mill
D u n e l m
mill
D u n e l m
www.dunelm-mill.com
Dunelm Group plc
Fosse Way
Syston
LE7 1NF
Tel: 0116 264 4356
Email: investorrelations@dunelm-mill.co.uk
Annual report & accounts 2009
Dunelm Group plc
Dunelm Group plc  Annual report & accounts 2009 Contents
Business review
01 Highlights
02 Chairman’s statement
03 Chief Executive’s review
07 Finance Director’s review
10 Directors
Governance
12 Corporate governance report
15 Remuneration report
18  Directors’ report and business 
review
22  Statement of Directors’ 
responsibilities
Financial statements
23 Independent Auditor’s report
24 Consolidated income statement
25 Consolidated balance sheet
26  Consolidated cash flow 
statement
27  Consolidated statement of 
changes in equity
28 Accounting policies
32  Notes to the annual financial 
statements
44 Parent Company accounts
Annual General Meeting
53  Notice of Annual General 
Meeting
59 Form of proxy
Dunelm is a fast growing specialist out-
of-town homewares retailer providing 
a comprehensive range of products to 
a wide customer base, under the brand 
name Dunelm Mill.
 Superstores open at 28 June 2008
 Superstores opened after 29 June 2008
Business strategy: These are our key areas of focus 
Growing the store portfolio  Developing the customer offer  
We are ambitious to continue driving Dunelm’s growth by rolling 
out the successful superstore format. Of the existing 85 
superstores as of 15 September 2009, the majority are located in 
the Midlands or the North West of England and coverage of many 
parts of the UK is limited. The opportunity for geographic 
expansion is therefore very significant.
We intend to continue to focus on homewares and our ‘Simply 
Value for Money’ proposition – deep ranges of quality products at 
keen prices, with high availability and supported by friendly 
service. We want to keep strengthening each element of the offer.
Advisers
Corporate Brokers UBS Investment Bank
and Financial Advisers 1 Finsbury Avenue
 London EC2M 2PP
 Tel: 020 7567 8000
 Oriel Securities Limited
 125 Wood Street
 London EC2V 7AN
 Tel: 020 7710 7600
Legal Advisers Allen & Overy LLP
 One Bishops Square
 London E1 6AO
 Tel: 020 3088 0000
Auditors KPMG Audit Plc
 1 Waterloo Way
 Leicester LE1 6LP
 Tel: 0116 256 6000
Principal Bankers Barclays Bank plc
 Midlands Corporate Banking
 PO Box 333
 15 Colmore Row
 Birmingham B3 2WN
 Tel: 0845 755 5555
Registrars Equiniti
 Aspect House
 Spencer Road
 Lancing 
 West Sussex BN99 6DA
 Tel: 0871 384 2030
Financial Public Relations Hogarth Partnership Limited
 No. 1 London Bridge
 London SE1 9BG
 Tel: 020 7357 9477  2005
£282.5m
2006
£315.2m
2007
£354.7m
2008
£391.8m
2009
£423.8m
2005
£282.5m
2006
£315.2m
2007
£354.7m
2008
£391.8m
2009
£423.8m
£417.1m
1
2005
£37.6m
2006
£38.0m
2007
£37.8m
2008
£49.1m
2009
£53.5m
2005
£36.2m
2006
£38.2m
2007
£40.8m
2008
£49.4m
2009
£52.6m
2005
£36.2m
2006
£38.2m
2007
£40.8m
2008
£49.4m
2009
£52.6m
£51.6m
1
2005
£30.1m 2006
£24.1m
2007
£34.7m
2008
£45.0m
2009
£67.4m
Annual report & accounts 2009 Dunelm Group plc
01
Business review Governance Financial statements Annual General Meeting
Highlights
Revenue
Profit before tax*
†
Operating profit*
†
Net cash from operations
Exploiting our infrastructure  Growing Dunelm Direct  
Operational
94 stores at 4 July 2009 (82 superstores)
6 new superstores opened in the year
Average superstore selling area  
of 28,000 square feet
Around 20,000 lines in a superstore – 
broad and deep ranges
Financial
Revenue increase 8.2% in FY 2008/09
Operating margin 12.4%
Operating cash flow £68m after  
interest and tax
*    The 2007 figures for operating profit and profit before tax included non-recurring 
items in respect of IPO and warehouse relocation as well as a non-recurring gain on a 
property disposal. The combined effect of these was to reduce operating profit by 
£3.2m and profit before tax by £3.0m.
†
  The 2009 figures reflect a 53 week trading period, compared with 52 weeks in all 
prior years.
We are in a strong position to exploit further our increasing scale, 
as well as to benefit from the significant infrastructure investments 
made in recent years, particularly in IT systems.
We have had a transactional website since 2006. We see significant 
opportunity to grow our overall business by further developing 
direct channels in conjunction with expanding our store base. Dunelm Group plc Annual report & accounts 2009
02
Chairman’s statement
The last 12 months have been challenging 
for all retailers. The number of business 
failures has increased significantly, and has 
included some well known names with 
involvement in the homewares market. 
Against this difficult background, Dunelm 
has demonstrated great resilience as 
customers have continued to buy into our 
‘Simply Value For Money’ proposition. 
We expect that the retail environment  
will remain challenging for some time, 
reflecting the depth of the background 
difficulties in the UK economy. In this 
scenario, consumers’ continual search  
for better value, together with a trend 
towards switching of expenditure into 
home improvements, leaves us well 
positioned to make further progress.
After the end of the financial year we 
welcomed a new Non-Executive Director  
to the Board, appointing Nick Wharton, 
Finance Director of Halfords Group plc.  
His wealth of experience and knowledge  
of the retail sector will be a great asset  
to the Board as we continue to pursue our 
growth strategy.
Focusing on 
developing the 
customer offer
Dunelm has 
demonstrated 
great resilience.
The business celebrates its 30th year of 
operations with another year of increase  
in sales and profits. In addition, there was 
strong positive cash generation and we 
ended the year with significant cash 
surplus. This strong performance has 
enabled the Board to recommend a 9.1% 
increase in the dividend, broadly in line 
with the growth in earnings per share.  
The Group remains in a very strong position 
to continue our strategy of investing in 
organic growth in the coming years. 
Geoff Cooper
Chairman
15 September 2009
20,000
Product lines available in 
superstores Annual report & accounts 2009 Dunelm Group plc
Business review Governance Financial statements Annual General Meeting
03
Chief Executive’s review
opened three further stores since the 
year-end in Norwich, Londonderry and 
Broadstairs and we are contractually 
committed to nine more units which are 
due to open over the next twelve months. 
We also have numerous further 
opportunities under negotiation. With 
little occupier demand for ‘big box’ retail 
warehousing space, we believe that we are 
well positioned to continue our store 
roll-out programme over the next few 
years whilst maintaining our disciplined 
and demanding approach to return  
on investment. 
Whilst expanding our superstore chain 
towards our medium-term target of at 
least 150 superstores, we continue to look 
for opportunities to relocate our older high 
street shops. The superstore opening in 
Worcester replaced our high street store 
there, leaving us with 12 high street stores.
Priority 2 – developing the customer offer
We know that it is essential for us to 
continue improving our retail proposition. 
We are as passionate as ever about giving 
‘Simply Value For Money’ to all our 
customers – a combination of price,  
choice, quality, product availability and 
friendly service. 
We have introduced a number of 
developments in our offer over the past 
We see an 
increasing number 
of opportunities 
to grow the 
superstore 
portfolio without 
compromising 
our long-term 
financial returns.
Trading
I am delighted to report continued 
successful growth of the Group during the 
last financial year. Our overall sales 
increased by 8.2% over the financial year, or 
6.3% on a comparable 52 week basis.  
Like-for-like sales (calculated by comparing 
stores which have traded throughout the 
last two financial years) recovered from a 
decline of 5.6% in the first half to end the 
year just 0.5% down – significantly beating 
the overall homewares market. 
I firmly believe that Dunelm remains the 
leading multiple homewares specialist in 
the UK. We intend to maintain our success 
by pursuing the four priorities which have 
constituted our strategy since flotation.
Priority 1 – growing the store portfolio
We opened six new superstores in the year, 
at Huddersfield, Newtownabbey, 
Plymouth, Worcester, Workington and 
Llanelli. We continue to receive very 
favourable customer reaction to all of our 
new openings and are pleased with trading 
in all of these locations. Altogether the 
chain of 82 superstores as at the year-end 
provided 2.4m square feet of selling space.
 
We see an increasing number of 
opportunities to grow the superstore 
portfolio without compromising our 
long-term financial returns. We have  Dunelm Group plc Annual report & accounts 2009
04
Focused on  
growing  
Dunelm Direct
Chief Executive’s review
continued
year. For example, we have launched an 
arts & crafts section in a number of stores, 
and have grouped together various existing 
ranges to create a new laundry & cleaning 
section. We now also offer add-on services 
in many stores – for example, we deliver 
products to customers’ homes and fit them 
when required. 
We have responded to the difficult 
economic environment by increasing the 
proportion of special buys available for 
customers, and have introduced some 
additional short-term product promotions 
under the banner of ‘Miss It Miss Out’.
In our new and refitted stores, we now 
include a dedicated Dorma area, following 
our acquisition of rights to the Dorma brand 
in July 2008 (Dorma is a high-end home 
textiles brand with strong heritage in bed 
linen particularly). We have successfully 
retained Dorma’s royal warrants following 
the acquisition, have refined the branding 
and have developed an exciting new range 
of Dorma bed linen designs exclusive to 
Dunelm. We have also begun to apply the 
Dorma name to other product categories 
such as bathroom and table linen.
We have continued investing to improve 
the shopping environment in our older 
stores. We completed six refits in the  
last financial year and intend to continue 
our refit programme at the rate of 5–10 
stores per year. To date the cost has been 
approximately £0.5m per store, with 
payback anticipated in approximately 3–5 
years. We have received a good response  
to these refitted stores both from 
customers and from our store teams.
Priority 3 – growing Dunelm Direct
Dunelm Direct is the name we give to our 
multi-channel strategy. Sales from our 
website (www.dunelm-mill.com) have 
grown well over the last financial year. We 
expect this to continue in the coming year 
as we are about to relaunch the site on a 
new technology platform which will 
improve the shopping experience and give 
us a much stronger technological base to 
build upon.
Also on this new technology platform will 
be a new website for Dorma (www.dorma.
co.uk) which will act as a showcase for the 
Dorma brand, stocking all Dorma products, 
whether Dunelm exclusive designs or 
products distributed under licence by our 
third party partner.
Whilst it is still early days for our Dunelm 
Direct growth strategy we think the 
investment we have made over the last 
financial year will give us a strong and 
scalable platform on which to build.
Priority 4 – exploiting our infrastructure
We continue to extract further benefits from 
our past investment in IT systems, enabling 
us to improve stock control and make 
in-store processes more efficient. We are 
also seeing improvements to our customer 
offer directly supported by IT, for example 
the forthcoming launch of a gift card.
We are taking steps to underpin our 
medium term expansion plans by securing 
additional leasehold space at our central 
warehouse in Stoke, where we have an 
option over 100,000 square feet of 
warehousing to supplement the 250,000 
square feet we currently occupy. We 
anticipate moving operations into this 
additional space during 2010. Our capital 
expenditure to fit out new warehousing 
space is not expected to exceed £2m.
As our business grows, we will also need  
to expand our head office facility. We are 
investigating the possible purchase of 
freehold land in the neighbourhood of  
our existing base in Syston, Leicester.  
This is a long-term project and any new 
building is unlikely to be ready for 
occupation until 2011. 
Outlook
For the first 10 weeks of our financial  
year, to 12 September, total sales growth 
has been 26.5% and like-for-like sales  
have grown by 16.1%. Gross margin has 
remained strong, with an increase of 
180bps year-on-year. 
We are very pleased with the start to  
our new financial year. We are confident 
1 1,000+
Our webstore has been relaunched 
with over 1 1,000 products Annual report & accounts 2009 Dunelm Group plc
Business review Governance Financial statements Annual General Meeting
05
that our ‘Simply Value For Money’ 
proposition will continue to appeal to 
customers in the current economic 
climate. Our product ranges are suitable 
for all budgets and tastes. Our business is 
not significantly reliant on big-ticket 
purchases – our average basket remains 
below £30. In addition, the relatively weak 
state of the commercial property market 
gives us good opportunities to roll out  
our offer to more locations. Having said  
all this, we recognise that it will be very 
challenging to maintain our recent trading 
performance as like-for-like sales 
comparatives start to strengthen, and 
economic factors (including the planned 
increase in VAT and anticipations of  
public spending reductions and rising 
unemployment) potentially subdue 
consumer spending. Nonetheless, the 
business is in excellent health, we are 
confident of continuing to grow our  
market share and we remain excited  
about our growth prospects in the  
medium term.
  
 
Will Adderley
Chief Executive
15 September 2009 Dunelm Group plc Annual report & accounts 2009
06
Focusing on  
growing our  
store portfolio
85
Superstores located 
throughout the UK Annual report & accounts 2009 Dunelm Group plc
07
Business review Governance Financial statements Annual General Meeting
Finance Director’s review
Our scale, buying 
power and mix 
of special buys 
have continued 
to deliver gross 
margin growth
53 Weeks
Dunelm’s financial years are determined by 
reference to ‘Mean Accounting Dates’ and 
therefore every few years the Group reports 
a 53 week financial period. The year ended 
4 July 2009 was a 53 week year. Unless 
otherwise stated, throughout the Finance 
Director’s Review references to ‘the 
financial year’ or to 2009 relate to the 53 
weeks ended 4 July 2009 and for 2008, to 
the 52 weeks ended 28 June 2008. The 53rd 
week represented £6.7m of revenue and 
£1.0m of operating profit.
Operating result
Group revenues in the financial year were 
£423.8m (2008: £391.8m), an increase of 
8.2% (6.3% on a 52 week basis). Like-for-like 
sales (calculated by comparing stores which 
have traded throughout the last two 
financial years) witnessed a decline of 0.5% 
on a 52 week basis, although H2 like-for-like 
sales at + 5.0% showed a strong recovery 
from a H1 decline of 5.6%.
Our scale, buying power and mix of special 
buys have continued to deliver gross margin 
growth, achieving a 120 basis point 
improvement to 45.8% in 2009 (2008: 
44.6%). Taking into account all charges for 
inventory write-downs, gross margin was 
44.9% (2008: 43.1%) and we will report 
gross margin on this basis in the future.
Operating costs remained tightly 
controlled, with an overall 4.7% increase  
in operating costs in like-for-like stores. 
Property rents increased by 5.6% reflecting 
an unusually high number of rent reviews 
falling due in the period. Utility costs 
increased by 29.9%, reflecting higher tariffs 
in the first part of the year. Non-store costs 
grew by £3.7m, including additional 
logistics costs to support the increase in 
special buy merchandise as well as further 
investment in advertising and Head Office 
support infrastructure.
Operating profit for the 53 weeks to 4 July 
2009 was £52.6m. On a 52 week basis 
operating profit was £51.6m, an increase of 
£2.2m (4.5%) on the previous year’s £49.4m.
EBITDA
Earnings before interest, tax, depreciation 
and amortisation were £63.2m. This  
has been calculated as operating profit 
(£52.6m) plus depreciation and 
amortisation (£10.6m) and represented  
a 7.3% increase on the previous year.  
The EBITDA margin achieved was 14.9% of 
sales (2008: 15.0%). 
Financial items and PBT
The net interest charge for the year ended  
4 July 2009 was £0.1m (2008: £0.3m). This 
reduction is a direct result of the Group’s 
strong cash generation enabling 
elimination of the prior year net debt. 
A foreign exchange gain of £1.0m arose in 
the year in respect of US dollar holdings 
within the Group. At the year end, the 
Group held no forward contracts for the 
purchase of foreign currency but did hold 
$2.2m in cash. Dunelm Group plc Annual report & accounts 2009
08
Finance Director’s review
continued
After accounting for interest and foreign 
exchange impacts, profit before tax for the 
year amounted to £53.5m (2008: £49.1m), 
an increase of 8.9%.
Tax, PAT and EPS
The tax charge for the year was 29.7% of  
PBT (2008: 31.5%), benefiting year-on-year 
from the reduction in the headline rate of 
corporation tax to 28.0%.
Basic EPS for the year ended 4 July 2009 was 
18.8p (2008: 16.8p), an increase of 11.9%. 
Fully diluted EPS increased by 12.0% to 
18.6p (2008: 16.6p); this would have been 
approximately 18.3p (10.2% increase) on a 
52 week basis.
Capital expenditure
Gross capital expenditure in the financial 
year was £25.9m, up from £18.0m last year. 
The Group took advantage of market 
conditions to acquire two freehold stores 
at attractive yields as well as funding fit-out 
costs for six new stores opened in the year 
and six store refits. Rights to the Dorma 
brand name were acquired during the 
period at a cost of £5.0m.
Working capital
The Group reduced working capital in  
the year by £14.8m. Investment in 
inventories was £57.9m at the year end,  
a reduction of £2.8m compared with  
last year despite the addition of six new 
stores – reflecting specific management 
focus on this area. Trade and other payables 
generated a positive cash movement of 
£11.1m, although some of this benefit is 
attributable to the 53 week accounting 
period and is expected to reverse.  
Cash position
The Group continues to generate  
extremely strong cash flows. Net cash  
from operations, after interest and tax, 
amounted to £67.4m (2008: £45.0m) in  
the last financial year. As at 4 July 2009 the 
Group had net cash resources of £24.0m 
(2008: net debt of £7.2m).  Together  
with committed undrawn revolving loan 
facilities of £40.0m this puts us in an 
excellent position to fund future growth.
Dividend
An interim dividend of 2.0p was paid in 
April 2009 (2008: 2.0p). It is proposed to 
pay a final dividend of 4.0p per share (2008: 
3.5p). The total dividend of 6.0p represents 
a 9.1% increase over last year. 
Key performance indicators
In addition to the traditional accounting 
measures of sales and profits, the Directors 
review business performance each month 
using a range of other KPIs. These include:
  FY09 FY08
Like-for-like 
sales growth  –0.5% +2.5%
Change in 
gross margin  +120bp +60bp
Number of new 
store openings  6 8
Key risks
The Directors also consider key risks to  
the business in the areas of strategic, 
operational and financial risks.
Strategic risks
New entrants to and/or formats within the 
homewares market could materially alter 
the competitive environment. We will 
continue to monitor competitor activity 
and to modify our proposition if necessary.
The outlook for consumer expenditure 
growth is uncertain and a prolonged 
downturn could have a significant effect  
on our business, as well as on many other 
retailers. We mitigate this risk by retaining 
the ability to react quickly to changes in 
customer demand and to adjust our offer 
accordingly. We have the ability to flex our 
offer in response to customer demand as 
evidenced by the increased proportion of 
‘special buy’ merchandise in the business. 
Our focus on a low cost base also enables  
us to maintain our ‘Simply Value For 
Money’ proposition. 
Like all businesses, we face the risk of 
increased costs from compliance with new 
laws and regulations. In addition, any 
changes to property regulation could have 
a particular impact on our opportunities for 
opening new stores. At present we are not 
aware of any significant forthcoming 
changes in the regulatory environment.
Our growth plans rely heavily on our being 
able to gain access to additional trading 
Focusing on exploiting  
our infrastructure
2.4
m sq. ft.
Total selling space Annual report & accounts 2009 Dunelm Group plc
09
Business review Governance Financial statements Annual General Meeting
locations. If for any reason the supply of 
vacant retail warehouse space declines 
significantly, we will be forced to accept a 
lower pace of expansion. However, in view 
of the economic pressures on both retailers 
and landlords we anticipate good availability 
of space over the next few years.
Operational risks
As with most major retailers, the business 
is heavily reliant on information systems 
and technology. 
A major IT incident could constitute a 
significant threat to the business, at least in 
the short-term. Dunelm maintains a disaster 
recovery plan to provide business continuity 
in the event of such an occurrence.
Similarly, the business could suffer 
disruption in the event of a major incident 
within the supply chain, e.g. loss of our 
central warehouse or a major supplier. 
However, our use of a wide supply base, 
active management of key supplier 
relationships, high stock service levels and 
a high proportion of direct-to-store 
deliveries mitigate this risk. 
Dunelm has a number of staff members in 
specialist positions whose expertise is 
important to operations and who could not 
easily be replaced. Additional 
strengthening of the operating 
management team over the past 12 
months has given greater depth and 
coverage in a number of areas.
Financial risks
The Group has a committed bank facility 
under a revolving loan agreement  
with Lloyds Banking Group plc of £40m 
expiring in September 2011. This facility, 
together with existing cash resources,  
is considered to provide sufficient  
funding for the Group’s operations. 
We do not consider our direct  
exposure to interest rate fluctuations  
to generate any significant downside  
risk and we will be well placed to take 
advantage of upside potential.
Surplus funds are placed on deposit  
in a range of overnight and fixed  
term facilities with counter parties 
approved by the Board. The Group  
actively manages counter party risk.  
A credit rating of at least an ‘A’ is required.
David Stead
Finance Director
15 September 2009 Dunelm Group plc Annual report & accounts 2009
10
Directors
Bill Adderley
Founder and Life President
Bill Adderley founded Dunelm along with his wife Jean in 1979. 
He led the development of the business successfully for many 
years, then took a non-executive role before retiring in February 
2008. He and Jean remain passionate Dunelm supporters and 
major shareholders.
Geoff Cooper
Non-Executive Chairman
Geoff Cooper, joined the Board in 
November 2004. Chairman of the Audit 
Committee and Member of the 
Remuneration and Nominations 
Committees. He is currently Chief 
Executive of Travis Perkins plc, and is a 
former Director of Gateway (now 
Somerfield plc) and has also been Finance 
Director and then Deputy Chief Executive 
of Alliance UniChem plc.
Marion Sears
Senior Independent Non-Executive 
Director
Marion Sears, joined the Board in July 2004. 
Chairman of the Remuneration and 
Nominations Committees and Member of 
the Audit Committee. She is also a 
Non-Executive Director of Zetar Plc.
Will Adderley
Chief Executive
Will Adderley, joined the business in 1992. 
He has worked in and is familiar with all 
major areas of the business and took over 
the day-to-day running of the Group from 
his father in 1996.
Focused on leadership Annual report & accounts 2009 Dunelm Group plc
11
Business review Governance Financial statements Annual General Meeting
David Stead
Finance Director
David Stead, joined the Group in 2003. 
Previously he spent 14 years at Boots where 
he was Finance Director of Boots The 
Chemists and Finance Director of Boots 
Healthcare International.
Simon Emeny
Independent Non-Executive Director
Simon Emeny, joined the Board 
in June 2007. Member of the Audit, 
Remuneration and Nominations 
Committees. Simon is an Executive 
Director of Fuller Smith and Turner P.L.C. 
where he is responsible for the Fuller’s 
Inns division.
Nick Wharton
Independent Non-Executive Director
Nick Wharton, joined the Board in August 
2009. Member of the Remuneration and 
Nominations Committees and will become 
Chairman of the Audit Committee. Nick is 
Finance Director of Halfords Group plc. Dunelm Group plc Annual report & accounts 2009
12
Corporate governance report
The Board is committed to high standards of corporate 
governance. This report explains how the Group has applied the 
principles of good governance and code of best practice set out in 
the Combined Code dated 2008.
Throughout the financial year the Group has complied with the 
Combined Code except that Geoff Cooper, Group Chairman, is 
also Chairman of the Audit Committee. Given the balance of other 
independent Non-Executive Directors who sit on the committee 
this is not considered to result in the Chairman exercising undue 
influence over the committee.
Going forward, the committee will be chaired by Nick Wharton. 
The Board considers that Nick Wharton has recent and relevant 
financial experience by virtue of his professional qualification and 
his current role as Finance Director of Halfords Group plc.
The Board
The Board has overall responsibility for controlling the Group, 
making decisions relating to the Group’s strategic direction and 
measuring progress towards strategic goals.
The Board has 10 scheduled meetings per annum, including one 
strategy meeting. There was full attendance at all Board and 
Committee meetings during the year except that Geoff Cooper 
was absent from one Board meeting. 
There is a schedule of matters reserved to the Board for decision 
or approval, which is available on the Group’s website or from the 
Company Secretary. Examples of such matters include Group 
strategy and budget, Group capital structure, approval of financial 
results and report and accounts, significant capital or contractual 
commitments, maintaining internal control and risk management, 
and approval of Group-wide policies.
At each meeting, the Chief Executive reports on operational 
performance (including health and safety) and the Finance Director 
reports on financial performance. Other matters are discussed by 
the Board as required, supported by a briefing paper where a 
decision is to be made by the Board.
Minutes of all Board and Committee meetings are taken by the 
Company Secretary and committee secretaries respectively and 
circulated for approval. Any unresolved concerns raised by a 
Director are recorded in the minutes.
The Chairman and the other Non-Executive Directors meet from 
time to time without Executive Directors being present, and 
regularly have individual meetings with other senior managers in 
the business. In addition the Non-Executive Directors have the 
opportunity to meet at least once a year without the Chairman 
present as part of the appraisal process.
Directors
The Non-Executive Chairman is Geoff Cooper and the Chief 
Executive is Will Adderley. The Board has adopted a written 
statement setting out their respective responsibilities. In general 
terms, the Chairman is responsible for running the Board and the 
Chief Executive is responsible for running the Group’s business. 
The other Non-Executive Directors are Marion Sears, Simon 
Emeny and Nick Wharton (appointed on 14 August 2009). David 
Stead is an Executive Director.
The Senior Independent Director is Marion Sears.
The Board considers that Geoff Cooper was independent on 
appointment, and that Marion Sears, Simon Emeny and Nick 
Wharton are independent. Overall the Board considers that there 
is a good balance of Executive and Non-Executive Directors.
Directors are required to retire from the Board by rotation and offer 
themselves for re-election at least every three years.
Board committees
The Audit Committee was chaired during the year by Geoff 
Cooper, the other members being Marion Sears and Simon 
Emeny. The Board considers that Geoff Cooper has recent and 
relevant financial experience by virtue of his professional 
qualification and his current executive role with Travis Perkins plc.
The committee has adopted terms of reference which are available 
on the Group’s website or from the Company Secretary.
The committee is scheduled to meet at least three times a year, to 
coincide with key dates in the Group’s financial reporting and audit 
cycle. During the period under review it met in September, 
February and May with full attendance. The Finance Director 
usually attends meetings by invitation, along with a representative 
from the external auditors.
The principal responsibilities of the committee are to:
monitor the integrity of the Group’s financial statements and •	
public announcements relating to financial performance;
oversee the external audit process, including the appointment •	
of the auditors, their objectiveness and independence and the 
scope and effectiveness of the audit;
monitor the effectiveness of internal controls and consider •	
annually the need for an internal audit function; and
review the process for identifying and managing risk throughout •	
the Group.
During the year the committee:
approved the interim results issued in February; •	
decided that an internal audit function was not required in view •	
of the adequacy of financial controls in place;
confirmed the Group’s policy for use of the auditors for •	
non-audit advice;
verified the independence of the auditors, and approved the •	
scope of the audit plan and the audit fee; and
reviewed the business continuity plans in place. •	
The committee met privately with the auditors in the course of 
each meeting during the period.
The committee has approved a policy which allows employees  
to raise legitimate concerns in confidence without fear  
of discrimination.
The committee has also approved a policy that the auditors should 
only be used for non-audit work if they offer demonstrably better 
capability than alternative providers and there is no potential 
conflict with the independence of the audit.
The Remuneration Committee is chaired by Marion Sears, the 
other members are Geoff Cooper, Simon Emeny and with effect 
from 14 August 2009, Nick Wharton. The Chief Executive normally 
attends by invitation. Annual report & accounts 2009 Dunelm Group plc
13
Business review Governance Financial statements Annual General Meeting
The committee has adopted terms of reference which are available 
on the Group’s website or from the Company Secretary.
The committee’s responsibilities include:
recommending to the Board the specific pay and benefits •	
packages for the Executive Directors, including pensions and 
any compensation payments;
recommending and monitoring the level and structure of pay •	
and benefits for senior management; and
implementing any awards made under share incentive schemes. •	
During the year the committee met three times with full  
attendance and:
determined the pay reviews and incentive arrangements for •	
Executive Directors;
determined the annual bonus payable to Executive Directors  •	
in respect of the year ending 28 June 2008; and
approved conditional share awards to be made to Executive •	
Directors under the Group’s Long-Term Incentive Plan.
Further details of the committee’s activities are set out in the 
Remuneration Report on page 15.
The Nominations Committee is chaired by Marion Sears, the 
other members are Geoff Cooper, Simon Emeny and with effect 
from 14 August 2009, Nick Wharton.
The committee has adopted terms of reference which are available 
on the Group’s website or from the Company Secretary.
The committee’s responsibilities include:
reviewing the composition and balance of the Board; •	
Board succession planning; and •	
making recommendations on appointments to the Board •	
(including reappointments at Annual General Meeting).
During the year the committee met three times with  
full attendance. 
Appointment and removal of Directors
The Articles of Association of the Company provide that a Director 
may be appointed by ordinary resolution of the Company’s 
shareholders in general meeting, or by the Board so long as the 
Director stands down and offers himself for election at the next 
Annual General Meeting of the Company. The Articles also provide 
that each Director must stand down and offer him or herself for 
re-election by shareholders at the Annual General Meeting at least 
every three years.
Directors may be removed by a special resolution of shareholders, 
or by an ordinary resolution of which special notice has been given 
in accordance with the Companies Act 2006. The Articles also 
provide that the office of a Director shall be vacated if he is 
prohibited by law from being a director, or is bankrupt; and that the 
Board may resolve that his office be vacated if he is of unsound 
mind or is absent from Board meetings without consent for six 
months or more. A Director may also resign from the Board.
The Nominations Committee makes recommendations to the 
Board on the appointment and removal of Directors.
Powers of Directors
In accordance with the Companies Act 2006 and the Articles of 
Association, the business of the Company is managed by the 
Board, which may exercise all of the powers of the Company, 
subject to the requirements of the Companies Acts, the 
Memorandum and Articles of Association of the Company, and 
any special resolution of the Company. As stated above, the Board 
has adopted internal delegations of authority in accordance with 
the Combined Code, and these set out matters which are 
reserved to the Board or Committees and the powers and duties 
of the Chairman and Chief Executive respectively.
At the Annual General Meetings of the Company in 2007 and 2008 
the Board sought and was given authority to issue shares and to 
buy back and reissue shares, subject to the limits imposed by law 
and those set out in the text of the resolution. Similar resolutions 
are being tabled at the 2009 Annual General Meeting. For further 
details see pages 20 and 21 of the Directors’ Report and Business 
Review, and the Notice of Annual General Meeting on pages 53 
and 54.
Advice and insurance
All Directors have access to the advice and services of the 
Company Secretary. In addition Directors may seek legal advice at 
the Group’s cost if they consider it necessary in connection with 
their duties.
The Group purchases Directors’ and Officers’ Liability insurance 
cover for its Directors.
 
Training
Upon joining the Board, any new Director is offered a 
comprehensive induction programme with visits to key sites and 
meetings with senior managers and other staff members. 
Throughout the year all Directors have maintained a regular series 
of visits to stores and meetings with members of the senior 
management team. The Board has also received presentations 
from independent advisers on financial policy, IT developments 
and on retail sector trends.
Evaluation
The Chairman appraises the performance of the Chief Executive 
with regard to personal objectives agreed at the start of each 
financial year. The Chief Executive similarly appraises the 
performance of the Finance Director.
There is a well established process for evaluating the performance 
of the Chairman, the other Non-Executive Directors, the Board 
Committees and the Board as a whole. This takes the form of a 
Board meeting convened solely for the purpose of such review. 
During the course of this meeting there is the opportunity for the 
Chairman or other individual Directors to be asked to leave the 
discussion whilst their performance is assessed. Dunelm Group plc Annual report & accounts 2009
14
Corporate governance report
continued
Conflicts of interest
The Companies Act 2006 allows the Board of public companies to 
authorise conflicts and potential conflicts of interest of individual 
directors where the Articles of Association contain a provision to 
that effect. At the 2008 Annual General Meeting, new Articles of 
Association were adopted which give the Board this authority 
subject to the following safeguards:
Directors who have an interest in matters under discussion at  •	
a Board meeting must declare that interest and abstain  
from voting.
Only directors who have no interest in the matter being •	
considered are able to approve a conflict of interest and, in 
taking that decision and the Directors must act in a way they 
consider, in good faith, would be most likely to promote the 
success of the Company. 
The Directors are able to impose limits or conditions when •	
giving authorisation if they feel this is appropriate. 
Following the adoption of the Articles of Association, all Directors 
were requested to disclose any actual or potential conflicts to the 
Board and the following matters were considered and approved:
Will Adderley is a major shareholder and connected to other •	
major shareholders. Authorised on the basis that Mr Adderley 
continues to abide by the terms of the relationship Agreement 
entered into between himself, other major shareholders and the 
Company on flotation of the Company in 2006.
Geoff Cooper is a director of Travis Perkins plc; and Nick •	
Wharton is a director of Halfords Group Plc, each of which 
potentially competes with the Company for retail property. 
Authorised on the basis that Mr Cooper is not involved in day to 
day decisions in relation to the property portfolio in either 
company; and Mr Wharton to absent himself from any meeting 
of the Company in which property matters are to be discussed 
and a conflict of interest might arise.
There were no other matters disclosed that were considered by 
the Board to reasonably give rise to a conflict of interest.
Any conflicts considered by the Board and any authorisations 
given are recorded in the Board minutes reviewed annually by  
the Board. 
The Board considers that its procedures to approve conflicts of 
interest and potential conflicts of interest are operating effectively.
Significant shareholders
The Group’s significant shareholders are listed in the Directors’ 
report on page 19 voting rights are stated on page 18.
Articles of Association
The Company’s Articles of Association may only be amended by a 
special resolution of shareholders. 
Risk management and internal control
Throughout the year and up to the date of approval of this Annual 
Report there has been in place an established, ongoing process 
for identifying, evaluating and managing the significant risks faced 
by the Group which has been regularly reviewed by the Audit 
Committee and the Board and is in accordance with the Turnbull 
Guidance on Internal Control for Directors on the Combined Code 
(revised June 2008).
A register of strategic and operational risks is maintained and 
reviewed quarterly by the Board, who also monitor the status of 
agreed actions to mitigate key risks.
The Board is ultimately responsible for the Group’s system of 
internal control and for reviewing its effectiveness. However such a 
system is designed to manage rather than eliminate the risk of 
failure to achieve business objectives and can provide only 
reasonable, and not absolute, assurance against material loss  
and misstatement.
The Group maintains a well established control framework 
comprising clear structures and accountabilities, well understood 
policies and procedures and budgeting and review processes. 
Each store manager has clear responsibilities and operates within 
defined policies and procedures covering such areas as financial 
targets, human resources management, customer service, health 
and safety etc. The Executive Directors monitor compliance with 
these policies and procedures in the course of regular reviews.
Investor relations
There is a formal investor relations programme based around 
results presentations and trading statements. In addition analyst/
shareholder visits are arranged. All of the Non-Executive Directors 
are available to attend meetings at shareholder request. The 
Chairman and Executive Directors feed back any investor 
comments to the Board.
All Directors will be available at the Annual General Meeting to 
meet with shareholders and answer their questions. Annual report & accounts 2009 Dunelm Group plc
15
Business review Governance Financial statements Annual General Meeting
Remuneration report
The Directors present their Remuneration Report for the period 
ended 4 July 2009.
Introduction
The Remuneration Committee has prepared this report in 
accordance with the requirements of Section 420 Companies Act 
2006 and the Listing Rules. The report and the Group’s 
remuneration policy comply with the Combined Code. An ordinary 
resolution to approve the report through a shareholder vote will be 
proposed at the Annual General Meeting.
The disclosures that the Group’s auditors are required to audit 
within the Remuneration Report are contained in the section 
headed ‘Audited Information’. The auditors’ opinion is included in 
their report on page 23.
Non-audited information
Remuneration committee and advisers
During the year ended 4 July 2009, the Remuneration Committee 
was made up of three members, Marion Sears, Simon Emeny and 
Geoff Cooper. Marion Sears, who is the Senior Independent 
Non-Executive Director, chairs the committee and also acts as 
Secretary. The committee determines the Executive Directors’ 
annual remuneration packages and provides guidance on the 
remuneration packages of members of senior management. No 
Director determines their own pay.
Changes in policy during the year
There have been no changes to remuneration policy during  
the year. 
Executive remuneration policy
The Remuneration Committee’s policy is to provide an executive 
remuneration structure that will attract, motivate and retain the 
high quality individuals who are essential for the successful 
development of the business over the long term. Executive 
remuneration aims to ensure that the Executive Directors are fairly 
rewarded for their success measured by the Group’s performance 
and are incentivised to enhance value for shareholders on a 
continuing and long-term basis.
There are three main elements of the remuneration package for 
Executive Directors:
base annual salary including benefits; •	
annual bonus; and •	
Long-Term Incentive Plan. •	
 
Two of these main elements are performance based, which means 
that there is significant emphasis in the Group’s executive 
remuneration policy on its performance.
The Remuneration Committee oversees two performance-based 
plans: an annual bonus plan and a Long-Term Incentive Plan 
(LTIP). In accordance with governance guidelines and the 
requirements of the Combined Code, the Remuneration 
Committee implemented these two performance based plans to 
align the interests of investors and senior management. The annual 
bonus plan is short-term and cash based. The LTIP is long-term 
and share-based.
Base salary and benefits
Prior to the beginning of each financial year the Remuneration 
Committee sets the base salaries of Executive Directors. The 
committee examines the salaries of Directors in a comparator 
group of public companies with similar market capitalisation. It 
also reviews published research and surveys, and considers the 
wage increases across the Group as a whole. The committee aims 
to set salaries at around the median level provided by similar 
companies. In addition to base salary, the Executive Directors are 
entitled to benefits comprising a car allowance, a contribution to a 
personal pension, private medical insurance and life insurance.
Annual bonus
The Group operates a discretionary cash bonus plan. Any bonus 
amounts determined to be payable are paid annually after the 
year-end results are finalised. The Remuneration Committee has 
established bonus objectives that are principally financial but also 
include personal objectives for the year relevant to each Director. 
The maximum bonus payable is 60% of base salary. 24% of base 
salary is paid for achieving on-target EPS, subject to satisfactory 
performance against personal objectives. For the year ended  
4 July 2009, EPS performance exceeded budget and, taking into 
account Executive Directors’ performance against job objectives, 
the committee awarded an annual bonus to Will Adderley of 
£150,000 and to David Stead of £100,000.
Long-Term Incentive Plan
Participants in the LTIP are awarded nominal cost options at the 
start of the performance period. At the end of the three-year 
performance period, the awards will vest to the extent that the 
applicable performance targets are met. Grants will be made 
annually under the LTIP. Awards cannot be granted under the LTIP 
over ordinary shares in excess of 5% of the issued ordinary share 
capital in any rolling 10 year period. Awards of ordinary shares 
worth 120% of base salary were made to Will Adderley and David 
Stead in March and September 2008 and in September 2009. 
These will vest to the extent that the performance targets are met 
based on the Group’s results for the years ending 4 July 2009, 
3 July 2010 and 2 July 2011 respectively.
The Remuneration Committee has chosen growth in fully diluted 
EPS as the performance target for the awards under the LTIP.  
The committee believes that this measure is closely aligned to the 
drivers of growth of the business, and that in the long term, EPS 
performance will be reflected in shareholder value. The committee 
will meet after each 3 year plan period results are available to 
determine whether performance conditions have been satisfied.  
In respect of awards made for the performing periods 2009 and 
2010, no ordinary shares will vest if the compound annual growth 
in fully diluted EPS is less than RPI + 5% and all of the ordinary 
shares subject to an award will vest if the compound annual 
growth in fully diluted EPS reaches RPI + 20%. In respect of 
awards made for the performance period to 2011, no ordinary 
shares will vest if the compound annual growth in fully diluted EPS 
is less than RPI +3.6% and all of the ordinary shares subject to an 
award will vest if the compound annual growth in fully diluted EPS 
reaches RPI +12.6%. The award will vest on a straight-line basis 
between the respective two points. There will be no retesting.
Other share options
The Group operates an all-employee SAYE scheme in which 
Executive Directors are also entitled to participate.
Non-executive remuneration policy
Non-Executive Directors’ remuneration is determined by the Board 
as a whole. The Non-Executive Directors do not receive bonuses 
or participate in any incentive plans. They are paid annual fees but 
do not receive additional fees for time spent on a committee of the 
Board. All Non-Executives have letters of appointment, detailed in 
the table below.
Service contracts
It is the Group’s policy that service contracts for Executive Directors 
have no fixed term, that the notice period for termination is not  0 
20 
40 
60 
80 
100 
120 
140 
160 
180 
18.10.2006 18.01.2007 18.04.2007 18.07.2007 18.10.2007 18.01.2008 18.04.2008 18.07.2008 18.10.2008 18.01.2009 18.04.2009 
Dunelm FTSE All Share General Retail Index FTSE Small Cap Index FTSE 250 
Dunelm Group plc Annual report & accounts 2009
16
Remuneration report
continued
greater than 12 months and that payments on termination are 
restricted to a maximum of the value of salary for the notice period.
The notice period to terminate Will Adderley’s and David Stead’s 
service contract is 12 months from either party. In accordance 
with the Group’s policy, payments on termination are restricted to 
the value of salary for the notice period. 
The Non-Executive Directors have letters of appointment for an 
initial period of three years with a provision for termination of one 
month’s notice from either party, or three months’ notice from 
either party in the case of Geoff Cooper, the Chairman.
     
  Date of Unexpired Notice
  contract  term period
Will Adderley  28.09.06 n/a 12 months
David Stead  15.09.03 n/a 12 months
Geoff Cooper  08.10.04 13 months 3 months
Marion Sears  22.07.04 10 months 1 month
Simon Emeny  25.06.07 11 months 1 month 
Nick Wharton  10.08.09 2 years 1 month 
   11 months 
Retirement plans
The Remuneration Committee has decided not to use final salary 
pension plans as a way of remunerating its Executive Directors. 
Instead the Group contributes to the Executive Directors’ personal 
pension plans. The Remuneration Committee believes this is an 
efficient way to assist Executives to prepare for retirement. When 
determining the mixture of fixed and performance based pay, the 
Remuneration Committee takes account of contributions to 
pension plans.
Performance graph
The graph below shows the Group’s performance since flotation, 
measured by total shareholder return, compared with the FTSE 
General Retail Index, the FTSE SmallCap Index and the FTSE 250. 
The Remuneration Committee has chosen these indices for 
comparison because they provide a range of comparator 
companies which have similar market capitalisation, which are in 
the same sector and which face similar market and economic 
challenges in the long term.
The shares traded in the range 112.25p to 273.25p during the year, and stood at 216.25p at 4 July 2009. Annual report & accounts 2009 Dunelm Group plc
17
Business review Governance Financial statements Annual General Meeting
Audited information
Details of Directors’ remuneration
Details of individual Directors’ remuneration in respect of the year ended 4 July 2009 are as follows:
     Contribution
  Base salary  Vehicle Taxable to personal Annual 2009 2008
  or fees  allowance benefits pension bonus Total Total
  £’000 £’000 £’000 £’000 £’000 £’000 £’000
Executive Directors       
Will Adderley  320 10 1 waived 150 481 435
David Stead  220 10 waived 18 100 348 313
Non-Executive Directors
Geoff Cooper  84 – – – – 84 80
Marion Sears  32 – – – – 32 30
Simon Emeny  26 – – – – 26 25
Total  682 20 1 18 250 971 883
Will Adderley waived pension contributions totalling £17,850 and David Stead waived other taxable benefits totalling approximately 
£1,000.
Directors’ interests in share options
The Directors’ beneficial interests in options granted under the Long-Term Incentive Plan, all of which will vest only if EPS performance 
conditions are met, are as follows:
      Share End of Market Price
     Date of options at performance of Shares at
Director     award 4 July 2009  period date of award
Will Adderley     March 2007 151,304 June 2009 227p
     Sept 2007      190,130 June 2010 193p
     Sept 2008 259,459 June 2011 148p
David Stead     March 2007 99,130 June 2009 227p
     Sept 2007 127,792 June 2010 193p
     Sept 2008 178,378 June 2011 148p
The Remuneration Committee has reviewed the Company’s EPS record over the three year performance period which ended on 4 July 
2009. Reported EPS, adjusted to reflect the 53-week trading period in the last financial year, grew at a compound annual rate of 14.8%. 
This is 12.4% above RPI over the same period. Accordingly, 62% of the March 2007 LTIP award will vest in March 2010, representing 
93,809 shares in favour of Will Adderley and 61,461 shares in favour of David Stead. 
The Directors’ beneficial interests in options granted under other schemes are as follows:
  Shares Shares     Market
   under under     price
  option option Granted Exercised Lapsed Exercise of shares 
 Type of at 1 July at 4 July during during during price per at date of Vesting Expiry
Director option 2008 2009 period period period share exercise date date
Will Adderley SAYE 6,114 7,710 7,710 – (6,114) 124p – Jan 2012 June 2012 
David Stead SAYE 6,176 7,710 7,710 – (6,176) 124p – Jan 2012 June 2012
Approval
This report was approved by the Board of Directors on 15 September 2009 and signed on its behalf by:
Marion Sears
Chairman of Remuneration Committee
15 September 2009 Dunelm Group plc Annual report & accounts 2009
18
Directors’ report and business review
The Directors present their report together with the audited 
financial statements for the year ended 4 July 2009. Together with 
certain information in the reports from the Chief Executive and the 
Finance Director on pages 3 to 9 above which are incorporated 
into this report by reference, this report satisfies the requirements 
of the Companies Act 2006 to produce a Business Review.
The purpose of this Business Review is to provide to shareholders 
a review of the Group’s business over the period, and to describe 
the principal risks and uncertainties facing the Group.
Principal activity
The principal activity of the Group is that of a specialist UK 
homewares retailer selling to customers through stores and  
over the internet.
Review of business and future developments
A review of the business and future developments of the Group is 
given in the Chief Executive’s Review on pages 3 to 5.
Shareholder and voting rights
All members who hold ordinary shares are entitled to attend and 
vote at the Annual General Meeting. On a show of hands at a 
general meeting every member present in person shall have one 
vote and on a poll, every member present in person or by proxy 
shall have one vote for every ordinary share held.
On 2 October 2006, Jean Adderley, Bill Adderley and Will Adderley 
(all shareholders) entered into a Relationship Agreement with the 
Company, pursuant to which each of Jean Adderley, Bill Adderley 
and Will Adderley undertook to the Company that, for so long as, 
individually or together, they are entitled to exercise, or to control 
the exercise of, 30 per cent or more of the rights to vote at general 
meetings of the Company or they are able to control the 
appointment of directors who are able to exercise a majority of 
votes at Board meetings of the Company, they will:
(a) conduct all transactions and relationships with any member  
of the Group on arms length terms and on a normal 
commercial basis;
(b) not take any action which precludes or inhibits any member  
of the Group from carrying on its business independently of 
Jean and Bill Adderley and their associates (as defined in the 
Listing Rules);
(c) not exercise any of their voting rights or other powers to 
procure any amendment to the Articles of Association of the 
Company which would be inconsistent with or undermine any 
of the provisions of the Relationship Agreement;
(d) abstain from voting on any resolution to which LR11.7.R(4) of 
the Listing Rules applies involving Jean Adderley, Bill Adderley 
or Will Adderley or any of their associates as the related party;
(e) not carry on (other than through their holding of securities of 
the Company) or have any financial interest (other than a 
financial interest in securities which are held for investment 
purposes only) in any person who carries on a business as a 
homewares retailer, to the extent that it would be inconsistent 
with or undermine any provisions of the Relationship 
Agreement: and
(f) only enter into, amend or terminate any transaction, agreement 
or relationship between themselves or any of their associates 
and any member of the Group with the approval of a majority 
of the independent Non-Executive Directors.
There are no restrictions on the transfer of ordinary shares in the 
Company other than certain restrictions imposed by laws and 
regulations (such as insider trading and marketing requirements 
relating to close periods) and requirements of the Listing Rules 
whereby Directors and certain employees of the Company require 
Board approval to deal in the Company’s securities.
Change of control
The Company is not party to any significant agreements which 
take effect, alter or terminate solely on a change of control of the 
Company following a takeover bid.
There are no agreements between the Company and its Directors 
or employees providing for additional compensation for loss of 
office or employment (whether through resignation, redundancy or 
otherwise) that occurs because of a takeover bid.
Results and dividends
The consolidated profit for the year after taxation was £37.6m 
(2008: £33.7m). The results are discussed in greater detail in the 
Finance Director’s review on pages 7 to 9.
A final dividend of 4.0p per share (2008: 3.5p) is proposed in 
respect of the year ended 4 July 2009 to add to an interim 
dividend of 2.0p per share paid on 1 May 2009 (2008: 2.0p per 
share). The final dividend will be paid on 11 December 2009 to 
shareholders on the register at 27 November 2009.
Directors
Details of the Directors in office at the year end are set out on  
page 10 and 11. 
Directors serving at the year end and their interests in the shares 
of the Company were:
   At  At
   4 July 2009 29 June 2008
   1p ordinary  1p ordinary
   shares shares
WL Adderley   50,000,000 50,000,000
D Stead      430,085 430,085
G Cooper      181,611 181,611
M Sears      100,000 100,000
S Emeny        19,000 5,000
On 14 August 2009, Nick Wharton was appointed as a Director of 
the Company. 
There were no changes in the Directors’ shareholdings between 
the year end and 15 September 2009.
Details of share options held by Directors at the year end are given 
in the Remuneration Report.
Geoff Cooper and David Stead are retiring by rotation at the 2009 
Annual General Meeting and will be offering themselves for 
re-election. Nick Wharton is retiring in accordance with the Articles 
of Association of the Company and is offering himself for election. 
Biographical details of these Directors are set out on pages 10 and 
11 and details of their service contracts are in the Remuneration 
Report on page 15. Annual report & accounts 2009 Dunelm Group plc
19
Business review Governance Financial statements Annual General Meeting
Share capital and treasury shares
The Company has only one class of shares, ordinary shares of 
1p each. 
The issued share capital of the Company has not changed during 
the period. 
At 4 July 2009 the Company held 837 ,135 shares in treasury. During 
the period the Company purchased 127,000 ordinary shares into 
treasury and 241,365 shares were transferred to employees on the 
exercise of share options. Details of option exercises are set out in 
note 11 to the Parent Company accounts on page 50. 
The remaining shares in treasury are held by the Company for the 
purpose of delivery to employees under employee share schemes. 
 
Substantial shareholders
At 15 September 2009 the following had notified the Company of a 
disclosable interest in 3% or more of the nominal value of the 
Company’s ordinary shares:
    Percentage
   Ordinary  of share
   shares capital
W Adderley   83,670,000 41.7
WL Adderley   50,000,000 24.9
  
Powers of Directors
Specific powers of Directors in relation to shares and the 
Company’s Articles of Association are referred to in the Corporate 
Governance Report at page 12.
Corporate Social Responsibility 
The Group recognises its duty to behave responsibly to all 
stakeholders. The Board places particular emphasis on 
maintaining good relationships with its customers, employees and 
suppliers; on ethical sourcing; on environmental issues; and on 
charitable contributions.
The Chief Executive reports regularly to the Board on all of  
these issues. 
Customers
The Group is committed to delivering consistently high standards 
of customer service and satisfaction. We constantly strive to 
provide high quality, safe products at a fair price supported by our 
‘Simply Value For Money’ ethos. 
The Group aims to ensure that it complies fully with relevant 
legislation in all areas affecting its customers including marketing, 
product quality, the environment and customer data.
The Group has a dedicated Customer Service team that deals with 
customer contact whether it is by letter, e-mail, fax or phone and 
supports the store teams in delivering a strong customer experience.
Weekly communications are sent to all stores highlighting areas of 
good customer service and also areas where we can improve.  
Employees
Dunelm employs 5,414 staff engaged throughout the Group’s 
stores, distribution and head office locations and in a range of 
disciplines including Buying, Marketing, Warehousing, IT, Finance, 
HR as well as many customer facing roles.
The Group is a growing business and offers competitive benefits 
as well as personal and career enhancement opportunities. We 
have recently launched our ‘Dunelm Directions’ programme to 
support the development of talented staff and management. We 
also offer further support for employees to obtain relevant 
professional skills and qualifications.
The Group is an equal opportunities employer. We are committed 
to recruit, develop, promote and retain skilled and motivated 
people regardless of disability, race, religion, gender, colour, 
nationality, sex, sexual orientation, marital status or age.
The Group places considerable value on the involvement of its 
employees and continues its practice of consulting with employees 
on matters likely to affect their interests, through its partners’ council.
Information on matters of concern to employees is also given 
through bulletins, reports and an in-house newsletter.
Health and safety
Dunelm is responsible for the health and safety of our employees, 
contractors, customers and any other visitors to our premises. 
The Group recognises that a high standard of health and safety 
management is fundamental to a successful business and has 
created the post of Health and Safety Manager to safeguard these 
high standards.
During the past year the number of reported accidents was 56 
(2008: 49).
The Group has engaged with our risk management partners to 
identify further areas where it can focus on improved health and 
safety management. We employ a rigorous self-auditing 
programme to enforce our policies and identify any weakness in 
compliance and implementation.
Suppliers 
Dunelm seeks to encourage contractors and suppliers to manage 
the environmental impact of their activities and to support the 
Group’s environmental policy.
The Group has a firm policy on ethical sourcing which all suppliers 
are required to sign up to. Independent audits of suppliers’ facilities, 
particularly in the Far East are carried out on a regular basis.
Payment policy and average payment period
Whilst it does not follow any published code or standard, the 
Group’s and Company’s policy concerning the payment of 
suppliers is to agree terms of payment at the start of business  
with each supplier or to ensure the supplier is made aware of the 
Group’s standard payment terms. The number of days’ purchases 
outstanding for payment at 4 July 2009 was 33 days (2008: 27 
days). This increase stems from the additional week’s liabilities in 
the 53 weeks of 2009 against 52 weeks in 2008. Dunelm Group plc Annual report & accounts 2009
20
Directors’ report and business review
continued
Environment
Dunelm recognises that the world in which we do business is 
changing. We have a responsibility to ensure that our actions as a 
business always have a consideration for the environment and that 
we enable our customers to do the same when it comes to buying 
our products for their home.
Dunelm is therefore committed to achieving high standards of 
environmental performance in all aspects of its business activities, 
including complying with all relevant legislation.
The Group has an Environmental Committee chaired by Tim Slade 
(Central Operations Director), comprising a number of senior 
managers. This committee reviews the environmental impact of 
business activities in all areas and sets targets for improvement. 
These cover the following specific areas:
1. Increasing the proportion of waste which is recycled 
All Dunelm operations are required to separate plastic and paper 
materials for recycling. Collections are co-ordinated nationally.  
We have a desire to minimise the consumption of raw materials 
and promote the use of recycled materials or material from 
sustainable sources. 
Our target for the forthcoming year is to reduce the cube volume 
of waste sent to landfill by 10%.
2. Reducing the level of product packaging
The Group is constantly working with suppliers to reduce the level of 
packaging in its products. A trial has recently been launched to 
introduce reusable delivery totes into our supply chain to eliminate the 
need for external product packaging and improve vehicle fill levels.
In addition we have introduced eco-bags in prominent positions in 
our stores to promote reusable customer packaging and reduce 
the number of carrier bags consumed. The number of carrier bags 
used during the Financial year declined by 16%, despite the 
increase in business.
Our target for the forthcoming year is to reduce the number of 
carrier bags used per store by a further 10%.
3. Reducing energy consumption across all locations
Dunelm is focused on minimising the consumption of energy 
through detailed monitoring and targeting of investment 
throughout the estate. We have invested in new electricity meters 
at all stores to provide detailed, half-hourly consumption data to 
help us challenge and reduce high usage. This programme will be 
extended to gas meters in the forthcoming year.
Our target for the forthcoming year is to reduce electricity and gas 
usage by 10% on a like-for-like basis.
4. Carbon Reduction (CO
2
)
Dunelm’s energy carbon footprint for the period ended 4 July 2009 
was 21,537 tonnes of CO
2
 (Company’s Independent energy 
advisers). We are constantly looking at ways to reduce our  
carbon footprint. 
This year we have sourced some of our energy from ‘Green 
Energy’ supplies such as combined heat and power sources 
where CO
2
 emissions are 30% lower than the national average. We 
have also opened all new stores with low energy lighting and look 
at our route planning and vehicle fill levels in our transport fleet to 
reduce emissions from transport.
This year we will look to re-lamp our Distribution Centre and will 
survey our stores to identify facilities that can be targeted to 
reduce energy.
Dunelm will be one of 5,000 companies reporting under the new 
Carbon Reduction Commitment (‘CRC’) legislation. 
Our target for the forthcoming year is to reduce absolute CO
2
 
levels year on year.
Charitable donations
The Group’s charity of the year in the last financial year was 
Children’s Hospices UK. Collections are made in stores for the 
nominated charity throughout the financial year, specific fund-
raising events are organised and the Group makes its own 
donations. The total value of donations made by the Group in the 
year ended 4 July 2009 was £49,000 (2008: £46,000). 
The Group made no donations to political parties in either 
financial year.
Dunelm will continue to work towards improving the social, 
environmental and economic issues within our direct or 
indirect control. 
Treasury and risk management
The Group’s approach to treasury and financial risk management 
is explained in the Finance Director’s Review.
 
Going concern
The Directors have considered the principal strategic, operational 
and financial risks to the business in the context of the Group’s 
expected future results and various scenarios have been modelled 
to determine the likely impact on both profitability and cash flow.
As a consequence the Directors have formed a judgement at the 
time of approving the financial statements that there is a 
reasonable expectation that the Group had adequate resources to 
continue in operational existence for the foreseeable future.
For this reason the Directors continue to adopt the going concern 
basis in preparing the financial statements.
Disclosure of information to auditors
The Directors who held office at the date of approval of this 
Directors’ report confirm that, so far as they are each aware, there 
is no relevant audit information of which the Group’s auditors are 
unaware; and each Director has taken all the steps that they ought 
to have taken as a Director to make themselves aware of any 
relevant audit information and to establish that the Group’s 
auditors are aware of that information. Annual report & accounts 2009 Dunelm Group plc
21
Business review Governance Financial statements Annual General Meeting
Disclaimer
This Directors’ Report and Business Review and the Financial 
Statements contain certain forward-looking statements with 
respect to the financial condition, results, operations and business 
of Dunelm Group plc. These statements and forecasts involve risk 
and uncertainty because they relate to events, and depend upon 
circumstances, that will occur in the future. There are a number of 
factors that could cause actual results or developments to differ 
materially from those expressed or implied by these forward-
looking statements and forecasts. Nothing in this Directors’ Report 
and Business Review or in these Financial Statements should be 
construed as a profit forecast.
Annual General Meeting
The Annual General Meeting will be held on Thursday 
12 November 2009 at 10.30 am at The Hilton Hotel, Leicester. 
Special business at the Annual General Meeting will be:
Requesting authority pursuant to section 551 of the  •	
Companies Act 2006, to issue shares to the value of one  
third of the issued ordinary share capital of the Company.  
The nominal amount of shares covered by this authority is 
£666,514 (66,651,421 ordinary shares, 33.3% of the issued 
share capital at 15 September 2009). At that date the Company 
also held 837,135 ordinary shares in treasury, which represents 
approximately 0.41% of the total ordinary share capital.  
This authority will lapse at the 2010 Annual General Meeting  
or, if earlier, on 29 December 2010. The Directors have no 
present intention to exercise this authority except to issue 
shares pursuant to the Group’s employee share schemes.
Requesting authority pursuant to section 561 of the Companies •	
Act 2006 to distribute ordinary shares to the value of £100,395 
(10,039,570 ordinary shares), which constitutes 5% of the 
Company’s issued share capital (excluding treasury shares)  
at 15 September 2009, without offering them to existing 
shareholders. This authority will lapse at the 2010 Annual 
General Meeting or, if earlier, on 29 December 2010. The 
Directors do not intend to issue more than 7.5% of the issued 
share capital of the Company for cash on a non pre-emptive 
basis in any rolling three year period without prior consultation 
with the Investment Committees of the Association of British 
Insurers and the National Association of Pension Funds.
Requesting that the Directors be authorised pursuant to section •	
701 of the Companies Act 2006 to buy up to 19,000,000, 
approximately 10% of issued ordinary share capital (excluding 
treasury shares) in the Company, less the number of shares 
held in treasury at the date of this report. The Directors will only 
exercise this authority if it enhances earnings per share and is 
in the interests of shareholders generally. Shares purchased 
may be cancelled or held in treasury. If held in treasury and 
used to satisfy share options, the NAPF’s (National Association 
of Pension Funds) guidelines would be complied with.
Authorising the Board to convene a general meeting other than •	
an Annual General Meeting on at least 14 days’ notice. The 
Companies (Shareholders’ Rights) Regulations require that all 
meetings other than an Annual General Meeting must be held 
on at least 21 days’ notice unless shareholders agree to a 
shorter period. Under the Companies Act 2006 and the 
Company’s Articles of Association, the Company can call 
meetings other than an Annual General Meeting on 14 days’ 
notice. This resolution will allow the Company to continue to do 
so, and will be effective until the next Annual General Meeting 
when it is intended that a similar resolution will be proposed. 
The Company will also need to meet the requirements for 
electronic voting under the Regulations before it can call a 
meeting on 14 days’ notice.
 
The Notice of Annual General Meeting is set out on pages 53  
to 55.
Auditors
KPMG Audit Plc offer themselves for reappointment as auditors in 
accordance with section 489 of the Companies Act 2006.
By order of the Board
David Stead
Company Secretary
15 September 2009 Dunelm Group plc Annual report & accounts 2009
22
Statement of Directors’ responsibilities
in respect of the Annual Report and the financial statements
The Directors are responsible for preparing the Annual Report and 
the Group and Parent Company financial statements in 
accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and Parent 
Company financial statements for each financial year. Under that 
law they are required to prepare the Group financial statements in 
accordance with IFRSs as adopted by the European Union (EU) 
and applicable law and have elected to prepare the Parent 
Company financial statements on the same basis.
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 of the Group and Parent Company and 
of their profit or loss for that period. In preparing each of the Group 
and Parent Company financial statements, the Directors are 
required to:
select suitable accounting policies and then apply them •	
consistently;
make judgements and estimates that are reasonable and •	
prudent;
state whether they have been prepared in accordance with •	
IFRSs as adopted by the EU; and
prepare the financial statements on the going concern basis •	
unless it is inappropriate to presume that the Group and the 
Parent Company will continue in business.
The Directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the Parent 
Company’s transaction and disclose with reasonable accuracy at 
any time the financial position of the Parent Company and enable 
them to ensure that its financial statements comply with the 
Companies Act 2006. They have general responsibility for taking 
such steps as are reasonably open to them to safeguard the 
assets of the Group and to prevent and detect fraud and  
other irregularities.
Under applicable law and regulations, the Directors are also 
responsible for preparing a Directors’ Report, Directors’ 
Remuneration Report and Corporate Governance Statement that 
comply with that law and those regulations.
The Directors are responsible for the maintenance and integrity  
of the corporate and financial information included on the 
Company’s website.
Legislation in the UK governing the preparation and dissemination of 
financial statements may differ from legislation in other jurisdictions.
Responsibility Statement
We confirm that to the best of our knowledge:
(a) The financial statements, prepared in accordance with the 
applicable set of accounting standards, give a true and fair 
view of the assets, liabilities, financial position and profit or loss 
of the Company and the undertakings included in the 
consolidation taken as a whole; and
(b) The management report includes a fair review of the 
development and performance of the business and the  
position of the Company and the undertakings included in the 
consolidation taken as a whole, together with a description of 
the principal risks and uncertainties that they face.
By order of the Board
Geoff Cooper   Will Adderley
Chairman   Chief Executive
15 September 2009 Annual report & accounts 2009 Dunelm Group plc
23
Business review Governance Financial statements Annual General Meeting
Independent Auditor’s report to the 
members of Dunelm Group plc 
We have audited the financial statements of Dunelm Group plc for 
the financial year ended 4 July 2009 set out on pages 24 to 27. 
The financial reporting framework that has been applied in their 
preparation is applicable law and International Financial Reporting 
Standards (IFRSs) as adopted by the EU and, as regards the 
Parent Company financial statements, as applied in accordance 
with the provisions of the Companies Act 2006.
This report is made solely to the Company’s members, as a body, 
in accordance with sections 495, 496 and 497 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 auditors’ report and for no other purpose. To 
the fullest extent permitted by law, we do not accept or assume 
responsibility to anyone other than the Company and the 
Company’s members, as a body, for our audit work, for this 
report, or for the opinions we have formed.
Respective responsibilities of Directors and auditors
As explained more fully in the Directors’ Responsibilities Statement 
set out on page 22, the Directors are responsible for the 
preparation of the financial statements and for being satisfied that 
they give a true and fair view. Our responsibility is to audit the 
financial statements in accordance with applicable law and 
International Standards on Auditing (UK and Ireland). Those 
standards require us to comply with the Auditing Practices Board’s 
(APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements 
is provided on the APB’s website at 
www.frc.org.uk/apb/scope/UKP.
Opinion on financial statements
In our opinion:
the financial statements give a true and fair view of the state of •	
the Group’s and of the Parent Company’s affairs as at 4 July 
2009 and of the Group’s profit for the financial year;
the Group financial statements have been properly prepared in •	
accordance with IFRSs as adopted by the EU;
the Parent Company financial statements have been properly •	
prepared in accordance with IFRSs as adopted by the EU and 
as applied in accordance with the provisions of the Companies 
Act 2006; and
the financial statements have been prepared in accordance •	
with the requirements of the Companies Act 2006 and, as 
regards the Group financial statements, Article 4 of the  
IAS Regulation.
Opinion 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; 
the information given in the Directors’ Report for the financial •	
year for which the financial statements are prepared is 
consistent with the financial statements; and
the information given in the corporate governance statement •	
pursuant to rules 7.2.5 and 7.2.6 in the Disclosure Rules and 
Transparency Rules is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report to you if, 
in our opinion:
adequate accounting records have not been kept by the Parent •	
Company, or returns adequate for our audit have not been 
received from branches not visited by us; or
the Parent Company financial statements 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
a separate corporate governance statement is required but has •	
been omitted; or
we have not received all the information and explanations we •	
require for our audit.
Under the Listing Rules we are required to review:
the Directors’ statement, set out on page 20, in relation to going •	
concern; and
the part of the Corporate Governance Statement relating to the •	
Company’s compliance with the nine provisions of the June 
2008 Combined Code specified for our review.
MJD Lane 
(Senior Statutory Auditor)
for and on behalf of KPMG Audit Plc, Statutory Auditor
Chartered Accountants
Leicester
15 September 2009 Dunelm Group plc Annual report & accounts 2009
24
Consolidated income statement
For the 53 weeks ended 4 July 2009
       53 weeks 52 weeks
       2009 2008 
      Note £’000 £’000
Revenue      1 423,783 391,795
Cost of sales       (229,701) (217,018)
Gross profit       194,082 174,777
Operating costs      3 (141,487) (125,346)
Operating profit      2 52,595 49,431
Financial income      5 1,563 1,075
Financial expenses      5 (667) (1,365)
Profit before taxation       53,491 49,141
Taxation      6 (15,870) (15,470)
Profit for the period       37,621 33,671
Earnings per ordinary share – basic      8 18.8p 16.8p
Earnings per ordinary share – diluted      8 18.6p 16.6p
Dividend proposed per ordinary share      7 4.0p 3.5p
Dividend paid per ordinary share      7 2.0p 2.0p
All activities relate to continuing operations. All profit is attributable to equity shareholders of parent.
There were no gains or losses for the current or comparative periods other than those reported above. Annual report & accounts 2009 Dunelm Group plc
25
Business review Governance Financial statements Annual General Meeting
Consolidated balance sheet
As at 4 July 2009
       4 July 28 June 
       2009 2008 
      Note £’000 £’000
Non-current assets   
Intangible assets      9 5,843 2,097
Property, plant and equipment      10 88,771 77,157
Total non-current assets       94,614 79,254
Current assets    
Inventories      12 57,895 60,710
Trade and other receivables      13 10,739 11,636
Cash and cash equivalents      14 24,016 2,853
Total current assets       92,650 75,199
Total assets       187,264 154,453
Current liabilities   
Trade and other payables      15 (65,550) (54,570)
Liability for current tax       (8,797) (3,840)
Interest-bearing loans and borrowings      16 (18) (20)
Total current liabilities       (74,365) (58,430)
Non-current liabilities
Deferred tax liability      11 (127) (634)
Interest-bearing loans and borrowings      16 – (10,000)
Total non-current liabilities       (127) (10,634)
Total liabilities       (74,492) (69,064)
Net assets       112,772 85,389
Equity   
Issued capital      18 2,008 2,008
Share premium       345 345
Retained earnings       110,419 83,036
Total equity attributable to equity holders of the Parent     112,772 85,389
The financial statements on pages 24 to 43 were approved by the Board of Directors on 15 September 2009 and were signed on its 
behalf by:
Will Adderley
Chief Executive Dunelm Group plc Annual report & accounts 2009
26
Consolidated cash flow statement
For the 53 weeks ended 4 July 2009
       53 weeks 52 weeks
       2009 2008 
      Note £’000 £’000
Profit before taxation       53,491 49,141
Adjustment for Net financing costs       (896) 290
Operating profit       52,595 49,431
Depreciation and amortisation       10,555 9,457
Loss/(profit) on disposal of property, plant and equipment     26 (278)
Operating cash flows before movements in working capital     63,176 58,610
Decrease/(increase) in inventories       2,815 (53)
Decrease/(increase) in debtors       897 (2,640)
Increase in creditors       11,132 3,460
Net movement in working capital       14,844 767
Share-based payments expense       599 286
Foreign exchange gains/(losses)       323 (49)
Cash flows from operating activities       78,942 59,614
Interest paid       (821) (1,642)
Interest received       523 1,075
Tax paid       (11,200) (14,093)
Net cash generated from operating activities      67,444 44,954
Cash flows from investing activities
Proceeds on disposal of property, plant and equipment     1 303
Acquisition of property, plant and equipment      (19,647) (17,466)
Acquisition of intangible assets       (6,295) (538)
Net cash utilised in investing activities      (25,941) (17,701)
Cash flows from financing activities
Proceeds from issue of share capital       – 80
Purchase of treasury shares       (186) (1,900)
Proceeds from issue of treasury shares       124 112
Repayment of bank loan       (10,000) (30,000)
Dividends paid       (10,993) (10,020)
Net cash flows utilised in financing activities      (21,055) (41,728)
Net increase/(decrease) in cash and cash equivalents     20,448 (14,475)
Foreign exchange revaluations       717 (39)
Cash and cash equivalents at the beginning of the period     2,833 17,347
Cash and cash equivalents at the end of the period    14, 21 23,998 2,833 Annual report & accounts 2009 Dunelm Group plc
27
Business review Governance Financial statements Annual General Meeting
Consolidated statement of changes in equity
For the 53 weeks ended 4 July 2009
     Issued
     share  Share Retained Total
     capital  premium earnings equity
     £’000 £’000 £’000 £’000
As at 1 July 2007     2,006 267 60,961 63,234
Profit for the financial year     – – 33,671 33,671
Issue of share capital     2 78 – 80
Purchase of treasury shares     – – (1,900) (1,900)
Treasury shares reissued in respect of share option schemes   – – 112 112
Share-based payments     – – 286 286
Deferred tax on share-based payments     – – (230) (230)
Current corporation tax on share options exercised    – – 156 156
Dividends     – – (10,020) (10,020)
As at 28 June 2008     2,008 345 83,036 85,389
Profit for the financial year     – – 37,621 37,621
Purchase of treasury shares     – – (186) (186)
Treasury shares reissued in respect of share option schemes   – – 123 123
Share-based payments     – – 599 599
Deferred tax on share-based payments     – – 139 139
Current corporation tax on share options exercised    – – 80 80
Dividends     – – (10,993) (10,993)
As at 4 July 2009     2,008 345 110,419 112,772
2008 financial year was 52 weeks. Dunelm Group plc Annual report & accounts 2009
28
Accounting policies
Basis of preparation
The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the ‘Group’). The Parent 
Company financial statements present information about the Company as a separate entity and not about its Group.
The Group financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting 
Standards as adopted by the EU (‘Adopted IFRSs’). The Company has prepared it’s Parent Company statements under Adopted IFRSs 
as applied in accordance with the provisions of the Companies Act 2006 and these are presented on pages 44 to 52.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these Group 
financial statements.
The annual financial statements are prepared under the historical cost convention. The financial statements are prepared in pounds 
sterling, rounded to the nearest thousand.
The Group has considerable financial resources together with long standing relationships with a number of key suppliers and an 
established reputation in the retail sector across different geographic areas. As a consequence, the Directors believe that the Group is 
well placed to manage its business risks successfully despite the current economic outlook. After making enquiries, the Directors have a 
reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the 
foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the Annual Report and financial statements.
Further information regarding the Group’s business activities, together with the factors likely to affect its future development, performance 
and position is set out in the Business Review on pages 18 to 21. The financial position of the Group, its cash flows, liquidity position and 
borrowing facilities are described in the Finance Director’s review on pages 7 to 9. In addition note 17 to the financial statements includes 
the Group’s objectives, policies and processes for managing its capital; its financial risk management objectives; and its exposures to 
credit risk and liquidity risk.
Use of estimates and judgements
The presentation of the annual financial statements requires the Directors to make judgements, estimates and assumptions that affect the 
application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions 
are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results 
may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period 
in which the estimate is revised and in any future periods affected.
The key estimates and judgements used in the financial statements are as follows:
Inventory provisions
The Group provides against the carrying value of inventories held, based upon average losses incurred to clear old and discounted lines.
Dilapidations
The Group provides for the full estimated costs of any dilapidations on stores with a lease renewal date falling due within three years of 
the balance sheet date. 
Taxation
There are transactions whose ultimate tax treatment is uncertain. The Group makes provision for anticipated tax issues based on the 
likelihood of whether additional taxes may arise. The Group recognises deferred tax assets and liabilities based on estimates of future 
taxable income and recoverability. If these estimates do not materialise or change, or there are changes in tax rates or to the period over 
which losses might be recognised, then the value of the deferred tax assets or liability will need to be revised in a future period.
Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the 
financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that 
presently are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated 
financial statements from the date that control commences until the date that control ceases.
Transactions eliminated on consolidation
Intragroup balances, and any unrealised gains and losses or income and expenses arising from intragroup transactions, are eliminated in 
preparing the consolidated financial statements.
Revenue
Revenue represents the proceeds from sales of goods and related services. It excludes sales between Group companies and is after 
deducting returns, discounts given and VAT. For the majority of sales, revenue is recognised at the point of sale with the exception of 
make-up charges for custom made products, where revenue is recognised at the point that the goods are collected, and gift vouchers, 
where revenue is recognised when the vouchers are redeemed. Annual report & accounts 2009 Dunelm Group plc
29
Business review Governance Financial statements Annual General Meeting
Foreign currencies
Transactions in foreign currencies are recorded at the prevailing rate at the date of the transaction. Monetary assets and liabilities 
denominated in foreign currency are translated at the rates ruling at the balance sheet date. Resulting exchange gains or losses are 
recognised in the income statement for the period.
Intangible assets
These comprise software development and implementation costs and trademarks and are stated at cost less amortisation (see below).
Amortisation
Amortisation is charged to the income statement on a straight-line basis over the estimated useful life of the asset. These are as follows:
software development 3 years •	
trademarks  5 years •	
Property, plant and equipment
Owned assets
Items of property, plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, 
plant and equipment.
Depreciation
Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of 
property, plant and equipment. Land is not depreciated. The estimated useful lives are as follows:
computer equipment 3 years •	
freehold buildings 50 years •	
fixtures and fittings 4 years •	
motor vehicles 4 years •	
office equipment 5 years •	
plant and machinery 4 years •	
leasehold improvements over the period of the lease •	
The residual value of an asset, if significant, is reassessed annually.
Current assets
Trade and other receivables
Trade and other receivables are initially recognised at fair value and then carried at amortised cost net of impairment provisions.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is derived using the average cost method and includes costs 
incurred in bringing the inventories to their present location and condition. Net realisable value is the estimated selling price less cost to 
sell in the ordinary course of business.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an 
integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the 
statement of cash flows.
Bank borrowings and borrowing costs
Interest-bearing bank loans and overdrafts are recorded at the proceeds received. 
Borrowing costs are recognised as an expense in the financial period in which they are incurred.
Borrowings are classed as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 
months from the balance sheet date.
Impairment
The carrying amounts of the Group’s assets, other than inventories and deferred tax assets, are reviewed at each balance sheet date to 
determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.
The recoverable amount is the greater of net selling price and value in use. In assessing value in use, the estimated future cash flows are 
discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time-value of money and 
the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is 
determined for the cash-generating unit to which the asset belongs.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds the recoverable amount. 
Impairment losses are recognised in the income statement. Dunelm Group plc Annual report & accounts 2009
30
Share capital
Where the Company purchases its own equity share capital (treasury shares) the consideration paid, including any directly attributable 
incremental costs is deducted from equity attributable to the Company’s equity holders until the shares are cancelled or reissued. Where 
such shares are subsequently sold or reissued, any consideration received net of any directly attributable incremental transactions costs 
and the related income tax effects, is included in equity attributable to the Company’s equity holders. 
Provisions
A provision is recognised in the balance sheet when the Group has a current legal or constructive obligation as a result of a past event, 
and it is probable that an outflow of economic benefits will be required to settle the obligation. A provision for onerous contracts is 
realised when the expected benefit to be derived by the Group from a contract is lower than the unavoidable costs of meeting its 
obligations under the contract.
Expenses
Property leases
Lease incentives received are realised in the income statement evenly over the full term of the lease.
Where leases for land and buildings provide for fixed rent review dates and amounts, the Group accounts for such reviews by 
recognising, on a straight-line basis, the total implicit minimum lease payments over the non-cancellable period of the lease term.
Financing income/expense
Financing income/expense comprises interest payable on borrowings calculated using the effective interest rate method, interest 
receivable on funds invested, foreign exchange gains and losses.
Retirement benefits
The Group operates a defined contribution pension plan using a third-party provider. Obligations for the contributions to this plan are 
recognised as an expense in the income statement as incurred.
Share-based payment transactions
The Group operates an employee share save scheme open to all employees with over six months’ service, enabling them to save money 
which may be used after three years to acquire shares in the Company at a predetermined price.
The Group also operates other share option schemes enabling certain employees to acquire shares of the Company.
The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. Fair value is measured at 
grant date and spread over the period during which the employees become unconditionally entitled to the options. Fair value is measured 
using the binomial model, taking into account the terms and conditions applicable to the options.
At each balance sheet date the Group revises its estimates of the number of share incentives that are expected to vest and amends the 
charge accordingly. 
Dividends
Dividends are recognised as a liability in the period in which they are approved such that the Company is obligated to pay the dividend.
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement except to the extent 
that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax represents the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at 
the balance sheet date, together with any adjustment to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of 
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can 
be recognised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be recognised.
Accounting policies
continued Annual report & accounts 2009 Dunelm Group plc
31
Business review Governance Financial statements Annual General Meeting
Adopted IFRS and IFRIC not yet applied
In the current year the Group adopted:
IFRS 2  Amended IFRS 2 – Share-Based Payment: Vesting Conditions and Cancellations
This did not have any significant impact on the financial statements of the Group or Company.
At the date of approval of these financial statements, the following standards, amendments and interpretations were in place but 
not yet effective:
IFRS 3 Revised IFRS 3 –  Business Combinations
IFRS 8  Operating Segments
IAS 1 Revised IAS 1 –  Presentation of Financial Statements
IAS 23 Revised IAS 23 –  Borrowing costs
IAS 27 Revised IAS 27 –  Consolidated and Separate Financial Statements
IAS 32 Revised IAS 32 –  Financial Instruments: Presentation
IAS 39/IFRS 7 Revised IAS 39 –  Financial Instrument: Recognition & Measurement and 
  IFRS 7 –  Reclassification of Financial Instruments
IFRIC 13 Customer Loyalty Programmes
The above will be adopted in the Group and Company’s financial statements when they become effective. Revised IFRS 3 will require the 
recognition of subsequent changes in the fair value of contingent consideration in the income statement rather than against goodwill, and 
transaction costs will be required to be recognised immediately in the income statement. IFRS 8 requires segment information to be 
based on the same basis as information reported to management for decision making purposes. Revised IAS 23 requires borrowing 
costs attributable to the acquisition or construction of certain assets to be capitalised.
When adopted none of the above standards or amendments are expected to have any significant impact on the financial statements of 
the Group or Company. Dunelm Group plc Annual report & accounts 2009
32
Notes to the annual financial statements
1 Segmental reporting
The Group has only one class of business, retail of homewares, and operates entirely in the UK market.
2 Operating profit
       2009 2008
       £’000 £’000
Operating profit is stated after charging/(crediting) the following items:
Inventories
Cost of inventories included in cost of sales      229,701 217,018
Write down of inventories       2,758 5,867
Amortisation of intangible assets       2,550 2,134
Depreciation of property, plant and equipment
Owned        8,005 7,323
Operating lease rentals
Land and buildings       21,683 19,140
Plant and machinery       1,151 937
Loss/(profit) on disposal of property, plant and equipment and intangible assets    26 (278)
The analysis of auditors’ remuneration is as follows:
       2009 2008
       £’000 £’000
Fees payable to the Company’s auditors for the audit of the Parent and consolidated annual accounts  15 15
Fees payable to the Company’s auditors and their associates for other services to the Group  
– the audit of the Company’s subsidiaries pursuant to legislation     52 67
– tax compliance       29 29
– other tax services       8 9
– all other services       – 34
3  Operating costs
       2009 2008
       £’000 £’000
Selling and Distribution       121,860 108,051
Administrative        19,601 17,573
Loss/(profit) on disposal of property, plant and equipment and intangible assets    26 (278)
       141,487 125,346
4  Employee numbers and costs
The average number of people employed by the Group (including Directors) was:
     2009 2009 2008 2008
     Number Full time Number Full time
     of heads equivalents of heads equivalents
Selling     5,003 3,302 4,875 3,254
Distribution     250 240 217 210
Administration     161 158 144 142
     5,414 3,700 5,236 3,606 Annual report & accounts 2009 Dunelm Group plc
33
Business review Governance Financial statements Annual General Meeting
4  Employee numbers and costs continued
The aggregate remuneration of all employees including Directors comprises:
       2009 2008
       £’000 £’000
Wages and salaries including bonuses and termination benefits     52,696 47,775
Social security costs       3,429 3,187
Share-based payment expense (note 20)      599 286
Defined contribution pension costs       206 172
       56,930 51,420
Details of Directors’ remuneration, share options, long-term incentive schemes and pension entitlements are disclosed in the Directors’ 
Remuneration Report on pages 15 to 17.
5  Financial income and expense
       2009 2008
       £’000 £’000
Finance income
Interest on bank deposits       523 1,075
Foreign exchange gains       1,040 –
       1,563 1,075
Finance expenses
Interest on bank borrowings and overdraft      (667) (1,278)
Foreign exchange losses       – (87)
       (667) (1,365)
Net finance income/(expense)       896 (290)
6  Taxation
       2009 2008
       £’000 £’000
Current taxation
UK corporation tax charge for the period      16,143 12,045
Adjustments in respect of prior periods       94 (255)
       16,237 11,790
Deferred taxation
Origination of temporary differences       (332) 3,293
Adjustment in respect of prior periods       (35) 554
Tax rate differential       – (167)
       (367) 3,680
Total taxation expense in the income statement      15,870 15,470
The tax charge is reconciled with the standard rate of UK corporation tax as follows:
       2009 2008
       £’000 £’000
Profit before tax       53,491 49,141
UK corporation tax at standard rate of 28.0% (2008: 29.5%)     14,977 14,496
Factors affecting the charge in the period:
Non-deductible expenses       7 128
Ineligible depreciation       947 918
Lease incentive deductions       (125) (128)
Adjustments to tax charge in respect of prior years      59 299
Profit on disposal in excess of capital gain      5 (76)
Tax rate differential       – (167)
       15,870 15,470
The taxation charge for the period as a percentage of profit before tax is 29.7% (2008: 31.5%). Dunelm Group plc Annual report & accounts 2009
34
7  Dividends
All dividends relate to the 1p ordinary shares. 
       2009 2008
       £’000 £’000
Final for the period ended 30 June 2007 – paid 3.0p      – (6,024)
Interim for the period ended 28 June 2008 – paid 2.0p     – (3,996)
Final for the period ended 28 June 2008 – paid 3.5p      (6,994) –
Interim for the period ended 4 July 2009 – paid 2.0p      (3,999) –
       (10,993) (10,020)
The Directors are proposing a final dividend of 4.0p per ordinary share for the period ended 4 July 2009 which equates to £8.0m. 
The dividend will be paid on 11 December 2009 to shareholders on the register at the close of business on 27 November 2009. 
8  Earnings per share
Basic earnings per share is calculated by dividing the profit for the period attributable to equity shareholders by the weighted average 
number of ordinary shares in issue during the period.
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive 
potential ordinary shares. These represent share options granted to employees where the exercise price is less than the average market 
price of the Company’s ordinary shares during the period.
Weighted average numbers of shares:
       53 weeks  52 weeks
       ended ended
       4 July  28 June
       2009 2008
       ’000 ‘000
Weighted average number of shares in issue during the period     199,874 200,446
Impact of share options       2,559 2,180
Number of shares for diluted earnings per share      202,433 202,626
Notes to the annual financial statements
continued Annual report & accounts 2009 Dunelm Group plc
35
Business review Governance Financial statements Annual General Meeting
9  Intangible assets
      Software  Rights to
      development  Dorma
      and licences  brand Total
      £’000 £’000 £’000
Cost
At 30 June 2007      5,921 – 5,921
Additions      538 – 538
Disposals      (208) – (208)
Transfers from property, plant and equipment     362 – 362
At 28 June 2008      6,613 – 6,613
Additions      1,237 5,036 6,273
Disposals      (153) – (153)
Transfers from property, plant and equipment     41 – 41
At 4 July 2009      7,738 5,036 12,774
Amortisation
At 30 June 2007      2,253 – 2,253
Charge for the financial period      2,134 – 2,134
Disposals      (208) – (208)
Transfers from property, plant and equipment     337 – 337
At 28 June 2008      4,516 – 4,516
Charge for the financial period      1,627 923 2,550
Disposals      (135) – (135)
At 4 July 2009      6,008 923 6,931
Net book value
At 4 July 2009      1,730 4,113 5,843
At 28 June 2008      2,097 – 2,097
At 30 June 2007      3,668 – 3,668
All additions were acquired and do not include any internal development costs.
Transfers relate to assets which were classified initially as fixtures and fittings and leasehold improvements. Dunelm Group plc Annual report & accounts 2009
36
10  Property, plant and equipment
   Land and  Leasehold Plant and Motor Fixtures
   buildings improvements  machinery vehicles and fittings Total
   £’000  £’000 £’000  £’000  £’000 £’000
Cost
At 30 June 2007   36,503 33,035 87 121 26,160 95,906
Additions   5,410 7,601 15 – 4,440 17,466
Transfers to intangible assets   5 (5) – – (362) (362)
Disposals   (149) (385) – (22) (1,146) (1,702)
At 28 June 2008   41,769 40,246 102 99 29,092 111,308
Additions   6,969 7,179 93 – 5,428 19,669 
Transfers to intangible assets   – (10) – – (31) (41)
Disposals   – (7) – (13) (151) (171)
At 4 July 2009   48,738 47,408 195 86 34,338 130,765
Depreciation
At 30 June 2007   1,672 7,101 29 121 19,919 28,842
Charge for financial period   552 3,125 23 – 3,623 7,323
Transfers to intangible assets   – – – – (337) (337)
On disposals   (170) (355) – (22) (1,130) (1,677)
At 28 June 2008   2,054 9,871 52 99 22,075 34,151
Charge for financial period   661 3,405 44 – 3,895 8,005
On disposals   – (4) – (13) (145) (162)
At 4 July 2009   2,715 13,272 96 86 25,825 41,994
Net book value
At 4 July 2009   46,023 34,136 99 – 8,513 88,771
At 28 June 2008   39,715 30,375 50 – 7,017 77,157
At 30 June 2007   34,831 25,934 58 – 6,241 67,064
11 Deferred tax
Deferred tax is provided in full on temporary differences under the liability method using a taxation rate of 28% (2008: 28%).
Deferred taxation assets and liabilities are attributable to the following:
  Assets Liabilities Net
   2009  2008 2009 2008 2009 2008
   £’000 £’000 £’000 £’000 £’000 £’000
Property, plant and equipment   – – (634) (813) (634) (813)
Other temporary differences   – – (51) (3) (51) (3)
Share-based payments   558 182 – – 558 182
   558 182 (685) (816) (127) (634)
The movement in the net deferred tax balance is as follows: 
     Balance at  Recognised Recognised Balance at
     1 July 2007  in income in equity 28 June 2008
     £’000 £’000  £’000  £’000
Property, plant and equipment     (547) (266) – (813)
Employee benefits     382 30 (230) 182
Lease incentives     2,636 (2,636) – –
Short-term temporary differences     805 (808) – (3)
     3,276 (3,680) (230) (634)
     Balance at  Recognised Recognised Balance at
     29 June 2008  in income in equity 4 July 2009
     £’000 £’000  £’000  £’000
Property, plant and equipment     (813) 179 – (634)
Employee benefits     182 236 140 558
Short-term temporary differences     (3) (48) – (51)
     (634) 367 140 (127)
Notes to the annual financial statements
continued Annual report & accounts 2009 Dunelm Group plc
37
Business review Governance Financial statements Annual General Meeting
12  Inventories
       2009 2008
       £’000 £’000
Goods for resale       57,895 60,710
13  Trade and other receivables
       2009 2008
       £’000 £’000
Trade receivables       463 144
Other receivables       1,113 1,813
Prepayments and accrued income       9,163 9,679
       10,739 11,636
All amounts fall due within one year. All trade receivables are current. No interest is charged on trade receivables, whilst these  
remain current. 
14 Cash and cash equivalents
       2009 2008
       £’000 £’000
Cash at bank and in hand       23,998 2,833
Cash and cash equivalents include the following for the purpose of the cash flow statement:  
Cash at bank and in hand       24,016 2,853
Bank overdraft       (18) (20)
       23,998 2,833
 
15  Trade and other payables
       2009 2008
       £’000 £’000
Trade payables       28,850 22,894
Accruals and deferred income       31,462 26,429
Other taxation and social security       3,971 4,351
Other creditors       1,267 896
       65,550 54,570
16  Interest bearing loans and borrowings
       2009 2008
       £’000 £’000
Bank overdraft       18 20
Bank loan       – 10,000
       18 10,020
On 26 September 2006 the Group entered into a £50m revolving credit facility, repayable in full on 26 September 2011 and sub-divided 
into two elements: a £40m facility and a £10m facility. The £10m facility was cancelled on 26 May 2009. The £40m facility was not utilised 
at the balance sheet date.
Interest is payable on funds utilised under the £40m facility at the rate of LIBOR plus 0.35%. LIBOR is fixed for a given loan at the date of 
draw down.
The facility is guaranteed by the Parent Company and its subsidiaries. Dunelm Group plc Annual report & accounts 2009
38
16  Interest bearing loans and borrowings continued
Interest rate risk profile of financial assets and liabilities
The interest rate profile of the Group’s financial liabilities as at the period end was:
 2009  2009 2009 Effective 2008 2008 2008 Effective
 Total Floating rate Fixed rate interest Total Floating rate Fixed rate interest
 £’000 £’000 £’000 rate % £’000 £’000 £’000   rate %
Revolving bank loan – – – – 10,000 – 10,000 6.31
Overdraft 18 18 – 2.00 20 20 – 6.00
 18 18 – 2.00 10,020 20 10,000 6.31
All liabilities are denominated in sterling.
The floating rate on the overdraft is linked to Barclays Bank Base Rate and the Group believes that an increase in the rate of 1% would not 
have had a material impact on profit before tax for the period
Financial assets at 4 July 2009 consisted of £24,016,000 (2008: £2,853,000) cash at bank; interest earned is at normal commercial rates.
17  Financial risk management
The Board of Directors has overall responsibility for the oversight of the Group’s risk management framework. A formal process for 
reviewing and managing risk in the business has been developed. A register of strategic and operational risks is maintained and reviewed 
quarterly by the Board, who also monitor the status of agreed actions to mitigate key risks.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual 
obligations and arises principally from the Group’s receivables from customers. The Group only deals with creditworthy counterparties, 
and uses publicly available financial information to rate its customers. 
As the principal business of the Group is retail related, trade receivables consist of a relatively small number of customers, which tend to 
be charity or local authority based. The carrying amount of financial assets recorded in the financial statements represents the Group’s 
maximum exposure to credit risk. 
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing 
liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal 
and extreme circumstances. The Group manages this risk by continuously monitoring cash flow forecasts. The Group’s available facilities 
can be found in note 16.
Group policy is that surplus funds are placed on deposit with counterparties approved by the Board, with a minimum of ‘A’ credit rating.
Subsequent to the year end the Group has capped credit limits with approved counterparties at £20m.
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Group’s income. 
Interest rate risk
The Group’s bank borrowings incur variable interest rate charges linked to LIBOR and Barclays Bank Base Rate. The Directors do not 
consider that future changes in interest rates are likely to cause a material direct impact on profitability. The Group’s exposure to interest 
rates on financial assets and liabilities are detailed in note 16.
Foreign currency risk
The Group is exposed to foreign currency risk on purchases denominated in US dollars. These amounted to approximately 10% of the 
total purchases in the year ended 4 July 2009. The outstanding US dollar liabilities at the year end were $400,000 (2008: $870,000).
The Group manages its exposure to exchange rate fluctuations by purchasing US dollars on the ‘spot’ market at levels required to meet 
medium-term purchases. As at 4 July 2009 the Group held US dollar balances of $2.2m (2008: $7.0m), in order to protect itself against 
short-term fluctuations in the US dollar rate. This was expected to cover purchases in US dollars for approximately two months. 
In the event of a significant adverse movement in the US dollar exchange rate, the Group would seek to minimise the impact on 
profitability by changing the selling price of goods.
 
Fair values
The fair value of the Group’s financial assets and liabilities is not materially different from their carrying value.
Notes to the annual financial statements
continued Annual report & accounts 2009 Dunelm Group plc
39
Business review Governance Financial statements Annual General Meeting
17  Financial risk management continued
Capital management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future 
development of the business.
From time to time the Group purchases its own shares on the market; the timing of these purchases depends on market prices. Primarily 
the shares are intended to be used for issuing shares under the Group’s share option programme. Buy and sell decisions are made on a 
specific transaction basis by the Board. The Group does not have a defined share buy-back plan.
The following table is a comparison by category of the carrying amounts and fair values of the Group’s financial assets and liabilities at 
4 July 2009 and 29 June 2008.
     2009  2009 2008  2008
     Carrying value  Fair value Carrying value  Fair value
     £’000 £’000 £’000 £’000
Cash and cash equivalents     23,998 23,998 2,833 2,833
Trade receivables     463 463 144 144
Total financial assets     24,461 24,461 2,997 2,997
Trade payables     (28,850) (28,850) (22,894) (22,894)
Long-term borrowings     – – (10,000) (10,000)
Total financial liabilities     (28,850) (28,850) (32,894) (32,894)
Net financial liabilities     (4,389) (4,389) (29,897) (29,897)
The fair value on trade receivables and trade payables are approximate to the carrying value.
The currency profile of the Group’s net debt is as follows:
       2009 2008
       £’000 £’000
Sterling       22,669 (688)
US dollar       1,329 3,521
       23,998 2,833
As at 4 July 2009, the analysis of trade receivables that were past due but not impaired is as follows:
    Neither    More
    past due nor Less than 31–60 61–90 than 90
   Total  impaired 30 days days days days
   £’000 £’000 £’000 £’000 £’000 £’000
4 July 2009   463 43 407 7 4 2
28 June 2008   144 36 85 3 20 –
18  Share capital
 Number of ordinary 
 shares of 1p each 
      2009 2008
In issue at the start of the period      200,791,400 200,617,400
Issued during the period in respect of share option schemes    – 174,000
  
In issue at the end of the period      200,791,400 200,791,400
Proceeds received in relation to shares issued during the period were £nil (2008: £80,000).
     2009   2008 
     number  2009 number 2008
     of shares £’000 of shares £’000
Ordinary shares of 1p each:    
Authorised     500,000,000 5,000 500,000,000 5,000
Allotted, called up and fully paid     200,791,400 2,008 200,791,400 2,008
The holders of the ordinary shares are entitled to receive dividends as declared and are entitled to one vote per share. Dunelm Group plc Annual report & accounts 2009
40
19 Treasury shares 
     2009   2008 
     number  2009 number 2008
     of shares £’000 of shares £’000
Outstanding at beginning of year      951,500 1,522 – –
Purchased during year     127,000 186 1,195,000 1,900
Reissued during the period in respect of share option schemes   (241,365) (407) (243,500) (378)
Outstanding at end of year     837,135 1,301 951,500 1,522
The Company acquired 127,000 of its own shares through purchases on the London Stock Exchange (2008: 1,195,000). These shares 
are held by the Company for the purpose of delivery to employees under employee share schemes. The total amount including fees 
paid to acquire the shares was £186,210 (2008: £1,905,481). The consideration has been deducted from retained earnings within 
shareholders equity. 
The Company reissued 241,365 (2008: 243,500) treasury shares for a total consideration of £124,453 (2008: £112,010). 
The Company has the right to reissue the remaining treasury shares at a later date.
20 Share-based payments
As at 4 July 2009, the Group operated three share award plans:
a) Dunelm Group Share Option Plan (‘GSOP’)
b) Dunelm Group Savings Related Share Option Plan (‘Sharesave’)
c) Long-Term Incentive Plan (‘LTIP’)
There were 245,935 exercisable options in total under these schemes as at 4 July 2009.
a) Dunelm Group Share Option Plan
The GSOP was established in December 2003. Options have a vesting period of three years from date of grant and a maximum life of 10 
years. All options granted prior to IPO have an exercise price equal to the market value as agreed with HMRC at date of grant; all 
subsequent grants have had an exercise price equal to market price at date of grant. There are no performance conditions but there is a 
requirement that the Group’s shares be traded on a public exchange at date of exercise, and the awards are also subject to continued 
employment with the Group.
The fair value of services received in return for share options granted is measured by reference to the fair value of the options, assessed 
using a binomial model. The fair value per option granted and the assumptions used in the calculations are as follows:
    June  August  September December September
    2008 2006  2005 2004 2004
    grant grant grant grant grant
Fair value at measurement date    65.6p 7.0p 6.3p 6.0p 6.2p 
Share price    220.5p n/a n/a n/a n/a
Exercise price    137.0p 62.1p 57.0p 46.0p 46.0p
Expected volatility (weighted average volatility used in modelling
– based on historical volatility of comparable quoted companies)  35% 35% 35% 35% 35%
Option life (weighted average life used in modelling)   3 years 3 years 3 years 3 years 3 years
Expected dividends    8.7% 8.7% 8.7% 8.7% 8.7%
Risk-free interest rate    4.8% 4.8% 4.8% 4.8% 4.8%
The number and weighted average exercise price of options under the GSOP is as follows:
     Weighted   Weighted
     average  Number average Number
     exercise  of shares exercise of shares
     price under option price under option
     2009  2009  2008  2008
Outstanding at beginning of year      52.4p 610,500 49.8p 1,028,000
Granted during year     137.0p 36,496 – –
Retrospective adjustment to prior year     46.0p 21,700 – –
Exercised during year     56.1p (241,365) 46.0p (417,500)
Outstanding at end of year     60.5p 427,331 52.4p 610,500
b) Dunelm Group Savings Related Share Option Plan
The Sharesave scheme was established in 2006 and is open to all staff with eligible length of service. One grant was made under the 
scheme during the year, in October 2008. Options may be exercised under the scheme on completion of the three year savings contract 
and must be exercised within six months from that date. There is provision for early exercise in certain circumstances such as death, 
disability, redundancy and retirement.
Notes to the annual financial statements
continued Annual report & accounts 2009 Dunelm Group plc
41
Business review Governance Financial statements Annual General Meeting
20 Share-based payments continued
The fair value per option granted and the assumptions used in the calculations are as follows:
      October October  November
      2008 2007 2006
Fair value at measurement date      47.0p 70.0p 69.0p
Share price      125.0p 212.0p 202.0p
Exercise price      124.5p 157.0p 153.0p
Expected volatility (weighted average volatility used in modelling 
– based on historical volatility of comparable quoted companies)    58% 30% 30%
Option life (weighted average life used in modelling)     3.5 years 3.5 years 3.5 years
Expected dividends      2.5% 2.5% 2.5%
Risk-free interest rate      3.0% 4.8% 4.8%
Forfeiture rate      48% 36% 8%
The number and weighted average exercise price of options outstanding under the Sharesave at 4 July 2009 is as follows:
     Weighted   Weighted
     average  Number average Number
     exercise  of shares exercise of shares
     price under option price under option
     2009  2009  2008  2008
Outstanding at beginning of year      154.0p 1,001,273 153.0p 1,045,846
Granted during year     124.5p 362,125 157.0p 219,979
Forfeited during year     151.4p (495,426) 153.0p (264,552)
Outstanding at end of year     142.9p 867,972 154.0p 1,001,273
c) Long-term Incentive Plan
The LTIP was approved by the Board in 2006 enabling the Group to award shares to particular individuals, normally in the form of nominal 
cost options. The LTIP is administered by the Remuneration Committee. Two grants were made in the year, to the Executive Directors and 
senior management. The Executive Directors’ grant in September 2008 is exercisable in September 2011 and the senior management 
grant in July 2008 is exercisable in July 2010. The grant to the Executive Directors is dependent on the level of growth in Group EPS 
relative to RPI. The grant to senior management is dependent on continuing employment within the Group. The maximum life of options 
under the LTIP is 10 years from the date of grant.
The fair value of services received in return for share options granted is measured by reference to the fair value of the options.
This has been calculated as follows:
      September September  March
      2008 2007  2007 
Share price at date of grant      149.0p 196.0p 229.0p
Discount factor, based on dividend yield of 3.0% to vesting date    0.889 0.913 0.913
Fair value of option      132.5p 178.9p 209.0p
The number and weighted average exercise price of options under the LTIP at 4 July 2009 is as follows:
     Weighted   Weighted
     average  Number average Number
     exercise  of shares exercise of shares
     price under option price under option
     2009  2009  2008  2008
Outstanding at beginning of year      – 568,356 – 250,434
Granted during year     – 713,554 – 317,922
Forfeited during year     – (18,339) – –
Outstanding at end of year     – 1,263,571 – 568,356
In addition, bonuses earned during the year by a number of senior managers will be paid in the form of nil cost share options, exercisable 
in September 2011, provided the individuals remain in employment with the Group at that date. The value of these options has been 
estimated on the basis of the assumed share price at the date of grant (September 2009) and the cost will be spread over the period from 
29 June 2008 to 30 September 2011. Dunelm Group plc Annual report & accounts 2009
42
20 Share-based payments continued
The total expense recognised in the income statement arising from share-based payments is as follows:
       2009 2008
       £’000 £’000
GSOP       6 14
Sharesave       128 17
LTIP – Executive Directors       266 164
LTIP – Senior Managers       199 91
       599 286
21 Analysis of movement in net debt
IAS 7 ‘Cash Flow Statements’ does not require the disclosure of a net debt reconciliation. The Group has shown this reconciliation to 
assist in the interpretation of the financial statements. Net debt is defined as cash at bank less loan and overdraft balances.
       
      At 4 July  At 28 June 
      2009 Cash flow 2008 
      £’000 £’000 £’000
Cash at bank and in hand      24,016 21,163 2,853
Bank overdrafts      (18) 2 (20)
      23,998 21,165 2,833
    
Debt due after one year      – 10,000 (10,000) 
Net (debt)/cash      23,998 31,165  (7,167)
22 Commitments
As at 4 July 2009 the Group had entered into capital contracts amounting to £2.0m. The equivalent figure as at 28 June 2008 was £2.3m.
The future minimum lease payments under non-cancellable operating leases were as follows:
   2009  2009 2009 2008 2008 2008
   Motor  Land and Plant and Motor Land and Plant and
   vehicles  buildings machinery vehicles buildings machinery
   £’000 £’000 £’000 £’000 £’000 £’000
Within one year   368 20,852 280 443 20,928 249
In the second to fifth year inclusive   398 76,915 578 226 77,861 540
After five years   – 103,199 – – 108,924 –
   766 200,966 858 669 207,713 789
The Group has 82 operating leases in respect of properties. These leases run for periods of up to 20 years, with an option to renew 
leases on expiry. Lease payments are typically reviewed every five years.
The Group also leases a number of vehicles, shop fittings and items of computer hardware under operating leases. These vary in length.
23 Contingent liabilities
The Group had no contingent liabilities at either period end date.
24 Related parties
Identity of related parties
The Group has related party relationships with its subsidiaries and with its Directors. Transactions between the Company and its 
subsidiaries, which are related parties, have been eliminated on consolidation for the Group.
Key management personnel
The key management personnel of the Group comprise members of the Board of Directors and the executive team.
Directors of the Company and their immediate relatives control 66.8% of the voting shares of the Company.
Notes to the annual financial statements
continued Annual report & accounts 2009 Dunelm Group plc
43
Business review Governance Financial statements Annual General Meeting
24 Related parties continued
Disclosures relating to remuneration of Directors are set out in the Remuneration Report on pages 15 to 17. The remuneration of the key 
management personnel (executive team excluding Directors) of the Group is set out below:
       2009 2008
       £’000 £’000
Salaries and other short-term benefits       637 831
Post employment benefits       13 12
Share-based payments       45 43
       695 886
From time to time the Group makes purchases on behalf of a major shareholder, Bill Adderley, and sells vehicles to him that the Group no 
longer requires. These amounts are billed based on normal market rates for such supplies and payable under normal payment terms. No 
balances remained unsettled at either period end. The aggregate value of these transactions was £1,000 (2008: £3,000).
All vehicles sold to Bill Adderley during the period were fully depreciated.
From time to time Directors of the Group, or their related entities, may purchase goods from the Group. These purchases are on the same 
terms and conditions as those entered into by other Group employees or customers and are trivial or domestic in nature.
25 Ultimate controlling party
The Directors consider that the Adderley family is the ultimate controlling party of Dunelm Group plc by virtue of their combined 
shareholding.
26 Subsequent events
There are no material post balance sheet events. Dunelm Group plc Annual report & accounts 2009
44
Parent Company accounts balance sheet
As at 4 July 2009
       2009 2008
      Note £’000 £’000
Non-current assets   
Investment in subsidiaries      4 2,616 2,283
Deferred tax asset       5 202 43
Total non-current assets       2,818 2,326
   
Current assets   
Trade and other receivables      6 64,107 64,413
Total current assets       64,107 64,413
Total assets       66,925 66,739
Current liabilities    
Trade and other payables       7 (591) (879)
Liability for current tax        (278) 89
Interest bearing loans and borrowings      8 (18) (20)
Total current liabilities       (887) (810)
Non-current liabilities   
Interest bearing loans and borrowings      8 – (10,000)
Total non-current liabilities       – (10,000)
Total Liabilities       (887) (10,810)
Net assets       66,038 55,929
Capital and reserves   
Issued capital      10 2,008 2,008
Share premium        346 346
Non-distributable reserves       616 283
Retained earnings        63,068 53,292
Equity shareholders’ funds       66,038 55,929
The financial statements on pages 44 to 52 were approved by the Board of Directors on 15 September 2009 and were signed on its 
behalf by:
David Stead
Director
15 September 2009 Annual report & accounts 2009 Dunelm Group plc
45
Business review Governance Financial statements Annual General Meeting
Parent Company accounts cash flow statement
For the 53 weeks ended 4 July 2009
       53 weeks 52 weeks
       2009 2008
       £’000 £’000
Profit before tax       20,773 19,920
Adjusted for:  
Net financing costs       (2,550) (1,826)
Operating profit       18,223 18,094
Operating cash flows before movements in working capital  
Decrease in debtors       306 21,387
(Decrease)/increase in creditors       (134) 197
Net movement in working capital       172 21,584
Investment income       (20,000) (20,097)
Share-based payments expense       266 166
Cash flows from operating activities       (1,339) 19,747
Interest paid       (870) (1,249)
Interest received       3,266 3,075
Tax received       – 58
Net cash generated from operating activities      1,057 21,631
   
Cash flows from financing activities   
Proceeds from issue of share capital       – 81
Purchase of treasury shares       (186) (1,900)
Proceeds from issue of treasury shares       124 112
Repayment of bank loan       (10,000) (30,000)
Dividends received       20,000 20,097
Dividends paid       (10,993) (10,020)
Net cash flows utilised in financing activities      (1,055) (21,630)
Net increase in cash and cash equivalents      2 1
Cash and cash equivalents at the beginning of the period     (20) (21)
Cash and cash equivalents at the end of the period     (18) (20) Dunelm Group plc Annual report & accounts 2009
46
Parent Company accounts statement of changes in equity
For the 53 weeks ended 4 July 2009
    Issued share Share Non Retained
    capital premium distributable earnings Total
    £’000 £’000 £’000 £’000 £’000
As at 30 June 2007     2,006 267 163 44,912 47,348
Profit for the period    – – – 20,036 20,036
Issue of new share capital    2 79 – – 81
Purchase of treasury shares    – – – (1,900) (1,900)
Treasury shares reissued in respect of share option schemes  – – – 112 112
Share-based payments    – – 120 166 286
Deferred tax on share-based payments    – – – (76) (76)
Corporation tax on share options exercised   – – – 62 62
Dividends    – – – (10,020) (10,020)
     
As at 28 June 2008    2,008 346 283 53,292 55,929
Profit for the period    – – – 20,545 20,545
Purchase of treasury shares    – – – (186) (186)
Treasury shares reissued in respect of share option schemes  – – – 123 123
Share-based payments    – – 333 266 599
Deferred tax on share-based payments    – – – 21 21 
Dividends    – – – (10,993) (10,993)
     
As at 4 July 2009    2,008 346 616 63,068 66,038
The non-distributable reserve’s purpose is to reflect movements in share-based payments in respect of awards given by the Parent 
Company to employees of subsidiaries. 
2008 financial year was 52 weeks. Annual report & accounts 2009 Dunelm Group plc
47
Business review Governance Financial statements Annual General Meeting
Accounting policies – Parent Company accounts
Basis of preparation
The Company financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting 
Standards as adopted by the EU (‘Adopted IFRSs’) and as applied in accordance with the provisions of the Companies Act 2006. 
The accounts of the Company are prepared under the historical cost convention, in accordance with the Companies Act 2006, applicable 
accounting standards and specifically in accordance with the accounting policies set out below.
After making enquiries, the Directors have a reasonable expectation that the Company have adequate resources to continue in 
operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial 
statements.
Investments
Investments in subsidiary undertakings are stated at the adjusted cost of the investment, IFRIC 8 ‘Scope of IFRS 2 share-based 
payments’ requires the Parent Company to recognise an increase in the cost of its investment in a subsidiary which has issued share 
options in the Parent Company’s shares to its employees. 
Bank borrowings and borrowing costs
Interest-bearing bank loans and overdrafts are recorded at the proceeds received. 
Borrowing costs are recognised as an expense in the financial period in which they are incurred.
Borrowings are classed as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 
months from the balance sheet date.
Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component 
of cash and cash equivalents for the purpose of the statement of cash flows.
Where a Group Company enters into financial guarantee contracts to guarantee the indebtedness of other Group Companies within 
the Group, the Company considers these to be insurance arrangements for them as such. In this respect, the Company treats the 
guarantee contract as a contingent liability until such time as it becomes probable the Company will be required to make a payment 
under the guarantee.
Share capital
Where the Company purchases its own equity share capital (treasury shares) the consideration paid, including any directly attributable 
incremental costs is deducted from equity attributable to the Company’s equity holders until the shares are cancelled or reissued. Where 
such shares are subsequently sold or reissued, any consideration received net of any directly attributable incremental transactions costs 
and the related income tax effects, is included in equity attributable to the Company’s equity holders.
Share-based payments
The Company operates two share options schemes details of which are set out in note 11. 
The fair value of options granted is realised as an employee expense with a corresponding increase in equity. Fair value is measured at 
grant date and spread over the period during which the employees become unconditionally entitled to the options. Fair value is measured 
using the binomial model, taking into account the terms and conditions applicable to the options.
At each balance sheet date the Company revises its estimates of the number of share incentives expected to vest. Any impact of this 
revision is recognised as an adjustment to equity with a corresponding adjustment to investments.
Dividends
Dividends are recognised as a liability in the period in which they are approved such that the Company is obligated to pay the dividend.
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the profit and loss account except to the 
extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax represents the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at 
the balance sheet date, together with any adjustment to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of 
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the  
asset can be recognised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will  
be recognised. Dunelm Group plc Annual report & accounts 2009
48
Notes to the Parent Company accounts
1 Income statement
The Company made a profit after tax of £20,544,000 (2008: £20,036,000). The Directors have taken advantage of the exemption 
available under section 408 Companies Act 2006 and have not presented an income statement for the Company alone.
The Company is not required to give details of the fees paid to its auditors in accordance with the Companies (Disclosure of Auditor 
Remuneration) Regulations 2005.
2 Employee costs
The Company has no employees other than the two Executive Directors. Full details of the Directors’ remuneration and interest are set 
out in the Directors’ Remuneration Report on pages 15 to 17, and share-based payments details in note 12 on pages 50 to 51.
3 Dividends
All dividends relate to the 1p ordinary shares.
       2009 2008
       £’000 £’000
Final for the period ended 30 June 2007 – paid 3.0p      – (6,024)
Interim for the period ended 28 June 2008 – paid 2.0p     – (3,996)
Final for the period ended 28 June 2008 – paid 3.5p      (6,994) –
Interim for the period ended 4 July 2009 – paid 2.0p      (3,999) –
       (10,993) (10,020)
The Directors are proposing a final dividend of 4.0p per ordinary share for the period ended 4 July 2009 which equates to £8.0m. 
The dividend will be paid on 11 December 2009 to shareholders on the register at the close of business on 27 November 2009. 
4 Investments
Shares in subsidiary undertakings.
        £’000
As at 30 June 2007        2,163
Share-Based Payments        120
As at 28 June 2008        2,283
Share-Based Payments        333
As at 4 July 2009        2,616
Principal subsidiaries
The following are the principal subsidiaries as at the end of the year: 
      Proportion of
      ordinary Nature
Subsidiary      shares held of business
Dunelm (Soft Furnishings) Limited     100% Retailer of soft furnishings
Dunelm Estates Limited     100% Property holding Company
Both of the above subsidiaries and the Parent Company are registered and operate in England and Wales. 
 
5 Deferred tax assets
        Other 
        temporary
        differences
        £’000
As at 30 June 2007        98
Reserves debit        (76)
Income statement credit        21
As at 28 June 2008        43
Reserves credit        21
Income statement credit        138
As at 4 July 2009        202
Deferred tax assets are recognised for other temporary differences to the extent that the realisation of the related tax benefit through 
future taxable profits is probable.
  Annual report & accounts 2009 Dunelm Group plc
49
Business review Governance Financial statements Annual General Meeting
6 Trade and other receivables
       2009 2008
       £’000 £’000
Amounts owed by subsidiary undertakings      64,071 64,365
Prepayments and accrued income       30 30
Other taxation and social security       6 18
       64,107 64,413
Amounts owed by subsidiary undertakings are immediately repayable. Interest is charged monthly on all intercompany balances at an 
annual rate of 5.25%.
7 Trade and other payables
       2009 2008
       £’000 £’000
Trade payables       14 15
Accruals and deferred income       557 864
Other creditors       20 –
       591 879
8 Interest bearing loans and borrowings
       2009 2008
       £’000 £’000
Bank loans       – 10,000
Bank overdraft       18 20
       18 10,020
On 26 September 2006 the Company entered into a £50m revolving credit facility which is repayable in full on 26 September 2011. The 
facility is sub divided into two elements: a £40m facility and a £10m facility. The £10m facility was cancelled on 26 May 2009. The £40m 
facility was not utilised at the balance sheet date.
Interest is payable on the £40m facility at the rate of LIBOR plus 0.35%.
The facility is guaranteed by the Company and its subsidiaries.
9 Financial risk management
Capital management
The following table is a comparison by category of the carrying amounts and fair values of the Company’s financial assets and liabilities at 
4 July 2009 and 29 June 2008.
     2009  2009 2008  2008
     Carrying value  Fair value  Carrying value  Fair value
     £’000 £’000 £’000 £’000
Subsidiary loans     64,071 64,071 64,365 64,365
Total financial assets     64,071 64,071 64,365 64,365
    
Short-term borrowings     (18) (18) (20) (20)
Trade payables     (14) (14) (15) (15)
Long-term borrowings     – – (10,000) (10,000)
Total financial liabilities     (32) (32) (10,035) (10,035)
Net financial liabilities     64,039 64,039 54,330 54,330
The fair value on subsidiary loans and trade payables are approximate to the carrying value. Dunelm Group plc Annual report & accounts 2009
50
9  Financial risk management continued
The currency profile of the Company’s net debt is as follows:
       2009 2008
       £m £m
Sterling       (18) (20)
       (18) (20)
10 Share capital
 Number of ordinary 
 shares of 1p each 
      2009 2008
In issue at the start of the period      200,791,400 200,617,400
Issued during the period in respect of share options     – 174,000
In issue at the end of the period      200,791,400 200,791,400
Proceeds received in relation to shares issued during the period were £nil (2008: £80,000). 
     2009  2008 
     Number 2009 Number 2008
     of shares £’000 of shares £’000
Ordinary shares of 1p each 
Authorised     500,000,000 5,000 500,000,000 5,000
Allotted, called up and fully paid     200,791,400 2,008 200,791,400 2,008
The holders of the ordinary shares are entitled to receive dividends as declared and are entitled to one vote per share.
11 Treasury shares 
     2009  2008 
     Number 2009 Number  2008
     of shares £’000 of shares £’000
Outstanding at beginning of year     951,500 1,522 – –
Purchased during year     127,000 186 1,195,000 1,900 
Reissued during the period in respect of share option schemes   (241,365) (407) (243,500) (378)
Outstanding at end of year     837,135 1,301 951,500 1,522
The Company acquired 127,000 of its own shares through purchases on the London Stock Exchange (2008: 1,195,000). These shares  
are held by the Company for the purpose of delivery to employees under employee share schemes. The total amount including fees  
paid to acquire the shares was £186,210 (2008: £1,905,481). The consideration has been deducted from retained earnings within 
shareholders equity.
The Company reissued 241,365 (2008: 243,500) treasury shares for a total consideration of £124,453 (2008: £112,010).
The Company has the right to reissue the remaining treasury shares at a later date.
12 Share-based payments
As at 4 July 2009, the Company operated two share award plans:
a) Dunelm Group Share Option Plan (‘GSOP’)
b) Long-Term Incentive Plan (‘LTIP’)
There were no exercisable options as at 4 July 2009.
a) Dunelm Group Share Option Plan
The GSOP was established in December 2003. Options have a vesting period of three years from date of grant and a maximum life of 10 
years. All options granted prior to IPO have an exercise price equal to the market value as agreed with HMRC at date of grant; there have 
been no further grants since IPO. There are no performance conditions but there is a requirement that the Group’s shares be traded on a 
public exchange at date of exercise, and the awards are also subject to continued employment with the Group.
Notes to the Parent Company accounts
continued Annual report & accounts 2009 Dunelm Group plc
51
Business review Governance Financial statements Annual General Meeting
12 Share-based payments continued
The fair value of services received in return for share options granted is measured by reference to the fair value of the options, assessed 
using a binomial model. The fair value per option granted and the assumptions used in the calculations are as follows:
     August  September December September
     2006  2005 2004 2004
     grant grant grant grant
Fair value at measurement date     7.0p 6.3p 6.0p 6.2p
Share price     n/a n/a n/a n/a
Exercise price     62.1p 57.0p 46.0p 46.0p
Expected volatility (weighted average volatility used in modelling  
– based on historical volatility of comparable quoted companies)   35% 35% 35% 35%
Option life (weighted average life used in modelling)    3 years 3 years 3 years 3 years
Expected dividends     8.7% 8.7% 8.7% 8.7%
Risk-free interest rate     4.8% 4.8% 4.8% 4.8%
The number and weighted average exercise price of options under the GSOP is as follows:
     Weighted   Weighted
     average  Number average Number
     exercise  of shares exercise of shares
     price under option price under option
     2009  2009  2008  2008
Outstanding at beginning of year     – – 46.0p 200,000
Exercised during year     – – 46.0p (200,000)
Outstanding at end of year     – – – –
b) Long-term Incentive Plan
The LTIP was approved by the Board prior to IPO enabling the Company to award shares to particular individuals, normally in the form of 
nominal cost options. The LTIP is administered by the Remuneration Committee. One grant has been made in the year, to the Executive 
Directors only, and is exercisable in September 2010 depending on the level of growth in Group EPS relative to RPI. The maximum life of 
options under LTIP is 10 years from the date of grant.
The fair value of services received in return for share options granted is measured by reference to the fair value of the options. 
This has been calculated as follows:
       September  March
       2007  2007
Share price at date of grant       196.0p 229.0p
Discount factor, based on dividend yield of 3.0% to vesting date     0.913 0.913
Fair value of option       178.9p 209.0p
 
The number and weighted average exercise price of options under the LTIP at 4 July 2009 is:
     Weighted   Weighted
     average  Number average Number
     exercise  of shares exercise of shares
     price under option price under option
     2009  2009  2008  2008
Outstanding at beginning of year      – 568,356 – 250,434
Granted during year     – 437,837 – 317,922
Outstanding at end of year     – 1,006,193 – 568,356
The total expense recognised in the income statement arising from share-based payments is as follows:
       2009 2008
       £’000 £’000
GSOP       – 1
LTIP       266 165
       266 166 Dunelm Group plc Annual report & accounts 2009
52
13 Contingent liability
The Company and certain subsidiaries have given joint and several guarantees in connection with all bank facilities provided by the 
Group’s principal bankers.
The Group’s banking facilities are subject to a netting facility whereby credit balances may be offset against indebtedness of other  
Group companies.
14 Related party disclosure
The amount due to the Company from subsidiary undertakings is set out in note 6. Transactions between the Company and its 
subsidiaries were as follows:
       2009 2008
       £’000 £’000
Cash paid to Group undertakings       (56,759) (47,267)
Cash received from Group undertakings      33,199 2,693
Dividends received       20,000 20,096
Net interest receivable       3,266 3,072
Notes to the Parent Company accounts
continued Annual report & accounts 2009 Dunelm Group plc
53
Business review Governance
Notice of Annual General Meeting
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
If you are in any doubt as to any aspect of the proposals referred to in the document or as to the action you should take, 
you should seek your own advice from a stockbroker, solicitor, accountant or other professional adviser. 
If you have sold or otherwise transferred all of your shares, please pass this document together with the accompanying 
documents to the purchaser or transferee, or to the person who arranged the sale or transfer, so that they can pass them 
to the person who now holds the shares.
Notice is hereby given that an Annual General Meeting of the Company will be held at The Hilton Hotel, Leicester on Thursday 12 
November 2009 at 10:30 am at which the following matters will be dealt with:
Ordinary business
To consider and if thought fit pass the following resolutions as ordinary resolutions:
1. That the Company’s annual accounts for the financial year ended 4 July 2009 together with the Directors’ Report, and the Auditors’ 
Report on those accounts be received and adopted.
2. That Geoff Cooper, who is retiring in accordance with the Articles of Association of the Company, and being eligible, is offering 
himself for re-election, be reappointed as a Non-Executive Director of the Company.
3. That David Stead who is retiring in accordance with the Articles of Association of the Company, and being eligible, is offering himself 
for re-election, be reappointed as an Executive Director of the Company.
4.  That Nick Wharton, who is retiring in accordance with the Articles of Association of the Company, and being eligible, is offering 
himself for election, be appointed as a Non-Executive Director of the Company.
5. To declare a final dividend on the ordinary shares of 4.0p per share in respect of the year ended 4 July 2009.
6. That KPMG Audit Plc be reappointed as auditors to the Company and that the Directors be authorised to determine the  
auditors’ remuneration.
7. That the Directors’ Remuneration Report be approved.
Special business
To consider and if thought fit pass the following resolutions of which the resolution number 8 will be proposed as an ordinary resolution 
and the resolutions numbered 9, 10 and 11 will be proposed as a special resolution:
8.  That:
(a) in accordance with section 551 of the Companies Act 2006, the Directors be authorised to allot ordinary shares in the Company 
or grant rights to subscribe for ordinary shares or to convert any securities into shares in the Company up to a maximum nominal 
amount of £665,466 to such persons and on such terms as the Directors may determine; and 
(b) this authority shall expire at the conclusion of the next Annual General Meeting of the Company after the passing of this 
resolution, or, if earlier, on 29 December 2010 unless previously renewed, varied or revoked although the Directors may exercise 
this authority after this date in respect of an offer or agreement made while this authority was in force; and
(c) all previous unutilised authorities under section 80 of the Companies Act 1985 shall cease to have effect (save to the extent that 
the same are exercisable pursuant to section 80(7) of the Companies Act 1985 by reason of any offer or agreement made prior to 
the date of this resolution which would or might require relevant securities to be allotted on or after that date).
9.  That:
(a) Subject to the passing of resolution 8 above, and in accordance with section 570 of the Companies Act 2006, the Directors be 
given power to allot equity securities for cash or by way of a sale of treasury shares pursuant to the previous resolution as if 
section 561(1) Companies Act 2006 does not apply to the allotment;
(b) the powers under paragraph (a) shall be limited to the allotment of equity securities:
 (i)   where securities have been offered to holders of ordinary shares in the capital of the Company in proportion (as nearly as may 
be) to their existing holdings of ordinary shares subject to any exclusions or other arrangements that the Directors consider 
necessary or expedient to deal with fractional entitlements and legal or practical problems under the law of, or the 
requirements of any recognised regulatory body or stock exchange in any territory; and 
 (ii) having a nominal amount not exceeding in aggregate £100,000;
(c) this authority shall expire at the conclusion of the next Annual General Meeting of the Company after the passing of this resolution 
or, if earlier, on 29 December 2010 although the Directors may exercise this authority after this date in respect of an offer or 
agreement made while this authority was in force; and
(d) all previous unutilised authorities under section 95 of the Companies Act shall cease to have effect.
Annual General Meeting Financial statements Dunelm Group plc Annual report & accounts 2009
54
10. That, in accordance with section 701 of the Companies Act 2006, the Company be generally and unconditionally authorised to make 
market purchases (within the meaning of that section 701) of ordinary shares of 1p each in the capital of the Company (‘ordinary 
shares’) provided that:
(a) the maximum aggregate number of ordinary shares authorised to be purchased is the lesser of 19,000,000, being approximately 
10% of the issued ordinary share capital at 4 July 2009 (excluding treasury shares), and 10% of the Company’s issued ordinary 
share capital at the date of passing of this resolution (excluding treasury shares);
(b) the maximum price (not including expenses) which may be paid for each ordinary share is an amount equal to 105% of the 
average of the middle market quotations for an ordinary share, as derived from the London Stock Exchange Daily Official List, for 
the five business days immediately before the day on which the purchase is made and the amount stipulated in the Buy-Back and 
Stabilisation Regulation 2003; and
(c) the minimum price (not including expenses) which may be paid for each ordinary share is 1p per share.
 This authority shall, unless previously varied, revoked or renewed, expire at the conclusion of the next Annual General Meeting of the 
Company or, if earlier, on 29 December 2010, except in relation to a purchase of ordinary shares the contract for which was 
concluded before such time and which will or may be executed wholly or partly after such time.
11. That a general meeting of the Company other than the Annual General Meeting may be called on not less than 14 clear days’ notice.
Biographies of the Directors who are standing for appointment are set out on page 10 and further explanation in relation to the resolutions 
proposed as Special Business are set out in the Directors’ Report on page 20.
The Directors consider that all the resolutions put to the meeting are in the best interests of the Company and its shareholders as a whole 
and are most likely to promote the success of the Company and its shareholders as a whole. Your Board will be voting in favour of them 
and unanimously recommends that you do so as well.
By Order of the Board
David Stead
Company Secretary
Fosse Way
Syston
Leicester
LE7 1NF
9 October 2009
Notice of Annual General Meeting
continued Annual report & accounts 2009 Dunelm Group plc
55
Business review Governance Annual General Meeting Financial statements
Notes
1.  Information regarding the meeting, including the information required by section 311A of the Companies Act 2006, is available from the Investor Information section of our 
corporate website http://production.investis.com/dnlm/investorinfo/agm/
2.  Pursuant to section 319A of the Companies Act 2006, the Company must cause to be answered at the Annual General Meeting any question relating to the business being 
dealt with at the meeting which is put by a member attending the meeting, except in certain circumstances, including if it is undesirable in the interests of the Company or the 
good order of the meeting that the question be answered or if to do so would involve the disclosure of confidential information.
3. A member is entitled to appoint a proxy to exercise all or any of his rights to attend, speak and vote instead of him, using the form in this report. Only the procedures set out in 
these notes and the note to the proxy form can be used to appoint a proxy. A proxy need not be a member of the Company. A member may appoint more than one proxy to 
exercise rights attached to different shares. A member may not appoint more than one proxy to exercise rights attached to any one share. If you wish your proxy to speak on 
your behalf at the meeting you will need to appoint your own choice of proxy (not the Chairman) and give your instructions directly to them.
4. The ‘vote withheld’ option is to enable shareholders to abstain on any particular resolution. This is not a vote in law and will not be counted in the votes ‘for’ or ‘against’  
any resolution.
5. To be valid, a duly completed Form of Proxy must be sent by post, together with the power of attorney or other authority (if any) under which it is signed (or a notarially 
certified copy), to Equiniti, Aspect House, Spencer Road, Lancing, West Sussex BN99 6ZX so as to arrive not later than 48 hours before the time fixed for the meeting or 
adjourned meeting or (in the case of a poll taken otherwise than at or on the same day as the meeting or adjourned meeting) for the taking of the poll at which it is to be used. 
Completion and return of a Form of Proxy will not preclude a member from attending and voting in person at the meeting.
6. To change your proxy instructions please submit a new proxy appointment in accordance with the instructions above. The appointment received last before the cut-off time 
and date specified above will take precedence.
7. A person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 to enjoy information rights (a ‘Nominated Person’) may, under 
an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the 
Annual General Meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to 
give instructions to the shareholder as to the exercise of voting rights.
 The statement of the rights of members in relation to the appointment of proxies in paragraphs 3, 5 and 6 does not apply to a Nominated Person. The rights described in 
these paragraphs can only be exercised by registered members of the Company.
 Nominated Persons are reminded that they should contact the registered holder of their shares (and not the Company) on matters relating to their investments in  
the Company.
8. The time by which a person must be entered on the register of members of the Company in order to have the right to attend or vote at the meeting is 6 pm on the day which 
is two days (excluding any non-working days) before the time fixed for the meeting or the adjourned meeting. Changes to entries on the register of members after that time 
will be disregarded in determining the rights of any person to attend or vote at the meeting.
9. To appoint a proxy or to give or amend an instruction to a previously appointed proxy via the CREST system, the CREST message must be received by the issuer’s agent  
(ID RA19) by 48 working hours before the time fixed for the Annual General Meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the 
timestamp applied to the message by the CREST Applications Host) from which the issuer’s agent is able to retrieve the message. After this time any change of instructions 
to a proxy appointed through CREST should be communicated to the proxy by other means.
 CREST Personal Members or other CREST sponsored members and those CREST Members who have appointed voting service provider(s) should contact their CREST 
sponsor or voting service provider(s) for assistance with appointing proxies via CREST.
 For further information on CREST procedures, limitations and system timings, please refer to the CREST manual at www.euroclear.com/CREST. We may treat as invalid a 
proxy appointment sent by CREST in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
10. You may not use any electronic address provided either in this notice of Annual General Meeting or any related documents to communicate with the Company for any 
purpose other than those expressly stated.
11. Copies of the Executive Directors’ service agreements with the Company, the Non-Executive Directors’ terms of appointment and the register of Directors’ interests will be 
available for inspection during normal business hours on each business day at the registered office of the Company from the date of this notice until the date of the meeting 
and also at the place of the meeting for 15 minutes prior to and during the meeting.
12. As at 15 September 2009 the Company’s issued share capital (excluding treasury shares) consists of 19,954,265 ordinary shares carrying one vote each. Therefore, the total 
voting rights in the Company as at 15 September 2009 are 19,954,265.
13. Pursuant to Chapter 5 of Part 16 of the Companies Act 2006 (sections 527 to 531), where requested by either:
a member or members having a right to vote at the meeting and holding at least 5% of total voting rights of the Company; or •	
at least 100 members have a right to vote at the meeting and holding, on average, at least £100 of paid up share capital, •	
 the Company must publish on its website, a statement setting out any matter that such members propose to raise at the meeting relating to the audit of the Company’s 
accounts (including the Auditor’s Report and the conduct of the audit) that are to be laid before the meeting.
 Where the Company is required to publish such a statement on its website:
it may not require the members making the request to pay any expenses incurred by the Company in complying with the request; •	
it must forward the statement to the Company’s auditors no later than the time the statement is made available on the Company’s website; and •	
the statement may be dealt with as part of the business of the meeting. •	
 A member wishing to request publication of such a statement on the Company’s website must send the request to the Company using one of the following methods:
in hard copy form to David Stead, Company Secretary at the Company’s registered office; •	
by e-mail to david.stead@dunelm-mill.co.uk and be confirmed in writing to the registered office address; or •	
by fax to 0116 2644490 marked for the attention of David Stead and confirmed in writing to the registered office address. •	
 Whichever form of communication is chosen, the request must:
either set out the statement in full or, if supporting a statement sent by another member, clearly identify the statement which is being supported; and •	
be received by the Company at least one week before the meeting. •	 Dunelm Group plc Annual report & accounts 2009
56
Notes Annual report & accounts 2009 Dunelm Group plc
57
Business review Governance
Notes
Annual General Meeting Financial statements Dunelm Group plc Annual report & accounts 2009
58
Notes Business review Governance Annual General Meeting Financial statements
Form of proxy – Dunelm Group plc
I/We ...............................................................................................................................................................................................................
(FULL NAME(S) IN BLOCK CAPITALS)
of ....................................................................................................................................................................................................................
.......................................................................................................................................................................................................................
(ADDRESS IN BLOCK CAPITALS)
being member(s) of the above named Company, hereby appoint 
................................................................................................................................or failing him the Chairman of the meeting as my/our 
proxy to exercise all or any of my/our rights to attend, speak and vote for me/us and on my/our behalf at the Annual General Meeting of the 
Company to be held at The Hilton Hotel, Leicester on Thursday 12 November 2009 at 10.30 am and at any adjournment of the meeting.
This proxy is in respect of all of the shares registered in my name unless I/We have indicated a smaller number of shares in the box below,
  Please tick here if this appointment is one of multiple appointments being made. For the appointment of more than one proxy please 
refer to Explanatory Note 2.
Please indicate with an ‘X’ in the space below how you wish your vote to be cast. If the form is returned without any indication as to how 
the proxy shall vote on any particular matter the proxy will vote as he or she thinks fit or abstains from voting at his or her discretion. On 
any other business arising at the meeting (including any motion to amend a resolution or to adjourn the meeting) the proxy will act at his 
or her discretion.
 
Signature  .....................................................Date  ...............................2009  Vote
  For Withheld Against
Ordinary business
1. To receive and approve the Directors’ Report and the audited accounts for  
the period ended 4 July 2009 and the report of the auditors
2. To re-elect Geoff Cooper as a Director
3. To re-elect David Stead as a Director
4. To elect Nick Wharton as a Director
5. To declare a dividend on the ordinary shares of 4.0p per share
6. To reappoint KPMG Audit Plc as auditors of the Company and to authorise  
the Directors to fix their remuneration
7. To approve the Directors’ Remuneration Report
Special business
8. To authorise the Directors to allot relevant securities
9. To authorise the Directors to allot equity securities for cash
10. To authorise the Company to purchase its own ordinary shares 
11  To hold general meetings on 14 days’ notice.  
Notes
1. Every holder has the right to appoint some other person(s) of their choice, who need not be a shareholder as his proxy to exercise all or any of his rights, to attend, speak and 
vote on their behalf at the meeting. If you wish to appoint a person other than the Chairman, please insert the name and address of your chosen proxy holder in the space 
provided. If the proxy is being appointed in relation to less than your full voting entitlement, please enter in the box next to the proxy holder’s name the number of shares in 
relation to which they are authorised to act as your proxy. If left blank your proxy will be deemed to be authorised in respect of your full voting entitlement (or if this proxy form 
has been issued in respect of a designated account for a shareholder, the full voting entitlement for that designated account). 
2.  To appoint more than one proxy, (an) additional proxy form(s) may be obtained by contacting the Registrars helpline on 0871 384 2030 or you may photocopy this form. 
Please indicate in the box next to the proxy holder’s name the number of shares in relation to which they are authorised to act as your proxy. Please also indicate by ticking 
the box provided if the proxy instruction is one of multiple instructions being given. All forms must be signed and should be returned together in the same envelope.
3. Unless otherwise instructed above, the proxy will exercise his or her discretion both as to how he or she votes and as to whether or not he or she abstains from voting on any 
resolutions proposed at the meeting.
4. The ‘vote withheld’ option is to enable you to abstain on any particular resolution. This is not a vote in law and will not be counted in the votes ‘for’ and ‘against’ a  
particular resolution.
5. To be valid this form duly signed, together with the power of attorney or other authority (if any) under which it is signed (or a notarially certified copy of such power or 
authority) must be deposited at the offices of the registrars no later than 48 hours before the time for holding the meeting.
6. In the case of a corporation this form must be under its Common Seal or otherwise executed in accordance with Section 36A Companies Act 1985 as amended or it must be 
signed by an officer or attorney duly authorised in writing.
7. Any alterations to this form must be initialled.
8. In the case of joint holders only one need sign but the names of all joint holders must be stated. The vote of the senior holder who tenders a vote shall be accepted to the 
exclusion of the votes of the other joint holders. For this purpose seniority shall be determined by the order in which names stand in the register of members.
9. For details of how to change your proxy instructions or revoke your proxy appointment please see the notice of meeting. If you submit more than one valid proxy 
appointment, the appointment received last before the latest time for receipt of proxies will take precedence.
10. Shares held in uncertificated form (i.e. in CREST) may be voted through the CREST Proxy Voting Service in accordance with the procedures set out in the CREST manual.
11. You may not use any electronic address provided in this proxy form to communicate with the Company for any purposes other than those expressly stated. Second fold
Third fold and tuck in 
First fold
Equiniti 
Aspect House 
Spencer Road 
Lancing 
West Sussex 
BN99 6ZX
BUSINESS REPLY SERVICE
Licence No. SEA 10855
2      
Do not affix Postage Stamps if posting in  
Gt. Britain, Channel Islands, or Northern Ireland. Contents
Business review
01 Highlights
02 Chairman’s statement
03 Chief Executive’s review
07 Finance Director’s review
10 Directors
Governance
12 Corporate governance report
15 Remuneration report
18  Directors’ report and business 
review
22  Statement of Directors’ 
responsibilities
Financial statements
23 Independent Auditor’s report
24 Consolidated income statement
25 Consolidated balance sheet
26  Consolidated cash flow 
statement
27  Consolidated statement of 
changes in equity
28 Accounting policies
32  Notes to the annual financial 
statements
44 Parent Company accounts
Annual General Meeting
53  Notice of Annual General 
Meeting
59 Form of proxy
Dunelm is a fast growing specialist out-
of-town homewares retailer providing 
a comprehensive range of products to 
a wide customer base, under the brand 
name Dunelm Mill.
 Superstores open at 28 June 2008
 Superstores opened after 29 June 2008
Business strategy: These are our key areas of focus 
Growing the store portfolio  Developing the customer offer  
We are ambitious to continue driving Dunelm’s growth by rolling 
out the successful superstore format. Of the existing 85 
superstores as of 15 September 2009, the majority are located in 
the Midlands or the North West of England and coverage of many 
parts of the UK is limited. The opportunity for geographic 
expansion is therefore very significant.
We intend to continue to focus on homewares and our ‘Simply 
Value for Money’ proposition – deep ranges of quality products at 
keen prices, with high availability and supported by friendly 
service. We want to keep strengthening each element of the offer.
Advisers
Corporate Brokers UBS Investment Bank
and Financial Advisers 1 Finsbury Avenue
 London EC2M 2PP
 Tel: 020 7567 8000
 Oriel Securities Limited
 125 Wood Street
 London EC2V 7AN
 Tel: 020 7710 7600
Legal Advisers Allen & Overy LLP
 One Bishops Square
 London E1 6AO
 Tel: 020 3088 0000
Auditors KPMG Audit Plc
 1 Waterloo Way
 Leicester LE1 6LP
 Tel: 0116 256 6000
Principal Bankers Barclays Bank plc
 Midlands Corporate Banking
 PO Box 333
 15 Colmore Row
 Birmingham B3 2WN
 Tel: 0845 755 5555
Registrars Equiniti
 Aspect House
 Spencer Road
 Lancing 
 West Sussex BN99 6DA
 Tel: 0871 384 2030
Financial Public Relations Hogarth Partnership Limited
 No. 1 London Bridge
 London SE1 9BG
 Tel: 020 7357 9477  mill
D u n e l m
mill
D u n e l m
www.dunelm-mill.com
Dunelm Group plc
Fosse Way
Syston
LE7 1NF
Tel: 0116 264 4356
Email: investorrelations@dunelm-mill.co.uk
Annual report & accounts 2009
Dunelm Group plc
Dunelm Group plc  Annual report & accounts 2009