Dairy Crest plc
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Directors’ remuneration report

Composition of the Remuneration Committee

The Board has appointed a Remuneration Committee of Non-executive Directors of the Company. During the year the Committee consisted of:

Howard Mann (chairman);

Andrew Carr-Locke; and

Stephen Alexander.

In March 2012, Howard Mann announced his intention not to seek re-appointment as a Non-executive Director having completed nine years' service with the Company. He stepped down as a Director of the Company and as chairman of the Remuneration Committee on 18 May 2012. Stephen Alexander became chairman of the Remuneration Committee from that date.

Anthony Fry attends the Remuneration Committee by invitation. Members of the Remuneration Committee have no potential conflicts of interest arising from cross-directorships and they are not involved in the day-to-day running of the Company. The Committee also received materials, assistance and advice on remuneration policy from the Group's Human Resources Director, Rob Tansey. The Remuneration Committee has appointed PricewaterhouseCoopers LLP (“PwC”) to provide advice on executive remuneration. During the year, PwC also provided other valuation and consultancy services to the Group. The Chief Executive attends all meetings by invitation, but is not present at any discussions relating specifically to his own remuneration.

Role of the Remuneration Committee

The Remuneration Committee is responsible for the broad policy with respect to senior executives' salary and other remuneration. It specifically determines, within remuneration principles agreed with the Board, the total remuneration package of each Executive Director and reviews with the Chief Executive the remuneration packages for other senior executives. A copy of the terms of reference of the Committee can be found on the Company's website.

The Committee met five times during 2011/12. Details of attendance are shown on page 11, and topics covered included the following:

Meeting

Key activities

April 2011

Review of operations of incentive structures

May 2011

Outcomes of Annual Bonus Scheme
Approval of LTISP 2008 Scheme Vesting
Approval of 2011/12 Annual Bonus Scheme rules and targets
Approval of LTISP Award 2011/12 rules and performance conditions
Salary review for Executive Directors and next tier of Senior Management
Approval of Directors' Remuneration Report

July 2011

Impact of budget on Executive Incentive Arrangements

November 2011

Review of 2012 Executive Incentive Arrangements

March 2012

Review of projected 2011/12 Annual Bonus outcomes
Review of LTISP 2009 indicative vesting
Review of Annual Bonus and LTISP proposal for coming year

Key Developments

2011/12

2011/12 has been a year of progress for Dairy Crest in which we have continued to deliver against our strategy despite challenging trading conditions. Adjusted profit before tax remained broadly flat at £87.4 million (2010/11: £87.6 million) despite difficult trading conditions in our Dairies business. The Group is taking proactive action to position itself for the future, in line with our well established strategy of growing brands, driving efficiencies, improving the quality of earnings and making acquisitions and disposals which generate value for shareholders. These actions include the strategic review of St Hubert and the proposed restructuring of the Dairies business; however, this restructure has resulted in significant non-cash impairment charges. Cash management remained tight albeit net debt increased during the year as expected.

Payment of annual bonus is subject to achieving demanding short-term financial targets and personal objectives. The stretch financial targets (encompassing adjusted profit before tax and net cash generation) were partly met in the year (42% of maximum payout for these elements). Combined with their achievements against their personal objectives this has resulted in bonus payouts for the 2011/12 performance year of 50% of salary for Mark Allen, Alastair Murray and Martyn Wilks.

Awards under the Long Term Incentive Share Plan (“LTISP”) 2009 had a three-year vesting period to March 2012. 40% of the total award was based on the Group's Adjusted basic earnings per share (“EPS”) and 60% was measured against the Total Shareholder Return (“TSR”) performance of the FTSE 250 (excluding financial services companies, real estate companies and investment trusts). The Company did not achieve the minimum EPS target threshold of 50.0 pence per share due principally to high levels of RPI inflation of 14% over the three-year period. Nor did the Group meet the TSR target threshold and therefore none of the awards will be released and all June 2009 share options have lapsed at 31 March 2012.

Based on 31 March 2012 data and forecasts, awards under the 2010 and 2011 LTISPs look unlikely to vest in future years as both EPS and TSR targets are tracking below the vesting thresholds.

2012/13

2012/13 is expected to be another challenging year in light of the current economic environment. Our focus will continue to be on investment in brands and innovation, reductions in our cost base and improving the quality of earnings.

The Committee undertook a review of the incentive arrangements during 2011/12 to ensure that they continue to meet the Company's objectives in the longer term. At this stage and for 2012/13, no change is proposed to the existing arrangements but the effectiveness of these arrangements remains under review. Shareholders will be consulted in advance of any new arrangements being adopted in 2013.

The Executive Directors have elected to forgo any inflationary salary increases this year to reflect the current economic environment. Consequently, there will be no base salary increases for the Executive Directors in 2012/13.

Summary of remuneration policy for 2012

We ensure that remuneration packages contribute to the delivery of long-term shareholder value. This is reflected in the Company's annual bonus scheme and LTISP awards which are explained in more detail below.

The remuneration structure and underlying principles on which the package is based, reflecting changes for 2011/12 are shown below.

Strategic objectives

Basis of delivery

Quantum

Base salary

Reflect assessment of market practice based on role and experience. Salary increases are linked to performance as measured in annual performance review.

Benchmarked against executives with similar responsibilities in companies of comparable size and complexity.

For 2012/13:

Mark Allen: £517,625

Alastair Murray: £344,597

Martyn Wilks: £346,270

Pension

To provide a market competitive level of provision with good flexibility whilst minimising risk to the Group.

No further service accrual under final salary pension scheme from 1 April 2010 - alternatives are the defined contribution scheme and/or salary supplement.

Mark Allen and Alastair Murray - employer contributions plus cash supplements will not exceed 23% of salary.

Martyn Wilks - cash supplement of 23% of salary.

Bonus

Ensure that annual reward is consistent with successfully achieving the short-term strategic objectives of the Group.

Annual performance period.

Balance of 75% demanding, relevant financial targets and 25% personal objectives.

Maximum - 100% salary overall (see deferred bonus below).

Deferred bonus

Ensure appropriate balance maintained between long-term and short-term reward and to build up Directors' shareholdings in line with policy.

Deferred for three years, conditional on continued employment until vesting date.

Issued in shares.

Any bonus over 50% of annual salary is deferred.

LTISP

Encourage continuing improvement in Group's performance over the longer term.

Alignment of interest between participant and shareholders.

Three-year performance period.

Payable in shares.

60% subject to relative TSR conditions.

40% subject to adjusted basic EPS growth targets.

Annual limit - 150% salary.

Maximum potential awards made during the year - 100% salary.

Make up of remuneration

A significant proportion of a Director's total remuneration package is variable, being subject to the achievement of specified short-term and long-term business objectives. In applying this policy the Committee has taken account of the provisions of Schedule A of the UK Corporate Governance Code of June 2010 (“Code”).

In the chart below we show the make up of remuneration given on-target performance. It can be seen that the fixed elements of pay represent around half of the total.

Base salary is taken as amount paid in the year excluding any salary supplements in relation to pensions;

Benefits are taken as the taxable benefit provided in the year;

Pension is taken as the amount of Company contributions for defined contribution schemes. It also includes any cash supplements resulting from contribution caps or non-membership of any Company scheme;

Bonus is taken as the amount that would have accrued for the year ended 31 March 2012 for on-target performance; and

LTISP awards are based on the fair value in a manner consistent with IFRS2.

The actual remuneration for 2011/12 is set out below. The actual bonus for 2011/12 of 50% is in line with on-target payout. However, LTISP awards granted in 2011 are not expected to vest based on conditions at 31 March 2012 and these have therefore been treated as having no value in the table below.

Components of remuneration

Base salary

There will be no base salary increases for the Executive Directors in 2012/13.

Proposed 2012/13 increase

Current annual salary*

M Allen

0%

£517,625

A Murray

0%

£344,597

M Wilks

0%

£346,270

* Post-July 2011 increases

Bonus

The maximum annual bonus opportunity for all Executive Directors is 100% of annual salary. Payment of the bonus is subject to the achievement of demanding short-term financial targets and personal objectives. Financial targets comprise 75% of the bonus and personal objectives, 25%. Financial targets include profit and cash targets. Personal objectives are based on a range of strategic goals. From 2008/09, the scheme has been structured to pay up to 40% of salary for on-target performance in relation to the financial targets.

To ensure that an appropriate balance is maintained between long-term and short-term reward, any bonus earned over 50% of annual salary is paid in the Company's shares and deferred for a three-year period subject to continued employment.

Long Term Incentive Share Plan

The LTISP is designed to encourage continuing improvement in the Group's performance over the longer term. An LTISP award is payable in shares, rather than cash, to emphasise the alignment of interests between the participants and the Company's shareholders. The LTISP has a three year performance cycle and pre-determined performance conditions, which must be met before awards under the LTISP can be exercised. Awards under the LTISP are granted annually.

The Committee has decided to maintain the Adjusted Basic Earnings Per Share (“EPS”) growth targets for the 2012 LTISP awards. The Committee believes that adjusted EPS provides transparency for shareholders and participants as well as a strong line of sight to focus participants on achieving the Company's earnings objectives, and believes that the targets outlined below are suitably stretching in the current environment.

Therefore, for the 2010, 2011 and proposed 2012 awards under the LTISP:

40% of the total award is based on EPS growth; and

60% of the total is measured on TSR performance against the FTSE 250 (excluding financial service companies, real estate companies and investment trusts).

Performance against both adjusted EPS and TSR is measured over a three year period.

The targets for the 2012 awards will be the same as for the 2011 awards and are as follows:

LTISP Award

TSR element

EPS element

Performance achieved

Proportion
of total
LTISP award
vesting

EPS target

Proportion
of total
LTISP award
vesting

Upper quartile

60%

RPI + 5%

40%

Median

18%

RPI + 1%

12%

Between median
and median plus 9% pa

Pro rata
between
18% and 60%

Pro rata
between
12% and 40%

The targets for the 2010 awards were as follows:

LTISP Award

TSR element

EPS element

Performance achieved

Proportion
of total
LTISP award
vesting

EPS target

Proportion
of total
LTISP award
vesting

Upper quartile

60%

RPI + 8%

40%

Median

18%

RPI + 3%

12%

Between median
and median plus 9% pa

Pro rata
between
18% and 60%

Pro rata
between
12% and 40%

The value of shares awarded under the LTISP in any financial year is subject to limits determined by the Remuneration Committee from time to time. The current annual limit for awards is 150% of base salary, however the maximum potential awards for the year were set at 100% of base salary.

Executive Share Option Scheme

The Dairy Crest Executive Share Option Scheme (“ESOS”) was established on 30 July 1996 for Directors and certain senior management and expired in July 2006. A new ESOS was adopted at the AGM 2006 (“ESOS 2006”). Part A is approved by the Inland Revenue and Part B is an unapproved scheme. Options are granted to participants at prices determined by the Remuneration Committee which may not be less than the market price of the shares as derived from the London Stock Exchange Daily Official List at the time of grant. At 31 March 2012, there were 141,826 outstanding options under this scheme which were awarded as part of the 2010 and 2011 LTISP (2011: 487,179 awarded as part of the 2009 and 2010 LTISP).

Sharesave Scheme

The Dairy Crest Sharesave Scheme was first established on 30 July 1996 and there have been eight grant phases since that date. The life of the Sharesave Scheme was extended in August 2006 to allow options to be granted until the twentieth anniversary of flotation, being August 2016. The Sharesave Scheme is open to all eligible employees and full time Directors. Employees enter into an approved savings contract over a three year term to make monthly contributions up to an overall maximum of £250 per month. At the end of the term, members have the right to buy ordinary shares in the Company at a price fixed at the time of the option grant. The price at which the options may be offered may not be less than 80% of the market price at the time of option grant.

A Sharesave grant was made in December 2011 in which approximately 1,040 employees participated. We intend to make a further grant in 2012/13.

Pension benefits

At 1 April 2010, the Company closed its defined benefit scheme to future service accrual. As part of the transitional arrangements, employees whose notice periods were six months or greater received service accrual up to 6 November 2010 (being 12 months from the decision to close the scheme to future service accrual). This applied to Mark Allen and Alastair Murray. This service accrual was included in the analysis presented at 31 March 2010. On closure of the defined benefit scheme, all members were offered active early retirement terms. This allows members to draw their pension early while continuing to work for the Company as long as an election was made before 31 March 2010. Mark Allen made such an election and from 31 March 2010 received a pension of £33,227 per annum and a lump sum amount of £221,510. Alastair Murray made no election to draw early pension payments.

Martyn Wilks was not a member of a Company pension scheme in the two years ended 31 March 2012. He received a salary supplement of 20% of base salary from April 2010 to June 2010 and 23% of base salary from July 2010 to March 2012.

From March 2010 to June 2010, Mark Allen and Alastair Murray received a salary supplement of 20% of base salary above the earnings cap (£123,600 for 2010/11), which was included in cash allowances. From July 2010 to November 2010, they received a salary supplement of 23% of base salary above the earnings cap. From November 2010 to 31 March 2011, Mark Allen and Alastair Murray received a salary supplement of 23% of base salary.

From 1 April 2011 the Company has made contributions into the Dairy Crest defined contribution pension scheme for both Mark Allen and Alastair Murray. The Company contributes up to the £50,000 limit beyond which Mark Allen and Alastair Murray receive a cash supplement. Overall employer contributions plus cash supplements do not exceed 23% of base salary.

Benefits in kind

These include the taxable value of company car benefits, life assurance cover and Company contributions to medical insurance plans.

Remuneration of the Chairman and of Non-executive Directors

The remuneration of the Non-executive Chairman is determined by the Board following a recommendation by the Chief Executive and the Remuneration Committee in consultation with PwC. The remuneration of Non-executive Directors is determined by the Board, also in consultation with PwC. The total fees for Non-executive Directors remain within the limit of £600,000 set out in the Articles of Association. There are no pre-determined special provisions for Non-executive Directors with regard to compensation in the event of loss of office.

The table below sets out the Non-executive Director fees at 31 March 2012. There were no increases in fees during the year.

Annual fees

Non-executive Chairman

£155,000

Non-executive Director (base)

£38,000

Audit Committee Chair

£5,000

Corporate Responsibility Chair

£5,000

Remuneration Committee Chair

£5,000

Senior Independent Director

£5,000

The information on pages 41 to 45 (beginning with this section ‘Remuneration of the Chairman and of Non-executive Directors') is subject to audit, except for the details of service contracts on page 41, details of Directors' shareholdings also on page 41 and the graph on total shareholder return on page 45.

Service contracts

In accordance with best practice as set out in the Code, all Executive Directors have a notice period not exceeding one year. All such Directors' service contracts provide explicitly for termination payments in the event of termination by the Company other than on grounds of incapacity or in circumstances justifying summary termination. Payments on termination are calculated at 70-90% of the value of annual salary, benefits, pension and bonus for the notice period. In the case of Martyn Wilks and for future appointments, there is a mitigation clause in the service contract with respect to termination payments such that certain compensation payments are deferred. A summary of the service agreements of the Executive Directors is available on the Company's website.

The service contracts and letters of appointment include the following terms:

Executive Directors

Date of contract

Notice period (months)

M Allen

18 July 2002

12

M Wilks

7 January 2008

12

A S N Murray

20 June 2003

12

Non-executive Directors

Letters of appointment

Notice period (months)

A Fry

15 July 2009

3

H Mann

16 October 2009

3

A Carr-Locke

15 July 2009

3

R Macdonald

4 October 2010

3

S Alexander

4 October 2010

3

S Farr

6 October 2011

3

Letters of appointment for all Non-executive Directors include a
three month notice period. It is the Company's policy that Non-executive Directors should not normally serve for more than nine years. A summary of the terms of appointment of Non-executive Directors is available on the Company's website.

Details of the Directors offering themselves for election and re-election at the forthcoming Annual General Meeting are set out in the Corporate Governance Report on page 53 (with biographical details at pages 10 to 11).

Shareholding guidelines

Directors are encouraged to build a shareholding in the Company equivalent to one year's salary and to this end would normally retain 50% of net proceeds from share plans and bonus share awards until that shareholding is achieved.

The interests of the Directors at the end of the year in the ordinary share capital of the Company were as follows:

As at 31 March
2012
Beneficial

As at 31 March
2011/resignation
Beneficial

As at 31 March
2012
Deferred shares**

As at 31 March
2011
Deferred shares **

A Fry

3,000

3,000

-

-

M Allen

139,801

136,162

52,704

55,635

A S N Murray

150,021

150,021

36,571

36,571

M Wilks

18,500

18,500

36,748

36,748

H Mann

20,000

20,000

-

-

A Carr-Locke

2,000

-

-

-

R Macdonald

1,000

-

-

-

S Alexander

1,000

-

-

-

S Farr

4,465

-

-

-

C Piwnica *

-

5,000

-

-

N Monnery *

-

5,000

-

-

* Holding at date of resignation

** This analysis excludes shares resulting from reinvested dividends on deferred shares, as Directors have no legal or beneficial interest in such shares until and if the Remuneration Committee exercises its discretion to award such shares at the end of the vesting period.

Shareholdings above exclude options under the LTISP scheme and deferred shares for Executive Directors as part-payment of bonuses are shown as a separate column. These shares are released three years after the year in which the bonus was earned. An analysis of the movement in deferred bonus shares and deferred bonus share options (applicable from 2011) is set out below:

Bonus
year

Year of
award

Balance at
March 2011

Awarded

Dividend
reinvestment
on issuance

Issued

Balance at
March 2012

Mark Allen

2007/08
2009/10
2010/11

2008
2010
2011

2,931
52,704
-

-
-
5,070

708
-
-

(3,639)
-
-

-
52,704
5,070

Alastair Murray

2009/10
2010/11

2010
2011

36,571
-

-
3,409

-
-

-
-

36,571
3,409

Martyn Wilks

2009/10
2010/11

2010
2011

36,748
-

-
3,426

-
-

-
-

36,748
3,426

The share prices at the date of award for the 2008, 2010 and 2011 awards were £3.28, £3.95 and £3.68 respectively. The share price at the date of exercise of the 2008 award was £3.75. Note that 2011 deferred bonuses were granted as options rather than as deferred shares and are not included in the table of Directors' shareholdings above as they are not legally or beneficially held by the Directors until vesting.

No Director holds a non-beneficial interest in the Company's share capital. There have been no changes in Directors' shareholdings between 31 March 2012 and 23 May 2012. The above interests exclude any rights to acquire shares under the LTISP arrangements, which are set out below.

External appointments

Executive Directors may be invited to become Non-executive Directors of other companies and it is recognised that exposure to such duties can broaden their experience and skills which will benefit the Company. External appointments are subject to agreement by the Chairman and reported to the Board. Any external appointment must not conflict with a Director's duties and commitments to Dairy Crest.

During the year, the fees received by executive Directors for external appointments were as follows:

Director

Appointee company

Additional positions held at appointee company

Total fees (£000)*

Mark Allen

Howdens Joinery Group plc

Audit Committee member and Remuneration Committee member

23

* Total fees are as reported by Howdens for the financial year up to 24 December 2011. Mark Allen was appointed to the Board on 31 May 2011. His fees were pro-rated to reflect the amount of time spent in the role during the year.

Directors' remuneration for the year ended 31 March 2012

Basic

Cash allowances

To defined

salary/fees

Pension

Other

Benefits

Bonus

Total remuneration

contribution schemes

2012

2012

2012

2012

2012

2012

2011

2012

2011

£000

£000

£000

£000

£000

£000

£000

£000

£000

Non-executive Chairman

A Fry

155

-

-

-

-

155

155

-

-

Executive Directors

M Allen

512

109

-

27

256

904

888

9

-

A Murray

341

69

1

21

171

603

596

9

-

M Wilks

343

79

-

13

171

606

610

-

-

1,196

257

1

61

598

2,113

2,094

18

-

Non-executive Directors

H Mann

48

-

-

-

-

48

46

-

-

A Carr-Locke

43

-

-

-

-

43

43

-

-

R Macdonald
(appointed 3 November 2010)


43


-


-


-


-


43


16


-


-

S Alexander
(appointed 1 January 2011)


38


-


-


-


-


38


10


-


-

S Farr
(appointed 1 November 2011)


16


-


-


-


-


16


-


-


-

N Monnery
(resigned 20 July 2010)


-


-


-


-


-


-


14


-


-

C Piwnica
(resigned 9 December 2010)


-


-


-


-


-


-


30


-


-

188

-

-

-

-

188

159

-

-

1,539

257

1

61

598

2,456

2,408

18

-

Basic salary, benefits and bonus are defined on pages 39 to 41. Bonuses detailed above include the full value of any bonus payment deferred as shares. For 2011/12 this amounts to nil. In 2010/11 this amounted to £18,656 for Mark Allen, £12,545 for Alastair Murray and £12,606 for Martyn Wilks.

Cash allowances principally comprise pension related salary supplements. Mark Allen and Alastair Murray were members of the defined contribution scheme throughout 2011/12. The Company made contributions up to the £50,000 limit for employee and employer contributions. Further cash supplements were paid such that the total of cash supplements and employer contributions amounted to 23% of basic salary. Mr M Wilks was not a member of any Company pension scheme in the year ended 31 March 2012 and received a salary supplement of 23% of basic salary.

Directors' pension entitlements

The pension entitlements of the Directors from the Dairy Crest Group Pension Fund, a defined benefits scheme, which have been excluded from the table on page 43, were as follows:

Age

Length of
pensionable service
Years

Accumulated
total accrued
pension at
31 March 2012
£000

Accumulated
total accrued
pension at
31 March 2011
£000

Increase in
accrued
pension during
the year*
£000

Transfer value
of increase
in accrued
pension
£000

M Allen

52

19.3

36

35

0

0

A S N Murray

51

7.2

31

30

0

0

* Excluding inflation

The transfer value of each Director's accrued benefits at the end of the financial year is set out below. The transfer values shown in the table have been calculated in accordance with actuarial guidance note GN11. Transfer values are determined based on financial conditions at the date of calculation including stock market values and bond yields. Following the closure of the pension scheme to future accruals, there is no increase in accrued pension during the year other than inflationary increases.

As at
31 March 2012
£000

As at
31 March 2011
£000

Director's
contributions
in the year
£000

Movement less
director's
contributions
£000

M Allen

1,278

996

0

282

A S N Murray

557

421

0

136

Notes

The scheme closed to future accrual at 31 March 2010 and length of pensionable service is unchanged from then. Length of service recognized at March 2010 included the seven months to November 2010, reflecting the transitional arrangement based on notice period that was agreed on the closure of the scheme to future service accrual.

Mark Allen decided to draw benefits from 31 March 2010 and receives an annual pension and received a cash lump sum of £221,510 in 2010/11. Mark Allen's accrued pension immediately before electing to draw it early was £63,931 per annum (including seven months' additional pension service). The future pension payable at March 2011 was less than £63,931 per annum due to the application of an early retirement reduction and because some pension was exchanged for a lump sum cash payment. Benefit accrual ceased on 31 March 2010 and Mark Allen and Alastair Murray are no longer paying contributions into the fund.

The increase in transfer value in the year is purely a result of falling gilt yields which are used as the benchmark for discount rates used in the transfer value calculations.

Long-Term Incentive Share Plan Awards

LTISP performance conditions are set out on page 40. The performance periods commence on 1 April in each year and conclude on 31 March three years later. Actual and potential awards held by Executive Directors under LTISP at the beginning and end of the year, details of actual awards, awards vested during the year and their value, are as follows:


Year of
award


Bonus
1 April 2011



Awarded


Exercised
- retained


Exercised
- sold



Lapsed


Balance at
31 March 2011

Market price
at original
award

M Allen

2009

163,718

11,557

-

-

(175,295)

-

313.7p

2010

121,154

8,567

-

-

-

129,721

398.9p

2011

-

140,149

-

-

-

140,149

368.0p

A S N Murray

2009

113,602

8,032

-

-

(121,634)

-

313.7p

2010

84,068

5,944

-

-

-

90,012

398.9p

2011

-

93,302

-

-

-

93,302

368.0p

M Wilks

2009

114,155

8,072

-

-

(122,227)

-

313.7p

2010

84,476

5,973

-

-

-

90,449

398.9p

2011

-

93,754

-

-

-

93,754

368.0p

Notes to the LTISP table:

- Awarded shares include reinvestment of dividends.

- The above table includes options granted under the ESOS. Part of the 2009 LTISP award is held in the form of HMRC approved options. If the performance criteria are met and there has been an increase in share price, the approved options may be exercised to deliver part of the total value of the LTISP subject only to capital gains tax. To the extent that value is delivered through these approved options, an equivalent proportion (in value) of the non-approved LTISP options will lapse. Options granted under the ESOS in 2009 for Mark Allen, Alastair Murray and Martyn Wilks were 9,564 shares each.

- The 2009 awards vested at 0%.

- LTISP 2010 and LTISP 2011 performance measurement and vesting periods end on 31 March 2013 and 31 March 2014 respectively. Options will be exercisable from 28 June 2013 and 1 July 2014 respectively.

- The closing share price on 31 March 2012 was £3.33 (31 March 2011: £3.59).

- There were no LTISP awards or exercises between 31 March 2012 and 23 May 2012.

Performance graph

Schedule 8 of The Large and Medium Companies and Groups (Accounts and Reports) Regulations 2008 requires companies to provide by graph an analysis of their performance over time. The graph below sets out for the five years ended 31 March 2012 the total shareholder return of Dairy Crest Group plc and the performance of the Food Producers and Processors sector of the FTSE and of the FTSE 250 index (excluding investment companies) of which the Company is a constituent member.

Directors' Sharesave options

At 31 March 2012 the Directors held the following share options under the Sharesave Scheme.

At 31 March
2011

Granted
in year

Exercised
in year

At 31 March
2012

M Allen

3,997

-

-

3,997

A S N Murray

3,997

-

-

3,997

M Wilks

3,997

-

-

3,997

Share options in the above table represent the total awards made in 2009/10 assuming participants continue to save throughout the three year life of the Scheme.

No awards were granted under the Sharesave Scheme in the period from 31 March 2012 to 23 May 2012, nor were there any Sharesave Scheme exercises during this period.

The mid-market price of the above shares as at the close of business on 31 March 2012 was 333 pence per share. During the year between 
1 April 2011 and 31 March 2012 the mid-market closing price ranged from 311 pence per share to 410 pence per share.

Exercise of options

No options were exercised in the year ended 31 March 2012 or 31 March 2011.

On behalf of the Board

Stephen Alexander

Chairman of Remuneration Committee
23 May 2012