NOURISHING

THE SOUL

SINCE 1845

Annual

Report and

Accounts

2023

Living our purpose,Living our purpose,

Celebrating together Celebrating together

Being part of the Family

We are a family business in the

broadest sense, bringing that family

ethos and feeling to how we work.

One team, pulling together, in each

pub and hotel, and also together

across Fuller’s.

p.21p.21

Celebrating individuality

We nurture the individuality, spirit and

unique character of each person, pub,

and bedroom, because that’s what

makes us special.

p.25p.25

At Fuller’s, we create experiences

that nourish the soul, and

throughout this report we will

show how we do that through

acommitment to excellence

andaclear long-term strategy.

Doing things the right way

We have a deep pride for and a

genuine enjoyment of the business

we’re inand we apply care, quality

andintegrity to everything we do.

Always asking what’s next?

We have a restless passion to

continuously improve, experiment

andmake things better. We are

alwaysasking how we can do

moreforour people, our customers,

ourpubs andhotels.

What’s inside...

p.19p.19

p.23p.23

Strategic Report

Highlights 1

At a Glance 2

Where we Operate 4

Investment Proposition 6

Chairman’s Statement 8

Chief Executive’s Review 10

Business Model 14

Strategy 16

Key Performance Indicators 28

Financial Review 30

Risk Management 34

Principal Risks and Uncertainties 36

Sustainability Report 40

Task Force on Climate-related

Financial Disclosures

Stakeholder Engagement 62

Section 172 Statement 64

Non-Financial Information Statement 65

Governance

Chairman’s Introduction 66

Board of Directors 68

Corporate Governance Report 70

Nominations Committee Report 76

Audit and Risk Committee Report 81

Directors’ Remuneration Report 86

Directors’ Report 101

Directors’ Responsibilities Statement 104

Financial Statements

Independent Auditor’s Report 105

Group Income Statement 112

Group Statement of Comprehensive Income 113

Group Balance Sheet 114

Company Balance Sheet 115

Group Statement of Changes in Equity 116

Company Statement of Changes in Equity 117

Group Cash Flow Statement 118

Company Cash Flow Statement 119

Notes to the Financial Statements 120

Additional Information

Shareholder Information 166

Glossary 167

Five Years’ Progress 168

Highlights

Financial and Operational Summary

• Revenues grew 33% to £336.6 million (FY2022: £253.8 million) as the

businessrecoveredfrom the impact of Covid-related restrictions on trade

• Like-for-like sales in the year grew by 17.5% compared to prior year,

withCentralLondongrowing by 40.1%

• Adjusted profit before tax increased by 76% to £12.7 million (FY2022: £7.2 million)

• Net debt at £132.8 million (FY2022: £131.9 million) with cash generated by the business

funding investment in the estate and returns to shareholders

• Directors’ valuation of the total property portfolio in May 2022 at £995.6 million,

approximately £400 million above our current book value – giving implied adjusted

netasset value per share of £14.07

• Total dividend of 14.68p declared, representing a 30% increase on last year

• Board to keep further share buybacks under review in line with its capital

allocationframework.

Strategic Update

• Clear long-term strategy, with all elements contributing to growing sales momentum

andprofitability

• Maintained investment in the existing estate, with £25 million invested in the period

toenhance capital values and drive further growth

• Maximising our pubs’ potential through proactive portfolio management to ensure all

pubs are operated to deliver a great customer experience, while optimising our returns

– Three new pubs opened during the year – The Rising Sun in the New Forest, The

Willow in Bourton-on-the-Water, and The Queen’s Arms at Heathrow Terminal 2

– Four pubs transferred from Managed operations to Tenanted Inns in the year, with

afurther 23 identified, of which four transfers have already completed

– Small number of pubs earmarked for disposal

– Sale agreed on The Mad Hatter, Southwark, which will realise £20 million in value

anda profit on disposal of £17 million

• Continued investment in our people to develop the leaders of the future and deliver

bestin class service for our customers

• Dawn Browne, People & Talent Director, promoted to Main Board from 3 July 2023

• Implementing a wide range of energy reduction initiatives as part of our Life is too

goodtowaste programme.

FY2023

£m

FY2022

£m

Revenue and other income 336.6 253.8

EBITDA

51.8 44.3

Adjusted profit before tax

12.7 7.2

Statutory profit before tax 10.3 11.5

Basic earnings per share

12.98p 11.59p

Adjusted earnings per share

16.10p 9.79p

Dividend per share 14.68p 11.31p

Net debt excluding lease liabilities

132.8 131.9

All figures above are from continuing operations.

1 Earnings before interest, tax, depreciation, amortisation, profit on disposal of property, plant and

equipment, andseparately disclosed items.

2 Adjusted profit before tax is the profit before tax excluding separately disclosed items.

3 Per 40p ‘A’ or ‘C’ ordinary share. Adjusted EPS is calculated using earnings attributable to equity

shareholders after tax excluding separately disclosed items. Basic EPS includes separately

discloseditems.

4 Net debt excluding lease liabilities comprises cash and short-term deposits, bank overdraft, bank loans,

debenture stock and preference shares.

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At a Glance

Our purpose

WE CREATE EXPERIENCESTHAT

nourish the soul

Our mission

WE’RE CRAFTING A FAMILY

OFDISTINCTIVE PUBS

ANDHOTELS WHERE

PEOPLE

feel

they belong

Our

Sustainability

Pillars

OUR PEOPLE

See pages 52 to 53

OUR COMMUNITIES

See pages 48 to 51

Our people are what

makes Fuller’s special.

That’s why we work

hard to ensure we

create an environment

where they can be

theirtrueself.

Communities have

always been at the

heart of Fuller’s – it’s

what makes our pubs

more than just bricks

and mortar.

Cotswold Inns & Hotels

Fuller’s acquired Cotswold Inns & Hotels in October 2019 –

acollection of seven beautiful hotels, with a total of 201

bedrooms,inthe heart of the Cotswolds – one of the most

beautifulparts ofGreat Britain.

Specialising in traditional hospitality and incredibly popular for

weddings, the hotels offer the chance to get away from the hustle

and bustle of daily life in venues offering outstanding service, the

heartiest of breakfasts, the most delicate of afternoon teas and a

fantastic array of fresh food and excellent wines, beers and spirits.

Who we are

WE ARE THE PREMIUM PUBS AND HOTELS

BUSINESS THAT IS FAMOUS FOR BEAUTIFUL

AND

inviting

VENUES WITH DELICIOUS

FRESH FOOD, A

vibrant

AND

INTERESTING RANGE OF DRINKS,

beautiful

BEDROOMS AND ENGAGING

SERVICE FROM

passionate

PEOPLE

2 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

30%

23%

14%

33%

Fuller’s Managed

within M25

Fuller’s Tenanted

within M25

Fuller’s Managed

outside M25

Fuller’s Tenanted

outside M25

91%

Managed

Tenanted

18%

40%

42%

Urban

Suburban

Rural

Managed Pubs and Tenanted Inns (%)*

Revenue by Division (%)*

Analysis of Managed revenue

urban/suburban/rural (%)*

OUR PLANET

See pages 42 to 45

We know that a healthy planet

is essential for the future of

humanity and small changes

collectively make a big

difference. We are on

ourjourney to Net Zero.

Our values

DOING THINGS THE RIGHT WAY

See page 19

BEING PART OF THE FAMILY

See page 21

CELEBRATING INDIVIDUALITY

See page 25

ALWAYS ASKING

WHAT’S NEXT?

See page 23

Bel & The Dragon

Fuller’s acquired Bel & The

Dragon in June 2018. It now

comprises seven stunning

country inns, across the

HomeCounties. This year, we

added TheGeorge & Dragon in

Westerham to the brand. Bel &

The Dragon offers outstanding

hospitality, incharacterful

buildings, with afocus on

world-class wines – including

many sold by the glass – and

high quality, fresh, seasonal

dishes that are both visually

stunning and delicious.

* As at 1 April 2023

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LONDON

Where we Operate

Suburban

The number of Managed Pubs & Hotels

417

Number of bedrooms

Rural

The number of Managed Pubs & Hotels

402

Number of bedrooms

Acquisition: The Willow

Bourton-on-the-Water

We love iconic locations – and they don’t

come much more iconic than this amazing

village, known as The Venice of the Cotswolds.

A great addition that further builds our

presence in this affluent area.

OUR

diverse portfolio

ENCOMPASSES

SOME 377 PUBS AND HOTELS ACROSS LONDON

AND THESOUTH OF ENGLAND

4 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

LONDON

Our Pubs & Hotels

186

MANAGED

BEL & THE

DRAGON

COTSWOLD

INNS &

HOTELS

177

TENANTED

Urban

Number of Managed

Pubs&Hotels

205

Number of bedrooms

Operational

Highlights

Average number of employees

5,247

Number of covers

bookedoutdoors

97.7k

Number of people

onourdatabase

4.1m

RevPar in the year

£88.94

Pints soldduringthe year

20.3m

Year on year growth

incocktailsales

42%

Number of burgers

soldduringtheyear

860k

Rise in like-for-like

accommodationsales

24.7%

Refurbishment:

The George &Dragon,

Westerham

Having transferred this historic building from

our Tenanted Inns division, we completed

a£2.6m investment and it is now standing

proud in the centre of Westerham, as part

ofour Bel & The Dragon estate.

Rising from the ashes:

TheAdmiralty,

Trafalgar Square

After a major fire in July 2022, we

rebuilt The Admiralty – including

making it fully electric. Read more

on page 45.

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Investment Proposition

WE HAVE A CLEAR STRATEGY

We operate a family of characterful pubs

and hotels in the South of England

• Our estate encompasses some 377 pubs

and hotels across London and theSouth

ofEngland

• We operate in the premium segment while

offering excellent value for money.

We source and create experiences

thatnourish the soul

• Most of our pubs are deeply entrenched in

their local communities with generations

of goodwill behind them. We are a regular

part of our customers’ lives, and we strive

to earnthe right to welcome them

backagain and again

WE OPERATE IN A MARKET

WITHOPPORTUNITIES

Demographic strengths

• In our heartland of London and the

SouthofEngland, incomes are traditionally

more resilient. Hospitality spend in our

regions is 13% greater than the UK

average, and incomes are circa 14%

higher. Our wide demographic also attracts

mature customers, manyof whom have

greater disposable incomes.

Customers are attracted by our premium offer

• Every week we welcome thousands of

people to our pubs and hotels, many being

WE ARE FAMILY, INSIDE AND OUT

Our multi-generation family business

extends a sense of belonging to all

ourstakeholders

• For customers, we maintain the cherished

ethos of ‘the local’

• Our people are also family. We create

meaningful career paths and invest in their

development. This shows in our senior

leadership where around 65% of our

general managers joined us at entry level

and have developed within the business

• Our pubs are operated locally, with

managers given the freedom to optimise

the décor and the offer according to local

characteristics. Thisextends to creating

engaging experiences, from open-air

Shakespeare to stand-up comedy

andopen mic nights.

Our teams are customer-centric, focused on

delivering outstanding quality and service

• Memorable hospitality demands great

people behind the bar and stars in the

kitchen. Our focus on quality and

servicehelps turn our customers

intopowerful ambassadors.

returning guests. Our customers look for

agreat experience and they appreciate

the benefit of our premium offer.

Leveraging digital opportunities

• An increasing digital awareness among our

customers allows us to get even closer to

them, and provide a tailored experience

which is smooth and seamless. We have

developed our digital infrastructure to utilise

robust user data and help enhance the

effectiveness of our targeted marketing.

Wehave also enhanced our online

presence, from booking tables, rooms

orevents through to ordering and paying.

• Much of our kitchen talent is also

home-grown and at our Chefs’ Guild we

set a clear pathway that can take kitchen

assistants right up to executive chef level.

We welcome over 100 apprentice chefs

each year, giving them an inspirational

start to careers in hospitality.

Great family businesses think andactlong term

• We are custodians of the Company, with

the clear goal of passing it onineven

better health than we found it. This means

managing our assets carefully, with the

collective strength of our portfolio

delivering increasing value.

OUR INVESTMENT PROPOSITION PUTS US IN A

POSITION OF

strength

AND

security

6 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

WE HAVE A CLEAR AND CONSISTENT

CAPITAL ALLOCATION FRAMEWORK TO

ENHANCE LONG-TERM VALUE CREATION

We invest in the long-term organic growth

of the business

• We invest annually to grow capital value,

and to drive returns.

A sustainable and progressive dividend

• With a planned cover range of 2.5-3.0x,

and growth in line with EPS growth to

drive dividend yield.

WE ACTIVELY MANAGE OUR

ASSETPORTFOLIO

The Company has a high quality portfolio

• Freehold ownership represents 92%

ofour asset value. Following the latest

valuation, this represents an asset value

of£995.6 million.

We deliver capital appreciation aswell

asearnings growth

• As custodians of the portfolio, weprotect

and enhance its quality withmaintenance

investment and lookfor opportunities to

enhance tradeand grow income through

investment. Each year we expect to invest

in the region of £20–30 millionimproving

the estate.

WE OWN OUR IMPACT BECAUSE

LIFEISTOO GOODTO WASTE

Our environment and our planet demand that

we take meaningful actionto protect them

• We aim to be Net Zero by 2030

(operational) and 2040 (supply chain)

• We will continue to source 100%

renewable energy

• We will reduce energy consumption

by25% and halve our gas usage.

We create spaces where communities are

welcomed, supported and can come together

• Each site encouraged to support at least

one local group each year

M&A opportunities

• With a disciplined approach to inorganic

investment and aview to increasing

long-term returns.

Leverage

• With a target of up to circa 3x net debt/

EBITDA. If achieved, surplus cash

maybereturned to shareholders.

Our strong Balance Sheet provides

uswithaccess to capital

• We haverecently agreed a new four

year£200 million bank facility. This

alsoprovides significant headroom to

continue our M&A strategy, building on

the successful Cotswold Inns & Hotels

andBel & The Dragon transactions

• We actively manage the property

portfolio to optimise returns – as

demonstrated by the recent transfers of

Managed pubs to Tenanted operations

• We continually gauge the performance

ofassets, considering fresh pub

propositions, or the option of disposals.

• We donate 1% of our profits to good

causes every year

• We create good job opportunities for

people with additional needs.

Our governance is designed to build trust

and ensure equal opportunities foreveryone

• A diverse place to work with no barriers to

entry and with clear development paths

• A place where everyone has a voice

• A place free from modern slavery

anddiscrimination of any kind.

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he 2020s is fast becoming the decade that has seen an

unprecedented use of the word unprecedented. A year

ago,Ireflected on the impact of the Omicron variant on our

business. Since then, the war in Ukraine has continued, food and

energy inflation, together with the cost of living in general, has

spiralled, we have seen strikes across a wide range of industries

and we have had three Prime Ministers, four Chancellors of the

Exchequer and fiscal statements that have taken the economy

inallmanner of directions.

Against this backdrop, your Company has delivered a good

performance, and in times of short-term upheaval, long-term

businesses come into their own. The Executive Team, under

theleadership and guidance of Simon Emeny, is implementing

ourstrategic plan to return to pre-pandemic levels of profitability

anddeliver long-term growth for the Company, our shareholders

andour team members.

With our clear purpose to create experiences that nourish the soul,

and five defined strategic pillars, our teams throughout the business

understand the role they play in our success and have the skill,

motivation and dedication to deliver it. Despite the twists and turns,

the stops and starts, they have continuously bounced back to delight

their customers and deliver an outstanding level of service. They are

the heart and soul of Fuller’s, and I would like to thank each and every

one of them for their loyalty and commitment.

MICHAEL TURNER —CHAIRMAN

“ WE COULD NOT

DO WHAT WE DO

WITHOUT THE

commitment

AND

dedication

OF OUR PEOPLE.”

Chairman’s Statement

8 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Underpinning our success is, and has always been, the strength

ofourexcellent, predominately freehold estate. We have always

maintained that operating both managed and tenanted models offers

a wide range of benefits, particularly around portfolio management.

And while I am always proud of all parts of the Fuller’s business, I was

particularly delighted to see the Tenanted Inns team pick up the award

for Best Tenanted Pub Company at this year’s Publican Awards.

We are seeing rising numbers of international tourists and ever more

workers returning to the City and this, combined with the actions we

are taking as part of the strategy to continue to improve profitability,

gives me confidence and optimism in the future.

As part of our ongoing succession planning, I am delighted to announce

that Dawn Browne has accepted our invitation to join the Board with

effect from 3 July 2023. Dawn joined Fuller’s in 2011 and, following

roles in the Learning & Development Team and a successful term as

Head of Operations for the City, has been our People & Talent Director

since 2019. As a people-centric business, and given her unique skillset,

she has an important role to play on the Board. Her in-depth knowledge

of our team members, alongside her operational experience, will

provide invaluable insight. We also look forward to her support to

help us to drive and prioritise diversity and inclusion, and to provide

visibility on matters around culture and organisational change. I know

her appointment will be extremely well received by the business.

+30%

Increase in total dividend per share

+33%

Increase in total Group revenue

Dividend

The Board is pleased to announce a final dividend of 10.0p

(FY2022: 7.41p) per 40p ‘A’ and ‘C’ ordinary share and 1.0p

(FY2022: 0.741p) per 4p ‘B’ ordinary share, representing a

year-on-year increase of 35%. This will be paid on 27 July 2023

toshareholders on the share register as at 23 June 2023.

Thetotaldividend of 14.68p (FY2022: 11.31p) per 40p ‘A’

and‘C’ordinaryshare and 1.468p (FY2022: 1.131p) per 4p ‘B’

ordinarysharerepresents a30% year-on-year increase and

continuesourreturn to a progressive dividend policy.

Michael Turner

Chairman

14 June 2023

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“ WE HAVE STARTED

THE

next chapter

IN OUR HISTORY.”

Overview

We have made good progress in the last year, with continued

investment in our people and properties, providing the perfect

post-Covid springboard for the future. Looking forwards, that future

looks very positive. We continue to build on our five strategic pillars,

investing in the areas that have the greatest impact on our business

and growing our profitability. We live by our values and our culture,

and despite having had a lot to contend with over the last year

–withinterruptions from tube and train strikes and high cost

inflationin energy, food and wages – our teams across the estate

aresuccessfully delivering experiences that nourish the soul.

There is clearly more to come too, as international tourism numbers

continue to rise, the rhythm of life grows louder across offices in our

towns and cities, and cost pressures stabilise. Ongoing rail strikes

are unhelpful – particularly in the Capital – but commuters are a

resilient bunch and the impacts, while detrimental financially, are

thankfully short-lived. Most importantly to Fuller’s is that we have

along-term vision, continuing to stick to the things we do best,

andthis is validated by our customers’ continued loyalty.

Strategic Review

We have forward momentum, a great team of people, we are

alreadybuilding on the 33% rise in total sales last year and have

started the new financial year with excellent like for like growth.

Wewill continue to achieve this through our long-term strategy –

delighting our customers, inspiring our people, enhancing our estate,

evolving ourbusiness and owning our impact. These strategic pillars

have not changed, and they provide a framework that allows us to

grow our business in a sustainable manner.

We are a proactive asset manager and have taken some significant

portfolio management decisions to evolve our estate, ensuring it

remains fit for the future. In order to improve and sustain returns in

thelong term, post year end we identified 23 of our Managed Pubs

totransfer across into our Tenanted Inns division – four of which

havemoved across already. We have also taken theopportunity

tocrystallise the value of The Mad Hatter in Southwark, which

SIMON EMENY —CHIEF EXECUTIVE

Chief Executive’s Review

10 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

wehave contracted to sell as part of a larger property redevelopment,

in a sale that will deliver Fuller’s £20 million in value on completion

nextyear. These funds, combined with our ambition to continue to

build our business, will allow us to grow both organically and

throughacquisition.

Like all businesses, margins have been increasingly squeezed due

tocost inflation, but we are addressing this through a programme of

action focused on delivering sales-led growth while keeping a tight

rein on costs.

Delight our customers

We are confident that a trip to the great British pub will always be

anaffordable luxury and part of our national psyche. But customers

have a choice, and they will choose to go to the pubs and hotels that

deliver an outstanding customer experience at a price the consumer

sees as good value.

In recent years, we have put a lot of effort and emphasis on the entire

customer journey – starting with the digital touchpoints that attract

the customer, through the in-pub experience around choice, service

delivery and reasons to visit, and finishing with the correct level of

follow up and future contact.

We are reaping the rewards of the digital transformation project

thatcompleted in the previous financial year, and which allows for

easy, low cost per customer communications to promote the great

activities that take place in our pubs. One of the activities that we will

be looking at for the coming year is to build our presence around a

premium sport experience – which will increase frequency of visit,

spend per head and help acquire new customers.

We know that there is a demand for premium sports occasions –

bothin terms of near-stadium packages such as at The Cabbage

Patch and The Turk’s Head, both at Twickenham, and when watching

live sport on the television. The pub is always seen as the next best

place to being inthe stadium for major sporting events and we will

begiving our customers amazing hospitality, bookable spaces,

greatmenus and atmosphere to build on these lucrative occasions,

incollaboration with our drinks partners – particularly Asahi, who

are one of the mainsponsors of this year’s Rugby World Cup.

To stay ahead of the competition, we are also in the process

ofafarmtofork project to ensure we keep our food offer fresh,

interesting andrelevant. This process has included some extensive

customer segmentation work, which will further help us to ensure

that we target the right offer, in the right style of venue, to the right

customer – driving sales and reducing the acquisition and retention

costs of new and existing customers.

+10%

Like for like food sales

Service with a smile

Food for thought

It’s our amazing people that make

thereal difference in our businesses

andyou can see how we invest in

ourpeopleon page 16.

We will be taking on over 100 chef

apprentices next year who will learn

their trade through our Chefs’ Guild

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Chief Executive’s Review Continued

£306.8m

Total revenue for Managed Pubs and Hotels

£30m

Operating profit f om our

ManagedPubsandHotels

Inspire our people

Hospitality is a people business and it is our amazing team members

at the front line that can make the biggest impact on our customers.

They will only deliver great service and an experience that nourishes

the soul if they are well-trained, highly motivated, happy and engaged.

During the last year, we have worked hard to ensure we are listening

toour teams across the business – so we were delighted that

response rates and levels of happiness and engagement rose

whenwe conducted our second Happiness Index survey. In addition,

wereceived a plethora of individual comments and suggestions –

allofwhich have been read, recorded and collated into common

themesand, in turn, shared and discussed by the Executive Team

sofuture actions can be taken. This is only one strand of our listening

strategy and is supported by new forums for our General Managers,

our Head Chefs and our support centre team and regular catch-up

sessions with Helen Jones, our designated Non-Executive Director

responsible for employee engagement.

During the year, we also had our largest graduation event for all

thoseundertaking development programmes, and our apprenticeship

programmes – both front of house and through our Chefs’ Guild

–continue to deliver excellent results with 200 apprentices trained

last year across six different programmes, making full use of our

Apprenticeship Levy. There is more to come, with an anticipated 220

apprenticeships in the coming year, and I am delighted to see more

ofour General Managers choosing to take onthe LEAP programme

degree level apprenticeship. This investment indevelopment, and

inparticular leadership, will secureour future success.

Enhance our estate

Operating both Managed and Tenanted pubs has always been a

keytenet of our strategy. It allows us to holistically curate our pub

estate, so we can operate individual sites under the business model

that works best for the pub and its customers, best for the Company,

and delivers the best return for our shareholders.

Over the years, we have always moved sites between the two

businesses, but moves normally happen on an individual basis.

Following 12 months of trading free of restrictions, and in light of

thechanging economics of running a pub, we undertook a detailed

review of the estate post year end – particularly around profitability

within our managed framework – and, as a result, decided to move

23pubs intoour Tenanted Inns division. Four of these transfers

havealready happened, with the remainder due to take place in

thecoming weeks.

In line with our values, we put our people first, and the majority

ofteam members in the impacted pubs could either remain in situ

with the new Tenant, apply to take on the Tenancy for themselves,

ormove to another Fuller’s managed site.

During the year we decided to exit a small number of leasehold sites,

including The Ship at Borough and The Inn of Court at Holborn, and

earmarked for disposal a handful of pubs which no longer satisfy

ourinternal returns criteria. We have also decided to accept an

offerof £20 million in value for The Mad Hatter in Southwark,

representing asignificant premium above its net book value of

£2.7 million. Thistransaction is due to complete in summer 2024.

Supporting all of this activity is our continued commitment to

maintaining high standards in our existing estate and developing

sites for the future. This is reflected with three new openings during

the year – The Rising Sun in the New Forest, The Willow in the idyllic

Cotswolds village of Bourton-on-the-Water, and The Queen’s Arms

at Heathrow Terminal 2.

In addition, we continue to invest to enhance the core pub estate.

Wewere delighted to reopen The Admiralty – the iconic and

onlypubon Trafalgar Square – following a £3.3 million rebuild

afteramajor fire last summer – and we recently completed

a£2.5 million investment at The Sanctuary House, near

WestminsterAbbey, reopening in time to welcome customers

forKingCharles III’scoronation.

Evolve our business

While we have a long-term strategy – we never stop monitoring

trends, societal changes, and the behaviour of existing and potential

customers. Reacting to those changes is imperative in delivering

continued growth and this has been reflected in the investments

wemade through our digital transformation project and that we

willmake as we continually review and hone our food offering.

12 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

In November, I was delighted to welcome Sam Bourke to the Executive

Team as Marketing Director. Sam has a long history in the hospitality

sector having previously worked for ETM, The Restaurant Group and

Wasabi. Sam is already adding value across the business with her

drive, enthusiasm, and clear focus on the key trading opportunities

that will deliver strong sales for our pubs and hotels.

As well as building on the opportunities provided through enhancing

our premium sports packages, the marketing team is also reviewing

our kids’ menus and ensuring our family proposition is best in class.

In addition, we are looking to capitalise on trading opportunities

during all parts of the day, for example with an elevated and indulgent

brunch offer.

The new Business Central finance system which was implemented

in2021 is delivering high quality information that aids the decision-

making process and with finance, marketing and operations working

in perfect harmony, we can make successful decisions based on our

knowledge of consumer trends, supported by hard data, excellent

supplier relationships, and outstanding operational capability.

Own our impact – because Life is too good to waste

Sustainability and decisions around our people, the planet and our

communities, are at the heart of everything we do – and while doing

things the right way has always been a Fuller’s value, it is now

absolutely part of business as usual.

We have a long-standing declared commitment to reach Net Zero by

2030 for our operational emissions and by 2040 for our supply chain.

We have made good progress on our target to increase recycling and

reuse, while driving down single use items, and we continue to send

zero waste to landfill. In addition, we are currently rolling out a

programme of sustainability champions to help us embed best

practice across the estate.

There are, of course, added benefits to our sustainability programme

with reductions in energy usage of 14% for gas and 13% for

electricity. New equipment in our pubs continually moves us away

from gas and both The Queen’s Arms at Heathrow and The Admiralty

are fully electric. Combined with the fact that all our electricity is

from renewable sources, that means these two pubs are exclusively

As well as our commitment to the environment, we continue to

investin our diversity and inclusion programme, with allseniorleaders

undertaking diversity and inclusion training. In a great example of

creating a virtuous circle, we are recruiting more team members

withintellectual disabilities through a programme supported by our

corporate charity partner, Special Olympics Great Britain. It is joined

up thinking that helps a company of our size punch far above its

weight in this area.

Tenanted Inns

One of the highlights of the year was seeing our excellent Tenanted

Team, under the leadership of Iain Rippon, pick up the award for

BestTenanted and Leased Pub Company (up to 500 sites) at this

year’s Publican Awards. It was great recognition for the excellent

work Iain and the team have done supporting our Tenants, especially

in the current inflationary cost environment.

We have always seen the benefit of operating both managed and

tenanted models. The latter allows pubs to remain within the Fuller’s

estate but with lower capex, lower costs and shared risk and reward,

enabling the innovative, entrepreneurial Tenants, which our pubs

attract, to benefit from Fuller’s operational expertise and vice

versa.The flexibility it facilitates to move pubs between the models

constantly proves useful to all parties and as well as the obvious

benefits of the 23 houses that are moving into the Tenanted division,

we see the benefits of moving in the other direction through sites

such as The George & Dragon in Westerham and The Plough at

EastSheen.

It has been particularly rewarding to see the success of those pubs

on turnover linked agreements, where we have added additional

marketing resource to help our Tenants build their business and

access the benefits that come from also having a Managed estate.

From Shakespeare and opera to panto, we can give our Tenanted

pubs access to revenue building reasons to visit.

Finally, it is training that is the key to running successful tenancies.

Atno cost to our Tenants, this currently includes a Fuller’s induction

day, covering the basics and introductions to key support team

members, social media and marketing courses delivered locally,

bespoke training for turnover agreement pubs, personal licence

courses, a business development day held by a third-party trainer,

and full access to the suite of FLOW online training. We also run an

excellent cellar course at the Fuller’s Brewery through our long-term

supply agreement with Asahi.

Current trading and outlook

We are delighted that our sales momentum has continued into the

new financial year and like for like sales for the first 10 weeks are

up13.9%. Our recent investments at The Willow, The Sanctuary

House and The Admiralty are outperforming our expectations,

andwe have exciting projects planned for this financial year

atTheCounting House in the City, The Forester in Ealing, and

TheRisingSun near Bashley.

I am more optimistic about the future than I have been since before

the pandemic. While the well-documented inflationary environment

has been a challenge, there are positive signs on the horizon. In

addition, we are ever hopeful of a resolution to the ongoing train

strikes to allow us to further benefit from the increasing numbers

ofoffice workers and international tourists returning to the Capital.

Fuller’s is, and has always been, about the long term. We have

anexcellent vision and strategy that signposts the direction the

Company is heading and what we will do to get there. We have a

clear pathway to further growth based on enhancing profitability

from our underlying business, proactively managing our property

portfolio to ensure we are getting the best returns, and continuing

toseek out appropriate acquisitions. We have astrong set of values

that guide us in how to get there, and we have an amazing team of

people who will deliver all of the above. Finally, we have a predominately

freehold estate, epitomised by iconic sites in outstanding locations.

I am excited by the opportunities ahead, optimistic about the future, and

confident in our ability to deliver excellent service to our customers,

careers for our people and returns for our shareholders.

Simon Emeny

Chief Executive

14 June 2023

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Business Model

14 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

CUSTOMER OFFER

We are famous for delicious, fresh, seasonal

foodand an extensive range of beers, wines,

spirits and soft drinks, as well as over 1,000

boutique bedrooms. We have a clear vision to

deliver memorable experiences that ensure our

customers leave happier than when they arrived.

PEOPLE

Our people make the real difference to our

business. Whether dealing with consumers

orcolleagues, they deliver outstanding service

from bar to boardroom. Our purpose is to create

experiences that nourish the soul – and we

striveto ensure that everyone knows the key

rolethey play in delivering that purpose, vision

and strategy.

ICONIC PROPERTIES

Our predominantly freehold estate is mainly

located in the South and South East of England.

Itis a great balance, with rural, suburban and

urban sites. It includes some truly iconic sites

such as The Still & West in Old Portsmouth and

The Churchill Arms in Notting Hill.

DIGITAL TECHNOLOGY

This encompasses a myriad of digital touch points

for the consumer in both pubs and hotels that,

toachieve optimal efficiency and a frictionless

journey, all need to be seamlessly interlinked.

Inaddition, continued development of our digital

technologies and systems further enhance our

customer knowledge and understanding and

create efficiencies in our internal processes.

FINANCIAL STRENGTH

Our strong Balance Sheet and prudent

approachto cash management ensure that

wearewell placed to grow both organically

andthrough acquisition.

MANAGED

ESTATE

TENANTED

INNS

Our resources How we create value

REINVESTMENT AND

REFURBISHMENT

Keeping our fantastic, iconic properties in

firstclass condition is a key tenet for Fuller’s,

and you can find out more on page 17.

Life is too good

to waste

Focused on our people, our communities,

andour planet, Life is too good towaste

is our commitment to sustainability and

underpins everything we do.

Our people are too

good to waste

Find out more

on pages 52 to 53

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We create

experiences

that nourish

the soul

Our purpose

REVENUES

Revenues come from four main

sources – primarily through

operations in our Managed Pubs

and Hotels and our Tenanted Inns,

but also through some unlicensed

property rental and through

rebates from suppliers.

CUSTOMERS

Our customers reward our efforts with their

tradeand their loyalty. They are ultimately the

reason for everything we do and you can see

more details about our commitment to delighting

our customers on page 16. Happy customers make

for happy team members and vice versa –itis the

ultimate virtuous circle.

PEOPLE

Our team members tell us that they enjoy

beingpart of the Fuller’s family and that they

appreciate our investment in their wellbeing. We

provide best-in-class training and development

programmes and genuine opportunities to develop

through internal career progression. Our policies

ensure that we have a respectful and inclusive

working environment and a consistent approach

to supporting our people.

COMMUNITIES

We strive to play a key role in the communities

and neighbourhoods in which we operate with

support for local events and groups. We support

anumber ofcharities, including Special Olympics

GB at a corporate level and, where possible, offer

matched funding for our team members where

they are undertaking fundraising activities.

SUPPLIERS

Having true partnerships with suppliers makes

areal difference – to both parties. We always look

to the long term and making commitments such

asforward buying helps both parties to plan for

the future with confidence and certainty. It also

allows us to work collaboratively to come up with

interesting, bespoke drinks and dishes to tantalise

our customers tastebuds, that are available only

at Fuller’s.

SHAREHOLDERS

This year, we have increased our final dividend

by35%, confirming our commitment to returning

to our progressive dividend policy. In addition,

shareholders with over 1,000 ‘A’ or ‘C’ ordinary

shares, or more than 10,000 ‘B’ ordinary shares

benefit from our Inndulgence Card scheme, giving

discounts in Fuller’s Managed Pubs and Hotels.

The value we share

Our communities

are too good

to waste

Find out more

on pages 48 to 51

Our planet is too

good to waste

Find out more

on pages 42 to 45

We have a highly

cash generative

business and a careful

approach to our

financial management.

SUPPLIER COLLABORATION

We work closely with our suppliers in the spirit of

mutual collaboration and often have bespoke products

on our bars and menus that are available only at Fuller’s.

Strategy at a Glance

WE’RE CRAFTING A

distinctive

FAMILY OF PUBSAND HOTELS WHERE

PEOPLE FEEL THEY belong

DELIGHT OUR CUSTOMERS INSPIRE OUR PEOPLE

Surprise and delight with

distinctiveservice

• Every venue will be an

individualexperience

• Every team member trained inservice

• An inspirational service coach

ateverysite

• Reward and recognition for greatservice

• Measure through Net Promoter Score

(“NPS”).

Tailor the experience in every

puband hotel

• Empower our leaders to deliver

ahighquality, flexible offering

thatfitslocal customer needs

• Indulgent, great British pub classics

with a modern twist, using seasonal

ingredients on the menu

• Broad selection of beers, wines and

spirits, plus artisan drinks ranges, served

byknowledgeable team members

• Beautiful bedrooms, individually styled

with the highest quality standards

• Delivering sector-leading like for like

sales growth.

Create a smoother

customerjourney

• Optimise customers’ digital

journeyforseamless interaction

• Continually evolve our bookings process

to integrate and improvefunctionality

• Improve digital methods of

communication and marketing

throughamulti-channel approach

• Measure by increase in traffic

tomicrosites and associated

conversion to sales.

Attract new customers and

increase visit frequency

• Refresh brand communications

• Extend our appeal to a broader

customer base

• Deliver experience-led events

todrivefrequency and spend

• Drive a culture to maximise sales

fromevent spaces.

2024 priorities

• Delivery of strong like for like salesgrowth

• Development and execution of

exceptional events and experiences

forour customers.

Create a workplace where

everyonefeels they belong

• Launch and deliver inclusion actionplan

• Train and develop our peopleininclusive

leadership

• Create an inclusive culture throughevents

• Create a network of 150 mental health first

aiders across the business.

Appreciate and value our colleagues

• Develop our listening culture using a range

of tools including The Happiness Index

survey, Fuller’s Forum, My Voice, and

Employee Resource Groups

• Fully embed our transparent pay

structureto attract, retain and

encouragedevelopment

• Evolve our distinctive benefits package.

Support and encourage career

development

• Focus on internal promotions,

particularlyatgeneral manager level

• Provide at least 100 apprentices with

careeropportunities every year

• Develop our chefs through the

Fuller’sChefs’ Guild.

Attract the best talent

• Grow our True to You employer brand

• Utilise Brilliant Recruitment, our new

recruitment system and practices

• Recruit for personality and train forskill.

2024 priorities

• Further enhance our leadership capabilities

with all General Managers participating in

our leadership development programme

• Implement actions arising from

ourHappiness Index survey.

See pages 18 to 19 for this

strategic pillar in action

See pages 20 to 21 for this

strategic pillar in action

16 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

EVOLVE OUR BUSINESS OWN OUR IMPACT

ENHANCE OUR ESTATE

Innovate to excite

futureconsumers

• Evolve and innovate our

proposition to adapt to changes

in consumer behaviour.

Grow our profitability

• Ensure our strategy is executed

acrossthe business to achieve our

likefor like sales growth ambition

• Grow EBITDA margins by growing

sales, effective labour management

and scheduling, and agile product

portfoliomanagement

• Mitigate central costs by improving

theefficiency of processes

• Leverage the full benefits of

ourinvestment in systems

tomaximiseefficiency.

Enhance our supplier

partnerships

• Build genuine long-term partnerships

• Source authentic food and drink

products, focusing around the seasons

• Continue our positive relationship

withAsahi

• Leverage the appeal of our customer

base and geographic position of

ourestate to retain and attract the

bestsuppliers.

2024 priorities

• As the market evolves, stay ahead

ofmarket trends through the use

ofdata insights

• Evolution of differentiated

day-part offering.

Take action to protect and

respectour planet

• Our planet is too good to waste.

Create spaces for communities

toconnect and feel welcome

• Our communities are too good towaste.

Care for our people and foster

asense of belonging

• Our people are too good to waste.

2024 priorities

• Programme of work to support

commitment to Net Zero by 2030

• Investment in diversity and inclusion

programmes.

Care for our estate

• Continue to look after the fabric

ofourestate

• Utilise skills within the team and our

poolof designers to enhance our offer

• Continue to uphold the highest standards

in the industry

• Ensure the estate and capital value

areprotected for future generations.

Evolve through transformational

investment

• Maximise the potential of our estate by

evolving our pubs through investment

• Optimise our portfolio through active

asset management

• Constantly assess optimal operating

model for each site

• Work with and invest alongside our

Tenants to drive returns.

Invest in growing the estate

• Invest in markets where we alreadyexcel

• Add scale to our core premium pub and

hotel estate

• Complement the existing business

inhighincome, premium demographic

areas, with predominately freehold

assets, and in-filling geographical gaps.

2024 priorities

• Targeted capital investment of

£20-25 million to deliver returns

andenhance the value of our estate

• Effectively transition the planned

23 Managed Pubs and Hotels to

TenantedInns to deliver enhanced

returnswhile looking after our team

members andcustomers.

See pages 24 to 25 for this

strategic pillar in action

See pages 26 to 27 for this

strategic pillar in action

See pages 22 to 23 for this

strategic pillar in action

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Delight

OUR

CUSTOMERS

e live to create experiences

thatnourish the soul – making

memories and delighting our

customers. We do this through fresh and

delicious seasonal dishes, an amazing

array of premium and interesting drinks,

and beautiful, individually crafted

bedrooms. But what makes the real

difference is the welcome you receive

when you walk through the door – when

that is extra special, our teams know your

soul is well and truly nourished.

Tailor the

experience in

every

pub and hotel

Today’s consumer

expects the

personal touch

– whether that’s in

the digital comms

we send or the

burger we cook.

Strategy in Action

18 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Surprise and delight with

distinctive service

Attract new

customers

and

crease

visit frequency

Create a smoother customer journey

Q&A

Including

delightingdog

owners everywhere

with our dog

friendly pubs.

Is there anything better than spending time

withasmile on your face? That’s the difference

agreat pub, with great people, can make. It’s

morethan food and drink – it’s leaving happier

thanyou arrived.

We have over one million opted in customers on

ourdatabase – and we tailor our communications

tomatch the things we know they like to do. In

addition, our pubs have the ability to communicate

directly with their own customers about the brilliant

events that are going on in our pubs.

Link to Values:

Doing things the right way

We love it when our team members

dothe right thing and to reward them,

we make a point of recognising those

tiny noticeable things (“TNT”) that

ladder up to make all the difference

indelighting our customers. From

driving stranded customers to Peppa

Pig World, to sending a terminally ill

customer up ina Spitfire, those TNT

moments are rewarded with vouchers,

recognition and team nights out.

Outside of the obvious financial metrics, how do you know your

customers are delighted?

Hospitality is a people business – and it’s one of the few sectors where a smile

on a customer’s face really is the best gauge of how well you are doing. Our

team members live for good feedback and that’s why we use Net Promoter

Scores as one of our bonus measures. It’s also the reason we introduced the

TNT programme, which gives us a quick and meaningful way to thank our team

members for going the extra mile. It’s our people that set us apart from the

competition and they are at their best when they are delighting our customers.

How will you deliver on this strategic pillar?

Building on the points above, we have launched an internal initiative around

Bethe Difference. By embracing the Be the Difference philosophy and

focusing on delivering TNTs, we demonstrate our commitment to providing

exceptional experiences for every customer. We understand that it’s the small

touches and the genuine interactions that truly leave a lasting impression.

Ourpeople are the driving force behind our success, and by consistently going

above and beyond, we can foster customer loyalty, positive word-of-mouth,

and an enduring reputation as a hospitality provider that truly cares. If we get

that right, we will easily deliver on this strategic objective again and again.

Fred Turner, Retail Director

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Inspire

OUR PEOPLE

Create a workplace where

everyone feels they belong

Appreciate and value

our colleagues

Together we are the difference,

and that’s why we make sure our

colleagues can recognise and

reward the achievements of their

peers with our TNT initiative.

This year has seen our work

around diversity and inclusion

take big steps in the right

direction and there’s a lot

moretocome.

Strategy in Action

Continued

ur people are absolutely at the

heart of what we do. Together,

wemake the difference and they

are the people who create the experiences

thatnourish the soul. We aim to create

aworkplace where everyone feels they

belong and where training, development

and career progression are available, and

encouraged, for all. We thrive off each

other too – it’s what gives us energy, what

makes us special, and what helps us build

a fun, exciting and sustainable business.

“ There’s no script, it’s all

aboutbeing yourself.”

— Alex, Head Chef

20 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Link to Values:

Celebrating Individuality

Being Part of the Family

At Fuller’s, being True to You is very

important to us. We believe everyone

should feel able to be themselves, and

we do this by celebrating individuality.

But this isn’t just about diversity

andinclusion – this is about how we

express ourselves at work too and

welove encouraging creativity and

innovation in the workplace. One of

ourother key values is being part

ofthefamily – and for us, diversity

andinclusion is the point on a Venn

diagram where these two values meet.

At Fuller’s, we want to celebrate all

individuals and we want everyone

tofeel part of the family.

Support and encourage

career development

Attract the best talent

Many of our team members

have never had a graduation.

But we make sure we hold one

for everyone who undertakes

aFuller’s apprenticeship or

development course.

Recruitment has called for

some new thinking in recent

times, which is why we

arenow actively targeting

people over 50 through our

partnership with Rest Less.

Q&A

What have been your key areas of focus over the last

financialyear?

We have had a major focus on recruitment over the last year, and it is

reapingrewards. We relaunched our recruitment website and partnered

withrecruitment specialists Harri, which has combined to improve the overall

process and has led to more engaged candidates. Alongside this has been our

continued focus on development, which we know improves key metrics like

retention rates and happiness. We love to recognise successful development

too, and it was amazing to have 300 graduates at Troxy in East London last

November for a brilliant graduation ceremony.

What are you most excited about looking forwards?

I love watching people develop and progress – I find it incredibly rewarding

and I am really proud of the opportunities we offer. This year, we will support

220 apprentices undertaking a number of different programmes from entry to

degree level, work with our partners Rest Less to recruit more people over 50

and the charity Only a Pavement Away, to provide careers to those who are

homeless or in danger of being homeless. I am particularly proud of the work

we are doing with Special Olympics GB, to provide sustainable employment

topeople with intellectual disabilities. I want Fuller’s to be a place where

everyone can have can a fulfilling career, whatever that looks like for them.

Dawn Browne, People & Talent Director

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Enhance

Strategy in Action Continued

OUR ESTATE

e are very fortunate to have

suchan amazing line-up of

iconic pubs in some of England’s

best-known and most beautiful locations.

From The Red Lion on Whitehall to The

White Buck at Burley in theheart of the

New Forest and out to our stunning sites

inthe Cotswolds, our pubs stand proud.

This predominately freehold estate

provides thesolid foundation on which

ourCompany is built – and we pride

ourselves on the love, care and attention

wegive to these properties.

Reopening the Admiralty

A new pub in the heart

he Cotswolds

Investing in the outdoors too

Following a large fire in July last year,

wewere delighted to get the Fire Brigade

back – this time to reopen The Admiralty

following a £3.3 million refurbishment.

We have continued with our winterisation

projects, increasing the amount of outdoor

covers that can be pre-booked throughout

the year.

22 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Where have you been investing this year?

We have added some really great sites to our Managed Pubs and Hotels

business during the year – including The Rising Sun near Bashley, in the

heartof the New Forest, The Willow at Bourton-on-the-Water, which is

knownas the Venice of the Cotswolds, and The Queen’s Arms, which is

landside at Heathrow Terminal 2 and a fantastic sister site to the very

successful London’s Pride. We’ve also transferred two pubs from

TenantedtoManaged operations, The Plough at East Sheen and The

George&Dragon inWesterham. The latter is now part of our Bel & The

Dragonbrand, has 13 stunning bedrooms and a terrace with amazing views.

What are your priorities for the coming year?

We are in the middle of transferring a number of pubs from our Managed

toTenanted business, which will be completed in the near future. We are

alsotaking advantage of an amazing opportunity to sell The Mad Hatter

aspartofawider property development in the area. The latter will realise

around £20 million in value – far above the net book value of the property.

Inaddition, we will continue to invest in our core estate – including the

addition of a furthersix bedrooms at The Counting House on Cornhill and

amajor bedroom refurbishment at The Chamberlain, to capitalise on the

continued post-Covid revival of London.

Creating unique and memorable

periences in magical spaces

Investing in beautiful bedrooms

The Sanctuary House by Westminster

Abbey really was fit for a king when it

reopened after a £2.5 million bedroom

scheme, in time for the Coronation.

Weddings are becoming

increasingly important, and

wehave beautiful spaces fit

forany nature of celebration.

Q&A

“ Taking opportunities

toenhance the fabric

ofour wonderful estate

is always one of my

keypriorities.”

— Peter Turner, Property Director

Link to Values:

Doing things the right way

Always asking what’s next?

We take great pride in the schemes

wecarry out and always want to ensure

we respect the historical integrity and

enhance the ambience when we carry

out an investment. We are always

looking to improve too – as can be seen

at The Admiralty, where we took the

opportunity of making the pub fully

electric. A great example of looking

forward and doing things the right way.

Peter Turner, Property Director

Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C. 23

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Evolve

Strategy in Action Continued

hile we have nearly 180 years

ofhistory behind us, we are

always looking to the future

toensure we remain relevant to our current

and potential customers. We are constantly

innovating our proposition to stay ahead

of,and respond to, changes in consumer

behaviour. Evolution is not just about

change though – it’s also about ensuring

our strategy helps us to continually grow

sales and profitability. We are focused

ongrowing our customer base and basket,

constantly strengthening our supplier

relationships and leveraging the appeal

ofour amazing pubs to successfully grow

in a sustainable manner.

Grow our profitability

Enhance our supplier partnerships

Our long-term supply agreement with

Asahi puts us in a great position for

theRugby World Cup in the autumn,

where Asahi is a key sponsor.

By enhancing our wine lists, we have

given our customers a wider and more

interesting range to choose from and

improved our profit margin.

OUR BUSINESS

24 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

As the newest member of the Executive Team, where do you

see yourpriorities?

I’m really excited by the opportunities available and I have already identified

three key areas where I think we can quickly make an impact – premium sports

occasions, brunch and the lucrative family market. We’ve got great plans for

each, and I’m looking forward to reporting on our progress in the future. If

youjust take the first of these, research shows that although a number of our

customers enjoy watching sport in our pubs, there is a greater percentage who

would like to do so more often with the right offer in place. My team is working

collaboratively across the business to build a first class sports environment

forour customers where our customers wish to enjoy it. And with the Rugby

World Cup this autumn, it’s the perfect time to get this offer right.

Is there a lot more that can be done in the digital space?

Definitely. The digital transformation that was completed before I joined is

already delivering results. We can now easily split our data by segment –

providing the right offer, for the right customer, at the right time, and it has

given us much better sales lead management with pre-booked sales already

up20% on pre-Covid levels. I’m now looking forward to seeing how we can

further harness its power to drive party, corporate and special occasion

bookings, where I think there is a big opportunity across our fantastic pubs

and hotels estate.

Improved use of the

data available

Innovate to excite future consumers

We are still realising further benefits

from the digital transformation project,

smoothing the customer journey and

helping increase pre-booked sales.

We are looking at our food offer from

farm to fork and you can already see

the improvements in our spring/

summer menu – with more to come.

Q&A

Link to Values:

Celebrating Individuality

Always asking what’s next?

We evolve our business at site level

byenabling our pubs to personalise

their offer with a range of events and

activities from comedy and panto to

opera and Jane Austen. Combined

withthis is a laser focus on the future

for the next big trends to make sure

weare always ahead of the game.

Sam Bourke, Marketing Director

Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C. 25

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impact

Strategy in Action

Continued

Take action to protect

and respect our planet

Putting

sustainability

front and centre

Care for our people and foster

a sense of belonging

We continue to reduce energy

use and are on course for Net

Zero by 2030 (operations) and

2040 (supply chain).

Our partnership with

Green Goblet reusable

plastic glasses has

removed a vast quantity

ofsingle use plastic.

Diversity and inclusion training has

been completed by the Board,

Executive Teamand Senior

Managers, and will be rolled out

throughout the Company.

#BeingPartOfTheFamily.

ur Life is too good to waste strategy

launched in January 2020 and has

developed each year. It underpins

the other four areas of strategy and is fairly

and squarely part of business as usual.

Itcovers three distinct areas – our people,

our communities and our planet – with

each area having its own committee, led

bya member of the Executive Team. From

aholistic approach to our main charity

partner, Special Olympics GB, which

combines raising funds with improving

employment prospects for people with an

intellectual disability (“ID”), to substantial

improvements in reducing our carbon

footprint, we are taking ownership of

ourimpact and making life better for us,

ourcustomers, our neighbourhoods and

theenvironment.

OWN OUR

26 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

What are you most of proud of achieving during the year?

I’m really proud of the progress we have made in reducing our energy usage

and the changes we have made in our kitchens. We have seen electricity

consumption fall by 13% and gas fall by 14%. We have also opened two fully

electric pubs – The Admiralty on Trafalgar Square and The Queen’s Arms at

Heathrow. Asourelectricity all comes from renewable sources, this means

these twopubs are exclusively powered by net zero carbon energy. That really

excites me.

What are your key priorities for the coming year?

We are on the cusp of really unlocking our plans to recruit more team members

with an intellectual disability. At The Cabbage Patch, General Manager Stuart

Green is leading the way and has already provided work or work experience

formore than 100 young adults with IDs – and we are now ready to roll out

similar schemes across further pubs. We are working with Special Olympics,

and its athlete leaders, to raise awareness of the opportunities available and

to help our teams understand how they can best support someone with an ID.

This isafantastic example of ESG truly embedding itself in the business. We

raisedover £450,000 for Special Olympics GB last year, providing even more

sporting opportunities for people with IDs. By bringing them into sustainable

employment, we create a truly virtuous circle. That is what ESG should be

allabout.

Q&A

Link to Values:

Doing things the right way

Always asking what’s next?

Protecting the planet is non-negotiable,

so when we are looking to the future,

we always have one eye on making

sure we consider the impact on our

people, our communities and our planet.

That’s why we add charging points for

electric cars when we do an investment

scheme with a car park and why more

and more of our pubs will become fully

electric – helping us get to Net Zero.

Take action to protect

and respect our planet

“ Unemployment among

people with intellectual

disabilities stands at 94%, so

it’s amazing to have a corporate

partner that raises money

and developssustainable

employment opportunities”

— Colin Dyer, CEO, Special Olympics GB

We are trialling a premium draught

tonic solution in some sites, which has

resulted in the removal of 35,000 glass

bottles from our supply chain.

Oliver Rosevear, Sustainability Director

Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C. 27

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GOVERNANCE

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WE USE FINANCIAL

INDICATORS TO

MONITOR OUR

progress

INDELIVERING

AGAINST OUR

STRATEGY

TOCREATE

long-term

sustainable

VALUE FOR ALL

STAKEHOLDERS.

Non-financial performance metrics are used

withinthe business, including employee

engagement and satisfaction scores,

customerNPSand environmental targets.

Key Performance Indicators

REVENUE AND OTHER INCOME

£336.6m

Definition

Revenue and other income comprises sales

of goods and services, accommodation

income and rental income. We have two

main revenue segments: Managed Pubs

andHotels and Tenanted Inns.

Why is it important for Fuller’s?

Revenue and other income drives the overall

business, resulting in cash generation,

which allows for investment in our estate,

our people, rewards to our stakeholders

andacquisitions.

Performance in FY2023

Revenue and other income increased by

33% compared with FY2022, with a 34%

increase in Managed Pubs and Hotels

revenue and an increase of19% in

Tenanted Inns revenue. This increase

isdriven by the improved ability to trade

inFY2023, compared to the prior year

when trading was still restricted because

of the pandemic.

ADJUSTED PROFIT BEFORE INCOME TAX

£12.7m

Definition

Adjusted profit before tax is profit before

taxexcluding separately disclosed items

asshown in the Income Statement.

Why is it important for Fuller’s?

The Directors believe that this measurement

of profitability allows stakeholders to analyse

trends and performance without being

impacted by separately disclosed items.

Performance in FY2023

Adjusted profit increased by 76%

comparedto FY2022. The increase

waslargely due tothe improved

abilitytotrade in FY2023, particularly

inLondon as people returned to offices

and international tourism recovered. In

theprior year trading was restricted for

part ofthe year because of the pandemic.

Adjusted profit in the current year was

impacted by the inflationary environment

with costs such as utilities, food and staff

costs increasing significantly in the year.

ADJUSTED EARNINGS PER SHARE (“EPS”)

16.10p

Definition

Adjusted earnings per share is profit after

tax excluding separately disclosed items

attributable to equity holders of the Group

divided by the weighted average number

ofordinary shares in issue during the year

and using a 40p ordinary share.

Why is it important for Fuller’s?

This measure shows how much money

theGroup is generating for its shareholders.

Ittakes into consideration changes in profit

and loss and the effects of new shares

issued but excludes the impact of separately

disclosed items. It is an important variable

indetermining our share price.

Performance in FY2023

Adjusted earnings per share increased

by64% compared to FY2022 in line with

growth in adjusted profit before tax.

NET DEBT EXCLUDING LEASE LIABILITIES

£132.8m

Definition

Net debt comprises cash and short-term

deposits, bank overdraft, bank loans,

debenture stock and preference shares.

Netdebt is pre IFRS 16 and therefore does

not include lease liabilities.

Why is it important for Fuller’s?

This measure helps shareholders to

determine the level of debt and the

overallfinancial stability of the Group.

Performance in FY2023

Net debt (excluding leases) was at

£132.8 million (FY2022: £131.9 million).

Thisis only a marginal increase from last

year astheGroup has delivered on its

capital allocation framework through

investment in the estate and returns

toshareholders through both dividends

andshare buybacks.

023

336.6

253.8

73.2

022

021

023

16.10

9.79

(72.09)

022

021

023

132.8

131.9

218.1

022

021

023

12.7

7.2

(48.7)

022

021

28 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

REVENUE AND OTHER INCOME

£336.6m

Definition

Revenue and other income comprises sales

of goods and services, accommodation

income and rental income. We have two

main revenue segments: Managed Pubs

andHotels and Tenanted Inns.

Why is it important for Fuller’s?

Revenue and other income drives the overall

business, resulting in cash generation,

which allows for investment in our estate,

our people, rewards to our stakeholders

andacquisitions.

Performance in FY2023

Revenue and other income increased by

33% compared with FY2022, with a 34%

increase in Managed Pubs and Hotels

revenue and an increase of19% in

Tenanted Inns revenue. This increase

isdriven by the improved ability to trade

inFY2023, compared to the prior year

when trading was still restricted because

of the pandemic.

ADJUSTED PROFIT BEFORE INCOME TAX

£12.7m

Definition

Adjusted profit before tax is profit before

taxexcluding separately disclosed items

asshown in the Income Statement.

Why is it important for Fuller’s?

The Directors believe that this measurement

of profitability allows stakeholders to analyse

trends and performance without being

impacted by separately disclosed items.

Performance in FY2023

Adjusted profit increased by 76%

comparedto FY2022. The increase

waslargely due tothe improved

abilitytotrade in FY2023, particularly

inLondon as people returned to offices

and international tourism recovered. In

theprior year trading was restricted for

part ofthe year because of the pandemic.

Adjusted profit in the current year was

impacted by the inflationary environment

with costs such as utilities, food and staff

costs increasing significantly in the year.

ADJUSTED EARNINGS PER SHARE (“EPS”)

16.10p

Definition

Adjusted earnings per share is profit after

tax excluding separately disclosed items

attributable to equity holders of the Group

divided by the weighted average number

ofordinary shares in issue during the year

and using a 40p ordinary share.

Why is it important for Fuller’s?

This measure shows how much money

theGroup is generating for its shareholders.

Ittakes into consideration changes in profit

and loss and the effects of new shares

issued but excludes the impact of separately

disclosed items. It is an important variable

indetermining our share price.

Performance in FY2023

Adjusted earnings per share increased

by64% compared to FY2022 in line with

growth in adjusted profit before tax.

NET DEBT EXCLUDING LEASE LIABILITIES

£132.8m

Definition

Net debt comprises cash and short-term

deposits, bank overdraft, bank loans,

debenture stock and preference shares.

Netdebt is pre IFRS 16 and therefore does

not include lease liabilities.

Why is it important for Fuller’s?

This measure helps shareholders to

determine the level of debt and the

overallfinancial stability of the Group.

Performance in FY2023

Net debt (excluding leases) was at

£132.8 million (FY2022: £131.9 million).

Thisis only a marginal increase from last

year astheGroup has delivered on its

capital allocation framework through

investment in the estate and returns

toshareholders through both dividends

andshare buybacks.

Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C. 29

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NEIL SMITH —FINANCE DIRECTOR

Group Revenue increased by 33% to £336.6 million (FY2022:

£253.8 million). Both financial years had periods when trade was

disrupted, with train and tube strikes in the current financial year

andCovid restrictions in the prior year. The train and tube strikes

were particularly detrimental in Central London, where a significant

proportion of our estate is situated, with commuters choosing to

work from home. We estimate that the strike action has reduced

sales by in excess of £5 million in the financial year.

The trading environment during the year was very challenging.

Thewar in Ukraine caused our energy costs to increase substantially.

Even with hedging arrangements in place, and reduced usage, our

total energy costs increased to £14.2 million, compared to £7.6 million

in theprior year. We have had to manage significant foodand drink

inflation, and growing wage costs as a result of labour shortages at

the start of the year, as well as the increase in National Living Wage.

This national inflationary environment has also led to the Bank of

England raising interest rates,with our finance costs rising by nearly

10% from the prior year. Despite this background, the Group has

delivered an adjusted profit of £12.7 million, up by 76% on the prior

year (FY2022: £7.2 million).

“ DESPITE A CHALLENGING

TRADING ENVIRONMENT

WE HAVE DELIVERED

SALES GROWTH OF

33% AND INCREASED

ADJUSTED PROFIT

BEFORETAX BY 76%.”

Financial Review

30 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

The financial year to 1 April 2023 comprised 53 weeks of trading,

whereas theprior year represented 52 weeks. The additional week

oftrade contributed £5.7 million of Group revenues and £0.3 million

Group adjusted profit.

In our Managed Pubs and Hotels business, like for like sales have

grown by 17.5% compared to the prior year, with total sales increasing

by 34%. Like for like sales in our Central London sites have risen by

40.1%, demonstrating both workers and tourists are returning to

London andcontinue to do so.

Adjusted EBITDA for the Managed Pubs and Hotel business was

£53.4 million which represents an increase of 11% on the prior year

(FY2022: £48.0 million). However, adjusted EBITDA margin declined

from 21.0% to 17.4%, reflecting the impact of increased energy and

labour costs. Additionally, in the prior year, the UK Government was

providing some support due to the pandemic. VAT rates for food and

accommodation were at 5% and then 12.5%, but increased back to

20% in the current year. We also received some support grants in

theprior year, which were not repeated in the current year.

Tenanted Inns revenue grew by 19% from £25.0 million to £29.8 million.

Adjusted EBITDA margin improved from 51.6% to 52.0%. The low cost

base of the Tenanted business means that it is a highly profitable

partof the Group and continues to trade strongly despite the

economicbackdrop.

During the year, the Group refinanced its banking facilities with

newunsecured facilities of £200 million, comprising a revolving credit

facility of £110 million and a term loan of £90 million. These facilities

have been agreed for a tenure of four years through to May 2026.

Thenew facilities bear interest at a margin dependent on the leverage

covenant plus a base rate of SONIA. In the year, interest rates have

increased sharply with SONIA increasing from 60bps tojust

under420bps. In order to mitigate the risk of high SONIA rates, on

2 September 2022, the Group entered into a zero-premium cap and

collar over £60 million of the term facility. This instrument is in place

for a three-year period to hedge some of the variability in interest

rates. The Group sold a floor of 310bps and bought a cap of 500bps,

which gives some protection should SONIA exceed 500bps.

Finance costs

Total net finance costs (before separately disclosed items) have

increased by £1.1 million to £12.4 million. The increase is due to the

rising Bank of England base rate partially offset by the improved

margins secured on the new bank facilities as part of the refinancing

inMay 2022. This means that the average cost of borrowing was

7.0% in the current financial year compared to 4.2% in the prior year.

Separately disclosed items

The net position on separately disclosed items of £2.4 million expenses

(FY2022: £4.3 million credit) comprises £11.8 million of profits on the

disposal of nine predominately unlicensed properties, impairments

of£14.3 million on 22 properties, costs of£0.5 million incurred as a

result of corporate reorganisation, offset by a £0.8 million credit in

respect of a historical VATprovision.

Tax

The underlying effective tax rate was 22.8% (FY2022: 16.7%) as some

movements are at the current corporation tax rate of 19% and other

are at the future tax rate of 25%. Separately disclosed items have an

effective tax rate of 20.8% (FY2022: 74.4%) resulting in an overall tax

rate of 23.3% (FY2022: 38.3%).

During the year, the significant tax revenues the Group generates

forthe Government rose by 70%. For the 53 weeks ended 1 April

2023, the total tax contribution of the Group to the UK Exchequer

was£80.0 million (FY2022: £47.2 million) in taxes borne and taxes

collected on behalf of colleagues, customers and suppliers. This

significant increase is predominately in VAT payments due to the

increase in sales, along with the increase in output VAT rate from

ablended 8.75% in FY2022 on food and accommodation sales back

tothe normalised rate of 20% in FY2023.

Total tax collected (£m)

FY2022 FY2023

14.7

37.0

19.0

15.9

11.0

14.4

8.6

7.2

1.0

0.9

-2.5

-20

Employer’s NI

Other taxes and Apprenticeship Levy

Business rates

Corporation tax

PAYE and Employees’ NIVAT

Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C. 31

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66-104

Pension

The net defined benefit pension scheme accounting surplus has

increased by £0.3 million to £14.6 million (FY2022: £14.3 million surplus)

as a result of both a decrease in present value of pension obligations

as the discount rate increased from 3.0% to 4.75%, andasimilar

quantum of decline in the fair value of scheme assets. InApril 2023,

the 2022 triennial valuation was concluded, and theCompany agreed

to continue to pay contributions into thePlanin line with the existing

recovery plan. Under this plan, deficit reduction contributions started

at £2.2 million per annum inJuly2022. As of January 2023, the deficit

reduction contributions have increased to £2.4 million.

Shareholders’ return

The proposed final dividend of 10.00p per ‘A’ and ‘C’ ordinary share

(FY2022: 7.41p), together with the interim dividend of 4.68p per share

already paid makes a total of 14.68p per share, which is an increase of

30% and marks a return to a progressive dividend policy. The middle-

market quotation of the Company’s ordinary shares at the end of the

financial year was 465p. The highest price during the year was 650p,

while the lowest was 444p. The Company’s market capitalisation at

1 April 2023 was £282.6 million (FY2022: £383.9 million).

Capital allocation framework

The Group’s capital allocation framework aims to enhance

shareholder value whilst targeting leverage at no more than 3x

netdebt/EBITDA. The table below summarises the framework

inwhich the Group will do this.

Policy Targets and Philosophy Outlook

Invest in long-

term organic

growth

Returns-based

approach to capital

investment

Annual investment

of£10-15 million on

maintenance capex and

£10-15 million on trade

enhancing capex

Sustainable

andprogressive

dividend

Normalised dividend

cover range of 2.5-3x

Progressive dividend

growth in line with EPS

growth to drive dividend

yield for investors

Invest in

additional

growth

opportunities

Disciplined approach

to assessing

investment

opportunities

IRR used to measure

themerits of one-off

investments in assets

orM&A

Targeting

leverage of 3x

net debt/EBITDA

Strong Balance

Sheet maintained –

target leverage at

nomore than 3x

net debt/EBITDA

Recent refinancing provides

certainty offunding

If within our leverage

target, then surplus cash

may enable additional

shareholder returns

including share buybacks

Cash flow and net debt

Net debt (excluding leases) was at £132.8 million (FY2022:

£131.9 million). This is only a marginal increase from last year

astheGroup has delivered on its capital allocation framework

through investment in the estate and returns to shareholders.

Atotalof £30.7 million was invested in the estate in the year–

including three new acquisitions, The Queen’s Arms at Heathrow,

TheRising Sun, near Bashley in the heart of the New Forest, and

TheWillow in Bourton-on-the-Water. The improvement in EBITDA

has meant that net debt/EBITDA is now at 3x, which is in line with

ourcapital allocation framework.

Cash flow

FY2023

£m

EBITDA 51.8

Interest (8.7)

Tax –

Working capital and share transactions (2.9)

Pension contributions (2.3)

Cash available for discretionary spend 37.9

Capital expenditure (30.7)

Separately disclosed items (0.5)

Property disposals and lease surrenders 13.9

Dividends (7.5)

Share buyback (4.7)

Cash flow 8.4

Non cash movement (1.7)

Net debt movement 6.7

Source of finance

Bank debt 119.4

Other debts 27.5

Cash (14.1)

Net debt before lease liabilities 132.8

Lease liabilities 73.1

Total net debt 205.9

Sources of finance

During the year, the Group refinanced its banking facilities with new

unsecured banking facilities of £200 million, comprising a revolving

credit facility of £110 million and a term loan of £90 million. These

facilities have been agreed for a tenure of four years through to

May2026. The new facilities bear interest at a margin dependent

onthe leverage covenant plus a base rate of SONIA.

The Group’s financing is a mix of bank debt, debentures, cumulative

preference shares, overdraft, cash and short-term deposits as

disclosed in notes 22, 24 and 26 to the financial statements. Other

financial assets and liabilities such as trade receivables and payables

arise through the Group’s operating activities. The Group does not

trade in financial instruments.

Financial Review Continued

32 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Financial risks and treasury policies

The Group operates a centralised treasury function, which controls

cash management and borrowings and the Group’s financial risks.

The objectives of the function are to manage the Group’s financial

risk, to secure cost effective funding for the Group’s operations,

andto minimise the adverse effects of fluctuations in the financial

markets on the value of the Group’s financial assets and liabilities,

onreported profitability, and on the cash flows of the Group.

Transactions of a speculative nature are prohibited. The Group’s

treasury activities are governed by policies approved and monitored

bythe Board.

Going concern statement

The Group’s business activities, together with the factors likely

toaffect its future development, performance and position are set

outin the Strategic Report on pages 1 to 65. The financial position

ofthe Company, its cash flows, net debt and borrowing facilities, and

the maturity of those facilities are set out above on pages 147 to 159.

In addition, there are further details in the financial statements on

the Group’s financial risk management, objectives and policies in

note 25. The Directors have outlined the assessment approach for

going concern in the accounting policy disclosure in note 1 to the

financial statements. Following that review, the Directors have

concluded that it is appropriate for the Group to adopt thegoing

concern basis in preparing its financial statements.

Viability statement

The Corporate Governance Code requires that the Directors have

considered the viability of the Group over an appropriate period of

time selected by them. The Directors have chosen to assess this over

three financial years through to March 2026 as this aligns with the

Group’s strategic planning, which was reviewed and approved as

part of the refinancing process. This three year plan is supported by

the forecasts that are presented and approved by the Board. It takes

into consideration the Group’s current position and the potential

impact of the principal risk documented on pages 36 to 39 in the

Strategic Report. The most significant risks impacting the forecasts

are the recovery of the UK economy and cost inflation, specifically

food, utilities and wage costs. These factors will also have an impact

on consumer behaviour and consequentially sales volumes.

Management have prepared, and the Board has considered two

keyscenarios:

A “base case” is the Board approved Budget for FY2024 which forms

part of the three year plan to FY2026. The base case assumes there

iscontinued impact from cost inflation specifically food, utilities

andlabour in FY2024 but these start to ease as we move into FY2025

and FY2026. Under this scenario, the Group would have sufficient

resources and headroom on its covenants through the duration of

theviability period.

A “downside case” which assumes that sales volume reduce by 10%

and costs across food, staff and interest continue to rise at a much

higher rate. Again, the model assumes that these cost pressures

alleviate during FY2025 and FY2026. The model also assumes that

train strikes are more frequent than experienced in FY2023 but are

resolved in the longer term. In this ‘downside case’, management

would implement mitigating actions such as overhead cost reduction

and reduction of capital expenditure and other property spend

toonly essential. Under this scenario, the Group would still have

sufficient resources and headroom on its covenants through the

duration of the period.

At 1 April 2023, the Group’s Balance Sheet comprises of 92% ofthe

estate value being freehold properties and available headroom on

facilities of £79.5 million and £14.1 million of cash and resulting net

debt of £132.8 million.

During the year, the Group has secured a new facility of £200 million,

split between a RCF of £110 million and a term loan of £90 million, for

a tenure of four years to May 2026. Under the new agreement, the

minimum liquidity covenant of £10 million tested monthly remained

until November 2022. From December 2022 (and tested quarterly

thereafter), the covenant suite consists of net debt to EBITDA

(leverage) and EBITDA to net finance charges. See further details

innote 24 to the financial statements.

Taking account of the Company’s current position, principal risks

facing the business and the sensitivity analysis discussed above,

aswell as the potential mitigating actions that the company could

take, the Board expects that the Company will be able to continue in

operation and meet its liabilities as they fall due over the three year

period of assessment.

Further details on the forecast process and assumptions can be

found in note 1 to the financial statements.

Neil Smith

Finance Director

14 June 2023

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Risk Management Governance Framework

The risk management process is operated by the Executive Team, supported by the Head of Risk, and is overseen by the Audit and Risk

Committee and the Board, which is further supported by the external audit process.

Governance Role Output

Board

• Oversees the risk management and internal

controlsprocesses

• Defines the Group’s risk appetite and assesses

theprincipalrisks

• Final approval

Audit and Risk

Committee

• Provides guidance and direction and supports the Board

inthe management of risk

• Reviews the effectiveness of the risk management

strategyand internal controls process

• Recommendations

tothe Board

Executive

Team

• Responsible for day to day operational implementation

oftherisk management strategy

• Provides advice and guidance to the business areas

• Considers emerging risks

• Accountable to the Audit and Risk Committee and Board

• Group risk register

• Principal risk reviews

• Audit and Board reports

Business Risk

Management

• Implements and maintains risk management procedures

• Maintains risk registers including identification of risk,

mitigating controls and actions

• Division and

Department risk

registers

Task Force on

Climate-related Financial

Disclosures Working

Group

• Oversees climate specific risks and integrates mitigation

controls and actions into the wider risk strategy

• TCFD report and

climate-related risk

mitigation approach

Risk Management

anaging risks effectively is key to ensuring that we

achieve our strategic objectives in the long term and

continue to deliver the high standards our customers, our

people and our shareholders expect. Risk arises both as a natural

consequence of doing business and in the pursuit of our strategy.

Our risk management approach is governed through a robust

framework and we follow a consistent process for the identification

and review of risk. The Board reviews these risks in the knowledge

that currently unknown, non-existent or immaterial risks could turn

out to be significant in the future, and ensures that a robust

assessment has been performed.

Role of the Board

The Board is responsible for effective risk management and oversees

a governance model that incorporates an integrated assurance

model. It also formally articulates theGroup’soverarching appetite

and tolerance for risk.

Through our risk governance structures, frameworks, processes and

reporting mechanisms, Directors are provided with the information

and insight needed to make a robust assessment of the Group’s most

material risks and to understand how they are being mitigated and

managed in line with the Board’s stated risk appetite and tolerance.

The Board is responsible for monitoring the Group’s culture to ensure

it encourages openness and transparency across the business,

which directly supports effective risk management.

34 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Risk Appetite

The Group’s approach is to take a long-term view of its business and

to assess all risks accordingly, while ensuring we take opportunities

to deliver economic reward in line with the Group’s strategy, asfollows:

• Risks should be managed consistently and in line with the Group’s

strategy, financial objectives and guiding principles

• Opportunities should only be pursued where the scope for appropriate

reward is supported by an informed assessment of risk

• Risks should be actively managed and monitored through the

appropriate allocation of management and other resources.

Risk Management Process

The Executive Team follows a clear, simple and robust process to

identify the Group’s most significant risks, incorporating both

top-down and bottom-up assessments:

• Both the Managed and Tenanted businesses as well as the support

centre functions prepare their material risks in registers which are

reviewed on a half yearly basis by the Executive Team

• This also includes a review of the climate-related risks considered

over short, medium and long-term horizons. The detail of our

climate-related risks are disclosed in our TCFD reporting on

pages54 to 61

• We use a risk categorisation framework to analyse the

riskregisters

• The risks identified through this mechanism that are considered

most significant, in terms of their materiality to the Group, are

recorded in the Group risk register

• Emerging risks are discussed regularly by the Executive Team

andescalated to the Audit and Risk Committee as required

• In addition, the Audit and Risk Committee conducts a deep dive

onspecific risk areas based on the judgement of the Committee,

looking at: changes in risk likelihood; changes in the materiality

ofimpact; any changes to the mitigation; and controls that are

inplace

• Every principal risk is assessed to see whether it could have

amaterial strategic or commercial impact, either on its own

oraspart of a multiple risk scenario

• The Executive Team ensures principal risks are managed

appropriately, monitored and reported internally andexternally

• At each half year, the Executive Team considers and challenges

whether risks are being managed to the tolerance approved by

theBoard, using principal risk reports to monitor how far material

financial, operational and compliance controls and mitigations

have been implemented, their effectiveness, and how close the

current net risk rating is to our risk tolerance

• The outcomes of half yearly reviews considered by the Executive

Team are reported to the Audit and Risk Committee and the Board,

with particular focus on risks that are outside tolerance, and

actions areagreed

• Principal risk reviews also support the Audit and Risk Committee

and Board in monitoring andreviewing the effectiveness of the

Group’s internal controlframework.

Risk Assessment

We rate risks by considering their potential financial and non-

financial impacts and the likelihood that they will happen, using a

consistent rating grid to compare and prioritise risks. The risk rating

takes into account the controls and mitigations in place to reduce

thelikelihood and/or impact of the risk, its implementation status

andeffectiveness. Risk ratings are regularly reviewed to consider

whether the external or internal context, strategy, business

objectives or resources available to manage the risk have changed.

The suitability of the controls and mitigations are reviewed through

robust reporting and monitoring which creates a feedback loop

enabling a continuous improvement process to be in place

regardingrisk management. This includes reviewing ownership

andaccountability of risks and controls across the Executive and

Management teams.

Assessment of Emerging Risks

As well as assessing ongoing risks, we continue to consider how

thebusiness could be affected by emerging risks. Our Executive

Team and department heads horizon-scan to monitor any potential

disruptions that could dramatically change our industry and/or

ourbusiness, from both a risk and opportunity perspective, to

understand the changing landscape and take appropriate actions.

Itis often possible to predict the potential impacts of emerging

risks,but it is more challenging to predict their likelihood, timing

andvelocity.

Changes to Risk Scores Versus Prior Year

Coronavirus

We have seen an improving risk outlook on the impact of Covid-19.

The UK has fully opened up and international tourism is recovering.

On5 May 2023, the WHO agreed that the disease no longer fits the

definition of a Public Health Emergency of International Concern.

Wehave therefore reduced the likelihood of a pandemic impacting

our business but remain alert to the potential risks. We continue to

monitor global health issues and their potential impact as part of our

horizon scanning and emerging risk process.

Recruitment and Retention

Our vacancy levels are at the lowest they have been post-pandemic

and whilst recruitment and retention remains a significant challenge

across the industry, the mitigating actions we have taken have meant

that the risk to the business has lessened over the last year.

Supply Chain

While we continue to face a degree of uncertainty due to the ongoing

situation in Ukraine, we see the supply chain situation easing in the

future. The combination of returning to business as usual post-Covid,

better access to data, and support from key suppliers has resulted in

improved forecasting and management of stock.

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Principal Risks and Uncertainties

Principal risks

1. Economic Uncertainty MOVEMENT

Owner Description Control and Risk Mitigation

Chief Executive

The inflationary environment, cost

ofliving increases and the threat

ofrecession could have an impact

ondemand.

In addition, the impact of strike action

–particularly transport strikes – has a

significant impact on our city centre sites.

We closely monitor our cash flow to ensure we maintain an

appropriate level of liquidity, continue to keep a diversified

estateand review the composition.

Our core customer group is typically at higher income levels,

whichhelps mitigate some of the effects of inflationary pressures

on ourbusiness.

We are able to adjust our variable cost base to reduce the impact

ofstrike action on our overall profitability.

Risk Key

New Decrease Increase No change

The following heatmap sets out the impact and likelihood scores for our principal risks and further detail of these risks and emerging risks is set

out in the table below. The analysis is not intended to be a comprehensive list of all risks actively managed by the business. The key financial

risks are detailed in note 26 to the financial statements.

Annual impact to profit before tax

LIKELIHOOD

IMPACT

Risks

Economic Uncertainty

Consumer Demand Shifts

Information Technology/Cyber Security

Financing

Cost Inflation

Supply Chain

Recruitment & Retention

Health & Safety

Future Pandemic

Sustainability & Environment

36 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

2. Consumer Demand Shifts MOVEMENT

Owner Description Control and Risk Mitigation

Marketing

Director

The Group’s success is attributable

toitsability to anticipate and react

toconsumer demand.

In recent years, we have seen

changes including but not limited

toworking from home, the demand

shift in city venues vs rural, and

food delivery services. There

isacontinued trend towards

healthy andlifestyle choices

whichcould impactdemand. As

noted above, this is alsoimpacted

by economic uncertainty.

Management monitor and research consumer trends, gather consumer feedback

through Net Promoter Score surveys, online andsocial media reviews, and

customer complaints.

We analyse retail pricing and market share data to ensure we arecompetitive

butstill premium.

The balance of our estate across both city and rural locations allowsus to

manage demand shifts.

Our digital transformation now enables us to increase frequencyandspend

fromexisting customers, and to targetnew customers.

3. Information Technology/Cyber Security MOVEMENT

Owner Description Control and Risk Mitigation

Finance

Director

The Group is increasingly reliant

onits information systems to

operate, and trading would be

affected by any significant or

prolonged failures and/ordata loss.

In addition, the sophistication of

cyber attacks continues toincrease.

Our IT function has a range of facilities and controls in place to ensure that, in

theevent of an issue, normal operation would be restored quickly. These include

aformal IT Recovery Plan, online replication of systems and backup datacentres,

andexternal support for hardware and software. We continue to introduce more

preventive measures to reflect the increased risk. These include external reviews

of our IT controls and a range of assessment and training for all team members who

have access to our network.

4. Financing MOVEMENT

Owner Description Control and Risk Mitigation

Finance

Director

Interest rates may increase,

adversely impacting profit, and/or

there could be arisk of breaching

financial covenants. There is a risk

that we are unable to find suitable

financing when required.

Our current financing facility runs until May 2026 and we maintain good

relationships with our current lenders. The predominately freehold nature of

ourbusiness means we have the ability to offer more certainty than many in our

sector when raising finance, and alternative financing approaches are available.

We closely monitor our cash flow and control of investments to ensure we

maintain appropriate levels of debt cover. We have an interest rate cap and

collarin place to mitigate some of the impact of rising rates.

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5. Cost Inflation MOVEMENT

Owner Description Control and Risk Mitigation

Finance

Director

There is a risk of rising input

costsacross all areas, including

food anddrink, utilities and staff

costs. This hasbeen accelerated

bythecurrent global economic

environment and the war in Ukraine.

Staff costs could be impacted by

further changes to the National

Living Wage, atightening of labour

supply, and the demand for higher

wages due to the costofliving

increases and inflation.

We regularly monitor prices using relevant commodity databases, review

forwardlooking inflation and all key contracts are competitively tendered.

Wehaveincreased the frequency of our margin monitoring internally, and our

retailprice monitoring compared with our competitors. This allows us to act

quicklyif there are significant changes in input costs.

Our property management platform allows us to control propertycosts.

Our preference is to have long-term agreements in place and we have recently

agreed deals across the majority of our drinks suppliers. Wehave a Long-Term

Supply Agreement (“LTSA”) in place with Asahi Europe & International Ltd

forthesupply of beer, cider and other beverages to 2029, which caps the increase

tobelow CPI.

The majority of our energy use is covered by fixed-term prices. Forthe 2024 financial

year, we are fully hedged for both gas and electricity.

We aim to mitigate the risk of staff cost increases through operational efficiency

and continued optimisation of staffing levels.

6. Supply Chain MOVEMENT

Owner Description Control and Risk Mitigation

Finance

Director

There is a risk that failure in our

supplychain may damage customer

satisfaction and could impact the

profitability of the Group. Any large

scale issue with out of stock items

could have an impact on trade in

ourbusinesses.

We have also identified a potential

long term risk to our supply chain

asa result of climate change.

The LTSA in place with Asahi Europe & International Ltd for the supply of beer,

ciderand other beverages ensures that products will meet certain brand

performance metrics, and the supply service is subject to key performance

indicators (“KPIs”).

All other key suppliers are subject to service and quality KPIs which are monitored

on a monthly basis. Our preference is for long-term agreements which enable strong

relationships, and we work with smaller suppliers to ensure that they grow healthy

sustainable businesses outside of their agreement with Fuller’s.

We have a reputation of honesty, trust and fairness, and our long-term collaborative

approach has meant our suppliers continue to fulfil our needs. Given the ongoing

difficulties in supply, these relationships, coupled with our ability to replace and

adapt our customer offering, help us to mitigate supply chain challenges. We seek

tounderstand more about products at risk as a result of climate change and look

toidentify ways to mitigate this risk over time.

7. Recruitment & Retention MOVEMENT

Owner Description Control and Risk Mitigation

People

&Talent

Director

The recruitment and retention of high

calibre employees is fundamental

toour ability to deliver a distinctive

experience for our customers,

andtosupport our growth agenda.

The challenging recruitment market

for hospitality is likely to continue

for roles held by support centre

employees, who may viewa

careerwithinhospitality as

lessattractivethan other parts

oftheeconomy currently.

We invest heavily in our people, offering them real career paths. We are able to

differentiate ourselves from the competition and ensure that we remain an employer

of choice in a challenging market. The opportunity tojoin at a junior level, e.g. as an

apprentice, complete our Chefs’ Guild Scholarship, and progress to either Head Chef

or General Manager is very appealing. We continue to develop our apprenticeship

and development programmes, have a competitive pay and reward structure,

andrun asuccessful inhouse recruitmentfunction.

We have succession plans in place for key Senior Management roles and have

drawn upon these when selecting an Executive Team to deliver the Board’s strategy

for our pubs and hotels focused business.

Principal Risks and Uncertainties Continued

38 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

8. Health & Safety MOVEMENT

Owner Description Control and Risk Mitigation

Retail

Director

The health and safety of our

employees and customers, and

thegeneral public when on our

estate, isakey priority for us.

There is a risk that we do not

adhere tothehighest health

andsafety standards, further

increased by the large number

ofsites weoperate.

There is a risk of a customer

suffering from our staff failing

todeliver our allergens policies

andprocedures.

We have a comprehensive training programme in place for our employees

covering all aspects of health and safety.

All sites complete a risk assessment and are required to undertake detailed

weekly and monthly compliance checks which are then subject to review

byourin-house health and safety team. The allergen procedures we have

implemented to manage the risks arecontinuously reviewed to ensure

controlsremain appropriate.

We continue to utilise the services of expert third party health and safety

consultants to undertake annual audits covering food, fire and general

healthandsafety risks on all our sites and to perform detailed investigations

ininstances where an incident does occur.

9. Future Pandemic MOVEMENT

Owner Description Control and Risk Mitigation

Chief

Executive

The Covid-19 outbreak had a

seismicimpact on our industry,

mostobviously through the closure

of all our pubs and hotels followed

by theenforced social distancing

and otherrestrictions. Thereisa

riskofsubsequent pandemics,

eitherentirely new strains of a

virusor evolutions of the current

strain, anda government strategy

inresponse to this that negatively

impacts the business.

We closely monitor our cash flow to ensure we maintain an appropriate level

ofliquidity, continue to keep a diversified estate andreview the composition in

the light of recent events, negotiating more flexibility into leases going forward,

keeping strong ties withgovernment, building on our pandemic response plan,

and maintainingand enhancing our flexibility in our customer offering and

operationalprocedures.

We have successfully emerged from Covid-19, which gives us confidence that we

could do so again.

10. Sustainability & Environment MOVEMENT

Owner Description Control and Risk Mitigation

Chief

Executive

Climate change risk could impact

our supply chain. Uncertainties

over how these risks will evolve

could reduce revenues and profit.

This could alsoimpact trust and

reputation amongcustomers,

investors and otherstakeholders.

The Group is contributing to the Net Zero Carbon Roadmap to Net Zero by 2030

forScope 1 and 2 and 2040 for Scope 3. We are already working on energy usage

and supplier engagement to mitigate carbon emissions.

Our TCFD reporting helps us to identify and assess key risks and opportunities and

the impacts of climate change to our business. We intend to further analyse the

potential climate-related risks to our business and seek to mitigate these over time.

We have implemented our Life is too good to waste programme which is across

ourpeople, communities and planet.

Our Sustainability Director has identified a programme of changes and initiatives

inour pubs, hotels and support centre to help us grow in a sustainable way.

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14%

Reduction in gas usage

£10k

Raised for Made in Hackney

57%

Happiness Index response rate

13%

Reduction in electricity usage

6.5k

Special Olympics GB athletes supported

100

Mental Health Champions

100%

Waste diverted from landfil

2,000

Miles walked for Special Olympics GB

963

My Voice comments

285k

Litres of waste cooking oil collected

94%

Unemployment rate among those with IDs

7.6

Average happiness score

OUR PLANET

See pages 42 to 45

OUR COMMUNITIES

See pages 48 to 51

OUR PEOPLE

See pages 52 to 53

2023 Highlights

Sustainability Report

WE ARE

COMMITTED TO

ALWAYS DOING

THINGS THE

right way

FOR OUR

PEOPLE, OUR

COMMUNITIES,

AND THE PLANET.

40 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

LIFE IS TOO GOOD TO WASTE

Fuller’s approach to becoming a more sustainablebusiness

We protect and respect the things that matter and, when we work together – the Fuller’s family, our customers, and our suppliers

–there’sno limit to what we can achieve. Taking small steps together we intend to make a big difference because we know that

Lifeistoogood to waste.

OUR PLANET OUR COMMUNITIES OUR PEOPLE

Fuller’s knows that a healthy planet is

essential to the future ofourbusiness,

people and communities. We know

that small changes can collectively

make a big difference. We are

committed tomaking better choices

– behind the bar, in the kitchen, and

inour support centre.

Communities have always been at

theheart of Fuller’s and through

ourcharity links and community

initiatives, we want to continue

tohelpthem thrive. Our pubs and

hotels have never just been bricks

andmortar –they’re places where

communities meet and connect. They

are places everyone can feel welcome.

We all have a role to play in supporting

our communities and reigniting a true

sense of community spirit.

Our people are what makes Fuller’s

special. That’s why we’re focused on

looking after them – ensuring they have

a sense of belonging and a belief that

we truly care abouttheir wellbeing,

aswell asopportunities togrow.

We’re committed to creating inclusive

workplaces so our people feel confident

tobring their whole selves to work.

We’re thinking ahead – offering genuine

work opportunities will make sure

people can build something incredible

now and for their future.

LIFE IS

too good

TO WASTE

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OUR PLANET

Sustainability Report Continued

In October 2021, we committed to procuring 100% renewable

energyacross our Managed estate and our support centre,

PierHouse –sourced from wind, solar and hydroelectricity.

Thischange cut our carbon emissions in half overnight.

In March 2022, the focus on reducing energy became ever more

essential as energy prices surged – increasing energy costs

bycircatwo times those of the previous year. By targeting

highenergyareas of the business, including kitchen extract,

refrigerationand the lighting and heating of our pubs, we aimed

tosignificantly reduce ourconsumption of electricity and gas.

All our managed sites have been fitted with smart electricity and

gasmeters, allowing us to monitor and act on high energy usage.

OurIT team developed a pub managers’ online tool to help the team

understand how and when they were using energy and to identify

opportunities to save energy throughout the day and night. Alongside

this, we also launched a series of training and engagement guides

forGeneral Managers, Head Chefs and their teams – to share the

opportunities to save energy through behavioural change. We also

worked with team members to create videos showing how small

changes could make a big difference. Finally, we set a bonused reduction

target with our General Managers and Senior Management team

toensure they remained focused on the task in hand.

To support our teams on their journey, we engaged with Hospitality

Energy Saving consultants to carry out energy audits – to optimise

energy usage in sites and help teams understand how they can

reduce energy. The results of these visits were shared with the

General Managers, Operations Managers, and Surveyors to ensure

action was taken. In the second half of the year, we began follow

upcoaching calls with our General Managers to take them through

theresults of the audit and review how their efforts to reduce

energywere progressing.

n 2021, Fuller’s joined 27 other hospitality businesses to

createaRoadmap for Hospitality to Net Zero. As a collective,

weannounced we would achieve Net Zero by 2040 – with a

commitment to achieve Net Zero for operational emissions by 2030.

With this in mind, we set out our own roadmap to achieve this

ambitious goal. During FY2022, we mapped out our carbon footprint

across our operations and supply chain. In our baseline year, FY2020,

26% ofFuller’s carbon footprint related to Scope 1 and 2 operational

emissions with the other 74% arising in our supply chain and

Tenantedestate.

As a business we recognise the importance of aligning our response

tothe climate crisis with the latest climate science. We have therefore

aligned our emission reduction targets with the Science Based Targets

initiative (“SBTi”). These targets – which will cover ourScope 1, 2

and 3 emissions –have been submitted for validation with SBTi and

we are currently awaiting approval.

42 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

While behavioural change has helped to reduce energy usage,

wealso needed to ensure we invested in our estate to help our team

tobetter control energy usage. Over the past few years, Fuller’s had

already transitioned to LED lights both internally and externally in

spaces such as car parks. However, we continue to review where

better lighting controls and motion sensors can be implemented

aspart of planned refurbishments of our pubs and hotels.

Heating accounts for over 50% of the gas used in our sites.

Tolimitgasusage across the winter, we carried outproactive

boilerservices – resetting controls to the correct timeperiods

andtemperature. We also added an organic additive, EndoTherm,

toour heating systems to improve the efficiency of heat transfer

fromradiators.

Our pubs typically generate hot water using standard gas fired

boilers. We now have five sites where the hot water is generated

byan air source heat pump system – which takes waste heat from

our cellar cooling condenser and uses it to create hot water. This

notonly reduces gas demand but utilises heat which typically

wouldhave gone to waste. We are looking at other sites where

wecan implement this technology over time.

We recognised that cellar cooling can be responsible for over

20%ofan average pub’s energy usage. We worked with our cellar

services team to identify controls which can reduce energy usage.

Onour remote beer coolers, we have added smart timers which

switch off the refrigeration overnight. This can save up to 25% of

electricity overnight without impacting the beer quality. This same

technology has also been embedded into our post mix coolers by our

beverages partner Britvic. We have also changed the temperature

controls on our cellar cooling unit to achieve the right temperature

where the beer is stored rather than the ambient temperature of

thecellar. This again keeps the beer at the right temperature while

reducing energy usage by 20%. We are also using these works

asanopportunity to ensure all our cellar equipment is running

atitsoptimum.

Kitchens also require a significant amount of gas and electricity to

power equipment. We’ve been working with our chefs to consider

how and when they switch on equipment to save energy. We have

also been trialling new electrical kitchen equipment to reduce our

requirement for gas and ultimately reduce carbon emissions. We

haveseveral sites where we have swapped from gas to induction

hobs. We find the new induction hobs only require power for a tenth

ofthe time that a typical gas hob would be required – as they only

switch on when in contact with a pan. We believe transition to induction

cooking is not only environmentally beneficial but financially too, as

well as reducing the heat in the kitchen for ourchefs.

Our support centre, Pier House, now hosts 104 solar panels on the

roof – these will generate around 10% of the power requirements

forthe building.

As a result of all these initiatives, we have reduced energy usage

todate by 13% for electricity and 14% for gas. This has resulted in

a948-tonne reduction in carbon emissions. We expect to see further

savings as the projects continue to roll out over the coming months.

In order to achieve Net Zero in our operations by 2030, we need to

transition away from high carbon fuels such as mains gas, oil and

liquefied petroleum gas (“LPG”). Our approach is to develop energy

efficient, electrically powered pubs where possible to dramatically

reduce our reliance on these fuels. In August 2022, we opened our

first all electric pub – The Queen’s Arms in Heathrow Terminal 2.

TheAdmiralty reopened in April 2023 following a refit due to a fire.

As part of the refurbishment, the pub is now fully electric – with

acommitment to only procure 100% renewable electricity, it is

the-Water, our newest pub located in the Cotswolds, is also kitted

out with energy saving equipment throughout – all lighting, heating

andcooling, and the majority of the kitchen equipment, are all

define how we electrify more of our pubs and hotels moving forward.

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Sustainable travel

As part of our commitment to the planet and our people, we

recognise the need to encourage more sustainable travel for

ourteams and guests. We have 7KW fast electric vehicle (“EV”)

chargers installed in 15 locations within the Fuller’s estate and

arelooking to expand this network over the next 12 months.

We’vealsoinstalled 10new EV charge points at Pier House.

Thisgives our teams and guests more opportunities to charge

theirEV vehicles when they visit our support centre.

We also look at ways to support our teams in moving to more

sustainable forms of travel. We have recently launched an EV

salarysacrifice scheme with Octopus Energy to create better

accessfor employees to electric cars. In addition, wehave a

cycletowork discount scheme and a partnership with Lime

whichoffers our London-based team members 50% off when

theyridea Lime e-bike ore-scooter.

Streamlined Energy and Carbon Reporting

This report details our Greenhouse Gas (“GHG”) emissions and energy use for FY2023 under the Streamlined Energy and Carbon Reporting

(“SERC”) requirements.

Methodology:

We have collated data relating to our Scope 1, Scope 2, and partial Scope 3 emissions and energy use for activities over which we have

financial control. All of our emissions and energy use relate to UK activities. Our GHG emissions were calculated in line with HM Government

Environmental Reporting and the GHG Protocol methodology.

The table below summarises emissions and energy use for FY2023:

FY2023 FY2022

FY2021 FY2020

Scope 1 Energy Consumption kWh

39,121,389 43,047,445 23,590,317 –

Scope 2 Energy Consumption kWh

32,767,748 30,438,473 18,503,251 –

Scope 3 Energy Consumption kWh

1,025,618 827,6 09 202,476 –

Total Energy Consumption kWh

72,914,756 74,313,526 42,296,044 83,555,406

Scope 1 emissions tCO

e 7,669 8,119 4,419 8,436

Scope 2 emissions tCO

e 6,337 6,463 4,314 8,902

Scope 3 emissions tCO

e 253 928 48 –

Gross Scope 1, 2 and 3 emissions tCO

e 14,259 15,511 8,781 17,338

Net Scope 1, 2 and 3 emissions tCO

7,922 11,911 8,781 17,3 38

Turnover £m 336.6 253.8 73.2 342.0

Gross Intensity Ratio: tCO

e / turnover £m 42.4 61.1 120.0 50.7

Net Intensity Ratio: tCO

e / turnover £m

23.5 46.9 120.0 50.7

1 From October 2021, we have purchased 100% renewable electricity and therefore associated emissions can be deducted from the gross total to give net Scope 1, 2

and 3 emissions as stated above.

2 FY2022 figures have been restated following the availability of additional data. Year on year comparison is distorted due to the impact of Covid-19 on trading in

FY2021 and FY2022, resulting in reduced energy consumption.

The largest single element is gas consumption, which is predominately used for heating and kitchen equipment. When compared to

electricity, gas will often have higher emissions, but will be significantly lower in cost.

Scope 2 consumption has increased slightly compared to FY2022 due to electrification and the addition of new sites. Scope 1 emissions

have reduced when compared to FY2022 due to lower gas and LPG consumption. Scope 3 emissions from employee-owned vehicles has

reduced significantly when compared to FY2022.

There is a significant reduction in both gross and net intensity metrics, due to the increased turnover reported, the reduction in Scope 1

and Scope 3 emissions and the full reporting period being covered by renewable electricity supply for the first time.

Reduce, Reuse, Recycle

We are committed to reducing the amount of material resource

weuse to operate our business and follow the principle of

reducing,reusing, and recycling wherever possible.

Reduce

We recognise that reducing the volume of waste created in the first

place is the most sustainable way to operate. Over the past year,

wehave tested and implemented a number of initiatives.

We have been working with our beverage partner Britvic to trial

anew premium tonic dispenser in four of our London pubs. The

dispense unit supplies a number of styles of tonic from the London

Essence range. Introducing this unit has helped to significantly

reduce the number of glass tonic bottles used in these sites. During

the four site trial, we were able to reduce the number of glass tonic

bottles by 35,000 – avoiding 6.7 tonnes of glass waste and reducing

delivery road miles by 27,000km. We are looking to implement this

solution into a number of sites in the coming year.

44 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

In September 2022, we introduced a reusable cup scheme with

eventsolutions experts, Green Goblet. The scheme was launched in

partnership with two of our key drinks suppliers, Asahi and Sipsmith.

The cups are being used in our pubs during major events such as

theSix Nations, the Boat Race and football match days. We will also

utilise them in our gardens during the summer. The reusable cups will

replace single use plastic cups which have historically been usedfor

large outdoor events where glassware isn’t suitable for operational

and health and safety reasons. Using the Green Goblet cups will

savetens of thousands of single use plastic cups going towaste

during these events. We trialled the reusable cups in some of our

popular rugby pubs, near Twickenham Stadium, during the Autumn

Internationals in November 2022. By doing so, we saved over 65,000

single use plastic cups from being used – across just fivepubs. Green

Goblet will also ensure the cups are professionally washed and dried

after each event – saving time, energy and water for the pubs. It is a

simple solution to eliminating one form of single useplastics.

After the Government’s recent announcement on the imminent

banning of single useplastics in England, rolling out the Green Goblet

cups means we’re ahead of the curve. This solution also demonstrates

Fuller’s commitment to being an environmentally responsible

organisation inreducing waste, encouraging reuse, andpushing

towards acircular economy to reduce our impact on the planet.

Reuse

In order to keep our pubs and hotels in great condition, we are

continuously carrying out refurbishments of our existing estate

aswell as acquiring new sites such as The Willow in Bourton-on-

the-Water. We keep many unwanted items taken from our pubs and

use them in new propertiesrather than sending them off for

recycling. Where relevant, we will remove, refurbish and repair

existing items for use in future projects.

Recycle

In March 2022, Fuller’s moved its waste management to Veolia,

tosignificantly increase access to recycling forour pubs and hotels.

The majority of our sites now have access to mixed, glass and food

recycling – which has seen our recycling rate increase from 35%

to57%.

Veolia’s team is working closely with our sites to encourage better

segregation of waste and looking at innovative ways to recycle more.

We are also pleased to confirm that 100% of the waste collected is

being diverted from landfill.

Several of our sites have taken the initiative to collect used coffee

grounds and offer them to some of our customers who are keen

gardeners as an alternative to compost. The nitrate levels in the

coffee act as a natural soil improver and it’s an opportunity for this

waste product to be used in a more sustainable way.

Many of our sites work with our oil recyclers Olleco to collect waste

cooking oil. Olleco recycles this oil creating a biodiesel product used

to fuel vehicles. Over the past 12 months, it has collected 285,258

litres of oil from our pubs and hotels. This product reduces emissions

from vehicles by up to 88%.

The Admiralty

In the kitchen, electric induction hobs, powered by a renewable

energy source, have been installed to reduce the amount of

energy used. This also reduces the heat in the kitchen for our

chefs and reduces the amount of extraction required. We also

have highly efficient electric fryers and grills in place to allow

better control ofenergy by our chefs. The induction hobs, and

salamander grills that have also been installed, draw energy

when inuse rather than being on all the time. We have installed

apower monitoring and management system that reduces

energy use byturning high demand equipment on and off

withoutaffectingtrade.

The pub has heat recovery technology – where heat produced

bythecellar cooling is captured and converted into hot water

forthe site. The heating, air conditioning and ventilation systems

utilise industry leading equipment – boasting high energy

efficiency, allzoned throughout the pub and thermostatically

controlled. Plus, allthe lighting in The Admiralty is low energy

LED – with timer clocks to manage use.

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Severn & Wye

Severn & Wye is one of our seafood suppliers and creates our

iconicLondon Porter smoked salmon in its Gloucestershire

smokery. Severn & Wye is committed to purchasing raw material

from both asustainable and responsible supply base, wherever

possible. Severn & Wye never purchase fish from species recorded

on any endangered species list or with an Marine Conservation

Society (“MCS”) rating greater than 3.

Severn & Wye fully supports the commitment of the farmed

salmonfeed suppliers in their efforts to achieve zero net

deforestation through the cultivation of soy contained within

itsfeed.In order to achieve this, Severn & Wye only sources

rawmaterials that are certified as sustainable by schemes such

asProTerra or the Round Table on Sustainable Soy. This year, it

participated in the responsible soy mapping through sustainability

consultants 3Keel, assessingthe use of soy in feed in the supply

chain – with an aim toreduce deforestation caused by soy in the

foodindustry.

Likewise, where palm oil is used within the feed, it must be

certified to theRSPO principles and criteria, and must come

through segregated supply chains.

Our supply chain is responsible for over 62% of our carbon

emissions and our suppliers are the key to us reducing our impact

on the planet. Fuller’s has always been proud of the relationships

we hold with our suppliers and their willingness to support us on

our mission. More than ever, this year, our suppliers have been

working hard on their own sustainability journeys and these

initiatives are helping usand them to strive for a better planet

andstronger communities.

Direct Seafoods

“ Sourcing fish responsibly is paramount to our business.

Wepassionately believe in promoting the most sustainable

products available to us. We work closely with our fish and

seafood suppliers, both mainstream and specialist. We have

linkswith NGOs such as MSC to develop and market sustainable

alternatives. We only ship fishacross the country if they are not

available locally; minimum foodmiles means maximum freshness.

A significant amount of seafood is wild caught which can lead

tooverfishing, unwanted by-catch and destructive catch

methods. Wetake the view that we need to work within the

industry to guide our customers towards sustainable choices.

Our Seafood Sustainability principles dictate that we:

1. Seek third party independent accreditation wherever

possible and give preference to suppliers that are accredited.

2. We demand to know the source and origin of the

seafoodwesell and endeavour to shorten the supply

chainwhereverpossible.

3. We never knowingly sell products that damage the

environment or risk the survival of a species without

aplanto rectify the products’ sustainability credentials.

We believe that the process of investigating sustainability

options for customers is a task without end. Nothing will ever

remain completely sustainable and often unsustainable choices

may become sustainable through proper management. Therefore,

we treat the search as a journey rather than a destination.”

Direct Seafoods was the first seafood business to join the Ethical

Trading Initiative (“ETI”). The ETI is an allegiance of companies,

trade unions andNGOs that promotes respect for workers’ rights

around the globe. Itsvision is a world where all workers are free

from exploitation and discrimination, and enjoy conditions of

freedom, security, andequity.

OUR SUPPLIERS’

SUSTAINABILITY JOURNEYS:

PROTECTING THE PLANET

THROUGH

partnership

46 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Asahi

Asahi plans to become carbon neutral within its breweries by

2030 and to engage its suppliers and partners to reduce carbon

emissions of its products across the whole supply chain by 30%

in the same period. Asahi’s ultimate commitment is to achieve

Net Zero emissions across its entire supply chain by 2050. By

2025, allelectrical energy that it uses in its breweries will be

coming fromrenewable sources.

“ By the year 2030, our ambition is that all of our breweries will be

carbon neutral, all the packaging we use recyclable, ingredients

coming from sustainable sources and we will continue to be the

best in class in water consumption, while fostering partnerships

across our supply chains, as well as in the communities where

we operate.”

Water is an absolutely crucial ingredient in brewing beer. Asahi’s

aimis to make sure that it secures plentiful water of good quality.

Over the past decade, Asahi has cut its water consumption to

alevel which is the best in class not only in Europe, but also

worldwide. By 2030, it aims to reach an average consumption

inEurope of 2.75 litres of water per litre of beer brewed in every

single brewery it operates in Europe.

By 2030, Asahi will only use containers and secondary packaging

that is reusable or fully recyclable, and made chiefly from

recycled content.

Asahi’s Draught Technical Services team recently moved its

10-vehicle fleet to plug-in hybrid electric vehicles (PHEVs). In an

average year, the Draught Technical Services team covers 200k

miles, generating a carbon output of around 67 tonnes per year.

As a result of the switch to PHEV petrol vehicles, the estimated

annual carbon output of the team should now be 22 tonnes –

cutting emissions bytwo thirds.

While keeping a keen eye on EV and hydrogen development,

stopgap alternatives are being considered such as sustainably

sourced HVO biofuel to directly replace diesel. Not only would

this cut emissions, but it would help reduce air pollution in

urbanareas.

Sipsmith: Proud to be a B Corp

In May 2021, Sipsmith achieved its B Corp certification and

continues to maintain its high standards of social and ethical

performance, public transparency and legal accountability –

both in the sector asone of the first gin distilleries to have B

Corpand within the wider business community.

Sipsmith continues to source its electricity from renewable

sources, eliminating Scope 2 emissions. It harnessed the

power of cold water in the winter to reduce its energy use

during distilling. Sipsmith continues to improve the efficiency

of its steam generation by detecting and eliminating leaks.

“ Flex-hex packaging was trialled for our single use bottles

during2022, where 1.5k bottles were sent out. The feedback

from customers was positive, with no complaints about

breakages. Building on this success, we will be redesigning

ourpackaging for the new bottle once our existing packaging

stock has been used.”

“ London Interdisciplinary School conducted research on behalf

of Sipsmith to identify opportunities for us to collaborate with

local businesses, researching possible uses for effluent and

botanical by-products. For botanicals, recommendations

included partnerships with sustainable fashion houses or

otherB Corp companies. For the reuse of effluent, the report

recommended it was spread on the land, sent to an anaerobic

digestion plant or further research could be conducted into

itsuse in emerging technologies.”

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Special Olympics GB

Since 2018, Special Olympics GB has been our main charity partner.

Special Olympics GB provides opportunities for year-round, all-

ability sports programmes for more than 10,000 athletes of all ages

with intellectual disabilities – to help transform lives through sport.

Since the beginning of our partnership, Fuller’s support has allowed

Special Olympics GB to deliver its work to more than 6,500 athletes

at 95 all-ability, inclusive sports clubs – covering 27 sports across

England, Scotland and Wales. This provides nearly 13,000 regular,

hour-long sporting sessions per year, all delivered by a team of

morethan 3,800 volunteers.

OUR CHARITY PARTNERS:

OUR

communities

FULLER’S HAS BEEN ACTIVE IN ITS

local communities

SINCE 1845 AND TODAY, WE HAVE A

COMMITMENT OF DONATING

OF OUR ANNUAL PROFITS TO

CHARITY. WE SUPPORT A

wide

range

OF CHARITIES.

48 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

What is an intellectual disability?

Intellectual disability (“ID”) is a disability characterised by significant

limitations both in intellectual functioning (reasoning, learning,

problem solving) and in adaptive behaviour – which coversa range

ofeveryday social and practical skills. This disability originates

before the age of 18.

There are 1.5 million children and adults with an intellectual

disabilityin Great Britain. It is the most common disability in

theUK.It’s caused by the way the brain develops and examples

include Down’s Syndrome and types of autism.

People with an ID are often socially excluded and many are bullied.

They have a shockingly lower life expectancy and 78% donot take

part in any sport.

How does Fuller’s support Special Olympics GB?

We raise money on a corporate level in a number of ways including:

• 50p from every children’s meal purchased is donated

• Our annual charity fundraiser. In 2023, we held our second Bridge

Walk – 98 Fuller’s and Special Olympics GB colleagues walked

21 miles, from The Swan in Staines to One Over the Ait in Brentford

– raising £20,000.

Pennies

Pennies is a digital upgrade of the traditional charity box, designed

tofit with our increasingly cashless lifestyles. It gives customers

inour Managed Pubs and Hotels the opportunity to give a few pence

tocharity when paying by card with the press of a button to round

upto the nearest pound.

We have partnered with Pennies since July 2019. Last year, our

customers donated £205,050 – proving that small donations go

along way.

Of the money raised through our Pennies donations, 90% of this

iscurrently donated to Special Olympics GB and the remaining

10%goes to Pennies, a registered charity – to help it grow

moreopportunities for UK consumers to give digital pennies

toUKcharities.

• Annual charity football tournament. In 2022, 16 teams from

acrossFuller’s – and our partners – played in a six-a-side

footballtournament. We raised £10,000 on the day.

• 90% of our Pennies donations go to Special Olympics GB.

• We support all our pubs and team members across the

Companytoraise money in their own way.

Employment project

Employment within the ID community has, unfortunately, been

exceedingly low. Recently, the number of those with an ID who

havegained and are within employment has dropped beneath 6%.

We are working with Special Olympics GB to offer employment

opportunities to people with IDs – with an initial goal of hiring at

least20 individuals with IDs in Fuller’s pubs and hotels by the end of

the summer. We will work with Special Olympics GB to co-create an

employment pathway for those with IDs to work in our pubs and hotels.

A select cohort of pubs has attended workshops alongside Special

Olympics athletes – with the aim of creating this employment path

together, to ensure the project is sustainable and beneficial for

everyone. Throughout the project, we will take on feedback to

offerinsight on how we can scale this up for all of our sites to use.

Stuart Green, General Manager of The Cabbage Patch in

Twickenham, has been employing people with IDs for a number

ofyears and provides first hand insight into the benefits they

canbring to our teams.

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Made in Hackney

Our recent partnership with Made in Hackney, a community

cookery school and emergency food support service, kicked

offwith Made in Hackney’s plant-based burger launching across

Fuller’s estate – with 50p for every burger sold being donated

back to the charity.

Made in Hackney’s expert chefs developed the recipe for the

plant-based burger to be a delicious and nutritious, wholefoods

alternative to imitation meat. The burger patty comprises a

selection of tasty and healthy ingredients – including mushrooms,

beetroot, quinoa and more. Topped with a smoked cheese

alternative, tahini-dressed kale, balsamic beef tomatoes and

asecret sauce – the result is a mouth-watering treat that’s

goodfor you and the planet.

Since its launch in August, over £10,000 has been raised

sofarthrough sales of the plant-based burger. Additionally,

plant-based burgers are significantly less carbon intense than

those made ofbeef – using roughly 60% less carbon. We’ve

soldaround 20,000 Made in Hackney burgers, producing

60fewertons of carbon emissions than an equivalent

numberofburgers made from beef.

Our partnership with Made in Hackney won the Best Community

orCharity Initiative at the Restaurant Marketer and Innovator

Awards 2023.

OnSide

In 2019, Fuller’s committed to investing £150,000 into a new

youthzone in the Borough of Hammersmith and Fulham. The

project is being delivered by national charity, OnSide, which

operates 14 youth zones across the UK.

Based in White City, Hammersmith and Fulham Youth Zone

willbepart of an innovative education hub, known as EdCity.

Named WEST (standing for ‘Where Everyone Sticks Together’)

bylocal young people, it will be open to young people from

across Hammersmith and Fulham. They will have access to

allthefantastic facilities for a cost of £5 for an annual

membership and 50p per visit.

The WEST youth zone will be a brand new, purpose-built building

buzzing with energy and crammed with incredible facilities. It willbe

staffed by skilled and dedicated youth workers who truly believe in

young people – helping them see what they can achieve, and giving

them the skills, confidence and ambition togo for it.

Fuller’s is committed to a long-term relationship with the WEST

Youth Zone and is looking at further opportunities to support it

through volunteering, career opportunities and hospitality

skillstraining.

50 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Only a Pavement Away

We work with Only a Pavement Away – a charity which provides

stability through employment for those who are homeless or in

danger of being homeless. We support the charity with its

fundraising activities, for example, the annual Fill a Flask event

– where volunteers walk the streets of London and other cities

offering water to rough sleepers in the summer. Volunteers also

raise awareness of the charity and the opportunities available

tothose who may be struggling to find employment due to their

personal circumstances.

We hosted the Pedalling for Pubs 10k Base Camp challenge

atThe Admiralty where three static bikes were set up and

participants cycled 10k each in support of those taking on

themain challenge.

Only a Pavement Away’s head office is based in the offices above

The Barrowboy and Banker, London Bridge – which we provide

tothe charity rent free.

Local community support

The Builder’s Arms in Croydon raised

over £1,000 through a hamper raffle and

used the funds raised to purchase nine

trolley-loads of goodies for the Esther

Community Enterprise Food Bank.

The Grove Lock in Leighton

Buzzard raised £2,000 for

Linsdale School Parent, Teacher,

Friends Association (PTFA) at its

annual fireworks event. Money was

raised on the night through generous

donations from customers, a bake

sale and a charity raffle.

Our pubs are active members within their communities and oftentake

partin fundraising activities for local charities and organisations.

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DIVERSITY AND

INCLUSIONCHARTER

uller’s recently signed the British

Beer and Pub Association’s (“BPPA”)

Diversity and Inclusion charter – as

part of our commitment tobeing Open to All.

The pledge signifies Fuller’s aim of ensuring

ourpubs are inclusive spaces and taking a

zero-tolerance approach to harassment or

discrimination of any kind.

The diversity and inclusion charter looks

toenact real, long-term change across the

brewing and pub industry. Our commitment

to inclusion is for our team members and our

customers. We want you to feel comfortable

and safe whenever you’re in a Fuller’s pub

– whether you are there as a team member

or customer.

We know that we still have work to do to

achieve this goal. Therefore, we are looking

at the steps we can take to ensure everyone

feels a sense of belonging in our pubs.

We recently launched the Equality of Voice

survey – so that we can understand how our

teams feel about diversity and inclusion at

Fuller’s and understand more about the

demographics of our team.

OUR People

52 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Feedback

In our employee Happiness Index survey, we saw significant

improvement across response rates and average happiness and

engagement scores since 2021.

A year ago, we launched My Voice – a platform for our team members

to give honest and anonymous feedback on how they’re feeling. This

was a result of teams sharing in our first Happiness Index survey that

they did not feel they had a voice and their opinions were sometimes

not being heard.

We launched the Fuller’s Forum – which gives our teams the

opportunity to have their say about what happens in Fuller’s. The

Fuller’s Forum is made up of 12 General Managers from across our

Managed estate who meet every few weeks. Each member of the

Forum represents a group of their fellow General Managers – who

are encouraged to approach their Forum reps with any feedback

theyhave about the business. The Forum is run jointly by the support

centre and operations. Our designated Non-Executive Director

responsible for employee engagement, Helen Jones, also now attends

the meetings. The Forum has created atwo-way communication path

between the team members in our pubs andhotels, and the teams in

our support centre.

The Fuller’s Forum has been a great success and, therefore, we are

launching a Forum for our Head Chefs as well as one for our Pier

House colleagues.

We have launched a First Impressions survey which invites new

members to the Fuller’s family to share their experiences pre-joining

and then their experience through their induction phase.

Mental Health Champions

Our teams’ overall wellbeing is important to us and to help us support

our teams, we have introduced our Mental Health Champions – 100

team members from across our Managed Pubs and Hotels who have

been trained to help their colleagues with mental health support.

TheMental Health Champions help Fuller’s promote a positive mental

health culture in our sites by regularly talking about mental health to

tackle the stigma around it. They are encouraged to be open and to

talk to their colleagues about the importance of mental health.

Our Mental Health Champions have all attended a one day course to

ensure they are equipped with the knowledge and skills to help their

colleagues. Some of our Champions will soon be attending a two day

course to become Mental Health First Aiders.

In January 2023, we held our first Mental Health Champions

conference – a virtual event where all Champions were invited

tofurther helpthem in their role. The conference covered a range

oftopics – including where they can access support and self help

exercises, followed by a session with the Licensed Trade Charity.

Menopause Policy

On 18 October 2022, World Menopause Day, we launched our

Menopause Policy. We are now in a world where we are living longer

and working longer, and it is our responsibility to ensure that anyone

transitioning through menopause is fully supported at work. By

talking about menopause openly, raising awareness and putting

theright support in place, we may be able to get to a place where

menopause is no longer seen as taboo and those going through this

transition face no barriers at work.

The policy outlines what the menopause is, typical symptoms one

might experience and line management guidance on how to have

supportive, open communications.

Rest Less

Fuller’s launched a new partnership with Rest Less – a digital

community and advocate for people in their 50s, 60s and older – to

reach out to potential older workers. We posted specific positions on

Rest Less’ job board right across its businesses and geographical area.

We have always had a number of older workers in Fuller’s, but

thisisthe first time we have specifically targeted this group with

abespoke campaign. Older workers have a lot to offer us –andwe

have a lot to offer them, with shift lengths and work patternsto suit.

We are very much a people business, and the oldergeneration brings

an exceptional level of customer service andconsumer interaction.

My Fuller’s

My Fuller’s is the home of our employee benefits. Team members

canaccess discounts from a range of providers – from well-known

retailers to holidays, insurance, days out, restaurants and more.

We’ve recently increased the number of providers offering discounts,

streamlined the process so it’s easier to use andincreased the

discount available with many of the providers.

International Women’s Day

We held our first ever International Women’s Day menu dish

competition, with the winning dish – a superb banana bread from

KiahEnticknap of The Queen’s Head in Kingston – taking pride of

place on menus across our Managed Pubs and Hotels during the

month of March. A 50p donation for each dish sold, facilitated by

Workfor Good, was given to Refuge – the country’s largest single

provider of specialist support to women and their children

experiencing domestic abuse.

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Task Force on Climate-related Financial Disclosures (“TCFD”)

Introduction

We are pleased to present our second annual report in line with the recommended disclosures of the TCFD for the year ended 1 April 2023. This

year marked a significant evolution in our TCFD reporting activities, as we followed the plan that we set out last year and continued to develop

our work in this area. We have refreshed our assessment of our climate-related risks and opportunities, evolved our analysis of how we expect

these to impact our business, and undertaken scenario analysis for the first time to gain further insights into some of our key climate risks.

Thisyear’s report reflects this significant work and the progress that we have made. However, we view our reporting activities for TCFD

asaniterative process, and while we have made a good start, we are continuing to mature our approach and understanding in this area

ofourbusiness to enhance our disclosures on climate-related risks and opportunities.

The table below summarises where we have responded to each of the TCFD disclosure recommendations in this report.

TCFD disclosure recommendations

FY2023

compliance Page reference for disclosure

Governance

a. Describe the board’s oversight of climate-related risks

andopportunities.

Page 55

b. Describe management’s role in assessing and managing

climate-related risks and opportunities.

Page 55

Strategy

a. Describe the climate-related risks andopportunities the

organisation hasidentified over the short, medium, andlong term.

Pages 56 to 59

b. Describe the impact of climate-related risks and opportunities on

theorganisation’s businesses, strategy, andfinancial planning.

Pages 56 to 59

c. Describe the resilience of the organisation’s strategy, taking

intoconsideration different climate-related scenarios,

includinga2°Corlowerscenario.

Pages 56 to 59

Risk Management

a. Describe the organisation’s processes foridentifying

andassessingclimate-related risks.

Pages 34 to 39 and 60

b. Describe the organisation’s processes formanaging

climate-relatedrisks.

Pages 34 to 39 and 60

c. Describe how processes for identifying, assessing, and

managingclimate-related risks are integrated into the

organisation’s overall riskmanagement.

Pages 34 to 39 and 60

Metrics & Targets

a. Disclose the metrics used by the organisation to assess climate-

related risks and opportunities in line with its strategy and risk

management process.

Pages 60 to 61

b. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse

gas (“GHG”)emissions and the related risks.

Page 44

c. Describe the targets used by the organisation to manage climate-

related risksand opportunities andperformance against targets.

Pages 60 to 61

54 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Governance

Our approach to the governance of sustainability and climate-related

matters, and in particular the associated risks and opportunities,

isrooted in our commitment to sustainability and our belief that

implementing both top-down and bottom-up structures ensures

wecan deliver on our strategy, with responsibility integrated

appropriately throughout our business.

The Board

At Fuller’s, the Board has overall responsibility and accountability

forall of our risks and opportunities, which includes those that are

climate-related. The Board considers our climate-related issues as

part of its broader role in ensuring our ability to perform in both the

short and long term. The Board considers material climate-related

issues when reviewing strategic projects and business objectives,

such as the acquisition of a new site or the undertaking of major

refurbishments, to understand potential operational impacts and

ensure that Fuller’s can continue to perform as expected. The Board’s

consideration of such issues is informed by advice from senior leaders

within the business, including the Sustainability and Property Directors.

The Audit andRisk Committee supports the Board in its consideration

of climate-related risks through its oversight of our integrated risk

management assurance model and continues to monitor the potential

materiality and impact of climate-related risks for the business through

its role in our ongoing risk management. Climate-related risks are

presented to the Audit and Risk Committee on an annual basis,

whichis a key element of the new approach to TCFD that we have

implemented this year.

Executive Team

The Chief Executive is the designated Board member responsible

forall sustainability matters, including climate change, and leads

onour Life is too good to waste sustainability strategy. With regards

to TCFD, the Finance Director acts as the Board member responsible

for overseeing our work in this area.

Our Executive Team is assisted in their delivery of oursustainability

and climate work, including our Life is too good towaste strategy,

bythe Sustainability Director, the Environment Committee, and

othersenior leaders within the business (seefurtherdetails below).

Briefings on our sustainability work, including our climate-related

risks and opportunities and progress against our targets and objectives,

are provided to the Board by theSustainability Director, who attends

the Environment Committee and leads our programme of work on

climate change.

Performance against our sustainability agenda, which includes

targets for our climate work, also forms part of the criteria for

theremuneration of our Executive Team. Further detail can be

foundon page 92.

Senior Leadership and internal stakeholders

Our Sustainability Committees as detailed on page 74 are responsible

for establishing our targets and objectives, providing oversight and

monitoring progress against key environmental andsocial sustainability

initiatives in collaboration with relevant departments, such as our

property and purchasing functions. TheEnvironment Committee

ischaired by the Retail Director, Fred Turner, who also sits on the

Board, and it is tasked withensuring that we make progress against,

and achieve, our climate-related targets andobjectives.

This year, to further progress our work in this area, we formed a TCFD

Working Group. This group consists of relevant management-level

stakeholders from across the business and acts as the key forum for our

work on assessing climate-related risks and opportunities. In the next

year, we plan to formally integrate this Working Group as a sub-

committee of our Environment Committee, with our Sustainability

Director responsible for convening the group to progress our TCFD

programme of work moving forward. As the Board member responsible

for our TCFD work, the Finance Director receives regular briefings

from the Sustainability Director on the output of our TCFD programme

of work. As our day to day lead on sustainability, our Sustainability

Director also works with several departments across the business

toensure that we deliver on our broader sustainability objectives.

Fuller, Smith & Turner PLC Board

Audit and Risk Committee

Executive Team

Business Departments

TCFD

Working

Group

Sustainability

Director

Environment

Committee

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1 As described by TCFD, transition risks are “risks related to the transition to a lower-carbon economy” while physical risks are “risks related to the physical impacts of

climate change” (TCFD, 2017) available at www.fsb-tcfd.org/publications

2 NGFS Scenarios available at www.ngfs.net/ngfs-scenarios-portal

TCFD Continued

Strategy

Approach to Strategy disclosures

As we have further developed our TCFD work this year, we are now

able to disclose what we deem to be the key climate-related risks for

our business and the opportunities in the transition to a low carbon

economy that we feel we are well-positioned to pursue. We define

key climate-related risks as those that we consider potentially

material to Fuller’s, its investors, and its other stakeholders.

Our approach to identifying, assessing, and managing these

climate-related risks is set out in the Risk Management section

ofthis disclosure (see page 60). In line with guidance from the

TCFD,wecategorise our risks as transition risks and physical risks

Alongside this, we have also identified the periods in which we see

these risks materialising as potential impacts on the business. These

periods are defined as: short (1-5 years); medium (5-15 years); and

long (>15 years). We view this categorisation of potential timeframes

as appropriate for the nature of the climate-related risks assessed

and how we view the life of our physical assets and business models,

which generally require an analytical lens that goes beyond normal

business planning cycles.

We recognise the need to identify risks early and implement actions

to mitigate any potential impacts on our business and on the planet.

We also firmly believe that, by being proactive, we can position

ourselves well to seize the opportunities presented by the

transitionto a lower carbon economy.

Scenario Analysis

We have also engaged this year in our first scenario analysis to

enhance our understanding of how some of the business’s key

climate-related risks may develop over time under different

scenarios. As a key recommendation of the TCFD and an evolving

area, we recognise this is a complex exercise which will continue

todevelop significantly in the coming years. For our initial scenario

analysis this year, we used the scenario analysis tools and

framework set out by the Network for Greening the Financial

System(“NGFS”). The NGFS represents a group of central banks

andsupervisory bodies that share best practice and contribute

tothedevelopment of environment and climate risk management

inthe financial sector. The NGFS has broadened the intended

audience for its work to include corporates, and its framework

forscenario analysis represents a useful starting point for

organisations such asours.

In this year’s scenario analysis, we qualitatively assessed our key

risks, and for some selected risks, we have also begun to explore

quantitative analysis. To analyse our risks, in line with TCFD

guidance, we used three scenarios defined by NGFS – ‘Current

Policies’, ‘Delayed Transition’ and ‘Net Zero 2050’ – which represent

a diverse set of scenarios covering different potential global warming

levels

. We have begun to assimilate the results from this work internally

to deepen our understanding of climate-related risks in the business

and inform our approach to their assessment moving forward. As

climate scenario analysis represents a relatively new process for

us,we look forward to continuing to develop our approach in this

area and further enhance our understanding andinsight on climate-

related risks in the coming years.

Our identified climate-related risks and opportunities

The following climate-related risks and opportunities are those

thatwe have identified as key for Fuller’s to consider over short,

medium, and long-term time horizons. For the risks outlined here,

wehave described how we define each risk and, in turn, how we

think each one could affect our business. We have also identified

various mitigation activities alongside each risk. These mitigation

actions are either already in place, in the process of being implemented

or are being considered as part of our strategy and financial planning.

These mitigation actions will also be revisited andadapted over time

to ensure that the business’s strategy is resilient to the potential

effects of such climate-related risks. From our work conducted

sofarto assess all our climate-related risks and the mitigations

wehave in place, or are planning, we have reviewed the resilience

ofour strategies in light of them. On this basis, we have not identified

any material concerns with respect to the resilience of our strategies

and we do not currently view climate-related risks as a material

concern to the business in the short term.

Risks

Risk

Type

ofrisk?

Risk

sub-

category Timeframe

How do we define this risk and

see it impacting our business? Mitigation Activities

Introduction

of a carbon

tax

Transition Policy Medium The introduction by the UK

Government of mandatory

carbonpricing.

This risk could lead to a direct

costtothe business based on

ourdirect Scope 1 and Scope 2

operational emissions.

• We are awaiting validation of

ourscience-based targets and

areintheprocess of implementing

areductions strategy for our

GHGfootprint.

• Our decarbonisation actions include

moving to 100% renewable energy

supply for our Managed estate;

pursuing electrification of sites

where possible; shifting to low-GWP

refrigerants; and transitioning the

company car fleet to electric vehicles.

56 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Risk

Type

ofrisk?

Risk

sub-

category Timeframe

How do we define this risk and

see it impacting our business? Mitigation Activities

Legislative

changes to

support

climate

change

initiatives

Transition Policy Medium The introduction by the UK government

of mandatory policies to support

thetransition to net zero in 2050

(e.g.more stringent legal requirements

for minimum energy performance

standards in commercial properties).

This could result in increased costs

asthe business adapts to comply

withany new legislation (e.g. the

needto invest in our properties to

raiseEnergy Performance Certificate

(“EPC”) ratings). This could also lead to

an increased risk of costs associated

withnon-compliance.

• Regarding proposed legislation

onincreased EPC standards, we

areaware of our Tenanted estate’s

current performance and the

changes that would be required.

• The implementation of our climate

and broader sustainability strategy,

by lowering our overall impacts,

should also put us in a good

positionto respond to potential

legislative changes.

• Our Sustainability Director works

with external consultants and

industry bodies to monitor potential

legislation that may impact our

business and regularly meets with

the Executive Team and the Board to

keep them informed of any relevant

developments and how the business

may need to respond.

Energy price

volatility

Transition Market Medium The fluctuation of energy prices

aseconomic conditions, supply

availability and changing weather

patterns affect the energy market.

This could result in increased

operating costs for properties in our

Managed estate. In our Tenanted

estate, under extreme energy price

rises, this could result in a loss of

income if tenants were unable to

meetthe obligations of their leases.

• We are exploring opportunities to

secure long-term electricity supply

for our Managed estate through

on- and off-site renewable

installations, such as a power

purchasing agreement (“PPA”).

• We are implementing an energy

efficiency strategy across our

Managed estate to reduce on-site

energy consumption.

• We engage with our Tenanted

estate to help them effectively

manage their energy use and costs.

Increased

supply chain

disruption

Physical /

Transition

Chronic /

Market

Medium /

Long

Disruption in global supply chains

arising as a second-order effect of

either physical or transition risks.

This risk could lead to increased

procurement costs and, in some

cases,the reduced availability

ofproducts for our sites.

• We continue to pursue a diversified

supplier base, which allows the

business to adapt to potential

disruption more effectively.

• We also regularly engage with

oursuppliers to understand the

challenges facing them and have

recently begun to explicitly engage

on sustainability issues, including

climate, to understand what actions

suppliers are taking to address their

own impacts.

• We have a flexible food and drink

menu offering as a business, which

prevents over-reliance on any single

product/category of product.

• We use local and seasonable

produce where possible.

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Risk

Type

ofrisk?

Risk

sub-

category Timeframe

How do we define this risk and

see it impacting our business? Mitigation Activities

Flooding Physical Acute /

Chronic

Short Increased inland and coastal flooding

due to more frequent and severe

precipitation and rising sea levels.

This risk would primarily affect

properties in the estate that are in

flooding-prone areas and result in

costs for the business associated

withrepairs and business interruption,

where these are not covered by

insurance. In the longer term, the

business could also see increases

ininsurance premiums and reduced

asset values for sites that are highly

impacted by flood risk.

• We are already aware of the risk

exposure of our estate at a property

level, for both inland and coastal

flooding, and have suitable

insurance provisions in place.

• For those properties considered

particularly exposed to this risk,

weengage with local partners,

suchas the Environment Agency,

toimplement mitigation measures,

including flood defences or dredging,

where possible. The business has

also invested in these sites to improve

their resilience, for example, through

the installation of site flood defences.

• We plan to actively evaluate our

exposure for certain at-risk

properties in the medium to long

termand explore how this can

bemitigated appropriately.

Water stress

and Drought

Physical Acute /

Chronic

Medium Drought events and/or prolonged

periods of abnormally dry weather

leading to water scarcity.

This risk could lead to increased

operating costs for properties in

ourManaged estate as the cost

ofwater supply increases. In some

cases, business interruptions costs

may also arise where localised

droughts severely impact water

availability on sites. This risk could

also lead to disruption in our supply

chain. For example, it could disrupt the

supply of key beverages, such as beer.

• We continue to manage the water

use of our properties by proactively

identifying and repairing leaks in

partnership with our water

consultants, and we are investing

inthe estate to improve water use

efficiency through the installation

oflow flow taps, showers and

toilets. We also work with our

landscaping contractors to minimise

our use of water through the

installation of drip watering for

hanging baskets and planters.

• A detailed assessment of our property

estate will be conducted tounderstand

the full risk potentiallyposed by water

stressanddrought, and how

thismightvary across sites.

• We are in discussions with our

majorsupplier, Asahi, who are

aware of this risk and are taking

mitigating actions.

Heat stress Physical Chronic Medium Prolonged periods of abnormally

hotweather affecting the operation

ofFuller’s sites.

This could affect our business through

(temporary) changes in customer

demand during sustained periods

ofhot weather and the need for

increased capital investment to

manage the impact of hotter

weatheron our properties.

• We continue to invest in our estate

and, where appropriate, we are

looking into glazing and shading

opportunities as part of our site

development work

• We have also been installing air

conditioning units in affected sites

to mitigate the impact of heat on

both our customers and our people.

TCFD Continued

58 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Risk

Type

ofrisk?

Risk

sub-

category Timeframe

How do we define this risk and

see it impacting our business? Mitigation Activities

Storm

damage

Physical Acute Medium Site damage or interruption of service

caused by extreme weather such as

high winds, heavy rain or snowstorms.

This risk could lead to increased

costsassociated with repair or

business interruption, where these

arenot covered by insurance. Further,

extreme weather may also lead to

afall in customer demand if visiting

sitesbecomes undesirable or unsafe.

• Through our insurance provisions,

we are aware of the risk exposure of

our property estate to storm damage

• We carry out annual property and

maintenance reviews to ensure that

our estate is in a good condition and

that appropriate action has been

taken where necessary to mitigate

any property-specific storm risks.

Opportunities

Opportunity Category Timeframe

How do we define this opportunity

and see it impacting our business?

Changing consumer

expectations and demand

Market / Reputation Medium The demand from consumers for ‘greener’ menu options

isapotential trend that we are well positioned to respond

togiven our flexible menu offering and our continued

implementation of the Life is toogood to waste strategy.

Ourrecent work with Made in Hackney, for example,

hasdemonstrated the opportunity to create both social

andenvironmental value in considering new and less

environmentally impactful dishes. This could generate

market and reputational advantages in responding to

changing customer expectations and meeting new demands.

Site investment – reduced

costs, increased efficiency

Operations Medium Investment in our sites to meet our climate targets and

respond to potential legislative requirements could realise

reductions in our operating costs in the medium to long term.

We continue to explore, where appropriate, shifts to

renewable energy on- and off-site; the electrification of

kitchens and hot water heating; and the adoption of energy

efficiency measures for our sites. Such investments could

also contribute to mitigating multiple climate-related risks

for Fuller’s and help to future-proof our business for a more

uncertain world.

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TCFD Continued

Risk Management

Fuller’s views the effective management of our risks as key to

ensuring that we achieve our strategic objectives in the long term,

while delivering the high standard that our customers, our people,

and our shareholders expect. Climate-related risks are treated as

asubset of our wider corporate risks, and they are integrated into

our robust corporate risk assessment framework and approach.

Wecontinually monitor these risks and review our climate-related

risks on an annual basis. While we assess our climate-related risks

individually, as part of our TCFD work, we also consider them as part

of our broader assessment of sustainability and climate change-

related risk. This overall assessment is included within our corporate

risk register and represents our overall evaluation of the individual

climate-related risks identified in this report, alongside other

sustainability related risks (see page 39). The Chief Executive

holdsresponsibility for this broader risk category. The responsibility

for addressing the individual climate-related risks and opportunities,

identified in this report and accounted for within this category,

sitswith the Executive Team, Sustainability Director, Environment

Committee, and the TCFD Working Group. We believe thatthis

approach ensures we have a top-down understanding of climate-

related risks and opportunities within the business, which is

reinforced by bottom-up systems to support the oversight of

suchrisks by the Board and Executive Team.

Our assessment of our climate-related risks and opportunities is

informed by, and builds on, our approach to other corporate risks,

with appropriate adjustments made where necessary to reflect the

unique and complex nature of climate-related risks. This year, our

newly formed TCFD Working Group, with the support of external

advisors, acted as our key forum for identifying and assessing our

climate-related risks. Through meetings of key stakeholders from

across our business departments, we identified our potentially

relevant risks and then considered their potential materiality to the

business. For those risks deemed relevant to us in this process, the

Working Group undertook an assessment of their potential likelihood,

impact and timeframes, closely aligned with how we assess our

other corporate risks. The outcomes of this work were then tested

for robustness, with input from external advisors and members

oftheWorking Group, the Executive Team and the Audit and Risk

Committee. The relevant risks identified through this process have

been reported in this year’s disclosure and, from this, our Working

Group has considered our existing and potential mitigations, which

have alsobeen fed back to the Executive Team.

Metrics and Targets

We continue to track our performance across the business using

several climate-related metrics. This year, we are pleased to have

formally committed to set near-term company-wide emissions

reductions in line with climate science via the Science Based Targets

initiative (“SBTi”). These targets, which will cover our Scope 1, 2 and 3

emissions have been submitted for validation with SBTi and are

currently awaiting approval. This marks a significant step forward

forus and, in the coming year, we will be working to further develop

our data systems to enable regular reporting and tracking of progress

against these targets. While we already report annually onour Scope 1

and 2 emissions (see metrics and targets table below), our focus in the

coming year will be on continuing to work with our strategic partners

and suppliers to improve the accuracy and reliability of the data that

we collect internally and externally, and toevolve our reporting on

Scope 3 emissions. Our metrics and targets are outlined below:

Metric/Target Current, and historical, performance Future delivery plans

Net Zero across our operational

emissionsby 2030, and across

oursupplychain by2040

• Delivered an 8% reduction in gross

operational carbon emissions in FY2023

(Scope 1 and 2).

• The introduction of 100% renewable

energyled to a net carbon emissions

reduction of 49% vs FY2022.

• Continued investment into energy

efficiency measures on our sites.

• Continuing to explore the electrification of

our sites to remove the use of natural gas.

• Developing a comprehensive transition

plan to map out in the longer term our

pathway to Net Zero.

• Working with strategic partners and

suppliers to improve accuracy and

reliability of the data we collect to

evolveour Scope 3 emissions reporting.

Secure 100% renewable

electricitysupplylong term

• From October 2021, purchased 100%

renewable electricity.

• Exploring the implementation of on- and

off-site renewables for our properties.

By 2025 we aim to recycle at

least75%ofour operational waste

anddivert 100% from landfill

• Increased from 35% to 57% in FY2023. • Further implementation of food

wasteandglass collection for all

sites,where feasible.

• Introduction of a training programme to

encourage correct waste segregation

on-site.

• Introduction of a food waste reduction

programme to support redistribution

beforerecycling.

60 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Metric/Target Current, and historical, performance Future delivery plans

By 2030 we aim to reduce our overall

energy usage by at least 25%

• Like for like reduction of 13.4% in electricity

and 14.3% in gas consumption in FY2023 vs

our baseline year of FY2020.

• Continued investment into energy

efficiency measures in our properties and

an education initiative and behavioural

change programme to help our team

reduceusage.

By 2030 we aim to eliminate the use of

natural gas, oil and LPG where feasible

• 14.4% reduction in the use of natural gas in

FY2023, achieved though the implementation

of energy efficiency measures and the

transition to more electric kitchens and

hotwater and heating systems in our

property estate.

• Investment plans for sites using LPG

andoil to transition to electric kitchens

and hot water and heating systems.

• Where eliminating oil and gas is not

possible due to building constraints,

wewill focus on implementing reduction

measures and upgrading heating systems

to be more efficient.

By 2030 we aim to eliminate all

unnecessary plastics from our operation.

• Implementation of Green Goblet reusable

cupsfor major events to replace single-use

plastic cups

• Working with our suppliers to transition

away from single-use plastic items,

primarily in our hotel estate.

Other internal metrics that we track include packaging waste

output;waste processing and destination; and water consumption.

For thesemetrics, we continue to assess our performance against

short, medium and long-term targets, which we have set in our

Lifeistoo good to waste strategy.

Our climate-related metrics and targets are an area that we continue

to develop and expand. While several of the targets mentioned above

link to transition risks, such as such as a potential carbon tax and our

focus on achieving GHG emissions reductions, we are looking to

incorporate further metrics and targets in the coming year, particularly

those focused on physical climate risks. The significant progress that

we have made this year indisclosing our climate-related risks and

how they relate to our business highlights the potential for new

metrics to reflect how we are performing in mitigating these risks or

seizing the opportunities, such as our exposure to flood risk across

the business and investment in our estate to increase its sustainability.

We also recognise that, as a business that has committed to Net Zero

through the Hospitality Industry’s Net Zero Roadmap, it is important

that we set out how we plan to achieve this target. We welcome the

development of guidance on transition plans through the Transition

Plan Taskforce, and this is an area that we will be working on further

in the coming year. We have already outlined some of our plans

toelectrify our estate and improve its performance, and this is

something that we will be expanding on to outline how we intend

toachieve Net Zero across all emissions scopes by 2040.

Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C. 61

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ADDITIONAL INFORMATION

166-186

GOVERNANCE

66-104

Stakeholder Engagement

Stakeholder What matters How we engage and respond

We welcome thousands of people to our pubs and hotels each

week and strive to deliver positive and memorable experiences

that nourish the soul, and where everyone leaves happier than

when they arrived.

• Vibrant and well-maintained venues at the heart of the community

• Outstanding customer service

• Fresh seasonal food and extensive drinks range

• Value for money.

We regularly review and act on customer feedback from across a range of channels to better

understand what is important to our customers, to identify changing habits and trends, and

toimprove our offering. We undertake regular audits of our pubs and hotels to ensure high

operational standards are maintained and have a programme of continuous investment

across our estate.

Read more about how we

engage with our people

on pages 52 to 53

We support 177 Tenanted businesses. Our Tenants are an

extension of the Fuller’s team, although they have autonomy

inrunning their own business. We aim to recruit Tenants who

share our values and philosophy.

• Affordable rents and mutually beneficial contracts

• Well-maintained buildings and facilities

• Open communication and engagement

• Business support and development.

We have a team of Business and Sales Development Managers led by an experienced

Director of Tenanted Operations, who ensure that our Tenants are in the best place

tooperate a successful business that delivers a good return for both parties. During

theyear, we have provided support to help our Tenants deal with rising energy prices.

Wewere delighted to be named Tenanted Pub Company of the Year (up to 500 sites) at the

Publican Awards in recognition of the excellent relationship we have withour Tenants.

Read more about how we

engage with our Tenants

on page 13

Our shareholders range from founding family members to retail

shareholders and large institutional investors. They own our

business and provide us with the capital that enables us to

progress our strategy.

• Robust operating and financial performance supported

byastrongstrategy

• Sustainable income and capital growth

• Progressive dividend policy

• ESG performance

• Directors’ remuneration.

We maintain a regular dialogue with all our shareholders. We actively engage with them

aspart of our investor roadshows following our half year and full year results presentations,

and we are easily accessible to respond to questions and feedback throughout the year.

Allshareholders are encouraged to attend our AGM, and relevant Company announcements,

reports and documentation are readily available via a dedicated section of our website.

Shareholders receive a copy of The Griffin, our quarterly inhouse magazine.

Read more about how we

engage with our suppliers

on pages 46 to 47

The Great British pub has always been at the heart of the community

and we strive to have a positive and lasting impact on the communities

in which we operate by being a responsible business, and a good

neighbour, supporting worthy causes, providing employment and

minimising our environmental impact.

• Engaging with industry bodies and national policy makers

• Acting fairly and ethically

• Providing employment opportunities

• Supporting community and charitable causes

• Reducing the environmental impacts of our activities including

carbon emissions, energy and water

• Complying with legislation.

We regularly meet with both our local MPs and other legislative stakeholders, including

through membership of both the British Beer and Pub Association and UKHospitality,

andcontribute to consultations on issues that impact our sector. Our sustainability strategy

Life is too good to waste is a key principle of our overall business strategy and outlines our

approach to engaging with our communities, the environment and our people.

Read more about how we

engage with our people

on pages 52 to 53

We support 177 Tenanted businesses. Our Tenants are an

extension of the Fuller’s team, although they have autonomy

inrunning their own business. We aim to recruit Tenants who

share our values and philosophy.

• Affordable rents and mutually beneficial contracts

• Well-maintained buildings and facilities

• Open communication and engagement

• Business support and development.

We have a team of Business and Sales Development Managers led by an experienced

Director of Tenanted Operations, who ensure that our Tenants are in the best place

tooperate a successful business that delivers a good return for both parties. During

theyear, we have provided support to help our Tenants deal with rising energy prices.

Wewere delighted to be named Tenanted Pub Company of the Year (up to 500 sites) at the

Publican Awards in recognition of the excellent relationship we have withour Tenants.

Read more about how we

engage with our Tenants

on page 13

Our shareholders range from founding family members to retail

shareholders and large institutional investors. They own our

business and provide us with the capital that enables us to

progress our strategy.

• Robust operating and financial performance supported

byastrongstrategy

• Sustainable income and capital growth

• Progressive dividend policy

• ESG performance

• Directors’ remuneration.

We maintain a regular dialogue with all our shareholders. We actively engage with them

aspart of our investor roadshows following our half year and full year results presentations,

and we are easily accessible to respond to questions and feedback throughout the year.

Allshareholders are encouraged to attend our AGM, and relevant Company announcements,

reports and documentation are readily available via a dedicated section of our website.

Shareholders receive a copy of The Griffin, our quarterly inhouse magazine.

Read more about how we

engage with our suppliers

on pages 46 to 47

The Great British pub has always been at the heart of the community

and we strive to have a positive and lasting impact on the communities

in which we operate by being a responsible business, and a good

neighbour, supporting worthy causes, providing employment and

minimising our environmental impact.

• Engaging with industry bodies and national policy makers

• Acting fairly and ethically

• Providing employment opportunities

• Supporting community and charitable causes

• Reducing the environmental impacts of our activities including

carbon emissions, energy and water

• Complying with legislation.

We regularly meet with both our local MPs and other legislative stakeholders, including

through membership of both the British Beer and Pub Association and UKHospitality,

andcontribute to consultations on issues that impact our sector. Our sustainability strategy

Life is too good to waste is a key principle of our overall business strategy and outlines our

approach to engaging with our communities, the environment and our people.

Read more on how

weengage with

ourcommunities

onpages48 to 51

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GOVERNANCE

66-104

Stakeholder Engagement

Section 172 Statement

This section outlines how, as required by Section 172 of the Companies Act 2006 (the “Act”), the Directors have acted in a way they consider,

ingood faith, promotes the success of the Company for the benefit of its members as a whole, while having regard to the matters set out in

Section 172(1)(a) to (f).

The Board strives to ensure that its decision making is consistent and aligned to our purpose, values and strategy. During the year, the

Directors consider that, in complying with their statutory duties, they had regard to:

The likely consequences of any decision in the long term

For Fuller’s and the Board, this has always been an integral part of our culture. As a long-established family business,

thelong term for Fuller’s means much more than normal business modelling entails. It is at the heart of all decisions taken

by the Board and is underpinned by our value of always asking what’s next?

The interest of the Company’s employees

Our people are what makes Fuller’s special and our commitment to their personal development is reflected through our value of

celebrating individuality. Each and every one plays a key role in the success of the Company. Details of the normal engagement

process with employees can be found in the Stakeholder Engagement section on page 62 to 63, the Sustainability Report on

pages 52 to 53 and the Corporate Governance Report on page 71.

The need to foster the Company’s business relationship with suppliers, customers and others

The Board believes that successfully delivering our strategy requires strong mutually beneficial relationships, in line with our

value of being part of the family, with our Tenants, suppliers and customers, and with industry bodies that further the interests

of the sector as a whole. More details of engagement can be found in the Sustainability Report and Stakeholder Engagement

on pages 46 to 51 and 62 to 63.

The impact of the Company’s operations on the community and the environment

We are committed to always doing the right thing for our communities and the environment through our sustainability strategy

Life is too good to waste. Details can be found from page 40.

The desirability of the Company maintaining a reputation for high standards of business conduct

Fuller’s is well regarded as a business because it has a consistent record of always doing things the right way – one of the

mostenduring key values of the business. This is integral to our culture.

The need to act fairly as between members of the Company

The unique capital structure of Fuller’s as a partly listed company has always required the Board to balance the interests

ofadiverse shareholder base. The focus on the long term is well understood by the Company’s shareholders themselves.

The Board recognises the value of engaging with all its stakeholders and building strong relationships with them, to understand what matters

to them and their changing needs, which helps inform strategic decision making and ensures our long-term success. More information about

our key stakeholders and how we engage with them can be found on pages 62 and 63.

SHARE BUYBACK PROGRAMME DIVIDEND

Principal Decisions Taken During the Year

Factors considered:

The share buyback programme, announced in September 2022,

to buyback one million ‘A’ ordinary shares completed in February

2023. The Board considered the effective management and

utilisation of cash and the need to balance planned investment

into the business, alongside internal and external opinion

andfeedback from shareholders on the preferred use of cash.

The Board supported the use of proceeds from the disposal of

non-core assets in the year and agreed that the share buyback

programme was aligned to our strategy of long-term sustainable

growth and delivering value for our shareholders.

Factors considered:

During the year, the Board declared an interim dividend of 4.68p

per ‘A’ and ‘C’ ordinary share and 0.468p per ‘B’ ordinary share

and is recommending a final dividend of 10.0p per ‘A’ and ‘C’

ordinary share and 1.0p per ‘B’ ordinary share.

The Board considered if declaring an interim and final dividend

supported the long-term sustainable success of the Company.

Following the return to profitability during FY2022 and the

increase in revenue and growth in earnings per share during

theyear the Board decided it was appropriate to pay dividends

in the year, in line with the stated intention to return to a

progressive dividend policy.

64 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

IMPACT OF INFLATIONARY PRESSURES ON OUR PEOPLE, CUSTOMERS,

SUPPLIERS AND COMMUNITIES

ESTATE RATIONALISATION

Factors considered:

During the year, the Board has continued to monitor the impact

ofinflationary pressures on our people, customers, suppliers,

and our communities.

To support our colleagues, we shifted our pay structures to

ensure that all are paid above the National Minimum Wage or the

National Living Wage depending on their age. Pay increases of

between 6% and 11% have been granted in 2023, following a 3%

increase in 2022, and the earlier award date of April (previously

June) has been retained. Following a review of benefits, the

Board supported the introduction of salary sacrifice for our

defined contribution pension scheme and extending medical

benefits to all team members with more than one year’s service

through a healthcare cash plan.

We have delayed increasing prices where possible during the

year, but it has not been possible to absorb all cost increases

while ensuring the business remains profitable. When necessary,

the Board have carefully considered the need to balance rising

costs against ensuring that our suppliers receive a fair price for

the goods they provide and that for our customers a visit to our

pubs always remains an affordable treat.

Non-Financial Information Statement

The table below, together with signposts to other relevant sections of the Annual Report and Fuller’s website, constitutes the Company’s

non-financial information statement, in compliance with Sections 414CA and 414CB of the Companies Act 2006.

Reporting requirement Key policies/standards/frameworks For additional information

Business model Business Model on pages 14 and 15

Principal risks and

impactonbusiness

Risk Management on pages 34 to 39

Non-financial Key

PerformanceIndicators

Strategic Report on pages 16 and 17

Sustainability Report on pages 40 to 53

Environmental matters Sustainability strategy – Our environment

Responsible Sourcing Policy*; Environmental Policy*

Sustainability Report from page 40

TCFD Report on pages 54 to 61

Employees Sustainability strategy – Our people

People policies including flexible working; parental

leaveincluding maternity, paternity and adoption leave;

mental wellbeing; employee conduct; recruitment,

training and development; and health and safety.

Whistleblowing Policy

Sustainability Report on pages 52 to 53

Stakeholder Engagement on pages 62 to 63

Corporate Governance Report on page 71

Social matters Sustainability strategy – Our people, environment,

andcommunities; Gender Pay Gap reporting*

Sustainability Report from page 40

Human rights Modern Slavery Statement*

Privacy policies in relation to employees, customers*

and tenants*

Stakeholder Engagement on pages 62 to 63

Directors’ Report on page 102

Anti-corruption and

anti-bribery matters

Anti-Bribery and Corruption Policy (covering gifts

andhospitality); Responsible Sourcing Policy*

Whistleblowing Policy

Audit and Risk Committee Report

on pages 84 to 85

* Available at www.fullers.co.uk

2023 Strategic Report

The Group’s Strategic Report, encompassing pages 1 to 65, was approved by the Board and signed on its behalf by:

Simon Emeny

Chief Executive

14 June 2023

Factors considered:

A key part of our strategy has always been to maintain both

aManaged and Tenanted business, allowing us to constantly

review and holistically manage our pub estate, operating individual

sites under the business model that works best for thepub and

best for Fuller’s. Following 12 months’ trading with no restrictions

and combined with the changing economics of running a pub, we

undertook a strategic review of the whole estate to ensure it

provided the best composition for the long term. As a result of this

review, the decision was made to move 23 of our Managed Pubs

and Hotels into the Tenanted Inns division. We have also decided

to exit a small number of leasehold sites and earmarked a handful

of pubs for disposal.

The Board considered the needs of impacted employees and

ensured that appropriate plans were in place to communicate

thechanges clearly and transparently and to support employees

throughout the transfer process.

The Board is of the view that pubs being transferred will thrive

aspart of the Tenanted business and will deliver a better financial

return for thepub, for Fuller’s and ultimately our shareholders, and

in the case ofdisposals, no value was seen in retaining ownership

of these pubs. The changes will put Fuller’s in the strongest position

to continue building, growing, and enhancing the estate.

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GOVERNANCE

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Dear Shareholder,

I am pleased to present our Corporate Governance Report for the

year ended 1 April 2023.

As described in my Chairman’s Statement, there has continued to

beunprecedented disruption to our business on a number of fronts.

Despite the challenges we have faced, we have a clear pathway

tofurther growth which has remained the focus of the Board.

Fundamental to supporting the delivery of our purpose, vision

andstrategy for the long-term benefit of all our stakeholders, is

toensure we maintain good and appropriate governance. Details

ofour well-established corporate governance framework and

compliance with the UK Corporate Governance Code are set out

inthefollowingpages.

The Board met regularly during the year and, following two years of

disruption, has welcomed the return to in-person meetings, both at

Pier House and within the retail estate, and a more regular meeting

schedule. Our Board Committees have been busy during the year

andfurther detail of their work is reported on pages 76 to 100.

Iwouldlike to thank my fellow Board members and theExecutive

Team for their significant contribution through the twists and turns

throughout the year.

The role oftheNominations Committee, which I chair, has been

broadened tofurthersupport the Board in its work with regard to

Board composition, succession planning and initiatives on diversity

and inclusion, as detailed on pages 77 to 79. Ourdevelopment and

progress in the important area of diversity and inclusion will be

further supported by the Nominations Committee in the coming year

as we look to review the Board’s policies and objectives, and increase

our oversight of diversity and inclusion objectives across the business.

As a people focused business, engagement with our team members

isalways high on the agenda. Throughout the year we have exposure

to talent as members of the Executive Team and Senior Management

are invited to make presentations to the Board on key business and

strategic projects. Board members also make time to visit our sites

and meet team members so we can hear their views first-hand and

wenow also benefit from employee insights provided by Helen Jones,

our designated Non-Executive Director responsible for employee

engagement. More about Helen’s role and employee engagement

canbe read on page 71.

“ I WOULD LIKE TO

THANK MY FELLOW

BOARD MEMBERS

FOR THEIR

SIGNIFICANT

contributions

DURING THE YEAR.”

Chairman’s Introduction to Governance

66 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

We have an embedded approach to sustainability across our

people,communities and planet, and we know that governance

around sustainability is fundamental to the success of the business

and ensures we can deliver on our strategy. To drive this important

agenda item, the Board puts sustainability at the front and centre

ofdecision making and proactively manages risks and opportunities.

We have continued to receive regular updates on sustainability

matters from our Executive Team and Oliver Rosevear, our Sustainability

Director, throughout the year and, with the support of the Audit and

Risk Committee, we have evolved our TCFD reporting. Our TCFD

Report can be found on pages 54 to 61.

We have a group of Directors with the skills required to run this

business and a good balance of experience, independence and

knowledge, as outlined on pages 68 to 69.

As reported in my Chairman’s Statement, I am delighted to welcome

Dawn Browne to the Board with effect from 3 July 2023. We are a

people focused business and the Board will benefit from her knowledge

of our team members and operational experience. We very much look

forward to working with Dawn.

At an Executive level, the business was also pleased to welcome

Sam Bourke as Marketing Director in November 2022. She brings

awealth of knowledge of hospitality retail marketing and a focus

oncustomer engagement and experience to the Executive Team.

Following the external Board evaluation in 2022, our review this year

was carried out by our Senior Independent Director, Juliette Stacey.

Iam pleased to report that the results show that the Board and its

Committees continue to be working effectively. We are currently

developing an action plan in response to the feedback identified in

the evaluation. Further details of the evaluation and progress against

our action plan from last year can be found on pages 79 and 80.

Our AGM this year will once again be held at The George IV in

Chiswick, London, on 20 July 2023 and, along with my Board

colleagues, Ilookforward to meeting you on the day and answering

any questions you may have about the business.

Michael Turner

Chairman

14 June 2023

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Board of Directors

Chairman

Executive Directors

Michael Turner

Non-Executive Chairman

Date appointed to the Board: January 1985

Experience: Michael brings an in-depth

understanding and knowledge of this long-

established family business and extensive

experience in leadership and executive

management. A Chartered Accountant with

international experience, Michael joined Fuller’s

in1978, initially running the Wine Division as Wine

Director. Appointed Marketing Director in 1988,

Managing Director in 1992, Chief Executive in 2002

and Chairman in 2007. Chairman of the British Beer

and Pub Association 2008-2010. Master of the

Worshipful Company of Vintners 2011-2012.

Key external appointments: None

Simon Emeny

Chief Executive

Date appointed to the Board: May 1998

Experience: Simon has a detailed knowledge

ofFuller’s operations gained through his 25 year

experience with the Group and valuable commercial

expertise in consumer-focused businesses. Joined

in 1996 from Bass plc where he held a variety of

senior operational and strategic planning roles.

Appointed to the Board as Retail Director in May

1998, Managing Director, Fuller’s Inns in July 2006,

Group Managing Director in November 2010 and

Chief Executive in July 2013. Previously Senior

Independent Director and Chair of the Remuneration

Committee of Dunelm Group plc. An economics

graduate and alumnus of Harvard Business School.

Key external appointments: Non-Executive Director

of The National Gallery Company Limited and

UKHospitality, and Senior Independent Director

ofWH Smith PLC.

Neil Smith

Finance Director

Date appointed to the Board: November2021

Experience: As well as extensive financial

experience in hospitality and consumer-focused

businesses, Neil has strong commercial expertise,

including business and strategic development.

Previously served as Chief Financial Officer of

Domino’s Pizza Group PLC and, prior to this, Chief

Financial Officer of Ei Group plc (formerly Enterprise

Inns plc). Neil has also held senior financial roles at

Compass Group plc, Virgin Media, Telewest Global

Inc. and Somerfield plc. Qualified as a Chartered

Accountant with PwC.

Key external appointments: None

Fred Turner

Retail Director

Date appointed to the Board: June 2019

Experience: Fred has a strong financial background

and a deep understanding of Fuller’s operations

having worked in a number of roles in the business.

Joined the Company in 2013 as an Operations

Manager for Fuller’s Inns. Appointed Head of

Tenanted Operations in 2015 and Tenanted Director

in 2018. Qualified as a Chartered Accountant with

Grant Thornton UK LLP. Civil engineering graduate.

Key external appointments: None

Top to bottom: Sir James Fuller; Rachel

Spencer, Richard Fuller, Juliette Stacey,

Robin Rowland, Fred Turner, Neil

Smith, Simon Emeny, Michael Turner

andHelen Jones

68 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Key to Committee membership:

A Audit and Risk Committee

N Nominations Committee

R Remuneration Committee

Committee Chair

Chairman

Executive Directors

Non-Executive Directors

Independent Non-Executive Directors

11%

33%

23%

33%

Male

Female

78%

22%

44%

12%

44%

0-3 years

3-6 years

+9 years

Board composition Board gender balance Board tenure

Non-Executive Directors

Helen Jones A N

Independent Non-Executive Director

Date appointed to the Board: March 2019

Experience: Helen has over 35 years of commercial

andgeneral management experience in consumer-

focused businesses. She brings valuable operations,

marketing and branding expertise, and also remuneration

committee chair experience in otherplcs. In light

ofher background, Helen is thedesignated Director

responsible for employee engagement forFuller’s.

Formerly Group Executive Director ofCaffèNero

and Managing Director of Zizzi, theItalian casual

dining chain, and Non-Executive Director ofinternational

fast-dining restaurant group VapianoSE.

Key external appointments: Senior Independent

Director and Chair of the Environmental, Social

andGovernance Committee of Halfords Group plc,

Non-Executive Director and Chair of the Remuneration

Committees of Virgin Wines UK Plc and Premier Foods

plc. She is also the workforce engagement director

forHalfords and Premier Foods.

Juliette Stacey

N R

Senior Independent

Non-Executive Director

Date appointed to the Board: March 2018

Experience: Juliette has over 30 years’ leadership

experience with a strong finance background.

Shebrings extensive knowledge of business and

strategic (including M&A) development, listed

company experience and risk management. She is

an experienced audit committee chair. Former Chief

Executive of Mabey Holdings Limited. Former Chief

Operating Officer (UK and Europe) and previously

Finance Director (Commercial UK) of Savills plc.

Qualified as a Chartered Accountant with Ernst

&Young LLP and is a Fellow of the Royal Institution

ofChartered Surveyors.

Key external appointments: Non-Executive Director

and Chair of the Audit Committees of Renishaw PLC

and Sanderson Design Group plc, and Non-Executive

Director of Willmott Dixon Holdings Limited.

Sir James Fuller, BT N

Non-Executive Director

Date appointed to the Board: June 2010

Experience: James has a deep understanding of the

Fuller’s business and provides a key link with family

shareholders. Served in The Life Guards from 1991

to1998. Employed by the Company from 1998 to

2003, working in the Tied and Managed Pub estate,

and has since been running his own business.

Key external appointments: None

Richard Fuller

Non-Executive Director

Date appointed to the Board: December2009

Experience: Richard has a deep understanding of

the Fuller’s business and operations, having worked

for the Company since 1984. Appointed a Divisional

Director in 1992 and to the Board in December 2009,

with responsibility initially for sales then, additionally,

personnel, corporate affairs and government relations.

Became Non-Executive Director in February 2020.

AGMP graduate of Harvard Business School. Master

of the Worshipful Company of Brewers 2020-2022.

Key external appointments: Non-Executive Chair

ofboth the Cotswold Cider Company and Kempton

Park Racecourse.

Robin Rowland, OBE A N R

Independent Non-Executive Director

Date appointed to the Board: March 2020

Experience: Robin brings over 35 years’ experience

in the restaurant and food and beverage sectors,

and has strong financial, commercial expertise,

andbusiness and strategic development experience.

Previously Chairman and Chief Executive of YO!

Sushi, and Non-Executive Director of Marstons PLC

and Tortilla. Awarded an OBE in 2015 for outstanding

services to hospitality.

Key external appointments: European Partner

ofTriSpan Private Equity with Chairman and

Non-Executive Director roles with five portfolio

companies: Mowgli, Pho, Rosa Thai, Rosa Mexicano

(USA) and Thunderbird. Independent Non-Executive

Director at Caffè Nero and UKHospitality.

Rachel Spencer

Company Secretary

Date appointed to the Board: January 2021

Experience: Rachel is an experienced company

secretary and has significant corporate governance,

regulatory and compliance expertise. Previously

held positions at a number of other listed companies,

including Invensys PLC, Aldermore Group PLC (both

the listed entity and the regulated bank) and, most

recently, Clarkson PLC. Fellow of the Institute of

Chartered Secretaries and Administrators. Rachel

serves as a trustee to the Fuller, Smith & Turner

Pension Plan.

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Corporate Governance Report

The pages that follow in this Governance section explain how we have complied with and applied the Code during the year.

Board leadership and company purpose

Statement of Compliance with the UK Corporate Governance Code 2018 (“the Code”)

The Board is committed to maintaining effective corporate governance and integrity, enabling us to deliver our strategy for the long-term benefit

of all our stakeholders. With this in mind, the Company has applied the main principles of the Code throughout the year. However, given the

structure of the Group – we are a listed public company but still very much a family-controlled concern – there are some provisions of the Code

where we do not comply but where we do consider our governance framework remains appropriate. These are summarised in the table below.

The Code can be found on the Financial Reporting Council’s website at www.frc.org.uk

Code Provision Detail of non-compliance Further information

Principle 2: division of responsibilities

11 At least half of the Board,

excluding the Chairman,

arenot independent

Non-Executive Directors.

The Board considers that membership is well balanced with the right mix of skills and

experience. The presence of Non-Executive Directors who are long-standing family

shareholders is important in this professionally run family business.

Principle 3: composition, succession and evaluation

18 Directors are not subject

toannual re-election.

In accordance with the Company’s Articles of Association (“Articles”), all Directors are

subject to election by shareholders at the first AGM after their appointment and to re-

election at three yearly intervals. As part of the annual Board effectiveness review, the

performance of the Directors is evaluated and forms the recommendation in the Notice of

AGM as to why the Company believes an individual Director should be re-elected. In view

ofthe Company’s size, its ownership structure and its history, the Board is not minded to

move to annual re-election of Directors but will keep this requirement under review.

19 Chairman has been in post for

more than nine years.

The Board considers that the Chairman’s knowledge and understanding of this long-

established family business and its requirements is extremely valuable.

Principle 5: remuneration

38 Pension contribution rates

for the Chief Executive

andRetail Director are not

aligned with those available

to the workforce.

Given the pension rate for the Chief Executive and Retail Director represents an existing

contractual commitment, the Board does not consider it appropriate to make a reduction

atthis stage. However, whenever any new Executive Director is appointed, the pension

opportunity will be aligned with the policy for the majority of the workforce. This was

theposition with the Finance Director who was appointed in November 2021.

Role of the Board

Led by the Chairman, the Board is collectively responsible to the

shareholders for the performance and long-term success of the Group,

as well as to other stakeholders for the wider impact we have.Its role

includes the establishment, review and monitoring ofthe Company’s

strategy, approval of major acquisitions, disposals and capital

expenditure, setting the Company’s purpose and values, overseeing the

Group’s systems of internal controls, governance andrisk management,

and ensuring that the appropriate resources are in place to deliver these.

The Board has an established governance framework which ensures

we meet our responsibilities and enables effective decision making.

An overview of the governance framework is set out on page 74.

A formal schedule of matters reserved for the Board is in place.

TheBoard has delegated some of its responsibilities to mandated

Committees, each of which operates under written terms of reference

approved by the Board and reviewed annually. Committee Chairs report

to the Board on their activities following meetings, and the minutes

of those meetings are made available to Board members (other than

if there is a conflict of interest in respect of any particular matter).

Board meetings enjoy open dialogue, and constructive challenge on

all issues is encouraged. With a good information flow between and

prior to Board meetings, decisions are made in a timely manner after

appropriate questions are dealt with.

The Board delegates all operational matters and execution of the

strategy to the Chief Executive, who is supported by the Executive

Team (which comprises the Executive Directors, the Marketing

Director, the People & Talent Director, and the Property Director)

who collectively make up the Executive Committee. As set out in

thegovernance framework on page 74, three sub-committees

reportinto the Executive Committee and are responsible for

reviewing and approving capital related projects and investments

and central costs, and driving and monitoring progress against

theLife is too good to waste strategy. Regular updates from these

sub-committees are reported to the Executive Committee.

Purpose, values and culture

The Board is responsible for establishing the Company’s purpose,

values and strategy, and for defining, monitoring and overseeing

theCompany’s culture to ensure that they are aligned. Our purpose

ofcreating experiences that nourish the soul underpins our values

ofdoing things the right way, being part of the family, celebrating

individuality and always asking what’s next, and it defines our

culture and everything that we do.

The Board, through the Executive Directors, strives to ensure that

everyone understands the key role they play in delivering our purpose,

vision and strategy. In March 2023, senior team members from across

the business came together for the annual Senior Managers Conference,

‘Fuller’s Future’, following its relaunch in2022. The event provided an

70 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

opportunity for the Executive Teamtore-articulate the Company’s

purpose and values after ayearofchallenging trading conditions, and

to outline the key strategic priorities for the year ahead. In May 2023,

following the unprecedented times we have faced, we relaunched our

General Managers Conference, which provided our operational team

leaders with the same opportunity as well as an occasion to reconnect

with colleagues and celebrate achievement.

The Board monitors the values and culture of the business through

anumber of channels, including regular updates to the Board on

operational performance and health and safety reporting, the results

of employee engagement surveys and action plans, and the approval

of key policies. The Board also receives regular updates from the

designated Non-Executive Director responsible for employee

engagement. Directors regularly visit our pubs and hotels in apersonal

capacity, outside of formal Board visits, which gives them a true

insight into how our values and culture are embedded across the

business and the guest experience our teams deliver.

Engagement with employees

The Board receives regular updates on employee matters throughout the

year from the Executive Directors, from the designated Non-Executive

Director responsible for employee engagement, and through briefings

on key employee matters provided by the People & Talent Director. The

Chief Executive has continued to deliver vlogs to the business, first

introduced in 2020 in response to the Covid-19 pandemic, to keep

everyone informed of key events and activity across the business

andkey decisions taken by the Executive Committee and the Board.

In March 2022, the Board approved the appointment of Helen Jones

as the designated Non-Executive Director responsible for employee

engagement. During the year, Helen has worked with the People &

Talent Director to develop her role and connections with the wider

business. This has included.

• providing advice and guidance on employee engagement initiatives

• attending Fuller’s Future, the General Managers Conference and

similar events across the business

• becoming a regular attendee of the Fuller’s Forum meetings –

toread more about the work of the Fuller’s Forum, go to page 53

• reviewing feedback from various listening channels including

theHappiness Index survey; My Voice; recruitment and induction

surveys; and exit interviews and Glass Door reviews

• providing regular reports to the Board on the themes emerging

from the different listening channels, any relevant matters and

concerns that may arise through the role.

We provide opportunities for the Non-Executive Directors to spend time

in the business with members of the Executive Team and Operations

team. This helps to keep Non-Executive Directors up to date with the

operations in our pubs and hotels and provides them with an opportunity

to engage directly with a broad range of our team members and hear

valuable feedback. Attendance at events such as the Fuller’s Future

and General Managers Conference, as well as the ‘Long Service

Celebration’ to recognise employees reaching a service milestone of

more than 15 years, provides Non-Executive Directors with another

opportunity to engage with employees.

The Board recognises the benefits of encouraging employee share

ownership, and the Company offers employees the opportunity to

purchase shares in the Company at a discounted price through its

Sharesave plan. The Company Secretary and the Executive Directors

keep all employees, including employee shareholders, informed of

publicly available financial updates andgovernance changes such

asnew Director appointments.

Q. How do you ensure the voice of employees

isheardin the Boardroom?

During the year, I was invited to join the Fuller’s Forum meetings,

following their establishment in 2022, and I have attended a

number of meetings in the year. I also meet on a quarterly basis

with the People & Talent Director and the People Experience

Manager to review feedback from our listening channels and to

discuss emerging themes. I always encourage colleagues to be

honest when providing their feedback – both positive and negative

–and I really appreciate how open they have been with their

comments. Listening to the employee voice and providing a link

tothe Board is a responsibility I take very seriously. In addition

tomore informal updates throughout the year, I provide a formal

report on a bi-annual basis highlighting the key themes from my

various engagement activities including what’s working well for

colleagues but also, importantly, those of concern which the

Company should address. As the Chair of the Remuneration

Committee, I also find it particularly helpful in the context of

executive pay to gain insight on pay and benefit matters for

discussion with my fellow Committee members.

Q. How do you ensure you don’t just listen but

thataction is taken?

The results of the Happiness Index survey and other survey and

listening channel outputs are carefully reviewed and considered

by the Board. Associated action plans are regularly reviewed by

the Board and are incorporated into functional area engagement

plans. For FY2023, employee engagement and satisfaction,

measured by reference to improvement in the results of the

Happiness Index survey, was also incorporated as an objective for

the annual bonus for Executive Directors and the Executive Team.

Q. What were the key highlights this year?

During the year, we have created a culture of listening and

havestrengthened trust with our colleagues through regular

communication and consistent language, committing to actions

and closing feedback loops, as evidenced by our improved employee

engagement score. An added highlight for me personally is how

Ihave been so warmly welcomed by members of the Fuller’s

Forumand following the success of its launch, I look forward to

theestablishment of and participating in forum groups for our

Head Chef and support centre colleagues, which will broaden

ourengagement across other areas of the business.

Q. What are the Board’s areas of focus going forward?

Diversity and inclusion is a key area of focus for the Board for the

coming year. Following the launch of the Equality of Voice survey

inSeptember 2022, we have a better understanding of how our

colleagues currently feel about diversity and inclusion at Fuller’s

and have better insight of our demographics. Feedback from this

survey will inform our company-wide inclusion plan and will help

shape our strategy. As part of this work, we need to ensure that

the voices of allour colleagues are heard and that everyone feels

asense of belonging.

Q&A

Helen Jones, designated

Non-Executive Director responsible

for employee engagement

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Engagement with shareholders

The Company has an ongoing programme of individual meetings with

institutional shareholders, allowing it to update shareholders on the

performance of the business and the strategy for the future, and to give

them an opportunity to discuss corporate governance matters. The

Company’s brokers also contact key shareholders to establish if they

would like to see the Chief Executive and Finance Director in the days

following the presentation of the preliminary and half year results.

The Chairman, Richard Fuller and Sir James Fuller are the key

contacts with the Company’s family shareholders and Sir James

Fuller has a specific role to keep in touch with those shareholders.

The Senior Independent Director and the other Non-Executive

Directors are all willing to attend meetings with shareholders or to be

contacted by shareholders should they have any concerns which have

not been resolved through the normal channels. All Board members

receive feedback from the results presentations and meetings with

shareholders, enabling them to keep in touch with shareholder opinion.

The Board supports the use of the AGM to communicate, in particular,

with private investors, and the Chairman and Chief Executive make a

detailed presentation to shareholders updating them on the Company’s

performance and progress. The Board is keen to encourage institutional

investors to attend the meeting, in line with the duties setout in the

Stewardship Code for institutional shareholders. Should they have

concerns over any issues being voted upon at the AGM, they canthen

meet the Directors and discuss them in person. The Chairman arranges

for the Committee Chairs to answer relevant questions at themeeting

and encourages all Directors to be present.

The 2022 AGM was held at The George IV, in Chiswick, in July.

Shareholders were given the opportunity to ask questions ahead

ofthe meeting, using adedicated email address if they were unable

to attend in person. Toenable all shareholders to vote on all resolutions

in proportion totheir shareholding, voting at the 2022 AGM was, in

line with best practice, conducted by way of a poll.

Shareholders can opt to receive Company communications such

asthe Annual Report electronically in PDF format, either via email

orfrom our website, or continue to receive a hard copy in the post.

The Board continues to encourage shareholders to consider moving

to electronic communications to benefit from timely and secure

communications and to help reduce the cost and environmental

impact of our communications. Annual Reports and other key

communications are also made available on request from the

Company Secretary, should beneficial shareholders have difficulties

receiving documentation via their nominee providers.

Engagement with stakeholders

The Board recognises the importance of building strong relationships

with its key stakeholders to ensure we understand how our decisions

may impact them. We therefore actively encourage and carry out

engagement with our key stakeholders to understand their views,

predominately through the Executive Directors, who ensure that the

Board is kept informed of any key issues or changes, which helps to

inform our decision making. Our Section 172 statement outlined on

pages 64 and 65 explains how the Board’s duty to promote the success

of the Company takes into account stakeholder considerations.

Corporate Governance Report Continued

Board activity

Key strategic matters considered by the Board in the year under review and to date included:

Standing agenda items

• Reports from the Executive Directors and Company Secretary covering

operational,financial and governance matters in the period

• Employee engagement reports

• Reports from the Audit and Risk, Remuneration

andNominationsCommittees

• Monthly management accounts

Q1 FY2023

• Group refinancing of banking facilities

• Directors’ valuation of the estate

• FY2022 Board evaluation feedback and agreed areas of focus

• FY2022 Results Announcement and Annual Report and Accounts,

includingriskreview

• FY2022 Final dividend payment

• Inflation and supply chain pricing increases, including

energymanagement

• Re-appointment of Richard Fuller and Sir James Fuller

asNon-Executive Directors

• Re-appointment of Michael Turner as Chairman

Q2 FY2023

• Appointment of Sir James Fuller to the Nominations Committee

• Group interest rate hedging arrangements

• Anti-Bribery and Corruption Policy

• Review of long term market trends and our strategic response

• Inflation and supply chain pricing increases, including

energymanagement

• Modern Slavery Statement

Q3 FY2023

• FY2023 Interim Results, including risk review

• FY2023 Interim dividend payment

• Cyber security update

Q4 FY2023

• Employee engagement survey outcomes and action plans

• FY2024 Group-wide remuneration proposal

• Nominations Committee terms of reference

• Diversity and inclusion training

• Estate rationalisation plan

• Tax Strategy Statement

• FY2024 budget

• Environmental Policy and Responsible Sourcing Statement

• Annual review of Board governance documents

• Re-appointment of Helen Jones as Non-Executive Director

Q1 FY2024

• FY2023 Board evaluation report

• FY2023 Results Announcement and Annual Report and Accounts,

including risk review

• FY2023 Final dividend payment

• Appointment of Dawn Browne to the Board

72 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

The Board holds at least six meetings a year, with additional

meetings scheduled as required. Meetings are held in-person at

theGroup’s support centre, Pier House, and also within the retail

estate. Board calls which are scheduled to provide business updates

between meetings are also held.

An annual programme of agenda items is agreed with the Board in

advance of the start of the financial year. It is developed from the

matters reserved for the Board, strategic objectives and the financial

calendar, and provides a framework to ensure that key matters are

addressed. The process for agreeing the final agenda is managed by

the Company Secretary in consultation with the Chairman and with

input from the Chief Executive.

The programme includes updates from each of the Executive Directors

and the Company Secretary on matters for which they are responsible.

It also includes presentations from members of the Executive Team and

Senior Management. This gives the Board exposure to talent in the

business while also providing an opportunity to engage in the key areas

being worked on and agreed strategic projects. Presentations during

the year have included information about further developing our people

and sustainability strategies, our food and drink proposition, and our

Bel& The Dragon, Cotswold Inns & Hotels, and Tenanted Inns Divisions,

utilities risk strategy and cyber security. These sessions also enable the

Board to provide feedback and guidance to the individual presenting.

In addition to scheduled meetings, the Board also meets every

yearfor an in-depth review of the Group’s strategy, which includes,

among other things, discussions about market trends, consumer

market, competitor landscape and capital structure. This year,

thestrategy day was held over two days in south-west London.

TheBoard was joined by members of the Executive Team to

providetheir views on the strategy, together with external

speakerswho provided input on the economic forecast for the

UK,sector and consumer trends, and investor considerations.

As well as the dialogue within the boardroom, the independent

Non-Executive Directors communicate privately, under the leadership

of theSenior Independent Director, without the Executive Directors

andother Non-Executives present. All Non-Executive Directors

alsomeet informally with the Chairman and the Chief Executive on

aregular basis. These meetings allow for the review of issues faced

bythe business, the continuation of dialogue on strategic issues,

thediscussion of Board appointments when appropriate, succession

planning, and the provision of support to the Chairman and the Chief

Executive in their roles.

Division of responsibilities

Board balance and independence

The Board currently comprises the Chairman, three Executive

Directors, and five Non-Executive Directors, of which two, Sir James

Fuller and Richard Fuller, and the Chairman Michael Turner, are family

members. The other three Non-Executive Directors, all of whom are

deemed independent under the Code, are experienced business

leaders, and collectively all of the Non-Executives bring a wide range

ofskills and experience to the Board. Although at least half of the

Board(excluding the Chairman) does not comprise independent

Non-Executive Directors, the Board considers it is well balanced

asithas the right number of members for the size of the Group, with

representation of the founding families on the Board being considered

very important in a company with a high proportion of family shareholders.

The Directors agree that no one individual dominates discussions and

that each makes a full and positive contribution.

Board and Committee structure

The Board has overall responsibility for governance across the

Groupand set out on the next page is the Company’s governance

framework. There is clear differentiation between the roles of

Chairman, Chief Executive and Senior Independent Director, and the

particular responsibilities of Board members are also set out below. The

responsibilities of the Chairman, Chief Executive and Senior Independent

Director, and the terms of reference of the Board Committees are set out

in writing andare available on the Company’s website.

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The Board

Acting as a sounding board

tothe Chairman and an

intermediary for Non-Executive

Directors when necessary

Being available to shareholders

if they wish to raise concerns

outside of the usual

communication channels

Evaluating the Chairman’s

performance as part

oftheannual Board

evaluationprocess

Advising the Board on all

corporate governance matters

and ensuring good governance

practices are followed throughout

the Group

Supporting the Chairman and

Non-Executive Directors with

theirresponsibilities

Communications with

shareholders and organisation

ofthe AGM

All Directors have access to the

advice ofthe Company Secretary

Providing independent

judgement, knowledge and

commercial experience to

discussions and decision making

Providing oversight of the

Group’sstrategy

Providing constructive

challengeto theExecutive

Directors and scrutinising

theirperformance against

agreedperformanceobjectives

Board Committees

Audit and Risk Committee

Monitors the integrity of the financial

reporting for the Group, manages the

relationship with the external auditors, and

oversees the effectiveness of the risk

management and internal control systems

Remuneration Committee

Sets the Remuneration Policy for the

Chairman and the Executive Directors, and

also reviews the remuneration framework

for other Senior Management

Nominations Committee

Responsible for leading the process for

appointment of Directors for approval by

theBoard, succession planning, reviewing

thestructure, size and composition of

theBoard and overseeing diversity

andinclusion initiatives

Executive Committee

The Chief Executive is supported by the Executive Team consisting of the Executive Directors, the Marketing Director,

thePeople&TalentDirectorandthe Property Director

Approvals Committee

Responsible for reviewing and approving

central costs, support centre staffing

changes and material procurement contracts

Sustainability Committees

Responsible for developing the Group’s

sustainability strategy around our people,

communities and the planet, and providing

oversight of key sustainability initiatives,

targets and objectives

Investment Committee

Responsible for reviewing and approving

capital related projects and investments

Senior Independent Director

Is responsible for:

Non-Executive Directors

Are responsible for:

Leading the Board and

maintaining aculture of

openness, debate and

constructive challenge

Setting the agenda, style

andtone ofBoardmeetings

Monitoring the Board’s

effectiveness

Ensuring effective

communication with the

Group’s shareholders and

otherstakeholders

Managing the Group’s financial

affairs and supporting the

ChiefExecutive in the

management of the Group

Overseeing the implementation

of strategyand monitoring the

performance of thebusiness

Providing regular updates

totheBoard onall financial

matters of significance

Facilitating two-way

communication between the

Board and the workforce

through various employee

engagement initiatives

Ensuring that information

feeding into the Board’s

decision-making process

reflects the views of employees

Day to day management of the

business of theGroup

Developing and implementing

the Group’sstrategy agreed

bythe Board

Delivering the Group’s

sustainability strategy

Ensuring effective

communication with the

Group’sshareholders and

otherstakeholders

Managing the Group’s

operational affairs

andsupporting the

ChiefExecutive in the

management of the Group

Overseeing the implementation

of strategy and monitoring the

performance of thebusiness

Providing regular updates to the

Board onall operational matters

of significance

Chairman

Is responsible for:

Chief Executive

Is responsible for:

Retail Director

Is responsible for:

Finance Director

Is responsible for:

Non-Executive Director

responsible for employee

engagement

Is responsible for:

Company Secretary

Is responsible for:

Governance Framework

Corporate Governance Report Continued

74 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Board and Committee meetings

The table below shows the attendance of Directors at Board and Committee meetings held during the year under review.

Director Board

Audit and Risk

Committee

Nominations

Committee

Remuneration

Committee

Michael Turner 13/13 – 4/4 –

Simon Emeny 13/13 – – –

Neil Smith 13/13 – – –

Fred Turner

12/13 – – –

Sir James Fuller

13/13 – 3/3 –

Richard Fuller

10/13 – – –

Helen Jones

12/13 4/4 4/4 4/4

Robin Rowland

12/13 4/4 4/4 4/4

Juliette Stacey 13/13 4/4 4/4 4/4

1 Includes scheduled and ad hoc meetings.

2 Unable to attend one ad-hoc meeting called at short notice due to prior commitments.

3 Sir James Fuller was appointed as a member of the Nominations Committee on 18 July 2022.

4 Unable to attend one scheduled meeting due to a long standing arrangement and two ad hoc meetings called at short notice due to prior commitments.

Time commitment

The Board is satisfied that all Directors can devote sufficient time

totheir roles to discharge their duties effectively. All Directors

arerequired to seek permission before accepting any external

appointments so that, amongst other things, the Board can be

satisfied that they will continue to have sufficient time available

todevote to the Company. Further, the Nominations Committee

considers the time commitments of proposed candidates prior to

appointment to the Board to ensure that they are able to dedicate

sufficient time to the role.

Conflicts of interest

The Board has adopted a procedure, in accordance with the

Company’s Articles, to consider and, if it sees fit, to authorise

situations were a Director to have an interest that conflicts, or

maypossibly conflict, with the interests of the Company. Directors

have acontinuing duty to update any changes to their conflicts of

interest. The Company maintains a register of authorised conflicts

ofinterest which is reviewed at least annually and authorisations

reconfirmed. The Board may impose certain limits or conditions

whengivingauthorisation.

Advice for the Board

All Directors have access to the advice and services of the Company

Secretary, whose appointment and removal is a matter for the whole

Board. There is also a formal procedure in place under which Board

members can, at the Company’s expense, obtain independent

professional advice should they decide it is necessary in order to

fulfil their responsibilities as Directors. The Company Secretary is

responsible to the Board for ensuring that Board procedures are

complied with. The Directors are satisfied that any concerns they

raise at Board meetings are recorded in the minutes. The Company

maintains appropriate insurance cover in respect of legal action

against its Directors and officers.

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NOMINATIONS

COMMITTEE

At a glance

Nominations Committee Report

MICHAEL TURNER

CHAIR OF THE NOMINATIONS COMMITTEE

Key Activities During the Year

• Reviewed and updated the Committee’s terms of reference

andmembership, including the appointment of Sir James Fuller

tothe Committee

• Reviewed the Board composition, supported by the development

of the Board skills matrix

• Monitored the changes to the Listing Rules and Disclosure

Guidance and Transparency Rules regarding gender and

diversityrequirements

• Considered succession planning at the Board and received

briefings on changes to the Executive Committee and other

keyleadership roles

• Recommended the re-appointment of Helen Jones as a

Non-Executive Director, Chair of the Remuneration Committee

andthedesignated Director responsible for employee engagement

atthe expiry of her term

• Facilitated the annual Board evaluation process for FY2023

• Recommended the appointment of Dawn Browne, People &

TalentDirector, to the Board with effect from 3 July 2023.

Members

Michael Turner (Chair), Juliette Stacey, Sir James Fuller,

HelenJones, Robin Rowland

Number of

meetings

held

Number of

meetings

attended

Michael Turner (Chair) 4 4

Juliette Stacey 4 4

Sir James Fuller (appointed 18 July 2022) 3 3

Helen Jones 4 4

Robin Rowland 4 4

Key Duties of the Committee

• Lead the process for appointment and re-appointment of Directors,

for approval bytheBoard

• Regularly review the size, structure and composition of the Board

andits Committees

• Consider succession planning for the Board and Executive

Committee positions

• Oversee the development of the Company’s policy and initiatives

on diversity and inclusion

• Oversee Board induction, training and professional development

• Assist the Chairman and Senior Independent Director with the

implementation of the annual Board evaluation.

“We continue to oversee

development of the Board’s

policy and initiatives on

diversity and inclusion.”

76 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Dear Shareholder,

As Chair of the Nominations Committee, I am pleased to present the

Nominations Committee Report for the year ending 1 April 2023.

The Nominations Committee comprises our three Independent

Non-Executive Directors, Helen Jones, Robin Rowland and

JulietteStacey, and Non-Executive Director, Sir James Fuller,

whowas appointed to theCommittee in July 2022. I was delighted

towelcome James to theNominations Committee, particularly

asheis the key contact with family shareholders so can offer

adifferent perspective during discussions. The majority of

membersare considered independent and, in the event of any

matters discussed concerning my role, I would absent myself,

andJuliette Stacey as Senior Independent Director would chair

themeeting, in line with the Code requirements. The Chief Executive

attends meetings by invitation and the Company Secretary acts

assecretary to the Nominations Committee.

As reported in my Chairman’s Statement, as part of our ongoing

succession planning, I am pleased to announce that, on the

recommendation of the Nominations Committee, the Board

approvedthe appointment of Dawn Browne to the Board with

effectfrom 3 July 2023. We are a people focused business and

herin-depth insight of people matters as well as operational

experience will be invaluable to the Board. A customised induction

programme is being developed to support her in her new role.

As outlined in last year’s report, the Board agreed that the role

oftheNominations Committee would be broadened to further

support the Board in its work with regard to Board composition,

succession planning and initiatives on diversity and inclusion.

Duringthe year, revised terms of reference were developed by the

Committee and adopted by the Board. The Nominations Committee

met four times during the year. Key matters discussed at the meetings

included a comprehensive review of the composition of the Board;

succession planning for the Board and Executive Committee;

consideration ofchanges to the Listing Rules and Disclosure

Guidance and Transparency Rules regarding gender and diversity

requirements; there-appointment ofNon-Executive Director

HelenJones; and the Board evaluation process for FY2023.

During the year ahead, the Nominations Committee will continue to

focus onlonger-term succession planning to ensure that appropriate

succession arrangements are in place for the Board and Executive

Committee members. The Nominations Committee will also continue to

oversee development of the Board’s policy and initiatives on diversity

and inclusion, and consider our approach to collecting numerical data

across the business to both monitor progress againstinitiatives and

tocomply with reporting requirements.

Michael Turner

Chair of the Nominations Committee

14 June 2023

Composition, Succession and Evaluation

Board Composition

Details of the Directors, including their qualifications, experience

andother commitments, are set out on pages 68 and 69. There were

no changes to the Board during the year.

Following the adoption of the revised Nominations Committee terms

ofreference, the Committee, on behalf of the Board, is responsible

forcontinually assessing the composition of the Board and its

Committees to ensure there is the right balance of skills and

experience. The composition of the Board and its Committees is

alsoconsidered as part of the annual Board evaluation. During the

year, the Nominations Committee undertook a comprehensive

reviewof the composition of the Board, taking into account the

skills,experience, diversity and tenure of the Directors. Thereview

was supported by the development and introduction of aBoard skills

matrix to capture the current skills and expertise of theBoard and

toassist the Nominations Committee in its discussions regarding

future Board composition and succession planning. The matrix

demonstrates, along with the Director biographies on pages 68 to69,

that the Directors have a range of relevant skills and experience,

andthe Nominations Committee is satisfied that theBoard has

thenecessary mix of skills and subject matter expertise, further

supported by the expertise of the Executive Committee members

andfunctional heads.

While at least half of the Board, excluding the Chairman, is not

independent as stipulated by the Code, the Committee believes that

the presence of Non-Executive Directors who are long-standing

family shareholders is important. The Nominations Committee also

acknowledges that the Chairman has been in post beyond nine years;

however, theNominations Committee considers that the Chairman’s

knowledge and understanding of this long-established family

business and its requirements are extremely valuable. In line with

theCode and letters of appointment, independent Non-Executive

Directors serve no more than nine years and the chart below

summarises their current tenure and unexpired terms.

Independent Non-Executive Director Tenure

20202018

Juliette Stacey

Helen Jones

2022 2024 2026 20

2028

Current term ends Nine year rule

Robin Rowland

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Induction and Professional Development

On appointment, the Nominations Committee will, in conjunction with

the Chairman and the Company Secretary, ensure that new Directors

undertake a tailored induction programme. This would typically consist

of an introduction to the Board and the Executive Team, visitsto pubs

and hotels across the estate, an induction reference material pack,

briefings ongovernance requirements and legal andregulatory

obligations asa Director, and access to independentadvisors.

Directors are encouraged to attend training courses, industry

forumsand specialist briefings relevant to their role throughout the

year. The Company Secretary, in consultation with the Chairman and

Nominations Committee, has developed a Learning and Development

programme for the Board and arranges for external speakers and

specialists, such as the Company’s brokers and legal advisors,

tojoinBoard meetings to brief the Board on topics of interest as

appropriate. During the year, the Board received a refresher on

Directors’ duties and the Market Abuse Regulation presented by

theCompany’s legal advisors to ensure that Directors continue to

understand their obligations. In line with our commitment to create

inclusive spaces where everyone – employees and customers – feel

they belong, WiHTL facilitated a session on diversity and inclusion.

For the year ahead, future topics will include sustainability and

climate competence, cyber security and developments intechnology.

Executive Directors are permitted to hold one other paid directorship,

with the Board’s consent, as the Board believes that experience

ofhow other boards work enhances the Directors’ contribution to

theCompany.

Succession Planning

Succession planning is a key issue for a business that has very low

turnover amongst its Senior Management and is still very much a

family-controlled concern while also being a public listed company.

Following the adoption of the revised Nominations Committee terms

of reference, succession planning and the development of talent has

become a key focus of the Nominations Committee, and is a standing

agenda item at each meeting. During the year, the Committee has

reviewed and updated the plan that is in place for the succession

ofkey roles. Talented and“critical to retain” individuals have been

identified, and each individual has their own development plan,

owned by the individual and supported and overseen by their leader

and the People Team. Development plans are grounded in data from

assessments and feedback, and external partners and experts are

engaged to support development where required.

Role descriptions and personal specifications for key Board positions,

including the Chairman and Chief Executive, have been reviewed by

the Committee and updated to reflect the needs of the business and

to support longer-term succession planning.

During the year ahead, the Nominations Committee will continue to

focus on longer-term succession planning to ensure that appropriate

succession arrangements are in place for the Board and Executive

Committee members.

Election and Re-election

The Nominations Committee is responsible for recommending to the

Board the appointment of new Directors and the re-appointment of

existing Directors.

As outlined in last year’s report, the Nominations Committee

recommended the re-appointment of Sir James Fuller, whose three

year term expired in May 2022, for a further three years, to May 2025.

The Committee also considered the re-appointment of Helen Jones

as Non-Executive Director, Chair of the Remuneration Committee

and the designated Director responsible for employee engagement,

whose three year term expired during the year, and recommended

that her term be renewed for a further two years, to March 2025. On

the recommendation of the Nominations Committee, the Board has

approved the appointment of Dawn Browne as a Director with effect

from 3 July 2023.

At every AGM, one-third of the Directors are subject to retirement

byrotation. In addition, if any Director has, at the start of the AGM,

been in office for more than three years since their appointment or

re-appointment, they shall retire at that AGM and offer themselves

for re-election. At the AGM in July 2023, Dawn Browne and Helen

Jones will offer themselves for election/re-election following their

appointment/re-appointment by the Board. Robin Rowland and

Juliette Stacey will retire by rotation and offer themselves for

re-election. The Board is of the opinion that each Director standing for

election or re-election makes an effective and valuable contribution

to the Company towards its long-term sustainable success.

The Nominations Committee has considered the Code requirement

forDirectors to be subject to annual re-election. In view of the

Company’s size, its ownership structure and its history, the Board

agreed with the Nominations Committee not to move to annual

re-election of Directors but will keep this requirement under review.

Diversity and Inclusion

The Board is committed to diversity and inclusion at both the Board

level and across the business. Whilst the Board is alert to the need to

ensure diversity in all its forms is promoted, it believes appointments

should be made on merit and does not want to adopt targets that may

affect its ability to make the right decision for the business and all its

stakeholders. As and when Board vacancies arise and, should the

support of an executive search firm be required, the Board and the

Nominations Committee will ensure that it only uses firms that have

signed up to their industry’s Voluntary Code ofConduct.

Diversity and inclusion has been a focus of the business in the year.

Fuller’s has signedthe British Beer and Pub Association’s (“BPPA”)

diversity and inclusion charter and our aim is to ensure all our venues

are inclusive spaces and that we have a zero-tolerance approach

toharassment ordiscrimination of any kind. Inclusive leadership

training has been introduced for the Executive Team and our senior

leaders and, as part of this work, a company-wide inclusion plan

hasbeen developed. Going forward, the Nominations Committee

willundertake areview ofthe Board’s policy and objectives, and

increase its oversight ofdiversity and inclusion objectives across

thebusiness, and anannual report on diversity and inclusion

initiatives willbepresented tothe Nominations Committee by

thePeople &Talent Director.

Nominations Committee Report Continued

78 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

The Board is aware of the changes to the Listing Rule introduced

bythe Financial Conduct Authority (“FCA”) around setting targets

inrelation to Board diversity and the disclosure of diversity and

inclusion metrics at the Board and Executive Committee level going

forward. Currently, the Board does not meet the target of having

women make up at least 40% of the Board or having at least one

Board member from a non-white ethnic minority background. Juliette

Stacey is our Senior Independent Director and therefore there is at

least one woman in asenior Board position, as defined in the rules.

The Committee is cognisant of the disclosure requirements and we

are currently collecting numerical data regarding ethnic background

and gender identity or sex at the Board and Executive Committee

level and across the business to enable reporting next year when

webecome in scope.

In line with the Code, the Nominations Committee has reviewed

thegender balance of those in Senior Management, considered

tobethe Executive Committee members, and their direct reports

at1 April 2023, as illustrated on the right. Details on the gender

balance across the Board and all-employees is also disclosed.

Board Evaluation

The annual Board and Committee evaluation continues toprovide

avaluable opportunity for the Board to reflect on how itoperates,

enabling it to improve its effectiveness and that of its Committees.

Following the completion of an in-depth external review for FY2022,

on the recommendation of the Nominations Committee, for FY2023,

the Board completed an internal evaluation process between

Marchand May this year, led by the Senior Independent Director.

Theevaluation consisted of a questionnaire which probed how

theBoard had operated during the year under review and included

the performance of the Board as whole and its Committees, the

effectiveness of the Executive Directors and Non-Executive

Directors, key learnings from the year in review and considerations

forfuture areasof focus.

Outcomes and recommendations from FY2023 evaluation

The consolidated output was finalised in June 2023. Overall,

feedback was positive and demonstrated that the Board and

itsCommittees were considered tobe working effectively.

Further,theBoard was considered to comprise relevant skills

andexperience, and all Directors were committed to the success

ofthe Company.

As would be expected, there were some opportunities identified

byBoard members to increase effectiveness to ensure that the

Company benefits from the combined expertise and insight of

theBoard. Work has begun on developing an action plan and, once

approved by the Board, the recommendations will be incorporated

ina tracker, alongside any ongoing recommendations from the prior

year, to monitor progress.

Male 7

Female 2

78%

22%

Directors

Male 20

Female 18

47%

53%

Executive Team and their direct reports

Male 2,871

Female 2,515

47%

53%

All Employees

(excluding Directors and Executive Team)

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Nominations Committee Report Continued

Update on FY2022 Evaluation Recommendations

Progress made against the recommendations arising from the Boardevaluation completed at the end of FY2022 are set out in the table below.

Recommendation Progress update

Provide further opportunities for Board members

toconnect with the business

Following the re-introduction of Board visits in the second half of 2021, the Board

spent the day in trade visiting several pubs and hotels in Hampshire in June 2022.

Board members have also been partnered with members of the Operations team

to facilitate days in the Fuller’s estate and were invited to attend the Fuller’s

Future and General Managers Conference.

Broaden the role of the Nominations Committee The terms of reference of the Nominations Committee have been reviewed

andthe duties of the Committee expanded to include responsibility for Board

composition, succession planning, training and development, evaluation and

initiatives on diversity and inclusion.

Review the approach to Board learning Responsibility for Board training and development has been delegated to

theNominations Committee. The Committee has established a Learning

andDevelopment programme and identified topics for inclusion, with regular

sessions scheduled throughout the year.

Develop the Board’s oversight of people

andsustainabilitymatters

Updates from the Sustainability Director to the Board have been formalised,

withupdates on sustainability matters now being presented to the Board on a

regular basis. Helen Jones, as designated Non-Executive Director responsible for

employee engagement provides a formal report bi-annually totheBoard on the

outcomes of her engagement with colleagues across thebusiness and the results

of the annual Happiness Index survey are presented totheBoard by the People &

Talent Director. The Chief Executive also keepstheBoardappraised ofkey people

and sustainability matters throughout the year. Goingforward an annual report on

diversity and inclusion initiatives will be presented to the Nominations Committee

by the People & Talent Director.

80 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

AUDITAND RISK

COMMITTEE

At a glance

Audit, Risk and Internal Control

Audit and Risk Committee Report

JULIETTE STACEY

CHAIR OF THE AUDIT AND RISK COMMITTEE

• Reviewed all matters relating to the half year and full year results

announcements, including reports presented by the external

auditors (EY) and assessment of key judgements and accounting

policies, and assessed whether taken as a whole the Annual

Report was fair, balanced and understandable

• Conducted a review of the effectiveness of the external audit

process and external auditor, and recommended EY’s re-appointment

• Reviewed and recommended to the Board for approval the revised

Anti-Bribery and Corruption Policy

• Reviewed and confirmed the appropriateness of the Policy on

Auditor Independence and Provision of Non-Audit Services

• Reviewed and recommended to the Board for approval the Tax

Strategy Statement for the year ended 31 March 2023

• Considered reports on key areas of compliance, including data

protection, employee relations, health and safety, cyber security,

and whistleblowing

• Conducted an annual review of the Audit and Risk Committee’s

effectiveness and terms of reference

• Reviewed the outputs of the FRC’s inspection of the FY2022

auditconducted by EY

• Oversaw the development of our TCFD reporting (the TCFD

Reportis set out on pages 54 to 61)

• Considered changes to the half year review process

• Reviewed EY’s plan for the FY2023 audit, terms of engagement

andproposed fee.

Members

Juliette Stacey (Chair), Helen Jones, Robin Rowland

Number of

meetings

held

Number of

meetings

attended

Juliette Stacey (Chair) 4 4

Helen Jones 4 4

Robin Rowland 4 4

Key Duties of the Audit and Risk Committee

• Monitors the integrity of the financial reporting for the Group

• Manages the relationship with the external auditors

• Oversees the effectiveness of the risk management and internal

control systems.

Key Activities During the Year

• Reviewed the effectiveness of the Group’s internal controls

andrisk management systems and assessed the need for an

internal auditfunction

• Monitored the progress in the documentation of the Group’s

internal control framework to identify enhancements to controls

• Received updates on specific risk areas, including cyber risk

andITcontrols, and an extensive review of our supply chain

toevaluate supplier, performance and service

• Reviewed the Group’s principal risks register ahead of the

announcement of the half year and full year results

“Our work during the year has focused

on the impacts of the challenging trading

environment. While we are more optimistic

about the future, monitoring any ongoing

disruption will continue to be a key agenda

item over the next year.”

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Dear Shareholder,

I am pleased to present the Audit and Risk Committee Report for

theyear ended 1 April 2023.

As you will have noted, the Committee’s name has changed since

thelast report, which underlines our wider focus on theGroup’s risk

and control environment, alongside the oversight that we maintain

over the statutory audit and the relationship with the external auditors.

Our work during the year has focused on the impacts of the challenging

trading environment and national inflationary environment, cost of living

crisis, and disrupted trading due to tube and rail strike action. In particular,

we have reviewed and robustly challenged management’s assessment of

various trading scenarios and management of risks given the uncertain UK

economic environment. The Audit and Risk Committee is satisfied that the

factors considered and assumptions used are appropriate to support the

going concern and viability of the business going forward and, while as

aBoard we are more optimistic about the future, monitoring any ongoing

disruption will continue to be a key agenda item over the next year.

Ernst & Young LLP (“EY”) are conducting their third audit following

theirappointment in 2021. Both the Audit and Risk Committee and

management have an open and transparent relationship with EY.

Wewelcome the fresh perspective and robust challenge they continue

to provide to the Audit and Risk Committee’s deliberations. We were

also pleased that the outcome of the FRC’s inspection of EY’s FY2022

audit was in the top classification, with no key findings and only limited

improvements required. We are supportive of EY’s re-appointment

which shareholders will be asked to vote on at the 2023 AGM.

During the year, the Audit and Risk Committee considered the

Government’s audit and governance reform agenda and has received

regular updates from EY and management following the publication

ofthe draft Audit Reform Bill ahead of the introduction of the Audit,

Reporting and Governance Authority (“ARGA”). We have developed

ourown roadmap for those changes we consider appropriate to

enhance our internal control environment and each element is being

process mapped and documented to provide assurance to the Audit

andRiskCommittee to aid future reporting and transparency.

We recognise the importance to all our stakeholders in understanding

and managing the climate related risks and opportunities to our business

and supply chain, and this is the second year that we have reported

against the recommendations of the Task Force on Climate-related

Financial Disclosures (“TCFD”). Supported by our Sustainability Director,

we have evolved our TCFD reporting and, given the ever-evolving

requirements in this area and changing market landscape, we now have

an annual update and training session on climate risk included on

theCommittee’s agenda. You can read the full TCFD Report on

pages54 to 61.

I will be attending the AGM on 20 July 2023 and I look forward to

answering any questions about the work of the Audit and Risk Committee.

Juliette Stacey

Chair of the Audit and Risk Committee

14 June 2023

Committee Membership

The Audit and Risk Committee comprises three independent Non-

Executive Directors and has a good balance of skills, with competence

and experience in the sector in which the Group operates. The Chair

ofthe Audit and Risk Committee is a Chartered Accountant and has

abroad range of experience in senior finance roles, and is therefore

considered to meet the requirement under the Code that at least

onemember should have recent and relevant financial experience.

TheAudit and Risk Committee is advised internally by the Company

Secretary, Rachel Spencer, who also acts as secretary to

theCommittee.

Meeting Attendance

All meetings are attended by the external auditors and the Company

Secretary, and regular attendees include the Chairman, Chief Executive,

Finance Director, Group Financial Controller and Head of Risk. Other

Senior Management attend relevant meetings at the Audit and Risk

Committee Chair’s request or submit reports as required by the agenda.

The Audit and Risk Committee meets at least once a year with the

external auditors, without management present, to discuss any

matters they may wish to raise. The Audit and Risk Committee Chair

also meets separately with the Finance Director and auditors outside

of the formal meeting programme, which helps to identify key areas

offocus and emerging issues that may need to be added to the Audit

and Risk Committee’s agenda.

Key Activities

The Audit and Risk Committee has a detailed annual meeting planner

which sets out the key items to be covered at its scheduled meetings.

This includes reviewing the financial statements and announcements,

monitoring changes in accounting practices and policies, and

reviewing decisions with a significant element of judgement.

At each meeting, an update on risk management and internal controls is

presented, together with reports on compliance with health and safety,

employee relations, data protection and cyber security. In light of the

impact of inflation and tube and rail strikes ontrading during the year,

there has continued to be focus around potential risks arising from any

ongoing economic and operational uncertainty.

The Audit and Risk Committee keeps abreast of regulatory and

governance developments as part of ongoing reporting from the

auditors and the Company Secretary.

The effectiveness of the Audit and Risk Committee formed part of the

Board evaluation process described in the Nominations Committee

Report on page 79.

Financial Reporting and Significant Judgement

The Audit and Risk Committee monitors the integrity of the financial

information published in the interim and annual financial statements

and considers the extent to which suitable accounting policies have

been adopted, presented and disclosed.

During its review of the Group’s financial statements for the period

to1 April 2023, the Audit and Risk Committee has reviewed the key

judgements applied in the preparation of the consolidated financial

statements, including those communicated by the auditors during their

reporting. These are described in the accounting policies detailed in

note 1 to the financial statements. The Board was made fully aware

ofanysignificant financial reporting issues and judgements made

inconnection with the preparation of the financial statements.

Audit and Risk Committee Report Continued

82 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

The key issues and judgements considered by the Audit and Risk Committee are detailed in the table below:

Key accounting judgement How the issue was addressed

Going concern

The Audit and Risk Committee considered the appropriateness of the decision to adopt the

going concern basis of reporting in the preparation of the financial statements. The Audit

andRisk Committee reviewed two scenarios – the “base case” and the downside “severe

butplausible” case, as well as the reverse stress test and the mitigations available to the

Group, as disclosed in note 1 to the financial statements. The Audit and Risk Committee has

challenged the assumptions used in each scenario and is satisfied that, even under a severe

but plausible scenario, the Group has adequate resources for the going concern assessment

period and supports the Group adopting the going concern basis.

Impairment testing

ofpropertyassets

The Audit and Risk Committee considered the proposed impairment of property assets for

both the Half Year Report and the Annual Report.

The Audit and Risk Committee challenged management’s approach, in particular the

methodology and inputs used to estimate both value in use and fair value less cost to sell for

site level impairment reviews, including challenging the underlying trading forecasts. The

Audit and Risk Committee also reviewed the disclosures in the Annual Report to ensure their

appropriateness. The Audit and Risk Committee was satisfied with the approach presented by

management, the judgements made for those properties at risk of impairment and the related

disclosures in the 2023 Annual Report and Accounts.

Separately disclosed items

The Audit and Risk Committee considered the nature of items classified as “separately

disclosed items” in the financial statements. The Audit and Risk Committee was satisfied

thatthe items management proposed to be shown as separately disclosed items were not

linked to the underlying trading of the Group. Separately disclosed items include:

• costs relating to the corporate reorganisation of the Group

•

ofit or loss on property disposals

• impairment on properties.

In addition, the Audit and Risk Committee reviewed these disclosures within the 2023

AnnualReport and Accounts to ensure they clearly identified and reconciled to the relevant

GAAP measure.

Pension accounting

The pension liability is sensitive to the actuarial assumptions applied in measuring future cash

outflows. The use of assumptions such as discount rate and inflation, which have an impact on

the valuation of the defined benefit pension scheme, was assessed by the Audit and Risk

Committee. The Audit and Risk Committee was satisfied with the proposed accounting

treatment and disclosures of the Group’s defined benefit plan in the financial statements.

Going Concern and Viability Statement

The Audit and Risk Committee assessed in detail the going concern

and viability reviews undertaken by management, as detailed in

theFinancial Review on page 33. This involved looking at potential

revenues, costs and cash flow modelling on both a prudent base

case and downside case scenario where there was much greater

uncertainty. The Audit and Risk Committee was satisfied with the

approach presented by management, including the judgements

madein the estimation of future cash flows and the Group’s

financing, and considering the high proportion of freehold

propertythat underpins the estate.

In addition, the Audit and Risk Committee has reviewed the Group’s

assessment of viability over a period greater than 12 months. The

Audit and Risk Committee considered the potential financial impact

of the Group’s principal risks and uncertainties, including the impact

of climate change and climate change legislation on the Group’s

operations. The Audit and Risk Committee has concluded that the

factors considered and assumptions used are appropriate in

assessing the Group’s viability.

Internal Control and Risk Management

The Board has overall responsibility for the Group’s system of

internal control and management of risks and for reviewing its

effectiveness. The system was designed to provide reasonable

butnot absolute assurance of:

• the mitigation of risks which might cause the failure of

businessobjectives

• no material misstatements or losses

• the safeguarding of assets against unauthorised use or disposal

• the maintenance of proper accounting records and the reliability

offinancial information used within the business or for publication

• compliance with applicable laws and regulations.

The Directors’ statement on the Company’s system of internal

controls is set out on the next page.

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At the start of the year, the Audit and Risk Committee discussed

theCompany’s risk management process and, on behalf of the

Board,considered the Group’s principal risks which had been

reviewed bytheindividual risk owners and, where applicable,

themitigating actions and controls had been updated and the risk

ratingupdated. Any significant changes to risks were discussed

ineach subsequent Audit and Risk Committee meeting.

During the year, a selection of key risks were presented to either

theAudit and Risk Committee or the Board. This has included risks

around increasing focus on sustainability issues, including climate

change risk, and IT security and cyber security.

The Group maintains business continuity plans and normally tests

the resilience of these plans on an annual basis. During the year

acrisis management test of all emergency communication groups

was completed to ensure that call tree procedures work. In addition,

a scenario planning exercise was undertaken to test the actions

should an announced or unannounced power blackout occur.

TheBoard and Audit and Risk Committee consider the thorough

responses bythe Executive Team and the broader management

teams to significant challenges they have faced during the year –

including themajor fire at the Admiralty in July 2022, supply chain

issues, thechallenging trading environment due to inflation and the

UK economic uncertainty, and the repeated disruption to trading due

totube and rail strike action – as solid evidence of the effectiveness

of existing disaster recovery and business continuity plans.

The Finance team is responsible for theappropriate maintenance of

financial records and processes that ensure all financial information

is relevant, reliable, in accordance with the applicable laws and

regulations, and distributed both internally and externally ina

timelymanner.

The new finance system, launched in November 2021, has simplified

the accounting process and control framework. It has improved

controls on expenditure and has enabled more insightful reporting

tobe used by both finance and operational management, as well

asincreasing the quality of our budgeting process. The Investment

Committee and Approvals Committee, two sub-committees of

theExecutive Committee, further strengthen controland scrutiny

ofcosts across the business below Board level authority. The

Investment Committee is responsible for reviewing and approving

capital related projects and investments and for completing

post-investment appraisals. The Approvals Committee isresponsible

for reviewing and approving central costs, support centre staffing

changes and material procurement contracts. TheFinance Director

chairs both committees and provides regular updates to the

Executive Committee, and to the Audit and Risk Committee

andtheBoard as required.

Throughout the period, the Executive Directors provided relevant and

timely financial commentary to supplement the financial reporting,

ensuring the Audit and Risk Committee and the Board were informed

of the financial position and results of the Group.

The Audit and Risk Committee and the Board have considered the

effectiveness of the Group’s system of internal controls. Key elements

of the system of internal control designed to address significant risks

and uncertainties, as documented on pages 34 to35, include:

• clearly defined levels of responsibility and delegation throughout

the Group, together with well-structured reporting lines up to

theBoard

• the preparation of annual budgets for each division, including

commentary on key business opportunities and risks

• the reviews by the Executive Team of actual monthly results

against budget, together with commentary on significant variances

and updates of both profit and cash flow expectations for the year

• a detailed investment approval process requiring Board

authorisation for all major projects

• post-implementation appraisals of major capital

expenditureprojects as requested by the Board

• regular reporting of legal and accounting developments to

theBoard

• regular review of the Group’s risk register and discussion of

significant risks by the Audit and Risk Committee and the Board,

whichamong other things take account of the significance of

environmental, social and governance matters to the business

• regular reporting of compliance with, dataprotection and health

and safety, and the monitoring of accident statistics and the

results of health and safety audits.

Internal Audit

The Group does not have a dedicated internal audit function but uses

its own Finance team and Retail Audit team, augmented with external

specialists as required, to provide assurance regarding the strength

of the control environment and risk management.

The team of retail business auditors monitor, in particular,

thecontrols over stock and cash in the Managed Pub estate,

Bel&The Dragon sites, and Cotswold Inns & Hotels. The function

reports into the Head of Risk who attends all meetings of the Audit

and Risk Committee to provide an update on the activities of the

Retail Audit team.

External resource is used when specialist advice is required on

anyareas of risk or controls where the Audit and Risk Committee

considers the business may be exposed. The Audit and Risk

Committee received regular reports covering third party audits

onhealth and safety and food safety matters.

For FY2024, the Audit and Risk Committee confirmed that the

existingarrangements of internal audit remained appropriate.

Climate Risk and TCFD Disclosure

The Audit and Risk Committee is responsible for overseeing that

theeffects and consequences of climate change are adequately

reflected in our financial statements. Climate-related risks are

presented to the Audit and Risk Committee on an annual basis,

whichis a key element of the new approach to TCFD that has

beenimplemented this year. In addition a training session on

theevolving requirements around climate risk has been added

totheannual meeting planner.

The Audit and Risk Committee reviewed and agreed that the TCFD

disclosures set out on pages 54 to 61 were appropriate and that

theassumptions used in the financial statements are consistent

withthese disclosures.

Whistleblowing

The Audit and Risk Committee is responsible for reviewing

theadequacy and security of the Company’s arrangements for

employees and contractors to raise concerns about any suspected

wrongdoing, as set out in the Company’s Whistleblowing Policy.

TheCompany has in place mechanisms for concerns to be raised

inconfidence internally andanonymously through the appointment

ofan independent whistleblowing service operated by Safecall.

Audit and Risk Committee Report Continued

84 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Any whistleblowing reports are reported immediately to the Audit

and Risk Committee Chair and, following investigation, to the full

Audit and Risk Committee and, at least annually, to the Board.

Astanding report is tabled at each Audit and Risk Committee meeting

providing an update on employee relation matters in the period,

which allows the Audit and Risk Committee to identify anytrends.

Anti-Bribery and Corruption

To prevent bribery and corruption, the Group has a policy which

allemployees and contractors must follow. This includes guidance

around the acceptance of gifts and hospitality. The policy sets out

our commitment to conducting business in an honest and ethical

manner and our zero tolerance approach to bribery and corruption

from our people and any third parties, including customers

andsuppliers.

External Audit

Ernst & Young LLP were first appointed in 2021, following a tender

process, to conduct the audit of the Group’s financial statements for

the financial year to 27 March 2021, and this is its third year auditing

the Group’s Annual Report. In accordance with best practice and

professional standards, the external auditor is required to adhere

toa rotation policy whereby the audit engagement partner is rotated

at least every five years. The FY2023 audit is the third year of Rachel

Savage’s tenure as lead audit engagement partner.

The auditors are invited to attend all meetings of the Audit and Risk

Committee and report on the plan and approach for the full year audit

and half year review.

The Audit and Risk Committee Chair meets the auditors on a regular

basis during the year and the Audit and Risk Committee meets with

the auditors, without management present, at least annually in order

to allow both the members of the Audit and Risk Committee andthe

auditors to raise any issues directly and to discuss the auditors’ remit.

The Audit and Risk Committee reviewed the effectiveness of EY’s

performance of the external audit process, taking into account:

• the quality and scope of the audit plan, and evaluation of delivery

and performance against the plan

• qualifications, efficiency and performance of the audit team

• the communication between the Company and EY

• EY’s understanding of the Group’s business and industry sector

• the results of the FRC’s Audit Quality Inspection Report on EY

• any specific observations arising from the FRC’s inspection of the

FY2022 audit conducted by EY.

After considering these matters, the Audit and Risk Committee was

satisfied with the effectiveness of the year end audit process and

recommended to the Board that EY be re-appointed at the Company’s

AGM on 20 July 2023.

During the year, the Company complied with the provisions of the

Statutory Audit Services for Large Companies Market Investigation

(Mandatory Use of Competitive Tender Process and Audit Committee

Responsibilities) Order 2014.

Auditor Independence and Non-Audit Services

Auditor independence and objectivity are safeguarded by a number

of control measures, and a formal written policy was approved in

January 2021 and reviewed during the course of the year to confirm

its continued appropriateness. The Policy sets out processes for

assessing independence and objectivity, including disclosure

requirements of the auditors, restrictions on the employment

oftheauditors’ former employees and the circumstances in which

theauditors may be permitted to undertake non-audit services.

The Policy is in line with the recommendations set out in the FRC’s

Guidance on Audit Committees and the requirements of the FRC’s

Revised Ethical Standard 2019 (the “Standard”). In respect of

non-audit services, only a very short list of non-audit services is

nowpermitted under the Standard, which are detailed in the Policy,

and all spend has to be approved by the Audit and Risk Committee,

which ensures full visibility.

In FY2023, the fees paid to EY for audit services were £465,000. No

fees were paid for non-recurring audit services (FY2022: £366,500

including £55,000 for non-recurring audit services). During the year,

fees paidto EY for non-audit services included £45,000 for the review

of the FY2023 half year results announcement and £5,000 for the

completion ofa compliance certificate from the auditors required

under the terms ofthe 6.875% Debenture Stock 2018 Trust Deed.

In line with the approach taken by many companies, it has been

agreed that EY will no longer be engaged to provide a review opinion

in accordance with International Standard on Review Engagements

2410 (UK) on the half year results. The auditors will continue to

attend all meetings of the Audit and Risk Committee, including the

discussions to approve the half year results and will conduct limited

agreed upon procedures for the benefit of the directors.

Fair, Balanced and Understandable

The Audit and Risk Committee reviewed whether the 2023 Annual

Report, taken as a whole, was fair, balanced and understandable, and

also whether it provided the information necessary for shareholders

to assess the Company’s position and performance, business model

and strategy. In making its assessment, the Audit and Risk

Committee took the following into account:

• A timetable for the production of the 2023 Annual Report was

agreed by the Finance team and the auditors, with overall

co-ordination of the report being overseen by the Finance Director

• Each section of the report was prepared by a member of

management with appropriate knowledge and experience,

including representatives from finance, communications,

companysecretariat and risk

• Management’s views on each of the key judgements, which

werethen discussed by the Audit and Risk Committee

• Reports and feedback from the auditors which were presented

tothe Audit and Risk Committee

• Board members received drafts of the report for review, which

provided an opportunity to provide comments and ensure

messaging was cohesive.

Following its review, the Audit and Risk Committee confirmed

totheBoard that the 2023 Annual Report was fair, balanced and

understandable, and the Board’s statement is set out on page 104.

Juliette Stacey

Chair of the Audit and Risk Committee

14 June 2023

Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C. 85

FINANCIAL STATEMENTS

105-165

OVERVIEW

0-03

STRATEGIC REPORT

04-65

ADDITIONAL INFORMATION

166-186

GOVERNANCE

66-104

REMUNERATION

COMMITTEE

At a glance

Remuneration

Directors’ Remuneration Report

HELEN JONES

CHAIR OF THE REMUNERATION COMMITTEE

Key Activities During the Year

• Reviewed performance under the Long-Term Incentive Plan

(“LTIP”) and Executive Share Option Scheme (“ESOS”) awards

granted in 2020 and confirmed vesting outcomes

• Set Executive Director objectives and bonus targets for

FY2023and approved proposals for the Executive Team

andDivisional Directors

• Agreed the targets for the annual FY2023 LTIP awards and

FY2023ESOS awards

• Approved pay increases for FY2023 for Executive Directors,

Executive Team and Divisional Directors taking into account

thepay review for the wider workforce

• Considered remuneration arrangements for the wider workforce

inthe context of the current cost of living crisis

• In conjunction with the Board, received regular reports on

Group-wide remuneration for FY2023 and wider workforce

remuneration arrangements and issues

• Reviewed the Group’s gender pay gap reporting for FY2022

• Approved an invitation under the Group’s all employee

Sharesave(“SAYE”) Scheme for FY2023

• Approved the remuneration arrangements for the incoming

Marketing Director

• Reviewed the Chairman’s fee

• Noted remuneration proposals for the wider workforce for

FY2024,implemented with effect from 1 April 2023

• Reviewed the independence and effectiveness of the

Remuneration Committee advisor, Deloitte

• Conducted an annual review of the Remuneration Committee

terms of reference.

Members

Helen Jones (Chair), Juliette Stacey, Robin Rowland

Number of

meetings

held

Number of

meetings

attended

Helen Jones (Chair) 4 4

Juliette Stacey 4 4

Robin Rowland 4 4

Key Duties of the Committee

• Sets the Remuneration Policy for the Chairman, Executive

Directors, Executive Team members and Divisional Directors

• Determines the total remuneration package (including pensions,

service agreements and termination payments) of the Chairman

and Executive Directors and, in consultation with the Chief

Executive, determines the total remuneration package of the

members of the Executive Team and Divisional Directors

• Reviews workforce remuneration and related policies.

“One of our key focus areas is to ensure

the Executive Directors are appropriately

rewarded for implementing our strategic

plan and delivering long-term growth for

the Company and all our stakeholders .”

86 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Dear Shareholder,

On behalf of the Board, I am pleased to present the Remuneration

Report for the year ended 1 April 2023.

Against the backdrop of a challenging trading background, the Group

has delivered sales growth of 33% with revenues of £336.6m and

adjusted profit of £12.7 million, up by 76% on the prior year. The

increase was largely due to improved ability to trade in FY2023,

particularly in London as people returned to offices and international

tourism recovered. While sales and profit growth has been strong, it

was held back by significant external factors such as rising energy,

food and labour costs and the impact of train and tube strikes. This

resulted in the outcome for the year being below original expectations

which is reflected in no payouts being awarded against variable

elements of pay as detailed below.

Going forward, one of the key focus areas for the Remuneration

Committee is to ensure that our Executive Directors are appropriately

rewarded for implementing our strategic plan to return to pre-pandemic

levels of profitability and deliver long-term growth for the Company

and all our stakeholders.

Directors’ Remuneration Policy (“Policy”)

Our remuneration philosophy is to incentivise management to drive

business performance to deliver sustained and profitable growth. We

presented our revised Policy to shareholders at the AGM in 2021, where

we received strong support with a vote in favour of 86.15%. The Policy

is intended to cover the three year period to the AGM in 2024 and it was

applied consistently during the year ended 1 April 2023. The Remuneration

Committee did not exercise any discretion to adjust remuneration

outcomes in the year. No changes are proposed to the Policy for FY2024.

Incentive Outcomes for FY2023

The annual bonus for FY2023 was based 80% on Group adjusted

profitbefore tax (pre IFRS 16) performance and 20% on individual

strategic performance. Group adjusted profit (pre IFRS 16) was

£13.6million, which was below the minimum financial target.

Performance against individual strategic objectives was assessed

and, while these objectives had been fully achieved, the Remuneration

Committee agreed with the recommendation of the Executive

Directors that no bonus should be paid.

The performance targets for the LTIP and ESOS awards granted in

October 2020 and January 2021 respectively, which were based on

Group adjusted EPS before tax performance for the LTIP, and Group

adjusted EBITDA performance for the ESOS measured over the period

to FY2023, were not met and therefore the awards will lapse in full.

Executive Director Remuneration for FY2024

Salary

The Remuneration Committee reviewed carefully the approach

takenfor the wider workforce when considering salary increases

forExecutive Directors, given the significant cost pressures faced

bycolleagues over the last 12 months. Salary increases across

theGroup consisted of increases of between 6% and 11%, with those

earning the least receiving the largest increases to support those most

impacted by increasing costs. Base salaries for Executive Directors

have been increased by 6% in line with the lowest increase for the

wider workforce. In light of the increasing pressures on the cost

ofliving, the implementation of pay increases across the wider

business was brought forward in 2022, to take effect from 1 April

andthis change has been retained for 2023, although the normal

review date of 1 June remains in place for the Executive Directors.

Annual bonus

The maximum annual bonus will continue to be 100% ofbase salary,

based 80% on Group adjusted profit before tax (pre IFRS 16) performance

and 20% on individual strategic objectives.

Long term incentive awards

The maximum LTIP award will continue to be 125% of base salary

forthe Chief Executive and Retail Director, and 100% for the Finance

Director, based on the achievement of EPS performance for FY2026.

Awards under the ESOS will be granted to Executive Directors with

reference to the increased tax efficient limit which has increased

from £30,000 to £60,000 with effect from 6 April 2023.

Non-Executive Director Fees

The Remuneration Committee reviewed the Chairman’s fee during

theyear and determined that a reduction was appropriate. The

Chairman’s fee was therefore reduced from £250,000 per annum to

£210,000 per annum effective 1 January 2023. Non-Executive Director

fees were last reviewed by the Board in November 2021 and remain

unchanged forFY2024.

Employee Engagement and Support

The Remuneration Committee receives updates on workforce

payand benefits throughout the Group and considers workforce

remuneration as part of the review of executive remuneration. The

agreed average annual pay increase for all employees was taken into

account by the Remuneration Committee when agreeing pay reviews

for the Executive Directors, Executive Team and Divisional Directors.

We have taken a number of steps to help our employees through

boththe impact of the pandemic and the current cost of living crisis.

These include a shift in our pay structures to ensure that all our

employees are paid above the National Minimum Wage or the National

Living Wage depending on their age; implementing salary sacrifice for

our defined contribution pension scheme; extending medical benefits

to all team members with more than one year’s service through a

healthcare cash plan; and continuing to offer theWagestream App,

which gives all employees the chance totakesalary ahead of payday,

negating the need for expensive payday loans.

Shareholder Engagement

The Remuneration Committee welcomes ongoing shareholder

dialogue. Our intention is that shareholder views will be sought when

there is any significant change to Directors’ remuneration. Should

shareholders have any concerns about the Policy, the Remuneration

Committee Chair will endeavour to meet with them, as appropriate,

tounderstand and respond to any issues they may have.

I hope that you find the report clear and comprehensive and

thatithelps demonstrate how Directors’ remuneration is linked

totheperformance of the Company. On behalf of the Remuneration

Committee, I would like to thank shareholders for your continued

support and feedback over the year and I hope that you are able to

support the resolution on the Annual Report on Remuneration being

presented at this year’s AGM on Thursday 20 July 2023.

Helen Jones

Chair of the Remuneration Committee

14 June 2023

Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C. 87

FINANCIAL STATEMENTS

105-165

OVERVIEW

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STRATEGIC REPORT

04-65

ADDITIONAL INFORMATION

166-186

GOVERNANCE

66-104

Annual Report on Remuneration

This Annual Report on Remuneration from pages 86 to 100 will be put to an advisory shareholder vote at the Company’s AGM on Thursday20 July 2023.

Directors’ Remuneration Policy

We presented our Remuneration Policy (the “Policy”) to shareholders at the AGM in 2021, where we received strong support with a vote

infavour of 86.15%. This Policy covers the three year period until the AGM in 2024 and it was applied consistently during the year ended

1 April2023. The full Policy can be found on pages 58 to 68 of the 2021 Annual Report and is available in the Investor section of our website

(www.fullers.co.uk). The table below provides a summary of the main elements of the Policy for Executive Directors:

+ =

SALARY BENEFITS PENSION

ANNUAL

BONUS

LTIP

RECOVERY

LTIP

ESOS

TOTAL

REMUNERATION

FIXED VARIABLE

Remuneration Philosophy and Principles

In developing the Policy, the Remuneration Committee considered the key principles set out in Provision 40 of the UK Corporate Governance

Code. The Remuneration Committee believes that the Policy is clear and transparent and aligned with our culture. In normal years, we operate

asimple incentive framework of an annual bonus, an LTIP award, and an ESOS award, subject to maximum award levels set by HMRC. Award

levels are capped with pay-out linked to performance against a limited number of measures which are linked to our strategy. Stretching but

fairtargets are set. This ensures that potential reward outcomes are clear and aligned with performance achieved, with the Remuneration

Committee having the discretion to adjust pay-outs where this is not considered to be the case.

Pay levels are set taking into account external market levels as well as internal practice to ensure pay remains competitive while being

equitable within the Company. Malus and clawback and discretion provisions, LTIP holding periods and shareholding guidelines, including

post-employment, are in place to mitigate reputational and other risks.

Remuneration arrangements are determined throughout the Group based on the same principle: that the remuneration policies and practices

should be aligned to the Company’s purpose and values, support the delivery of the strategy and promote long-term sustainable success.

FIXED

Key features Implementation in FY2023 Implementation in FY2024

Base Salary

Reflects the importance

ofthe role to the business

and the experience the

individual brings to it

Reviewed annually with increases

normally effective from 1 June

Increases will normally be in line

with increases across the Group

Increased by 3% from 1 June 2022

inlinewiththewider workforce

• Chief Executive – £525,300

• Finance Director – £363,000

• Retail Director – £210,000

Increased by 6% from

1 June2023 inline with the

wider workforce increase

• Chief Executive – £556,500

• Finance Director – £385,000

• Retail Director – £222,500

Benefits

Provides competitive

benefits which also

protect the individual

andprovides preventative

care for them

The Company offers Executive

Directors a range of benefits

consistent with the role

Taxable benefits included:

• a car allowance

• private medical insurance

• optional cash vouchers for use in Fuller’s pubs

and hotels

Non-taxable benefits included:

• life assurance and permanent health insurance

• Group-wide employee benefits, such as an

employee discount linked to length of service

and all-employee share plans

No changes proposed

Directors’ Remuneration Report Continued

88 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

FIXED

Key features Implementation in FY2023 Implementation in FY2024

Pension

Provides an

appropriatelevel of

retirement benefits

Executive Directors are either

deferred members of the

Company’s defined benefit

pension plan (closed to future

accruals), the defined contribution

plan or receive a cash allowance

in lieu of pension

The Chief Executive received an annual cash

allowance in lieu of pension and the Retail Director

received an annual pension contribution of 17.5%

ofbase salary

The Finance Director received an annual cash

allowance in lieu of pension of 5% of base salary in

line with the policy for the majority of the workforce

No changes proposed

For any new Executive Director

appointed to the Board,

thepension opportunity will

beinline with the policy for

themajority of the workforce

VARIABLE

Key features Implementation in FY2023 Implementation in FY2024

Annual Bonus

Incentivises achievement

of annual financial

objectives and delivery

ofthe business strategy

Maximum opportunity of 100%

ofsalary based on annual

performance targets

Any bonus earned in excess

of75% of salary will normally

bedeferred into shares for

threeyears

The maximum bonus award for Executive

Directors was 100% of base salary based 80%

onGroup adjusted profit before tax (pre IFRS 16)

and 20% onindividual strategic performance

Bonus pay-out:

• Chief Executive – nil

• Retail Director – nil

• Finance Director – nil

Executive Directors will have

amaximum opportunity of

100% of salary for FY2024

The annual bonus will be

based 80% on Group adjusted

profit before tax (pre IFRS 16)

and 20% on individual

strategic performance

LTIP

Incentivises the

delivery of long-term

sustainable returns

forallshareholders

The maximum annual award

inrespect of a financial year

is125%of base salary

Awards vest based on

performance over three

financialyears

Normally 25% of awards vest for

threshold levels of performance

Recovery LTIP awards (granted

ona one-off basis in 2022) have

amaximum opportunity of 250%

ofbase salary

The Chief Executive and Retail Director were

granted awards of 125% of salary and the

Finance Director was granted an award of

100%of base salary

Awards were based on pre-tax adjusted EPS

performance for FY2025 of:

• Threshold – EPS of 49.93p

• Maximum – EPS of 60.15p

Awards will be granted at

125% of base salary to the

Chief Executive and the Retail

Director and 100% of base

salary to the Finance Director

Awards will be based on

pre-tax adjusted EPS

performance for FY2026 of:

• Threshold – EPS of 39.78p

• Maximum – EPS of 55.9p

ESOS

Aligns interests of

Executive Directors

withthose of

shareholders

andincentivises

deliveryoflong-term

sustainablereturns

Executive Directors may be

granted market value options

uptoa maximum total value

setbyHMRC

Options vest based on

performance over three

financialyears

Once vested, options must

beexercised before the

10thanniversary of grant

Awards made to the Finance and Retail

Directorsup to the maximum value set

byHMRCat the time of award

No award made to the Chief Executive as

optionsheld were equal to the maximum

totalvalue set by HMRC at the time of

award(previously £30,000)

Awards were based on adjusted EPS

performance for FY2025 of 49.93p.

Awards will be granted

toExecutive Directors, to

theextent they are eligible,

upto the maximum value

setby HMRC

Awards will be based

onpre-tax adjusted

EPSperformance for

FY2026of23.58p

Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C. 89

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Statement of implementation of Remuneration Policy for FY2024

This part of the Directors’ Remuneration Report sets out how the Policy will be operated in the coming year.

Base Salaries

The Executive Directors’ base salaries have been increased by 6% in line with the lowest increase received across the wider workforce. The

Remuneration Committee reviewed carefully the approach taken for the wider workforce when considering salary increases for Executive

Directors, given the significant cost pressures faced by colleagues over the last 12 months. Salary increases across the business consisted of

increases of between 6% and 11%, with those earning the least receiving the largest increases to support those most impacted by increasingcosts.

In 2022, in light of the increasing pressures on the cost of living, the implementation of pay increases across the wider business was brought

forward to take effect from 1 April and this change has been retained in 2023, although the normal review date of 1 June remains for the

Executive Directors, other members of the Executive Team and Divisional Directors.

Salary increases for the Executive Directors from 1 June 2023 are therefore as follows:

Chief Executive – £556,500

Finance Director – £385,000

Retail Director – £222,500

Benefits

No changes to Executive Directors’ benefits are proposed for FY2024.

Annual Bonus

For FY2024, we intend to operate an annual bonus in line with our normal Policy. The maximum annual bonus will be 100% of base salary

forallDirectors. The annual bonus will be based 80% on Group adjusted profit before tax (pre IFRS 16) performance and 20% on individual

strategic performance.

Targets are considered to be commercially sensitive and have therefore not been disclosed. Our intention is to disclose targets in the FY2024

Directors’ Remuneration Report, provided that these are no longer considered to be commercially sensitive at that time.

LTIP

The Remuneration Committee intends to continue to grant LTIP awards for FY2024 to ensure that management are aligned with shareholders

and incentivisedto deliver long-term performance. Awards will be granted at the Policy level of 125% of base salary to the Chief Executive

andtheRetail Director, and 100% of base salary to the Finance Director. The Remuneration Committee is aware of shareholder guidance

regarding reviewing award levels where there has been a fall in share price. We are not planning to reduce grant sizes given the significant

need to continue to motivate and retain management. However, the Remuneration Committee retains discretion to adjust vesting outcomes

ifitconsiders that there have been any “windfall” gains.

The LTIP will be based on pre-tax adjusted EPS performance as the Remuneration Committee considers that this provides a clear objective

formanagement and supports our strategy. The portion of the LTIP award that vests for threshold performance will be 25% of maximum.

ForFY2024 LTIP awards, EPS targets have been set as absolute pence targets for FY2026 as set out below.

We want to measure the performance of our Executive Directors against a criterion that aligns the Executive Directors’ interest with the

long-term interests of our shareholders. We believe that an earnings per share measure is more appropriate than a simple profit measure

asthelatter could be improved, for example, by the issuance of shares to raise cash or to finance an acquisition, having a consequent diluting

effect on existing shareholders’ interests. Additionally, given the aim of encouraging long-term performance, we believe that the earnings

pershare figure should not reflect short-term non-trading impacts on profit, whether positive or negative, for example, profits or losses on the

sale offreehold properties, and such items should be adjusted for. Lastly, given that changes in tax rates are unrelated to Executive Directors’

performance, we believe that any earnings per share measure for the LTIP should be based on pre-tax earnings.

The awards will be subject to clawback provisions and a two year post-vesting holding period.

Pre-tax adjusted EPS targets for the FY2024 awards are proposed as follows:

Threshold

(25% vesting)

Maximum

(100% vesting)

Pre-tax adjusted EPS pence in FY2026

39.78p 55.90p

1 Vesting increases on a straight-line basis between Threshold and Maximum.

These targets were set taking into account internal and external expectations of performance and the Committee considers that these targets

are appropriately stretching taking into account the macroeconomic context.

Directors’ Remuneration Report Continued

90 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

ESOS

The Remuneration Committee intends to grant ESOS awards to Executive Directors up to the increased HMRC limit of £60,000. The Awards

willbe based on pre-tax adjusted EPS performance for FY2026 of 23.58p.

Pension and Benefits

No changes are proposed to the pension and benefits provision for Executive Directors for FY2024.

The Chief Executive receives an annual cash allowance in lieu of pension of 17.5% of base salary and the Retail Director receives an annual

pension contribution of 17.5% of base salary. The Remuneration Committee is aware of shareholder guidance that pensions for Executive

Directors should be aligned with the wider workforce. However, given the current rate represents an existing contractual commitment,

theRemuneration Committee does not consider it appropriate to make a reduction at this stage. The Remuneration Committee will keep

thisapproach under review.

As previously advised, the pension opportunity for new Executive Directors appointed to the Board will be in line with the maximum employer

contribution available for the majority of the workforce. Accordingly, the Finance Director, appointed in November 2021, receives an annual

cash allowance in lieu of pension of 5% of base salary.

Implementation of Remuneration Policy for FY2023

This part of the Directors’ Remuneration Report sets out the Directors’ remuneration paid in respect of FY2023. Sections in the report not

specifically stated as audited are not subject to audit.

Single Total Figure of Remuneration Table (audited)

Salary/Fees Taxable benefits

Annual bonus

LTIP/Options

Pension Total variable Total fixed Total

2023

£000

2022

£000

2023

£000

2022

£000

2023

£000

2022

£000

2023

£000

2022

£000

2023

£000

2022

£000

2023

£000

2022

£000

2023

£000

2022

£000

2023

£000

2022

£000

Simon Emeny 523 509 25 25 0 312 0 0 91 89 0 312 639 623 639 935

Neil Smith

361 119 23 7 0 69 0 0 18 6 0 69 402 132 402 201

Fred Turner 209 203 23 23 0 125 0 0 37 36 0 125 269 262 269 387

Michael Turner 241 250 27 27 – – – – – – – – 268 277 268 277

Sir James Fuller 55 51 – – – – – – – – – – 55 51 55 51

Richard Fuller 50 46 – – – – – – – – – – 50 46 50 46

Helen Jones 70 64 – – – – – – – – – – 70 64 70 64

Robin Rowland 60 56 – – – – – – – – – – 60 56 60 56

Juliette Stacey 80 76 – – – – – – – – – – 80 76 80 76

1 Taxable benefits include a car allowance, family private medical insurance and cash vouchers for use in Fuller’s pubs and hotels.

2 The annual bonus in respect to FY2022 was paid in cash.

3 LTIP/Options may include the value transferred to Directors from the LTIP, ESOS and SAYE Schemes. For LTIP and ESOS, the benefit is calculated as the share price at

the year end less the exercise price multiplied by the number of vested options. For SAYE, the benefit is calculated as the share price at the grant date less the exercise

price, multiplied by the number of shares under option being purchased.

4 From his appointment on 30 November 2021.

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Base salary

Executive Directors’ base salaries were increased by 3% in line with the increase received across the wider workforce, effective 1 June 2022.

Benefits

Executive Directors received taxable benefits which include a car allowance, private medical insurance and optional cash vouchers for use in

Fuller’s pubs and hotels. Executive Directors also received other non-taxable benefits including life assurance and permanent health insurance

and other Group-wide employee benefits, such as an employee discount linked to length of service and all-employee share plans.

Annual bonus (audited)

The annual bonus for the year was based 80% on Group adjusted profit before tax and 20% on individual strategic objectives.

The following sets out details of actual performance against the targets set:

Financial targets (80%)

Threshold Target Maximum

Measure

% of financial

target

Required

performance

% of financial

target

Required

Performance

% of financial

target

Required

performance

Actual

performance

Pay-out as % of

max

Group adjusted profit

before tax (pre IFRS 16)

10% £25.9m 50% £28.8m 100% £31.7m £13.6m nil

Individual strategic performance (20%)

The non-financial element of the bonus for FY2023 was dependent on personal performance against non-financial strategic objectives

approved by the Remuneration Committee. The table below summarises the achievements against each of those objectives.

Strategic performance measure Outcome

1. Employee engagement and satisfaction

Measured by reference to increasing the overall response

ratetotheannual Happiness Index survey and improving

theoverallengagement score

Exceeded – The overall response rate and score for the

2022HappinessIndex survey increased from prior year

2. Customer Satisfaction

Measured by an enhancement in NPS score

Exceeded – The overall NPS for the year increased from FY2022

3. Sustainability Agenda

Measured with reference to a reduction in energy usage in

FY2023anda reduction in Scope 1 and 2 emissions for FY2023.

Exceeded – Reduction in like for like electricity and gas usage of

13%and 14% respectively against the baseline of FY2020 and

areduction in Scope 1 and 2 emissions of 8% against FY2022

The Remuneration Committee discussed the formulaic outturns of the financial targets and individual strategic performance objectives in the

context of the Group’s overall performance and shareholder return performance. The Remuneration Committee noted the significant progress

that had been made against the strategic objectives, which would have resulted in an award of 100% against individual strategic performance,

but as the financial target was not met and, on the recommendation of the Executive Directors, it was decided no bonus should be paid.

Directors’ Remuneration Report Continued

92 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

LTIP awards vesting in respect of FY2023 (audited)

LTIP awards granted in October 2020 were based on pre-tax Group adjusted EPS performance for FY2023. The EPS targets were not met and

therefore these awards will lapse. The Remuneration Committee did not exercise any discretion in relation to the LTIP outcome. The following

sets out details of performance against targets set:

Target set

Performance measure

Minimum

(25% vesting)

Maximum

(100% vesting) Value of award Actual performance Value of award

LTIP Pre-tax Group

adjusted EPS

50.16p 61.09p Percentage vest of

original grant:

Minimum – 25%

Maximum – 100%

20.86p nil

ESOS awards vesting in respect of FY2023 (audited)

ESOS awards granted in January 2021 were based on a Group EBITDA performance target for FY2023 of £47 million. TheEBITDA target

wasnotmet and therefore awards will lapse. No awards are held by Executive Directors.

Total pension entitlements

Michael Turner and Richard Fuller are pensioners of the defined benefit Company pension plan, which is closed to future accrual, under

theDirectors’ section.

Simon Emeny became a deferred member of the defined benefit Company pension plan, under the main section, when the plan closed to future

accruals on 1 January 2015. Prior to closure, he received a salary supplement of 17.5% of the excess of his base salary over the earnings cap

foruse as part of his retirement planning. Following closure of the pension plan, Simon Emeny is paid an annual salary supplement of 17.5%

ofhis salary by the Company.

During the year, Neil Smith was paid an annual cash allowance of 5%, in line with the Policy. Fred Turner received an annual pension contribution

of 17.5%, in line with his existing contractual arrangements.

Executive Directors who receive a cash allowance are required to use the supplement as part of their overall retirement planning. They are also

normally expected to contribute 8% of their salary to their pension or another investment vehicle. The Remuneration Committee considers that

the Policy operated as intended during the year.

Scheme Interests Awarded During the Financial Year (audited)

In respect of the 53 week period ended 1 April 2023, the following share awards were granted:

Director

Type of

award

Number of ‘A’

Number of ‘B’

Face value at grant

£000

Date of grant

Performance

period end

2,3

% of award grant

vesting at minimum

threshold

Simon Emeny LTIP 87,754 219,386 657 05/07/2022 31/03/2025 25%

Total 87,754 219,386 657

Neil Smith LTIP 48,513 121,282 363 05/07/2022 31/03/2025 25%

ESOS 5,000 – 30 05/07/2022 31/03/2025 100%

Total 53,513 121,282 393

Fred Turner LTIP 35,081 87,704 263 05/07/2022 31/03/2025 25%

ESOS 834 – 5 05/07/2022 31/03/2025 100%

Total 35,915 87,704 268

1 Face values have been calculated using the actual grant price of £5.99 per ‘A’ ordinary share and an assumed share price of £0.599 per ‘B’ ordinary share for the LTIP,

being the average share price during the five dealing days ending immediately before the date of grant, and £6.00 per ‘A’ ordinary share for the ESOS, being the share

price on the day immediately before the date of grant.

2 The LTIP awards are subject to a pre-tax adjusted EPS performance condition, with the targets set on an absolute basis and measured over a period of three years.

25%of the awards vest for pre-tax adjusted EPS of 49.93p in FY2025, with 100% vesting for pre-tax adjusted EPS of 60.15p (straight-line vesting in-between).

3 The ESOS awards are subject to a pre-tax adjusted EPS performance condition, with the target set on an absolute basis and measured over a period of three years,

of49.93p in FY2025.

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Non-Executive Directors’ Fee

Non-Executive Directors receive a basic fee and additional fees for further duties and the Chairman receives a basic fee. The Remuneration

Committee reviewed the Chairman’s fee during the year and, in consultation with the Chairman, agreed that a reduction was appropriate.

TheChairman’s fee was reduced from £250,000 per annum to £210,000 per annum effective 1 January 2023. Non-Executive Director fees

werelast reviewed by the Board in November 2021 and remain unchanged for FY2024.

A summary of the current fee structure for the Non-Executive Directors, including the Chairman, is set out below:

Base fee

Senior

Independent

Director Committee Chair

Committee member

(Audit and

Remuneration)

Family

Shareholder

Liaison Total

Michael Turner £210,000 – – – – £210,000

Sir James Fuller £50,000 – – – £5,000 £55,000

Richard Fuller £50,000 – – – – £50,000

Helen Jones £50,000 – £10,000 £10,000 – £70,000

Robin Rowland £50,000 – – £10,000 – £60,000

Juliette Stacey £50,000 £10,000 £10,000 £10,000 – £80,000

Payments to Past Directors (audited)

There were no payments made to past Directors in the period.

Payments on Loss of Office in Prior Year (audited)

No payments were made in respect of loss of office in respect of the financial year ended 1 April 2023.

Executive Share Ownership

The Company has share ownership guidelines for Directors which state that Executives should hold shares worth at least 200% of their salary.

Accordingly, until their guideline is met, Executives are expected to retain:

• all shares they hold in the Share Incentive Plan (“SIP”)

• all shares they acquire as a result of exercising SAYE options

• all shares that they acquire as a result of exercising options under the ESOS net of the cost of those options

• at least 50% of any post-tax and National Insurance vested shares under the LTIP and the Bonus and Deferred Bonus Plan (“BDBP”).

Based on the share price on 1 April 2023 of £4.65, Simon Emeny held shares with a value of 211% of salary, Fred Turner held shares with a value

of 340% of salary and Neil Smith held shares with a value of 8% of salary. All of the Executive Directors’ shareholdings therefore already meet

the guideline with the exception of Neil Smith, who joined the Company on 30 November 2021.

Executive Directors will normally be expected to maintain a minimum shareholding of 200% of base salary (or actual shareholding if lower) for

the first 12 months following departure from the Board and 100% of base salary (or actual shareholding if lower) for the subsequent 12 months.

The Remuneration Committee retains discretion to waive this guideline if it is not considered appropriate in the specific circumstances.

Directors’ Remuneration Report Continued

94 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Directors’ Shareholdings (audited)

Directors’ share interests

Beneficial

interest at

1 April

2023

Non-beneficial

interest at

1 April

2023

Beneficial

interest at

26 March

2022

Non-beneficial

interest at

26 March

2022

Simon Emeny

‘A’ ordinary 40p shares 130,472 – 130,472 –

‘B’ ordinary 4p shares 1,055,684 – 1,055,684 –

‘C’ ordinary 40p shares 2,000 – 2,000 –

Neil Smith

‘A’ ordinary 40p shares 6,000 – 6,000 –

Fred Turner

‘A’ ordinary 40p shares 2,571 – 1,471 –

‘B’ ordinary 4p shares 502,400 – 496,050 –

‘C’ ordinary 40p shares 100,819 – 100,819 –

2nd preference £1 shares 4,342 – 4,324 –

Michael Turner

‘A’ ordinary 40p shares 271,378 – 271,378 –

‘B’ ordinary 4p shares 3,056,388 – 3,050,243 –

‘C’ ordinary 40p shares 624,260 – 624,260 –

2nd preference £1 shares 71 – 71 –

Sir James Fuller

‘A’ ordinary 40p shares 88,942 – 88,942 –

‘B’ ordinary 4p shares 10,486,379 – 10,486,379 –

‘C’ ordinary 40p shares 2,703,003 621,050 2,702,003 621,050

Richard Fuller

‘A’ ordinary 40p shares 15,267 893,937 13,267 872,937

‘B’ ordinary 4p shares 3,065,726 10,935,015 3,065,726 10,935,015

‘C’ ordinary 40p shares 20,000 – 20,000 –

2nd preference £1 shares 303 7,499 303 7,499

Helen Jones

‘A’ ordinary 40p shares 2,970 – 2,970 –

Robin Rowland

‘A’ ordinary 40p shares 7,165 – 7,165 –

Juliette Stacey

‘A’ ordinary 40p shares 2,454 – 2,454 –

1 There were no changes in the interests of any Director to 14 June 2023.

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Scheme Interests Outstanding at the Year-End (audited)

Executive Directors’ share options

Director Scheme

1,2, 3

As at 26

March 2022 Granted Exercised Lapsed

As at 1 April

2023

Exercise

price

Date of

grant

Performance

period end

Exercisable

from Expiry date

Simon Emeny ESOS 3,296 – – – 3,296 £9.10 01/07/13 31/03/16 01/07/16 30/06/23

SAYE 6,896 – – – 6,896 £4.35 30/09/20 n/a 01/12/25 01/06/26

Total 10,192 – – – 10,192

Neil Smith ESOS – 5,000 – – 5,000 £6.00 05/07/22 31/03/25 05/07/25 04/07/32

Total – 5,000 – – 5,000

Fred Turner ESOS 2,590 – – – 2,590 £9.65 30/06/14 31/03/17 30/06/17 29/06/24

ESOS 520 – – (520) – £9.61 15/01/20 31/03/22 15/01/23 14/01/30

ESOS – 834 – – 834 £6.00 05/07/22 31/03/25 05/07/25 04/07/32

SAYE 6,896 – – – 6,896 £4.35 30/09/20 n/a 01/12/25 01/06/26

Total 10,006 834 – (520) 10,320

1 The ESOS and SAYE are both tax-advantaged share option schemes.

2 SAYE options are normally exercisable for a period of six months from the maturity date at an option price that is discounted by 20% of the average market price for the

three days prior to grant.

3 The ESOS performance conditions are disclosed in note 27 to the financial statements.

4 It is intended that in July 2023, Fred Turner will surrender vested awards granted to him on 30 June 2014 under the ESOS and will be eligible to receive an award under

theESOS in 2023 up to the revised HRMC limit to £60,000.

Vested but unexercised options

Executive Directors’ Long-Term Incentive Plan

Director

Total held at

26March 2022 Awarded Vested Lapsed

Total held at

1 April 2023

Simon Emeny

‘A’ ordinary shares 337,849 87,754 – (45,785) 379,818

‘B’ ordinary shares 844,624 219,386 – (114,464) 949,546

Neil Smith

‘A’ ordinary shares 104,360 48,513 – – 152,873

‘B’ ordinary shares 260,902 121,282 – – 382,184

Fred Turner

‘A’ ordinary shares 130,559 35,081 – (13,735) 151,905

‘B’ ordinary shares 326,403 87,704 – (34,339) 379,768

1 Includes annual LTIP awards and the one-off Recovery LTIP awarded to Executive Directors during FY2022. The performance conditions are disclosed in note 27

tothefinancial statements.

Directors’ Remuneration Report Continued

96 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Directors’ Service Contracts and Letters of Appointment

Executive Directors have rolling service contracts terminable on no more than one year’s notice served by the Company or Director. In

theevent of early termination, Executive Directors are entitled to a payment equal to the salary due for the unexpired period of their notice,

payable in monthly instalments, subject to mitigation. Simon Emeny’s contract has been in place for a number of years and in the event of

earlytermination, he would be entitled to a payment equal to his base salary and the value of all benefits for the unexpired period of his

notice,without any reduction for mitigation.

The Chairman and Non-Executive Directors serve the Company on the basis of renewable letters of appointment which can be terminated

bywritten notice by either party. No compensation is awarded on termination.

The following sets out the date of the Executive Directors’ service contracts and Non-Executive Directors’ dates of appointment:

Executive Directors Date of contract Notice period

Simon Emeny 13 January 1999 12 months

Neil Smith 16 June 2021 12 months

Fred Turner 23 May 2019 12 months

Non-Executive Directors Date of appointment Term expires

Michael Turner

1 July 2013 June 2025

Juliette Stacey 21 March 2018 July 2024

Sir James Fuller 1 June 2010 May 2025

Richard Fuller

1 February 2020 January 2025

Helen Jones 12 March 2019 March 2025

Robin Rowland 24 March 2020 March 2024

1 Michael Turner was first appointed to the Board as an Executive Director in January 1985 and became Non-Executive Chairman on 1 July 2013.

2 Richard Fuller was first appointed to the Board as an Executive Director in December 2009 and was appointed as a Non-Executive Director on 1 February 2020.

Service contracts and letters of appointment are available for inspection at the AGM and at the Company’s registered office.

External Directorship Fees

The Board may give approval for Executives to hold one paid non-executive role and to retain any related fees paid.

Simon Emeny is the Senior Independent Director of WH Smith PLC, for which he receives and retains an annual fee of £78,000.

Performance Graph and Table

The graph below shows a comparison of the Total Shareholder Return (“TSR”) for the Company’s listed ‘A’ ordinary shares for the last

10financial years against the TSR for the companies in the FTSE All Share Index. The Company is a constituent of this Index and therefore

theRemuneration Committee considers that it is an appropriate choice for this report.

Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Mar 21 Mar 22

Mar 23

2,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Fuller, Smith & Turner P.L.C. FTSE All Share Source: Thomson Data stream

Fuller, Smith & Turner P.L.C. 7,068

FTSE All Share 16,868

4,000

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The table below shows the total remuneration figure for the Chief Executive over the last 10 financial years and the annual bonus and LTIP

pay-out for each year as a percentage of the maximum available:

2014

2015 2016 2017 2018 2019 2020

2021

2022 2023

Single figure total

remuneration (£000) 977 1,244 1,418 1,097 1,089 687 600 590 935 639

Annual bonus

77% 76% 85% 41% 48% 48% nil nil 61% nil

LTIP 64% 96% 100% 100% 56% nil nil nil nil nil

1 Simon Emeny was appointed as Chief Executive in July 2013. This single total figure comprises the remuneration received by him in the financial year, hence, includes

remuneration for the three months prior to this promotion.

2 One-third of the annual bonus was due to pay-out, reflecting the Company’s strong like for like sales performance vs the Peach Tracker. However, in light of the broader

business circumstances following the outbreak of coronavirus in 2020, the Remuneration Committee and the Executive Directors agreed that it was not appropriate to

pay this portion of the annual bonus.

3 Total remuneration includes the Chief Executive’s voluntary 25% reduction in salary from 1 April 2020 to 30 June 2020.

4 Annual bonus as a percentage of the maximum available.

Percentage Change in Remuneration of Directors and Employees

The table below shows the percentage change in the remuneration (based on salary, benefits and annual bonus) of the Board of Directors

compared with that of the average of all employees of the Company taken as a whole. The Chairman and Non-Executive Directors do not receive

any variable pay.

FY2022-FY2023 FY2021-FY2022 FY2020-FY2021

Change in

annual salary/

fees

Change in

annual taxable

benefits

Change in

annual bonus

Change in

annual salary/

fees

Change in

annual taxable

benefits

Change in

annual bonus

Change in

annual salary/

fees

Change in

annual taxable

benefits

Change in

annual bonus

Average of all employees

2,3

3.3% (12.2)% 100% 2.3% (17.0)% (100)% 1.0% (1.6)% (1.2)%

Simon Emeny 2.8% 0.2% 100% 8.4% 0.3% nil% (4.0)% (0.1)% nil%

Neil Smith

– – – – – – – – –

Adam Councell

– – – (44.6)% (49.5)% nil% – – –

Fred Turner

2.8% 0.6% 100% 8.4% 1.0% nil% – – –

Michael Turner

(3.7)% 0.8% n/a 6.7% 1.3% n/a (6.2)% 1.5% n/a

Sir James Fuller 7.3% n/a n/a 9.3% n/a n/a (6.2)% n/a n/a

Richard Fuller

8.1% n/a n/a 9.6% n/a n/a (73.9)% (93.8)% n/a

Helen Jones

9.4% n/a n/a 10.1% n/a n/a (4.5)% n/a n/a

Robin Rowland

6.7% n/a n/a 9.1% n/a n/a – n/a n/a

Juliette Stacey

4.9% n/a n/a 8.4% n/a n/a (0.7)% n/a n/a

1 Reflects the increase or decrease in the percentage of annual salary paid out as bonus. In the prior year no bonus was paid out and therefore the bonus as a percentage

of salary has increased by 100% as a bonus was paid in the current year.

2 The employee comparator group excludes employees not employed by the parent company.

3 The change in taxable benefits is principally due to the phasing out of company cars into a car allowance benefit since 2020.

4 Neil Smith was appointed on 30 November 2021 part way through the comparative year, therefore the annual comparison from FY2022 to F Y2023 is not relevant.

5 Adam Councell was appointed on 27 August 2019 and resigned on 30 September 2021.

6 Fred Turner was appointed on 1 June 2019.

7 Michael Turner’s fee was reduced from £250,000 to £210,000 per annum from 1 January 2023.

8 A number of Non-Executive Directors changed roles in FY2020 (Richard Fuller, Juliette Stacey and Helen Jones), which impacted the year on year comparison.

9 Robin Rowland was appointed on 24 March 2020.

10 Board members took a voluntary pay decrease between April 2020 and June 2020. Non-Executive Director fees were also increased from 1 January 2022.

Directors’ Remuneration Report Continued

98 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

CEO Pay Ratio

The following table sets out CEO pay ratio figures, in respect of the financial year ended 1 April 2023.

Year Method

25th percentile

pay ratio

Median

pay ratio

75th percentile

pay ratio

FY2023 Option B 30.8:1 26.0:1 18.9:1

FY2022 Option B 49.1:1 43.6:1 30.7:1

FY2021 Option B 35.7:1 33.2:1 23.8:1

FY2020 Option B 33.0:1 32.6:1 31.6:1

The decrease in the pay ratio between FY2023 and FY2022 is predominately driven by the CEO receiving a bonus in relation to FY2022 whereas

in the current year no bonuses were paid.

The relevant individuals have been identified using Option B, as defined under the relevant regulations, which the Remuneration Committee

considered to be the most appropriate methodology based on the availability of data at the time the Annual Report was published. The

respective single figure values for each individual for FY2023 have then been calculated. No estimates were required, and no elements ofpay

were omitted in calculating the relevant single figures. The figures do not include amounts paid to individuals in respect of their tronc share.

The single figure values for individuals immediately above and below the identified employee at each quartile within the Gender Pay Gap

analysis were also reviewed. The chosen individuals were reviewed to determine if they were representative of the 25th percentile, median

and 75th centile employees. Where the chosen individual had left the business or had changed roles during the financial year, an alternative

employee was used for the calculations. The alternative employee used in each instance was the closest employee to the relevant percentile,

who was considered representative of that percentile. For the 53 weeks ended 1 April 2023, alternative employees were selected for the 25th,

median and 75th percentile.

Year Supporting information

Chief

Executive

25th percentile pay

ratio Median pay ratio

75th percentile pay

ratio

FY2023 Salary £522,750 £20,777 £24,531 £33,096

Total pay £639,543 £20,777 £24,618 £33,802

Relative Importance of Spend on Pay

The graph below shows the total remuneration for the Group’s employees compared with other key financial indicators:

Capital

expenditure

and business

combinations

Remuneration Dividends

and share

buybacks

Taxes

payable to

HMRC

£m

2023

2022

100

120

1 Taxes payable to HMRC is based upon tax incurred in the year and includes corporation tax, VAT, PAYE, NI, duty, stamp duty, non-domestic rates, property licences,

environmental levies and machine game duty.

2 Capital expenditure (including business combinations) represents cash paid in the year.

Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C. 99

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0-03

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ADDITIONAL INFORMATION

166-186

GOVERNANCE

66-104

The Remuneration Committee

The Remuneration Committee consists entirely of Independent Non-Executive Directors and the members during the period were Helen Jones

(Chair), Juliette Stacey and Robin Rowland. Its terms of reference are available on the Company’s website. The Chairman of the Company,

Michael Turner, and the Chief Executive, Simon Emeny, are invited to attend the Committee meetings and to advise, where appropriate, on

theremuneration and performance of the Executive Directors and related matters, except in circumstances where their own remuneration

isbeing discussed. Members of the Remuneration Committee have no personal financial interest in the Company, other than as shareholders

and Directors. The Remuneration Committee is advised internally by the Company Secretary, Rachel Spencer, who also acts as secretary to

theCommittee.

Employee Engagement

The Remuneration Committee receives updates on workforce pay and benefits throughout the Group and considers workforce remuneration

aspart of the review of executive remuneration. The Remuneration Committee will take into account any feedback on executive remuneration

provided by the People & Talent Director and any relevant feedback from employee surveys. As part of her role as Non-Executive Director

responsible for employee engagement, the Remuneration Committee Chair engages with employees which also provides an opportunity for

feedback on remuneration matters. Share ownership amongst employees is encouraged and awards were made under the SAYE scheme

duringthe course of the year. This tax-advantaged scheme allows employees to participate as shareholders and aligns their interests with

those of other shareholders.

Independent Advisors

Deloitte LLP was appointed by the Remuneration Committee in June 2019 and, during the year under review, provided the Remuneration

Committee and the Company with advice in connection with remuneration matters as well as the Company’s LTIP and share option schemes.

Deloitte is a founding member of the Remuneration Consultants’ Group (“RCG”), which is responsible for the development and maintenance

ofthe voluntary Code of Conduct that clearly sets out the role of executive remuneration consultants and the professional standards by

whichthey advise their clients. Fees are charged on a time and expenses basis and totalled £7,750 (plus VAT) during FY2023 (FY2022: £26,620

(plus VAT)). During the year, Deloitte also provided other unrelated tax advice to the Company.

The Remuneration Committee is satisfied that advice received from Deloitte during the year was objective and independent and that all

individuals who provided remuneration advice to the Remuneration Committee have no connections with Fuller’s or its Directors that may

impair their independence. TheRemuneration Committee reviewed the potential for conflicts of interest and judged that there were appropriate

safeguards against such conflicts.

XPS Pension Group provides the Company with advice on matters relating to the defined benefit Company pension plan (now closed).

XPSPension Group is authorised and regulated by the Financial Conduct Authority and its actuaries are also separately required to abide

byActuarial Profession Standards which include the requirement for them to provide objective and independent advice.

Committee Evaluation

The Remuneration Committee reviews its performance with Board members and other participants, through the annual Board evaluation.

Seefurther information on page 79.

Statement of Voting at Annual General Meeting

The results of the shareholder votes at the AGM on 23 September 2021 in respect of the Directors’ Remuneration Policy and at the AGM on

21 July 2022 in respect of the Directors’ Remuneration Report were as follows:

Resolution text

Number of

votes cast for

Percentage of

votes cast for

Number of votes

cast against

Percentage of

votes cast against

Total

votes cast

Number of votes

withheld

Approval of Remuneration Report 2022 88,580,372 80.69% 21,192,410 19.31% 109,772,782 68,505

Approval of Remuneration Policy 2021 89,801,044 86.15% 14,436,237 13.85% 104,237,281 5,833,531

The Directors’ Remuneration Report, encompassing pages 86 to 100, was approved by the Board and signed on its behalf.

Helen Jones

Chair of the Remuneration Committee

14 June 2023

Directors’ Remuneration Report Continued

100 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Directors’ Report

The Directors present their report to shareholders together with the

audited financial statements for the 53 weeks ended 1 April 2023. The

Directors’ Report (pages 101 to 103) and the Strategic Report (pages

1to 65) together constitute the management report for the purpose

ofRule 4.1.8R of the Disclosure Guidance and Transparency Rules.

Other information relevant to the report, including information

relevant pursuant to the Companies Act 2006 and UK Listing Rule

9.8.4R, isincorporated.

As permitted by legislation, some of the matters required to be

included in the Directors’ Report have instead been included in the

Strategic Report as the Board considers them to be of strategic

importance. Specifically, these are:

Information Reported in Pages

Future business developments Strategy 16 and 17

Employee engagement Stakeholder

Engagement

Sustainability

Report

62 and 63

52 and 53

Engagement with suppliers,

customers and others

Stakeholder

Engagement

62 and 63

Emissions reporting Sustainability

Report

Annual General Meeting

The 2023 AGM will be held at 11am on Thursday 20 July 2023 at The

George IV, 185 Chiswick High Road, London, W4 2DR. The Notice of

Meeting which sets out the resolutions to be proposed has been

posted to shareholders and is available on the Company’s website

atwww.fullers.co.uk.

Articles of Association

The Company’s Articles of Association were adopted in 2014. In

accordance with the Companies Act 2006, the Articles of Association

may only be amended by a special resolution of shareholders in a

general meeting.

Directors

The names and biographical details of the Directors who served on

the Board and Board Committees during the financial year and up to

the date of this report are given on pages 68 and 69. All Directors

served for the full year.

Appointment and retirement of Directors

The Articles state that the Board may appoint Directors and that

atthe subsequent AGM, shareholders may elect any such Director.

Alternatively, the Company may directly appoint a Director. The Articles

also contain the power for the Company to remove any Director by

special resolution and appoint someone in his or her place by ordinary

resolution. There are various other circumstances under the Articles

which would mean that the office of a Director would be vacated,

including if he or she resigns, or becomes of unsound mind orbankrupt.

At every AGM, one-third of the Directors who are subject to retirement

by rotation or, if their number is not three or any multiple of three, then

the number nearest to but not exceeding one-third shall retire from

office, but if there is only one Director who is subject to retirement

byrotation, he or she shall retire. In addition, if any Director has at

thestart of the AGM been in office for more than three years since

hisorher last appointment or re-appointment, he or she shall retire

atthatAGM.

Powers of the Directors

Subject to the Company’s Memorandum and Articles of Association and

UK legislation, the business of the Company is managed by the Board,

which may exercise all the powers of the Company. The Articles of the

Company have a section entitled “Powers and Duties of the Board”

which sets out powers such as the rights to establish local boards, to

appoint agents, to delegate and to appoint persons with the designation

“Director” without implying that the person is a Director of the Company.

There are further sections of the Articles entitled “Allotment of Shares”

setting out the Board’s power to issue shares and purchase the

Company’s own shares, and “Borrowing Powers” setting out the

provisions concerning the Company’s power to borrow and give security.

The Directors have been authorised to allot and issue ordinary shares.

These powers are exercised under authority of resolutions of the

Company passed at its AGM.

Directors’ indemnities and insurance

The Articles of Association provide the Directors with indemnities in

relation to their duties as Directors, including qualifying third party

indemnity provisions (within the meaning of the Companies Act).

TheCompany purchases Directors and Officers liability insurance,

which gives appropriate cover for any legal action brought against its

Directors. This insurance also covers the Trustees of the Company’s

defined benefit pension scheme.

Directors’ interests

Details of all Directors’ interests as at the end of the financial year are

setout in the Directors’ Remuneration Report on pages 95 to 96.

Dividends

The Company paid an interim dividend of 4.68p per ‘A’ and ‘C’ ordinary

share of 40p each and 0.468p per ‘B’ ordinary share of 4p each on

3 January 2023 (FY2022: 3.90p per A’ and ‘C’ ordinary share of 40p

eachand 0.39p per ‘B’ ordinary share of 4p each). The Directors now

recommend a final dividend of 10.0p per ‘A’ and ‘C’ ordinary share of

40peach and 1.0p per ‘B’ ordinary share of 4p each. This makes a total

dividend for the financial year of 14.68p per ‘A’ and ‘C’ ordinary share of

40p each and 1.468p per ‘B’ ordinary share of 4p each (FY2022: 11.31p

per ‘A’ and ‘C’ ordinary share of 40p each and 1.13p per ‘B’ ordinary share

of 4p each).

The total proposed final dividend on ordinary shares will be £6.1 million,

which together with the 2023 interim dividend payment of £2.8 million

and the £120,000 of cumulative preference share dividends paid in

the year, will result in total dividend payments of £9.0 million.

Employees

The Company is committed to treating all of its employees and job

applicants equally. No employee or potential employee receives less

favourable treatment or consideration on the grounds of race, colour,

religion, nationality, ethnic origin, sex, sexual orientation, marital

status, or disability. We give full consideration to applications for

employment from disabled persons where the requirements of the

job can be adequately fulfilled by people with disabilities. We

endeavour to retain the employment of, and arrange suitable

retraining for, any employee who becomes disabled during their

employment as well as providing training, career development

andpromotion to disabled employees wherever appropriate.

During the year, the Company maintained arrangements to provide

employees with information on matters of concern to them, to

regularly consult employees for views on matters affecting them,

toencourage employee involvement in the Company’s performance

through share schemes, and to make all employees aware of financial

and economic factors affecting the performance of the Group.

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External Auditor

The auditors, Ernst & Young LLP, were appointed by the Directors

in2021 following a formal tender process. Ernst & Young LLP have

indicated their willingness to continue in office, and a resolution

thatthey be re-appointed will be proposed at the AGM.

Human Rights

The Board has overall responsibility for ensuring the Company upholds

and promotes respect for human rights. We respect all human rights

and regard those rights relating to non-discrimination, fair treatment

and respect for privacy to be most relevant in conducting our business.

The Company seeks to anticipate, prevent and mitigate any potential

negative human rights impacts as well as enhance positive impacts

through our policies and procedures and, in particular, through our

policies regarding employment, equality and diversity, treating our

stakeholders and customers fairly, and information security. Group

policies seek to ensure that employees comply with the relevant

legislation and regulations in place to promote good practice.

We are committed to ensuring that there are no forms of modern

slavery within our operations or supply chains. In line with the

Modern Slavery Act 2015, we publish an annual Modern Slavery

Statement on our website.

Information Required under the Listing Rules

For the purposes of LR9.8.4R, the information required to be disclosed

by the LR9.8.4R can be found in the Annual Report in the following

locations and is hereby incorporated by reference into this

Directors’Report:

• Information about long-term incentives is disclosed in the

Directors’ Remuneration Report on page 96.

• Information about any waiver of dividends or future dividends

byashareholder is disclosed on page 102.

Political Donations

The Group does not make political donations.

Post-Balance Sheet Events

There were no post-balance sheet events.

Purchase of Own Shares

At the AGM held on 21 July 2022, the Company was given authority

topurchase up to 3,982,025 ‘A’ ordinary shares to be held as treasury

shares to be used in connection with, among other purposes, the

LTIP and/or other share option schemes. Shareholders will be asked

to give a similar authority to purchase shares up to 10% of the ‘A’

ordinary capital at the 2023 AGM.

The Company’s maximum issued ordinary share capital during the

year was £25,381,446, comprising 41,082,339 ‘A’ ordinary shares,

89,052,625 ‘B’ ordinary shares and 13,466,013 ‘C’ ordinary shares.

During the year, the Company purchased a total of one million ‘A’

ordinary shares at a total cost of £4,819,569 (exclusive of stamp

duty). These share purchases represented 0.7% of the Company’s

maximum issued ordinary share capital and 2.4% of the Company’s

‘A’ ordinary share capital.

11,300 ‘A’ ordinary shares held in treasury were allocated to

participants of the Savings Related Share Option Scheme, and

Executive Share Option Scheme on exercise of options, generating

net cash proceeds of £60,816.70. As at 1 April 2023, a total of

2,251,818 ‘A’ ordinary shares and a total of 4,327,915 ‘B’ ordinary

shares are held as treasury shares.

Share Capital

Information on the Company’s financial instruments, capital structure

and related restrictions is given in notes 25 and 26 to the financial

statements. Details of significant shareholdings are set out below.

As at 1 April 2023, Computershare Trustees Limited held a total of

159,543 ‘A’ ordinary shares on behalf of employees of the Company

who are participants in its SIP. This represents 0.41% of the issued ‘A’

ordinary share capital (excluding shares held in treasury). Adividend

waiver is in place in respect of the shares that have not been

allocated to participants. In respect of the shares that have been

allocated, Computershare Trustees Limited exercises voting rights in

relation to those shares, having consulted with the participants

about their voting intentions.

As at 1 April 2023, the Fuller, Smith & Turner Employee Share

Ownership Trust held 316,441 ‘B’ ordinary shares and 5,935 ‘C’

ordinary shares in the Company. A dividend waiver is in place to

cover the entire holding. The Trustees do not exercise the voting

rights attached to shares held in the Trust.

Substantial Shareholdings

The Company had been notified under the Disclosure Guidance and Transparency Rules of the following holdings of voting rights of its listed

issued share capital:

‘A’ ordinary shares of 40p each

% of total voting rights

As at

1 Apr 2023

As at

13 June 2023

BlackRock, Inc 9.97 9.97

Lansdowne Partners (UK) LLP 8.40 8.40

Ameriprise Financial, Inc. (Columbia Threadneedle) 4.68 4.68

It should be noted that these holdings may have changed since the Company was notified of them as notification of any change is not required

until the next notifiable threshold is crossed.

Directors’ Report Continued

102 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

The Company is also aware of the following interests in 3% or more of the voting rights in the two classes of its unlisted share capital:

‘B’ ordinary shares of 4p each

As at

1 April 2023

As at

13 June 2023

Mr A W M Mitchell & Burges Salmon Trustees Ltd

14.85 14.85

Mr R H F Fuller & Mr P J Turner & Mr P A Sheils

7.66 7.66

Mr A G F Fuller 5.74 5.74

Mr R H F Fuller & Mr P A Sheils & Mr P J Turner

4.62 4.62

Mr R D Inverarity 3.62 3.62

Dunarden Limited 3.60 3.60

Mr G F Inverarity 3.48 3.48

Mr M J Turner 3.39 3.39

Miss S M Turner 3.33 3.33

Mr R H F Fuller 3.08 3.08

Mr T J M Turner 3.00 3.00

‘C’ ordinary shares of 40p each

As at

1 April 2023

As at

13 June 2023

Mr A W M Mitchell & Burges Salmon Trustees Ltd

33.31 33.31

Mr T J M Turner 6.66 6.66

Miss S M Turner 5.64 5.64

Mr P A R Carter & Sir J H F Fuller

4.61 4.61

Sir J H F Fuller & Mr A W M Mitchell

4.43 4.43

Mrs D M St. C Turner 3.32 3.32

Mr C D W Williams 3.25 3.25

1 Shares held for the benefit of a Trust.

Significant Agreements

The Group has entered into a number of agreements with the major brewers operating in the UK under which it buys beer, and these

agreements may be terminated by the other party should the Group undergo a change of control.

In the event of a change of control, the Company is obliged to notify its main bank lenders of such. The lenders shall not be obliged to fund

anynew borrowing requests and the facilities will lapse after 30 days from the change of control if terms on which they can continue have

notbeen agreed. All borrowings including accrued interest will become repayable within 10 days of such a lapse.

The service agreements of the Executive Directors include provisions regarding a change of control. Further details are included in the

Directors’ Remuneration Policy published in the 2021 Annual Report.

By order of the Board

Rachel Spencer

Company Secretary

14 June 2023

Fuller, Smith & Turner P.L.C.

Pier House

86-93 Strand-on-the-Green

London W4 3NN

Registered in England under number: 241882

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Directors’ Responsibilities Statement

Statement of Directors’ Responsibilities inRespect

ofthe Financial Statements

The Directors are responsible for preparing the Strategic Report,

theAnnual Report, the Remuneration Report, and the Group and

Company financial statements in accordance with applicable

UnitedKingdom law and regulations.

Company law requires the Directors to prepare financial statements

for each financial year. Under that law, the Directors have elected

toprepare the financial statements in accordance with international

accounting standards in conformity with the requirements of the

Companies Act 2006.

Under company law, the Directors must not approve the financial

statements unless they are satisfied that they give a true and fair

view of the state of affairs and profit or loss of the Group and

Company for the financial period.

Under the Financial Conduct Authority’s Disclosure Guidance

andTransparency Rules, Group financial statements are required

tobe prepared in accordance with International Financial Reporting

Standards (“IFRSs”). In preparing the Group and Company financial

statements, the Directors are required to:

• select suitable accounting policies in accordance with IAS 8

Accounting policies, changes in accounting estimates and errors

and then apply them consistently;

• present information, including accounting policies, in a

mannerthat provides relevant, reliable, comparable and

understandable information;

• provide additional disclosures when compliance with the specific

requirements in IFRSs is insufficient to enable users to understand

the impact of particular transactions, other events and conditions on

the Group and Company financial position and financial performance;

• make an assessment of the Company’s ability to continue as a

going concern;

• state that the Group and Company have complied with international

accounting standards in conformity with the requirements of the

Companies Act 2006 and IFRSs subject to any material departures

disclosed and explained in the financial statements; and

• make judgements and estimates that are reasonable and prudent.

The Directors are responsible for keeping adequate accounting

records that are sufficient to show and explain the Group’s

transactions and disclose with reasonable accuracy at any time

thefinancial position of the Group and Company, and enable them

toensure that the financial statements and the Remuneration Report

comply with the Companies Act 2006 and applicable regulations,

including the requirements of the Listing Rules and the Disclosure

and Transparency Rules (“DTR”) and in the case of the Group

financial statements, with Article 4 of the IAS Regulation. They are

also responsible for safeguarding the assets of the Group and, hence,

for taking reasonable steps for the prevention and detection of fraud

and other irregularities.

The Directors are responsible for preparing the Annual Report in

accordance with applicable law and regulations. The Directors are

responsible for the maintenance and integrity of the corporate and

financial information included on the Company’s website. Legislation

in the United Kingdom governing the preparation and dissemination of

financial statements may differ from legislation in other jurisdictions.

Statement as to Preparation of Financial Statements

The Directors confirm, to the best of their knowledge:

• that these financial statements, prepared in accordance with

international accounting standards in conformity with the

requirements of the Companies Act 2006 and IFRSs, give a true

and fair view of the assets, liabilities, financial position and profit

of the Group and Company taken as a whole;

• that the Annual Report and the Strategic Report include a fair

review of the development and performance of the business and

the position of the Group and Company taken as a whole, together

with a description of the principal risks and uncertainties that they

face; and

• that they consider the Annual Report and the financial statements,

taken as a whole, provides the information necessary to assess

the Company’s performance, business model and strategy, and is

fair, balanced and understandable.

The Directors of Fuller, Smith & Turner P.L.C. are listed on pages 68

and 69.

Directors’ Statement as to Disclosure of Information

toAuditors

The Directors who were members of the Board at the time of

approving the Directors’ Report are listed on pages 68 and 69.

Havingmade enquiries of fellow Directors and of the Company’s

auditors, each of these Directors confirms that:

• to the best of each Director’s knowledge and belief, there is no

information relevant to the preparation of this report of which the

Company’s auditors are unaware; and

• each Director has taken all the steps a Director might reasonably

be expected to have taken to be aware of any relevant audit

information and to establish that the Company’s auditors are

aware of that information.

On behalf of the Board

Michael Turner

Chairman

14 June 2023

104 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Independent Auditor’s Report

to the members of Fuller, Smith & Turner P.L.C

Opinion

In our opinion:

• Fuller, Smith & Turner P.L.C.’s Group financial statements and Company financial statements (the “financial statements”) give a true and fair view of the state

of the Group’s and of the Company’s affairs as at 1 April 2023 and of the Group’s profit for the 53 week period (the ‘period’) then ended;

• the Group financial statements have been properly prepared in accordance with UK adopted international accounting standards;

• the Company financial statements have been properly prepared in accordance with UK adopted international accounting standards as applied in accordance

with section 408 of the Companies Act 2006; and

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

We have audited the financial statements of Fuller, Smith & Turner P.L.C (the ‘Company’) and its subsidiaries (the ‘Group’) for the 53 week period ended 1 April 2023

(the ‘period’) which comprise:

Group Company

Group balance sheet as at 1 April 2023 Company balance sheet as at 1 April 2023

Group income statement for the 53 week period then ended Company statement of changes in equity for the 53 week period then ended

Group statement of comprehensive income for the 53 week period then ended Company cash flow statement for the 53 week period then ended

Group statement of changes in equity for the 53 week period then ended Related notes 1 to 29 to the financial statements including a summary

ofsignificant accounting policies

Group cash flow statement for the 53 week period then ended

Related notes 1 to 29 to the financial statements, including a summary

ofsignificant accounting policies

The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards and as

regards the parent company financial statements, as applied in accordance with section 408 of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards

are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have

obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group and Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including

the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with theserequirements.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Company and we remain independent of the Group and

the Company in conducting the audit.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial

statements is appropriate. Our evaluation of the directors’ assessment of the Group and Company’s ability to continue to adopt the going concern basis of

accounting included:

• We confirmed our understanding of the Group’s going concern assessment process and Management’s related Board memoranda;

• The audit engagement partner increased her time directing and supervising the audit procedures on going concern and utilised corporate finance specialists,

with relevant hospitality sector expertise, to assist in assessing the assumptions employed;

• We validated the covenants and terms of the debt facilities in the model to executed debt agreements and re-performed the calculation of the Net Debt and

Interest cover covenants against the terms of these agreements;

• We assessed the appropriateness of the duration of the going concern review period to 29 June 2024, which is a period of at least 12 months from the date

of approval of the financial statements, and considered whether there are any known events or conditions that will occur beyond the period;

• We obtained the cash flow forecast models (base case, downside, stress and reverse stress test) to 29 June 2024, used by the Board in its assessment,

reviewing their arithmetical accuracy, whether they have been approved by the Board and considering the Group’s historical forecasting accuracy for periods

when the Group’s pubs were able to trade without restrictions due to Covid-19;

• With the assistance of our hospitality sector specialists, we challenged the cash flow forecasts with reference to historical trends and considered any

evidence or market forecasts that contradict the assumptions in management’s forecasts;

• We assessed the consistency of the base case cash flows with the cash flow forecasts used within our impairment and deferred tax recoverability assessment;

• We challenged the integrity of the models used by re-performing calculations and testing of formulas applied throughout;

• We confirmed the calculation of the reverse stress test scenario;

• We enquired of any climate change commitments in the going concern period and challenged whether any associated cash outflows should be included

within the forecasts;

• We read the Board minutes to identify any matters that may impact the going concern assessment; and

• We assessed the appropriateness of the going concern disclosures in describing the risks associated with the Group’s ability to continue as a going concern

for the review period to 29 June 2024.

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Independent Auditor’s Report

to the members of Fuller, Smith & Turner P.L.C Continued

The key observations we communicated to the Audit and Risk Committee were that following the amend and extend refinancing arrangements agreed

inMay2022, the Group has committed borrowing facilities and available liquidity through the going concern period (under both the base case and downside

case).Inmanagement’s base case and sensitised scenarios (which reflect a slowdown in customer spending influenced by the current cost of living crisis

andcost pressures on margin from the well documented cost increases), the Group remains in compliance with its covenants, through the going concern

period.In addition, based on the reverse stress testing, the events that would lead to the covenants being compromised were considered of remote

likelihoodby management.

Going concern has also been determined to be a key audit matter.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively,

maycast significant doubt on the Group and Company’s ability to continue as a going concern for the period to 29 June 2024.

In relation to the Group and Parent Company’s reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or draw attention

to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. However, because

not all future events or conditions can be predicted, this statement is not a guarantee as to the Group or Company’s ability to continue as a going concern.

Overview of our audit approach

Audit scope • We performed an audit of the complete financial information of the Group, which accounted for 100% of the profit before

taxation, 100% of revenue and 100% of total assets. Our approach to scoping and resulting coverage is consistent with 2022.

Key audit matters • Going concern

• Impairment of property, plant and equipment and right-of-use assets

• Management override in the recognition of revenue

Materiality • Overall Group materiality of £1.68 million (2022: £1.27 million) which represents 0.5% of Group revenue.

An overview of the scope of the Company and Group audits

Tailoring the scope

Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope for each company within

theGroup. Taken together, this enables us to form an opinion on the consolidated financial statements. The Group’s operations are based solely in the United

Kingdom with a single head office and finance function and therefore all audit procedures are completed by one audit team at this location.

We take into account size, risk profile, the organisation of the Group and effectiveness of Group-wide controls, changes in the business environment, the

potential impact of climate change and other factors such as recent external and internal audit results when assessing the level of work to be performed.

In assessing the risk of material misstatement to the Group financial statements, and to ensure we had adequate quantitative coverage of significant accounts in the

financial statements we performed full scope audit procedures over 100% of the Group’s results for the 53 week period ended 1 April 2023 and 100% ofthe Group’s

total assets at that date. We obtained an understanding of the entity-level controls of the Group which assisted us in identifying and assessing risks of material

misstatement due to fraud or error, as well as assisting us in determining the most appropriate audit strategy. This approach is consistent with the prior period.

Climate change

Stakeholders are increasingly interested in how climate change will impact the Group. The Group has determined that the most significant future impacts fromclimate

change on its operations will be from higher sourcing costs/supply issues for ingredients affected by increased extreme weather events impacting harvests and the

risk of increased extreme weather events (e.g. flooding) in the UK causing reduced footfall/pub closures and impacting staff travel and wellbeing. These are explained

in the Task Force for Climate related Financial Disclosures on pages 54 to 61 and in the principal risksand uncertainties. They have also explained their climate

commitments on page 42. All of these disclosures form part of the “Other information,” rather than the audited financial statements. Our procedures on these

unaudited disclosures therefore consisted solely of considering whether they are materially inconsistent with the financial statements or our knowledge obtained

in the course of the audit or otherwise appear to be materially misstated, inline with our responsibilities on “Other information”.

In planning and performing our audit we assessed the potential impacts of climate change on the Group’s business and any consequential material impact on

itsfinancial statements.

The Group has explained in the basis of preparation (note 1 of the financial statements) how it has reflected the impact of climate change in their financial statements.

Our audit effort in considering the impact of climate change on the financial statements was focused on evaluating management’s assessment of the impact

ofclimate risk, physical and transition, its climate commitments, the effects of material climate risks disclosed on pages 56 to 59 and the significant

judgements and estimates disclosed in note 1. As part of this evaluation, we performed our own risk assessment, supported by our climate change internal

specialists, to determine the risks of material misstatement in the financial statements from climate change which needed to be considered in our audit.

We also challenged the Directors’ considerations of climate change risks in their assessment of going concern and viability and associated disclosures.

Whereconsiderations of climate change were relevant to our assessment of going concern, these are described above.

Based on our work we have not identified the impact of climate change on the financial statements to be a key audit matter or to impact a key audit matter.

106 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period

and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which

had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters

were addressed in the context of our audit of the financial statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on

these matters.

Risk Our response to the risk

Key observations communicated

to the Audit and Risk Committee

Impairment of property, plant and

equipment (PPE) and right-of-use

assets (ROUA)

Refer to the Audit and Risk Committee

Report (page 83); Accounting policies

(page 123); and Note 13 of the

Consolidated Financial Statements

(page 141)

As at 1 April 2023, the carrying

valueofPPE is £583.3 million

(2022: £592.7 million) and

right-of-use asset is£66.4 million

(2022: £73.8 million).

The challenging trading environment

driven by high levels of cost inflation

and changes in consumer spending

habits arising from the ‘cost of living’

crisis, has been identified as an

indicator of impairment.

Impairment for tangible assets

(PPEandROUA) is tested on the basis

of each individual cash generating

unit(CGU) – an individual pub site.

There is a risk that pubs may not

achieve the anticipated business

performance to support their carrying

value. This could lead to an impairment

charge that has not been recognised

bymanagement.

Significant judgement is required in

forecasting future cash flows of each

pub, the long-term growth rate and

therate at which cash flows are

discounted. For a portion of the pub

estate where the value-in-use model

may indicate an impairment charge,

anoverlay based on the market value

approach is performed which involves

significant judgement in determining

the fair value of these pubs.

The impairment charge is classified

asa separately disclosed item in the

Income Statement.

We gained an understanding through a walkthrough of the process and controls

management has in place over the impairment process.

We validated that the methodology of the impairment exercise is consistent

withthe requirements of IAS 36 Impairment of Assets, including appropriate

identification of cash generating units and the allocation of central service costs

inthe value in use calculations.

We tested the arithmetical accuracy and integrity of the impairment model and

confirmed that the forecasts were consistent with the Board approved forecasts

and those used in the going concern assessment.

We agreed the carrying value of each CGU back to the fixed asset register.

Below we summarise the procedures performed in relation to the key judgements

for the tangible (PPE and ROUA) assets impairment review:

• In respect of the cost inflation and consumer spending habit assumptions

onboth short-term trading and the longer-term growth rate, we compared

management’s assumptions against external economic forecasts and actual

performance from the last year.

• We also performed sensitivity analysis based on reasonable possible changes

to key assumptions determined by management being revenue, discount rate

and long-term growth rate. We assessed that the reasonably possible change

inassumptions applied by management were appropriate by reference to the

ranges independently established by our work.

• We used our internal valuations specialists to support our assessment of the

discount rate and long-term growth rate applied to cash flows by independently

determining an acceptable range of values for each assumption.

• Where management’s pub impairment assessment was based on the

fairvalueapproach, we obtained an external property valuation from

management’s specialists on a sample of pubs and reviewed the methodology

applied and audited the key assumptions that form part of the valuation in

lightof recent transactions in the market with the assistance of our internal

valuation specialists.

We assessed the disclosures in notes to the financial statements against the

requirements of IAS 36 Impairment of Assets, in particular the requirement to

disclose further sensitivities for CGUs where a reasonably possible change in a key

assumption would cause an impairment. We also assessed the related separately

disclosed item accounting treatment by reference to the Company’s accounting

policy, industry practice and the FRC guidance.

Based on our audit procedures

we have concluded the

impairment charge of

£14.3million is appropriately

determined. We highlighted

that a reasonably possible

change in certain key

assumptions including sales

forecasts and risk adjustment

factors could lead to material

additional impairment charges.

We concluded appropriate

disclosures had been included

by management for the above

assumptions and that the

impairment is appropriately

presented as separately

disclosed items given

marketpractice.

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Risk Our response to the risk

Key observations communicated

to the Audit and Risk Committee

Management override in the

recognition of revenue

Refer to the Accounting policies

(page126) and Note 3 of the

financialstatements (page 131)

The Group recorded revenue of

£336.6 million in the period

(2022: £253.8 million), including

£306.8 million in the Managed houses

segment (2021: £228.8 million) and

£29.8 million in the Tenanted Inns

segment (2022: £25.0 million).

The vast majority of the Group’s

revenuetransactions are non-complex,

with no judgement applied over the

amount recorded.

We consider the significant risk

relatingto fraud in revenue recognition

to be around management override

ofcontrols and topside journals

torevenue in the managed and

tenanted estate.

For managed houses, revenue

istypically comprised of a large number

of low value transactions. Although

there is little management judgement

involved, there is a risk that manual

topside adjustments could be posted

which could result in revenue being

overstated or not recorded. For

Tenanted Inns there is also a risk that

manual topside adjustments could be

posted to revenue.

We performed a walkthrough of each of the Group’s significant revenue processes,

including the recording of manual journal adjustments, and assessed the design

effectiveness of the key controls that are in place.

We applied correlation data analysis over the Group’s entire revenue journal

population to identify how much of the Group’s revenue is converted to cash

postings and to isolate non-standard revenue transactions for further analysis,

focusing our testing on higher risk transactions identified. We determined the

higher risk journal entries to be the adjustments made at or near the end of the

reporting period, post-closing adjustments and other adjustments made to record

transactions outside the normal course of business and performed substantive

procedures to obtain sufficient appropriate audit evidence that those entries were

properly supported and approved.

We searched for any topside journals to revenue, but none were identified.

We performed cut-off testing procedures including review of post period end cash

receipts and journals, and an analytical review of significant variances to the prior

year, to assess for completeness.

We concluded that revenue

was reasonably stated.

We did not identify any

instances of management

override in relation to revenue.

Our application of materiality

We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit and in forming our

audit opinion.

Materiality

The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the economic decisions of the

users of the financial statements. Materiality provides a basis for determining the nature and extent of our audit procedures.

We determined materiality for the Group and Company to be £1.68 million (2022: £1.27 million), which is 0.5% (2022: 0.5%) of Group revenue. We believe that

Group revenue continues to an appropriate materiality basis due to its prominence in financial reporting to the Group’s equity and debt stakeholders in the

context of the Group which has not returned to a normalised level of profit.

Independent Auditor’s Report

to the members of Fuller, Smith & Turner P.L.C Continued

108 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Performance materiality

The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the probability that the

aggregate of uncorrected and undetected misstatements exceeds materiality.

On the basis of our risk assessments, together with our assessment of the Group’s overall control environment, our judgement was that performance materiality

was 75% (2022: 75%) of our planning materiality, namely £1.26 million (2022: £0.95 million). We have set performance materiality at this percentage as we did

not anticipate a significant level of audit differences following our FY2022 audit.

Reporting threshold

An amount below which identified misstatements are considered as being clearly trivial.

We agreed with the Audit and Risk Committee that we would report to them all uncorrected audit differences in excess of £84,000 (2022: £64,000), which is

set at 5% of planning materiality, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.

We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of other relevant qualitative

considerations in forming our opinion.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. The directors

are responsible for the other information contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not

express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial

statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies

or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves.

If,based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent

withthe financial statements; and

• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Group and the Company and its environment obtained in the course of the audit, we have not identified

material misstatements in the strategic report or the directors’ report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from branches not visited by us; or

• the Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the accounting records and

returns; or

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

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

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Corporate Governance Statement

We have reviewed the directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating

tothe Group and Company’s compliance with the provisions of the UK Corporate Governance Code specified for our review by the Listing Rules.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is

materially consistent with the financial statements or our knowledge obtained during the audit:

• Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set out

on page 120;

• Directors’ explanation as to its assessment of the company’s prospects, the period this assessment covers and why the period is appropriate set out on page 33;

• Director’s statement on whether it has a reasonable expectation that the Group will be able to continue in operation and meets its liabilities set out on page 120;

• Directors’ statement on fair, balanced and understandable set out on page 104;

• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 104;

• The section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on page 83; and

• The section describing the work of the Audit and Risk Committee set out on page 82.

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement set out on page 104, the directors are responsible for the preparation of the financial

statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the

preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group and Company’s ability to continue as a going concern, disclosing,

asapplicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the

Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due

tofraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an

audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of

these financial statements.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined

above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one

resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent

towhich our procedures are capable of detecting irregularities, including fraud is detailed below.

However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the company and management.

• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and Company and determined that the most

significant are Companies Act 2006, Health & Safety and food hygiene laws, Minimum Wage regulations, Money Laundering regulations and the UK

Corporate Governance Code 2018.

• We understood how the Company is complying with those frameworks by making inquiries of management, those charged with governance, those

responsible for legal and compliance procedures and the Company Secretary. We corroborated our inquires through inspection of board minutes and

correspondence with regulatory authorities and through attendance at Audit and Risk Committee meetings.

• We assessed the susceptibility of the Group and Company’s financial statements to material misstatement, including how fraud might occur by making

inquiries of management, those charged with governance and various other individuals within the financial reporting function. We corroborated these inquiries

by inspecting board minutes, internal audit reports and findings, reports to the Group’s internal whistleblowing hotline and by understanding both the Group’s

bonus scheme structure and the expectations of investors and analysts, to understand areas in which individuals may be incentivised to commit fraud.

• Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved making

inquiries as described above, inspecting minutes of all significant board and committee meetings, reading correspondence with regulatory authorities,

testing manual journal entries with higher risk characteristics and testing unusual or non-standard transactions.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at

https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Independent Auditor’s Report

to the members of Fuller, Smith & Turner P.L.C Continued

110 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Other matters we are required to address

• Following the recommendation from the Audit and Risk Committee, we were appointed by the Company on 27 January 2021 to audit the financial statements

for the year ended 27 March 2021 and subsequent financial periods.

The period of total uninterrupted engagement including previous renewals and reappointments is three years, covering the years ended 27 March 2021 to

01 April 2023.

• The audit opinion is consistent with the additional report to the Audit and Risk Committee.

Use of our report

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been

undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose.

To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body,

forour audit work, for this report, or for the opinions we have formed.

Rachel Savage (Senior statutory auditor)

for and on behalf of Ernst & Young LLP, Statutory Auditor

London

14 June 2023

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Group Income Statement

for the 53 weeks ended 1 April 2023

53 weeks ended 1 April 2023 52 weeks ended 26 March 2022

Note

Before

separately

disclosed

items

£m

Separately

disclosed

items

£m

Total

£m

Before

separately

disclosed

items

£m

Separately

disclosed

items

£m

Total

£m

Revenue 3 3 3 6. 6 – 3 3 6. 6 2 5 3.8 – 2 5 3.8

Operating costs 4,5 (3 11. 5) (14 . 2) (3 2 5 .7) (23 5 .3) (2 .0) (2 3 7. 3)

Operating profit 2 5 .1 (14 . 2) 10 . 9 18 . 5 (2 .0) 16 . 5

Finance costs 5,6 (1 2 . 4) – (12 . 4) (11. 3) – (11 . 3)

Profit on disposal of properties 5 – 11. 8 11. 8 – 6.3 6 .3

Profit before tax 12 .7 (2 . 4) 10 . 3 7. 2 4.3 11. 5

Tax 7 (2 . 9) 0 . 5 (2 . 4) (1. 2) (3.2) (4 .4)

Profit for the year 9.8 (1. 9) 7. 9 6.0 1.1 7. 1

Earnings per share per 40p ‘A’ and ‘C’ ordinary share

Pence Pence Pence Pence

Basic 8 16 .10 12 . 9 8 9 .79 11. 5 9

Diluted 8 16. 0 7 12. 9 6 9 .7 3 11. 5 1

Earnings per share per 4p ‘B’ ordinary share

Basic 8 1. 6 1 1. 3 0 0.98 1.1 6

Diluted 8 1. 6 1 1. 3 0 0.97 1.1 5

112 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Group Statement of Comprehensive Income

for the 53 weeks ended 1 April 2023

Note

53 weeks

ended

1 April

2023

£m

52 weeks

ended

26 March

2022

£m

Profit for the year 7. 9 7. 1

Items that may be reclassified to profit or loss in subsequent years (net of tax)

Net gains on valuation of financial assets and liabilities 25 0 .1 0.5

Tax related to items that may be reclassified to profit or loss 7 – (0 .1)

Items that will not be reclassified to profit or loss in subsequent years (net of tax)

Net actuarial (losses)/gains on pension schemes 22 (2 . 5) 15 . 5

Tax related to items that will not be reclassified to profit or loss 7 0. 6 (3.8)

Other comprehensive (losses)/gains for the year, net of tax (1. 8) 1 2 .1

Total comprehensive income for the year, net of tax 6 .1 19 . 2

Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C. 113

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Group Balance Sheet

1 April 2023

Note

Group

2023

£m

Group

2022

£m

Non-current assets

Intangible assets 10 29.0 2 9.5

Property, plant and equipment 11 58 3. 3 5 9 2.7

Investment properties 12 1. 5 1.6

Retirement benefit obligations 22 1 6 .1 16. 2

Right-of-use assets 16 6 6.4 73. 8

Other financial assets 14 0 .1

–

Total non-current assets 69 6.4 713 .8

Current assets

Inventories 17 4. 2 3.6

Trade and other receivables 18 10 . 2 10 . 7

Current tax receivable 0.7 0.6

Cash and short-term deposits 21 14 .1 15 . 6

Total current assets 2 9 . 2 30.5

Assets classified as held for sale 19 7. 0 5.4

Total assets 7 3 2 . 6 74 9 . 7

Current liabilities

Trade and other payables 20 (5 4 .6) (5 7. 1)

Provisions 24 (0. 5) (0 .5)

Borrowings 21 (6 . 0) (1 20.0)

Lease liabilities 16 (4 . 8) (6.8)

Other financial liabilities 14

–

(0 .1)

Total current liabilities (6 5 .9) (18 4 .5)

Non-current liabilities

Borrowings 21 (14 0. 9) (27 .5)

Lease liabilities 16 (6 7. 0) (7 3.9)

Retirement benefit obligations 22 (1. 5) (1. 9)

Deferred tax liabilities 7 (14.7) (12 .7)

Total non-current liabilities (2 2 4 .1) (1 1 6.0)

Net assets 4 4 2. 6 4 4 9.2

Capital and reserves

Share capital 26 2 5 .4 25.4

Share premium account 26 5 3 . 2 5 3.2

Capital redemption reserve 26 3 .7 3 .7

Own shares 26 (2 1. 3) (16 .6)

Hedging reserve 26 – (0 .1)

Retained earnings 3 8 1.6 3 8 3.6

Total equity 4 4 2. 6 4 4 9.2

Approved by the Board and signed on 14 June 2023.

M J Turner, FCA

Chairman

Registered Number: 241882

114 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Company Balance Sheet

1 April 2023

Note

Company

2023

£m

Company

2022

£m

Non-current assets

Intangible assets 10 5.7 6.2

Property, plant and equipment 11 583.3 592.7

Investment properties 12 1.5 1.6

Retirement benefit obligations 22 16.1 16.2

Right-of-use assets 16 66.0 73.3

Other financial assets 14 0.1

–

Investments in subsidiaries 15 108.7 109.1

Total non-current assets 781.4 799.1

Current assets

Inventories 17 4.2 3.6

Trade and other receivables 18 10.2 10.7

Current tax receivable 0.7 0.6

Cash and short-term deposits 21 14.1 15.6

Total current assets 29.2 30.5

Assets classified as held for sale 19 7.0 5.4

Total assets 817.6 835.0

Current liabilities

Trade and other payables 20 (197.7) (193.8)

Provisions 24 (0.5) (0.5)

Borrowings 21 (6.0) (120.0)

Lease liabilities 16 (4.7) (6.5)

Other financial liabilities 14 – (0.1)

Total current liabilities (208.9) (320.9)

Non-current liabilities

Borrowings 21 (140.9) (27.5)

Lease liabilities 16 (66.6) (72.8)

Retirement benefit obligations 22 (1.5) (1.9)

Deferred tax liabilities 7 (14.7) (12.8)

Total non-current liabilities (223.7) (115.0)

Net assets 385.0 399.1

Capital and reserves

Share capital 26 25.4 25.4

Share premium account 26 53.2 53.2

Capital redemption reserve 26 3.7 3.7

Own shares 26 (21.3) (16.6)

Hedging reserve 26 – (0.1)

Merger reserve (1.6) (1.6)

Retained earnings 325.6 335.1

Total equity 385.0 399.1

Profit attributable to ordinary shareholders and included in the financial statements of the Parent Company was £0.4 million (2022: £3.3 million).

Approved by the Board and signed on 14 June 2023.

M J Turner, FCA

Chairman

Registered Number: 241882

Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C. 115

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Group Statement of Changes in Equity

for the 53 weeks ended 1 April 2023

Group

capital

(note 26)

£m

premium

account

(note 26)

£m

Capital

redemption

reserve

(note 26)

£m

Own shares

(note 26)

£m

Hedging

reserve

£m

Retained

earnings

£m

Total

£m

At 27 March 2021 22.8 4.2 3 .7 (1 7. 0) (0.5) 3 66. 3 379.5

Profit for the year – – – – – 7. 1 7.1

Other comprehensive income for the year – – – – 0.4 11. 7 1 2 .1

Total comprehensive income for the year – – – – 0 .4 18 . 8 19 . 2

Issue of share capital (note 27) 2.6 4 9.0 – 0.2 – – 5 1. 8

Shares released from ESOT and treasury – – – 0. 2 – – 0 .2

Dividends (note 9) – – – – – (2.4) (2.4)

Share-based payment charges – – – – – 0.8 0.8

Tax credited directly to equity – – – – – 0 .1 0 .1

At 26 March 2022 2 5 . 4 5 3 . 2 3 .7 (16 . 6) (0 .1) 38 3. 6 4 4 9. 2

Profit for the year – – – – – 7. 9 7. 9

Other comprehensive income for the year – – – – 0 .1 (1. 9) (1. 8)

Total comprehensive income for the year – – – – 0 .1 6.0 6 .1

Shares purchased to be held in ESOT or as treasury – – – (4. 8) – – (4. 8)

Shares released from ESOT and treasury – – – 0 .1 – – 0 .1

Dividends (note 9) – – – – – (7. 4) (7. 4)

Share-based payment credits – – – – – (0. 4) (0 .4)

Tax credited directly to equity – – – – – (0.2) (0.2)

At 1 April 2023 2 5 . 4 5 3 . 2 3 .7 (2 1. 3) – 3 8 1. 6 4 4 2 . 6

116 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Company Statement of Changes in Equity

for the 53 weeks ended 1 April 2023

Company

capital

(note 26)

£m

premium

account

(note 26)

£m

Capital

redemption

reserve

(note 26)

£m

Own shares

(note 26)

£m

Hedging

reserve

£m

Merger

reserve

£m

Retained

earnings

£m

Total

£m

At 27 March 2021 22.8 4.2 3.7 (17.0) (0.5) (1.6) 321.6 333.2

Profit for the year – – – – – 3.3 3.3

Other comprehensive income for the year – – – – 0.4 – 11.7 12.1

Total comprehensive income for the year – – – – 0.4 – 15.0 15.4

Issue of share capital (note 27) 2.6 49.0 – 0.2 – – – 51.8

Shares released from ESOT and treasury – – – 0.2 – – – 0.2

Dividends (note 9) – – – – – (2.4) (2.4)

Share-based payment charges – – – – – – 0.8 0.8

Tax credited directly to equity – – – – – – 0.1 0.1

At 26 March 2022 25.4 53.2 3.7 (16.6) (0.1) (1.6) 335.1 399.1

Profit for the year – – – – – – 0.4 0.4

Other comprehensive income for the year – – – – 0.1 – (1.9) (1.8)

Total comprehensive income for the year – – – – 0.1 – (1.5) (1.4)

Shares purchased to be held in ESOT or as treasury – – – (4.8) – – – (4.8)

Shares released from ESOT and treasury – – – 0.1 – – – 0.1

Dividends (note 9) – – – – – – (7.4) (7.4)

Share-based payment credits – – – – – – (0.4) (0.4)

Tax credited directly to equity – – – – – – (0.2) (0.2)

At 1 April 2023 25.4 53.2 3.7 (21.3) – (1.6) 325.6 385.0

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Group Cash Flow Statement

for the 53 weeks ended 1 April 2023

Note

Group

53 weeks ended

1 April 2023

£m

Group

52 weeks ended

26 March

2022

£m

Profit before tax for continuing operations 10. 3 11. 5

Net finance costs before separately disclosed items 6 12 . 4 11 . 3

Separately disclosed items 5 2 . 4 (4. 3)

Depreciation and amortisation 4 2 6 .7 25.8

Adjusted EBITDA 5 1. 8 4 4.3

Difference between pension charge and cash paid 22 (2. 3) (2. 3)

Share-based payment (credit)/charges 4 (0 . 4) 0.8

Change in trade and other receivables 2 . 5 0.5

Change in inventories (0. 6) (1. 5)

Change in trade and other payables (3. 0) 28.8

Cash impact of operating separately disclosed items 5 (0 .5) (1. 9)

Cash generated from operations 4 7. 5 6 8 .7

Tax received – 2.5

Net cash generated from operating activities 4 7. 5 7 1. 2

Cash flow from investing activities

Purchase of property, plant and equipment and intangibles (3 0.7) (25.8)

Sale of property, plant and equipment, right-of-use assets and assets held for sale 16. 0 10.0

Net cash (outflow) from investing activities (14 .7) (1 5.8)

Cash flow from financing activities

Purchase of own shares 26 (4 . 8) –

Receipts on release of own shares to option schemes 26 0 .1 0 .1

Interest paid (8 .7) (7. 2)

Preference dividends paid 9 (0 .1) (0 .1)

Equity dividends paid 9 (7. 4) (2.4)

Net proceeds from equity placing – 51. 8

Repayment of CCFF 21 – (1 00.0)

Drawdown of bank loans 21 – 12 . 6

Surrender of leases (2 .1) (1. 9)

Principal and interest elements of lease payments 16 (9 . 8) (8 .6)

Payment of loan arrangement fees 21 (1. 5) (1. 2)

Net cash (outflow) from financing activities (3 4 . 3) (56.9)

Net movement in cash and cash equivalents (1. 5) (1. 5)

Cash and cash equivalents at the start of the year 21 15 . 6 1 7. 1

Total cash and cash equivalents at the end of the year 21 14 .1 15 . 6

118 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Company Cash Flow Statement

for the 53 weeks ended 1 April 2023

Note

Company

53 weeks ended

1 April 2023

£m

Company

52 weeks ended

26 March 2022

£m

Profit before tax for continuing operations 3.1 7.6

Net finance costs before separately disclosed items 18.8 14.9

Separately disclosed items 3.2 (4.2)

Depreciation and amortisation 26.7 25.7

Adjusted EBITDA 51.8 44.0

Difference between pension charge and cash paid 22 (2.3) (2.3)

Share-based payment (credit)/ charges (0.4) 0.8

Change in trade and other receivables (3.9) 0.5

Change in inventories (0.6) (1.5)

Change in trade and other payables 3.3 29.0

Cash impact of operating separately disclosed items (0.5) (1.9)

Cash generated from operations 47.4 68.6

Tax received – 2.5

Net cash generated from operating activities 47.4 71.1

Cash flow from investing activities

Purchase of property, plant and equipment and intangibles (30.7) (25.8)

Sale of property, plant and equipment, right-of-use assets and assets held for sale 16.0 10.0

Net cash (outflow) from investing activities (14.7) (15.8)

Cash flow from financing activities

Purchase of own shares 26 (4.8) –

Receipts on release of own shares to option schemes 26 0.1 0.1

Interest paid (8.7) (7.2)

Preference dividends paid 9 (0.1) (0.1)

Equity dividends paid 9 (7.4) (2.4)

Net proceeds of equity placing – 51.8

Repayment of CCFF 21 – (100.0)

Drawdown of bank loans 21 – 12.6

Surrender of leases (2.1) (1.9)

Principal and interest elements of lease payments 16 (9.7) (8.3)

Cost of refinancing 21 (1.5) (1.2)

Net cash outflow from financing activities (34.2) (56.6)

Net movement in cash and cash equivalents (1.5) (1.3)

Cash and cash equivalents at the start of the year 21 15.6 16.9

Total cash and cash equivalents at the end of the year 21 14.1 15.6

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Notes to the Financial Statements

1. Authorisation of Financial Statements and Accounting Policies

Authorisation of Financial Statements

The financial statements of Fuller, Smith & Turner P.L.C. and its subsidiaries (the “Group”) for the 53 weeks ended 1 April 2023 were authorised for issue by

the Board of Directors on 14 June 2023 and the Balance Sheet was signed on the Board’s behalf by M J Turner. Fuller, Smith & Turner P.L.C. is a public limited

company incorporated and domiciled in England and Wales. The Company’s ordinary ‘A’ shares are traded on the London Stock Exchange.

Significant Accounting Policies

Basis of preparation

The Group’s and Company’s financial statements have been prepared in accordance with international accounting standards in conformity with the

requirements of the Companies Act 2006, and in accordance with UK adopted International Financial Reporting Standards, and applied to the financial

statements of the Group and the Company for the 53 weeks ended 1 April 2023. The principal accounting policies adopted by the Group and by the Company

are set out in the accounting policies below.

The Group and Company financial statements are presented in Sterling and all values are shown in millions of pounds (£m) rounded to the nearest hundred

thousand, except where otherwise indicated.

As permitted by Section 408 of the Companies Act 2006, a separate Income Statement for the Parent Company has not been prepared.

Going concern

The Group’s business activities, together with the factors likely to affect its future development, performance and position are set out in the strategic report

on pages 1 to 65. The financial position of the Company, its cash flows, net debt and borrowing facilities and the maturity of those facilities are set out above

on pages 147 to 159.

In addition, there are further details in the financial statements on the Group’s financial risk management, objectives and policies in note 27.

At 1 April 2023, the Group Balance Sheet comprises of 92% of the estate being freehold properties and available headroom on facilities of £79.5 million and

£14.1 million of cash and resulting net debt of £132.8 million.

During the year, the Group secured a new facility of £200 million, split between a RCF of £110 million and a term loan of £90 million, for a tenure of four years

to May 2026. Under the new agreement, the minimum liquidity covenant of £10 million tested monthly remained until November 2022. From December 2022

(and tested quarterly thereafter) the covenant suite consists of net debt to EBITDA (leverage) and EBITDA to net finance charges. See further details in Note 23.

The Group has modelled financial projections for the going concern period, which is the period to 29 June 2024, based upon two scenarios, the ‘base case’ and

the ‘downside case’. The base case is the Board approved FY2024 budget as well as the Q1 FY2025 plan which forms part of the Board approved three year

plan. The base case assumes that sales will continue to recover, in particular in Central London. However, the budget remains cautious about the inflationary

environment and also the impact on the consumer and therefore only assumes moderate levels of volume growth as well as continued pressure on margins.

The base case scenario indicates that it will have sufficient resources to continue to settle its debts as they fall due and operate well within its covenants for

the going concern assessment period.

The Group has also modelled a ‘downside case’ which assumes that sales volume reduce by 10% from the ‘base case’ and costs across food, staff and interest

continue to rise. This model also assumes train strikes are more frequent than experienced in FY2023. In this ‘downside case’, management would implement

mitigating actions such as overhead cost reduction and restructuring of capital expenditure and other property spend to essential maintenance. Under this

scenario, the Group would still have sufficient resources to settle liabilities as they fall due and headroom on its covenants through the duration of the period.

The Group has also performed a ‘reverse stress case’ which shows that the Group could withstand a 24% reduction in volumes from those assessed in the

‘base case’ throughout the going concern period, as well as costs assumed to increase at a similar or higher rate than the downside scenario, before the

covenant levels would be exceeded on 31 March 2024. The Directors consider this scenario to be remote as other than when the business was closed

because of the pandemic, it has never seen volumes decline at anywhere close to that rate.

Under both the base and downside scenarios modelled, the Group would have sufficient headroom on its facilities throughout the going concern assessment

period. Additionally, under the downside scenario there are further mitigating actions which the Group has in its control to either improve EBITDA or reduce

net debt, such as further reduction in capex spend to only essential maintenance and decision not to pay dividends and bonuses. Further mitigating actions

would also include disposals of licensed and unlicensed properties.

The Directors have also determined that, over the period of the going concern assessment, there is not expected to be a significant impact because of

climate change.

After due consideration of the matters set out above, the Directors are satisfied that there is a reasonable expectation that the Group has adequate resources

to continue in operational existence for the going concern assessment period, being the period to 29 June 2024, and have therefore adopted the going concern

basis in the preparation of these financial statements.

120 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Significant accounting judgements, estimates and assumptions

The areas of estimation and assumption which are considered to be significant in the preparation of the financial statements are as follows:

The Group determines whether goodwill is impaired on an annual basis and this requires an estimation of the value in use of the cash-generating units (“CGUs”)

to which the goodwill is allocated. This involves estimation of future cash flows and choosing a suitable discount rate. Full details are supplied in note 13,

together with an analysis of those key assumptions.

The Group reviews impairment of all property, plant and equipment and right-of-use assets at CGU level where there is any indication of impairment. This

requires an estimation of the value in use and involves estimation of future cash flows and choosing a suitable discount rate. See note 13, which describes

the assumptions used, together with an analysis of the key assumptions.

Measurement of defined benefit pension obligations requires estimation of future changes in inflation, as well as mortality rates, the expected return on

assets and the selection of a suitable discount rate. These have been determined on advice from the Group’s qualified actuary. The estimates used and the

key assumptions are provided in note 22.

The areas of judgement which are considered to be significant in the preparation of the financial statements are as follows:

Judgement is used to determine those items that should be separately disclosed to allow a better understanding of the underlying trading performance of

the Group. The judgement includes assessment of whether an item is of a nature that is not consistent with normal trading activities or of sufficient size or

infrequency. See note 5 for further details.

The Group has exercised significant accounting estimation and judgement in the recognition of deferred tax liabilities in respect of property, plant and equipment.

Significant accounting estimates and judgements include those used to determine the amount of net book value of property, plant and equipment to which the

initial recognition exemption applies, the calculation of the tax base on sale (which is subject to certain restrictions under tax law) and the offsetting of inherent

losses against inherent gains where tax losses are expected to be utilised against future profits and gains.

Basis of consolidation

The Group financial statements consolidate the financial statements of Fuller, Smith & Turner P.L.C. and the entities it controls (its subsidiaries) drawn up for the

53 weeks ended 1 April 2023 (2022: 52 weeks ended 26 March 2022). Subsidiaries are consolidated from the date of their acquisition, being the date on which

the Group obtains control, and continue to be consolidated until the date that such control ceases. Control comprises the power to direct the relevant activities

of the subsidiary which significantly affect the return of the subsidiary, so as to obtain benefit from its activities, and is achieved through direct or indirect

ownership of voting rights; currently exercisable or convertible potential voting rights; or by way of contractual agreement. All intercompany balances and

transactions, including unrealised profits arising from them, are eliminated.

Business combinations and goodwill

Business combinations are accounted for under IFRS 3 Business Combinations using the purchase method. Any excess of the consideration of the business

combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities is recognised in the Balance Sheet as

goodwill and is not amortised. To the extent that the net fair value of the acquired entity’s identifiable assets, liabilities and contingent liabilities is greater than

the cost of the investment, a gain is recognised immediately in the Income Statement.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Contingent consideration classified as

equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability that is a

financial instrument and within the scope of IFRS 9 Financial Instruments is measured at fair value with the changes in fair value recognised in the statement

of profit or loss in accordance with IFRS 9. Other contingent consideration that is not within the scope of IFRS 9 is measured at fair value at each reporting date

with changes in fair value recognised in profit or loss.

After initial recognition, goodwill is stated at cost less any accumulated impairment losses, with the carrying value being reviewed for impairment, at least

annually and whenever events or changes in circumstances indicate that the carrying value may be impaired. Any impairment of goodwill made cannot be

reversed if circumstances subsequently change.

For the purpose of impairment testing, goodwill is allocated to the related CGUs (or group of CGUs) monitored by management. Where the recoverable amount

of the CGU is less than its carrying amount, including goodwill, an impairment loss is recognised in the Income Statement.

The carrying amount of goodwill allocated to a CGU is taken into account when determining the gain or loss on disposal of the CGU, or of an operation within it.

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Property, plant and equipment

Property, plant and equipment is stated at cost or deemed cost less accumulated depreciation and any impairment in value. Depreciation is calculated on a

straight-line basis to write down the cost to the estimated residual value over the expected useful life of the asset as follows:

Freehold buildings – Hotel accommodation and offices Up to 50 years

Freehold buildings – Licensed retail property and unlicensed property From 50 to 100 years

Leasehold improvements The term of the lease

Roofs From 10 to 50 years

Plant, machinery and vehicles, fixtures and fittings From three years up to 25 years

As required under IAS 16 Property, Plant and Equipment, expected useful lives and residual values are reviewed every year. Land is not depreciated. An item

of property, plant and equipment and any significant part initially recognised is derecognised upon disposal (i.e., at the date the recipient obtains control) or

when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference

between the net disposal proceeds and the carrying amount of the asset) is included in the Income Statement when the asset is derecognised.

Government grants

Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attached to them and that the grants

will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expenses the

related costs for which the grants are intended to compensate. When the grant relates to an asset, it is recognised as income in equal amounts over the

expected useful life of the related asset.

Coronavirus Job Retention Scheme (“CJRS”)

In the prior year, HMRC reimbursed up to 80% of the wages of certain employees who had been asked to stop working, but who were being kept on the payroll

(“furloughed”). The scheme was designed to compensate for staff costs, so amounts received are recognised in the Income Statement over the same period as

the costs to which they relate. In the Income Statement, payroll costs are shown net of grant income.

Hive-up transaction

When a subsidiary transfers its business to its parent immediately after acquisition (hive-up transaction) the assets are transferred at market value and the

investment is reduced to reflect the net effect of a return of capital in the form of the underlying net assets with any difference taken to the merger reserve.

Investment property

The Group owns properties that are not used for the sale of goods or services but are held for capital appreciation or rental purposes. These properties are

classified as investment properties and their carrying values are based on cost less impairment. Depreciation is calculated on a straight-line basis to write

down the cost to the estimated residual value over the expected useful life of the asset, which for investment properties is between 50 and 100 years.

Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their

fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated

impairment losses. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected

in profit or loss in the period in which the expenditure is incurred. The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible

asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of

each reporting period.

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the CGU level. The assessment

of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to

finite is made on a prospective basis.

An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use

or disposal. Any gain or loss arising upon derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of

the asset) is included in the statement of profit or loss.

Research and development costs

Research costs are expensed as incurred. Development expenditures on an individual project are recognised as an intangible asset when the Group can demonstrate:

• The technical feasibility of completing the intangible asset so that the asset will be available for use or sale

• Its intention to complete and its ability and intention to use or sell the asset

• How the asset will generate future economic benefits

• The availability of resources to complete the asset

• The ability to measure reliably the expenditure during development.

122 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Notes to the Financial Statements

Continued

Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortisation and accumulated

impairment losses. Amortisation of the asset begins when development is complete and the asset is available for use and will be amortised over the period

of expected future benefit. Amortisation is recorded in operating costs. During the period of development, the asset is tested for impairment annually.

Cloud Computing Arrangement costs

Cloud computing arrangements are ones in which a customer does not have control of the underlying software and use the software on an as-needed basis.

Costs associated with cloud computing arrangements can be recognised as an intangible asset when the Group can demonstrate ultimate control over the

software, with the entity having the power to obtain sole future economic benefits from access to the software and restrict others’ access to those benefits.

Where the above criteria cannot be demonstrated, then the right to access the software over the contract term in the future is a service contract. If the Group

determines that a cloud computing arrangement is a service contract, then it recognises the related expenditure when it receives the service.

Impairment

Carrying values are reviewed for impairment if events indicate that the carrying value of the asset may not be recoverable. If such an indicator exists and where

the carrying values exceed the estimated recoverable amount, the assets or CGUs are written down to their recoverable amounts. An asset’s recoverable amount

is the greater of the fair value less costs to sell and the value in use. In assessing value in use, the estimated future cash flows are discounted to present value

using a pre-tax discount rate that reflects the current market assessments of the time value of money and risks specific to the asset. In determining fair value

less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. For

an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the smallest CGUs to which the asset belongs.

The Group bases its impairment calculation on most recent management approved budgets and forecast calculations, which are prepared separately for each

of the Group’s CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of two years. A long-term

growth rate is calculated and applied to project future cash flows after the second year.

For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment

losses no longer exist or have decreased. If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment

loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was

recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that

would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.

Impairment losses, and any reversal of such losses, are recognised in the Income Statement.

Leases

The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified

asset for a period of time in exchange for consideration.

Group as a lessee

The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low value assets. The Group

recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

a) Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets

are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-

use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less

any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the lease term.

b) Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease

term. The lease payments include fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts

expected to be paid under residual value guarantees. Variable lease payments that do not depend on an index or a rate are recognised as expenses in the

period in which the event or condition that triggers the payment occurs. The lease payment also includes the exercise price of a purchase option reasonably

certain to be exercised by the Group and payment of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate.

Extensions to leases are recognised when it is reasonably certain the option is going to be exercised.

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate

implicit in the lease is not readily determinable. The carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term

or a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments).

The Group’s lease liabilities are included in Cash, Borrowings and Net Debt (see note 21).

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c) Short-term leases and leases of low value assets

The Group applies the short-term lease recognition exemption to its short-term leases of equipment (i.e., those leases that have a lease term of 12 months or

less from the commencement date and do not contain a purchase option). It also applies the lease of low value assets recognition exemption to leases of office

equipment that are considered to be low value. Lease payments on short-term leases and leases of low value assets are recognised as expense on a straight-

line basis over the lease term.

Group as a lessor

Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental

income arising is accounted for on a straight-line basis over the lease terms and is included in revenue in the Income Statement due to its operating nature.

Assets held for sale and discontinued operations

Assets are classified as held for sale when the carrying amount will be recovered principally through a sale transaction rather than continuing use. The criteria

for held for sale classification are regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its

present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision

to sell will be withdrawn. Management must be committed to the plan to sell the asset and the sale expected to be completed within one year from the date

of the classification.

Assets held for sale are valued at the lower of the carrying amount and fair value less costs to sell. No depreciation is charged whilst assets are classified as

held for sale.

In accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, results for the discontinued operations are presented separately

in the Group’s Income Statement (for which the comparatives and related notes have been restated). Additional disclosures are provided in note 19. All other

notes to the financial statements include amounts for continuing operations, unless indicated otherwise.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is calculated using the “Average Weighted Cost” method. Net realisable value is

the estimated selling price in the ordinary course of business less estimated costs of completion and the costs to be incurred in marketing, selling and

distribution.

Financial instruments

Initial recognition and derecognition

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument. Financial

assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks

and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.

Financial assets

Recognition and measurement

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (“OCI”) and

fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics

and the Group’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which

the Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value

through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component are measured at the transaction price in

accordance with IFRS 15.

There are three measurement categories into which the Group classifies its debt instruments:

• Amortised cost: Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are

measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or

loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses.

Impairment losses are presented as separate line item in the statement of profit or loss. The Group’s cash and cash equivalents, trade and other receivables

fall into this category.

• Fair value through OCI (“FVOCI”): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash

flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI and will be

recycled upon derecognition of the asset.

• Fair value through profit or loss (“FVPL”): Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt

investment that is subsequently measured at FVPL is recognised in profit or loss and presented net within other gains/(losses) in the period in which it arises.

124 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Notes to the Financial Statements

Continued

Impairment

IFRS 9’s impairment requirements use more forward-looking information to recognise expected credit losses – the expected credit loss (“ECL”) model.

Recognition of credit losses is no longer dependent on the Group first identifying a credit loss event. Instead, the Group considers a broader range of

information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable

forecasts that affect the future cash flows of the instrument.

When assessing impairment for trade receivables, the Group has applied the simplified approach to expected credit losses as per IFRS 9 Financial Instruments.

The model focuses on an appraisal of the risk that a receivable will default rather than whether a loss has been incurred. This involves an unbiased assessment

of a range of possible outcomes and their probabilities of occurrence, and is supported by past experience of collecting payments as well as changes in

economic conditions that correlate with default on receivables. Expected credit losses are initially determined based on the Group’s historical credit loss

experience, any forward-looking factors specific to a particular trade receivable and the current economic environment.

The timing of initial recognition for impairment losses is the same period that the asset is recognised. Movements in expected credit losses are recognised

in the Income Statement within operating costs. At the point a trade receivable is written off the ledger as uncollectable, the cost is charged against the

allowance account and any subsequent recoveries of amounts previously written off are credited to the Income Statement.

In the Parent Company, amounts due from subsidiary undertakings are recognised at their original amount less allowance for impairment based on the ECL

model. In determining the model, the Company considers the net assets and the resources available to that subsidiary.

Financial liabilities

Recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables or as derivatives

designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Group’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, derivative financial instruments and

lease liabilities.

For purposes of subsequent measurement, financial liabilities are classified in two categories:

• Financial liabilities at fair value through profit or loss which are measured subsequently at fair value with gains or losses recognised in the Income Statement

• Financial liabilities at amortised cost (loans and borrowings) which are measured using the effective interest method.

Bank loans, overdrafts and debentures

Interest bearing bank loans, overdrafts and debentures are initially recorded at the fair value of proceeds received, net of direct issue costs, and thereafter at

amortised cost. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an effective interest

rate basis in the Income Statement. Finance charges are added to the carrying amount of the instrument to the extent that they are not settled in the period

in which they arise.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable

legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

Derivative financial instruments and hedge accounting

Recognition and measurement

The Group uses interest rate swaps to hedge its interest rate risks. Such derivative financial instruments are initially recognised at fair value on the date

on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value

is positive and as financial liabilities when the fair value is negative.

For the purpose of hedge accounting, hedges are classified as:

• Fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or liability or an unrecognised firm commitment

• Cash flow hedges when hedging the exposure to variability in cash flows that is either attributable to a particular risk associated with a recognised asset

or liability or a highly probable forecast transaction or the foreign currency risk in an unrecognised firm commitment

• Hedges of a net investment in a foreign operation.

At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which it wishes to apply hedge accounting

and the risk management objective and strategy for undertaking the hedge.

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1. Authorisation of Financial Statements and Accounting Policies continued

The documentation includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the Group will assess

whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the hedge

ratio is determined). A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements:

• There is “an economic relationship” between the hedged item and the hedging instrument

• The effect of credit risk does not “dominate the value changes” that result from that economic relationship

• The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges and the

quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.

Hedges that meet all the qualifying criteria for hedge accounting are accounted for, as described below.

The Group has interest rate swaps which are classified as cash flow hedges. The effective portion of changes in the fair value of derivatives that

are designated and qualify as cash flow hedges is recognised in the cash flow hedge reserve within equity. The gain or loss relating to the ineffective portion is

recognised immediately in profit or loss, within other gains/(losses). Amounts previously recognised in other comprehensive income and accumulated in equity

are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same line as the recognised hedged item. If cash flow hedge

accounting is discontinued, the amount that has been accumulated in OCI must remain in accumulated OCI if the hedged future cash flows are still expected to

occur. Otherwise, the amount will be immediately reclassified to profit or loss as a reclassification adjustment. When a hedging instrument expires, or is sold or

terminated, or when a hedge no longer meets the criteria for hedge accounting, but the risk management objective remains the same, the hedge ratio is

adjusted so that it meets the qualifying criteria again.

Classification of shares as debt or equity

When shares are issued, any component that creates a financial liability of the Company or Group is presented as a liability in the Balance Sheet; measured

initially at fair value net of transaction costs and thereafter at amortised cost until extinguished on conversion or redemption. The corresponding dividends

relating to the liability component are charged as interest expense in the Income Statement. The initial fair value of the liability component is determined using

a market rate for an equivalent liability without a conversion feature.

The remainder of the proceeds on issue is allocated to the equity component and included in shareholders’ equity, net of transaction costs. The carrying amount

of the equity component is not remeasured in subsequent years.

The Group’s ordinary shares are classified as equity instruments. For the purposes of the disclosures given in note 25, the Group considers its capital to

comprise its ordinary share capital, share premium, capital redemption reserve, hedging reserve and accumulated retained earnings plus its preference shares

which are classified as a financial liability in the Balance Sheet. There have been no changes to what the Group considers to be capital since the prior year.

Preference shares

The Group’s preference shares are reported under non-current liabilities. The corresponding dividends on preference shares are charged as interest in the

Income Statement. Preference share dividends are at fixed rates.

Revenue

Revenue is recognised under IFRS 15 upon application of the following steps:

• Identify the contract with a customer

• Identify the performance obligations in the contract

• Determine the transaction price

• Allocate the transaction price to each performance obligation

• Recognise revenue when a performance obligation is satisfied by transferring a promised good or service to a customer.

Managed Pubs and Hotels revenue primarily consists of food, drink and accommodation sales. Food and drink revenue is recognised when control of the goods/

services has transferred, being at the point the customer purchases the food or drink. The Group also takes bookings for events and accommodation which

require a deposit to secure the booking. A contract liability for the deposit is recognised at the time of the sale. The contract liability is released and revenue is

recognised on a straight-line basis over the duration of the room occupation or event. A contract liability is recognised until the event is complete or the guest

has occupied the room.

The Group also earns revenue through selling drink to the Tenanted Inns division which is supplied to Fuller’s by Asahi under the Long-Term Supply Agreement

(“LTSA”). Revenue is recognised as though the Group is the principal as it has primary responsibility over the product and also bears the inventory risk.

Revenue is recognised under IFRS 16 where the Group receives rental income from Tenanted and unlicensed properties. This is recognised on a straight-line

basis over the lease term. Some rental income includes turnover rent which is based on the percentage of the income generated by that pub. This is recognised

when the revenue is earned. Revenue is recognised for machine income when net takings are earned.

126 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Notes to the Financial Statements

Continued

Borrowing costs

Borrowing costs directly attributable to the acquisition or construction of an asset that takes a substantial period of time to get ready for use are capitalised as

part of the cost of the asset being created. This is applied to development projects where the development is expected to last in excess of six months at the

commencement of the project. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs

that an entity incurs in connection with the borrowing of funds.

Separately disclosed items

The Group presents as separately disclosed items on the face of the Income Statement those material items of income and expense which, because of the

nature or expected infrequency of the events giving rise to them, merit separate presentation to allow shareholders to understand better the elements of

financial performance in the year, so as to facilitate comparison with prior periods and to better assess trends in financial performance. Separately disclosed

items are a key element used to demonstrate the underlying performance of the Group and reported as an alternative performance measure within the

management commentary for the reporting period.

Share-based payments

The Group has an employee Share Incentive Plan that awards shares to employees based on the reported profits of the Group for the year, and a Long-Term

Incentive Plan that awards shares to Directors and Senior Executives subject to specific performance criteria. The Group also issues equity-settled share-based

payments to certain employees under approved and unapproved share option schemes and a Savings Related Share Option Scheme.

The cost of equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are

granted and is recognised as an expense over the vesting period, which ends on the date on which the relevant employees become fully entitled to the award.

Fair value is determined using an appropriate pricing model. In valuing equity-settled transactions, no account is taken of any vesting conditions. The Group has

no equity-settled transactions that are linked to the price of the shares of the Company (market conditions).

No expense is recognised for awards that do not ultimately vest. At each Balance Sheet date before vesting, the cumulative expense is calculated, representing

the extent to which the vesting period has expired and management’s best estimate of the achievement or otherwise of non-market conditions and of the

number of equity instruments that will ultimately vest. The movement in cumulative expense since the previous Balance Sheet date is recognised in the Income

Statement, with a corresponding entry in equity.

Where the terms of an equity-settled award are modified or a new award is designated as replacing a cancelled or settled award, the cost based on the

original award terms continues to be recognised over the original vesting period. In addition, an expense is recognised over the remainder of the new vesting

period for the incremental fair value of any modification, based on the difference between the fair value of the original award and the fair value of the modified

award, both as measured on the date of the modification. No reduction is recognised if this difference is negative.

Where an equity-settled award is cancelled (including when a non-vesting condition within the control of the entity or employee is not met), it is treated as if

it had vested on the date of cancellation, and any cost not yet recognised in the Income Statement for the award is expensed immediately. Any compensation

paid up to the fair value of the award at the cancellation or settlement date is deducted from equity, with any excess over fair value being treated as an

expense in the Income Statement.

Own shares

Shares to be awarded under employee incentive plans and those that have been awarded but have yet to vest unconditionally are held at cost by an employee share

ownership trust (“ESOT”) and shown as a deduction from equity in the Balance Sheet. ESOT is an independently managed trust and not controlled by the Group.

In addition to the purchase of shares by the various ESOTs for specific awards, the Group also from time to time acquires own shares to be held as treasury

shares. These shares are occasionally but not exclusively used to satisfy awards under various share option schemes. Treasury shares are held at cost and

shown as a deduction from total equity in the Balance Sheet.

Consideration received for the sale of such shares is also recognised in equity, with any difference between the proceeds from sale and the original cost being

taken to reserves. No gain or loss is recognised in the profit or loss on the purchase, sale, issue or cancellation of treasury shares.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The current tax payable is based on taxable profit for the year using UK tax rates enacted or substantively enacted at the Balance Sheet date and any

adjustment to tax payable in respect of previous years. Taxable profit differs from net profit as reported in the Income Statement because it excludes

items of income or expense that are taxable or deductible in other years or are never taxable or deductible.

Deferred tax

Deferred tax is recognised on temporary differences at the Balance Sheet date between the tax bases of assets and liabilities and their carrying amounts

for financial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences,

carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which they can be utilised.

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Such deferred tax assets and liabilities are not recognised where the asset or liability arises from the initial recognition of goodwill or an asset or liability in a

transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. The carrying

amount of deferred tax assets is reviewed at each Balance Sheet date.

Deferred tax is not recognised in respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of the

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

Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred tax

balance relates to the same taxation entities.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the periods when the asset is realised or the liability is settled,

based on tax rates and laws enacted or substantively enacted at the Balance Sheet date.

Current and deferred tax for the year

Current and deferred tax are recognised in the Income Statement except when they relate to items that are recognised in the Statement of Comprehensive

Income or in equity, in which case the current and deferred tax are also recognised in the Statement of Comprehensive Income or directly in equity respectively.

Pensions and other post-employment benefits

Defined contribution schemes

Payments to defined contribution retirement benefit schemes are charged to the Income Statement as they fall due.

Defined benefit schemes

The Group operated a defined benefit pension plan for eligible employees where contributions were made into a separate fund administered by Trustees. The

Scheme closed to future accrual in January 2015.

The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method calculated by qualified actuaries. This

attributes entitlement to benefits to the current period (to determine current service cost) and to the current and prior periods (to determine the present value of

defined benefit obligation) and is based on actuarial advice. Past service cost is recognised as an expense at the earlier of the date when a plan amendment or

curtailment occurs and the date when an entity recognises any termination benefits, or related restructuring costs under IAS 37 Provisions, Contingent

Liabilities and Contingent Assets.

When a settlement (eliminating all obligations for benefits already accrued) or a curtailment (reducing future obligations as a result of a material reduction in

the scheme membership or a reduction in future entitlement) occurs, the obligation and related plan assets are remeasured using current actuarial assumptions

and the resultant gain or loss is recognised in the Income Statement during the period in which the settlement or curtailment occurs.

The Group determines the net interest charge/(credit) on the net defined benefit liability/(asset) for the period by applying the discount rate used to measure

the defined benefit obligation at the beginning of the period to the net pension liability/(asset) at the beginning of the period. The net interest charge/(credit)

is recognised immediately as a separately disclosed finance cost/(income) in the Income Statement. Actuarial gains and losses are recognised in full in the

Statement of Comprehensive Income in the period in which they occur.

The defined benefit pension asset or liability in the Balance Sheet comprises the total of the present value of the defined benefit obligation (using a discount

rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on

market price information and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is restricted to the sum of the

present value of any amount the Group expects to recover by way of refunds from the plan or reductions in the future contributions.

Foreign currencies

Transactions denominated in foreign currencies are recorded at the rates of exchange ruling at the dates of the transactions. Monetary assets and liabilities are

translated at the year end exchange rates and the resulting exchange differences are taken to the Income Statement.

Dividends

Dividends recommended by the Board but unpaid at the year end are not recognised in the financial statements until they are paid (in the case of the interim

dividend) or approved by shareholders at the Annual General Meeting (in the case of the final dividend).

128 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Notes to the Financial Statements

Continued

The Company’s investments in subsidiaries

In its separate financial statements, the Parent Company recognises its investment in its subsidiaries on the basis of cost less provision for impairment.

New standards and interpretations issued but not yet applied

The International Accounting Standards Board and International Financial Reporting Interpretations Committee have issued the following standards and

interpretations with an effective date for periods starting on or before the date on which these financial statements start:

• Amendments to IAS 1: Classification of Liabilities as Current and Non-current (effected 1 January 2023)

• Reference to the Conceptual Framework – Amendments to IFRS 3 (effected 1 January 2022)

• Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16 (effected 1 January 2022)

• IFRS 17 Insurance Contracts (effected 1 January 2023)

• Onerous Contract – Costs of Fulfilling a Contract – Amendments to IAS 37 (effected 1 January 2022)

• Definition of Accounting Estimates – Amendments to IAS 8 (effected 1 January 2022)

• Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2 (effected 1 January 2022)

• Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12 (effected 1 January 2022)

• IFRS 9 Financial Instruments – Fees in the “10 per cent” test for derecognition of financial liabilities (effected 1 January 2022).

The adoption of the above standards have not lead to material effect in the financial statements. Other new standards and interpretations in issue but not yet

effective are not applicable to the Company and therefore are not expected to have material impact on the Group’s financial position and results.

2. Segmental Analysis

Operating Segments

For management purposes, the Group’s operating segments are:

• Managed Pubs and Hotels, which comprises managed pubs, managed hotels, Bel & The Dragon and Cotswold Inns & Hotels.

• Tenanted Inns, which comprises pubs operated by third parties under tenancy or lease agreements.

The most important measure used to evaluate the performance of the business is adjusted profit, which is the profit before tax, adjusted for separately disclosed

items. The operating segments are organised and managed separately according to the nature of the products and services provided, with each segment

representing a strategic operating unit. The Managed Pubs and Hotels operating segments have been aggregated to one reportable segment on the basis they

have similar economic characteristics. Economic indicators assessed in determining that the aggregated operating segments share similar characteristics include

expected future financial performance, operating and competitive risks, and return on capital. As such, the operating segments meet the aggregation criteria

in paragraph 12 IFRS 8 Operating Segments (amended). More details of these segments are given in the Strategic Report on pages 1 to 65 of this report.

As segment assets and liabilities are not regularly provided to the Chief Operating Decision Maker (“CODM”), the Group has elected, as provided under IFRS 8

Operating Segments (amended), not to disclose a measure of segment assets and liabilities.

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2. Segmental Analysis continued

53 weeks ended 1 April 2023

Managed Pubs and

Hotels

£m

Tenanted

Inns

£m

Unallocated

£m

Total continuing

operations

£m

Revenue

Sale of goods and services 271.6 21.2 – 292.8

Accommodation income 33.7 – – 33.7

Total revenue from contracts with customers 305.3 21.2 – 326.5

Rental income 1.5 8.6 – 10.1

Revenue 306.8 29.8 – 336.6

Segment result 30.0 13.2 (18.1) 25.1

Operating separately disclosed items (14.2)

Operating profit 10.9

Profit on disposal of properties 11.8

Net finance costs (12.4)

Profit before tax 10.3

Other segment information

Additions to property, plant and equipment and intangible assets 25.2 4.7 0.1 30.0

Depreciation and amortisation 23.4 2.3 1.0 26.7

Impairment of property, right-of-use assets and assets classified as held for sale 12.5 1.8 – 14.3

52 weeks ended 26 March 2022

Managed Pubs and

Hotels

£m

Tenanted

Inns

£m

Unallocated

£m

Total continuing

operations

£m

Revenue

Sale of goods and services 205.1 17.9 – 223.0

Accommodation income 21.9 – – 21.9

Total revenue from contracts with customers 227.0 17.9 – 244.9

Rental income 1.8 7.1 – 8.9

Revenue 228.8 25.0 – 253.8

Segment result 24.7 11.1 (17.3) 18.5

Operating separately disclosed items (2.0)

Operating profit 16.5

Profit on disposal of properties 6.3

Net finance costs (11.3)

Profit before tax 11.5

Other segment information

Additions to property, plant and equipment and intangible assets 20.2 2.3 2.6 25.1

Depreciation and amortisation 23.3 1.8 0.7 25.8

Impairment of property 3.0 0.3 – 3.3

1 Unallocated expenses represent primarily the salaries and costs of central management. Unallocated capital expenditure relates to additions to the head office and additions to IT

development costs.

130 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Notes to the Financial Statements

Continued

3. Revenue

Geographical Information

All of the Group’s business is within the UK and therefore the Group only has one distinct geographical market.

53 weeks ended

1 April

2023

£m

52 weeks ended

26 March

2022

£m

Revenue disclosed in the Income Statement is analysed as follows:

Sale of goods and services 292.8 223.0

Accommodation income 33.7 21.9

Total revenue from contracts with customers 326.5 244.9

Rental income 10.1 8.9

Revenue 336.6 253.8

4. Operating Costs

53 weeks

ended

1 April 2023

£m

52 weeks

ended

26 March

2022

£m

Production costs and cost of goods used in retailing 72.2 57.9

Staff costs 119.1 96.2

Repairs and maintenance 8.5 8.5

Depreciation of property, plant and equipment and amortisation of intangible assets 19.6 18.1

Depreciation of right-of-use assets 7.1 7.7

Rental expense relating to short-term and low value leases 0.2 0.4

Variable lease payments

3.5 1.4

Property costs 18.0 14.4

Utilities 19.6 12.1

Separately disclosed items (note 5) 14.2 2.0

Grant income

– (5.4)

Other operating costs 43.7 24.0

325.7 237.3

1 Variable lease payments are dependent on turnover levels.

2 Grant income is amounts received from the Government to support businesses throughout the pandemic that were eligible depending on their rateable value.

Details of income and direct expenses relating to rental income from investment properties are shown in note 12.

a) Auditors’ Remuneration

53 weeks ended

1 April 2023

£m

52 weeks ended

26 March 2022

£m

Fees payable to Company’s auditors:

– Related to the audit of the Group and Company 0.5 0.4

0.5 0.4

Other audit related services of £5,000 (2022: £5,000) for covenant reporting and £45,000 (2022: £35,000) for interim review were also incurred in the period.

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4. Operating Costs continued

b) Employee Benefit Expenses

53 weeks ended

1 April 2023

£m

52 weeks ended

26 March 2022

£m

Wages and salaries

2,3

102.6 84.8

Social security costs 8.7 7.0

Pension benefits 2.2 1.9

Other staff costs

5.6 2.5

119.1 96.2

1 Includes Executive Directors.

2 Includes share-based credit of £0.4 million (2022: debit £0.8 million).

3 Prior year staff costs are stated net of £4.3 million claimed from the Government through the CJRS.

4 Includes temporary staff costs of £5.0 million.

c) Average Number of Employees

The average monthly number of persons employed by the Group (including part-time staff) was as follows:

2023

Number

2022

Number

Pub, hotel and restaurant teams 5,138 4,118

Support office

109 122

5,247 4,240

1 Includes Executive Directors.

2 Support office includes Finance, People Team, IT and other central functions.

d) Directors’ Emoluments

Full details are provided in the Directors’ Remuneration Report and tables on pages 86 to 100.

5. Separately Disclosed Items

The Group presents separately disclosed items on the face of the Income Statement for those material items of income and expense which, because of the

nature or expected infrequency of the events giving rise to them, merit separate presentation to allow shareholders to understand better the elements of

financial performance in the year.

53 weeks ended

1 April 2023

£m

52 weeks ended

26 March 2022

£m

Amounts included in operating profit:

Reorganisation costs (0.5) (0.8)

Impairment of properties, right-of-use assets and assets classified as held for sale (note 13) (14.3) (3.3)

Insurance claim (0.2) –

VAT provision release 0.8 –

Adjustment related to settlement of the Beer Business – 2.1

Total separately disclosed items included in operating profit (14.2) (2.0)

Profit on disposal of properties 11.8 6.3

Separately disclosed finance credits:

Finance credit on net pension liabilities 0.5 –

Finance charge on the write down of arrangement fees (0.5) –

Total separately disclosed finance credits – –

Total separately disclosed items before tax (2.4) 4.3

Exceptional tax:

Profit on disposal of properties (1.0) (1.3)

Change in tax rate 0.5 (3.3)

Other items 1.0 1.4

Total separately disclosed tax 0.5 (3.2)

Total separately disclosed items (1.9) 1.1

132 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Notes to the Financial Statements

Continued

The reorganisation costs comprise £0.5 million in relation to corporate restructure during the 53 weeks ended 1 April 2023 (26 March 2022: £0.8 million).

The impairment charge of £14.3 million (26 March 2022: £3.3 million) relates to the write down of 22 properties to their recoverable value (26 March 2022:

six properties).

The insurance claim of £0.2 million is the write off of property, plant and equipment and the cost of the rectification work (£2.7 million) net of insurance monies

claimed (£2.5 million).

The VAT provision release to a VAT adjustment of £0.8 million. In the prior year, £2.1 million credit is the release of the provision, net of the final settlement

amount on the sale of the Fuller’s Beer Business.

The profit on disposal of properties of £11.8 million during the 53 weeks ended 1 April 2023 (26 March 2022: £6.3 million) relates to the disposal of nine

licensed and unlicensed properties (26 March 2022: 12 properties).

The cash impact of operating separately disclosed items before tax for the 53 weeks ended 1 April 2023 was £0.5 million cash outflow (26 March

2022: £1.9 million cash outflow).

6. Finance Costs

53 weeks ended

1 April 2023

£m

52 weeks ended

26 March 2022

£m

Finance Income

Interest income from financial assets 0.2 –

Finance costs

Interest expense arising on:

Financial liabilities at amortised cost – loans and debentures (9.6) (8.1)

Financial liabilities at amortised cost – preference shares (0.1) (0.1)

Financial liabilities at amortised cost – lease liabilities (2.9) (3.1)

Net finance costs before separately disclosed items (12.4) (11.3)

Finance credit on net pension liabilities (note 5) 0.5 –

Finance charge on the write down of arrangement fees (0.5) –

Net finance costs after separately disclosed items (12.4) (11.3)

7. Ta xation

Tax on Profit on Ordinary Activities

Group

53 weeks ended

1 April 2023

£m

52 weeks ended

26 March 2022

£m

Tax charged in the Income Statement

Current income tax:

Current tax on profit for the year – 0.2

Adjustments for current tax on prior periods – 0.6

Total current income tax expense – 0.8

Deferred income tax:

Origination and reversal of temporary differences 3.6 2.2

Change in corporation tax rate – 3.3

Adjustments for deferred tax on prior periods (1.2) (1.9)

Total deferred tax expense 2.4 3.6

Total tax charged in the Income Statement 2.4 4.4

Analysed as:

Before separately disclosed items 2.9 1.2

Separately disclosed items (0.5) 3.2

2.4 4.4

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7. Taxation continued

Reconciliation of the Total Tax Charge

The tax expense in the Income Statement for the year is higher (2022: tax credit is higher) than the standard rate of corporation tax in the UK of 19%

(2022: 19%). The differences are reconciled below:

53 weeks ended

1 April 2023

£m

52 weeks ended

26 March 2022

£m

Profit before income tax expense 10.3 11.5

Accounting profit multiplied by the UK standard rate of corporation tax of 19% (2021: 19%) 2.0 2.2

Items not deductible/(taxable) for tax purposes 0.2 (0.3)

Current and deferred tax (over) provided in previous years (1.2) (1.3)

Net movements in respect of property 1.4 0.5

Change in corporation tax rate – 3.3

Total tax charged in the Income Statement 2.4 4.4

Deferred tax relating to items charged/(credited) to the Income Statement

Deferred tax depreciation 1.5 (0.8)

Unrealised capital gains (on PP&E) 1.7 5.2

Retirement benefit obligations 1.8 1.6

Tax losses 0.7 (2.8)

Other (3.4) (0.7)

Corporate interest restriction 0.1 1.1

Deferred tax in the Income Statement 2.4 3.6

Tax relating to items (credited)/charged to the Statement of Comprehensive Income

Deferred tax:

Valuation gains on financial liabilities – 0.1

Net actuarial (losses)/gains on pension scheme (0.6) 3.8

Total tax (credited)/charged in the Statement of Comprehensive Income (0.6) 3.9

Tax relating to items charged/(credited) directly to equity

Deferred tax:

Share-based payments 0.2 (0.1)

Total tax charged/(credited) to equity 0.2 (0.1)

134 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Notes to the Financial Statements

Continued

Deferred Tax Provision

The deferred tax included in the Balance Sheet is as follows:

Deferred tax

Deferred tax asset/(liability)

Group

Retirement

benefit

obligations

£m

Tax losses

carried forward

£m

Employee share

schemes

£m

Financial

(liabilities)/

assets

£m

Decelerated tax

depreciation

£m

Unrealised

capital gains

(on PP&E)

£m

Pension

spreading

£m

Other

£m

Total

£m

Balances at 27 March 2021 0.7 7.8 0.1 0.1 4.1 (22.3) 2.3 1.9 (5.3)

(Charge)/credit to Income Statement (0.4) 2.8 0.1 – 0.8 (5.2) (1.2) (0.5) (3.6)

(Charge) to other comprehensive

income (3.8) – – (0.1) – – – – (3.9)

Credit taken directly to equity – – 0.1 – – – – – 0.1

Recategorisation – – – – – 0.4 – (0.4) –

Balances at 26 March 2022 (3.5) 10.6 0.3 – 4.9 (27.1) 1.1 1.0 (12.7)

(Charge)/credit to Income Statement (0.8) (0.7) (0.1) – (1.5) (1.7) (1.0) 3.4 (2.4)

Credit to other comprehensive

income 0.6 – – – – – – – 0.6

(Charge) taken directly to equity – – (0.2) – – – – – (0.2)

Balances at 1 April 2023 (3.7) 9.9 – – 3.4 (28.8) 0.1 4.4 (14.7)

1 Includes £4.3 million of timing difference between tax and accounting treatment of capital disposals

2023

£m

2022

£m

Deferred tax assets 17.8 18.5

Deferred tax liabilities (32.5) (31.2)

(14.7) (12.7)

Deferred tax asset/(liability)

Company

Retirement

benefit

obligations

£m

Tax losses

carried forward

£m

Employee share

schemes

£m

Financial

(liabilities)/

assets

£m

Decelerated tax

depreciation

£m

Unrealised

capital gains

(on PP&E)

£m

Pension

spreading

£m

Other

£m

Total

£m

Balances at 27 March 2021 0.7 7.7 0.1 0.1 4.1 (22.3) 2.3 1.9 (5.4)

(Charge)/credit to Income Statement (0.4) 2.8 0.1 – 0.8 (5.2) (1.2) (0.5) (3.6)

(Charge)/credit to other

comprehensive income (3.8) – (0.1) – – – – (3.9)

Credit taken directly to equity – – 0.1 – – – – – 0.1

Recategorisation – – – – – 0.4 – (0.4) –

Balances at 26 March 2022 (3.5) 10.5 0.3 – 4.9 (27.1) 1.1 1.0 (12.8)

(Charge)/credit to Income Statement (0.8) (0.7) (0.1) – (1.7) (0.7) (1.0) 3.4 (2.4)

Credit to other comprehensive

income 0.6 – – – – – – – 0.6

Credit taken directly to equity – – (0.2) – – – – – (0.2)

Balances at 1 April 2023 (3.7) 9.9 – – 3.4 (28.8) 0.1 4.4 (14.7)

1 Includes £4.3 million of timing difference between tax and accounting treatment of capital disposals

2023

£m

2022

£m

Deferred tax assets 17.8 18.4

Deferred tax liabilities (32.5) (31.2)

(14.7) (12.8)

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8. Earnings Per Share

Group

53 weeks

ended

1 April

2023

£m

52 weeks

ended

26 March

2022

£m

Profit attributable to equity shareholders 7.9 7.1

Separately disclosed items net of tax 1.9 (1.1)

Adjusted earnings attributable to equity shareholders 9.8 6.0

Weighted average share capital 60,875,000 61,264,000

Dilutive outstanding options and share awards 90,000 413,000

Diluted weighted average share capital 60,965,000 61,677,000

40p ‘A’ and ‘C’ ordinary share Pence Pence

Basic earnings per share 12.98 11.59

Diluted earnings per share 12.96 11.51

Adjusted earnings per share 16.10 9.79

Diluted adjusted earnings per share 16.07 9.73

4p ‘B’ ordinary share Pence Pence

Basic earnings per share 1.30 1.16

Diluted earnings per share 1.30 1.15

Adjusted earnings per share 1.61 0.98

Diluted adjusted earnings per share 1.61 0.97

For the purposes of calculating the number of shares to be used above, ‘B’ shares have been treated as one-tenth of an ‘A’ or ‘C’ share. The earnings per share

calculation is based on earnings from continuing operations and on the weighted average ordinary share capital which excludes shares held by trusts relating to

employee share options and shares held in treasury of 2,134,152 (2022: 1,744,564).

Diluted earnings per share amounts are calculated using the same earnings figure as for basic earnings per share, divided by the weighted average number of

ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive

potential options into ordinary shares.

Adjusted earnings per share are calculated on profit after tax excluding separately disclosed items and on the same weighted average ordinary share capital as

for the basic and diluted earnings per share. Adjusted earnings per share measures have been included as the Directors consider that these measures better

reflect the underlying earnings of the Group.

9. Dividends

53 weeks ended

1 April

2023

£m

52 weeks ended

26 March

2022

£m

Declared and paid during the year

Equity dividends on ordinary shares:

Final dividend for 2022: 7.41p (2021: 0p) 4.6 –

Interim dividend for 2023: 4.68p (2022: 3.90p) 2.8 2.4

Equity dividends paid 7.4 2.4

Dividends on cumulative preference shares (note 6) 0.1 0.1

Proposed for approval at the Annual General Meeting

Final dividend for 2023: 10.0p (2022: 7.41p) 6.1 4.6

The pence figures above are for the 40p ‘A’ ordinary shares and 40p ‘C’ ordinary shares. The 4p ‘B’ ordinary shares carry dividend rights of one-tenth of those

applicable to the 40p ‘A’ ordinary shares. Own shares held in the employee share trusts do not qualify for dividends as the Trustees have waived their rights.

Dividends are also not paid on own shares held as treasury shares.

136 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Notes to the Financial Statements

Continued

10. Intangible Assets

Group and Company

Goodwill

£m

IT Development

costs

£m

Group

Total

£m

Company

Total

£m

Cost

At 27 March 2021 31.8 0.6 32.4 4.2

Additions – 2.4 2.4 2.4

At 26 March 2022 31.8 3.0 34.8 6.6

At 1 April 2023 31.8 3.0 34.8 6.6

Amortisation and impairment

At 27 March 2021 5.1 – 5.1 0.2

Provided during the year – 0.2 0.2 0.2

At 26 March 2022 5.1 0.2 5.3 0.4

Provided during the year – 0.5 0.5 0.5

At 1 April 2023 5.1 0.7 5.8 0.9

Net book value at 1 April 2023 26.7 2.3 29.0 5.7

Net book value at 26 March 2022 26.7 2.8 29.5 6.2

Net book value at 27 March 2021 26.7 0.6 27.3 4.0

IT Development costs

Costs are capitalised as IT development costs where it is deemed that the Group has control of the underlying asset. IT development costs relate to the implementation of

a new finance system and are made up of consulting time and internal employee costs. Amortisation is recognised over the useful life of the asset of five years.

Goodwill

2023 2022

Goodwill is allocated to CGUs as follows:

Managed

£m

Tenanted

£m

Total

£m £m

Gales estate 9.1 13.6 22.7 22.7

Jacomb Guinness estate 0.6 – 0.6 0.6

Bel & The Dragon 1.0 – 1.0 1.0

Cotswold Inns & Hotels 2.4 – 2.4 2.4

13.1 13.6 26.7 26.7

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11. Property, Plant and Equipment

Group

Land &

buildings –

owned & used

£m

Land &

buildings –

owned &

acting as

lessor

£m

Plant,

machinery &

vehicles

£m

Fixtures &

fittings

£m

Total

£m

Cost

At 27 March 2021 482.7 107.8 6.3 171.6 768.4

Additions 11.3 1.8 – 9.6 22.7

Disposals (1.3) – – (1.9) (3.2)

Transfer to assets held for sale (note 19) (1.5) – – (0.4) (1.9)

Transfer from assets held for sale (note 19) 2.4 – – 0.6 3.0

At 26 March 2022 493.6 109.6 6.3 179.5 789.0

Additions 12.0 2.3 – 15.7 30.0

Disposals (1.4) (0.3) – (6.6) (8.3)

Transfer to assets held for sale (note 19) (7.8) – – (1.4) (9.2)

At 1 April 2023 496.4 111.6 6.3 187.2 801.5

Depreciation and impairment

At 27 March 2021 48.8 9.7 1.7 118.0 178.2

Provided during the year 4.2 0.6 – 13.1 17.9

Disposals (1.3) – – (1.9) (3.2)

Impairment loss 3.3 – – – 3.3

Transfer to assets held for sale (note 19) (0.1) – – (0.3) (0.4)

Transfer from assets held for sale (note 19) – – – 0.5 0.5

At 26 March 2022 54.9 10.3 1.7 129.4 196.3

Provided during the year 4.8 1.0 – 13.3 19.1

Disposals (0.8) – – (6.3) (7.1)

Impairment loss (note 13) 13.4 – – – 13.4

Transfer to assets held for sale (note 19) (2.3) – – (1.2) (3.5)

At 1 April 2023 70.0 11.3 1.7 135.2 218.2

Net book value at 1 April 2023 426.4 100.3 4.6 52.0 583.3

Net book value at 26 March 2022 438.7 99.3 4.6 50.1 592.7

Net book value at 27 March 2021 433.9 98.1 4.6 53.6 590.2

138 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Notes to the Financial Statements

Continued

Company

Land &

buildings

– owned &

used

£m

Land &

buildings –

owned &

acting as

lessor

£m

Plant,

machinery &

vehicles

£m

Fixtures &

fittings

£m

Total

£m

Cost

At 27 March 2021 479.2 107.8 4.8 171.2 763.0

Additions 11.3 1.8 – 9.6 22.7

Disposals (1.3) – – (1.9) (3.2)

Transfer to assets held for sale (note 19) (1.5) – – (0.4) (1.9)

Transfer from assets held for sale (note 19) 2.4 – – 0.6 3.0

At 26 March 2022 490.1 109.6 4.8 179.1 783.6

Additions 12.0 2.3 – 15.7 30.0

Disposals (1.4) (0.3) – (6.6) (8.3)

Transfer to assets held for sale (note 19) (7.8) – – (1.4) (9.2)

At 1 April 2023 492.9 111.6 4.8 186.8 796.1

Depreciation and impairment

At 27 March 2021 44.6 9.7 2.5 116.0 172.8

Provided during the year 4.2 0.6 – 13.1 17.9

Disposals (1.3) – – (1.9) (3.2)

Impairment loss 3.3 – – – 3.3

Transfer to assets held for sale (note 19) (0.1) – – (0.3) (0.4)

Transfer from asset held for sale – – – 0.5 0.5

At 26 March 2022 50.7 10.3 2.5 127.4 190.9

Provided during the year 4.8 1.0 – 13.3 19.1

Disposals (0.8) – – (6.3) (7.1)

Impairment loss 13.4 – – – 13.4

Transfer to assets held for sale (note 19) (2.3) – – (1.2) (3.5)

At 1 April 2023 65.8 11.3 2.5 133.2 212.8

Net book value at 1 April 2023 427.1 100.3 2.3 53.6 583.3

Net book value at 26 March 2022 439.4 99.3 2.3 51.7 592.7

Net book value at 27 March 2021 434.6 98.1 2.3 55.2 590.2

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12. Investment Properties

Group and

Company

Freehold and

leasehold properties

£m

Cost at 27 March 2021 3.3

Transfer to assets held for sale (1.5)

Disposals (0.1)

Cost at 26 March 2022 1.7

Disposals (0.1)

At 1 April 2023 1.6

Depreciation and impairment at 27 March 2021 0.2

Provided during the year –

Transfer to asset held for sale (0.1)

At 26 March 2022 0.1

Provided during the year –

At 1 April 2023 0.1

Net book value at 1 April 2023 1.5

Net book value at 26 March 2022 1.6

Net book value at 27 March 2021 3.1

Fair value at 1 April 2023 6.7

Fair value at 26 March 2022 8.4

Fair value at 27 March 2021 15.0

The fair value of investment properties has been estimated by the Directors, based on the rental income earned on the properties during the year and average

yields earned on comparable properties from publicly available information, which is a Level 3 fair value valuation technique. An independent valuation of the

properties has not been performed.

Impairment

The Group considers each trading outlet to be a CGU and each CGU is reviewed annually for indicators of impairment. In assessing whether an asset has been

impaired, the carrying amount of the CGU is compared to its recoverable amount. The recoverable amount is the higher of its fair value less costs to sell and its

value in use. During the 53 weeks ended 1 April 2023, the Group did not impair any investment properties (2022: £nil).

Management have determined that the highest and best use of the property is its current use.

Investment Property Income

The properties are let on both landlord and tenant repairing leases. Amounts recognised in the profit for the financial year relating to rental income from

investment properties are as follows:

Group and Company

2023

£m

2022

£m

Rental income 0.3 0.4

Direct operating expenses – (0.1)

All direct operating expenses relate to properties that generate rental income.

140 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Notes to the Financial Statements

Continued

13. Impairment

During the year, impairment losses of £14.3 million (2022: £3.3 million) were recognised within separately disclosed items:

Group

2023

£m

2022

£m

Impairment losses

Property, plant and equipment 13.4 3.3

Right-of-use assets 0.5 –

Assets held for sale 0.4 –

Total net impairment charge 14.3 3.3

Company

2023

£m

2022

£m

Impairment losses

Property, plant and equipment 13.4 3.3

Right-of-use assets 0.5 –

Assets held for sale 0.4 –

Investments in subsidiaries

– 0.2

Total net impairment charge 14.3 3.5

1 Investment of Cotswold Inns & Hotels was impaired by £0.4 million as the majority of the trade and assets have been hived up into the Parent Company (2022: £0.2 million).

Property, Plant and Equipment and Right-of-use Assets

The Group considers each trading outlet to be a CGU and each CGU is reviewed annually for indicators of impairment. In assessing whether an asset has

been impaired, the carrying amount of the CGU is compared to its recoverable amount. The recoverable amount is the higher of its fair value less costs to sell

(“FVLCS”) and its value in use. In the absence of any information about the fair value of a CGU, the recoverable amount is deemed to be its value in use. For the

purposes of estimating the value in use of CGUs, management have used a discounted cash flow approach. The calculations use cash flow projections based on

the following plans covering a three year period.

The Group uses a range of methods for estimating FVLCS which include applying a market multiple to the CGU EBITDA and, for leasehold sites, present value

techniques using a discounted cash flow method. The Group has also obtained valuations for a subset of these CGUs from a third party property valuation

expert. Both FVLCS methods rely on inputs not normally observable by market participants and are therefore Level 3 measurements in the fair value hierarchy.

The key assumptions used by management in setting the Board approved financial budgets for the initial three year period were as follows:

• Trading volumes and forecast growth rates: the forecasts make assumptions on trading volumes by site based on the FY2023 results, assumptions around

the UK economic recovery and the on-going impact on consumer confidence

• Operating profits: the forecast are based on historical experience of operating margins, adjusted for the impact of inflation most notably food, utilities, and

wage inflation. The forecast assumes some of these cost pressures to abate as we move through FY2024 and into FY2025

• Local factors impacting the site in the current year or expected to impact the site in future years. Key assumptions include the future potential of recently

invested sites and the impact of increasing or reducing market supply in the local area.

Other assumptions used:

• A long-term growth rate of 2.0% (2022: 2.0%) was used for cash flows subsequent to the three year approved budget/forecast period.

• An EBITDA multiple is estimated based on a normalised trading basis and market data obtained from external sources. An average multiple of 10.5x (freehold

11.8x) is used for the managed estate and 10.9x on the Tenanted estate.

• The discount rate is based on the Group’s weighted average cost of capital, which is used across all CGUs due to their similar characteristics. The pre tax

discount rate is 10.3% (2022: 8.6%).

Impairments are recognised where the property valuation is also lower than the CGU’s carrying value for those determined to be at risk of impairment. This is

measured as the difference between the carrying value and the higher of FVLCS and its value in use. Where the property valuation exceeds the carrying value,

no impairment is required.

During the 53 weeks ended 1 April 2023, the Group recognised an impairment loss of £13.4 million (FY2022: £3.3 million) on property, plant and equipment

and £0.5 million (FY2022: £nil million) of impairment on right-of-use assets in respect of the write down of twenty two licensed properties where their asset

values exceeded the higher of FVLCS or their value in use. The impairment losses were driven principally by changes in the local competitive environment in

which the pubs are situated.

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13. Impairment continued

Sensitivity to Changes in Assumptions

The calculation of value in use is most sensitive to the assumptions in respect of achievement of budgeted cash flows, growth rate and discount rate. The

calculation of value in use is also dependent on the following assumptions: sales volume; gross margin in Managed premises; barrelage and rent projections

in Tenanted premises; and wage cost in Managed premises. The key assumptions above have their assigned values based on management knowledge and

historical information. The value in use calculations are sensitive to the assumptions used. The Directors consider a movement of 1.5% in the discount rate and

0.5% in the growth rate to be reasonable with reference to current market yield curves and the current economic conditions. The impact is set out as follows:

Impact on impairment of assets at risk – increase/(decrease)

2023

£m

2022

£m

Increase discount rate by 1.5% 24.7 11.1

Decrease discount rate by 1.5% (15.8) (4.4)

Increase growth rate by 0.5% (5.3) (1.5)

Decrease growth rate by 0.5% 6.7 3.3

The value in use calculation is also sensitive to variations in the budgeted cash flows, which represents the rate of recovery from the pandemic, the inflationary

environment and the consumer behaviour as a result of it. The CGUs represented by the “impact on impairment of assets at risk” would have their FVLCS

determined in order to conclude whether an impairment is required. A general decrease in property values across the portfolio would have a similar effect

to that set out above, i.e., any reduction in property values would lead to assets being at risk of impairment. In the current year, a decrease of 5% in the FVLCS

would have led to an additional impairment of £1.9 million for the CGUs where recoverable amount has been assessed on FVLCS.

Goodwill

Goodwill acquired through business combinations has been allocated for impairment testing on an estate and divisional CGU level. This represents the lowest

level within the Group at which goodwill is monitored for internal management purposes. An analysis of goodwill by operating segment is included within note

10. Recoverable amount is based on a calculation of value in use based upon the same cash flows as discussed under property, plant and equipment. Cash

flows beyond the budget period are extrapolated in perpetuity on the assumption that the growth rate does not exceed the average long-term growth rate for

the relevant markets. The same assumptions to calculate the value in use are used for goodwill as those for property, plant and equipment.

Sensitivity to Changes in Assumptions

Management have considered reasonable changes in key assumptions used in their calculations of value in use. An increase of 1.5% in the discount rate or

decrease in the growth of 0.5% would not result in an impairment.

Investment Property

The Group considers each trading outlet to be a CGU and each CGU is reviewed annually for indicators of impairment. During the 53 weeks ended 1April 2023,

the Group did not impair any investment properties (2022: £nil). Refer to note 12.

14. Other Financial Assets and Liabilities

Group and Company

Group

2023

£m

Group

2022

£m

Company

2023

£m

Company

2022

£m

Interest rate cap and collar 0.1 – 0.1 –

Interest rate swaps – (0.1) – (0.1)

Total financial assets/(liabilities) within non-current assets/(liabilities) 0.1 (0.1) 0.1 (0.1)

Details of the interest rate cap and collar and interest rate swaps are provided in note 25c (i).

142 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Notes to the Financial Statements

Continued

15. Investments in Subsidiaries

Company

Cost

£m

Provision

£m

Net book value

£m

At 27 March 2021 120.8 (11.5) 109.3

Impairment – (0.2) (0.2)

At 26 March 2022 120.8 (11.7) 109.1

Impairment – (0.4) (0.4)

At 1 April 2023 120.8 (12.1) 108.7

Principal subsidiary undertakings Holding Proportion held Nature of business

Griffin Catering Services Limited £1 ordinary shares 100% (indirect) Managed houses service company

George Gale and Company Limited £1 ordinary shares 100% Non-trading subsidiary

25p ‘A’ ordinary shares 100%

£10 preference shares 100%

F.S.T. Trustee Limited £1 ordinary shares 100% Non-trading subsidiary

Fuller Smith & Turner Estates Limited £1 ordinary shares 100% Non-trading subsidiary

Ringwoods Limited £1 ordinary shares 100% Non-trading subsidiary

Griffin Inns LTD. £1 ordinary shares 100% Non-trading subsidiary

Jacomb Guinness Limited £1 ordinary shares 100% Non-trading subsidiary

45 Woodfield Limited £1 ordinary shares 100% (indirect) Non-trading subsidiary

Grand Canal Trading Limited £1 ordinary shares 100% (indirect) Non-trading subsidiary

B & D Country Inns I Limited £1 ordinary shares 100% Holding company

B & D Country Inns II Limited £1 ordinary shares 100% Holding company

B & D (Cookham) Limited £1 ordinary shares 100% (indirect) Non-trading subsidiary

B & D (Farnham) Limited £1 ordinary shares 100% (indirect) Non-trading subsidiary

B & D (Kingsclere) Limited £1 ordinary shares 100% (indirect) Non-trading subsidiary

B & D (Odiham) Limited £1 ordinary shares 100% (indirect) Non-trading subsidiary

B & D (Reading) Limited £1 ordinary shares 100% (indirect) Non-trading subsidiary

B & D (Win) Limited £1 ordinary shares 100% (indirect) Non-trading subsidiary

RSH 200 Limited £1 ordinary shares 100% Holding company

Cotswold Inns and Hotels Limited £1 ordinary shares 100% (indirect) Non-trading subsidiary

The above companies are registered and operate in England and Wales. The registered office of all subsidiary companies is the same as Fuller, Smith & Turner

P.L.C. at Pier House, 86-93 Strand-on-the-Green, London, England, W4 3NN.

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Notes to the Financial Statements

Continued

144 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

16. Leases

This note provides information for leases where the Group is a lessee. For leases where the Group is a lessor, see note 28.

a) Amounts Recognised in the Balance Sheet

Group and Company

Group

2023

£m

Group

2022

£m

Company

2023

£m

Company

2022

£m

Right-of-use assets

Properties 66.2 73.1 65.8 72.6

Equipment 0.2 0.6 0.2 0.6

Vehicles – 0.1 – 0.1

66.4 73.8 66.0 73.3

Lease liabilities

Current 4.8 6.8 4.7 6.5

Non-current 67.0 73.9 66.6 72.8

71.8 80.7 71.3 79.3

Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:

Group

Property

£m

Equipment

£m

Vehicles

£m

Total

£m

Net carrying value at 27 March 2021 81.3 0.2 0.4 81.9

Lease amendments- rent concessions (2.6) – – (2.6)

Lease amendments

1.3 1.1 (0.2) 2.2

Depreciation (6.9) (0.7) (0.1) (7.7)

Net carrying value as at 26 March 2022 73.1 0.6 0.1 73.8

Disposals (1.0) – – (1.0)

Lease amendments

1.3 – (0.1) 1.2

Depreciation (6.7) (0.4) – (7.1)

Impairment (0.5) – – (0.5)

Net carrying value as at 1 April 2023 66.2 0.2 – 66.4

Company

Property

£m

Equipment

£m

Vehicles

£m

Total

£m

Net carrying value at 27 March 2021 80.8 0.2 0.4 81.4

Lease amendments- rent concessions (2.6) – – (2.6)

Lease amendments1 1.3 1.1 (0.2) 2.2

Depreciation (6.9) (0.7) (0.1) (7.7)

Net carrying value as at 26 March 2022 72.6 0.6 0.1 73.3

Disposals (1.0) – – (1.0)

Lease amendments

1.3 – (0.1) 1.2

Depreciation (6.6) (0.4) – (7.0)

Impairment (0.5) – – (0.5)

Net carrying value as at 1 April 2023 65.8 0.2 – 66.0

1 Lease amendments include lease terminations, modifications, reassessments and extensions to existing lease agreements.

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Set out below are the carrying amounts of lease liabilities (included under interest bearing loans and borrowings) and the movements during the period:

Group

£m

Company

£m

Net carrying value at 27 March 2021 89.9 88.3

Disposals (3.1) (3.1)

Lease amendments- rent concessions (2.6) (2.6)

Lease amendments

2.2 2.2

Accretion of interest 3.1 3.0

Payments (8.8) (8.5)

Net carrying value as at 26 March 2022 80.7 79.3

Disposal (3.1) (2.3)

Lease amendments

1.2 1.2

Accretion of interest 2.9 2.9

Payments

(9.9) (9.8)

Net carrying value as at 1 April 2023 71.8 71.3

1 Lease amendments include lease terminations, modifications, reassessments and extensions to existing lease agreements.

2 £1.5 million of the payments were payments in advance for FY2024.

A maturity analysis of gross lease liability payments is included within note 25.

b) Amounts Recognised in the Income Statement

Group

53 weeks

ended

01 April

2023

£m

52 weeks

ended

27 March

2022

£m

Depreciation charge on right-of-use assets

Properties 6.7 6.9

Equipment 0.4 0.7

Vehicles – 0.1

7.1 7.7

Interest expense (included in finance cost) 2.9 3.1

Expense relating to short-term leases and low value assets (included in operating costs) 0.2 0.4

Expense relating to variable lease payments not included in lease liabilities (included in operating costs) 3.5 1.4

Impairment of right-of-use assets 0.5 –

Income from sub leasing right-of-use assets (0.2) (0.2)

6.9 4.7

The Group’s total cash outflow in relation to leases in 2023 was £9.9 million (2022: £8.6 million).

Variable lease payments

Some property leases contain variable payment terms that are linked to sales generated from a pub. Variable payment terms are used for a variety of reasons,

including minimising the fixed costs base for newly established pubs. Variable lease payments that depend on sales are recognised in profit or loss in the period

in which the condition that triggers those payments occurs. Variable lease payments recognised in the Income Statement in the year ended 1 April 2023 were

£3.5 million (2022: £1.4 million).

17. Inventories

Group and Company

Group

2023

£m

Group

2022

£m

Company

2023

£m

Company

2022

£m

Stock at trading outlets 4.2 3.6 4.2 3.6

Amounts recognised in profit or loss

Inventories recognised as an expense during the year ended 1 April 2023 amounted to £73.6 million (2022: £53.2 million). These were included in operating

costs. Inventory is stated net of a provision for obsolete stock of £0.2 million (2022: £0.2 million).

Notes to the Financial Statements

Continued

146 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

18. Trade and Other Receivables

Group

2023

£m

2022

£m

Trade receivables 1.6 1.6

Other receivables 1.4 4.8

Prepayments and accrued income 7.2 4.3

10.2 10.7

Company

2023

£m

2022

£m

Trade receivables 1.6 1.6

Other receivables 1.4 4.8

Prepayments and accrued income 7.2 4.3

10.2 10.7

At 1 April 2023, the Group has included in other receivables £0.3 million (2022: £0.6 million) in relation to lease receivable for subleases.

The trade receivables balance above is shown net of the loss allowance. The Group and Company provide against trade receivables based on an expected

credit loss model, calculated from the probability of default for the remaining life of the asset.

In measuring the expected credit losses, the trade receivables have been assessed on a collective basis as they possess shared credit risk characteristics.

They have been grouped based on the days past due and also according to the geographical location of customers, which is the same for all.

The expected loss rates are based on the payment profile for sales over the past 24 months before the Balance Sheet date. The historical rates are adjusted to

reflect current and forward-looking macroeconomic factors affecting the customer’s ability to settle the amount outstanding. A financial asset is written off

when there is no reasonable expectation of recovering the contractual cash flows.

The movements on the loss allowance during the year are summarised below:

Group and Company

2023

£m

2022

£m

Opening balance 0.9 1.0

(Decrease) in loss allowance recognised in profit and loss – (0.1)

Amounts released for balances written off during the year (0.1) –

Closing balance 0.8 0.9

The loss allowance for trade receivables is recorded in the accounts separately from the gross receivable. The contractual ageing of the trade receivables

balance is as follows:

Group and Company

Group

2023

£m

Group

2022

£m

Company

2023

£m

Company

2022

£m

Current 1.1 1.1 1.1 1.1

Overdue up to 30 days 0.5 0.5 0.5 0.5

Overdue between 30 and 60 days 0.1 0.1 0.1 0.1

Overdue between 60 and 90 days – – – –

Overdue more than 90 days 0.7 0.8 0.7 0.8

Trade receivables before loss allowance 2.4 2.5 2.4 2.5

Less provision (0.8) (0.9) (0.8) (0.9)

Trade receivables net of loss allowance 1.6 1.6 1.6 1.6

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19. Assets Held for Sale

Group

£m

Company

£m

Assets held for sale as at 26 March 2022 5.4 5.4

Assets disposed of during the year (3.7) (3.7)

Assets transferred from property, plant and equipment 5.7 5.7

Impairment (note 13) (0.4) (0.4)

Assets held for sale as at 1 April 2023 7.0 7.0

At 1 April 2023, seven properties have been classified as held for sale (2022: 19 properties). These properties were reclassified predominantly from property,

plant and equipment as the carrying amounts of the properties identified are to be recovered principally through sale transactions rather than through

continuing use. Sale is expected within 12 months from the reporting date. An impairment charge of £0.4 million was recognised on reclassifying the property

to held for sale (2022: £nil). Valuations performed are based on observations of transactions involving properties of a similar nature, location and condition.

Since this valuation was performed using a significant non-observable input, the fair value measurement can be categorised as a Level 3.

20. Trade and Other Payables

Due within one year:

Group

2023

£m

2022

£m

Trade payables 19.0 24.4

Other tax and social security 4.7 4.3

Other payables 7.6 7.2

Accruals 19.9 18.2

Contract liabilities 3.4 3.0

54.6 57.1

Due within one year:

Company

2023

£m

2022

£m

Trade payables 19.0 24.4

Amounts due to subsidiary undertakings 143.1 136.7

Other tax and social security 4.7 4.3

Other payables 7.6 7.2

Accruals 19.9 18.2

Contract liabilities 3.4 3.0

197.7 193.8

Company amounts due to subsidiary undertakings of £143.1 million (2022: £136.7 million) have no fixed repayment date. Interest is payable on the balance at

3% above the Bank of England base rate. Company amounts due to subsidiary undertakings are unsecured.

Contract liabilities relate to deposits received from customers to secure bookings for events and accommodation. The balance will unwind and be recognised as

revenue in the following financial year.

21. Cash, Borrowings and Net Debt

Cash and Short-Term Deposits

Group

2023

£m

Group

2022

£m

Company

2023

£m

Company

2022

£m

Cash at bank and in hand 14.1 15.6 14.1 15.6

For the purposes of the Consolidated Cash Flow Statement, cash and cash equivalents comprise cash at bank and in hand, as above. Cash at bank earns

interest at floating rates.

Notes to the Financial Statements

Continued

148 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

21. Cash, Borrowings and Net Debt continued

Borrowings

Group

2023

£m

Group

2022

£m

Company

2023

£m

Company

2022

£m

Bank loans 119.4 120.0 119.4 120.0

Debenture stock 25.9 25.9 25.9 25.9

Preference shares 1.6 1.6 1.6 1.6

Total borrowings 146.9 147.5 146.9 147.5

Analysed as:

Borrowings within current liabilities 6.0 120.0 6.0 120.0

Borrowings within non-current liabilities 140.9 27.5 140.9 27.5

146.9 147.5 146.9 147.5

All borrowings at both year ends are denominated in Sterling and, where appropriate, are stated net of issue costs. Further information on borrowings is given

in note 25.

Bank Loans

Group and Company

On 27 May 2022, the Group secured a new facility of £200 million, split between a revolving credit facility of £110 million and a term loan of £90 million, for a

tenure of four years to May 2026. The new facilities bear an interest rate margin dependent on leverage covenant plus SONIA. Under the new agreement, there

was a minimum liquidity requirement of £10 million until November 2022. From December 2022, there is a covenant suite which consists of net debt to EBITDA

(leverage) and EBITDA to net finance charges to be tested quarterly.

At 1 April 2023, £79.5 million (2022: £71.2 million) of the total of £200 million (2022: £191.7 million) committed bank facility was available and undrawn.

The bank loans are repayable as follows:

2023

£m

2022

£m

On demand or within one year – 120.6

Less: bank loan arrangement fees – (0.6)

Current liabilities – 120.0

In the third to fifth year inclusive 120.5 –

Less: bank loan arrangement fees (1.1) –

Non-current liabilities 119.4 –

Debenture Stock

The debenture stocks are secured on specified fixed and floating assets of the Company and are redeemable on maturity.

Debenture stocks are repayable as follows:

2023

£m

2022

£m

On demand or within one year – 10.70% 1st Mortgage Debenture Stock 2023 6.0 –

Current liabilities 6.0 –

In the first to second year inclusive – 10.70% 1st Mortgage Debenture Stock 2023 – 6.0

In greater than five years – 6.875% Debenture Stock 2028 (1st floating charge) 20.0 20.0

Less: discount on issue (0.1) (0.1)

Non-current liabilities 19.9 25.9

Preference Shares

The Company’s preference shares are classified as debt. The shares are not redeemable and are included in borrowings within non-current liabilities. See note

23 for further details of the preference shares.

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Analysis of Net Debt

Group

53 weeks ended 1 April 2023

26 March

2022

£m

Cash flows

£m

Non-cash

£m

1 April

2023

£m

Cash and cash equivalents:

Cash and short-term deposits 15.6 (1.5) – 14.1

15.6 (1.5) – 14.1

Financial liabilities:

Lease liabilities (80.7) 11.9 (3.0) (71.8)

(80.7) 11.9 (3.0) (71.8)

Debt:

Bank loans

(120.0) 1.5 (0.9) (119.4)

Debenture stock (25.9) – – (25.9)

Preference shares (1.6) – – (1.6)

Total borrowings (147.5) 1.5 (0.9) (146.9)

Net debt (212.6) 11.9 (3.9) (204.6)

52 weeks ended 26 March 2022

27 March

2021

£m

Cash flows

£m

Non-cash

£m

26 March

2022

£m

Cash and cash equivalents:

Cash and short-term deposits 17.1 (1.5) – 15.6

17.1 (1.5) – 15.6

Financial liabilities:

Lease liabilities (89.9) 10.5 (1.3) (80.7)

(89.9) 10.5 (1.3) (80.7)

Debt:

Bank loans

(107.9) (11.4) (0.7) (120.0)

CCFF (99.8) 100.0 (0.2) –

Debenture stock (25.9) – – (25.9)

Preference shares (1.6) – – (1.6)

Total borrowings (235.2) 88.6 (0.9) (147.5)

Net debt (308.0) 97.6 (2.2) (212.6)

1 Non-cash movements relate to the amortisation of arrangement fees, arrangement fees accrued and movements in lease liabilities.

2 Bank loans are net of arrangement fees and cash flows include the payment of arrangement fees.

Notes to the Financial Statements

Continued

150 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

21. Cash, Borrowings and Net Debt continued

Company

53 weeks ended 1 April 2023

26 March

2022

£m

Cash flows

£m

Non-cash

£m

1 April

2023

£m

Cash and cash equivalents:

Cash and short-term deposits 15.6 (1.5) – 14.1

15.6 (1.5) – 14.1

Financial liabilities:

Lease liabilities (79.3) 11.4 (3.4) (71.3)

(79.3) 11.4 (3.4) (71.3)

Debt:

Bank loans

(120.0) 1.5 (0.9) (119.4)

Debenture stock (25.9) – – (25.9)

Preference shares (1.6) – – (1.6)

Total borrowings (147.5) 1.5 (0.9) (146.9)

Net debt (211.2) 11.4 (4.3) (204.1)

52 weeks ended 26 March 2022

27 March

2021

£m

Cash flows

£m

Non-cash

£m

26 March

2022

£m

Cash and cash equivalents:

Cash and short-term deposits 16.9 (1.3) – 15.6

16.9 (1.3) – 15.6

Financial liabilities:

Lease liabilities (88.3) 10.2 (1.2) (79.3)

(88.3) 10.2 (1.2) (79.3)

Debt:

Bank loans

(107.9) (11.4) (0.7) (120.0)

CCFF (99.8) 100.0 (0.2) –

Debenture stock (25.9) – – (25.9)

Preference shares (1.6) – – (1.6)

Total borrowings (235.2) 88.6 (0.9) (147.5)

Net debt (306.6) 97.5 (2.1) (211.2)

1 Non-cash movements relate to the amortisation of arrangement fees, arrangement fees accrued and movements in lease liabilities.

2 Bank loans are net of arrangement fees and cash flows include the payment of arrangement fees.

22. Pensions

a) Retirement Benefit Plans – Group and Company

The Group operates one closed funded defined benefit pension scheme, the Fuller Smith & Turner Pension Plan (“The Scheme”). The plan is defined benefit in

nature, with assets held in separate professionally managed, trustee-administered funds. The Scheme is an HM Revenue & Customs registered pension plan

and subject to standard United Kingdom pension and tax law. On 1 January 2015 the plan was closed to future accrual.

The Group also operates a defined contribution stakeholder pension plans for its employees. The Fuller’s Stakeholder Pension Plan was set up for new

employees of the Parent Company after the closure of the Fuller, Smith & Turner Pension Plan to new entrants on 1 August 2005.

The Group offers workplace pensions to all employees who are not members of the defined contribution stakeholder pension plan. The Group offers these

pensions through the National Employment Savings Trust (“NEST”).

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The Group also pays benefits, which are unfunded, to a number of former employees. The Directors consider these benefits to be defined benefit in nature and

the full defined benefit liability is recognised on the Balance Sheet.

Group and Company

53 weeks ended

1 April 2023

£m

52 weeks ended

26 March 2022

£m

Total amounts charged in respect of pensions in the year

(Credited)/charged to Income Statement:

Defined benefit scheme – net finance credit – separately disclosed items (0.5) –

Defined contribution schemes and NEST – total operating charge 2.2 1.9

1.7 1.9

Charge/(Credit) to equity:

Defined benefit schemes – net actuarial loss/(gains) 2.5 (15.5)

Total pension charge/(credit) 4.2 (13.6)

b) Defined Contribution Stakeholder Pension Plans – Group and Company

The total cost charged to income in respect of the defined contribution stakeholder schemes is shown in the total operating charge above.

c) Defined Benefit Plans – Group and Company

The Scheme provides pensions and lump sums to members on retirement and to their dependants on death.

Trustees are appointed by both the Company and the Scheme’s membership and act in the interest of the Scheme and all relevant stakeholders, including the

members and the Company. The Trustees are also responsible for the investment of the Scheme’s assets.

The Company pays the costs as determined by regular actuarial valuations. The Trustees are required to use prudent assumptions to value the liabilities and

costs of the Scheme whereas the accounting assumptions must be best estimates.

Responsibility for making good any deficit on the Scheme lies with the Company and this introduces a number of risks for the Company. The major risks are:

• Interest and investment risk – The value of the Scheme’s assets are subject to volatility in equity prices. The Scheme has diversified its investments to

reduce the impact of volatility and variable interest return rates

• Inflation risk – The defined benefit obligation is linked to inflation so higher rates would result in a higher defined benefit obligation

• Longevity risk – An increase over the assumptions applied will increase the defined benefit obligation.

The Company and Trustees are aware of these risks and manage them through appropriate investment and funding strategies. The Trustees manage

governance and operational risks through a number of internal control policies.

The Scheme is subject to regular actuarial valuations, which are usually carried out every three years. In April 2023, the 2022 triennial valuation was concluded,

and the Company has agreed to continue to pay contributions into the Plan in line with the existing recovery plan. Under this plan, deficit reduction contributions

started at £2.2 million per annum in July 2022. These are payable in equal monthly instalments and increase each January in line with CPI. As of January 2023,

the deficit reduction contributions have increased to £2.4 million. Fixed security over certain Company’s freehold properties (with a net book value of £29.8 million at

1 April 2023) has been provided to the Plan as additional security, the value of which will be reviewed at each triennial valuation. The next triennial valuation is due on

30 July 2025.

The figures in the following disclosures were measured using the projected unit credit method.

The Scheme has not invested in any of the Group’s own financial instruments or in properties or other assets in use by the Group.

Key assumptions

The key assumptions used in the valuation of the Scheme are set out below:

Mortality assumptions

2023

Years

2022

Years

Current pensioners (at 65) – males 22.0 22.2

Current pensioners (at 65) – females 24.2 24.5

Future pensioners (at 65) – males 23.3 23.6

Future pensioners (at 65) – females 25.7 25.9

The Scheme is now closed to future accrual. The average age of the members who were active at closure is 58 for males and 55 for females. The average age

of all non-pensioners is 57.

Notes to the Financial Statements

Continued

152 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

22. Pensions continued

Key financial assumptions used in the valuation of the Scheme 2023 2022

Rate of increase in pensions in payment 3.20% 3.75%

Discount rate 4.75% 3.00%

Inflation assumption – RPI 3.20% 3.80%

Inflation assumption – CPI (pre 2030/post 2030) 2.3%/3.2% 2.9%/3.8%

The present value of the Scheme liabilities is sensitive to the assumptions used, as follows:

Impact on Scheme liabilities – increase/(decrease)

2023

£m

2022

£m

Increase discount rate by 0.1% (1.2) (2.1)

Increase inflation assumption by 0.1%

0.1 1.3

Increase life expectancies by 1 year 3.9 6.2

1 The sensitivity analyses are based on a change in an assumption whilst holding all of the other assumptions constant. In practice, this is unlikely to occur and changes in some of the

assumptions may be correlated. When calculating the sensitivity to change, the same actuarial method has been applied as when calculating the pension liability within the Balance

Sheet. Due to the Scheme closing to future accrual on 1 January 2015, there are no longer any active members in the Scheme. As the members who were active at closure did not

maintain a salary link on their past service benefits, the future salary increase assumptions no longer have an impact on the Scheme’s liabilities.

2 For members who were active at closure, their pensions now increase in deferment in line with CPI inflation.

Assets in the Scheme

1 April 2023

£m

26 March 2022

£m

Corporate bonds 56.4 25.0

Index linked debt instruments 28.7 26.0

Overseas equities 6.6 31.5

Alternatives

19.0 56.5

Cash 0.3 1.6

Annuities 2.4 3.3

Total market value of assets 113.4 143.9

1 Alternatives is composed of holdings in diversified growth investment funds.

2023

£m

2022

£m

Fair value of Scheme assets 113.4 143.9

Present value of Scheme liabilities (98.8) (129.6)

Surplus in the Scheme 14.6 14.3

Included within the total present value of Group and Company Scheme liabilities of £98.8 million (2021: £129.6 million) are liabilities of £1.5 million

(2022: £1.9 million) which are entirely unfunded. These have been shown separately on the Balance Sheet as there is no right to offset the assets of the funded

Scheme against the unfunded Scheme.

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Defined benefit obligation Fair value of Scheme assets Net defined benefit surplus

2023

£m

2022

£m

2023

£m

2022

£m

2023

£m

2022

£m

Balance at beginning of the year (129.6) (147.3) 143.9 143.8 14.3 (3.5)

Included in profit and loss

Net interest credit (3.9) (2.8) 4.4 2.8 0.5 –

(3.9) (2.8) 4.4 2.8 0.5 –

Included in other comprehensive Income

Actuarial (losses)/gain relating to:

Actual return less expected return on Scheme’s assets – – (32.0) 0.6 (32.0) 0.6

Experience gains arising on Scheme liabilities 29.5 14.9 – – 29.5 14.9

29.5 14.9 (32.0) 0.6 (2.5) 15.5

Other

Employer contributions – – 2.3 2.3 2.3 2.3

Benefits paid 5.2 5.6 (5.2) (5.6) – –

5.2 5.6 (2.9) (3.3) 2.3 2.3

Balance at end of the year (98.8) (129.6) 113.4 143.9 14.6 14.3

The weighted average duration of the Scheme’s liabilities at the end of the period is 17 years (2022: 17 years).

The total contributions to the Scheme in the next financial year are expected to be £2.4 million for the Group and Company. Following the conclusion of the

2022 triennial valuation in April 2023, it was agreed that the Company would continue to pay contributions in line with the deficit recovery plan. Under this

plan, deficit reduction contributions started at £2.2 million per annum in July 2022. These are payable in equal monthly instalments and increase each January

in line with CPI. As of January 2023, the deficit reduction contributions have increased to £2.4 million. The recovery deficit plan will be reviewed at the next

triennial valuation, which is due on 30 July 2025. No further payments are made as the Scheme is now closed to future accrual.

23. Preference Share Capital

Group and Company

Authorised, issued and fully paid share capital

Number authorised and in issue:

First 6%

cumulative

preference share

£1 each

Number

000s

Second 8%

cumulative

preference share

£1 each

Number

000s

Total

Number

000s

At 1 April 2023 and 26 March 2022 400 1,200 1,600

Monetary amount: £m £m £m

At 1 April 2023 and 26 March 2022 0.4 1.2 1.6

The first 6% cumulative preference shares of £1 each are entitled to first payment of a fixed cumulative dividend and on winding up to a return of paid capital

plus arrears of dividends. The second 8% cumulative preference shares of £1 each are entitled to second payment of a fixed cumulative dividend and on

winding up a return of capital paid up (plus a premium calculated by reference to an average quoted price on the London Stock Exchange for the previous six

months) plus arrears of dividends.

Preference shareholders may only vote in limited circumstances: principally on winding up, alteration of class rights or on unpaid preference dividends.

Preference shares cannot be redeemed by the holders, other than on winding up.

Notes to the Financial Statements

Continued

154 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

24. Provisions

Legal claim

Group and Company

2023

£m

2022

£m

Balance at the beginning of the year 0.5 4.0

Utilised – (1.4)

Released – (2.1)

Balance at the end of the year 0.5 0.5

Analysed as:

2023

£m

2022

£m

Due within one year 0.5 0.5

Due in more than one year – –

0.5 0.5

25. Financial Instruments

Details of the Group’s treasury function are included in the Financial Review’s discussion of financial risks and treasury policies on page 33.

The accounting treatment of the Group’s financial instruments is detailed in note 1.

a) Capital Management – Group and Company

As described in note 1, the Group considers its capital to comprise the following:

Group

2023

£m

2022

£m

Ordinary share capital 25.4 25.4

Share premium 53.2 53.2

Capital redemption reserve 3.7 3.7

Hedging reserve – (0.1)

Retained earnings 381.6 383.6

Preference shares 1.6 1.6

465.5 467.4

Company

2023

£m

2022

£m

Ordinary share capital 25.4 25.4

Share premium 53.2 53.2

Capital redemption reserve 3.7 3.7

Hedging reserve – (0.1)

Merger reserve (1.6) (1.6)

Retained earnings 325.6 335.1

Preference shares 1.6 1.6

407.9 417.3

In managing its capital, the primary objective is to ensure that the Group is able to continue to operate as a going concern and to maximise return

to shareholders through a combination of capital growth, distributions and the payment of preference dividends to its preference shareholders. The Group

seeks to maintain a ratio of debt and equity that balances risks and returns at an acceptable level and maintains sufficient funds to meet working capital

targets, investment requirements and comply with lending covenants. As a minimum, the Board reviews the Group’s dividend policy twice yearly and reviews

the treasury position at every Board meeting.

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b) Categories of Financial Assets and Liabilities

The Group’s financial assets and liabilities as recognised at the Balance Sheet date may also be categorised as follows:

Group

2023

£m

2022

£m

Non-current assets

Derivative financial instruments used for hedging 0.1 –

Total current assets 0.1 –

Current assets

Trade and other receivables in scope of IFRS 9 1.6 1.6

Total current assets 1.6 1.6

Total financial assets 1.7 1.6

Current liabilities

Financial liabilities at amortised cost:

Trade and other payables in scope of IFRS 9 22.9 27.9

Lease liabilities 4.8 6.8

Loans 6.0 120.0

Total carried at amortised cost 33.7 154.7

Derivative financial instruments used for hedging – 0.1

Total current liabilities 33.7 154.8

Non-current liabilities

Derivative financial instruments used for hedging – –

Financial liabilities at amortised cost:

Lease liabilities 67.0 73.9

Loans and debenture stock 139.3 25.9

Preference shares 1.6 1.6

Total carried at amortised cost 207.9 101.4

Total non-current liabilities 207.9 101.4

Total financial liabilities 241.6 256.2

Notes to the Financial Statements

Continued

156 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

25. Financial Instruments continued

Company

2023

£m

2022

£m

Non-current assets

Derivative financial instruments used for hedging 0.1 –

Total non-current assets 0.1 –

Current assets

Trade and other receivables in scope of IFRS 9 1.6 1.6

Total current assets 1.6 1.6

Total financial assets 1.7 1.6

Current liabilities

Financial liabilities at amortised cost:

Trade and other payables in scope of IFRS 9 166.0 164.6

Lease liabilities 4.7 6.5

Loans 6.0 120.0

Total carried at amortised cost 176.7 291.1

Derivative financial instruments used for hedging – 0.1

Total current liabilities 176.7 291.2

Non-current liabilities

Derivative financial instruments used for hedging – –

Financial liabilities at amortised cost:

Lease liabilities 66.6 72.8

Loans and debenture stock 139.3 25.9

Preference shares 1.6 1.6

Total carried at amortised cost 207.5 100.3

Total non-current liabilities 207.5 100.3

Total financial liabilities 384.2 391.4

There is no set-off of financial assets and liabilities as shown above.

c) Financial Risks – Group and Company

The main risks associated with the Group’s financial assets and liabilities are set out below, as are the Group’s policies for their management.

Derivative instruments are used to change the economic characteristics of financial instruments in accordance with Group policy.

i. Interest rate risk

The Group manages its cost of borrowings using a mixture of fixed rates, variable rates and interest rate swaps. Fixed rates do not expose the Group to cash

flow interest rate risk, but do not enjoy a reduction in borrowing costs in markets where rates are falling. Floating rate borrowings, although not exposed to

changes in fair value, expose the Group to cash flow risk following rises in interest rates and cost.

The debentures totalling £25.9 million (2022: £25.9 million), net of interest paid in advance, are at fixed rates. The bank loans totalling £200 million

(2022: £120 million), net of arrangement fees, are at floating rates. At the year end, after taking account of the interest rate collar, 50% interest rate swaps

2022: 17%) of the Group’s bank loans and 60% (2022: 32%) of gross borrowings were at fixed rates or hedged.

Interest rate collar

The Group has entered into interest rate collar agreement, where the Group sold a floor and bought a cap, in order to hedge the risk in interest cash flows on

its borrowings going higher than the cap. At the Balance Sheet date, £60 million of the Group’s and Company’s borrowings were hedged by interest rate collar

at floor and cap rate of 3.10% and 5.00% respectively. At 26 March 2022, £20 million of the Group’s and Company’s borrowings were hedged by interest rate

swaps at a blended fixed rate of 2.34%. The swap active at 26 March 2022 expired in August 2022.

The interest rate collar is expected to impact the Income Statement in line with the liquidity risk table shown in section (iii) below. The interest rate collar cash

flow hedge in effect at 1 April 2023 was assessed as being highly effective. Net unrealised gain of £0.1 million (2022: £0.5 million) has been recorded in other

comprehensive income.

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Sensitivity – Group and Company

The Group borrows in Sterling at market rates. Three month Sterling SONIA rate during the 53 weeks ended 1 April 2023 ranged between 0.69% and 4.17%.

The Directors consider 1.00% to be a reasonable possible increase in rates and 0.50% to be a reasonable possible decrease in rates, with reference to market

yield curves and the current economic conditions.

The annualised effect of these changes to interest rates on the floating rate debt at the Balance Sheet date, all other variables being constant, are as follows:

Group Company

Impact on post-tax profit and net equity – increase/(decrease)

2023

£m

2022

£m

2023

£m

2022

£m

Decrease interest rate by 0.5% 0.8 0.5 1.3 1.0

Increase interest rate by 1.0% (1.5) (1.0) (3.6) (2.1)

1 The Company has substantial interest bearing payables due to subsidiary companies (note 20).

ii. Credit risk

The risk of financial loss due to a counter party’s failure to honour its obligations arises principally in relation to transactions where the Group provides goods

and services on deferred payment terms, deposits surplus cash and enters into derivative contracts.

Group policies are aimed at minimising losses and deferred terms are only granted to customers who demonstrate an appropriate payment history and satisfy

credit worthiness procedures. Individual customers are subject to credit limits to control debt exposure and goods may also be sold on a cash with order basis.

Cash deposits with financial institutions for short periods and derivative transactions are only permitted with financial institutions approved by the Board.

There are no significant concentrations of credit risk within the Group. The maximum credit risk exposure relating to financial assets is represented by their

carrying value as at the Balance Sheet date.

Trade and other receivables

The Group records impairment losses on its trade receivables separately from gross receivables. Further detail is included in note 18.

iii. Liquidity risk

The Group minimises liquidity risk by managing cash generation, applying trade receivables collection targets, monitoring daily cash receipts and payments and

setting rolling cash forecasts. Investments have cash payback periods applied as part of a tightly controlled investment appraisal process. The Group’s rating

with credit agencies is excellent.

The Group has a mixture of long and short-term borrowings and overdraft facilities: 1% (2022: 15%) of the Group’s borrowings are repayable after more than

five years, 95% (2022: 4%) within the first to fifth years and 4% (2022: 81%) within one year.

The tables on the following page summarise the maturity profile of the Group’s financial liabilities at 1 April 2023 based on undiscounted contractual cash

flows, including interest payable. Floating rate interest is estimated using the prevailing interest rate at the Balance Sheet date.

Group at 1 April 2023

demand

£m

Less than

3 months

£m

3 to 12

months

£m

1 to 5

years

£m

6 to 10

years

£m

More than

10 years

£m

Total

£m

Interest bearing loans and borrowings

– 2.7 14.1 144.1 – 20.1 181.0

Preference shares

– – 0.1 0.5 – 3.4 4.0

Trade and other payables 19.0 3.4 0.5 – – – 22.9

Lease liabilities – 2.0 6.1 29.3 29.5 32.3 99.2

1 Bank loans are included after taking account of the following cash flows in relation to the interest rate collar held in respect of these borrowings:

Group at 26 March 2022

demand

£m

Less than

3 months

£m

3 to 12

months

£m

1 to 5

years

£m

6 to 10

years

£m

More than

10 years

£m

Total

£m

Interest bearing loans and borrowings

– 1.9 125.4 12.0 – 21.5 160.9

Preference shares

– – 0.1 0.5 – 3.4 4.0

Trade and other payables 24.4 3.0 0.5 – – – 27.9

Lease liabilities – 2.3 6.8 27.3 26.0 39.4 101.8

1 Bank loans are included after taking account of the following cash flows in relation to the interest rate swap and cap held in respect of these borrowings:

Interest rate swaps – 0.1 0.1 – – 0.2

2 The preference shares have no contractual repayment date. For the purposes of the table above, interest payments have been shown for 20 years from the Balance Sheet date but no further.

Notes to the Financial Statements

Continued

158 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

25. Financial Instruments continued

The Company figures are as for the Group, except as follows:

Company at 1 April 2023

demand

£m

Less than

3 months

£m

3 to 12

months

£m

1 to 5

years

£m

6 to 10

years

£m

More than

10 years

£m

Total

£m

Amounts due to subsidiary undertakings

143.1 – – – – – 143.1

Trade and other payables 19.0 3.4 0.5 – – – 22.9

Lease liabilities – 1.9 6.0 28.9 29.5 32.3 98.6

Company at 26 March 2022

Amounts due to subsidiary undertakings

136.6 – – – – – 136.6

Trade and other payables 24.4 3.0 0.5 – – – 27.9

Lease liabilities – 2.2 6.6 26.2 25.9 39.2 100.1

3 Amounts due to subsidiary undertakings have no fixed repayment date. Interest is payable on the balance at 3% above the Bank of England base rate.

Security – Group and Company

The 10.7% debentures 2023 are secured on property, plant and equipment with a net book value of £10.7 million (2022: £10.5 million). The 6.875% debentures

2028 are secured by a floating charge over the assets of the Company.

Covenants – Group and Company

The Group and Company are subject to a number of covenants in relation to their borrowing facilities which, if contravened, would result in its loans becoming

immediately repayable.

The Group has secured a new facility of £200 million, split between a RCF of £110 million and a term loan of £90 million, for a tenure of four years to May 2026.

Under the new agreement, there is a covenant suite which consist of net debt to adjusted EBITDA (leverage) and adjusted EBITDA to net finance charges. See

further details in note 21.

d) Fair Value

Book value Fair value

Fair

value

LevelGroup

2023

£m

2022

£m

2023

£m

2022

£m

Financial assets

Interest rate collar 0.1 – 0.1 – 3

Financial liabilities

Lease liabilities (71.8) (80.7) (71.8) (80.7) 3

Fixed rate borrowings (25.9) (25.9) (29.2) (32.0) 3

Floating rate borrowings (119.3) (120.0) (119.3) (120.0) 3

Preference shares (1.6) (1.6) (1.6) (1.6) 3

Interest rate swaps – (0.1) – (0.1) 2

The Company figures are as for the Group above except for:

Book value Fair value

Fair

value

LevelCompany

2023

£m

2022

£m

2023

£m

2022

£m

Financial liabilities

Lease liabilities (71.3) (79.3) (71.3) (88.3) 3

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Level 1 fair values are valuation techniques where inputs are quoted prices in active markets for identical assets or liabilities that the entity can access at

measure data.

Level 2 fair values are valuation techniques where all inputs which have a significant effect on the recorded fair value are observable, either directly

or indirectly, but are not derived directly from quoted prices in active markets. The Group bases its valuations on information provided by financial institutions,

who use a variety of estimation techniques based on market conditions, such as interest rate expectations, existing at each Balance Sheet date.

Level 3 fair values are valuation techniques for which all inputs that have a significant effect on the recorded fair value are not observable. Derivative fair

values are obtained from quoted market prices in active markets. The fair values of borrowings have been calculated by discounting the expected future cash

flows at prevailing interest rates. Interest rates for borrowings range from 1.5% to 10.7%. The fair values of preference shares have been calculated using the

market interest rates.

Management assessed that the fair values of cash and short-term deposits, trade receivables and other receivables, and trade and other payables approximate

their carrying amounts largely due to the short-term maturities of these instruments.

There were no transfers between levels in the fair value hierarchy as at 1 April 2023 and 26 March 2022.

26. Share Capital and Reserves

a) Share Capital

Authorised, issued and fully paid

Number in issue

‘A’ ordinary

shares of

40p each Number

000s

‘C’ ordinary shares

40p each

Number

000s

‘B’ ordinary

shares of

4p each Number

000s

Total

Number

000s

At 26 March 2022 41,082 13,466 89,052 143,600

At 1 April 2023 41,082 13,466 89,052 143,600

Proportion of total equity shares at 01 April 2023 28.6% 9.4% 62.0%

Monetary amount £m £m £m £m

At 26 March 2022 16.4 5.4 3.6 25.4

At 1 April 2023 16.4 5.4 3.6 25.4

Share capital represents the nominal value proceeds received on the issue of the Company’s equity share capital, comprising 40p and 4p ordinary shares. The

Company’s preference shares are classified as non-current liabilities in accordance with IFRS (see note 23).

The ordinary shareholders are entitled to be paid a dividend out of any surplus profits and to participate in surplus assets on winding up in proportion to the

nominal value of each class of share (‘B’ shares have one-tenth of the nominal value of ‘A’ and ‘C’ shares).

All equity shares in the Company carry one vote per share, save that shares held in treasury have their voting rights suspended. The ‘A’ and ‘C’ shares have a

40p nominal value and the ‘B’ shares have a 4p nominal value so that a ‘B’ share dividend will be paid at 10% of the rate applying to ‘A’ and ‘C’ shares. The ‘A’

shares are listed on the London Stock Exchange. The ‘C’ shares carry a right for the holder to convert them to ‘A’ shares by written notice in the 30 day period

following the half year and preliminary announcements. The ‘B’ shares are not listed and have no conversion rights. In most circumstances the value of a ‘B’

share is deemed to be 10% of the value of the listed ‘A’ shares. The Trustee holding shares for participants of the LTIP currently waives dividends for shares

held during the initial three year period. Dividends are not paid on shares held in treasury.

The Articles include provisions relating to the Company’s ‘B’ and ‘C’ shares which provide that shareholders who wish to transfer their shares may only do so if

the transfer is to another ‘B’ or ‘C’ shareholder, or if the transfer is to certain of that shareholder’s family members or their executors or administrators or, where

shares are held by trustees, to new trustees, or to the trustees of any employee share scheme, or if the Company is unable to identify another shareholder of

that class willing to purchase the shares within the specified period, to any person.

Notes to the Financial Statements

Continued

160 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

26. Share Capital and Reserves continued

b) Own Shares

Own shares relate to shares held by independently managed employee share ownership trusts (“ESOTs”) together with the Company’s holding of treasury

shares. Shares are purchased by the ESOTs in order to satisfy potential awards under the Long Term Incentive Plan (“LTIP”) and Share Incentive Scheme (“SIP”).

Treasury shares are used, inter alia, to satisfy options under the Company’s share options schemes. The LTIP ESOT has waived its rights to dividends on the

shares it holds. Treasury shares have voting and dividend rights suspended. All own shares held, as below, are excluded from earnings and net assets per

share calculations.

Treasury shares LTIP ESOT SIP ESOT Total Total

Number

‘A’ ordinary 40p

000s

‘B’ ordinary 4p

000s

‘B’ ordinary 4p

000s

‘C’ ordinary 40p

000s

‘A’ ordinary 40p

000s

‘A’ ordinary 40p

000s

‘B’ ordinary 4p

000s

‘C’ ordinary 40p

000s

Own shares

000s

At 27 March 2021 1,274 4,558 326 6 5 1,279 4,884 6 6,169

Shares released (11) (230) – – – (11) (230) – (241)

At 26 March 2022 1,263 4,328 326 6 5 1,268 4,654 6 5,928

Share Purchased 1,000 – – – – 1,000 – – 1,000

Shares released (11) – – – – (11) – – (11)

At 1 April 2023 2,252 4,328 326 6 5 2,257 4,654 6 6,917

Monetary amount £m £m £m £m £m £m £m £m £m

At 27 March 2021 11.9 4.6 0.3 0.1 0.1 12.0 4.9 0.1 17.0

Shares released (0.1) (0.3) – – – (0.1) (0.3) – (0.4)

At 26 March 2022 11.8 4.3 0.3 0.1 0.1 11.9 4.6 0.1 16.6

Share Purchased 4.8 – – – – 4.8 – – 4.8

Shares released (0.1) – – – – (0.1) – – (0.1)

At 1 April 2023 16.5 4.3 0.3 0.1 0.1 16.6 4.6 0.1 21.3

Market value at

1 April 2023 10.5 2.0 0.2 – – 10.5 2.2 – 12.7

c) Other Capital Reserves

Share premium account

The balance in the share premium account represents the proceeds received above the nominal value on the issue of the Company’s equity share capital.

Capital redemption reserve

The capital redemption reserve balance arises from the buy-back of the Company’s own equity share capital.

Hedging reserve

The hedging reserve contains the effective portion of the cash flow hedge relationships incurred at the Balance Sheet date, net of tax.

Merger reserve

The merger reserve balance arises from the hive up of Bel & The Dragon.

27. Share Options and Share Schemes

The key points of each of the Group’s share schemes for grants up to 1 April 2023 are summarised below. All schemes are equity-settled. All disclosure relates

to both Group and Company. For the purposes of option and LTIP schemes, “Adjusted EPS” will normally be consistent with the pre-tax earnings per share

excluding separately disclosed items as presented in the financial statements. However, the Remuneration Committee is authorised to make appropriate

adjustments to Adjusted EPS as applied to these schemes.

Savings Related Share Option Scheme (“SAYE”)

This scheme grants options over shares at a discount of 20% on the average market price over the three days immediately prior to the date of offer. Employees

must save a regular amount each month. Savings are made over three or five years, at the participant’s choice. The right to buy shares at the discounted price

lasts for six months after the end of the savings contract. There are no performance conditions, other than continued employment.

Executive Share Option Scheme

This is an approved Executive Share Option Scheme. For grants up to the year ended 28 March 2020 options vest if growth in Adjusted EPS exceeds the growth

in RPI by 9% or more, over the three year performance period of the option. For grants made during the year ended 27 March 2021 options vest if a set EBITDA

target is achieved. For grants made during the year ended 26 March 2022 onwards, the options vest if a set pre-tax Adjusted EPS target is achieved. The

options must then be exercised within seven years after the end of the performance period.

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LTIP

This plan grants conditional share awards. Up until the LTIP granted during the year ended 28 March 2020 vesting is conditional on growth in Adjusted EPS

exceeding growth in RPI by 9% or more over the three year initial performance period of the award, with vesting levels on a sliding scale from 40% up to 100%,

if growth in Adjusted EPS exceeds growth in RPI by 24% or more.

From the LTIP granted during the year ended 27 March 2021 vesting is conditional upon pre-tax Adjusted EPS targets, with vesting levels on a sliding scale from

25% up to 100% dependent on the level of EPS achieved. An independent firm of advisors verifies the vesting level each year. The initial vesting period is three

years and, for Executive Directors, is followed by a two year holding period. After this time the shares may be passed to the plan participants, as long as

vesting conditions are met.

A one-off Recovery LTIP was granted during the year ended 26 March 2022. Vesting is conditional upon Group EBITDA (excluding IFRS 16) targets, with vesting

levels on a sliding scale from 25% up to 100% dependent on the level of EBITDA achieved. The initial vesting period is three years and is followed by a two year

holding period. After this time the shares may be passed to the plan participants, as long as vesting conditions are met.

SIP

This plan awards free shares. An equal number of shares are awarded to each eligible employee. The maximum value of shares allowable under the scheme is

£3,000 per year, per person with at least five months’ service as at 15 May each year. The basis of the award was changed with effect from the 2018 award so

that all eligible employees receive the same number of shares. There is no requirement for performance targets (although there may be tax consequences if

sold within five years of the award).

Share-based payment expense recognised in the year

The expense recognised for share-based payments in respect of employee services received during the 53 weeks ended 1 April 2023 is £0.4 million credit

(2022: £0.8 million expense). The whole of that expense arises from equity-settled share-based payment transactions.

Market value

The market value of the shares at 1 April 2023 was £4.65 (2022: £6.20).

Movements in the year

The following tables illustrate the number and weighted average exercise prices (“WAEP”) of, and movements in, each category of share instrument during the year.

Volatility

The expected volatility is based on the historical volatility over the expected life of the rights.

a) SAYE

2023

Number

000s

2023

WAEP

2022

Number

000s

2022

WAEP

Outstanding at the beginning of the year 474 £4.70 460 £4.79

Granted 131 £4.29 130 £5.43

Lapsed (130) £4.78 (105) £5.43

Exercised (5) £4.35 (11) £7.66

Outstanding at the end of the year 470 £4.49 474 £4.70

Exercisable at the end of the year – n/a 4 £7.70

Weighted average share price for options exercised in the year £4.79 £7.35

Weighted average contractual life remaining for share options outstanding at the

year end 2.0 years 2.7 years

Weighted average share price for options granted in the year £5.14 £6.40

Weighted average fair value of options granted during the year £1.98 £0.77

Range of exercise prices for options outstanding at the year end

– from £4.19 £4.35

– to £8.12 £8.12

Notes to the Financial Statements

Continued

162 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

27. Share Options and Share Schemes continued

Outstanding share options granted to employees under the SAYE scheme are as follows:

Exercisable at

Exercise price 40p

Number of ‘A’

ordinary shares

under option

2023

000s

Number of ‘A’

ordinary shares under

option

2022

000s

September 2021 7.70 – 4

September 2022 8.12 – 2

September 2023 7.70 – 2

November 2023 4.35 149 187

December 2024 5.43 51 76

November 2025 4.35 112 149

December 2025 4.19 99 –

December 2026 5.43 27 54

December 2027 4.19 32 –

470 474

b) Share Option Schemes

Executive Share Option Scheme

2023

Number

000s

2023

WAEP

2022

Number

000s

2022

WAEP

Outstanding at the beginning of the year 184 £7.23 212 £7.46

Granted 41 £6.92 – –

Lapsed (35) £10.24 (28) £9.00

Exercised (5) £5.78 – –

Outstanding at the end of the year 185 £7.46 184 £7.23

Exercisable at the end of the year 12 £9.03 25 £9.17

Weighted average share price for options exercised in the year £6.02 n/a

Weighted average contractual life remaining for share options outstanding at the year end 7.61 years 8.84 years

Weighted average share price for options granted in the year £6.30 n/a

Weighted average fair value of options granted during the year £1.65 n/a

Range of exercise prices for options outstanding at the year end

– from £6.00 £6.92

– to £10.90 £10.90

Outstanding options which are capable of being exercised between three and ten years from date of issue and their exercise prices are shown in the table below:

Executive Approved Scheme

Exercisable in/between

Exercise price 40p

Number of

‘A’ ordinary shares

under option

2023

000s

Number of

‘A’ ordinary shares

under option

2022

000s

2015 and 2022 7.05 – 5

2016 and 2023 9.10 7 9

2017 and 2024 9.65 5 5

2018 and 2025 10.90 – 5

2021 and 2028 9.46 – 1

2022 and 2029 9.61 – –

2024 and 2031 6.92 137 159

2025 and 2032 6.00 36 –

185 184

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c) LTIP

2023

‘A’ shares Number

000s

2023

‘B’ shares Number

000s

2022

‘A’ shares Number

000s

2022

‘B’ shares Number

000s

Outstanding at the beginning of the year 782 1,954 404 1,009

Granted 248 620 533 1,332

Lapsed (104) (261) (155) (388)

Outstanding at the end of the year 926 2,313 782 1,953

Weighted average share price for shares vested in the year n/a n/a n/a n/a

For shares outstanding at the year end, the weighted average contractual life

remaining is 1.52 years 1.52 years 2.12 years 2.12 years

Weighted average share price for shares granted in the year £6.30 £0.63 £7.40 £0.74

Weighted average fair value of shares granted during the year £5.60 £0.56 £7.16 £0.72

All LTIPs have a vesting price of £nil. LTIP shares do not receive dividends until vested.

d) SIP

2023

Number

000s

2022

Number

000s

Outstanding at the beginning of the year 73 112

Released

(32) (39)

Outstanding at the end of the year 41 73

Weighted average share price for shares released in the year £5.18 £7.17

For shares outstanding at the year end, the weighted average contractual life remaining is 0.77 years 1.32 years

Weighted average share price for shares granted during the year n/a n/a

Weighted average fair value of shares granted during the year n/a n/a

1 Shares have been issued from treasury shares.

Outstanding SIP shares represent shares allocated and held by the SIP Trustees on behalf of employees, which remain in the trust for between three and five

years. All SIPs have a vesting price of £nil. SIP shares receive dividends once allocated.

e) Fair Value of Grants

i. Equity-settled options and LTIPs

The fair value of equity-settled share options granted is estimated as at the date of grant, taking into account the terms and conditions upon which the awards

were granted. The following table lists the inputs to the model used for the 53 weeks ended 1 April 2023 and 52 weeks ended 26 March 2022, except for

exercise price and the weighted average share price for grants in the year, which are disclosed in sections a) to d) above.

LTIP scheme SAYE Executive Share Option Scheme

Fair value inputs 2023 2022 2023 2022 2023 2022

Dividend yield (%) 1.9% 1.1% 2.2% 1.3% 1.9% n/a

Expected share price volatility (%) n/a n/a 41.2%–45.6% 2.3–2.7% 45.1% n/a

Risk-free interest rate (%) 1.8% 0.5% 3.3% (0.1%) 1.8% n/a

Expected life of option/award (years) 3 years 3 years 3 to 5 years 3 to 5 years 4 years n/a

Model used Black Scholes Black Scholes Black Scholes Black Scholes Black Scholes n/a

ii. SIP free shares awarded

The fair value of free shares awarded under the SIP is the share price at the date of allocation. The total value of SIPs awarded is a fixed rate based on the

Group’s performance in the preceding financial year. The number of shares awarded is therefore dependent on the share price at the date of the award.

Notes to the Financial Statements

Continued

164 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

28. Guarantees and Commitments

Operating leases where the Group is the lessor

The Group earns rental income from two sources. Licensed property included within property, plant and equipment is rented under agreements where lessees

must also purchase goods from the Group. Additionally, there are a smaller number of agreements in respect of investment properties where there is no

requirement for the lessee to purchase goods.

Investment properties are let to third parties on leases that have remaining terms of between one and fifteen years.

At 1 April 2023, future minimum rentals receivable are as follows:

Investment properties Property, plant and equipment

Group

2023

£m

2022

£m

2023

£m

2022

£m

Within one year 0.3 0.3 5.7 5.7

One to two years 0.2 0.2 1.5 2.0

Two to three years 0.2 0.2 1.3 1.5

Three to four years 0.1 0.2 0.4 0.6

Four to five years 0.1 0.1 0.1 0.1

After five years 0.5 0.6 0.5 0.6

1.4 1.6 9.5 10.5

Company

Within one year 0.3 0.3 5.7 5.7

One to two years 0.2 0.2 1.5 2.0

Two to three years 0.2 0.2 1.3 1.5

Three to four years 0.1 0.2 0.4 0.6

Four to five years 0.1 0.1 0.1 0.1

After five years 0.5 0.6 0.5 0.6

1.4 1.6 9.5 10.5

The Group and Company’s commercial leases on property are principally for licensed outlets. The terms of the leases are normally for either three, four or five

years. The agreements allow for annual inflationary increases and full rental reviews occur on renewal of the lease.

At 1 April 2023, future minimum rentals receivable under non-cancellable subleases included in the figures above were £1.2 million (2022: £2.0 million).

b) Other Commitments

Group and Company

2023

£m

2022

£m

Capital commitments – authorised, contracted but not provided for 1.0 2.2

29. Related Party Transactions

Group and Company

During the current and prior years, the Company provided various administrative services to the Fuller, Smith & Turner Pension Plan free of charge. In addition,

the Company settled costs totalling £304,000 (2022: £394,000) relating to the provision of actuarial, consulting and administrative services by third parties to

the Fuller, Smith & Turner Pension Plan.

Compensation of key management personnel (including Directors)

53 weeks ended

1 April

2023

£m

52 weeks ended

26 March

2022

£m

Short-term employee benefits 4.1 3.1

Termination benefits 0.1 –

Post-employment benefits 0.3 0.3

4.5 3.4

Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C. 165

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OVERVIEW

0-03

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ADDITIONAL INFORMATION

166-186

GOVERNANCE

66-104

Company Only

During the year, the Company entered into the following related party transactions:

53 weeks ended 01 April 2023

Sales to related

parties

£m

Purchases from

related parties

£m

Interest due from

related parties

£m

Interest due to

related parties

£m

Amounts due to

related parties

£m

Amounts due from

related parties

£m

Subsidiaries – 64.9 6.4 – (143.1) –

52 weeks ended 26 March 2022

Sales to related

parties

£m

Purchases from

related parties

£m

Interest due from

related parties

£m

Interest due to

related parties

£m

Amounts due to

related parties

£m

Amounts due from

related parties

£m

Subsidiaries – 61.1 – 3.7 (136.7) –

Interest is payable on the majority of the amounts due to subsidiaries at 3% above the Bank of England base rate. All amounts outstanding are unsecured and

repayable on demand.

The Company also incurred rental expenses from subsidiaries of £0.1 million (2022: £0.3 million).

Subsidiaries of parent companies established within the European Economic Area are exempt from an audit if a guarantee is provided by the parent for the

subsidiary liabilities and the shareholders are in unanimous agreement. The Group will be exempting the following companies from an audit in 2023 for the

period ended 1 April 2023 under Section 479A of the Companies Act 2006, all of which are fully consolidated in these financial statements:

Company Company Number

Griffin Catering Services Limited 01577632

Jacomb Guinness Limited 02934979

George Gale and Company Limited 00026330

45 Woodfield Limited 04279254

Grand Canal Trading Limited 04271734

B & D Country Inns I Limited 07292333

B & D Country Inns II Limited 08029280

B & D (Cookham) Limited 07320065

B & D (Odiham) Limited 08377459

B & D (Reading) Limited 07309587

B & D (Win) Limited 07320245

B & D (Farnham) Limited 08392963

B & D (Kingsclere) Limited 08975762

RSH 200 Limited 12035987

Cotswold Inns and Hotels Limited 03309179

The Group will be exempting the following companies from the preparation and delivering of accounts to Companies House under Section 394A of the

Companies Act 2006, all of which are fully consolidated in these financial statements:

Company Company Number

Griffin Inns Ltd. 00495934

Ringwoods Limited 00178536

F.S.T. Trustee Limited 03163480

Fuller Smith & Turner Estates Limited 01831674

Additional Information

Chairman

Michael Turner, FCA,

Non-Executive Chairman

Executive Directors

Simon Emeny, Chief Executive

Neil Smith, Finance Director, ACA

Fred Turner, Retail Director, ACA

Non-Executive Directors

Juliette Stacey, ACA*

Sir James Fuller, Bt

Richard Fuller

Helen Jones*

Robin Rowland, OBE*

* Independent

President

Anthony Fuller, CBE

Chairman from 1982-2007, Anthony Fuller retired

from the Board in 2010 after a long career with

Fuller’s and continues as President.

Secretary and Registered Office

Rachel Spencer

Pier House

86-93 Strand-on-the-Green

London W4 3NN

Tel: 020 8996 2105

Email: company.secretariat@fullers.co.uk

Registered Number

241882

Auditors

Ernst & Young LLP

1 More London Place

London SE1 2AF

Stockbrokers

Numis Securities Limited

10 Paternoster Square

London EC4M 7LT

Registrars

Computershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol BS99 6ZZ

Tel: 0870 889 4096

Email via website:

www.investorcentre.co.uk/contactus

Registrars

Any enquiries relating to shareholdings on the

share register (for example, change of address,

bank mandates, communication preferences)

should be sent to the Company’s Registrars,

Computershare. You can also manage your

shareholding online at www.computershare.com/

investor/uk.

Shareholders may at any time choose to receive

notification of the availability of corporate

communications on Fuller’s website by email or

choose to receive them in printed form. To

receive notifications of the availability of a

corporate communication by email, or revoke or

amend an instruction to receive such notifications

by email go to www.computershare.com/

investor/uk or contact Computershare, quoting

your shareholder reference number.

Shareholder Privileges

Individual shareholders with at least 1,000 ‘A’ or ‘C’

ordinary shares or 10,000 ‘B’ ordinary shares are

eligible to receive a Shareholder Inndulgence Card.

For any individual issued with a Card prior to 1 April

2022, continued eligibility will be based on the

eligibility criteria at the time of issue, being at

least500 ‘A’ or ‘C’ ordinary shares or 5,000 ‘B’

ordinary shares.

Card holders are entitled to a 15% discount on

food and drinks in any of our Managed Pubs and

Hotels, including Bel & The Dragon and Cotswold

Inns & Hotels. It also offers a 15% discount on

the Best Flexible Rate or Standard Flexible B&B

Rate for Beautiful Bedrooms by Fuller’s and Bel

&The Dragon accommodation. There is currently

no accommodation discount available with the

Card at any of the Cotswold Inns & Hotel sites.

Further information is available from the

Company Secretariat.

Redesignation of ‘C’ Shares

‘C’ ordinary shares can be redesignated as ‘A’

ordinary shares within 30 days of the full year

andhalf year announcements by sending in

yourcertificates and a written instruction to

redesignate prior to or during the period to the

Company’s Registrars.

ShareGift

The Orr Mackintosh Foundation operates a

charity share donation scheme for shareholders

with small parcels of shares whose value makes

it uneconomic to sell them. If you have a small

number of shares and would like to donate them

to charity, details of the scheme can be found on

the ShareGift website www.sharegift.org, or by

contacting the Company Secretariat.

Financial Calendar and Key Dates

20 July 2023

Annual General Meeting (11am)

16 November 2023

FY2024 Half year results announcement

June 2024

FY2024 Full year results announcement

Shareholder Information

Directors, Advisors and Corporate Information

166 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Adjusted earnings per share (“EPS”) – this is earnings per share, adjusted for separately disclosed items. The Directors believe that this

measure provides useful information for shareholders as to the performance of the Group.

Adjusted profits – this is profit before tax and before separately disclosed items.

CCFF – this is an HM Treasury and Bank of England lending facility.

CJRS – this is a claim for 80% of employees’ wages plus any employer National Insurance and pension contributions for staff on furlough through

the Government’s Coronavirus Job Retention Scheme.

CRM – Customer Relationship Management.

Drinks, food and accommodation like for like sales growth – this is measured on the same basis as “Managed Pubs and Hotels invested

like for like sales growth”.

EBITDA – this is the earnings before interest, tax, depreciation, profit on disposal of plant and equipment, and amortisation, adjusted for

separately disclosed items.

ESOS – Executive Share Option Scheme.

LTIP – Long-Term Incentive Plan.

LTSA- Long term supply agreement

Managed Pubs and Hotels invested like for like sales growth – this is the sales growth calculated to exclude those pubs which have not

been trading throughout the two years for the corresponding period in both years. The principal exclusions from this measure are: pubs purchased

or sold in the last 12 months; sites which are closed; and pubs which are transferred to tenancy.

Market capitalisation – only the Company’s 40p ‘A’ ordinary shares are listed. The Company calculates its market capitalisation as the total of

all classes of ordinary shares; i.e. listed 40p ‘A’ ordinary shares, unlisted 4p ‘B’ ordinary shares and unlisted 40p ‘C’ ordinary shares plus all

potentially awardable share options and LTIP awards less any shares held in treasury. For the purposes of the calculation of market capitalisation,

a 4p ‘B’ ordinary share is treated as having 10% of the market value of a quoted 40p ‘A’ ordinary share and a 40p ‘C’ ordinary share is treated as

having an equivalent value to a 40p ‘A’ ordinary share.

Net debt – this comprises cash, bank loans, CCFF, debenture stock, preference shares and lease liabilities.

NPS – Net Promoter Score, a metric used to measure customer satisfaction.

Operating profit – this is profit before finance costs and tax and profit on disposal of properties.

PPA – Power purchase agreement is a contract that secures the long term supply of renewable energy.

SAYE – Savings Related Share Option Scheme.

SIP – Share Incentive Plan.

TCFD – Task Force on Climate-related Financial Disclosures, a framework developed by the Financial Stability Board for companies to report on

how climate change will affect their business.

Total annual dividend – the total annual dividend for a financial year comprises interim dividends paid during the financial year and the final

dividend proposed for approval by shareholders at the Annual General Meeting after the completion of the financial year.

Unnecessary plastic – eliminating all plastic which is used instantaneously but is unnecessary for food safety purposes and its removal will not

lead to unintended environmental consequences by its removal, such as increased waste or carbon emissions.

Working capital – calculated as current assets (trade receivables and inventory) less current liabilities (trade and other payables).

Glossary

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66-104

Five Years’ Progress

Group Income Statement

2023

£m

2022

£m

2021

£m

Restated

2020

£m

Restated

2019

£m

Revenue and other income 336.6 253.8 73.4 319.7 324.7

Operating profit before separately disclosed items 25.1 18.5 (40.3) 27.0 40.0

Finance costs before separately disclosed items (12.4) (11.3) (8.4) (7.6) (6.9)

Adjusted profit/(loss) before income tax 12.7 7.2 (48.7) 19.4 33.1

Exceptional items and discontinued operations (2.4) 4.3 (10.5) 146.8 (8.4)

Profit/(loss) before income tax 10.3 11.5 (59.2) 166.2 24.7

Taxation (2.4) (4.4) 9.6 (5.3) (5.2)

Profit/(loss) after income tax 7.9 7.1 (49.6) 160.9 19.5

Non-controlling interest – – – – (0.2)

Profit/(loss) attributable to equity shareholders of the Parent Company 7.9 7.1 (49.6) 160.9 19.3

EBITDA 51.8 44.3 (13.1) 53.9 59.5

1 Continuing operations only.

Assets employed

Non-current assets 696.4 713.8 702.5 757.1 595.3

Inventories 4.2 3.6 2.1 4.0 5.0

Other current assets 10.9 11.3 15.5 18.6 8.4

Assets classified as held for sale 7.0 5.4 9.6 2.6 87.0

Cash and cash equivalents 14.1 15.6 17.1 20.3 11.0

732.6 749.7 746.8 802.6 706.7

Current borrowings (6.0) (120.0) (207.7) (171.7) (50.0)

Other current liabilities (59.9) (64.5) (39.4) (50.7) (62.9)

666.7 565.2 499.7 580.2 593.8

Non-current borrowings (140.9) (27.5) (27.5) (27.5) (206.2)

Other non-current liabilities (83.2) (88.5) (92.7) (122.9) (49.1)

Net assets 442.6 449.2 379.5 429.8 338.5

2023 2022 2021 2020 2019

Per 40p ‘A’ ordinary share

Adjusted earnings 16.10p 9.79p (73.00)p 20.50p 62.78p

Basic earnings 12.98p 11.59p (89.84)p 291.89p 35.12p

Dividends (interim and proposed final)

14.68p 11.31p – 132.80p 20.15p

Net assets £7.27 £7.27 £6.87 £7.80 £6.16

Net debt (£ million)

(204.6) (212.6) (308.0) (291.8) (245.2)

Gross capital expenditure (£ million) 30.7 25.8 16.5 84.5 58.6

Average number of employees 5,247 4,240 4,219 5,166 5,399

2 2020 includes ‘D’ share dividend.

3 Net debt from FY20 onwards includes amounts relating to leases under IFRS 16.

168 Annual Report and Accounts 2023 Fuller, Smith & Turner P.L.C.

Design and production

www.luminous.co.uk

Fuller, Smith & Turner P.L.C.

Registered Office

Pier House

86-93 Strand-on-the-Green

London W4 3NN

Registered number: 241882

Telephone: +44 (0)20 8996 2000

Email: fullers@fullers.co.uk