Sligo-Young

Peter Whitehead

Patrick Dardis

Edward Turner (iii)

At 30
March
2015

1,844
1,071
–
1,844
1,071
1,844
1,071
1,844
1,071
–
1,844
1,071
–

Granted

Exercised

Lapsed

–
–
888
–
–
–
–
–
–
888
–
–
888

(1,844)
–
–
(1,844)
–
(1,844)
–
(1,844)
–
–
(1,844)
(505)
(123)

–
–
–
–
–
–
–
–
–
–
–
(566)
(765)

At 28
March
2016

–
1,071
888
–
1,071
–
1,071
–
1,071
888
–
–
–

Exercise
price
(pence per
share) (i)

488
840
1,013
488
840
488
840
488
840
1,013
488
840
1,013

Exercisable
from

01.09.15
01.09.17
01.09.18
01.09.15
01.09.17
01.09.15
01.09.17
01.09.15
01.09.17
01.09.18
01.09.15
01.09.17
01.09.18

Exercisable
to

28.02.16
28.02.18
28.02.19
28.02.16
28.02.18
28.02.16
28.02.18
28.02.16
28.02.18
28.02.19
28.02.16
28.02.18
28.02.19

Gains made
on exercise
of share
options (£)
(ii)

13,037
–
–
13,037
–
13,037
–
13,037
–
–
13,056
1,389
125

38
38

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Strategic report
Directors’ report
Financial statements
Shareholder information

Notes:
(i) The exercise prices are at a discount of not more than 20% to the market price of an A share at the time invitations to join the scheme

were issued.

(ii) The figures appearing in the Gains made on exercise of share options column are calculated by taking the difference between the exercise price

and the market price of an A share on the day the option was exercised, and then multiplying that by the number of A shares in respect of which
the option was exercised.

(iii) After he left the company Edward Turner continued to save privately under the scheme. He then bought a reduced number of shares within six

months of leaving. This was allowed per the scheme’s early leaver provisions.

The exercise prices of 488 pence per share, 840 pence per share and 1,013 pence per share represent a discount of not more than 20% to the
market price of an A share at the time the relevant invitations to join the scheme were issued, being 610 pence per share, 1,050 pence per share and
1,265.5 pence per share respectively.

9. EXC E PT I O NAL ITE M S

Amounts included in operating profit:
Upward movement on the revaluation of properties(1) (note 17)
Downward movement on the revaluation of properties(1) (note 17)
Acquisition costs(2)
Net profit on sale of properties(3)
Restructuring costs(4)
Goodwill impairment(5)
Capital gains tax on ESOP Trust allocated shares(6)
Pension settlement gain(7)

Exceptional tax:
Tax attributable to above adjustments
Change in corporation tax rate

Total exceptional items after tax

2016
£m

2015
£m

2.8
(3.3)
(0.4)
0.1
(1.0)
(0.3)
–
–

(2.1)

(0.6)
2.0

1.4

(0.7)

6.4
(2.2)
(1.0)
0.9
–
–
(0.2)
0.2

4.1

(1.9)
–

(1.9)

2.2

(1) The movement on the revaluation of properties is a non-cash item that relates to the revaluation exercise that was completed during the period.
The revaluation was conducted at an individual pub level and identified an upward movement of £2.8 million (2015: £6.4 million) representing
reversals of previous impairments recognised in the income statement and a downward movement of £3.3 million (2015: £2.2 million)
representing downward movements in excess of amounts recognised in equity. These resulted in a net downward movement of £0.5 million
(2015: £4.2 million net upward) which has been taken to the income statement. The downward movement for the period ended 28 March 2016
was split between land and buildings of £0.2 million downwards (2015: £4.5 million upward) and fixtures and fittings of £0.3 million downwards
(2015: £0.3 million downward). See note 5 for segmental information.

(2) The acquisition costs relate to the purchases of the Canonbury (Islington) and the Old Brewery (Greenwich). They include legal and professional fees
and stamp duty. The prior period acquisition costs related to the purchase of the Bull & Gate (Kentish Town), Fox & Anchor (Smithfield Market) and
the White Bear (Kennington).

(3) The profit on sale of properties relates to the difference between the cash, less selling costs, received from the sale or lease termination of the Seven
Stars (Brighton), New Town (Sutton) and Sekforde Arms (Clerkenwell) and the carrying value of the assets on the date of sale. In the prior period,
sales of properties include the Elephant (City of London), Tin Goose (Heathrow Airport), Tamworth Arms (Croydon) and the Bunch of Grapes
(Bradford upon Avon).

(4) Restructuring costs relate to a reorganisation of the group’s head office functions. These are largely made up of severance costs and consultancy fees.

(5) The goodwill impairment is a non-cash item and relates to the Lord Palmerston (Tufnell Park) which was transferred out of the Geronimo group of

cash generating units (which are pubs under the Geronimo concept) and falls within the Geronimo managed houses segment.

(6) In the prior period, the capital gains tax on ESOP Trust allocated shares relating to shares held within the Ram Brewery Trust II on behalf of the

closed profit sharing scheme was recognised within exceptional items. This charge is now reflected within operating costs.

(7) The pension settlement gain, in the prior period, related to members who have left the scheme. There was no such settlement gain in the current period.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 39

NOTES TO THE FINANCIAL STATEMENTS

Continued

10. OT H E R F I NAN C IAL M EAS U R E S

The table below shows how adjusted group EBITDA, operating profit and profit before tax have been arrived at. These alternative performance
measures have been provided as the board believes that they give useful additional measures of the group’s underlying performance. Details of the
exceptional items can be seen in note 9. All the results below are from continuing operations.

2016

Exceptional
items
£m

Unadjusted
£m

56.8

(17.9)

38.9
(5.3)
(0.3)

33.3

1.6

0.5

2.1
–
–

2.1

Adjusted
£m

Unadjusted
£m

58.4

52.1

(17.4)

(10.6)

41.0
(5.3)
(0.3)

35.4

41.5
(5.2)
(0.2)

36.1

EBITDA
Depreciation and net movement on
the revaluation of properties

Operating profit
Net finance costs
Other finance charges

Profit before tax

11 . FINANCE COSTS

Bank loans and overdrafts
Finance lease interest

12 . TAXATI ON

Tax charged in the group income statement

Current tax

Current tax expense
Adjustment in respect of current tax of prior periods

Deferred tax
Origination and reversal of temporary differences
Change in corporation tax rate
Adjustment in respect of deferred tax of prior periods

Tax expense

Deferred tax in the group income statement
Property revaluation and disposals
Capital allowances
Retirement benefit schemes
Share based payments

Tax (credit)/expense

Deferred tax in the group statement of comprehensive income

Property revaluation and disposals
Retirement benefit schemes
Interest rate swaps
Change in corporation tax rate

Tax expense

40
40

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

2015

Exceptional
items
£m

Adjusted
£m

0.1

(4.2)

(4.1)
–
–

(4.1)

2016
£m

5.2
0.1

5.3

2016
£m

7.1
(0.1)

7.0

1.9
(2.0)
(0.7)

(0.8)

6.2

(0.6)
(0.1)
0.2
(0.3)

(0.8)

2.4
0.9
–
(3.3)

–

52.2

(14.8)

37.4
(5.2)
(0.2)

32.0

2015
£m

5.1
0.1

5.2

2015
£m

7.6
0.3

7.9

1.6
–
(0.1)

1.5

9.4

1.8
(0.3)
0.2
(0.2)

1.5

2.5
(1.8)
(0.7)
–

–

Strategic report
Directors’ report
Financial statements
Shareholder information

A reconciliation of the tax expense applicable to the profit from operating activities before tax at the statutory rate to the actual tax expense at the
group’s effective tax rate for the periods ended 28 March 2016 and 30 March 2015 respectively is as follows:

Profit before tax

Total profit before tax at corporation tax rate of 20% (2015: 21%)
Tax effects of:

Expenses not deductible for tax purposes
Recognition of property revaluation, rollover claim and other property movements

Non-assessable income

Remeasurement of deferred tax – change in corporation tax rate
Prior period adjustment – current tax
Prior period adjustment – deferred tax

Total tax expense

2016
£m

33.3

6.7

0.5
1.7
0.1
(2.0)
(0.1)
(0.7)

6.2

2015
£m

36.1

7.6

0.7
1.8
(0.9)
–
0.3
(0.1)

9.4

Changes to the UK corporation tax rate from 20% to 19% (effective from 1 April 2017) and then to 18% (effective 1 April 2020), were substantively
enacted into law on 26 October 2015. It is not expected that deferred tax balances will be realised or settled between 1 April 2017 and 1 April 2020;
therefore the 19% rate has not been applied. Consequently, the deferred tax balances have been remeasured from 20% to 18%.

13. BUSINESS COMBINATIONS

The group and company acquired the Canonbury (Islington) and the Old Brewery (Greenwich) as business combinations in the current period for
considerations totalling £3.5 million. The aggregated fair value of the identifiable assets and liabilities of the acquired businesses was property and
equipment of £3.5 million and inventories of £nil. The group incurred £0.4 million of costs associated with the acquisitions, which have been recorded
as operating exceptional items.

Between the date of acquisition and the balance sheet date, the Canonbury and Old Brewery contributed £1.4 million of revenue and £0.1 million of
operating loss. If the acquisitions of the two pubs had been completed on 31 March 2015, group revenues for the period would have increased by
£1.9 million and the group operating profit would have increased by £0.4 million.

Prior period business combinations

580 Group
On 16 October 2014 the group acquired the entire issued share capital of 580 Limited for consideration of £10.4 million on a debt and working capital
free basis. 580 Limited, through its four subsidiaries, owned and operated four pubs in prime London locations: the Defector’s Weld (Shepherds Bush),
John Salt (Islington), Owl and Pussycat (Shoreditch) and the Fellow (King’s Cross). The transaction was part of our strategy of adding carefully selected
high-quality managed houses to our Young’s and Geronimo estates.

The fair value of the identifiable assets and liabilities of the acquired business at the date of acquisition was as follows:

Assets and liabilities acquired:
Property and equipment
Inventories
Cash
Trade and other receivables
Overdrafts and loans
Trade and other payables
Deferred taxation on fair value adjustments

Net assets
Goodwill arising on acquisition (note 16)

Total consideration for share capital

Cash flow on acquisition:
Cash acquired
Overdrafts and loans acquired and repaid
Net working capital acquired and repaid
Cash paid for share capital

Net cash outflow

Fair
value
£m

10.4
0.1
0.8
0.1
(3.6)
(0.8)
(0.9)

6.1
0.9

7.0

0.8
(3.6)
(0.6)
(7.0)

(10.4)

In addition, the group incurred £0.5 million of costs associated with the acquisition, paid in cash, which have been recorded as an operating
exceptional item in the prior period.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 41

NOTES TO THE FINANCIAL STATEMENTS

Continued

13. B U S I N E S S C O M B I NATI O N S (C O NT I N U E D)

The Bell at Stow Limited
On 7 January 2015 the group acquired the entire issued share capital of The Bell at Stow Limited for consideration of £1.5 million on a debt and
working capital free basis. The Bell at Stow owned and operated a pub and hotel in the Cotswolds which, together with the newly acquired and
adjacent Stuart House (see below), added a further 13 high quality boutique hotel rooms to the Young’s estate.

The fair value of the identifiable assets and liabilities of the acquired business at the date of acquisition was as follows:

Assets and liabilities acquired:
Property and equipment
Trade and other receivables
Overdrafts and loans
Trade and other payables
Deferred taxation on fair value adjustments

Net assets
Goodwill arising on acquisition (note 16)

Total consideration for share capital

Cash flow on acquisition:
Cash acquired
Overdrafts and loans acquired and repaid
Net working capital acquired and repaid
Cash paid for share capital

Net cash outflow

Fair
value
£m

1.5
0.1
(0.4)
(0.3)
(0.2)

0.7
0.2

0.9

–
(0.4)
(0.2)
(0.9)

(1.5)

In addition, the group incurred £0.1 million of costs associated with the acquisition, paid in cash, which have been recorded as an operating
exceptional item in the prior period.

The goodwill that arose on the acquisitions of 580 Limited and The Bell at Stow Limited included deferred taxation of £0.9 million and £0.2 million
respectively, which arose on the fair value adjustment of property and equipment. None of the goodwill was deductible for income tax purposes.

In the prior period, between the date of acquisition and the balance sheet date, the 580 Group and the Bell at Stow Limited contributed £3.2 million
of revenue and £0.7 million of operating profit. If the acquisitions of the 580 Group and the Bell at Stow Limited had been completed on 1 April
2014, group revenues for the prior period would have increased by £4.2 million and the group operating profit would have increased by £0.7 million.

Cash flow from business combinations

580 Group
The Bell at Stow Limited
Other business combinations

Total net cash outflow

2016
£m

–
–
(3.5)

(3.5)

2015
£m

(10.4)
(1.5)
(6.6)

(18.5)

42
42

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Strategic report
Directors’ report
Financial statements
Shareholder information

14. D I VI D E N D S O N E Q U I T Y S H AR E S

Final dividend (previous period)
Interim dividend (current period)

2016
Pence

8.56
8.38

2015
Pence

8.07
7.90

16.94

15.97

2016
£m

4.1
4.1

8.2

2015
£m

3.9
3.8

7.7

In addition, the Board is proposing a final dividend in respect of the period ended 28 March 2016 of 9.07 pence per share at a cost of £4.4 million.
If approved, it is expected to be paid on 7 July 2016 to shareholders who are on the register of members at the close of business on 10 June 2016.

15. EARNING S PER OR DINAR Y S HARE

(a) Earnings

Profit attributable to equity shareholders of the parent
Operating exceptional items
Tax attributable to above adjustments
Change in corporation tax rate

Adjusted earnings after tax

Basic weighted average number of ordinary shares in issue
Dilutive potential ordinary shares from outstanding employee share options

Diluted weighted average number of shares

(b) Basic earnings per share

Basic
Effect of exceptional items and other adjustments

Adjusted basic

Diluted
Effect of exceptional items and other adjustments

Adjusted diluted

2016
£m

27.1
2.1
0.6
(2.0)

27.8

2015
£m

26.7
(4.1)
1.9
–

24.5

Number

48,598,203
26,324

48,397,275
69,303

48,624,527

48,466,578

Pence

55.76
1.44

57.20

Pence

55.73
1.44

57.17

Pence

55.17
(4.55)

50.62

Pence

55.09
(4.54)

50.55

The basic earnings per share figure is calculated by dividing the profit attributable to equity shareholders of the parent for the period by the
weighted average number of ordinary shares in issue during the period.

Diluted earnings per share have been calculated on a similar basis taking into account 26,324 (2015: 69,303) dilutive potential shares under the
SAYE scheme (see notes 8(e) and 27).

Adjusted earnings per share are presented to eliminate the effect of the exceptional items and the tax attributable to those items on basic and
diluted earnings per share.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 43

NOTES TO THE FINANCIAL STATEMENTS

Continued

16. G O O DW I LL

2016

Geronimo

The Bell at Stow Limited

580 Limited

2015

Geronimo

The Bell at Stow Limited

580 Limited

Group

At 30 March

2015 Acquisitions
£m

£m

Disposal
£m

At 28 March
2016
£m

19.8

0.2

0.9

20.9

–

(0.3)

–

(0.3)

19.5

0.2

0.9

20.6

At 31 March
2014
£m

Acquisitions
£m

At 30 March
2015
£m

Disposal
£m

20.4

–

20.4

–

0.2

0.9

1.1

(0.6)

–

(0.6)

19.8

0.2

0.9

20.9

The opening goodwill of £20.9 million arose on the acquisition of Geronimo Group Limited and the prior period acquisitions of 580 Limited and The
Bell at Stow Limited. The goodwill was allocated for impairment testing purposes to the Geronimo group, the individual pubs within the 580 Group
and the Bell at Stow respectively; these are the cash generating units. The Geronimo group of cash generating units is the pubs trading under the
Geronimo concept. All three cash generating units fall within the managed houses segment.

During the current period the Lord Palmerston transferred out of the Geronimo group and the managed houses segment and into our Ram Pub
Company segment. The relative value of the goodwill associated with the Lord Palmerston, £0.3 million, has been expensed through exceptional items.

The group tests goodwill annually for impairment or more frequently if there are indicators that goodwill may have been impaired.

There will be an impairment if the recoverable amount is lower than carrying value. Recoverable amount is value in use. The value in use is calculated
using the three year business plan approved by the Board. Cash flows beyond this period assume 2.0% growth (2015: 2.0%) which is below the
industry long-term average growth rate. The pre-tax discount rate applied to cash flow projections is 8.7% (2015: 9.1%). The calculation is most
sensitive to revenue assumptions and the pre-tax discount rate, however the Board believes that the assumptions used are reasonable. The Board has
conducted a sensitivity analysis on the impairment test and neither a 10% decline in cash flow nor a 1% increase in the discount rate would lead to
the impairment of the goodwill in the period ended 28 March 2016 and is therefore comfortable that presently no reasonably possible change in key
assumptions would give rise to an impairment.

44
44

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

17. PR OPER TY AND EQUIPME N T

Group

Fixtures,
fittings &
equipment
£m

Land &
buildings
£m

Cost or valuation
At 31 March 2014
Additions
Business combinations
Disposals
Fully depreciated assets
Revaluation(1)
– effect of upward movement
in property valuation
– effect of downward movement
in property valuation

At 30 March 2015
Additions
Business combinations
Disposals
Fully depreciated assets
Revaluation(1)
– effect of upward movement
in property valuation
– effect of downward movement
in property valuation

562.6
10.7
17.0
(2.0)
(0.8)

24.9

(5.3)

607.1
16.6
2.3
(4.2)
–

29.3

(5.5)

93.4
21.7
1.5
(0.1)
(9.7)

–

106.8
25.0
1.2
(1.5)
(12.7)

–

Total
£m

656.0
32.4
18.5
(2.1)
(10.5)

24.9

(5.3)

713.9
41.6
3.5
(5.7)
(12.7)

29.3

(5.5)

Strategic report
Directors’ report
Financial statements
Shareholder information

Company

Fixtures,
fittings &
equipment
£m

Land &
buildings
£m

503.4
11.7
5.4
(2.0)
–

22.7

(5.1)

536.1
18.0
2.3
(4.1)
–

27.5

(4.4)

83.4
18.4
1.2
(0.1)
(9.2)

–

93.7
20.8
1.2
(1.1)
(10.1)

–

Total
£m

586.8
30.1
6.6
(2.1)
(9.2)

22.7

(5.1)

629.8
38.8
3.5
(5.2)
(10.1)

27.5

(4.4)

At 28 March 2016

645.6

118.8

764.4

575.4

104.5

679.9

Depreciation and impairment
At 31 March 2014
Depreciation charge
Disposals
Fully depreciated assets
Revaluation(1)
– effect of downward movement
in property valuation
– effect of upward movement
in property valuation

At 30 March 2015
Depreciation charge
Disposals
Fully depreciated assets
Transfers
Revaluation(1)
– effect of downward movement
in property valuation
– effect of upward movement
in property valuation

46.8
2.3
(0.2)
(0.8)

1.9

(6.4)

43.6
2.5
(0.9)
–
(1.0)

3.0

(2.8)

50.0
12.5
(0.1)
(9.7)

0.3

–

53.0
14.9
(1.3)
(12.7)
–

0.3

–

96.8
14.8
(0.3)
(10.5)

2.2

(6.4)

96.6
17.4
(2.2)
(12.7)
(1.0)

3.3

(2.8)

40.1
1.3
(0.2)
–

1.3

(5.6)

36.9
1.6
(0.8)
–
(1.0)

2.5

(2.3)

45.0
10.9
(0.1)
(9.2)

–

46.6
13.0
(1.0)
(10.1)
–

0.1

–

85.1
12.2
(0.3)
(9.2)

1.3

(5.6)

83.5
14.6
(1.8)
(10.1)
(1.0)

2.6

(2.3)

At 28 March 2016

44.4

54.2

98.6

36.9

48.6

85.5

Net book value

At 31 March 2014

At 30 March 2015

515.8

563.5

43.4

53.8

559.2

617.3

463.3

499.2

38.4

47.1

501.7

546.3

At 28 March 2016

601.2

64.6

665.8

538.5

55.9

594.4

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 45

NOTES TO THE FINANCIAL STATEMENTS

Continued

17. PR OPER TY AND EQUIPME N T (C O NTI N U E D)

(1) The group’s net book value uplift due to revaluation of £23.3 million (2015: £23.8 million) comprises a net upward movement of £23.8 million
(2015: £19.6 million) shown in the statements of comprehensive income plus a net downward revaluation of £0.5 million (2015: £4.2 million
reversal of downward revaluation) in the income statement. The company’s net book value uplift due to revaluation of £22.7 million (2015:
£21.9 million) comprises an upward movement of £23.1 million (2015: £17.6 million) shown in the statements of comprehensive income plus
downward revaluations of £0.3 million (2015: £4.3 million reversal of downward revaluation) in the income statement.

(a) Revaluation of property and equipment
On an annual basis, a portion of the group’s property estate is valued externally by CBRE Ltd, independent Chartered Surveyors, in accordance
with the provisions of the RICS Valuation – Professional Standards January 2014 (Revised April 2015) (‘the Red Book’), which takes account of the
properties’ highest and best value. The remaining portion of the estate is valued internally, based upon the information supplied by the group’s
external valuers and by Andrew Cox MRICS, the group’s director of property and tenancies and a Chartered Surveyor.

The valuation is based on information, such as current and historic levels of turnover, gross profit, wages and overheads and resultant EBITDA.
The valuers have then applied a multiplier to the EBITDA based upon the relative risks associated with the trading format, tenure and property.
In a number of cases the value of the property derived purely from an income approach understates the underlying property value. In these
cases the valuers have applied a spot value to the property rather than a value derived from a multiple applied to the income. EBITDA represents
a key unobservable input. In addition, the valuation was based on the valuer’s assumptions and models. Each individual pub is valued as a fully
equipped operational entity after taking into account its trading potential, location, tenure, size and condition and other factors such as recent market
transactions. Changes in these variables and assumptions could materially impact the valuations.

The external valuations made are consistent and in support with the values derived by Andrew Cox. These valuations and the assumptions used are
reviewed by the Board and the auditor. The highest and best use of the group’s properties do not differ materially from their current use.

These techniques are consistent with the principles in IFRS 13 Fair Value Measurement and use significant unobservable inputs such that the fair
value measurement of each property within the portfolio has been classified as Level 3 in the fair value hierarchy.

The key inputs to valuation on property and equipment are as follows:

Tenure

Freehold and long leasehold
Leasehold
Concession
Freehold and long leasehold
Leasehold

EBITDA
multiple range
High

Low

6.0
1.3
Spot
6.0
1.5

12.0
4.0
Spot
10.0
3.0

Freehold and long leasehold
Leasehold
Concession
Freehold and long leasehold
Leasehold

6.0
1.5
Spot
6.0
2.0

12.0
3.5
Spot
9.5
3.0

Segment
2016

Managed houses
Managed houses
Managed houses
Ram Pub Company
Ram Pub Company

Segment total
Unallocated

Total net book value at 28 March 2016

2015

Managed houses
Managed houses
Managed houses
Ram Pub Company
Ram Pub Company

Segment total
Unallocated

Total net book value at 30 March 2015

Number
of pubs

137
31
3
70
10

251
–

251

139
28
3
69
11

250
–

250

Value
of pubs
£m

566.6
30.5
0.1
59.5
1.2

657.9
7.9

665.8

531.3
22.1
0.3
55.8
0.2

609.7
7.6

617.3

In addition to the 3 concessions held at spot rate, 27 (2015: 25) freehold and leasehold properties in the managed houses segment and 33 (2015: 33)
leasehold properties within the Ram Pub Company segment are held at spot value.

If, at 28 March 2016, the property estate had been carried at historic cost less accumulated depreciation and impairment losses, its carrying amount
would have been approximately £419.5 million (2015: £393.7 million).

The revaluation surplus represents the amount by which the fair value of the estate exceeds its historic cost.

A sensitivity analysis has been conducted on the property estate to give an indication of the impact of movements in the most sensitive assumption,
EBITDA. The analysis considers this single change with the other assumptions unchanged. In practice changes in one assumption may be
accompanied by changes in another. Changes in market values may also occur at the same time as any changes in assumptions. This information
should not be taken as a projection of likely future valuation movements. Decreasing the EBITDA used in the revaluation by 10% would decrease the
valuation by £53.2 million (2015: £50.0 million). Increasing the EBITDA used in the revaluation by 10% would increase the valuation by £53.2 million
(2015: £50.0 million).

46
46

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

(b) Assets held under finance leases

The net book value of assets held under finance leases was:

Land and buildings held under finance leases

Capital commitments not provided for in these financial statements and
for which contracts have been placed amounted to:

18. INVEST MENTS I N S UBS ID I A RI E S

Cost and net book value

At 31 March 2014
Additions

At 30 March 2015
Additions

At 28 March 2016

Group subsidiary undertakings

Geronimo Inns Limited
Geronimo Airports Limited
580 Limited
587 Limited (1)
588 Limited (1)
591 Limited (2)
592 Limited (1)
The Bell at Stow Limited (1)

Strategic report
Directors’ report
Financial statements
Shareholder information

2016
£m

29.9

2015
£m

28.7

9.5

10.6

Company

£m

24.3
7.0

31.3
–

31.3

Country of
incorporation
and registration

Country of
principal
operations

% of
equity and
votes held

England
England
England
England
England
England
England
England

100
100
100
100
100
100
100
100

During the period, each of the following companies successfully applied to be struck off and dissolved, namely 587 Limited, 588 Limited, 591 Limited,
592 Limited and The Bell at Stow Limited. Prior to that, each of these entities was directly or indirectly a 100% subsidiary of the company.

(1) An application has been made to strike off and dissolve these companies. The strike off was effective from 5 April 2016.

(2) An application has been made to strike off and dissolve 591 Limited. The effective date remains pending at year end.

19. INVENT ORI ES

Finished goods and raw materials

Group

Company

2016

2015

2016

£m

2.6

£m

2.7

£m

1.9

2015

£m

2.0

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 47

NOTES TO THE FINANCIAL STATEMENTS

Continued

20. T R AD E AN D OTH E R R E C E I VAB LE S

Trade receivables

Other receivables

Prepayments and accrued income

Amounts due from subsidiaries

Group

Company

2016

£m

2.6

0.5

3.3

–

6.4

2015

£m

1.8

0.5

3.2

–

5.5

2016

2015

£m

2.1

0.4

2.5

23.8

28.8

£m

1.7

0.3

2.5

23.1

27.6

Trade receivables are denominated in sterling, are non-interest bearing and are generally on 0-20 days’ terms. The above carrying values are shown
net of a provision for impairment and equate to fair value.

At 28 March 2016, trade receivables with a nominal value of £0.8 million (2015: £0.7 million) were impaired and fully provided for.

Movements in the provision for impairment of receivables were as follows:

2016

2015

Opening balance

Charge for period

Amounts written off

£m

0.7

0.2

(0.1)

0.8

The amounts written off in the period were specific debts which proved irrecoverable.

The analysis of trade receivables at 28 March 2016 is as follows:

Neither

past due

Total

nor impaired

£m

2.6

1.8

£m

1.6

0.6

<31

days

£m

0.5

0.4

31-60

days

£m

0.4

0.6

61-90

days

£m

0.1

2016

2015

£m

0.7

0.2

(0.2)

0.7

91+

days

£m

–

0.1

Of the trade receivables that are neither past due nor impaired by value, 10.3% (2015: 7.8%) reflects new customers with no previous history of
default, 45.3% (2015: 51.0%) represents existing customers with no history of default and 44.4% (2015: 41.2%) represents existing customers
with some history of default.

21. TR AD E AN D OTH E R PAYA B LE S

Trade payables

Other related parties: Ram Brewery Trust II

Other tax and social security

Other creditors

Accruals and deferred income

Amounts due to subsidiaries

Group

Company

2016

£m

14.7

–

7.9

7.3

5.6

–

2015

£m

12.1

–

6.2

6.7

4.2

–

2016

£m

14.6

–

7.5

6.6

5.0

4.5

2015

£m

11.7

0.2

6.0

6.2

3.8

–

35.5

29.2

38.2

27.9

All trade payables are payable on demand and the carrying values above equate to fair value.

Other creditors mainly consist of employee and property related creditors.

48
48

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Strategic report
Directors’ report
Financial statements
Shareholder information

22. CAPIT AL MAN AG EMEN T A N D FIN AN CIAL INST RUME NT S

The group’s capital management objective is to maintain an optimal structure, measuring investment opportunities against returning capital to
shareholders, but with an appropriate level of gearing. This provides a platform from which the group can seek to maximise shareholder value. The
Board monitors its capital using gearing ratios, such as net debt as a multiple of EBITDA and interest cover. The group finances the business with a
mixture of equity (note 26) and debt (note 28).

The group’s principal treasury objective is to manage financial risks and provide secure and competitively priced funding for the group’s activities.
When appropriate, the group uses financial instruments and derivatives to manage these risks.

The borrowing requirements are met largely by bank debt and, to a very small extent, finance leases. Other sources of funding arise directly from
trading activities, such as trade and other payables.

The main financial risks relate to interest rates, credit, liquidity and cash flow. Other risks that the group faces are referred to in the principal risks and
uncertainty section starting on page 8. The Board seeks to manage the financial risks in the following manner:

Interest rate risk

The objective is to minimise the group’s interest cost and provide protection from adverse movements in interest rates. The Board does this by
maintaining a mix of debt at fixed and variable interest rates. Interest rate swaps are used to help manage this exposure by fixing interest rates whilst
matching the maturity profile and cash flows of the underlying debt. These swaps are designated as cash flow hedges.

The following table demonstrates the sensitivity of the group’s profit before tax to a change in interest rates, with all other variables held constant.

2016

2015

Increase/
decrease
in %

Effect on profit
before tax
£m

+1.0
–0.5

(0.300)
0.150

(0.490)
0.245

Credit risk

The objective is to minimise the group’s credit risk. Credit risks include counterparties defaulting on their debts or other obligations which would impair
the group’s ability to recover the carrying value of that asset. The group has financial control policies which it follows before entering into arrangements
with a new counterparty or when there is a substantial change in the existing relationship. Any potential impairments are monitored and, where
appropriate, provision is made for any irrecoverable balances. The company is not considered to have any exposure to credit risk from amounts due
from subsidiaries.

Liquidity and cash flow risk

The objective is to ensure that the group has sufficient financial resources to develop its existing business and exploit opportunities as they arise. The
Board manages liquidity risk by ensuring that the group’s debt profile is long dated, facilities are committed and the group does not rely unduly on
short term borrowings. The group’s borrowings are dependent on certain financial covenants being met. If these were breached, funding could be
withdrawn, leaving the group with insufficient working capital and if the group were unable to find other alternative sources of funding it may not be
possible to continue trading in its current form. The Board is vigilant in managing the business, assessing and monitoring acquisitions and investments,
and forecasting the group’s profit and cash flows. The funding position of the group is continuously reviewed against the headroom in the group’s
borrowing facilities.

(a) Derivative financial instruments: interest rate swaps

Current liabilities

Non-current liabilities

Total financial liability

Group and company

2016

£m

(3.1)

(9.0)

(12.1)

2015

£m

(2.5)

(9.5)

(12.0)

Fair value movement of interest rate swaps

–

(3.6)

The group has a number of interest rate swaps that fix future interest cash flows on the variable interest rate bank loans. These instruments result in
the group paying fixed interest rates on the notional amount for each swap’s life. The swaps are being used to hedge the exposure to changes in the
group’s cash flows on its variable rate loans due to changes in LIBOR. The secured loans and the interest rate swaps have the same critical terms over
their relevant period.

The duration of each swap, and its respective interest rates once combined with the bank’s margin and other costs, are detailed in part (b) of this note.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 49

NOTES TO THE FINANCIAL STATEMENTS

Continued

22. CAPITAL MANAG E M E NT A N D F I NAN C I AL I N S TRUM E NT S (C O NTI N U E D)

(b) Loans, borrowings, interest rates and fair values

2016

Secured
£20 million loan swapped into fixed rate
£30 million loan swapped into fixed rate
£20 million loan swapped into fixed rate
£30 million loan swapped into fixed rate
£75 million revolving credit facility

Unsecured
Finance leases

Non-current financial liabilities

Current borrowings

Non-current financial liabilities

Financial liabilities

2015

Secured
£20 million loan swapped into fixed rate
£30 million loan swapped into fixed rate
£20 million loan
£30 million loan swapped into fixed rate
£75 million revolving credit facility

Unsecured
Finance leases

Non-current financial liabilities

Current borrowings

Non-current financial liabilities

Financial liabilities

Group and company

Term or
expiry date

Effective
interest rate

Period
rate fixed

March 2018
March 2021
March 2021
March 2023
March 2019

4.58%
4.34%
2.23%
5.97%
Variable

2 years
5 years
5 years
7 years
None

Group and company

Term or
expiry date

Effective
interest rate

Period
rate fixed

March 2018
4.58%
March 2021 3.76% to 4.34%
Variable
March 2021
5.97%
March 2023
Variable
March 2019

3 years
6 years
None
8 years
None

Fair
value
2016
£m

21.3
32.7
19.8
38.0
43.1

Book
value
2016
£m

20.0
29.8
19.9
30.0
43.1

154.9

142.8

0.6

143.4

Group Company

2016
£m

–

2016
£m

–

143.4

Fair
value
2015
£m

21.6
32.3
19.9
37.8
23.9

Book
value
2015
£m

20.0
29.8
19.8
30.0
23.9

135.5

123.5

0.7

124.2

Group Company

2015
£m

5.0

124.2

129.2

2015
£m

6.0

124.2

130.2

The secured borrowings are secured on the assets of the group.

The fair values of borrowings and interest rate derivatives are estimates based on prevailing market rates of interest and expected future cash flows
arising from those instruments.

Bank overdrafts
Bank overdrafts are used for day to day cash management. The group has a £10 million overdraft facility with interest linked to the base rate.

Bank loan
The group has a bilateral £50 million term loan with the Royal Bank of Scotland and a £50 million syndicated facility with the Royal Bank of Scotland
and Barclays. The bilateral loan is repayable as to £20 million on 28 March 2018 and as to £30 million on 28 March 2023. The syndicated loan is
repayable on 17 March 2021. Interest rate swaps have been entered into in respect of some of these bank loans which result in the effective interest
charge being fixed at the rates disclosed above.

50
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YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Strategic report
Directors’ report
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Shareholder information

Revolving credit facility
The group has a £75 million revolving credit facility with the Royal Bank of Scotland and Barclays of which £43.5 million was drawn at the period
end. Final repayment of the total drawn down balance is due as one payment on 17 March 2019. This is a committed facility which permits
drawings of different amounts and for different periods. These drawings carry interest at a margin above LIBOR with a commitment payment
on the undrawn portions. Interest is payable at each loan renewal date.

2016

Borrowings
Trade and other payables
Derivative financial instruments

2015

Borrowings
Trade and other payables
Derivative financial instruments

Maturity of financial liabilities

Within
one year
£m

1.0
22.6
3.7

27.3

Within
one year
£m

6.0
18.3
2.9

27.2

Between
one and
two years
£m

Between
two and
five years
£m

21.0
–
3.2

24.2

Between
one and
two years
£m

1.3
–
3.1

4.4

96.2
–
7.5

103.7

Between
two and
five years
£m

48.0
–
8.2

56.2

After
five years
£m

30.0
–
3.0

33.0

After
five years
£m

82.6
–
5.0

87.6

Total
£m

148.2
22.6
17.4

188.2

Total
£m

137.9
18.3
19.2

175.4

The above maturity table includes contractual gross undiscounted cash flows of the borrowings, related interest, net derivatives, finance leases, trade
payables and contractual accruals.

(d) Fair value hierarchy for instruments measured at fair value

Financial liabilities at fair value
Interest rate swaps

Group and company

Fair value
2016
£m

Level 1
2016
£m

Level 2
2016
£m

Level 3
2016
£m

12.1

–

Fair value
2015
£m

Level 1
2015
£m

12.0

–

12.1

Level 2
2015
£m

12.0

–

Level 3
2015
£m

–

Level 1
Fair values measured using quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2
Fair values measured using inputs, other than quoted prices included within Level 1, that are observable for the asset or liability either directly
or indirectly.

Interest rate swaps are accounted for at their fair value calculated using a discounted cash flows method. Actual and estimated cash flows are
discounted by applying discount factors derived from observable market data and by considering the credit risk.

Level 3
Fair values measured using inputs for the asset or liability that are not based on observable market data.

(e) Financial assets and other financial liabilities
Financial assets and other financial liabilities of the group and the company are not included in this note because their book value approximates their
carrying value.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 51

NOTES TO THE FINANCIAL STATEMENTS

Continued

23. DEF ERR ED TAX

Deferred tax relates to the following:

Deferred tax assets
Interest rate swaps
Retirement benefit schemes
Decelerated capital allowances
Capital losses
Share based payments

Group

Company

2016
£m

2015
£m

2016
£m

2015
£m

2.2
1.2
1.1
0.9
0.8

6.2

2.4
2.8
1.1
0.9
0.5

7.7

2.2
1.2
1.0
0.9
0.8

6.1

2.4
2.8
1.0
0.9
0.5

7.6

Deferred tax liabilities
Rolled over gains and property revaluations

(57.4)

(59.8)

(50.5)

(52.6)

Net deferred tax liabilities

(51.2)

(52.1)

(44.4)

(45.0)

Opening balance
Tax credit/(expense) in the income statement
Tax (expense)/credit in the statement of comprehensive income
Tax credit recognised directly in equity
Deferred tax acquired in business combinations

Closing balance

Group

Company

2016
£m

(52.1)
0.8
–
0.1
–

(51.2)

2015
£m

(49.6)
(1.5)
–
0.1
(1.1)

(52.1)

2016
£m

(45.0)
0.8
(0.3)
0.1
–

(44.4)

2015
£m

(43.6)
(1.6)
0.3
0.1
(0.2)

(45.0)

The deferred tax assets and liabilities at the balance sheet date are calculated at the substantively enacted rate of 18%.

The group has realised capital losses of £6.9 million (2015: £6.1 million), which are available indefinitely to offset against future capital gains.
A deferred tax asset has not been recognised in respect of £1.6 million (2015: £1.6 million) of these losses because at present it is unclear whether
suitable gains will arise in the foreseeable future to utilise them. The company has realised capital losses of £5.3 million (2015: £4.5 million). A deferred
tax asset has been recognised in respect of these losses in both the current and the prior period.

In addition, the group has unrealised capital losses of £16.4 million (2015: £15.2 million). No deferred tax asset has been recognised in respect of these
losses (2015: £nil) because it is uncertain whether they will be utilised. The company has unrealised capital losses of £14.1 million (2015: £12.8 million).
No deferred tax asset has been recognised in respect of these losses (2015: £nil).

52
52

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Strategic report
Directors’ report
Financial statements
Shareholder information

24. R ETI R E M E NT B E N E F IT S C H E M E S
The company operates one defined benefit pension scheme, namely the Young & Co.’s Brewery, P.L.C. Pension Scheme, a defined contribution
pension scheme and a post retirement health care scheme.

The aggregate contribution to the defined contribution scheme was £0.8 million (2015: £0.5 million).

Independent, professionally qualified actuarial advice is sought to determine the liabilities arising from the defined benefit scheme, using the projected
unit credit method. The scheme is formally valued every three years. The obligations under the scheme consist mainly of a final salary scheme which
provides members with benefits based on length of service and salary.

Through its defined benefit scheme and post retirement health care scheme the group is exposed to a number of risks which are referred to in the
principal risks and uncertainties section starting on page 8.

The employer contribution to the defined benefit scheme for the period ended 28 March 2016 was £3.2 million (2015: £2.4 million) plus premiums of
£0.2 million (2015: £0.2 million) to the post retirement health care scheme. The current arrangement as regards contribution rates is described in the
relevant Schedule of Contributions.

Future employee contribution rates are projected to be between 6% and 7% of pensionable earnings. Future employer contribution rates are projected
to be 18% of pensionable earnings. The total contributions to the defined benefit scheme in the 2017 financial period are expected to be £1.5 million
which includes a special contribution of £1.2 million. The total contributions to the post retirement health care scheme in the 2017 financial period are
expected to be £0.2 million.

The defined benefit scheme is closed to new entrants.

In the prior period a settlement gain of £0.2 million was recorded within the pension scheme in relation to members who have left the scheme.
There was no such settlement gain in the current period.

Financial assumptions

Pension

Health care

Rate of increase in salaries
Discretionary pension increases
Rate of revaluation of deferred pensions
Discount rate
Inflation
General medical expenses inflation

Mortality assumptions

The life expectancies underlying the valuation are as follows:

Current pensioners (at age 65) – males
Current pensioners (at age 65) – females
Future pensioners (at age 65) – males
Future pensioners (at age 65) – females

2016
%

3.00
3.00
2.00
3.50
3.00
N/A

2015
%

3.20
3.20
2.20
3.30
3.20
N/A

2016
%

N/A
N/A
N/A
3.50
3.00
9.00

2016
Years

22.8
24.9
25.0
27.2

2015
%

N/A
N/A
N/A
3.30
3.20
9.00

2015
Years

22.7
24.8
24.8
27.1

At the period end date the average age of current pensioners was 72 years (2015: 71 years) and for future pensioners was 53 years (2015: 53 years).

The weighted average duration of liabilities for the current period was 18.6 years (2015: 18.7 years).

A one percentage point change in the assumed rate of increase in health care costs would have the following effects:

Effect on the aggregate service cost and interest cost
Effect on defined benefit obligation

Increase
£m

Decrease
£m

–
0.4

–
(0.4)

The sensitivities regarding the principal assumptions used to measure the schemes’ liabilities are set out below. The illustrations consider the single
change shown with the other assumptions assumed to be unchanged. In practice changes in one assumption may be accompanied by changes in
another assumption. Changes in market values may also occur at the same time as the changes in assumptions and may or may not offset them.

Assumption
Discount rate
Rate of inflation
Life expectations

Change in assumption
Increase/decrease by 0.5%
Increase/decrease by 0.5%
Increase by 1 year

Impact on scheme liabilities
Decrease/increase by 9.0%
Increase/decrease by 8.0%
Increase by 4.0%

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 53

NOTES TO THE FINANCIAL STATEMENTS

Continued

24. R ETIREMENT BENEFI T S C HE ME S (CONTINUED)

Pension scheme and health care scheme assets and liabilities

Equities
Diversified growth fund
Absolute return
Corporate bonds
Insured pensions
Other

Total fair value of assets
Present value of retirement benefit liabilities

Scheme deficit

Group and company

Assets and liabilities
2015
£m

2016
£m

28.6
9.8
12.1
51.7
10.6
(1.0)

29.8
10.4
12.0
53.3
11.2
(1.0)

111.8
(118.1)

115.7
(128.8)

(6.3)

(13.1)

The pension scheme assets includes some of the company’s A shares with a fair value of £3.9 million (2015: £3.8 million). There are no property
assets of the scheme occupied by the company.

Of the above assets, £102.2 million are quoted securities.

Movement in scheme deficits in the period

2016
Health
care
scheme
£m

Pension
scheme
£m

(a) Changes in the present value of the schemes are as follows:

Opening deficit
Current service cost
Settlement gain
Contributions
Other finance charges
Remeasurement through other comprehensive income

Closing deficit

(b) Recognised in the income statement

Current service cost included in operating costs

Settlement gain

(8.6)
(0.5)
–
3.1
(0.2)
4.0

(2.2)

(0.5)

–

(0.5)

(4.5)
–
–
0.3
(0.1)
0.2

(4.1)

–

Group and company

Pension
scheme
£m

2015
Health
care
scheme
£m

(1.5)
(0.6)
0.2
2.4
–
(9.1)

(8.6)

(0.6)

0.2

(0.4)

(4.5)
–
–
0.2
(0.2)
–

(4.5)

–

Total
£m

(13.1)
(0.5)
–
3.4
(0.3)
4.2

(6.3)

(0.5)

–

(0.5)

Total
£m

(6.0)
(0.6)
0.2
2.6
(0.2)
(9.1)

(13.1)

(0.6)

0.2

(0.4)

Net interest expense

(0.2)

(0.1)

(0.3)

–

(0.2)

Experience gains arising on the scheme liabilities
(Loss)/gain from change in demographic assumptions
Gain/(loss) from change in financial assumptions

Remeasurement of obligations
Return on scheme assets (less amounts included
in the net interest expense)

Net remeasurement recognised

2.5
–
8.0

10.5

(6.6)

3.9

0.2
–
0.1

0.3

–

0.3

2.7
–
8.1

10.8

(6.6)

4.2

0.9
–
(17.0)

(16.1)

7.0

(9.1)

0.3
–
(0.3)

–

1.2
–
(17.3)

(16.1)

7.0

(9.1)

54
54

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Strategic report
Directors’ report
Financial statements
Shareholder information

2016
Health
care
scheme
£m

Pension
scheme
£m

Group and company

Total
£m

Pension
scheme
£m

2015
Health
care
scheme
£m

(d) Movements in the present value of scheme obligations during the period

Opening defined benefit obligations
Current service cost
Interest on obligations
Contributions by scheme members
Remeasurement of obligations
Benefits paid

(124.3)
(0.5)
(4.0)
(0.1)
10.5
4.4

(4.5)
–
(0.1)
–
0.3
0.2

(128.8)
(0.5)
(4.1)
(0.1)
10.8
4.6

(106.8)
(0.4)
(4.8)
(0.1)
(16.1)
3.9

Present value of scheme liabilities

(114.0)

(4.1)

(118.1)

(124.3)

(e) Change in fair value of scheme assets

Opening fair value of scheme assets
Interest on scheme assets
Return on scheme assets (less amounts included
in the net interest expense)
Contributions by employer
Contributions by scheme members
Benefits paid

115.7
3.8

(6.6)
3.2
0.1
(4.4)

–
–

–
0.2
–
(0.2)

115.7
3.8

(6.6)
3.4
0.1
(4.6)

105.3
4.8

7.0
2.4
0.1
(3.9)

Fair value of scheme assets

111.8

–

111.8

115.7

(4.5)
–
(0.2)
–
–
0.2

(4.5)

–
–

–
0.2
–
(0.2)

–

Total
£m

(111.3)
(0.4)
(5.0)
(0.1)
(16.1)
4.1

(128.8)

105.3
4.8

7.0
2.6
0.1
(4.1)

115.7

25. PR OVI S I O N S

At 31 March 2014 and 30 March 2015

Created

At 28 March 2016

Analysed as:

Current liabilities

Non-current liabilities

At 28 March 2016

Group
£m

Company
£m

–

1.0

–

1.0

–

1.0

–

1.0

The provisions created in the current period relate to four property leases where the expected operating income does not cover the rents payable.
The rent payable commitments range from 14 to 55 years.

26. S HAR E CAPI TA L AN D R E S E RV E S

Issued and fully paid shares – 12.5p each

Opening balance

Issued under employee share schemes

2016
Shares

2016
£000

2015
Shares

2015
£000

48,453,599

6,057

48,290,292

6,036

215,892

163,307

Closing balance

48,669,491

6,084

48,453,599

6,057

Of the opening balance of 48,453,599 shares, 29,293,599 are A shares and 19,160,000 are non-voting shares (2015: 29,130,292 A shares,
19,160,000 non-voting shares). Of the closing balance of 48,669,491 shares, 29,509,491 are A shares and 19,160,000 are non-voting shares
(2015: 29,293,599 A shares, 19,160,000 non-voting shares).

The A shares issued in the current period relate to directors’ emoluments (see note 8(b)) and the share awards (see note 27).

The two classes of shares are equal in all respects except that the non-voting shares do not carry the right to receive notices of general meetings
or to attend, speak or vote at them.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 55

NOTES TO THE FINANCIAL STATEMENTS

Continued

27. SHARE AWARDS

The group operates two types of share based payment arrangements: a senior management deferred bonus scheme (“DBS”) and a Save-As-
You-Earn (“SAYE”) scheme.

(a) DBS
This scheme is designed to incentivise directors and certain other senior management to deliver long-term superior shareholder returns. For the
directors, half of any bonus is to be settled in shares, with the other half being paid in cash except to the extent that the director elects to receive
all or part of it in shares instead. The values of these parts of the bonus awards are capped at 100% of the directors’ basic annual salaries (but
for these purposes the basic annual salaries of certain directors are adjusted). For the senior management, there is no requirement for them
to take any of their bonus in shares, but they may elect to take up to half in this way. For every share taken in place of cash, the individual is
allowed to subscribe at nominal value for one ‘matching’ share. None of the individuals are generally free to sell any of the shares before the end
of a restricted period which ordinarily will end three years after the shares have been acquired or, if earlier, the date on which his employment
terminates by reason of illness, disability or redundancy. The ‘matching’ shares are subject to satisfaction of a further condition relating to the
extent to which the group’s adjusted earnings per ordinary share in respect of the group’s continuing operations for a particular performance
period exceeds the same measure for an earlier financial period. Any of the shares acquired, whether ‘matching’ or otherwise, are liable to
forfeiture in certain circumstances. The number of shares to be issued to an individual in order to fulfil his entitlement is calculated with reference
to the market price of the company’s A ordinary shares as shown in the Financial Times (online version) published on the date on which the
issue is made.

The following table summarises the shares issued under the DBS. These shares are registered in the relevant individual’s name and, save as
explained above, are fully vested.

Date
of award

Matching
shares
(Y/N)

At
30 March
2015

Awarded
during
the period

Restrictions
ceased to
apply during
the period

Forfeited
during
the period*

At
28 March
2016

Issue price
(pence per
share)

Stephen Goodyear

Torquil Sligo-Young

Peter Whitehead

Patrick Dardis

Edward Turner

June 2013
June 2013
September 2014
September 2014
June 2015
June 2015

June 2013
September 2014
September 2014
June 2015
June 2015

June 2013
June 2013
September 2014
September 2014
June 2015
June 2015

June 2013
September 2014
September 2014
June 2015

September 2014
June 2015
June 2015

Rupert Clevely

June 2013

Senior management
employees

June 2013
June 2013
September 2014
September 2014
June 2015
June 2015

N
Y
N
Y
N
Y

N
N
Y
N
Y

N
Y
N
Y
N
Y

N
N
Y
N

N
N
Y

N
Y
N
Y
N
Y

18,487
9,243
32,478
16,239
–
–

5,284
12,599
6,299
–
–

12,365
6,182
21,744
10,872
–
–

6,801
21,744
10,872
–

8,854
–
–

3,081

2,416
1,208
10,547
10,547
–
–

–
–
–
–
22,446
11,223

–
–
–
8,977
4,488

–
–
–
–
15,044
7,522

–
–
–
7,522

–
9,529
4,764

–

–
–
–
–
11,103
11,103

–
–
–
–
–
–

–
–
–
–
–

–
–
–
–
–
–

–
–
–
–

(8,854)
(9,529)
–

–

–
–
–
–
–
–

–
–
–
–
–

–
–
–
–
–
–

–
–
–
–

–
–
–

(3,081)

–
–
–
–
–
–

18,487
9,243
32,478
16,239
22,446
11,223

5,284
12,599
6,299
8,977
4,488

12,365
6,182
21,744
10,872
15,044
7,522

6,801
21,744
10,872
7,522

–
–
4,764

–

2,416
1,208
10,547
10,547
11,103
11,103

827.5
12.5
960.0
12.5
1,280.0
12.5

827.5
960.0
12.5
1,280.0
12.5

827.5
12.5
960.0
12.5
1,280.0
12.5

827.5
960.0
12.5
1,280.0

960.0
1,280.0
12.5

827.5

827.5
12.5
960.0
12.5
1,280.0
12.5

227,862

113,721

(18,383)

(3,081)

320,119

* These shares were forfeited. As a result, they were transferred on 22 June 2015 to the Ram Brewery Trust II, an employee benefit trust designed
by the company. The transfer was at 827.5p per share.

The performance period for the award dated June 2013 was from April 2013 to March 2016. The performance periods for the awards dated
September 2014 and June 2015 are from April 2014 to March 2017 and from April 2015 to March 2018 respectively.

56
56

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Strategic report
Directors’ report
Financial statements
Shareholder information

The group’s adjusted earnings per share performance conditions set a range for the adjusted earnings per share for the relevant period; they
are not disclosed due to commercial sensitivity. Based on the recent performance of the group and assuming this performance continues, it is
anticipated that the maximum target for the adjusted earnings per share performance conditions will be met.

A charge of £0.4 million (2015: £0.1 million) was made to the group and company income statements in respect of the outstanding 110,562
‘matching’ shares held by the company at nominal value at 28 March 2016.

(b) SAYE
The scheme enables eligible directors and eligible employees to acquire options over A shares of the company. The options are issued at a discount of up
to 20% of the market price of an A share at the time invitations to join the scheme for the relevant year are issued, with the proceeds of a related SAYE
savings contract then being used to acquire shares at a later date if the option holders choose to do so. All employees who have worked for the minimum
qualifying period on an invitation date are eligible to join the scheme. Options granted under the SAYE scheme are not subject to performance conditions
other than continued employment. These options are all equity settled.

In the current period, options over 47,864 A shares (2015: 43,023 A shares) were granted under the SAYE scheme on 10 July 2015 at an exercise
price of 1,013.0p per share (2015: 840.0p per share). Subject to the participants remaining in the employment of the group and making 36 monthly
contributions, these options will be exercisable between 1 September 2018 and 28 February 2019.

Options over 169,950 A shares were outstanding at the beginning of the period. During the period, a total of 13,145 options lapsed. A further 99,912
options were exercised at 488.0p per share, 1,245 options were exercised at 662.0p per share, 891 options were exercised at 840.0p per share and
123 options were exercised at 1,013.0p per share, resulting in an increase in share capital of £12,771 and an increase in share premium of £491,771.

A charge of £0.1 million (2015: £0.1 million), valued using the Black-Scholes option pricing model, was made to the group and company income
statements in respect of these options in the period. As at 28 March 2016 options over 102,498 A shares remain outstanding.

28. NET CA SH GENER ATED FROM OPER AT ION S AND AN ALYSI S O F N ET DEBT

Group

Company

Profit before tax on continuing operations
Net finance cost
Other finance charges

Operating profit on continuing operations
Depreciation
Movement on revaluation of properties
Net profit on sales of property and associated goodwill
Pension scheme settlement gain
Goodwill impairment
Difference between pension service cost and cash contributions paid
Share based payments
Provision for capital gains tax on ESOP Trust allocated shares
Movements in working capital
- Inventories
- Receivables
- Payables

Net cash generated from operations

Analysis of net debt

Cash
Current borrowings – bank overdraft
Non-current borrowings – loan capital and finance lease

Net debt

2016
£m

33.3
5.3
0.3

38.9
17.4
0.5
(0.1)
–
0.3
(2.9)
0.5
–

–
(0.9)
6.7

60.4

2015
£m

36.1
5.2
0.2

41.5
14.8
(4.2)
(0.9)
(0.2)
–
(2.0)
0.2
0.2

(0.1)
0.4
0.9

50.6

2016
£m

28.4
4.8
0.3

33.5
14.6
0.3
(0.1)
–
–
(2.9)
0.5
–

–
(1.2)
10.7

55.4

2015
£m

30.9
4.1
0.2

35.2
12.2
(4.3)
(1.5)
(0.2)
–
(2.0)
0.2
0.2

–
(0.9)
1.1

40.0

Group

Company

2016
£m

13.2
–
(143.4)

2015
£m

0.2
(5.0)
(124.2)

2016
£m

11.8
–
(143.4)

(130.2)

(129.0)

(131.6)

2015
£m

0.2
(6.0)
(124.2)

(130.0)

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 57

NOTES TO THE FINANCIAL STATEMENTS

Continued

29. R ELAT ED PARTY TRANSA C TI ONS
Balances and transactions between the company and its wholly owned subsidiaries have been eliminated on consolidation and are not disclosed
in this note; they were on an arm’s length basis and are disclosed in note 20. The transactions in the current period were £4.4 million (2015:
£3.9 million) and mostly relate to the provision of payroll and administration recharges.

Directors
Directors’ emoluments and retirement benefits are disclosed in notes 8(b) and (c). Directors’ shareholdings and interests are disclosed or referred
to on page 21 and in notes 8(d) and (e) and 27.

Rupert Clevely and his wife, Jo Clevely:

• reside from time to time, free of charge, in accommodation above one of the group’s pubs in London – the value of the benefit was £618*

(2015: £10,253) and is included in the Benefits column for Rupert Clevely in note 8(b);

• are lessees of a property in London from which the group operates one of its pubs – they hold the property on trust for two companies within

the group jointly and, as part of that arrangement, those companies have agreed to indemnify Rupert and Jo Clevely in respect of certain liabilities
relating to the property and the lease under which it is held; and

• are entitled to be reimbursed for certain liabilities, costs and expenses that may be incurred by them pursuant to or in connection with certain

pub-related guarantees given by them – the guarantees are not expected to be called on.

Rupert Clevely and four other members of his family own a 50% share of Rogers and Rufus Pty Limited, an Australian wine producer. That
company provides wine to the group for sale in its pubs via an intermediary wine supplier on an arm’s length basis. Goods purchased by the
group totalled £5,346* (2015: £55,010). No amount was outstanding at 28 March 2016 (2015: £nil).

Jo Clevely Design Limited, a company owned and controlled by Jo Clevely, provides interior design services for some of the group’s pubs.
For these services (and inclusive of expenses and reimbursement for items purchased on behalf of the group) that company received £7,449*
(2015: £132,942). No amount was outstanding at 28 March 2016 (2015: £10,674).

* This is for the period up to and including 27 April 2015, being the date on which Rupert Clevely ceased to be a director of the company.

No other transactions requiring disclosure have been entered into with the directors.

Pension scheme and trusts
The Young & Co.’s Brewery, P.L.C. Pension Scheme provides pensions and other benefits to employees of the group and certain other individuals.
It is managed by a corporate trustee, Young’s Pension Trustees Limited (“YPTL”). Torquil Sligo-Young, a director of the company, and two other
individuals, neither of whom is a director of the company, are the directors of YPTL. As at 28 March 2016, the pension scheme held 337,067 A
shares (2015: 387,541), being 1.14% of the class.

In 2008 the Ram Brewery Trust II was established. It holds assets for the benefit of employees and former employees, principally reflecting their
accrued entitlement to A shares under the group’s now closed profit sharing scheme – see note 8(d). The shares are all fully vested and are not
therefore disclosed as an investment in own shares in the group’s financial statements. The Ram Brewery Trust II is managed by a corporate trustee,
RBT II Trustees Limited (“RBT II”). Torquil Sligo-Young, a director of the company, and Roy Summers, a former non-executive director of the
company, are the directors of RBT II. As at 28 March 2016, the trust held 554,077 A shares (2015: 635,064), being 1.88% of the class.

Key management
The group considers key management personnel to be solely the directors of the company as they are the only people with authority and
responsibility for planning, directing and controlling the activities of the group. The compensation provided to the directors is detailed in note 8.
In addition, the group made employers national insurance contributions of £0.2 million (2015: £0.2 million) and incurred a share based payment
charge of £0.3 million (2015: £0.1 million).

58
58

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Strategic report
Directors’ report
Financial statements
Shareholder information

30. O BLIGATION S UNDER LEAS E S

(a) Obligations under finance leases
Finance leases for property are for terms ranging from 50 to 999 years. Minimum lease payments for most leases are nominal amounts. Leases do not
have a purchase option but most are renewable at the lessee’s option at the end of the lease term.

Future minimum lease payments under finance leases are as follows:

Future minimum lease payments due:
- Not later than one year
- Later than one year and not later than five years
- Later than five years

Less: finance charges allocated to future years

The present value of minimum lease payments is analysed as follows:
- Not later than one year
- Later than one year and not later than five years
- Later than five years

Group

Company

2016
£m

2015
£m

2016
£m

2015
£m

–
0.2
2.5

2.7
(2.1)

0.6

–
–
0.6

0.6

0.1
0.2
2.5

2.8
(2.1)

0.7

–
–
0.7

0.7

–
0.2
2.5

2.7
(2.1)

0.6

–
–
0.6

0.6

0.1
0.2
2.5

2.8
(2.1)

0.7

–
–
0.7

0.7

Future minimum rentals receivable from non-cancellable subleases on the above properties as at 28 March 2016 were £0.2 million (2015: £0.2 million).

(b) Operating lease agreements where the group is lessee
Operating leases for property are for terms ranging from one to 49 years. Minimum lease payments are typically reviewed every five years and are
based on a percentage of turnover or a negotiated rate per square foot. Most property leases are renewable at the lessee’s option at the end of the
lease term. Equipment is leased over terms of up to four years.

Future minimum rentals payable under non-cancellable operating leases are as follows:
- Not later than one year
- Later than one year and not later than five years
- Later than five years

6.7
22.1
38.5

67.3

6.2
19.8
35.1

61.1

3.1
10.8
21.1

35.0

3.0
10.5
19.9

33.4

Future minimum rentals receivable from non-cancellable subleases on the above properties as at 28 March 2016 were £0.9 million (2015: £1.2 million).

(c) Operating lease agreements where the group is lessor
The group leases licensed properties to third party tenants. These non-cancellable leases are over terms varying from one to 19 years.

Future minimum rentals receivable under non-cancellable operating leases are as follows:
3.4
- Not later than one year
5.8
- Later than one year and not later than five years
8.0
- Later than five years

3.6
5.9
9.4

3.3
5.8
8.0

17.2

18.9

17.1

3.4
5.9
9.4

18.7

31. PO ST BALANC E S HEET EV E N TS

There were no post balance sheet events apart from the acquisition of the Woolpack (Bermondsey). We also exchanged contracts for the acquisition
of the Blue Boar (Chipping Norton).

32. CONTIN GENT LIABI LITIES

There were no contingent liabilities at the current or prior period balance sheet dates.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 59

FIVE YEAR REVIEW

Strategic report
Directors’ report
Financial statements
Shareholder information

Revenue

245.9

227.0

210.8

193.7

2016

£m

2015

£m

2014

£m

2013

£m

Operating profit before exceptional items

Operating exceptional items

Net finance costs and other finance charges

Profit/(loss) before tax

Taxation (charge)/credit

Profit/(loss) from continuing operations

Loss from discontinued operation

Profit/(loss) for the period

Adjusted profit before tax

Net assets employed

Non-current assets

Current assets and assets held for sale

Current liabilities

Non-current liabilities

Financed by

Share capital

Reserves

2012

£m

179.0

26.1

(28.8)

(4.8)

(7.5)

2.1

(5.4)

(1.1)

(6.5)

21.3

526.9

16.2

(28.5)

(196.9)

41.0

(2.1)

(5.6)

33.3

(6.2)

27.1

–

27.1

35.4

37.4

4.1

(5.4)

36.1

(9.4)

26.7

–

26.7

32.0

33.2

(0.6)

(6.0)

26.6

(4.5)

22.1

–

22.1

27.2

28.9

(1.8)

(5.7)

21.4

(5.0)

16.4

–

16.4

23.2

692.6

22.2

(41.8)

(217.1)

645.9

8.4

(40.7)

(206.6)

584.4

10.9

(32.4)

(183.2)

543.4

17.6

(36.7)

(189.8)

455.9

407.0

379.7

334.5

317.7

6.1

449.8

455.9

6.1

400.9

407.0

50.9

6.0

373.7

379.7

33.6

6.0

328.5

334.5

20.5

6.0

311.7

317.7

25.6

Purchase of fixed assets and business combinations

45.1

Net debt

(130.2)

(129.0)

(112.0)

(112.6)

(118.1)

Per 12.5p ordinary share

Adjusted basic earnings from continuing operations

Basic earnings/(loss) from continuing operations

Dividends – paid in period

57.20

55.76

16.94

50.62

55.17

15.97

42.88

45.72

15.06

36.34

33.78

14.27

33.41

(11.13)

13.58

Pence

Gearing

28.6%

31.7%

29.5%

33.7%

37.2%

Average number of employees

3,735

3,496

3,357

3,242

2,985

60
60

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

NOTICE OF MEETING

Strategic report
Directors’ report
Financial statements
Shareholder information

If you hold any A shares, this notice is important and requires your immediate attention. If you are in any doubt as to any aspect
of the proposals referred to in this notice or as to the action you should take, you should seek your own advice from a stockbroker,
solicitor, accountant or other professional adviser. If you have sold or otherwise transferred all of your shares, please pass this copy
of the annual report, and any proxy form and business reply envelope that came with it, to the purchaser or transferee, or to the
person who arranged the sale or transfer so they can pass it or them to the person who now holds the shares.

If you hold any A shares, you should have received a proxy form for use at the meeting. Guidance notes on how to complete it, and on other
matters, are given on the form itself and in the notes to this notice. Whether or not you propose to attend the meeting, please complete and
submit the proxy form; it must be received by Computershare Investor Services PLC by 11.30am on Sunday, 3 July 2016. Appointing a proxy does
not stop you from attending the meeting and voting. An admission card is attached to the proxy form; please bring this with you to the meeting.

If you do not hold any A shares, this notice is for information purposes only.

Notice is hereby given that the 127th annual general meeting of Young & Co.’s Brewery, P.L.C. (the “Company”) will be held in the Civic
Suite in Wandsworth Town Hall, Wandsworth High Street, Wandsworth, London, SW18 2PU on Tuesday, 5 July 2016 at 11.30am for the
following purposes:

Ordinary resolutions
To consider and, if thought fit, to pass the following resolutions which will be proposed as ordinary resolutions:

1. To receive the Company’s annual accounts for the financial year ended 28 March 2016, together with the strategic report, directors’ report

and the auditor’s report on those accounts and reports.

2. To declare a final dividend of 9.07p per share for the financial year ended 28 March 2016.

3. That Ernst & Young LLP be, and is hereby, re-appointed as the Company’s auditor to hold office from the conclusion of this meeting until

the conclusion of the next general meeting of the Company at which the Company’s annual accounts and reports are laid in accordance
with section 437 of the Companies Act 2006.

4. That the directors be, and are hereby, authorised to fix the remuneration of the Company’s auditor.

5. That Nicholas Bryan be, and is hereby, re-appointed as a director.

6. That Stephen Goodyear be, and is hereby, re-appointed as a director.

7. That Patrick Dardis be, and is hereby, re-appointed as a director.

8. That the Company and all companies that are subsidiaries of the Company at any time during the period for which this resolution has

effect be, and are hereby, authorised to:
(a) make political donations to political parties, not exceeding £50,000 in total;
(b) make political donations to political organisations other than political parties, not exceeding £50,000 in total; and
(c) incur political expenditure, not exceeding £50,000 in total;
in each case at any time during the period starting with the date this resolution is passed and ending at the end of next year’s annual
general meeting (or, if earlier, at the close of business on 30 September 2017) but the aggregate amount of political donations and political
expenditure that may be made and incurred by the Company and its subsidiaries pursuant to this authority must not exceed £50,000.

Note: for the purposes of this resolution, “political donation” has the meaning given in section 364 of the Companies Act 2006, “political
expenditure” has the meaning given in section 365 of the Companies Act 2006 and reference to a “political party” or to a “political
organisation” is to a party or to an organisation to which Part 14 of the Companies Act 2006 applies.

9. That the directors be, and are hereby, authorised to allot shares in the Company and to grant rights to subscribe for, or to convert any

security into, shares in the Company:
(a) up to a nominal amount of £2,027,895 (such amount to be reduced by the nominal amount allotted or granted under paragraph (b)

below in excess of such sum); and

(b) comprising equity securities (as defined in section 560(1) of the Companies Act 2006) up to a nominal amount of £4,055,790 (such
amount to be reduced by the nominal amount allotted or granted under paragraph (a) above) in connection with an offer by way of
a rights issue:
(i) to holders of ordinary shares in proportion (as nearly as may be practicable) to their existing holdings; and
(ii) to holders of other equity securities as required by the rights of those securities or as the directors otherwise consider necessary,
and so that the directors may impose any limits or restrictions and make any arrangements which they consider necessary or
appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the
laws of, any territory or any other matter,

such authorities to apply until the end of next year’s annual general meeting (or, if earlier, until the close of business on 30 September
2017) but, in each case, during this period the Company may make offers and enter into agreements which would, or might, require shares
to be allotted or rights to subscribe for, or to convert securities into, shares to be granted after the authority ends and the directors may
allot shares or grant rights to subscribe for, or to convert securities into, shares under any such offer or agreement as if the authority had
not ended.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 61

NOTICE OF MEETING

Continued

Special resolutions
To consider and, if thought fit, to pass the following resolutions which will be proposed as special resolutions:

10. That if resolution 9 is passed, the directors be, and are hereby, given power to allot equity securities (as defined in section 560(1) of

the Companies Act 2006) for cash under the authorities given by that resolution and/or to sell ordinary shares held by the Company as
treasury shares for cash as if section 561 of the Companies Act 2006 did not apply to any such allotment or sale, such power to be limited:
(a) to the allotment of equity securities and sale of treasury shares for cash in connection with an offer of, or invitation to apply for, equity

securities (but in the case of the authority granted under paragraph (b) of resolution 9, by way of a rights issue only):
(i) to holders of ordinary shares in proportion (as nearly as may be practicable) to their existing holdings; and
(ii) to holders of other equity securities as required by the rights of those securities or as the directors otherwise consider necessary,
and so that the directors may impose any limits or restrictions and make any arrangements which they consider necessary or
appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the
laws of, any territory or any other matter; and

(b) in the case of the authority granted under paragraph (a) of resolution 9 and/or in the case of any sale of treasury shares for cash,
to the allotment (otherwise than under paragraph (a) above) of equity securities or sale of treasury shares up to a nominal amount
of £304,184,

such power to apply until the end of next year’s annual general meeting (or, if earlier, until the close of business on 30 September 2017)
but during this period the Company may make offers and enter into agreements which would, or might, require equity securities to be
allotted (and treasury shares to be sold) after the power ends and the directors may allot equity securities (and sell treasury shares) under
any such offer or agreement as if the power had not ended.

11. That the Company be, and is hereby, authorised for the purposes of section 701 of the Companies Act 2006 to make one or more

market purchases (as defined in section 693(4) of the Companies Act 2006) of its ordinary shares of 12.5p each (“Ordinary Shares”),
such authority to be limited:
(a) to a maximum number of 4,866,949 Ordinary Shares (which may be all A shares, all non-voting shares or a mix); and
(b) by the condition that, in each case exclusive of expenses, the minimum price that may be paid for an Ordinary Share is the nominal

amount of that share and the maximum price that may be paid for an Ordinary Share is an amount equal to 5% above the average of
the middle market quotations for that share as derived from the AIM appendix to the Daily Official List of the London Stock Exchange
for the five business days immediately preceding the day on which that share is contracted to be purchased,

such authority to apply until the end of next year’s annual general meeting (or, if earlier, until the close of business on 30 September
2017) but during this period the Company may enter into a contract to purchase Ordinary Shares which would, or might, be executed
wholly or partly after the authority ends and the Company may purchase Ordinary Shares pursuant to any such contract as if the
authority had not ended.

By order of the board

ANTH O NY S C H RO E D E R
Company Secretary
18 May 2016

Young & Co.’s Brewery, P.L.C.
Registered office:
Riverside House,
26 Osiers Road,
Wandsworth,
London SW18 1NH
Registered in England and Wales No. 32762

62
62

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Strategic report
Directors’ report
Financial statements
Shareholder information

Notes

Entitlement to attend, speak and vote at the meeting
To be entitled to attend, speak and vote at the meeting (and for the purpose of determining the number of votes you may cast), your
name must be entered in that part of the register of members relating to holders of A shares at 7am on Monday, 4 July 2016 (or, in the
event of any adjournment, at 7am on the day before the day of the adjourned meeting).

What you need to bring
If you come to the meeting, please bring with you the admission card attached to the proxy form.

Appointment of proxies
If you hold any A shares, you may appoint a proxy to exercise all or any of your rights to attend and to speak and vote on your behalf
at the meeting. You can do this by completing the proxy form which came with this document. If you did not receive a proxy form and
believe that you should have one, or if you require additional forms, please contact the Company’s registrars. To be valid, your proxy
form must be received by the Company’s registrars no later than 11.30am on Sunday, 3 July 2016.

Who to appoint as a proxy
A proxy does not have to be a member of the Company but must attend the meeting for your vote to be counted and to otherwise
represent you. Your proxy could be the chairman of the meeting, a director of the Company or someone you know personally who
has agreed to attend and represent you. If you appoint a proxy, you may still attend the meeting.

Multiple proxies
You may appoint more than one proxy in relation to the meeting provided each proxy is appointed to exercise the rights attached
to a different A share or different A shares held by you. A space has been included in the proxy form to allow you to specify the
number of A shares in respect of which that proxy is appointed. If you return the proxy form duly executed but leave this space
blank, you will be deemed to have appointed the proxy in respect of all of your holding of A shares. If you wish to appoint more
than one proxy in respect of your A shares, you should contact the Company for further proxy forms or photocopy the form as
required; you should also read the notes on the proxy form relating to the appointment of multiple proxies.

The following principles apply in relation to the appointment of multiple proxies:

(a) The Company will give effect to your intentions and include votes wherever and to the fullest extent possible.

(b) Where a proxy does not state the number of A shares to which it applies (a “blank proxy”) then, subject to the following principles
where more than one proxy is appointed, that proxy is deemed to have been appointed in relation to the total number of A shares
registered in your name (“your entire holding”). If there is a conflict between a blank proxy and a proxy which does state the
number of A shares to which it applies (a “specific proxy”), the specific proxy will be counted first, regardless of the time it was sent
or received (on the basis that as far as possible the conflicting forms of proxy should be judged to be in respect of different
A shares) and remaining A shares will be apportioned to the blank proxy (pro rata if there is more than one).

(c) Where there is more than one proxy appointed and the total number of A shares in respect of which proxies are appointed is no

greater than your entire holding, it is assumed that proxies are appointed in relation to different A shares, rather than that conflicting
appointments have been made in relation to the same A shares; that is, there is only assumed to be a conflict where the aggregate
number of A shares in respect of which proxies have been appointed exceeds your entire holding.

(d) When considering conflicting proxies, later proxies will prevail over earlier proxies, and which proxy is later will be determined on

the basis of which proxy is last sent (or, if the Company is unable to determine which is last sent, last received). Proxies in the same
envelope will be treated as sent and received at the same time to minimise the number of conflicting proxies.

(e) If conflicting proxies are sent or received at the same time in respect of (or deemed to be in respect of) your entire holding, none

of them will be treated as valid.

(f) Where the aggregate number of A shares in respect of which proxies are appointed exceeds your entire holding and it is not

possible to determine the order in which they were sent or received (or they were all sent or received at the same time), the
Company’s registrars or the Company will take steps to try to clarify the situation with you should time permit. If this is not possible,
none of your proxies will be treated as valid.

(g) If you appoint a proxy or proxies and then decide to attend the meeting in person and vote in person, then the vote in person

will override any proxy vote. If the vote in person is on a poll and is in respect of your entire holding then all proxy votes will be
disregarded. If, however, you vote at the meeting on a poll in respect of less than your entire holding, then if you indicate on your
poll card that all proxies are to be disregarded, that shall be the case; but if you do not specifically revoke proxies, then the vote in
person will be treated in the same way as if it were the last received proxy and earlier proxies will only be disregarded to the extent
that to count them would result in the number of votes being cast exceeding your entire holding.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 63

NOTICE OF MEETING

Continued

Strategic report
Directors’ report
Financial statements
Shareholder information

(h) In relation to paragraph (g), if you do not specifically revoke proxies, it will not be possible for the Company to determine the

intentions of you in this regard. However, in light of the aim to include votes wherever and to the fullest extent possible, it will
be assumed that earlier proxies should continue to apply to the fullest extent possible.

Changing proxy instructions
To change your proxy instructions, you need to submit a new proxy appointment – further copies can be obtained from the Company.
However, in doing so, you should be aware of the principles that apply to multiple proxies – see the note headed Multiple proxies. If
you are in any doubt as to what to do where you wish to change your proxy instruction, please contact the Company’s registrars or
your stockbroker, solicitor, accountant or other professional adviser.

Termination of proxy appointments
If you wish to revoke your proxy instruction, you must send to the Company’s registrars a signed hard copy notice clearly stating your
intention to revoke your proxy appointment. If you are a corporation, the revocation notice must be executed under your common seal
or signed on your behalf by an officer of you or an attorney for you. Any power of attorney or any other authority under which the
revocation notice is signed (or a notarially certified copy of such power or authority) must be included with the revocation notice. The
revocation notice must be received by the Company’s registrars before the start of the meeting. If you attempt to revoke your proxy
appointment but the revocation is received after the time specified then, subject as follows, your proxy appointment will remain valid.
Appointing a proxy does not stop you from attending the meeting and voting. If you appoint a proxy and attend the meeting, your
proxy appointment will automatically be terminated.

Multiple corporate representatives
If you are a corporation, you may appoint one or more corporate representatives who may exercise on your behalf all your powers
as a member provided they do not do so in relation to the same A shares.

Name and address of the Company’s registrars
The Company’s registrars are Computershare Investor Services PLC. They can be contacted at The Pavilions, Bridgwater Road,
Bristol, BS99 6ZZ.

Display documents
The following will be available for inspection at the Company’s registered office during normal business hours (Saturdays, Sundays
and public holidays excepted) from the date of this notice until 10am on the day of the meeting:

• copies of the executive directors’ service contracts; and

• copies of the letters of appointment of the non-executive directors.

After 10am on the day of the meeting, these documents will be available for inspection in the Civic Suite in Wandsworth Town Hall,
Wandsworth High Street, Wandsworth, London SW18 2PU until the end of the meeting.

Communication
Any address or number used for the purpose of sending or receiving documents or information by electronic means that is referred
to in the Company’s 2016 annual report or any proxy form for the Company’s 127th annual general meeting may not be used to
communicate with the Company for any purpose other than any expressly stated.

64
64

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

EXPLANATORY NOTES TO THE NOTICE OF MEETING

Strategic report
Directors’ report
Financial statements
Shareholder information

Notice of the 127th annual general meeting of Young & Co.’s
Brewery, P.L.C. (the “Company”) to be held on Tuesday, 5
July 2016 is set out on pages 61 to 64. The directors consider
that all the resolutions to be put to the meeting are in the
best interests of the Company and its shareholders as a
whole; accordingly, the Company’s board of directors will be
voting in favour of them and unanimously recommends that
all A shareholders do so as well.

Resolutions 1 to 9 are ordinary resolutions; this means that
for each of those resolutions to be passed, more than half
of the votes cast must be in favour.

Resolution 1: annual accounts and reports
The directors have to lay copies of the Company’s annual
accounts, the strategic report, directors’ report and the auditor’s
report on those accounts and reports before you at a general
meeting; this is a legal requirement.

Resolution 2: final dividend
An interim dividend of 8.38p per share was paid in December
2015. The directors are recommending a final dividend of 9.07p
per share for the year ended 28 March 2016, bringing the total
dividend for the year to 17.45p per share. Subject to approval
being given, the final dividend is expected to be paid on 7 July
2016 to shareholders on the register at the close of business on
10 June 2016.

Resolution 3: re-appointment of auditor
An auditor is required to be appointed for each financial year
of the Company. Ernst & Young LLP, the Company’s current
auditor, has agreed to serve for the current financial year and its
re-appointment is therefore being proposed.

Resolution 4: auditor’s remuneration
In accordance with normal practice, the directors are asking
for your authority to determine the auditor’s remuneration.

Resolutions 5-7: re-appointments of directors
Each of Nicholas Bryan, Stephen Goodyear and Patrick Dardis will
be retiring automatically from the office of director at the meeting;
this is because he held that position at the last two annual
general meetings and did not retire at either of them. All of these
individuals are seeking re-appointment and their brief biographical
details are on page 16.

Resolution 8: political donations etc.
This resolution seeks renewal of the existing authority for the
Company and its subsidiaries to make or incur certain political
donations and political expenditure. Although there is no intention
to make or incur such donations or expenditure, the legislation
is very broadly drafted and may catch activities such as funding
seminars and other functions to which politicians are invited
and supporting certain bodies involved in policy review and law
reform. The authority given by this resolution will be capped at
£50,000 in total.

Resolution 9: general authority to allot
This resolution effectively seeks renewal of the directors’ existing
authority to allot shares and grant rights. Paragraph (a) of this
resolution would give the directors the authority to allot shares
or grant rights to subscribe for, or to convert any securities into,
shares up to an aggregate nominal amount equal to £2,027,895
– this amount represents approximately one-third of the
Company’s issued share capital as at 17 May 2016 (but would
be reduced by the nominal amount of any shares allotted or
rights granted under paragraph (b) of this resolution in excess

of £2,027,895). In line with guidance issued by the Investment
Association, paragraph (b) of this resolution would give the
directors authority to allot shares or grant rights to subscribe
for, or to convert any securities into, shares in connection with a
rights issue in favour of shareholders up to an aggregate nominal
amount equal to £4,055,790, as reduced by the nominal amount
of any shares allotted or rights granted under paragraph (a) of
this resolution – this amount (before any reduction) represents
approximately two-thirds of the Company’s issued share capital
as at 17 May 2016. Therefore the maximum nominal amount
of shares and rights that may be allotted or granted under this
resolution is £4,055,790. The authorities sought under paragraphs
(a) and (b) of this resolution will expire at the end of next year’s
annual general meeting (or, if earlier, the close of business on
30 September 2017). The directors have no present intention of
exercising either of the authorities sought under this resolution
other than in respect of any one or more of the Company’s share
schemes. As at the date of the notice, no shares are held by the
Company in treasury.

Resolutions 10 and 11 are special resolutions; this means
that for each of those resolutions to be passed, at least
three-quarters of the votes cast must be in favour.

Resolution 10: general power to disapply
This resolution effectively seeks renewal of the directors’ existing
power to allot shares (or sell any shares which the Company elects
to hold in treasury) for cash without first offering them to existing
shareholders in proportion to their existing shareholdings. This
authority would be, similar to previous years, limited to allotments
or sales in connection with pre-emptive offers and offers to holders
of other equity securities if required by the rights of those shares
or as the directors otherwise consider necessary, or otherwise up
to an aggregate nominal amount of £304,184. This aggregate
nominal amount represents approximately 5% of the Company’s
issued share capital as at 17 May 2016. The power sought under
this resolution will expire at the end of next year’s annual general
meeting (or, if earlier, the close of business on 30 September 2017).

Resolution 11: authority to undertake market purchases of own shares
This resolution effectively seeks renewal of the Company’s existing
authority to make market purchases of not more than 4,866,949
of its shares, being no more than 10% of its issued share capital
as at 17 May 2016. The authority sought under this resolution will
expire at the end of next year’s annual general meeting (or, if
earlier, the close of business on 30 September 2017). The directors
have no present intention of exercising the authority to make
market purchases, however the authority provides the flexibility
to allow them to do so in the future. The directors will exercise
this authority only when to do so would be in the best interests
of the Company, and of its shareholders generally, and could
be expected to be earnings enhancing. Any shares purchased
pursuant to this authority will be held in treasury or be cancelled.
The minimum price, exclusive of expenses, that may be paid for
a share is its nominal value. The maximum price, exclusive of
expenses, that may be paid for a share is an amount equal to
105% of the average of the middle market quotations for that
share for the five business days immediately preceding the date of
the purchase. As at 01 May 2016, there were options outstanding
over 98,241 A shares, representing 0.2% of the Company's issued
share capital at that date. If the Company were to purchase its own
shares to the fullest possible extent of its existing authority and
of the authority sought pursuant to this resolution, these would
then represent 0.25% of the Company's issued share capital.
No warrants to subscribe for shares are outstanding.

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 65

PUBS AND HOTELS

London and the surrounding areas

Stow on the Wold
Bell at Stow H

Oxford
Angel & Greyhound
King’s Arms

Greenford
Bridge Hotel H

Kew
Coach & Horses H

Richmond
Lass O’Richmond Hill
Marlborough
Old Ship
Orange Tree H
Red Cow T
Shaftesbury
Waterman’s Arms T
White Cross

Kingston
Albert
Bishop
Grey Horse T
Spring Grove

Surbiton
Black Lion T
Victoria
Waggon & Horses T

Heathrow Airport
Five Tuns G
Three Bells G

Isleworth
Castle T
Coach & Horses

Twickenham
Alexander Pope H

Teddington
Abercorn Arms T

Staines
Bells T

Walton-on-Thames
Royal George T
Swan

Chertsey
Crown Hotel H

Weybridge
Hand & Spear H

Esher
Bear Inn H

Claygate
Foley H

Oxshott
Bear

Southern England

Radlett
Red Lion Hotel H

Hendon
Beaufort
Greyhound T

Kilburn
Queen’s Arms T

Maida Vale
Prince Alfred

Harlesden
Grand Junction Arms T

Ealing
Grange
New Inn T

Shepherd’s Bush
Bull (Westfield) G
Eagle G
Defector’s Weld

Hammersmith
Brook Green Hotel H
Butchers Hook T
Hammersmith Ram
Old Ship

Mortlake
Jolly Gardeners T

East Sheen
Hare & Hounds

Barnes
Bull’s Head G
Coach & Horses
White Hart

Putney
Boathouse
Coat and Badge G
Duke’s Head
Green Man
Half Moon G
Spotted Horse

Roehampton
Angel T
King’s Head

Wimbledon
Alexandra
Bayee Village T
Crooked Billet
Dog & Fox H
BurgerShack & Bar
Hand in Hand
Rose & Crown H

Epsom
King’s Arms T
Rising Sun T

Walton-on-the-Hill
Chequers

Paddington
Porchester

Bayswater
Mitre

Chelsea
Builder’s Arms G
Chelsea Ram G
Cooper’s Arms
Hollywood Arms
King’s Arms G
Phoenix G
Surprise G

Battersea
Duke of Cambridge
Nine Elms Tavern
Northcote G
Plough
Prince Albert G

Clapham
Clapham North T
Windmill H

Balham
Devonshire
Grove
Nightingale

Tooting
Castle
Trafalgar Arms G

Mitcham
King’s Arms T

Carshalton
Greyhound H

Notting Hill
Duke of Wellington
Elgin G

Kensington
Britannia
Curtains Up G
Duke of Clarence G

Fulham
Cock Tavern
Duke on the Green
Waterside

Wandsworth
Alma H
Armoury T
Brewers Inn H
County Arms
East Hill G
Gardeners’ T
Grand Union T
Grapes T
Old Sergeant T
Pig & Whistle T
Queen Adelaide
Ship
Spread Eagle T
Waterfront

Earlsfield
Halfway House
Leather Bottle

Sutton
Lord Nelson T
Robin Hood T

Burnham-on-Sea
Dunstan House Inn H

Congresbury
Old Inn T

Wrington
Plough Inn T

Broadway, Nr Illminster
Bell Inn T

Somerton
Unicorn T

Exeter
City Gate H
Double Locks

Exmouth
Grove

Sidmouth
Swan T

66
66

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016

Sherston
Rattlebone T

Littleton-on-Severn
White Hart

Bristol
Bristol Ram T
Highbury Vaults
Horts
Rope Walk T

Keynsham
Lock Keeper

Castle Cary
Horse Pond T

Barnet
Lord Nelson T

Hampstead
Flask
Roebuck

Primrose Hill
Queens

Marylebone
Lord Wargrave T

Westminster
Buckingham Arms
Clarence G
Morpeth Arms
Phoenix G
Royal Oak T

Pimlico
Fox & Hounds T
Rising Sun T

Winchmore Hill
Kings Head G

Tufnell Park
Lord Palmerston T

Kentish Town
Bull & Gate
Lion & Unicorn G

Camden
Spread Eagle

Euston
Square Tavern T

Fitzrovia
Adam & Eve G
One Tun

Mayfair
Guinea
Windmill

Islington
Canonbury
Castle G
Duchess of Kent G
John Salt
King’s Head
Marquess Tavern T
Narrowboat

King’s Cross &
St Pancras Station
Betjeman Arms G
Curious Pig G
Fellow G

Bloomsbury
Calthorpe Arms T
Lamb

Covent Garden
Marquess of Anglesey

Strategic report
Directors’ report
Financial statements
Shareholder information

Chelmsford
O’Connor’s T
Riverside Inn T

Clapton
Princess of Wales G

Bethnal Green
Royal Oak T

Stratford
Cow (Westfield) G

Bow
Coborn
Crown G

Stepney
Queen’s Head T

Aldgate
Leman Street Tavern G

Shoreditch
Owl & Pussycat G

City of London
Albion
Boisdales T
Dirty Dick’s
Finch’s
Grocer G
Fox & Anchor H
Lamb Tavern
Oyster Shed G
Paternoster
Three Lords T
White Horse G

Kennington
White Bear

Camberwell
Grand Union T

Southwark
Founder’s Arms
Mulberry Bush
Prince William Henry T

Borough Market
Bunch of Grapes
Wheatsheaf

Bermondsey
Woolpack T

Dartford
Court House T
Malt Shovel T

Peckham Rye
Clock House

Dulwich
Wood House

Norwood
Hope T
Railway Bell T

Greenwich
Cutty Sark
Old Brewery
Richard the First

Woolwich
Dial Arch
Guardhouse G

Rotherhithe
Ship T

Catford
Catford Ram T

Bromley
Two Doves T

Lee
Crown

Chislehurst
Bull’s Head Hotel H

Vauxhall
Fentiman Arms G
Riverside

Stockwell
Surprise T

Brixton
Trinity Arms
Grand Union T

Streatham
Bull

Thornton Heath
Lord Napier T
Railway Telegraph T

Wallington
Duke’s Head H

Croydon
Dog & Bull T

Beddington
Plough

Key

Young’s managed house unless marked

Tenanted
Geronimo
Hotel

T
G
H

Sherfield-on-Loddon
White Hart

Fetcham
Bell

Leatherhead
Penny Black

Effingham
Plough T

Betchworth
Dolphin

Hindon
Lamb Inn H

Shaftesbury
Mitre

Guildford
Weyside

Witley
White Hart T

Emsworth
Sussex Brewery T

Dorking
Falkland Arms T
Old House at Home T

Stonebridge
Royal Oak T

Southampton
Mavericks T

Chichester
Crown & Anchor

Bognor Regis
Waverley

Redhill
Home Cottage
William IV T

Farnborough
Rose & Crown T

Blindley Heath
Red Barn G

Lingfield
Greyhound T

East Grinstead
Ship T

Plumpton Green
Fountain Inn T

YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016 67

SENIOR PERSONNEL, COMMITTEES AND ADVISERS

Strategic report
Directors’ report
Financial statements
Shareholder information

Directors

Nicholas Bryan, B.A., F.C.A.
Non-executive Chairman

Stephen Goodyear
Chief Executive

Torquil Sligo-Young
Information Resources

Peter Whitehead, F.C.A.
Finance

Patrick Dardis
Retail

Roger Lambert, M.A.
Non-executive Senior Independent

Trish Corzine
Non-executive

Company Secretary

Anthony Schroeder

Audit committee

Roger Lambert (Chairman)
Nicholas Bryan
Trish Corzine

Remuneration committee

Nicholas Bryan (Chairman)
Roger Lambert
Trish Corzine

Auditor

Ernst & Young LLP
1 More London Place
London SE1 2AF

Bankers

Royal Bank of Scotland Group plc
Corporate Banking London
280 Bishopsgate
London EC2M 4RB

Barclays Bank plc
1 Churchill Place
London E14 5HP

Nominated adviser

J.P. Morgan Securities plc
25 Bank Street
Canary Wharf
London E14 5JP

Stockbrokers

J.P. Morgan Securities plc
25 Bank Street
Canary Wharf
London E14 5JP

Panmure Gordon (UK) Ltd
One New Change
London EC4M 9AF

Solicitors

Slaughter and May
One Bunhill Row
London EC1Y 8YY

Gowling WLG (UK) LLP
Two Snowhill
Birmingham
B4 6WR

SHAREHOLDER INFORMATION

Registrar

Shareholder offers

Proposed financial diary 2016

The company’s registrar is Computershare
Investor Services PLC.

If you have questions about your
shareholding or if you require other
guidance (e.g. to notify a change of
address or to give instructions for
dividends to be paid directly into a bank
account), please contact Computershare.
All requests to amend account details
must be made in writing.

Computershare’s contact address is:

The Pavilions
Bridgwater Road
Bristol BS99 6ZZ

Their telephone no. is 0370 707 1420.

Shareholders can manage their Young’s
shareholding online at:
www.investorcentre.co.uk

Details of shareholder discounts and offers
are mailed to shareholders from time to
time. Any shareholder who does not wish
to receive details of such offers should
write to the Company Secretary at the
registered office.

Registered office and
company number

Riverside House
26 Osiers Road
Wandsworth
London SW18 1NH
Registered number: 32762

Further information
Please visit:
www.youngs.co.uk

9 June 2016
Ex-dividend date for final dividend

10 June 2016
Record date for final dividend

5 July 2016
Annual general meeting

7 July 2016
Payment of final dividend

10 November 2016
Interim results announcement

24 November 2016
Ex-dividend date for interim dividend

25 November 2016
Record date for interim dividend

9 December 2016
Payment of interim dividend

68
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YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2016