ANNUAL REPORT & ACCOUNTS 2008

BOOKER GROUP PLC. Equity House Irthlingborough Road DRIVING AND BROADENING THE BUSINESS Wellingborough Northants NN8 1LT BOOKER GROUP PLC www.booker.co.uk ANNUAL REPORT & ACCOUNTS 2008 104093 Inner Cvr Spread:104093 Inner Cvr Spread 5/6/08 10:39 Page 1

Booker Group plc ANNUAL REPORT & ACCOUNTS 2008

DIRECTORS AND PROFESSIONAL ADVISERS

Directors Bankers

Richard Rose Bank of Scotland plc ANNUAL REPORT & ACCOUNTS Non-Executive Chairman 155 Bishopsgate London EC2M 3YB FOR THE YEAR ENDED 28 MARCH 2008 Charles Wilson Chief Executive Auditors

Jonathan Prentis KPMG Audit plc Booker is the UK’s leading food wholesaler. Group Finance Director St James’ Square, Manchester M2 6DS We supply 258,000 catering businesses and 72,000 independent retailers. Lord Karan Bilimoria Non-Executive Director Nominated Adviser and Broker We operate from 172 cash and carry branches throughout the United Kingdom. Andrew Cripps Investec Non-Executive Director 2 Gresham Street London EC2V 7QP Hans Kristian Hustad Non-Executive Director Solicitors

Allen & Overy LLP Kevin Lyon Non-Executive Director One Bishops Square London W1 6AO Jim McMahon Non-Executive Director Registrars Computershare Investor Services plc Company Secretary PO Box 82 Mark Chilton The Pavillions Bridgwater Road Registered Offi ce Bristol, BS99 2NH

Equity House Financial PR Irthlingborough Road Wellingborough, Northants NN8 1LT Tulchan Communications Group Highlights 1 Consolidated Income Statement 19 Sixth Floor, Kildare House 3 Dorset Rise Business Profi le 2 Consolidated Statement of Recognised Registered Number London EC4Y 8EN Income and Expense 20 Chairman’s Statement 3 05145685 (England) Consolidated Balance Sheet 21 Chief Executive’s Review 4 Consolidated Cash Flow Statement 22 Website Group Finance Director’s Report 7 Notes to the Group Financial Statements 23 Board of Directors 10 www.booker.co.uk Company Balance Sheet 50 Corporate Governance 11 Notes to the Company Financial Statements 51 Remuneration Report 14 Statement of Directors’ Responsibilities 55 Directors’ Report 17 Independent Auditors Report to the Members of Booker Group plc 56 Directors and Professional Advisers 57

Notes: In the Highlights, Business Profi le, Chairman’s Statement, Chief Executive’s Review and Group Finance Director’s Report Operating Profi t in 2005/06 is stated under UK GAAP before goodwill, impairment and exceptional items. Figures stated for 2006/07 are before an exceptional charge of £1.8m. Any forward looking statements made throughout this document represent management’s best judgement as to what may occur in the future. However, the group’s actual results for the current and future fi scal periods and corporate developments will depend on a number of economic, competitive and other factors, some of which will be outside the control of the group. Such factors could cause the group’s actual results for future periods to differ materially from those expressed in any forward looking statements made in this document.

104093 Inner cover.indd ii 5/6/08 1 5/6/08 10:27:54 Booker Group plc ANNUAL REPORT & ACCOUNTS 2008

HIGHLIGHTS

“It has been a year of steady delivery for Booker. Customer satisfaction has improved, sales have increased, operating profi ts are up 29%, net debt is down 38% and we integrated Blueheath. We made good progress, but there is a lot more to do.” Charles Wilson, Chief Executive.

Full Year Net Debt £m Sales change % Operating Profit £m

2005/06 129 -5.9 21.7

2006/07 76 -0.9 35.7

2007/08 47 +2.3 46.1

Financial Highlights Operational Highlights • Total sales £3.1bn, +2.3% (including 43 weeks • Conversion of a further 24 branches into the of Blueheath) ‘Extra’ format, taking the total number of Extra • Like for like sales: branches to 34. An additional 30 are planned for the current fi nancial year. - non-tobacco +3.3% (vs -1.2% last year) • The Blueheath integration is on track - tobacco -5.4% (vs -0.3% last year) • Customer satisfaction for choice, price and - sales to caterers +2.2% (vs -0.2% last year) service improved - sales to retailers -1.5% (vs -1.1% last year) • Internet sales increased to £109m (includes • Operating profi t up to £46.1m from £35.7m £17m Blueheath) from £44m last year (+29%) • Profi t before tax up to £36.2m from £28.5m last year (+27%) • Profi t after tax up to £29.8m from £12.7m (+135%) • Basic earnings per share at 2.04 pence up from 0.94 pence last year • Net debt reduced to £47.2m from £76.5m last year (-38%) • Given the good results the Board recommends a full year dividend of £8m (0.5375 pence per share) (2007: £nil) to be paid on 11 July 2008

1 Booker Group plc ANNUAL REPORT & ACCOUNTS 2008

BUSINESS PROFILE

Booker has 172 cash and carry branches in the UK.

We serve 258,000 catering businesses and 72,000 independent retailers.

Customer Sales Sales Sales Numbers 000’s £bn £bn £bn 2005/06 2006/07 2007/08 Caterers 258 0.80 0.83 0.85 Retailers 72 2.13 2.10 2.15 Others 76 0.11 0.08 0.08 Total 406 3.04 3.01 3.08

Of our sales, £1.8bn is non-tobacco and £1.2bn is tobacco.

Sales Sales Sales £bn £bn £bn 2005/06 2006/07 2007/08 Non Tobacco 1.77 1.75 1.84 Tobacco 1.27 1.26 1.24 Total 3.04 3.01 3.08

£2.5bn of sales are collected from the cash and carry by the customer. £0.5bn is delivered to the customers’ premises from the cash and carry and £0.1bn is delivered ‘direct’ from a regional distribution centre to the customer.

Sales Sales Sales £bn £bn £bn 2005/06 2006/07 2007/08 Cash and Carry collect 2.55 2.53 2.50 Cash and Carry delivery 0.49 0.48 0.50 Direct – – 0.08 Total 3.04 3.01 3.08

Since September 2005, substantial progress has been achieved.

Sept Mar Sept Mar Sept Mar 2005 2006 2006 2007 2007 2008 UK GAAP UK GAAP IFRS IFRS IFRS IFRS

Sales Change % (5.9%) (5.9%) (2.5%) +0.6% +2.5% +2.1%

Operating Profit £m13 920162422 Operating Profit Change % (54%) (44%) +54% +78% +20% +38%

Net Debt £m 361 125 70 77 47 47

Note: The periods to September are for 24 weeks, whilst periods to March are for 28 weeks. Figures for September 2005 and March 2006 have been prepared under UK GAAP, and under IFRS thereafter. Sales and net debt are calculated on a consistent basis under both UK GAAP and IFRS.

2 Booker Group plc ANNUAL REPORT & ACCOUNTS 2008

CHAIRMAN’S STATEMENT

I am pleased to report the merger of I am pleased that Lord Karan Bilimoria Sales are up 2.3% Blueheath Holdings Plc and Booker and Andrew Cripps have joined the to form Booker Group plc has been a Board as independent non-executive in the year. success. The merger was completed Directors. Their experience in relevant in June 2007. Since that time market market sectors is of great value to conditions have been challenging due the Board. to the cooling in the economy and the smoking ban in public places. Despite I should like to thank all our staff for Operating profi t is these issues, Booker Group plc has their contribution to the success of the up 29% and net debt performed ahead of expectations. Group in the year just ended. Sales are up 2.3% in the year. was cut by 38%. Basic earnings per share at 2.04 Operating profi t is up 29% and net pence is up from 0.94 pence last debt was cut by 38%. Customer year. Given the strong operational satisfaction has improved and the performance of the business the fi nancial performance is good. Board recommends the payment of The drive into the catering market a £8 million full year dividend on 11 is working with like-for-like sales to July 2008 equivalent to 0.5375 pence caterers having increased by 2.2%. per share. Sales to retailers declined by 1.5% due Outlook primarily to the smoking ban. Despite The economy is expected to product cost infl ation in some sectors, slow in 2008/09 and the food our prices have remained competitive wholesale market remains very and stock availability has been good. competitive. Despite these challenges The plans to ‘Broaden’ the business we remain optimistic and expect to are going well. We converted a further continue making good progress in a 24 branches to the ‘Extra’ format challenging market. during the year. We now have 34 For the fi rst period of 2008/09 ‘Extras’ which offer a better range and turnover, inventory levels and costs customer experience. The payback are in line with plan. Overall, Booker on the conversion costs is less than Group plc continues to trade in line one year. with management expectations. Blueheath is being successfully Annual General Meeting integrated into the Booker network. Our Annual General Meeting will be held The cash and cost benefi ts are being on 9th July 2008 and I look forward to delivered in line with plan. Through welcoming shareholders then. combining Blueheath’s technology and distribution expertise with Booker’s Richard Rose scale and operations capability we are Chairman starting to win profi table business in the delivered wholesale market.

3 Booker Group plc ANNUAL REPORT & ACCOUNTS 2008

CHIEF EXECUTIVE’S REVIEW

Booker has improved considerably in signifi cant progress during the year We now survey the past couple of years. In September which refl ects our efforts to improve 2005 net debt was £361m, sales were choice, price and service: over 40,000 dropping at 6%, profi ts had slumped and our pension liability was £125m. Choice Up customers per Supplier and customer confi dence in • In May 2007 we introduced ‘First annum to see how the business was very low. In November for Pubs’ range. We now sell over 2005 the senior management team 2,000 kegs of beer per week. each branch and was changed. At that time we outlined • In July 2007 we launched product category a three phase Recovery Plan which Euro Shopper, a range of 33 explained how we would ‘Focus’ the lines which allow the independent is performing. business, then ‘Drive’ it and then start to retailer to benefi t from the growth ‘Broaden’ Booker. The plan is working. of discount retailing. Euro Shopper Today our net debt is £47.2m, sales sales are now over £300k per are up 2.3%, operating profi t is up 29% week. Over 18,500 customers and our pension is in surplus. Despite purchase Euro Shopper every these improvements we still have a lot week and the consumer response to do to fulfi l our ambition of becoming has been excellent. Euro Shopper the UK’s best and biggest supplier to complements Booker Basics, our small business. entry price range for caterers which sells over £400k per week. FOCUS (commenced November 2005) • In November 2007 we launched Although most of our ‘Focus’ activity price marked packs of fruit and was completed between November vegetables for retailers. We also 2005 and March 2006, we continue introduced Butcher’s Market – a to improve business effi ciency. range of price marked fresh meats Colleagues in branches, the distribution which are selling very well. centres and the centre are improving Prices Down cash and cost effi ciency. For example, • In March 2007 we introduced we are moving more products ‘by the ‘cheaper by the case’ deals on pallet’ so that there is less wasted 33 lines. effort in taking the sales. Throughout • In April 2007 we launched ‘every the business we are seeking to ‘stop, day essentials’, very competitive simplify and standardise’ work so that pricing on milk, bread and other we enhance customer service whilst essentials. improving effi ciency. As a result of a EURO SHOPPERS FOR tight operational management our net • In May 2007 we offered ‘season RETAILERS debt in 2007/08 was cut by £29.3m. long’ pricing for caterers, where prices were fi xed for the entire season. DRIVE • During the year we have seen (commenced April 2006) product cost infl ation in several We now survey over 40,000 customers product sectors including cooking per annum to see how each branch oil, rice, pasta and bread. Despite and product category is performing. this challenge our prices have Most branches and categories made remained competitive.

BOOKER BASICS FOR CATERERS

4 Booker Group plc ANNUAL REPORT & ACCOUNTS 2008

CHIEF EXECUTIVE’S REVIEW continued

Better Service BROADEN The combination of • In October 2007 we extended (commenced April 2007) branch opening hours. We are now seeking to ‘Broaden’ improved choice, • In January 2008 we launched free Booker. To achieve this we are: price and service delivery and removed charges • Improving the cash and has enhanced for handling credit and debit cards. carry experience • All branch staff have been trained In January 2006 we converted our overall customer on PRIDE. How we can improve fi rst ‘Extra’ branch. This has now the Parking, Reception, Internal, been rolled out to 34 of the 172 satisfaction. Delivery and Exit experience for branches. The key features are a customers. lighter, brighter branch environment, We now have 2,106 customers trading an improved layout, signage and as Premier. Premier won several ranges. Our Stoke branch is typical awards for its excellent standards of the new format (see below). and was Symbol Group of the Year in 2006. In 2008 we will improve The ‘Extra’ format is a big move the scale and execution of Premier in forward. Caterers, retailers and partnership with the Premier retailers. small business customers much prefer the environment and the The combination of improved choice, payback on reformatting the branch price and service has enhanced overall is less than 12 months. customer satisfaction. Improved customer satisfaction has allowed • Internet Booker to increase sales in 2007/08 For the last 30 years multiple despite the cooling in the economy and retailers and caterers have benefi ted the ban on smoking in public places. from their superior use of technology. We believe that the internet will help transform the outlook for small business. In June 2007 we launched the improved booker. co.uk site. Customer satisfaction with the new site is excellent. Sales

STOKE ‘EXTRA’ BRANCH BEFORE

AFTER

5 Booker Group plc ANNUAL REPORT & ACCOUNTS 2008

CHIEF EXECUTIVE’S REVIEW continued

on the site have increased from to focus on the customer and We have saved £44m per annum last year to cash profi t. £109m (includes £17m Blueheath) 10,000 tonnes - In 2007 the majority of colleagues per annum this year. However, this 2 is just the start. Over the next year received a bonus. The fi rst time of CO (10% of customers will have internet over this has happened since 2000. our total carbon their mobile phones, community - We updated our health and safety ‘footprint’)... sites and a lot more. standards and in February 2008 • Booker Direct held a ‘Health and Safety Week’ due to driving less Booker distributes £500m of to increase awareness. We are food miles, using products from our branches to committed to making Booker a the customer’s premises. We better and safer place to work. less electricity and recognised the opportunity to • Sustainability improved product improve this service and identifi ed - Booker has saved over 10,000 packaging. Blueheath Holdings Plc as having tonnes of CO2 (10% of our total technology and expertise that would carbon ‘footprint’) in the past year accelerate this. In May 2007 we due to driving less food miles, announced the reverse take-over using less electricity and improved of Blueheath. We have achieved product packaging. the cash and cost benefi ts outlined last Summer. We have moved - The Group fulfi ls its duty to minimise Blueheath’s biggest customer to adverse environmental impacts by the Booker Hatfi eld distribution ensuring effi cient use of materials and centre. We have started to win energy, recycling wherever possible, new business such as Rippleglen, a minimising waste and ensuring chain of convenience stores in the compliance with relevant legislation. Midlands. Booker will now increase deliveries from regional distribution - We have pioneered a supplier centres and branches to caterers distribution carbon model which is and retailers. starting to optimise the distribution effi ciency for suppliers and The Focus, Drive, Broaden plan ourselves. is facilitated by improving staff development and by improving their Of our private label sales 79% of sustainability of the business: packaging can be recycled, which is better than many of the multiple • People retailers. - The Group is an equal opportunities employer. In summary, it has been a year of steady delivery for Booker. Customer - Branch colleagues have been satisfaction has improved, sales have trained in PRIDE (Parking, Reception, increased, operating profi ts are up Internal, Delivery, and Exit). This 29%, net debt is down 38% and we programme was designed by integrated Blueheath. We made good branch colleagues to help improve progress, but there is a lot more to do. customer service. - The role of the branch General Charles Wilson Manager has been clearly defi ned Chief Executive

6 Booker Group plc ANNUAL REPORT & ACCOUNTS 2008

GROUP FINANCE DIRECTOR’S REPORT

Reverse Acquisition Of Blueheath its old basis of accounting (UK GAAP). Group operating Holdings plc An explanation of how the transition On 4 June 2007 Blueheath Holdings from UK GAAP to Adopted IFRSs has profi t increased by plc became the ultimate legal parent affected the Group’s fi nancial position, company of Giant Topco Limited fi nancial performance and cash fl ows is £10.4m to £46.1m (parent company of Booker Limited) in set out in the “Restatement of fi nancial lifting operating a share-for-share transaction. Due to information under IFRS” which was the relative values of the companies, issued on 30 October 2007. However, margins by 0.3% the former Giant Topco Limited following a detailed review of property to 1.50%. shareholders became the majority leases, it was identifi ed that the Group shareholders with 90.36% of the has a number of leases that contain enlarged share capital. Following the minimum rental uplifts at predetermined transaction the Company’s continuing rent review dates. The International operations and executive management Financial Reporting Interpretations were predominantly those of Giant Committee (‘IFRIC’) has clarifi ed that Topco Limited. Accordingly, the it is necessary to account for these substance of the combination was increases on a straight-line basis over that Giant Topco Limited acquired the life of the lease. Previously, the Blueheath Holdings plc in a reverse Group charged such increases to the acquisition. As part of the business income statement in the year they combination Blueheath Holdings plc arose. The total amount payable over changed its name to Booker Group plc the life of the lease remains unchanged and changed its accounting reference but the timing of the income statement date to the end of March. charge changes. This has resulted in a pre tax charge of £1.4m in the year As a consequence of applying reverse ended 28 March 2008 (2007: £1.6m). acquisition accounting, the balance These restated fi nancial statements for sheet of the Group at 31 March 2006 the 52 weeks ended 30 March 2007 and the results for the 52 weeks ended are the comparators for Booker Group 30 March 2007 are those of Giant plc’s annual consolidated fi nancial Topco Limited. The consolidated statements for the 52 weeks ended fi nancial statements for Giant Topco 28 March 2008. Limited at 31 March 2006 and 30 March 2007, as reported under UK Financial Review GAAP, have been fi led with the registrar Overall Group revenue increased by of companies. 2.3% including 43 weeks of sales from Blueheath. Non tobacco like- The AIM Rules require that the annual for-like sales increased by 3.3% consolidated accounts of the Group and like-for-like tobacco sales fell by for the period ending 28 March 2008 5.4% due to the introduction of the be prepared in accordance with smoking ban in public places in International Financial Reporting England and Wales. Standards (‘IFRS’) as adopted by the European Union. Group operating profi t increased by £10.4m to £46.1m lifting operating In preparing its opening IFRS balance margins by 0.3% to 1.50%. The sheet, the Group has adjusted improvement in margin was due to a amounts reported previously in fi nancial better product mix and good control statements prepared in accordance with of costs.

7 Booker Group plc ANNUAL REPORT & ACCOUNTS 2008

GROUP FINANCE DIRECTOR’S REPORT continued

The interest charge of £9.9m (2007: Subject to shareholder approval at the Profi t before tax is up £7.2m) comprises the cash interest AGM, to be held on 9 July 2008, the cost of borrowing of £9.5m (2007: dividend will be paid on 11 July 2008 £7.7m at £36.2m, £11.4m), the amortisation of fees and to shareholders on the register at 6 discounting of provisions of £4.2m June 2008. The shares will go ex- an increase of (2007: £4.9m), a credit relating to dividend on 4 June 2008. 27.0%. the expected return on pension scheme assets less unwind on the Cash Flow liabilities of £3.6m (2007: £5.5m) and Management has continued to focus on an IAS39 credit relating to interest cash generation resulting in a net debt hedge instruments of £0.2m (2007: improvement of £29.3m to £47.2m. £3.6m). Despite interest margins Strong earnings before interest, tax, increasing by 0.5%, the cash interest depreciation and amortisation (EBITDA) cost of borrowing has fallen due of £62.3m, up from £53.1 in the prior to the repayment in 2007 of two year, and a further improvement in tranches of mezzanine debt, which working capital (£11.9m) allowed a step carried relatively high coupon rates, up on last year’s capital expenditure and a lower level of net debt carried to £11.0m (2007: £6.0m) and the throughout the year relative to the acquisition of the Blueheath Group prior year. (£11.0m including fees and debt repayments on acquisition). Profi t before tax is up £7.7m at £36.2m (2007: £28.5m), an Pensions increase of 27.0%. The Booker Pension Scheme, a defi ned benefi t scheme that was closed to The effective tax rate (being the tax new members in October 2001, had charge as a percentage of profi t on a small gross IAS 19 surplus of £9.8m ordinary activities before taxation) for (2007: gross defi cit of £27.3). The the Group of 17.7% was below the net surplus after allowing for deferred standard rate of corporation tax in the tax was £7.1m (2007: net defi cit of UK, due principally to the utilisation £16.5m). of tax assets not recognised in prior years. We expect, in the current The signifi cant improvement in the conditions, to hold this effective rate pension fund position is the result of of tax at around this level through improved asset returns, more favourable to 2011. corporate bond rates reducing liabilities, £9.7m of contributions and Profi t after tax was £29.8m, a better than expected take up of the an increase of £17.1m compared Company Offer made in December to 2007. 2006 to deferred members to leave the Scheme. Those deferred members Basic earnings per share rose to 2.04p who had accepted the offer by the up from 0.94p. close date of 30 March 2007 were transferred to a scheme of their choice A proposed dividend of £8m for the in this fi nancial year. In aggregate over year ended 28 March 2008 was 2,700 deferred members transferred recommended by the Board on out of the Booker Pension Scheme. 21 May 2008, at 0.5375p per share.

8 Booker Group plc ANNUAL REPORT & ACCOUNTS 2008

GROUP FINANCE DIRECTOR’S REPORT continued

During the year an agreement was During the year there were no Earnings per share reached with the pension fund breaches of the covenant limits. trustees to fund the Scheme Funding At 28 March 2008 under UK GAAP rose to 2.04p. defi cit of £89m at 30 March 2007 the Group achieved Interest Cover of over a nine year period at £10m per 7.3 and Cash Cover of 6.3 comfortably annum from April 2008, a reduction exceeding its covenant obligations. from the underlying contribution rate The Group must have also not of £14.5m in the year just ended. required its revolving credit facility for a total of eight working days within Goodwill the fi nancial year, a target that was The net book value of goodwill in the also exceeded. balance sheet is £423.9m. Additions to goodwill in the year totalled £13.8m In addition to these fi nancial covenants arising from the reverse acquisition of the Group’s borrowing agreements Blueheath Holdings plc. include general covenants and potential events of default. The Group Capital Structure has complied in all respects with the The Group fi nances its operations terms of its borrowing agreements at through a combination of bank the date of this report. borrowings, leases and retained profi ts. Its capital base is structured to Interest Rates meet the ongoing requirements of the The Group’s hedging policy is to business. As at 28 March 2008 the maintain the profi le of borrowings Group had net debt of £47.2m (2007: within a collar of interest rates. The £76.5m) (note 19). Group currently has an amortising interest rate swap at 4.98% for Included within net debt are £1.1m of £130m expiring in March 2011. In fi nance leases (2007: £1.5m) relating addition there are two option caps mainly to Information Technology and a fl oor, also at £130m and an equipment. option at 4.98% exercisable in March 2011 for two years. Borrowing Facilities The Group has a £89.8m term loan Liquidity which is due to be repaid in total in As at 28 March 2008 £41.0m was March 2011 and a £161.0m revolving held in cash and cash equivalents. credit facility available until March 2010. The Group’s only bank borrowings related to the £89.8m term loan. The Group’s borrowings are subject to covenants set by the lenders. The peak level of drawdown on the Covenant compliance is measured revolving credit facility on a cleared quarterly and semi-annually using basis in the year to 28 March 2008 fi nancial results prepared under was £53.5m (2007: £65m) giving UK GAAP. a minimum facility headroom in the year of £76.0m. At 28 March 2008 The fi nancial covenants are Interest the Group had in issue £31.5m of Cover, measured by the ratio of earnings guarantees (2007: £70.5m) leaving before interest, tax, depreciation and undrawn facilities of £129.5m. amortisation (‘EBITDA’) to interest, and Cash Cover, measured by the ratio of Jonathan Prentis cash infl ow to interest. Group Finance Director

9 Booker Group plc ANNUAL REPORT & ACCOUNTS 2008

BOARD OF DIRECTORS

Richard Rose, Jonathan Prentis, Hans Kristian Hustad, Non-Executive Chairman Group Finance Director Non-Executive Director (Age: 52) (Age: 46) (Age: 58) Richard joined Blueheath as deputy Jonathan qualifi ed as a chartered Hans Kristian started his career in the Chairman in May 2006 and was appointed accountant in 1987 with Deloitte & Touche. Norwegian food and beverage industry in Executive Chairman in September 2006. Jonathan was appointed as Group Finance the 1970’s. In 1996, he started to work for In June 2007, he was appointed Non- Director of Booker in 2005 after the one of the largest food retailers in Norway, Executive Chairman of the Group. Richard acquisition of The Big Food Group plc. Prior Reitan Group Ltd, and was responsible was formerly Chief Executive Offi cer to this appointment, Jonathan was Finance for the launch of Rema 1000 International of Whittard of Chelsea plc, a multi site Director of Woodward Foodservice Ltd and Ltd on the Oslo Stock Exchange through retailer of tea and coffee which was sold then Finance Director of Group Logistics a merger with the listed Narvesen Plc. to an investee company of Baugur Group within The Big Food Group plc. Prior to He became a Non-Executive Director of hf in 2006. Previously he was a Director 2003, Jonathan was with TDG plc. Baugur Group when the company was of Hagemeyer (UK) Ltd, a distributor of launched on the Icelandic Stock Exchange professional products and services, with a Lord Bilimoria CBE,DL, in 1999. When Baugur Group hf headed UK turnover approaching £1 billion through Non-Executive Director the consortium which bought The Big 360 outlets. Prior to that he had been Chief (Age: 46) Food Group plc in February 2005, he Executive Offi cer of WF Electrical plc, a fully Karan Bilimoria is a Cambridge University became Chairman and Chief Executive listed electrical distributor, where he created Law Graduate and a qualifi ed Chartered of Booker. When Charles Wilson became a substantial improvement in shareholder Accountant. He is the founder and Chairman Chief Executive of Booker from November value. Hagemeyer purchased WF Electrical of Cobra Beer. He is Chancellor of Thames 2005, he continued as Non-Executive plc in 2000. He was also Non-Executive Valley University and an Honorary Fellow of Chairman, until the reverse takeover of Chairman of AC Electrical Wholesale Ltd Sidney Sussex College, Cambridge. He Blueheath. He is a Non-Executive Director where he led a very successful growth is an Advisory Board Member of Boston of Hamleys and Wyevale. strategy resulting in a very substantial Analytics and a former Non-Executive increase in shareholder value. The Director of Brake Brothers. He is also Kevin Lyon, business was sold to Wolseley in 2006. Chairman of the UK India Business Council Non-Executive Director He is Chairman of Kiotech International plc, and an independent Crossbench Peer in (Age: 46) Non-Executive Chairman of Nanoscience the House of Lords. Kevin qualifi ed as a chartered accountant Inc. and Executive Chairman of Crawshaw in 1985. After two years in merchant Group Plc. Andrew Cripps, banking Kevin joined the private equity Non-Executive Director and venture capital business, 3i plc. While Charles Wilson, (Age: 50) with 3i, he built and developed several Chief Executive (Age: 42) Andrew read Economics at the University of successful investment teams across the Charles started his career in 1986 with Cambridge prior to qualifying as a Chartered UK and led many transactions in a wide Procter and Gamble following which he Accountant with KPMG. Following twenty range of sectors. Kevin also held a number was a consultant with OC&C Strategy years with Rothman International and British of leadership and management positions Consultants and a Director of Abberton American Tobacco plc, he has held a including Managing Director, UK Private Associates. In 1998 he became an number of non-executive directorships in Equity. Kevin left 3i plc in 2004 to build a Executive Director of Booker Plc which the UK and Europe. Andrew is currently portfolio of non-executive interests. Kevin merged with Iceland plc in 2000. In 2001 he non-executive deputy Chairman of Swedish is currently Chairman of a number of UK became an Executive Director of Arcadia Match AB where he also sits on the audit companies. Group plc and in 2004 he became an committee. Executive Director at Marks and Spencer Jim McMahon, Plc. In 2005 he was appointed as Chief Non-Executive Director Executive of Booker. (Age: 59) Jim is a founding partner, with Sir Tom Hunter, of West Coast Capital and has been involved in approximately £5 billion of West Coast Capital led deals since March 2001. Jim sits on a number of retail boards, including House of Fraser and Wyevale, providing strategic and fi nancial advice. Jim was a Senior Inspector of Taxes and then spent sixteen years with PricewaterhouseCoopers where he was a Tax Partner, a member of the PwC Supervisory Board and, prior to joining West Coast Capital, headed a national team advising some of the UK’s leading entrepreneurs and their businesses.

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104093 Text back R.indd 10 5/6/08 13:24:59 Booker Group plc ANNUAL REPORT & ACCOUNTS 2008

CORPORATE GOVERNANCE

Principles of Corporate Governance

The Company is committed to high standards of good governance and supports the Combined Code on Corporate Governance (“the Code”) published in June 2006 by the Financial Reporting Council. Whilst the Company is not bound by the Code, the Company is providing the following information on a voluntary basis.

The workings of the Board and its committees

The plc Board The Company is led and controlled by the Board of Directors (the ‘Board’), chaired by Richard Rose. The Board currently consists of two Executive Directors and six Non-Executive Directors, three of whom are considered to be independent of management and free from any business or other relationship that could materially interfere with the exercise of their independent judgement in accordance with the Code. The Board believes that it is appropriate to have a Senior Independent Non-Executive Director and Lord Bilimoria fulfi ls this role. He is available to shareholders if they have concerns which contact through the normal channels have failed to resolve, or for which such contact would be inappropriate.

The Board believes that it has suffi cient members to contain a balance of experience and skills, but is not so large as to be unwieldy. The Board contains a balance of Executive and Non Executive Directors such that no individual, or group of individuals, can dominate the Board’s decision making. No one individual has unfettered powers of decision.

Details of the individuals skills and experience are contained in the Directors’ biographies on page 10.

The Board meets regularly, on at least ten scheduled occasions during each year and more frequently if necessary. Following the reverse acquisition of Blueheath Holdings plc there were nine scheduled Board meetings, four Audit Committee meetings, one Remuneration Committee meeting and one Nomination Committee meeting held in the year under review and the attendance by Directors was as follows:

Board Audit Remuneration Nomination Richard Rose 1 3 9/9 3/3 1/1 1/1 Charles Wilson 2 3 4 9/9 4/4 1/1 1/1 Jonathan Prentis 2 9/9 4/4 Lord Bilimoria 1 3/4 1/1 1/1 Andrew Cripps 1 3/4 1/1 1/1 1/1 Hans Kristian Hustad 9/9 Kevin Lyon 9/9 4/4 Jim McMahon 5/9

1 Independent Director 2 Not a member of the Audit Committee but attended by invitation 3 Not a member of the Remuneration Committee but attended by invitation 4 Not a member of the Nomination Committee but attended by invitation

Richard Rose served on the Audit Committee from 4 June 2007 to 16 January 2008.

Andrew Cripps was appointed to the Audit Committee on 16 January 2008.

The Board keeps the membership of committees under review to ensure gradual refreshing of skills and experience. The Board is satisfi ed that all Directors have suffi cient time to devote to their roles and that it is not placing undue reliance on key individuals.

The Board has adopted a formal schedule of matters specifi cally reserved for decision by it, thus ensuring that it exercises control over appropriate strategic, fi nancial, operational and regulatory issues.

At these meetings, the Board reviews trading performance, ensures adequate fi nancing, sets and monitors strategy, examines investment and acquisition opportunities and discusses reports to shareholders.

Individual Directors may seek independent advice at the expense of the Company, subject to following an agreed procedure.

The Company maintains appropriate Directors’ and Offi cers’ Liability Insurance.

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CORPORATE GOVERNANCE continued

Information and professional development The Board is supplied with regular and timely information in a form and of a quality that enables it to discharge its duties. All Directors are encouraged to make further enquiries as they feel appropriate of the Executive Directors or management. In addition, Board committees are provided with suffi cient resources, plus the power to co-opt such additional support as they may require from time to time, to undertake their duties.

All Directors have access to the services of a professionally qualifi ed and experienced Company Secretary, who is responsible for information fl ows to the Board and advising the Board on corporate governance matters. This ensures compliance with Board procedure and applicable laws and regulation. The Board has responsibilty for the appointment or removal of the Company Secretary.

Audit Committee Chaired by Kevin Lyon, one of the Non-Executive Directors, the Audit Committee comprises one other Non-Executive, Andrew Cripps and has defi ned terms of reference, which are published on the Company’s website. Charles Wilson, Chief Executive, Jonathan Prentis, Group Finance Director, and external auditors attend by invitation. The Audit Committee is primarily responsible for:

• ensuring that the fi nancial performance of the group is properly monitored and reported on • meeting with the auditors and reviewing reports from the auditors relating to the group’s accounting and internal controls • reviewing the effectiveness of the group’s systems of internal control • agreeing the terms of appointment and remuneration of the auditors

Nomination Committee The Nomination Committee is chaired by the Chairman, Richard Rose and comprises two other Non-Executive Directors, Lord Bilimoria and Andrew Cripps and has defi ned terms of reference, which are published on the Company’s website. Charles Wilson, Chief Executive, is invited by invitation.

The Nomination Committee is responsible for making recommendations on the appointment of additional Directors and for reviewing the size, structure and composition of the Board and the membership of Board committees.

Remuneration Committee Chaired by Lord Bilimoria, the Senior Non-Executive Director, the Remuneration Committee comprises one other Non-Executive Director, Andrew Cripps and has defi ned terms of reference, which are published on the Company’s website. Charles Wilson, Chief Executive, is invited by invitation.

The Remuneration Committee is responsible for setting the remuneration and other terms of employment of the Company’s executive offi cers and management and determining and reviewing any share incentive plans.

The Remuneration Report, which includes details of the Remuneration Committee’s role, Director’s remuneration and pension entitlements, together with information on service contracts is set out on pages 14 to 16. Details of Directors’ interests are shown in the Director’s Report on page 17.

Executive Committee The Executive Committee is chaired by Charles Wilson, Chief Executive and comprises Jonathan Prentis, Group Finance Director, and other senior members of the management team representing the operational businesses within the Group. It meets once a month to discuss operational matters, compliance, health and safety and trading performance.

Re-Election of Directors All Directors are required by the Company’s Articles of Association to submit themselves to shareholders for re-election at the fi rst Annual General Meeting after their appointment and thereafter by rotation at least once every three years. Biographical details of all Directors are included on page 10.

In fulfi lling their responsibilities, the Directors believe that they govern the Company in the best interests of the shareholders, whilst having due regard to the interests of other stakeholders in the Company including clients, employees and suppliers.

Relations with shareholders The Code encourages a dialogue with institutional shareholders based on the mutual understanding of objectives. The Directors have regular and ongoing communication with shareholders throughout the year, by participating in investor roadshows and presentions to shareholders. Feedback from these visits is reported to the Board. The Directors also have regular contact with analysts and brokers.

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The Company maintains a website at www.booker.co.uk which is regularly updated and contains information about the Company.

The Code encourages boards to use the Annual General Meeting to communicate with investors and to encourage their participation. The Board welcomes as many shareholders as possible to attend the Annual General Meeting to discuss any interest or concern, including performance, governance or strategy, with the Directors.

At the Annual General Meeting, the Chairman will announce the level of proxies lodged on each resolution, the balance for and against and abstentions, after it has been dealt with on a show of hands. A separate resolution will be proposed at the Annual General Meeting in respect of each substantially separate issue. The Chairmen of the Audit, Remuneration and Nomination Committees will deal with matters relating to those committees.

Internal Controls and Risk Management The Board has overall responsibility for the Group’s system of internal control. Such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and aims to provide reasonable and not absolute assurance against material misstatement. In order to discharge that responsibility in a matter that ensures compliance with laws and regulations and promotes effective and effi cient operations, the Directors have established an organisational structure with clear operating procedures, lines of responsibility and delegated authority.

There is an established framework of internal controls, which is set out in procedures approved by Executive Management. These procedures are readily accessible to staff, who follow their guidance.

The more important elements of this framework are as follows:

Management Structure The Board has overall responsibility for the Company. Each member of the Executive Committee has responsibility for specifi c aspects of the Company’s affairs.

Corporate accounting and procedures Responsibility levels are communicated throughout the Group as part of the corporate communication procedure. Accounting, delegation of authority and authorisation levels, segregation of duties and other control procedures, together with the general ethos of the Group are included in these communications, and standardised accounting policies are in place refl ecting this policy.

Quality and integrity of personnel The integrity and competence of personnel is ensured through high recruitment standards and subsequent training. Quality personnel are seen as an essential part of the control environment and the ethical standards expected are communicated through senior members of staff.

Budgetary process Each year the Board approves the annual budget, which includes an assessment of key risk areas. Performance is monitored and relevant action taken throughout the year by regular reporting to the Board of updated forecasts together with information on key risk areas.

Investment appraisal Capital expenditure is regulated by the use of authorisation levels. For all expenditure beyond specifi ed levels, Board approval is required.

Internal audit The Group’s internal audit function reports to the Group Finance Director and monitors the effectiveness of key internal controls.

This report was approved by the Board of Directors on 21 May 2008.

Mark Chilton Company Secretary

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REMUNERATION REPORT

This section of the Annual Report and Accounts describes the role and composition of the Remuneration Committee (the “Committee”), the Company’s remuneration policy and the arrangements currently in place for remuneration of both Executive and Non-Executive Directors.

The Remuneration Committee

Membership The Committee comprises Lord Bilimoria (Chairman) and Andrew Cripps. Prior to their appointment on 16 January 2008, the committee members were Richard Rose and Kevin Lyon.

Role of the Committee The Committee advises the Board and makes recommendations to it about all elements of the remuneration packages of the Executive Directors and certain senior executives of the Company. It recommends the terms of service contracts with Executive Directors and any compensation arrangements resulting from the termination by the Company of an Executive Director’s service contract. The Committee also makes recommendations concerning the grant of shares and share options.

The Committee’s responsibilities are set out in its terms of reference, which are published on the Company’s Website.

Remuneration policy The Company wishes to attract, retain and motivate senior management of the requisite quality. Accordingly, its policy, in a competitive market, is to design remuneration packages which, through an appropriate combination of basic salary and bonus, reward senior management fairly for their individual contribution. The Committee’s overall policy is to provide competitive and potentially rewarding remuneration packages. The Committee has been reviewing the equity incentives it has in place as it believes that long term incentives are an important element of remuneration packages. To this end, the Committee intends to operate a savings-related share option scheme which will extend to all employees within the Group, and a long-term incentive plan (the LTIP) which will be extended on a discretionary basis to certain employees only. Under the LTIP, employees selected to participate will be entitled to acquire shares for no payment at the end of a vesting period (which will normally be three years). Vesting will be subject to continued employment and certain performance conditions being satisfi ed. In certain circumstances, however, a proportion of awards may vest early. There will be a limit on the number of shares that may be issued pursuant to options and awards of 10% of the share capital of the Company. Details of awards made under these plans will be disclosed in next year’s Annual Report and Accounts.

Executive Directors’ remuneration The remuneration package of the Executive Directors includes the following elements:

• Basic salary Salaries are normally reviewed annually and any changes are effective from 1 April.

• Bonus Payments under the annual scheme are based upon the achievement of budgeted profi t targets for the Group.

• Pensions The Executive Directors are entitled to a pension contribution at the rate of 15% of pensionable pay to be paid into their own personal pension arrangement or the Group personal pension plan, open to all of its permanent employees. Pensionable pay is set at basic salary.

Details of individual pension arrangements are set out in the table on page 15.

• Other benefi ts Benefi ts for executives principally comprise a car (or car allowance), private medical insurance, life cover of four times basic salary, critical illness cover of at least twice basic salary and permanent health cover.

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External appointments Executive Directors are not permitted to hold external directorships or offi ces of other fully listed or AIM listed companies.

Non-Executive Directors’ remuneration The fees for the Non-Executive Directors are determined by the Board. The Non-Executive Directors are not involved in any discussions or decisions about their own remuneration.

The Non-Executive Directors do not receive bonuses or pension contributions and are not entitled to participate in any of the Company’s share schemes. They are entitled to be reimbursed for reasonable expenses incurred by them in carrying out their duties as Directors of the Company.

Details of the fees paid to Non-Executive Directors are set out in the table below.

Sums paid to third parties No consideration was paid to or became receivable by third parties for making available the services of any person as a Director of the Company during the year.

Terms of Appointment At each Annual General Meeting, one third of Directors are required to retire and stand for re-election. Details of those Directors retiring by rotation this year are contained in the notice of Annual General Meeting as enclosed separately with this Annual Report and Accounts.

Service Contracts The Board’s policy is that service contracts of Executive Directors should provide for termination by the Company on twelve months’ notice. The service contracts of each of the current Executive Directors provide for such a period of notice.

The Non-Executive Directors have letters of appointment for an initial period of 3 years subject to termination on one month’s notice by the relevant Director or the company. These letters are available for inspection at the Company’s registered offi ce and at the Annual General Meeting.

Directors Emoluments The fi gures below represent the Directors remuneration earned for;

• 2007: as directors of Giant Topco Limited • 2008: as directors of Giant Topco Limited up to 3 June 2007 and as directors of Booker Group plc from 4 June 2007 or from date of appointment

Basic Annual bonus Benefits in Other Total Pension kind contributions 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Executive Charles Wilson 505 500 – – – – – – 505 500 76 75 Jonathan Prentis 204 201 72 153 14 14 – – 290 368 28 23 Non-Executive Richard Rose 63 – – – – – – – 63 – – – Lord Bilimoria 12 – – – – – – – 12 – – – Anderw Cripps 12 – – – – – – – 12 – – – Hans Kristian Hustad 1 75 250 – – – – 125 – 200 250 – – Kevin Lyon 2 35 35 – – – – 150 – 185 35 – – Jim McMahon 30 – – – – – – – 30 – – – Gunnar Sigurdsson – – – – – – – – – – – – 936 986 72 153 14 14 275 – 1,297 1,153 104 98

1 “Other” represents compenstion for loss of offi ce on resignation of Chairmanship of Giant Topco Limited 2 “Other” represents additional fees paid in connection with reverse acquistion

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REMUNERATION REPORT continued

With effect from 29 March 2008, the Directors’ basic salaries in relation to the Company will be as follows:

£’000 Exective Charles Wilson 510 Jonathan Prentis 206 Non-Executive Richard Rose 77 Lord Bilimoria 36 Andrew Cripps 36 Hans Kristian Hustad 36 Kevin Lyon 36 Jim McMahon 36 973

Directors’ Share Interests The benefi cial interests in the Ordinary shares of the Company of Directors who held offi ce at the end of the fi nancial year are set out in the Directors’ Report on pages 17 and 18.

This report was approved by the Board of Directors on 21 May 2008.

Lord Bilimoria CBE, DL Chairman of the Remuneration Committee

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DIRECTORS’ REPORT

The Directors present their report and audited accounts for the 52 week period ending 28 March 2008.

Business Review Information fulfi lling the requirements of the Business Review is contained in the Chief Executive’s Review and Group Finance Director’s Report.

Risk Factors Commercial Risk The economy is expected to slow in 2008/09 and the food wholesale market remains very competitive.

Operational Risk Risk management, health and safety and potential employers’ liability are key parts of the monthly executive meeting agenda.

Financial Risk The Group manages fi nancial and treasury risk through active working capital and debt management, including liaison with fi nance providers. Monitoring of net debt, banking facilities, cash fl ow and covenants is undertaken at Board level, on a regular basis.

The Group has a closed defi ned benefi t scheme which, on an IAS19 valuation, is £9.8m in surplus. This position may be affected by market movements, investment returns and the longevity of members.

Key Performance Indicators The principal KPI’s used to monitor the fi nancial performance of the business are £ gross profi t margin, earnings before interest, tax and amortisation relative to plan, stock and cash balances relative to plan and levels of net debt. Other key non fi nancial measures are customer satisfaction and health and safety.

Results and dividends The Group recorded a profi t for the period of £29.8m (2007: £10.9m) after deducting exceptional charges of £nil (2007: £1.8m).

The Directors have proposed a dividend of 0.5375p per share. This fi nal dividend will be payable on 11 July 2008 to shareholders on the register at the close of business on 6 June 2008.

Directors and their interests From 4 June 2007 the Directors of Booker Group plc were The Directors of Giant Topco Limited for the period ended as follows: 4 June 2007 were as follows:

Charles Wilson (appointed 4 June 2007) Charles Wilson Jonathan Prentis (appointed 4 June 2007) Jonathan Prentis Richard Rose (held offi ce throughout the period) Hans Kristian Hustad (resigned 4 June 2007) Lord Bilimoria (appointed 1 December 2007) Kevin Lyon (resigned 4 June 2007) Andrew Cripps (appointed 1 December 2007) Jim McMahon (resigned 4 June 2007) Hans Kristian Hustad (appointed 4 June 2007) Gunnar Sigurdsson (resigned 4 June 2007) Kevin Lyon (appointed 4 June 2007) Jim McMahon (appointed 4 June 2007)

The interests of the Directors in the shares of the Company were as follows:

Ordinary Shares in Booker Group plc Ordinary B Shares in Giant Topco Limited 28 March 2008 30 March 2007 Charles Wilson 121,241,986 36,000 Jonathan Prentis 22,863,486 6,800 Lord Bilimoria 200,000 - Andrew Cripps 200,000 - Kevin Lyon 200,000 -

On 4 June 2007, each Ordinary B Share in Giant Topco Limited was exchanged for 3,362.2774 Ordinary Shares in Booker Group plc.

At 28 March 2008 Richard Rose held options over 1.8 million ordinary shares. The options, which vested on 4 June 2007, the date of the reverse acquisition of Blueheath Holdings plc, are exercisable before 7 February 2017 at an option price of 5 pence per share.

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DIRECTORS’ REPORT continued

Substantial interests

In accordance with the Companies Act 1985, the Company has been notifi ed of shareholdings of 3% or more of the shares as at 21 May 2008.

% Milton ehf 31.38 Booker employees (excluding Charles Wilson) 14.09 Charles Wilson 8.13 Lansdowne Partners 7.68 Kaupthing Bank hf 6.19 TBH Trading Limited 5.79 Bank of Scotland 4.99 Kevin Stanford 4.42 Artemis Investment Management 3.05

Employees It is the Group’s policy to involve employees in the business and to ensure that matters of concern to them, including the Group’s aims and objectives and its fi nancial performance, are communicated in an open and regular way. This is achieved through the use of business briefi ngs, newsletters and other less formal communications.

The promotion of equal opportunities for all employees, including disabled persons, is regarded as an important Group priority. Applications for employment and promotion of disabled persons are treated on the same basis as those from other applicants having regard to aptitude, ability, requirements of the job and experience. The Group’s policy is to seek to continue the employment of, and to arrange appropriate training for, employees who have become disabled during the period when they were employed by the Group.

Suppliers The Group works closely with its suppliers to ensure the delivery of its policies on product quality and integrity, health and safety, and the environment. Payments to suppliers are made in accordance with terms and practices agreed with individual suppliers.

Going concern The Directors’ having made enquiries, consider that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future and, therefore, it is appropriate to continue to adopt the going concern basis in preparing the accounts.

Political and charitable contributions The Group made no political contributions or charitable donations during the period. Staff and Directors have raised £106,000 for Cancer Research and Caravan. In addition donations totalling £66,000 have been made to charities through a ‘Give as you Earn’ scheme.

Disclosure of information to auditors The Directors who held offi ce at the date of approval of this Directors’ report confi rm that, so far as they are aware, there is no relevant audit information of which the Company’s auditors are unaware and each Director has taken all the steps that they ought to have taken as a Director to make themselves aware of any relevant audit information and to establish that the Company’s auditors are aware of that information.

Auditors On 9 October 2007, Deloitte & Touche LLP resigned as auditors and the Directors appointed KPMG Audit plc. A resolution will be proposed at the AGM for the re-appointment of KPMG Audit plc as auditor of the company.

This report was approved by the Board of Directors on 21 May 2008.

Mark Chilton Company Secretary

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CONSOLIDATED INCOME STATEMENT For the 52 weeks ended 28 March 2008

52 weeks ended 28 March 2008 52 weeks ended 30 March 2007 Reorganisation Before Before costs and exceptional Exceptional exceptional professional costs items Total costs fees (note 6) Total Note £m £m £m £m £m £m Revenue 3,078.2 – 3,078.2 3,009.8 – 3,009.8 Cost of sales - excluding IAS 17 non cash item (2,985.7) – (2,985.7) (2,926.5) – (2,926.5) - IAS 17 non cash item 28 (1.4) – (1.4) (1.6) – (1.6) Total cost of sales (2,987.1) – (2,987.1) (2,928.1) – (2,928.1) Gross profit 91.1 – 91.1 81.7 – 81.7 Administrative expenses (45.0) – (45.0) (46.0) (1.8) (47.8) Operating profit 46.1 – 46.1 35.7 (1.8) 33.9 Finance income 7 3.8 – 3.8 10.7 – 10.7 Finance expenses 7 (13.7) – (13.7) (17.9) – (17.9) Net financing costs 7 (9.9) – (9.9) (7.2) – (7.2) Profit before tax 4 36.2 – 36.2 28.5 (1.8) 26.7 Tax 8 (6.4) – (6.4) (15.8) – (15.8) Profit for the period attributable to equity holders of the company 29.8 – 29.8 12.7 (1.8) 10.9 Basic and adjusted basic earnings per share (Pence) 9 2.04p – 2.04p 0.94p (0.13p) 0.81p Diluted and adjusted basic earnings per share (Pence) 9 2.03p – 2.03p 0.94p (0.13p) 0.81p

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52 weeks ended 52 weeks ended 28 March 2008 30 March 2007 Note £m £m Actuarial gain on defined benefit plans 20 23.8 31.4 (March 2007: the actuarial gain is shown net of £12.1m of payments to deferred members) Tax recognised on income and expenses recognised directly in equity 8 (6.6) (13.0) Effective portion of changes in the fair value of interest rate hedge (2.9) – Net income recognised directly in equity 14.3 18.4 Profit for the period 29.8 10.9 Total recognised income and expense for the period 44.1 29.3

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CONSOLIDATED BALANCE SHEET As at 28 March 2008

28 March 2008 30 March 2007 Note £m £m ASSETS Non-current assets Property, plant and equipment 10 60.2 65.1 Intangible assets 11 423.9 410.1 Retirement benefit assets 20 9.8 – Deferred tax asset 13 5.6 13.4 499.5 488.6 Current assets Inventories 14 184.7 176.2 Trade and other receivables 15 54.3 55.0 Cash and cash equivalents 41.0 29.9 Other financial assets 18 - 0.7 280.0 261.8 Total assets 779.5 750.4 LIABILITIES Current liabilities Bank overdraft 17 - (18.9) Other interest bearing loans and borrowings 17 (0.3) (0.6) Trade and other payables 16 (347.9) (338.9) Tax (16.5) (11.3) Other financial liabilities 18 (2.0) - (366.7) (369.7) Non-current liabilities Interest bearing loans and borrowings 17 (87.9) (86.9) Other payables 16 (27.9) (27.7) Retirement benefit liabilities 20 - (27.3) Provisions 21 (42.4) (42.4) (158.2) (184.3) Total liabilities (524.9) (554.0) Net assets 254.6 196.4

EQUITY Share capital 23 14.9 275.9 Share premium account 22 30.8 16.7 Merger reserve 22 260.8 - Share option reserve 22 0.2 - Hedge reserve 22 (1.6) - Retained earnings 22 (50.5) (96.2) Total equity attributable to equity holders 254.6 196.4

These fi nancial statements were approved by the board of directors on 21 May 2008 and were signed on its behalf by:

Charles Wilson Jonathan Prentis Director Director

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CONSOLIDATED CASH FLOW STATEMENT For the 52 weeks ended 28 March 2008

52 weeks ended 52 weeks ended 28 March 2008 30 March 2007 £m £m Cash flows from operating activities Profit before income tax 36.2 26.7 Depreciation 16.2 17.4 Finance income (3.8) (10.7) Finance expenses 13.7 17.9 Increase in inventories (4.4) (8.1) Decrease in debtors 15.2 8.0 Increase in creditors 1.1 26.7 Decrease in provisions (2.7) (3.5) Contributions to pension scheme (9.7) (8.3) Net cash flow from operating activities 61.8 66.1 Net interest paid (9.2) (7.5) Tax paid – (0.1) Cash generated from operating activities 52.6 58.5

Cash flows from investing activities Acquisition of property, plant and equipment (11.0) (6.0) Sale of property, plant and equipment 0.4 – Acquisition of subsidiary (11.0) – Net cash outflow from investing activities (21.6) (6.0)

Cash flows from financing activities Payment of finance lease liabilities (0.6) (0.4) Repayment of borrowings (0.4) (73.5) Net cash outflow from financing activities (1.0) (73.9)

Net increase/(decrease) in cash and cash equivalents 30.0 (21.4) Cash and cash equivalents at the start of the period 11.0 32.4 Cash and cash equivalents at the end of the period 41.0 11.0

Cash and cash equivalents consist of: Cash and cash equivalents 41.0 29.9 Bank overdrafts – (18.9) 41.0 11.0

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NOTES TO THE GROUP FINANCIAL STATEMENTS

1. General information

Overview Booker Group plc is a company incorporated in the United Kingdom under the Companies Act 1985 (Registration number 05145685). The address of the registered offi ce is Equity House, Irthlingborough Road, Wellingborough, Northants, NN8 1LT. The nature of the Group’s operations and its principal activities are set out in the Chief Executive’s Review and Directors’ Report.

Basis of accounting The group fi nancial statements have been prepared and approved by the directors in accordance with International Financial Reporting Standards as adopted by the EU (‘adopted IFRS’). The Company has elected to prepare its parent company fi nancial accounts in accordance with UK Generally Accepted Accounting Practice (‘UK GAAP’); these are presented on pages 50 to 54.

The group fi nancial statements consolidate those of the Company and its subsidiaries (together referred to as the “Group”). The parent company fi nancial statements present information about the Company as a separate entity and not about its group.

Reverse acquistion On 4 June 2007 the Company, then named Blueheath Holdings plc, became the legal parent company of Giant Topco Limited in a share-for-share transaction. Due to the relative values of the companies, the former Giant Topco Limited shareholders became the majority shareholders with 90.36% of the enlarged share capital. As part of the business combination Blueheath Holdings plc changed its name to Booker Group plc and changed its accounting reference date to March. Following the transaction the Company’s continuing operations and executive management were predominantly those of Giant Topco Limited.

IFRS3 ‘Business Combinations’ defi nes the acquirer in a business combination as the entity that obtains control. Accordingly, the combination was accounted as a reverse acquisition i.e. as if Giant Topco Limited had acquired Blueheath Holdings plc in return for consideration equal to the shares issued.

As a consequence of applying reverse acquisition accounting, the results of the Group at 28 March 2008 comprise the results of Giant Topco Limited for the 52 weeks ended 28 March 2008 and those of Blueheath Holdings plc from 4 June 2007. The comparative fi gures for the Group are those of Giant Topco Limited for the 52 weeks to 30 March 2007.

Transition to Adopted IFRSs The Group is preparing its fi nancial statements in accordance with Adopted IFRS for the fi rst time and consequently has applied IFRS 1. An explanation of how the transition to Adopted IFRSs has affected the reported fi nancial position, fi nancial performance and cash fl ows of the Group is provided in note 28.

IFRS 1 grants certain exemptions from the full reporting requirements in the transition year. The following exemptions have been taken in these fi nancial statements:

1. Employee benefi ts (IAS 19): all cumulative actuarial gains and losses have been recognised in equity at transition date.

2. Business combinations (IFRS 3): the Group has chosen not to restate business combinations prior to the transition date on an IFRS basis.

3. Cumulative translation differences (IAS 21): according to IAS 21, cumulative foreign exchange movements on translation of foreign entities on consolidation should be disclosed separately within shareholder’s funds. IFRS 1 allows the Group to not record cumulative translation differences arising before the date of transition. The Group has elected to take this exemption and have brought forward a nil balance in respect of these translation differences.

Recent accounting developments • IFRS 8 ‘Operating Segments’ has been endorsed by the EU and is effective for accounting periods beginning on or after 1 January 2009. It is not expected to have a signifi cant impact on the Group. • IFRIC 14 ‘IAS 19 - The Limit on a Defi ned Benefi t Asset, Minimum Funding Requirements and their Interaction’ was issued in June 2007 but has not yet been adopted for use in the EU. It limits the ability to recognise defi ned benefi t scheme surpluses. In anticipation, the basis of recoverability of the pension scheme surplus recognised at 28 March 2008 has been reviewed and the adoption of IFRIC14 is not expected to impact on the Group’s ability to recognise any pension scheme surplus in future accounting periods.

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NOTES TO THE GROUP FINANCIAL STATEMENTS continued

1. General information continued

Basis of preparation The fi nancial statements are presented in Pounds Sterling and rounded to the nearest hundred thousand. They are prepared on the historical cost basis except that fi nancial instruments are stated at their fair value. The fi nancial statements for the current and prior period have been prepared for a 52 week period to refl ect internal management reporting.

Basis of consolidation Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the fi nancial and operating policies of an entity so as to obtain benefi ts from its activities. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account. The fi nancial statements of subsidiaries are included in the consolidated fi nancial statements from the date that control commences until the date that control ceases.

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

These estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Some of these policies require a high level of judgement and management and the Audit Committee believes that the most critical accounting policies and signifi cant areas of judgement and estimation arise from the accounting for:

• IAS19 ‘Employee benefi ts’. Defi ned benefi t schemes are accounted for in accordance with the advice of an independent qualifi ed actuary but signifi cant judgements are required in relation to the assumptions for future salary and pension increases, infl ation, investment returns and mortality that underpin their valuations. • IAS37 ‘Provisions, contingent liabilities and contingent assets’. The Group is party to a number of leases on properties that are no longer required for trading. Whilst every effort is made to profi tably sub-let these properties, it is not always possible. Where a lease is onerous to the Group, a provision is established for the difference between amounts contractually payable to the landlord and amounts contractually receivable from the tenant (if any) for the period up until the point it is judged that the lease will no longer be onerous. In addition, provisions exist for the expected future dilapidation cost on leasehold properties and the expected future costs of removing asbestos from leasehold properties. Management believe that their estimates, which are based upon the advice of an in house property department who monitor the UK property market, are appropriate. • IAS36 ‘Impairment of assets’. In testing for impairment of goodwill, management have made certain assumptions concerning the future development of the business that are consistent with its annual budget and three year plan. Should these assumptions regarding the discount rate or growth in the profi tability be unfounded then it is possible that goodwill included in the balance sheet could be impaired. • IAS12 ‘Income Taxes’. In applying the Group’s accounting policy in relation to deferred tax, as set out below, management are required to make assumptions regarding the Group’s ability to utilise historical tax assets following an assessment of the likely quantum and timing of future taxable profi ts. A deferred tax asset is recognised to the extent that management are confi dent that the Group’s future profi ts will utilise historical tax assets.

2. Accounting policies

The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these group fi nancial statements and in preparing an opening IFRS balance sheet at 1 April 2006 for the purposes of the transition to Adopted IFRSs.

Revenue recognition Revenue is recognised when goods are received by the customer and the risks and rewards of ownership have passed to them. Revenue is measured at the fair value of consideration received or receivable and represents amounts receivable for goods provided in the normal course of business net of discounts and value added tax. Discounts are accounted for in the period they are earned. Provision is made for expected customer returns.

Cost of sales Cost of sales represents all costs incurred up to the point of sale including the operating expenses of the trading outlets.

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Supplier rebates Supplier allowances and credits are recorded as a reduction of cost of sales as they are earned according to the underlying agreement. Allowances consist primarily of promotional allowances, quantity discounts and payments under merchandising agreements. Amounts received under promotional or other merchandising allowance agreements that require specifi c performance are recognised when the performance is satisfi ed, the amount is fi xed and determinable and the collection is reasonably assured.

Expenses Operating lease payments Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease. Where a lease has a minimum fi xed increase, the total minimum lease payments are spread over the lease term. The total amount payable over the life of the lease remains unchanged but the timing of the income statement charge changes. The excess of the rent charged over the cash payment in any period will be held on the balance sheet within “Accruals and deferred income”.

Lease incentives received are recognised in the income statement as an integral part of the total lease expense.

Finance lease payments Minimum lease payments are apportioned between the fi nance charge and the reduction of the outstanding liability. The fi nance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Net fi nancing costs Net fi nancing costs comprise interest payable, fi nance charges on fi nance leases, interest receivable on funds invested, and gains and losses on hedging instruments that hedge risks associated with fi nancing activities that are recognised in the income statement (see Financial instruments accounting policy).

Interest income and interest payable is recognised in profi t or loss as it accrues, using the effective interest method.

Business combinations and goodwill Subject to the transitional relief in IFRS 1, all business combinations are accounted for by applying the purchase method. Goodwill represents amounts arising on acquisition of subsidiaries. In respect of business acquisitions that have occurred since 1 April 2006, goodwill represents the difference between the cost of the acquisition and the fair value of the net identifi able assets acquired. Identifi able intangibles are those which can be sold separately or which arise from legal rights regardless of whether those rights are separable.

Goodwill is capitalised and is subject to an impairment review, both annually and when there are indications that its carrying value may not be recoverable.

IFRS 1 grants certain exemptions from the full requirements of Adopted IFRSs in the transition period. The Group elected not to restate business combinations that took place prior to 1 April 2006. In respect of acquisitions prior to 1 April 2006, goodwill is included on the basis of its deemed cost, which represents the amount recorded under UK GAAP which was broadly comparable save that only separable intangibles were recognised and goodwill was amortised.

Foreign currency Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non- monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated at foreign exchange rates ruling at the dates the fair value was determined.

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NOTES TO THE GROUP FINANCIAL STATEMENTS continued

2. Accounting policies continued

Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

Leases in which the Group assumes substantially all the risks and rewards of ownership of the leased asset are classifi ed as fi nance leases. Where land and buildings are held under leases the accounting treatment of the land is considered separately from that of the buildings. Leased assets acquired by way of fi nance lease are stated at an amount equal to the lower of their fair value and the present value of the minimum lease payments at inception of the lease, less accumulated depreciation and impairment losses.

Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Freehold land is not depreciated. The estimated useful lives are as follows:

• Leasehold improvements lesser of the unexpired term of the lease and 50 years • Plant and equipment 5-25 years • Motor vehicles 4 years

Inventories Inventories are stated at the lower of cost and net realisable value. Cost is based on the weighted average principle and includes certain warehousing and distribution costs incurred in bringing the inventory to their existing location less supplier volume rebates. Net realisable value is the estimated selling price less the estimated costs of disposal.

Impairment of assets excluding goodwill The carrying values of all of the Group’s assets, other than inventories and deferred tax assets, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated and compared to the carrying amount.

An impairment loss is recognised to the extent that the carrying value of an asset exceeds its recoverable amount and is recognised in the income statement.

Financial instruments The Group uses fi nancial instruments to hedge its exposure to interest rate risks arising from fi nancing activities and they are stated at fair value. The Group currently has an amortising interest rate swap at 4.98% for £130m expiring in March 2011. In addition there are two option caps and a fl oor, also at £130m and an option at 4.98% exercisable in March 2011 for two years. The fair value is the estimated amount the Group would receive or pay to terminate these instruments at the balance sheet date, taking into account current interest rates and the current creditworthiness of the instruments’ counterparties. Changes in the fair value, that are designated as effective hedges of the future volatility, are recognised directly in equity. The ineffective portion is recognised in the income statement.

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

Interest bearing borrowings Interest bearing borrowings are recognised in the balance sheet at amortised cost. Costs associated with arranging a bank facility or loan are recognised in the income statement over the life of the facility or loan. All other borrowing costs are recognised in the income statement in the period in which they are incurred.

Classifi cation of fi nancial instruments issued by the Group Following the adoption of IAS 32, fi nancial instruments issued by the Group are treated as equity only to the extent that they meet the following two conditions:

(a) they include no contractual obligations upon the group to deliver cash or other fi nancial assets or to exchange fi nancial assets or fi nancial liabilities with another party under conditions that are potentially unfavourable to the group; and

(b) where the instrument will or may be settled in the company’s own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the company’s own equity instruments or is a derivative that will be settled by the company’s exchanging a fi xed amount of cash or other fi nancial assets for a fi xed number of its own equity instruments.

To the extent that this defi nition is not met, the proceeds of issue are classifi ed as a fi nancial liability. Where the instrument so classifi ed takes the legal form of the company’s own shares, the amounts presented in these fi nancial statements for called up share capital and share premium account exclude amounts in relation to those shares.

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Finance payments associated with fi nancial liabilities are dealt with as part of fi nance expenses. Finance payments associated with fi nancial instruments that are classifi ed in equity are treated as distributions and are recorded directly in equity.

Employee benefi ts Defi ned contribution plans Obligations for contributions to defi ned contribution pension plans are recognised as an expense in the income statement as incurred.

Defi ned benefi t plans The Group’s net obligation in respect of defi ned benefi t pension plans is calculated by estimating the amount of future benefi t that employees have earned in return for their service in the current and prior periods; that benefi t is discounted to determine its present value, and the fair value of any plan assets (at bid price) is deducted. The liability discount rate is the yield at the balance sheet date on AA credit rated bonds that have maturity dates approximating to the terms of the Group’s obligations. The calculation is performed by a qualifi ed actuary using the projected unit credit method.

All actuarial gains and losses as at 1 April 2006, the date of transition to Adopted IFRSs, were recognised. In respect of actuarial gains and losses that arise subsequent to 1 April 2006 the Group recognises them in the period they occur directly into equity through the statement of recognised income and expense.

Where the calculation results in a benefi t to the Group, the asset recognised is limited to the present value of any future refunds from the plan or reductions in future contributions to the plan.

The expected return on pension scheme assets (recorded net of the costs to administer the scheme) and the interest on pension scheme liabilities are shown in net fi nance costs within the income statement.

Short-term benefi ts Short-term employee benefi t obligations are measured on an undiscounted basis and are expensed as the related service is provided. A provision is recognised for the amount expected to be paid under short-term cash bonus or profi t-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Share based payments The Group has issued equity settled share based payments. The fair value is measured using an option valuation model, taking into account the terms and conditions upon which the options were granted. This fair value is recognised as an employee expense over the period in which the employees become unconditionally entitled to the options, with a corresponding increase in equity, shown in a separate share option reserve.

The dilutive effect of outstanding options is refl ected as additional share dilution in the computation of earnings per share.

Provisions A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outfl ow of economic benefi ts will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected, risk adjusted, future cash fl ows at a pre-tax risk-free rate.

Dividends Dividends proposed by the Board of Directors and unpaid at the period end are not recognised in the fi nancial statements until they have been approved by shareholders at the Annual General Meeting.

Taxation Tax expense included in the Income Statement comprises current and deferred tax.

Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous periods.

Tax is recognised in the income statement except to the extent it relates to items recognised directly in equity, in which case it is recognised in equity.

Deferred tax is provided using the Balance Sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for fi nancial reporting purposes and the amounts used for taxation purposes.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the Income Statement, except when it relates to items charged or credited directly to equity, in which case deferred tax is also dealt with in equity.

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NOTES TO THE GROUP FINANCIAL STATEMENTS continued

2. Accounting policies continued

Deferred tax liabilities and deferred tax assets are only recognised to the extent that, following an assessment of the quantum and timing of future taxable profi ts, it is probable that future taxable profi ts will be available against which deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each balance sheet date and the amount which is recognised is increased or reduced to the extent that it is then probable or no longer probable that suffi cient taxable profi ts will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are offset against each other when they relate to income taxes levied by the same tax jurisdiction and when the Group intends to settle its current tax assets and liabilities on a net basis.

3. Segmental reporting The Group operates as a wholesale business in one geographical segment, the United Kingdom.

4. Profi t before tax This is stated after charging:

2008 2007 £m £m Operating lease rentals – land and buildings (payable) 38.5 37.5 – land and buildings (non cash) 1.4 1.6 39.9 39.1

Operating lease rentals – plant and machinery 5.9 5.5 Depreciation of property, plant and equipment 16.2 17.4

During the period the Group incurred the following costs for services provided by the Company’s auditors: Audit of these financial statements 0.1 0.1 Audit of financial statements of subsidiaries pursuant to legislation 0.2 0.2

Other services relating to taxation 0.2 0.3

0.5 0.6

In addition to the above, £0.3m (2007: £nil) was paid to the auditors relating to corporate fi nance transactions in respect of the reverse acquisition of Blueheath Holdings plc and this has been capitalised.

5. Staff numbers and costs The average number of persons employed by the group (including directors) during the period, was as follows:

2008 2007 Number Number Branch and distribution 7,779 7,778 Administration 634 567 8,413 8,345

The aggregate payroll costs of these persons were as follows:

2008 2007 £m £m Wages and salaries 125.2 123.4 Social security costs 11.0 11.1 Other pension costs 3.0 3.1 139.2 137.6

Details of directors’ remuneration are provided in the Remuneration Report.

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6. Exceptional items

2008 2007 £m £m Business restructuring costs – 0.6 Professional fees in respect of pensions – 1.2 Total exceptional charge – 1.8

Business restructuring costs relate to redundancy costs.

During the prior period, the Group undertook two exercises with the objective of reducing the risk in relation to its defi ned benefi t pension scheme (see note 20), and incurred £1.2m of professional fees as a consequence.

7. Finance income and expense

2008 2007 £m £m Expected return on pension scheme assets (35.8) (40.2) Interest on pension liabilities 32.2 34.7 (3.6) (5.5) Interest receivable and similar income – (1.6) Net gain on re-measurement of interest rate swap to fair value (0.2) (3.6) Finance income (3.8) (10.7)

Interest on bank loans and overdrafts 9.4 12.6 Loan note interest – 0.1 Other interest payable 0.1 0.3 Unwinding of discount on provisions 2.5 2.6 Amortisation of financing costs 1.7 2.3 Finance expense 13.7 17.9

Net financing costs 9.9 7.2

8. Tax

i) Recognised in the income statement 2008 2007 £m £m Arising in respect of current period Current tax – 9.0 Deferred tax 6.0 6.8 6.0 15.8 Arising in respect of prior periods Understatement of prior period 5.2 – Benefit of recognition of deferred tax asset (4.8) – 0.4 – Total tax charge 6.4 15.8

UK corporation tax is calculated at 30% (2007: 30%) of the estimated assessable profi t for the period.

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NOTES TO THE GROUP FINANCIAL STATEMENTS continued

8. Tax continued

ii) Reconciliation of effective tax rate

The differences between the total tax charge shown above and the amount calculated by applying the standard rate of UK corporation tax to the profi t before tax is as follows:

2008 2007 £m £m Profit before tax 36.2 26.7 Tax using the current UK corporation tax rate of 30% 10.9 8.0 Non deductible expenses 1.0 1.2 Reversal of previously unrecognised temporary differences (5.9) (2.4) Recognition of deferred tax on prior period temporary differences (4.8) – Tax in respect of former overseas businesses 5.2 9.0

Total tax charge 6.4 15.8

Effective tax rate 17.7% 59.2%

iii) Tax recognised directly in equity 2008 2007 £m £m Deferred tax credit/(charge) on: Retirement benefit obligations (7.1) (13.0) Interest rate hedge 0.5 – (6.6) (13.0)

9. Earnings per share

2008 2007 Weighted Weighted average Earnings average Earnings Earnings shares per share Earnings shares per share £m Number m Pence £m Number m Pence Basic earnings 29.8 1,462.8 2.04 10.9 1,344.3 0.81 Share options – 4.7 (0.01) ––– Diluted earnings 29.8 1,467.5 2.03 10.9 1,344.3 0.81

As described in note 1, this transaction has been accounted for as a reverse acquisition.

To enable a meaningful comparison, the weighted average number of shares for the current and prior period have been based on the 1,344,910,958 new shares issued on 4 June 2007.

The actual Giant Topco Limited shares in issue in the period from 1 April 2006 to 30 March 2007 have been proportionately applied to the 1,344,910,958 shares deemed to be in issue at 4 June 2007 to derive a weighted average number of shares for the period to 30 March 2007.

The 143,488,122 of Blueheath Holdings plc shares in issue just prior to the reverse acquisition are deemed to have been issued on 3 June 2007 and have been used to calculate the weighted average number of shares for the period to 28 March 2008.

In aggregate, the number of shares in issue at 28 March 2008 are 1,488,399,080 (see note 23).

The share options relate to options that were granted by Blueheath Holdings plc prior to the reverse acquisition (see note 24).

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10. Property, plant & equipment

Long Short Plant & Motor Freehold Leasehold Leasehold Equipment Vehicles Total £m £m £m £m £m £m Cost At 31 March 2006 1.1 2.4 35.2 195.5 16.6 250.8 Additions – 0.3 0.3 5.4 – 6.0 Disposals – – (0.1) (0.1) (0.9) (1.1) Reclassifications (0.5) 0.8 0.3 (0.6) – – At 30 March 2007 0.6 3.5 35.7 200.2 15.7 255.7 Additions – 1.4 – 9.6 – 11.0 Disposals – – – (0.7) (6.5) (7.2) Reclassifications – 0.4 – (0.4) – – Acquisition of business – – 0.4 2.1 1.0 3.5 At 28 March 2008 0.6 5.3 36.1 210.8 10.2 263.0 Depreciation At 31 March 2006 – 0.3 18.4 143.0 13.4 175.1 Provided during the period – 0.1 1.6 14.3 1.4 17.4 Disposals – – – (0.1) (0.9) (1.0) Assets written off – – – (0.9) – (0.9) At 30 March 2007 – 0.4 20.0 156.3 13.9 190.6 Provided during the period – 0.2 1.5 13.7 0.8 16.2 Disposals – – – (0.7) (6.1) (6.8) Acquisition of business – – 0.4 1.9 0.5 2.8 At 28 March 2008 - 0.6 21.9 171.2 9.1 202.8 Net book value At 28 March 2008 0.6 4.7 14.2 39.6 1.1 60.2 At 30 March 2007 0.6 3.1 15.7 43.9 1.8 65.1 At 31 March 2006 1.1 2.1 16.8 52.5 3.2 75.7

The cost of freehold properties includes land of £0.5m (2007: £0.5m) on which depreciation is not provided.

The net book value of plant and equipment includes £1.1m (2007: £1.4m) in respect of assets held under fi nance leases.

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NOTES TO THE GROUP FINANCIAL STATEMENTS continued

11. Intangible assets

Goodwill £m Cost and net book value At 31 March 2006 and 30 March 2007 410.1 Recognised on acquisition in the period (see note 12) 13.8 At 28 March 2008 423.9

The principal remaining element of unamortised goodwill relates to the acquisition of The Big Food Group Ltd.

During the period, management has carried out an impairment test for the goodwill carried in the balance sheet. No impairments were identifi ed as a result of the review. All of the recoverable amounts were based on value in use.

The key assumptions applied in the value in use calculations were:

• cash fl ow projections based on management approved budget for 2009 and plan for 2010; • the weighted average cost of capital (“WACC”) of the Group is 10.3%; • long-term forecast growth rates applied from 2010 onwards.

12. Acquisition of subsidiary

On 4 June 2007, Giant Topco Limited completed the reverse acquisition of Blueheath Holdings plc in a share-for-share transaction. The consideration was £20.6m, refl ecting the fair value of the acquired business having a market value of 9.75p at the date of acquisition and transaction costs of £6.6m. Following the acquisition, the borrowings of £4.4m were repaid, giving a total cash outfl ow of £11.0m. The acquisition had the following effect on the Group’s assets and liabilities:

Acquiree’s Fair value Accounting Acquisition book values adjustments policy amounts £m £m £m £m Property, plant and equipment 0.8 (0.1) - 0.7 Stocks 4.5 – (0.4) 4.1 Trade and other receivables 15.8 (0.5) (0.8) 14.5 Interest-bearing borrowings (4.4) – – (4.4) Trade and other payables (7.9) – – (7.9) Provisions – – (0.2) (0.2) Net identifiable assets and liabilities 8.8 (0.6) (1.4) 6.8 Goodwill on acquisition 13.8 Consideration 20.6 Fair value of the 143,488,122 ordinary shares issued 14.0 Transaction costs 6.6 20.6

The fair value adjustments refl ect: - a writedown of obsolete fi xed assets - a writedown of a specifi c debtor

The accounting policy adjustments refl ect alignment of group policies in relation to: - stock provisions - trade debtor provisions - property provisions

The goodwill arising on acquisition is attributed to the anticipated profi tability and the future operating synergies arising in the enlarged group.

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The profi t and loss account of the Blueheath Group can be summarised as follows:

43 weeks to 52 weeks to 28 March 2008 28 March 2008 Note (a) £m £m Turnover 78.8 98.2 Retained loss (1.7) (2.1)

(a) Before making adjustments for fair value (£0.6m) and accounting policy adjustments (£1.4m).

13. Deferred tax assets and liabilities

Recognised deferred tax assets/(liabilities) The following are the major deferred tax assets/(liabilities) recognised by the Group:

Retirement Decelerated benefit Property Financial tax obligations leases instrument depreciation IAS 19 IAS17 IAS 39 Total £m £m £m £m £m At 31 March 2006 – 30.6 2.6 – 33.2 Credit/(charge) to the income statement – (6.8) – – (6.8) Credit/(charge) to equity – (13.0) – – (13.0) At 30 March 2007 – 10.8 2.6 – 13.4 Credit/(charge) to the income statement 4.8 (6.4) 0.4 – (1.2) Credit/(charge) to equity – (7.1) – 0.5 (6.6) At 28 March 2008 4.8 (2.7) 3.0 0.5 5.6

The deferred tax assets and liabilities have been offset as disclosed above.

Unrecognised deferred tax assets Based on an assessment of the quantum and timing of future taxable profi ts, deferred tax assets have not been recognised in respect of the following:

2008 2007 £m £m Property, plant and equipment 6.5 18.7 Tax losses 13.5 6.3 Surplus ACT carried forward 30.0 30.0 50.0 55.0

Change in corporate tax rate On 26 June 2007 the Finance Bill was approved, whereby the UK standard rate of taxation was reduced from 30% to 28% with effect from 1 April 2008. As such, all fi gures above are stated using the corporate tax rate of 28%.

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NOTES TO THE GROUP FINANCIAL STATEMENTS continued

14. Inventories

2008 2007 £m £m Goods held for resale 184.7 176.2

The amount of inventories recognised as an expense during the period was £2,987.1m (2007: £2,928.1m).

15. Trade and other receivables

2008 2007 £m £m Trade receivables 31.3 26.0 Allowance for doubtful debts (3.4) (2.4) 27.9 23.6 Prepayments and accrued income 26.4 31.4 54.3 55.0

Trade receivables of £27.9m (2007: £23.6m), which for the Group at the balance sheet date comprise principally amounts receivable from the sale of goods, together with amounts due from rebates are classifi ed as loans and receivables in note 18.

16. Trade and other payables

i) Current 2008 2007 £m £m Trade payables 297.8 287.8 Other taxes and social security costs 14.5 10.6 Other payables 6.6 5.5 Accruals and deferred income 29.0 35.0 347.9 338.9

ii) Non-Current 2008 2007 £m £m Accruals and deferred income 27.9 27.7

Trade payables, other taxes and social security costs and other payables of £318.9m (2007: £303.9m) are classifi ed under fi nancial liabilities in note 18.

The non-current accruals and deferred income relate mainly to the IFRS adjustments described in note 28: lease incentives and guaranteed minimum lease payments.

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17. Interest bearing loans and borrowings

a) Summary 2008 2007 £m £m Bank loans 89.8 89.8 Bank overdraft – 18.9 Finance leases 1.1 1.5 Loan notes 1.1 1.7 92.0 111.9 Less: unamortised arrangement fees (3.8) (5.5) 88.2 106.4 Current liabilities 0.3 19.5

Non-current liabilities 87.9 86.9 88.2 106.4

b) Borrowings repayable 2008 2007 £m £m On demand or within one year 2.0 21.2 Between one and two years 0.2 0.7 Between two to five years 89.8 90.0 92.0 111.9

c) Facilities available and maturity 2008 2007 £m £m Bank loan repayable in March 2011 89.8 89.8 Undrawn revolving credit facility available until March 2010 129.5 179.5

d) Obligations under fi nance leases 2008 2007 £m £m The maturity of these amounts is as follows: Within one year 0.9 0.6 Between one and two years 0.2 0.7 Between two to five years – 0.2 1.1 1.5

e) Interest rates 2008 2007 Bank loans and revolving credit facility LIBOR +2.0% LIBOR +1.5%

The increase in margin relates to a contractual ratchet which was triggered in 2007 when the Group exceeded cashfl ow targets. There are no further contractual changes to the margin.

f) Guarantees and security The bank loans and revolving credit facility are secured against the assets of the Group. There are cross guarantees between group companies.

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NOTES TO THE GROUP FINANCIAL STATEMENTS continued

18. Financial instruments

Details of signifi cant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of fi nancial asset, fi nancial liability and equity instrument are disclosed in note 2.

The carrying value and fair values of fi nancial instruments are as follows: 2008 2007 Note £m £m Financial assets: Loans and other receivables a 27.9 23.6 Cash and cash equivalents 41.0 29.9 Other financial assets b – 0.7 68.9 54.2 Financial liabilities: Other financial liabilities b (2.0) – Borrowings c (92.0) (111.9) Trade and other payables a (318.9) (303.9) Property guarantees d (4.0) (4.0) (416.9) (419.8)

Loans and other receivables represent amounts receivable from the sale of goods, together with amounts due from rebates (as described in note 15).

Fair values have been calculated as follows: a) amortised cost

b) estimated by discounting estimated future cash fl ows based on the applicable yield curves derived from quoted interest rates

c) based on discounted expected future principal and interest cash fl ows

d) estimated by discounting estimated future cash fl ows based on the terms and maturity and risk of each guarantee crystallising

The following is an analysis of the undiscounted contractual cash fl ows payable under fi nancial liabilities: Due within Due between Due between Due between Over 1 year 1 and 2 years 2 and 3 years 3 and 4 years 4 years £m £m £m £m £m

2008

Financial instruments – 0.7 0.2 – –

Borrowings 2.0 0.2 89.8 – –

Trade and other payables 318.9––––

320.9 0.9 90.0 – – 2007 Financial instruments (0.3) (0.3) (0.3) (0.2) 0.8 Borrowings 21.2 0.7 0.2 89.8 – Trade and other payables 303.9–––– 324.8 0.4 (0.1) 89.6 0.8

It is not possible to quantify the timing of the cash fl ows relating to the property guarantees.

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Credit risk The Group is predominantly a cash sales business with low levels of trade receivables in comparison to total sales for the year and has no signifi cant concentration of credit risk, with exposure spread over a large number of customers. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verifi cation procedures. The Group has an accounting policy to provide for certain overdue trade receivables based on past experience, and believe that there are no signifi cant unprovided overdue fi nancial assets.

Liquidity risk The Group will fi nance operations and growth from existing cash resources, fi nance leases and committed borrowing facilities to ensure the constant availability of an appropriate amount of reasonably priced funding to meet both current and future forecast requirements.

Interest rate risk The Group is exposed to interest rate risk as it has bank borrowings with a fl oating interest rate. This risk is managed by the use of interest rate contracts so that the exposure is either on a fi xed rate basis or is subject to movements within predefi ned limits. The Group is party to:

• an interest swap at 4.98% with a notional value of £130m maturing in 2011 • cap and fl oor options with a notional value of £130m maturing in 2011 which provide a cap and collar • an option at 4.98% with a notional value of £130m, exercisable in March 2011 for 2 years

2008 2007 £m £m Interest rate swap designated and effective as cash flow hedging instrument 0.3 - Interest rate options carried at fair value through profit and loss account (2.3) 0.7 Current (liabilities)/asset (2.0) 0.7 The movement in the fair value is as follows: At start of period 0.7 Effective portion of changes in the fair value of interest rate hedge (2.9) Net gain on re-measurement of interest rate swap to fair value recorded through income statement 0.2 At end of period (2.0)

A table showing the period cash fl ows associated with the interest rate contracts is shown on page 36.

The impact on the income statement is considered to be equivalent to the impact on cash fl ows.

Sensitivity analysis has been based on the exposure to interest rates on the borrowings that were outstanding at the balance sheet date. Due to the terms of the cap and fl oor options, together with the size of the swap in comparison to the year end debt, if interest rates were 1.0% higher, the interest charge would have been lower by £0.3m and if interest rates were 1.0% lower, the interest charge would also have been lower by £0.3m.

Capital risk The Group’s objectives when managing capital are:

• to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefi ts for other stakeholders; and • to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk. The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In assessing the level of capital all components of equity are taken into account (i.e. share capital and retained earnings). The Group has £47.2m of net debt as at 28 March 2008 and is not subject to externally imposed capital requirements. Management of capital therefore focuses around its ability to generate cash from its operations.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to raise funds. The Group believes it is meeting its objectives for managing capital as funds are available for reinvestment where necessary as well as being in a position to make returns to shareholders where this is felt appropriate.

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NOTES TO THE GROUP FINANCIAL STATEMENTS continued

18. Financial instruments continued

Foreign currency risk Less than 1% of purchases are denominated in foreign currencies and all sales are denominated in sterling. The directors do not consider that the Group has signifi cant exposure to movements in foreign exchange and the Group does not hold any foreign exchange contracts.

19. Analysis of net debt

At Debt acquired Non cash At 30 March 2007 on acquisition Cash flow items 28 March 2008 £m £m £m £m £m Cash and cash equivalents 29.9 – 11.1 – 41.0 Overdrafts (18.9) – 18.9 – – 11.0 – 30.0 – 41.0

Loan notes (1.7) – 0.6 – (1.1) Finance leases (1.5) – 0.4 – (1.1) Bank loans (89.8) (4.4) 4.4 – (89.8) Unamortised arrangement fees 5.5 – – (1.7) 3.8 (87.5) (4.4) 5.4 (1.7) (88.2)

Net debt (76.5) (4.4) 35.4 (1.7) (47.2)

Included within the opening cash and cash equivalents is £4.2m held in an Escrow account which could only be used to pay deferred members leaving the pension scheme.

Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less. The carrying amount of these assets approximates to their fair value.

20. Post employment benefi ts

The Group operates a variety of post employment benefi t arrangements, covering both funded defi ned benefi t and funded defi ned contribution schemes to provide benefi ts to both full-time and part-time employees.

Defi ned contribution schemes Pension contributions of £3.0m (2007: £3.1m) were charged to defi ned contribution schemes in the period. Included within accruals is £0.3m (2007: £0.3m) of outstanding pension contributions.

Defi ned benefi t schemes The defi ned benefi t scheme (The Booker Group Pension Scheme – the “Scheme”) is a funded pension arrangement based on fi nal salary and was closed to new entrants in October 2001 with benefi ts ceasing to accrue from July 2002. However, active members’ benefi ts retain a link to their fi nal salaries. The assets of the scheme are held separately from those of the Group and are invested by independent fund managers appointed by the Trustees. The benefi t obligations as at 28 March 2008 have been calculated by an independent actuary on an IAS 19 basis using membership data obtained from the 31 March 2007 triennial actuarial valuation which has then been updated to 28 March 2008.

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a) Major assumptions used by the actuary 2008 2007 Discount rate 6.40% 5.40% Rate of increase in salaries 4.80% 4.50% Pension increases 3.30% 3.00% Inflation 3.30% 3.00% Expected rate of return on scheme assets Equities 8.00% 8.00% Corporate bonds 5.80% 5.30% Other 5.25% 5.25%

Following analysis of mortality trends of the Scheme, which was carried out as part of the latest triennial actuarial assessment, it was decided to update the mortality assumptions by adopting the mortality tables PA92c2025 (2007: PA92c2015) for future pensioners and PA92c2015 (2007: PA92c2005) for current pensioners. Illustrative life expectancies are set out below:

2008 2007 Member age 65 retiring immediately (current pensioner) Male 19.4 18.5 Female 22.4 21.4 Member age 40 retiring at 65 (future pensioner) Male 20.2 19.4 Female 23.1 22.4

(b) The amounts recognised in the balance sheet

2008 2007 £m % £m % Equities 197.1 38% 272.9 44% Corporate bonds 315.2 61% 315.9 51% Other 4.5 1% 31.0 5% Total fair value of scheme assets 516.8 100% 619.8 100% Present value of scheme liabilities (507.0) (647.1) Surplus/(deficit) in the scheme 9.8 (27.3)

(c) Movement in the fair value of scheme assets 2008 2007 £m £m At start of period 619.8 626.9 Employer contributions 9.7 8.3 Current service cost 0.4 0.4 Member contributions – – Expected return on pension scheme assets 35.8 40.2 Actuarial losses (47.2) (19.4) Benefits paid (101.7) (36.6) At end of the period 516.8 619.8

The expected rate of return on assets is a weighted average based on actual assets held by the Scheme and the respective returns expected on the separate asset classes and then deducting the expected administration costs borne by the Group. The expected rate of return on equities is set with reference to the expected long term return taking into account the expected out performance of equities over bonds. The expected return on bonds is measured directly from actual market yields for government and corporate bonds at the balance sheet date. Expected returns on cash are measured with reference to the Bank of England base rate.

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NOTES TO THE GROUP FINANCIAL STATEMENTS continued

20. Post employment benefi ts continued

(d) Movement in the present value of defi ned benefi t obligations in the period 2008 2007 £m £m At start of period (647.1) (711.5) Current service cost (0.4) (0.4) Interest on pension scheme liabilities (32.2) (34.7) Actuarial gains 59.3 25.1 Experience gains 11.7 37.8 Benefits paid 101.7 36.6 At end of the period (507.0) (647.1)

(e) Movement in the scheme net (liability)/asset during the period 2008 2007 £m £m At start of period (27.3) (84.6) Employer contributions 9.7 8.3 Current service cost 0.4 0.4 Member contributions – – Credit recognised in the income statement 3.2 5.1 Actuarial gain recognised in equity 23.8 43.5 At end of the period 9.8 (27.3)

(f) Amounts recognised in the income statement 2008 2007 £m £m Expected return on pension scheme assets 35.8 40.2 Interest on pension scheme liabilities (32.2) (34.7) Credited to finance income 3.6 5.5 Current service cost – charged to administrative expenses (0.4) (0.4) Total credited in the income statement 3.2 5.1

(g) Cumulative actuarial gains and losses recognised in equity 2008 2007 £m £m At start of period 121.6 78.1 Actuarial gain recognised in equity 23.8 43.5 At end of the period 145.4 121.6

These cumulative gains refl ect the total recognised since the acquisition of The Big Food Group plc by Giant Topco Limited in February 2005.

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(h) Actual return on scheme assets 2008 2007 £m £m Expected return 35.8 40.2 Actuarial losses (47.2) (19.4) (11.4) 20.8

(i) Historical information 2008 2007 2006 2005 £m £m £m £m Fair value of scheme assets 516.8 619.8 626.9 544.1 Actuarial value of liability (507.0) (647.1) (711.5) (679.3) Surplus/(deficit) in the scheme 9.8 (27.3) (84.6) (135.2)

Difference between actual and expected return on assets (47.2) (19.4) 62.9 (2.0) Percentage of scheme assets (%) 9.1% 3.1% 10.0% 0.4% Experience gains/(losses) on scheme liabilities 11.7 37.8 (0.2) 0.1 Percentage of scheme liabilities (%) 2.3% 5.8% – –

(j) Contributions to be paid The Scheme and Group have agreed a schedule of contributions for the next 8 years (up to March 2016) of £10m per annum.

During the prior period, the Group decided to reduce some of the risk in relation to its defi ned benefi t pension scheme by implementing two separate projects:

• Deferred members were offered a payment, equal to the discount on the transfer value due to the scheme being underfunded, from the company if they opted to transfer out of the scheme to a new or existing scheme of their choice; • Current pensioners were offered the option to change the way their benefi ts were received by way of a one off increase in their pension in return for foregoing all non statutory future annual increases. In addition, the pension scheme rules were amended to allow future pensioners the option of exchanging future pension increases at retirement. Whilst the latter project fi nished in March 2007, the former project only completed in December 2007. Subsequently, more people were transferred than previously expected and an additional gain has been booked in the current period.

All members of the scheme have historically had the right to transfer out of the scheme and all pensioners included in the exercise were given the option to remain in the scheme. The Directors are of the view that the £2.5m gain that has arisen (2007: £25.6m) can be treated as an experience gain within actuarial gains and recorded direct to reserves as the number of deferred members transferring out as a result of the exercise is greater than that assumed in previous valuations.

As the payments made by the Group to deferred members transferring out of the scheme are closely linked to the actuarial gain arising and do not relate to the ongoing wage cost of current employees, the Directors are of the view that it is appropriate to record the charge of £nil (2007: £12.1m) direct to reserves in line with the accounting for the actuarial gain.

The £10.6m gain which arose in 2007 from the exercise with current pensioners results in a change in the way benefi ts can be taken, rather than a change in benefi ts. The Group have therefore recorded the gain that has arisen direct to reserves, an accounting treatment which is consistent with that adopted for the gains arising out of A Day.

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NOTES TO THE GROUP FINANCIAL STATEMENTS continued

20. Post employment benefi ts continued

The breakdown of the actuarial gains can be summarised as follows:

2008 2007 £m £m Experience gains Deferred members 2.5 25.6 Pensioner increase exercise – 10.6 Other gains 9.2 1.6 11.7 37.8 Change in actuarial assumptions Future pensioners accepting increase – 3.8 Changes in market indices 59.3 21.3 59.3 25.1

The Trustees agreed to waive pension contributions to the value of the total cash payments. However, the monthly contributions continued to be paid by the Group into an Escrow account. At the period end, there is £nil (2007: £4.2m) in this account and it has been included within “cash and cash equivalents”.

The prior period includes exceptional costs of £1.2m which relates to professional fees incurred to implement these arrangements.

The J Eversheds Pension and Life Assurance Scheme is a legacy pension scheme for which the Group is ultimately responsible. There are no outstanding liabilities in respect of the scheme and the advisors are currently determining how the remaining cash surplus of circa £1m will be distributed. No amounts have been recognised in respect of the asset.

21. Provisions

Property provisions Other Total £m £m £m At 30 March 2007 38.4 4.0 42.4 Charged/(released) to income statement – – – Unwinding of discount 2.5 – 2.5 Utilised (2.7) – (2.7) Acquisitions 0.2 – 0.2 At 28 March 2008 38.4 4.0 42.4

The property provisions principally relate to:

• the onerous leases on leasehold property currently vacant or sublet for less than the cost of the underlying head lease • the expected future dilapidation cost on leasehold properties • the expected future costs of removing asbestos from leasehold properties. Although not a health risk, the Group is legally required to undertake a program of removal Property provisions are discounted at 7.0% (2007: 7.0%), being the average yield for industrial properties and are expected to be utilised over the terms of the leases, with approximately £3.0m expected to be utilised in the year to March 2009.

Other provisions relate to third party property guarantees, for which the timing and quantum of payments is uncertain.

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22. Reconciliation of movement in capital and reserves

Share Share Share Merger option Hedge Retained capital premium reserve reserve reserve earnings Total £m £m £m £m £m £m £m Balance at 31 March 2006 275.9 16.7 – – – (125.5) 167.1 Total recognised income and expense – – – – – 29.3 29.3 Balance at 30 March 2007 275.9 16.7 – – – (96.2) 196.4 Reverse acquisition capital adjustment (261.0) 14.1 260.8 0.2 – – 14.1 Total recognised income and expense – – – – (2.4) 46.5 44.1 Reserves reclassification – – – – 0.8 (0.8) – Balance at 28 March 2008 14.9 30.8 260.8 0.2 (1.6) (50.5) 254.6

The merger reserve represents the capital adjustment required to reserves to effect the reverse acquisition.

The share option reserve comprises the fair value of outstanding share options charged to the profi t and loss account.

The hedge reserve comprises the effective portion of the cumulative net change in the fair value of cash fl ow hedging instruments related to hedged transactions that have yet to occur.

23. Share capital

2008 £m Authorised 2,000,000,000 ordinary shares of £0.01 each 20.0 Allotted, called up and fully paid 1,488,399,080 ordinary shares of £0.01 each 14.9

On 4 June 2007, the Company issued 1,344,910,958 ordinary shares of £0.01 each in respect of the reverse acquisition. The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

The share capital in the Group balance sheet at 30 March 2007 refl ected that of Giant Topco Limited prior to the reverse acquisition. This represented:

£’000 4,000,000 ordinary A1 shares of £0.01 each 40 7,200,000 ordinary A2 shares of £0.01 each 72 99,151 ordinary B shares of £0.01 each 1 113 1,004,218 preference B shares of £1.00 each 1,004 1,358,649 preference C shares of £1.00 each 1,359 273,437,133 preference D shares of £1.00 each 273,437 275,913

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NOTES TO THE GROUP FINANCIAL STATEMENTS continued

24. Share options

Prior to the acquisition of Giant Topco Limited by Blueheath Holdings plc, Blueheath Holdings plc had granted a number of share options to qualifying staff. Due to the accounting for the transaction as a reverse acquisition, information for the comparative period in these consolidated fi nancial statements are those of Giant Topco Limited which had no share options in issue. Therefore no share options have been refl ected for the comparative period. The share options issued by Blueheath Holdings plc have been accounted for in these consolidated fi nancial statements from the date of the reverse acquisition, when all outstanding options vested. Since the reverse acquisition no further options have been granted or exercised.

The number of options exercisable at 28 March 2008, together with the option price and expiry date are as follows:

Number of options Option price Expiry date 5,600,000 5.0 pence February 2017 168,625 80.475 -110.0 pence 2014-2015 5,768,625

Details of the share options granted by the parent company, prior to the reverse acquisition, are included in note 8 to the company balance sheet.

25. Operating leases

The Group leases a number of trading properties under operating leases. The leases are typically of 20 to 25 years duration, although some have lessee only break clauses. Lease payments are reviewed as contracted and increases applied accordingly. The Group also leased certain items of plant and equipment.

Operating lease payments represent rentals payable by the Group for certain of its retail, distribution and offi ce properties and other assets such as motor vehicles. The leases have varying terms, escalation clauses and renewal rights.

At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Land and buildings Others 2008 2007 2008 2007 £m £m £m £m Within one year 43.7 43.4 2.0 1.6 Within two to five years 182.1 180.0 3.8 2.0 After five years 465.9 510.0 - - 691.7 733.4 5.8 3.6

26. Capital commitments

The outstanding commitments at 28 March 2008 in respect of contracted capital expenditure not provided for amounted to approximately £1.5m (2007: £0.3m).

27. Related party transactions

In August 2005, the Group sold its interest in Woodward Foodservice Limited and its associated subsidiaries to GWW 677 Limited which had certain common owners with Giant Topco Limited. In the prior period, the fi nal instalment of £4.3m was received.

Only members of the Board of Directors are deemed to be key management personnel. It is the Board who have responsibility for planning, directing and controlling the activities of the Group. Board compensation is disclosed in the Remuneration Report.

During the year, there were no material transactions or balances between the Group and its key management personnel or members of their close family.

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28. Explanation of transition to Adopted IFRSs

As stated in note 1, these are the Group’s fi rst consolidated fi nancial statements prepared in accordance with Adopted IFRSs.

The accounting policies set out in note 2 have been applied in preparing the fi nancial statements for the period ended 28 March 2008, the comparative information presented in these fi nancial statements for the period ended 30 March 2007 and in the preparation of an opening IFRS balance sheet at 1 April 2006 (the Group’s date of transition).

In preparing its opening IFRS balance sheet, the Group has adjusted amounts reported previously in fi nancial statements prepared in accordance with its old basis of accounting (UK GAAP). An explanation of how the transition from UK GAAP to Adopted IFRSs has affected the Group’s fi nancial position, fi nancial performance and cash fl ows is set out in the following tables and the notes.

Explanation of the IFRS adjustments a) Goodwill arising on Business Combinations Previously goodwill on acquisitions was capitalised and amortised over its useful economic life. Under IFRS 3 “Business Combinations”, amortisation is no longer charged, instead goodwill is tested for impairment annually and again where indicators are deemed to exist.

b) Lease incentives Under UK GAAP, lease incentives are spread over the period to the next market rent review. Under SIC 15 “Operating Leases - Incentives”, these are spread over the term of the lease.

c) Interest Rate Swap The Group has an interest rate swap to manage its interest rate risk. Under UK GAAP, the derivative was not included on the balance sheet. However under IAS 39 “Financial Instruments: Recognition and Measurement”, the derivative is required to be recognised at fair value and movements in this are charged to the income statement.

d) Financial Guarantees Under UK GAAP, the Group disclosed certain third party property guarantees as a contingent liability. Under IAS 39 “Financial Instruments: Recognition and Measurement”, these are a fi nancial liability and are required to be measured and recognised at fair value. These property guarantees are included within “Provisions” on the balance sheet.

e) Guaranteed minimum lease payments Following a detailed review of property leases, it was identifi ed that the Group has a number of leases that contain minimum rental uplifts at predetermined rent review dates. The International Financial Reporting Interpretations Committee (‘IFRIC’) has clarifi ed that it is necessary to account for these increases on a straight-line basis over the life of the lease. Previously, the Group charged such increases to the income statement in the year they arose. The total amount payable over the life of the lease remains unchanged but the timing of the income statement charge changes. The excess of the rent charged over the cash payment in any period will be held on the balance sheet in “Trade and other payables”.

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RECONCILIATION OF PROFIT For the 52 weeks ended 30 March 2007

Reported IFRS adj IFRS adj IFRS adj IFRS adj Restated under under IFRS UK GAAP a b c e £m £m £m £m £m £m Revenue 3,009.8––––3,009.8 Cost of sales – excluding IAS 17 non cash item (2,923.3) – (3.2) – – (2,926.5) – IAS 17 non cash item ––––(1.6) (1.6) Total cost of sales (2,923.3) – (3.2) – (1.6) (2,928.1) Gross profit 86.5 – (3.2) – (1.6) 81.7 Administrative expenses – normal (46.0) –––– (46.0) – goodwill amortisation (21.6) 21.6–––– – exceptional items: professional fees re: pension scheme (1.2) ––––(1.2) – exceptional items: restructuring costs (0.6) –––– (0.6) Total administrative expenses (69.4) 21.6–––(47.8) Operating profit 17.1 21.6 (3.2) – (1.6) 33.9 Finance income 7.1 – – 3.6 – 10.7 Finance expenses (17.9) ––––(17.9) Net financing costs (10.8) – – 3.6 – (7.2) Profit before tax 6.3 21.6 (3.2) 3.6 (1.6) 26.7 Tax (15.8) ––––(15.8) (Loss)/profit for the period attributable to equity holders of the parent (9.5) 21.6 (3.2) 3.6 (1.6) 10.9

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Reported IFRS adj IFRS adj IFRS adj IFRS adj Restated under under IFRS UK GAAP a b c e £m £m £m £m £m £m Actuarial gain on defined benefit plans (The actuarial gain is shown net of £12.1m of payments to deferred members) 31.4––––31.4 Tax recognised on income and expenses recognised directly in equity (13.0) ––––(13.0) Net income recognised directly in equity 18.4––––18.4 (Loss)/profit for the period (9.5) 21.6 (3.2) 3.6 (1.6) 10.9 Total recognised income and expense for the period attributable to equity holders of the parent 8.9 21.6 (3.2) 3.6 (1.6) 29.3

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RECONCILIATION OF EQUITY As at 30 March 2007

Reported IFRS adj IFRS adj IFRS adj IFRS adj IFRS adj Restated under under IFRS UK GAAP a b c d e £m £m £m £m £m £m £m ASSETS Non-current assets Property, plant and equipment 65.1 – – – – – 65.1 Intangible assets 388.5 21.6 – – – – 410.1 Deferred tax asset 10.8 – – – – 2.6 13.4 464.4 21.6 – – – 2.6 488.6 Current assets Inventories 176.2 – – – – – 176.2 Trade and other receivables 55.0 – – – – – 55.0 Cash and cash equivalents 29.9 – – – – – 29.9 Other financial assets – – – 0.7 – – 0.7 261.1 – – 0.7 – – 261.8 Total assets 725.5 21.6 – 0.7 – 2.6 750.4 LIABILITIES Current liabilities Bank overdraft (18.9) – – – – – (18.9) Other interest bearing loans and borrowings (0.6) – – – – – (0.6) Trade and other payables (342.1) – 3.2 – – – (338.9) Tax (11.3) – – – – – (11.3) (372.9) – 3.2 – – – (369.7) Non-current liabilities Other interest bearing loans and borrowings (86.9) – – – – – (86.9) Other payables (8.6) – (9.8) – – (9.3) (27.7) Employee benefits (27.3) – – – – – (27.3) Provisions (38.4) – – – (4.0) – (42.4) (161.2) – (9.8) – (4.0) (9.3) (184.3) Total liabilities (534.1) – (6.6) – (4.0) (9.3) (554.0) Net assets 191.4 21.6 (6.6) 0.7 (4.0) (6.7) 196.4 EQUITY Capital and reserves Share capital 275.9 – – – – – 275.9 Share premium account 16.7 – – – – – 16.7 Retained earnings (101.2) 21.6 (6.6) 0.7 (4.0) (6.7) (96.2) Total equity attributable to equity holders 191.4 21.6 (6.6) 0.7 (4.0) (6.7) 196.4

NB – The above UK GAAP numbers have been adjusted into IFRS format (in accordance with IAS1)

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RECONCILIATION OF EQUITY As at 31 March 2006 (Opening balance sheet for IFRS)

Reported IFRS adj IFRS adj IFRS adj IFRS adj Restated under under IFRS UK GAAP b c d e £m £m £m £m £m £m ASSETS Non-current assets Property, plant and equipment 75.7 – – – – 75.7 Intangible assets 410.1 – – – – 410.1 Deferred tax asset 30.6 – – – 2.6 33.2 516.4 – – – 2.6 519.0 Current assets Inventories 168.1 – – – – 168.1 Trade and other receivables 63.0 – – – – 63.0 Cash and cash equivalents 32.4 – – – – 32.4 263.5 – – – – 263.5 Total assets 779.9 – – – 2.6 782.5 LIABILITIES Current liabilities Trade and other payables (300.4) 3.2 – – – (297.2) Other interest bearing loans and borrowings (30.2) – – – – (30.2) Tax (2.4) – – – – (2.4) (333.0) 3.2 – – – (329.8) Non-current liabilities Other interest bearing loans and borrowings (127.0) – – – – (127.0) Other payables (13.5) (6.6) – – (7.7) (27.8) Employee benefits (84.6) – – – – (84.6) Provisions (39.3) – – (4.0) – (43.3) Other financial liabilities – – (2.9) – – (2.9) (264.4) (6.6) (2.9) (4.0) (7.7) (285.6) Total liabilities (597.4) (3.4) (2.9) (4.0) (7.7) (615.4) Net assets 182.5 (3.4) (2.9) (4.0) (5.1) 167.1 EQUITY Capital and reserves Share capital 275.9 – – – – 275.9 Share premium account 16.7 – – – – 16.7 Retained earnings (110.1) (3.4) (2.9) (4.0) (5.1) (125.5) Total equity attributable to equity holders 182.5 (3.4) (2.9) (4.0) (5.1) 167.1

NB – The above UK GAAP numbers have been adjusted into IFRS format (in accordance with IAS1)

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COMPANY BALANCE SHEET As at 28 March 2008

Note 28 March 2008 4 March 2007 £m £m Fixed assets Investments 4 53.4 33.4 Debtors 5 10.0 – Creditors due within one year 6 (6.6) (0.1) Net current assets/(liabilities) 3.4 (0.1) Net assets 56.8 33.3 Capital and reserves Called-up share capital 7 14.9 1.4 Share premium account 9 30.8 30.8 Share option reserve 9 0.2 0.1 Profit and loss account 9 10.9 1.0 Shareholders’ funds 10 56.8 33.3

These fi nancial statements were approved by the board of directors on 21 May 2008 and were signed on its behalf by:

Charles Wilson Jonathan Prentis Director Director

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NOTES TO THE COMPANY FINANCIAL STATEMENTS

1. Accounting policies

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the fi nancial statements. Basis of preparation The accounts have been prepared under the historical cost convention in accordance with applicable United Kingdom Accounting Standards. Investments Investments are stated at cost less any provision for impairment in value. The carrying values of investments are reviewed for impairment if events or changes in circumstances indicate the carrying values may not be recoverable. Share based payments The Company has issued equity settled share based payments. The fair value is measured using an option valuation model, taking into account the terms and conditions upon which the options were granted. This fair value is recognised as an employee expense over the period in which the employees become unconditionally entitled to the options, with a corresponding increase in equity, shown in a separate share option reserve.

2. Profi t and loss account In accordance with the exemption permitted by section 230 of the Companies Act 1985, the profi t and loss account of the company is not presented separately. The profi t recognised for the 56 weeks ended 28 March 2008 was £9.9m (52 weeks ended 3 March 2007: profi t £0.4m). The audit fee for the Company was borne by another group undertaking without recharge (2007: £0.1m).

3. Staff numbers and costs

56 weeks ended 52 weeks ended 28 March 2008 3 March 2007 Number Number The average number of employees were as follows: Directors 7 7

Employee costs relate entirely to directors which in the current period have been fully borne by other group undertakings and in the prior period have been partly borne by other group undertakings. Amounts expensed by the company are as follows:

£’000 £’000 Salaries and fees – 217

Directors’ emoluments paid by the company and subsidiary undertakings in respect of their roles as Directors of the Group are as follows:

£’000 £’000 Emoluments 1,009 493 Pension contributions 89 – 1,098 493

The amounts in respect of the highest paid director are as follows:

£’000 £’000 Emoluments 421 121 Pension contributions 63 – 484 121

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NOTES TO THE COMPANY FINANCIAL STATEMENTS continued

4. Investments

Shares in subsidiary Loan to subsidiary Total undertakings undertakings £m £m £m Cost and net book value At start of period 9.0 24.4 33.4 Additions 20.0 – 20.0 At end of period 29.0 24.4 53.4

The addition in the year relates to the acquisition of Giant Topco Limited.

The Company’s principal subsidiary undertakings at 28 March 2008, all of which are wholly owned and registered in the United Kingdom are as follows:

Name of company Principal activities Booker Limited Wholesaler Booker Direct Limited (formerly Blue Heath Direct Limited) * Wholesaler C.T.M. Wholesale Limited * Wholesaler A.C. Ward & Son Limited * Wholesaler Giant Topco Limited * Intermediate holding company * Direct subsidiary of Booker Group plc Full details of all group subsidiary undertakings are included in the Company’s annual return fi led with Companies House.

5. Debtors

2008 2007 £m £m Amounts owed by group undertakings 10.0 –

Amounts owed by group undertakings are interest free, unsecured and payable on demand.

6. Creditors due within one year

2008 2007 £m £m Amounts owed to group undertakings 6.6 – Other creditors – 0.1 6.6 0.1

Amounts owed to group undertakings are interest free, unsecured and payable on demand.

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7. Share capital

2008 2007 £m £m Authorised 2,000,000,000 (2007: 200,000,000) ordinary shares of £0.01 each 20.0 2.0 Allotted, called up and fully paid 1,488,399,080 (2007: 143,488,122) ordinary shares of £0.01 each 14.9 1.4

On 4 June 2007, the Company issued 1,344,910,958 ordinary shares of £0.01 each in respect of the acquisition of Giant Topco Limited.

8. Share options

The Company has a number of share option schemes for employees of the group. Options are exercisable at various prices shown below. If the options remain unexercised after a period of 10 years from the date of grant, the options expire. Options are forfeited if the employee leaves the group before exercise. The following options have all fully vested, but are still to be exercised:

Number of options Option price Expiry date 5,600,000 5.0 pence February 2017 168,625 80.475 -110.0 pence 2014-2015 5,768,625

2008 2007 Number of share Weighted average Number of share Weighted average options exercise price options exercise price Outstanding at beginning of period 5,768,625 0.08 1,626,580 1.44 Granted ––5,600,000 0.05 Forfeited ––(1,457,955) 1.2426 Outstanding at end of period 5,768,625 0.08 5,768,625 0.08 Exercisable at end of period 5,768,625 152,375

The fair value of the options were estimated at the date of grant using a Black-Scholes model which used the following assumptions:

2008 2007 Weighted average share/exercise price – £0.05 Expected volatility – 52% Expected life – 6.5 years Risk free rate – 5.15% Expected dividends – 0%

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NOTES TO THE COMPANY FINANCIAL STATEMENTS continued

9. Reserves

Share Share Share Profit Total capital premium option and loss account reserve account £m £m £m £m £m At start of period 1.4 30.8 0.1 1.0 33.3 Retained profit for the period – – – 9.9 9.9 Share option charge – – 0.1 – 0.1 Issue of share capital 13.5–––13.5 At end of period 14.9 30.8 0.2 10.9 56.8

10. Reconciliation of movement in shareholders’ funds

2008 2007 £m £m Profit for the period 9.9 0.4 Issue of share capital (net of issue costs) 13.5 8.6 Share option reserve 0.1 – Shareholders’ funds at the start of the period 33.3 24.3 Shareholders’ funds at the end of the period 56.8 33.3

11. Related party transactions

The company has taken advantage of the exemption under FRS 8 ‘Related Party Transactions’ not to provide details of related party transactions with other Group companies, as the Company fi nancial statements are presented together with the consolidated Group fi nancial statements.

12. Contingent liabilities

The company has cross guaranteed the borrowings of other subsidiaries in the Group which at the period end amounted to £66.2m.

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STATEMENT OF DIRECTORS’ RESPONSIBILTIES in respect of the Annual Report and the Financial Statements

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

Company law requires the directors to prepare group and parent company fi nancial statements for each fi nancial period. As required by the AIM Rules of the London Stock Exchange they are required to prepare the group fi nancial statements in accordance with IFRSs as adopted by the EU and applicable laws and have elected to prepare the parent company fi nancial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice).

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

The parent company fi nancial statements are required by law to give a true and fair view of the state of affairs of the parent company.

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

• select suitable accounting policies and then apply them consistently; • make judgments and estimates that are reasonable and prudent; • for the group fi nancial statements, state whether they have been prepared in accordance with IFRSs as adopted by the EU; • for the parent company fi nancial statements, state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the fi nancial statements; and • prepare the fi nancial statements on the going concern basis unless it is inappropriate to presume that the group and the parent company will continue in business. The directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the fi nancial position of the company and enable them to ensure that its fi nancial statements comply with the Companies Act 1985. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the group and to prevent and detect fraud and other irregularities.

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

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INDEPENDENT AUDITORS’ REPORT to the members of Booker Group plc

We have audited the group and parent company fi nancial statements (the ‘’fi nancial statements’’) of Booker Group plc for the 52 weeks ended 28 March 2008 which comprise the Group Income Statement, the Group and Parent Company Balance Sheets, the Group Cash Flow Statement, the Group Statement of Recognised Income and Expense and the related notes. These fi nancial statements have been prepared under the accounting policies set out therein.

This report is made solely to the company’s members, as a body, in accordance with section 235 of the Companies Act 1985 and, in respect of reporting on corporate governance, on terms that have been agreed. 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 reporting on corporate governance, those matters that we have agreed to state to them in our report, and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors The directors’ responsibilities for preparing the Annual Report and the group fi nancial statements in accordance with applicable law and International Financial Reporting Standards (IFRSs) as adopted by the EU, and for preparing the parent company fi nancial statements in accordance with applicable law and UK Accounting Standards (UK Generally Accepted Accounting Practice) are set out in the Statement of Directors’ Responsibilities on page 55.

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

We report to you our opinion as to whether the fi nancial statements give a true and fair view and whether the fi nancial statements have been properly prepared in accordance with the Companies Act 1985. We also report to you whether in our opinion the information given in the Directors’ Report is consistent with the fi nancial statements. The information given in the Directors’ Report includes that specifi c information presented in the Operating and Financial Review that is cross referred from the Business Review section of the Directors’ Report.

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

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

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

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

Opinion In our opinion:

• the group fi nancial statements give a true and fair view, in accordance with IFRSs as adopted by the EU, of the state of the group’s affairs as at 28 March 2008 and of its profi t for the period then ended; • the parent company fi nancial statements give a true and fair view, in accordance with UK Generally Accepted Accounting Practice, of the state of the parent company’s affairs as at 28 March 2008; • the fi nancial statements have been properly prepared in accordance with the Companies Act 1985; and • the information given in the Directors’ Report is consistent with the fi nancial statements.

KPMG Audit Plc Chartered Accountants Registered Auditor Manchester 21 May 2008

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Booker Group plc ANNUAL REPORT & ACCOUNTS 2008

DIRECTORS AND PROFESSIONAL ADVISERS

Directors Bankers

Richard Rose Bank of Scotland plc ANNUAL REPORT & ACCOUNTS Non-Executive Chairman 155 Bishopsgate London EC2M 3YB FOR THE YEAR ENDED 28 MARCH 2008 Charles Wilson Chief Executive Auditors

Jonathan Prentis KPMG Audit plc Booker is the UK’s leading food wholesaler. Group Finance Director St James’ Square, Manchester M2 6DS We supply 258,000 catering businesses and 72,000 independent retailers. Lord Karan Bilimoria Non-Executive Director Nominated Adviser and Broker We operate from 172 cash and carry branches throughout the United Kingdom. Andrew Cripps Investec Non-Executive Director 2 Gresham Street London EC2V 7QP Hans Kristian Hustad Non-Executive Director Solicitors

Allen & Overy LLP Kevin Lyon Non-Executive Director One Bishops Square London W1 6AO Jim McMahon Non-Executive Director Registrars Computershare Investor Services plc Company Secretary PO Box 82 Mark Chilton The Pavillions Bridgwater Road Registered Offi ce Bristol, BS99 2NH

Equity House Financial PR Irthlingborough Road Wellingborough, Northants NN8 1LT Tulchan Communications Group Highlights 1 Consolidated Income Statement 19 Sixth Floor, Kildare House 3 Dorset Rise Business Profi le 2 Consolidated Statement of Recognised Registered Number London EC4Y 8EN Income and Expense 20 Chairman’s Statement 3 05145685 (England) Consolidated Balance Sheet 21 Chief Executive’s Review 4 Consolidated Cash Flow Statement 22 Website Group Finance Director’s Report 7 Notes to the Group Financial Statements 23 Board of Directors 10 www.booker.co.uk Company Balance Sheet 50 Corporate Governance 11 Notes to the Company Financial Statements 51 Remuneration Report 14 Statement of Directors’ Responsibilities 55 Directors’ Report 17 Independent Auditors Report to the Members of Booker Group plc 56 Directors and Professional Advisers 57

Notes: In the Highlights, Business Profi le, Chairman’s Statement, Chief Executive’s Review and Group Finance Director’s Report Operating Profi t in 2005/06 is stated under UK GAAP before goodwill, impairment and exceptional items. Figures stated for 2006/07 are before an exceptional charge of £1.8m. Any forward looking statements made throughout this document represent management’s best judgement as to what may occur in the future. However, the group’s actual results for the current and future fi scal periods and corporate developments will depend on a number of economic, competitive and other factors, some of which will be outside the control of the group. Such factors could cause the group’s actual results for future periods to differ materially from those expressed in any forward looking statements made in this document.

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BOOKER GROUP PLC. Equity House Irthlingborough Road DRIVING AND BROADENING THE BUSINESS Wellingborough Northants NN8 1LT BOOKER GROUP PLC www.booker.co.uk ANNUAL REPORT & ACCOUNTS 2008