mill
 mill
 Annual report  
& accounts 2008
Dunelm Group plc
www.dunelm-mill.com
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.
01	 Highlights
02	 Chairman’s statement
04	 Chief Executive’s review
06	 Finance Director’s review
10	 Directors and officers
12	 	Corporate governance report
14	 Remuneration report
18	 	Directors’ report and business review
23	 	Statement of Directors’ responsibilities
24	 	Independent Auditors’ report
26	 	Consolidated income statement
27	 	Consolidated balance sheet
28	 	Consolidated cash flow statement
29	 	Consolidated statement of changes  
in equity
30	 Accounting policies
34	 	Notes to the annual financial statements
46	 	Parent Company accounts
Dunelm	Group	plc  Annual report & accounts 2008
56	 	Notice of Annual General Meeting
59	 Form of proxy
Annual General Meeting Financial statements Governance Business review mill
 mill
 Annual report  
& accounts 2008
Dunelm Group plc
www.dunelm-mill.com
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.
01	 Highlights
02	 Chairman’s statement
04	 Chief Executive’s review
06	 Finance Director’s review
10	 Directors and officers
12	 	Corporate governance report
14	 Remuneration report
18	 	Directors’ report and business review
23	 	Statement of Directors’ responsibilities
24	 	Independent Auditors’ report
26	 	Consolidated income statement
27	 	Consolidated balance sheet
28	 	Consolidated cash flow statement
29	 	Consolidated statement of changes  
in equity
30	 Accounting policies
34	 	Notes to the annual financial statements
46	 	Parent Company accounts
Dunelm	Group	plc  Annual report & accounts 2008
56	 	Notice of Annual General Meeting
59	 Form of proxy
Annual General Meeting Financial statements Governance Business review Business 
strategy
 = Superstores open as at 30 June 2007
 = Superstores opened since 1 July 2007
Dunelm’s	 specialist	 homewares	 offering	 has	 powerful	 customer	 appeal	 and	 is	 clearly	 differentiated	 from	 other	 retailers.	 This	 has	 enabled	 the	 chain	 to	 expand	 at	 a	 rapid	 rate.	 Today	 the	 major	 focus	 is	 out-of-town	 retailing	 –	 and	 we	 now	 have	 77	 superstores	 located	 throughout	 the	 UK.
Growing	the	store	portfolio  
We are ambitious to continue driving Dunelm’s 
growth by rolling out the successful superstore 
format. Of the existing 77 superstores as of  
11 September 2008, 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.
 Developing	the	customer	offer	 	 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.
	Exploiting	our	infrastructure  
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.
Growing	Dunelm	Direct	 	 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.
>
>
>
>
Total number of superstores*
77
Total selling space
2.2m sq. ft.
Product lines available in superstores 
(Broad and deep ranges)
> 20,000
Number of employees
> 5,000
These are our key 
areas of focus 
Advisers
Corporate	Brokers UBS Investment Bank
and	Financial	Advisers 1 Finsbury Avenue
 London EC2M 2PP
 Tel: 020 7567 8000
 Landsbanki Securities (UK) Ltd
 Beaufort House
 15 St. Botolph Street
 London EC3A 7QR
 Tel: 020 7426 9000
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
Our business
at a glance
* As at 11 September 2008 Business 
strategy
 = Superstores open as at 30 June 2007
 = Superstores opened since 1 July 2007
Dunelm’s	 specialist	 homewares	 offering	 has	 powerful	 customer	 appeal	 and	 is	 clearly	 differentiated	 from	 other	 retailers.	 This	 has	 enabled	 the	 chain	 to	 expand	 at	 a	 rapid	 rate.	 Today	 the	 major	 focus	 is	 out-of-town	 retailing	 –	 and	 we	 now	 have	 77	 superstores	 located	 throughout	 the	 UK.
Growing	the	store	portfolio  
We are ambitious to continue driving Dunelm’s 
growth by rolling out the successful superstore 
format. Of the existing 77 superstores as of  
11 September 2008, 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.
 Developing	the	customer	offer	 	 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.
	Exploiting	our	infrastructure  
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.
Growing	Dunelm	Direct	 	 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.
>
>
>
>
Total number of superstores*
77
Total selling space
2.2m sq. ft.
Product lines available in superstores 
(Broad and deep ranges)
> 20,000
Number of employees
> 5,000
These are our key 
areas of focus 
Advisers
Corporate	Brokers UBS Investment Bank
and	Financial	Advisers 1 Finsbury Avenue
 London EC2M 2PP
 Tel: 020 7567 8000
 Landsbanki Securities (UK) Ltd
 Beaufort House
 15 St. Botolph Street
 London EC3A 7QR
 Tel: 020 7426 9000
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
Our business
at a glance
* As at 11 September 2008 2008 £391.8m
£354.7m
£315.2m
£282.5m
2007
2006
2005
2008 £49.4m
£40.8m
£38.2m
£36.2m
2007
2006
2005
2008 £49.1m
£37.8m
£38.0m
£37.6m
2007
2006
2005
2008 £45.0m
£34.7m
£24.1m
£30.1m
2007
2006
2005
Business review
Dunelm Group plc Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
Highlights
Operational
89 stores at 28 June 2008  
(76 superstores)
8 new superstores opened in the year
Average superstore selling area  
of 28,000 sq. ft.
Around 20,000 lines in a superstore – 
broad and deep ranges
Expansion of webstore to offer in excess 
of 9,000 lines
 
Financial
Revenue increase 10.5% in FY 2007 /08
Operating margin 12.6%
Operating cash flow £45m after  
interest and tax
£392m Revenue
£49.4m Operating profit*
£49.1m Profit before tax*
£45.0m Net cash from operations
*  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. 02/03 
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Geoff Cooper Chairman
We continue to have great 
faith in our ‘Simply value for 
money’ proposition.
Once again Dunelm has delivered record sales and profits, 
despite the difficult conditions in which the business has had 
to operate. 
Tough trading conditions allow strong companies to 
prosper at the expense of weaker competitors. I believe that 
this will be the case for Dunelm. We continue to have great 
faith in our ‘simply value for money’ proposition and we 
expect customers to become increasingly aware of the 
value we offer.
I am pleased to report that we have converted profits into 
cash very successfully. As a result we have been able to 
reduce net debt significantly during the period so that the 
balance sheet is now substantially unleveraged. This means 
we have the financial strength to face difficult times with 
confidence, and the flexibility to take advantage of 
opportunities as they arise – such as the acquisition 
of the Dorma brand which we announced shortly after 
the year-end, as well as the ongoing expansion of the 
store portfolio.
The business has enjoyed a high level of stability in terms of 
Board membership for a number of years. However, during 
the year Bill Adderley has stepped down from his position as 
Non-Executive Director after reaching his 60th birthday. I am 
delighted we are able to recognise his role in establishing 
Dunelm by confirming his honorary position of Founder 
and Life President.
Geoff Cooper
Chairman
11 September 2008
Chairman’s 
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Business review
Dunelm Group plc Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
Simply 
value for 
money... 04/05 
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Chief Executive’s 
review
Will Adderley Chief Executive
We remain as committed 
as ever to growing the 
superstore portfolio as 
rapidly as we can towards 
our medium term target of 
150 superstores. 
Trading
I am delighted to report continued successful growth of the 
Group during the last financial year. Our overall sales 
increased by 10.5%, including growth of 2.5% in like-for-like 
sales (calculated by comparing stores which have traded 
throughout the last two financial years). 
The market environment became increasingly difficult during 
the year. 
I firmly believe that Dunelm remains the leading multiple 
homewares specialist in the UK. This has been recognised in 
surveys by Verdict, the specialist market research agency. In 
December 2007 , they reported that Dunelm is Britain’s third 
favourite shop behind only John Lewis and Waitrose. More 
recently, their research identified Dunelm as one of the four 
retailers which engender the highest levels of customer 
loyalty. We intend to maintain this success by pursuing the 
four strategic priorities which we outlined two years ago at 
the time of our flotation.
Priority 1 – growing the store portfolio
We opened eight new superstores in the year, at Aberdeen, 
Shoreham, Peterborough, Dumfries, Eastbourne, Leeds, 
Bournemouth and Sittingbourne. We continue to receive 
strongly positive customer reaction to all of our new 
openings and are pleased with trading in all of these 
locations. Altogether the chain of 76 superstores as at the 
year-end provided over 2.2m square feet of selling space.
 
We remain as committed as ever to growing the superstore 
portfolio as rapidly as we can towards our medium-term 
target of 150 superstores, without compromising our long-
term financial returns. We have opened a further store since 
the year-end in Huddersfield and are contractually 
committed to six more units which are due to open this 
financial year or early next. We also have numerous further 
opportunities under negotiation. With few out-of-town 
retailers currently in the market for adding space, we believe 
that we are well positioned to achieve a solid pipeline of 
openings in the next few years. 
Whilst expanding our superstore chain, we continue to 
look for opportunities to relocate our older high street shops. 
The superstore opening in Peterborough replaced our high 
street shop there, leaving us with 13 high street stores; we will 
be relocating our Worcester high street store early in 2009.
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 great prices, unrivalled choice, excellent 
quality, great product availability and friendly service. 
One of the ways in which we are able to demonstrate the 
quality of the ranges we offer is through branding. We 
recently announced the acquisition of worldwide rights to 
Dorma, the internationally recognised bedlinen brand, from 
Dawson International for a consideration of £5m. We see this 
as a great way to underline the quality of our merchandise, 
as well as providing a strong point of difference compared 
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Business review
Dunelm Group plc Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
Simply focused
We have commenced a significant investment programme 
to improve the shopping environment in our older stores. We 
have completed three refits so far 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.
Priority 3 – exploiting our infrastructure
Following the roll-out of SAP stock management to all of our 
stores in the last twelve months we have had full visibility of all 
stock throughout the chain. We have used this to develop a 
chain-wide focus on the availability of key lines and we have 
seen a noticeable improvement in availability as a result.
Looking ahead we will continue to exploit our enhanced 
systems and information in various ways, for example in  
the areas of range management and simplification of  
in-store tasks.
Priority 4 – growing Dunelm Direct
Our webstore has been expanded to offer over 9,000 
products. Whilst this channel remains small relative to the 
business as a whole, sales are growing and we see an 
important future here. We are therefore investing in a new 
software platform for the on-line business which should be 
implemented during the current financial year, and which will 
offer a big improvement in the on-line shopping experience.
Outlook
In the early weeks of our new financial year, we have 
continued to face difficult trading conditions. For the 10 
weeks to 6 September, total sales growth has been 3.1% and 
like-for-like sales have declined by 5.7%; last year’s equivalent 
figures were +12.6% and +7 .2% respectively. Gross margin has 
remained strong, with an increase of 140 bps year on year 
driven by higher levels of promotional product and earlier 
introduction of new lines after our summer sale.
Against a very challenging market background, we are 
satisfied with these figures and believe that we continue to 
gain market share on a like-for-like basis. We naturally remain 
cautious about the medium-term outlook, but the current 
market conditions provide us with clear opportunities to 
grow and strengthen our business relative to the competition. 
Will Adderley
Chief Executive
11 September 2008 06/07 
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Finance Director’s 
review
David Stead Finance Director
Net debt at the year-end was 
just £7 .2m. This is an excellent 
position from which to fund 
future growth. 
Operating result
Sales in the financial year were £391.8m, an increase of 
10.5%. Like-for-like growth was 2.5%.
We continued to benefit from our increased scale and 
buying power allowing us to achieve a 60 basis points 
improvement in buying margin.
Operating costs remained well controlled, with an overall 
0.2% reduction in costs in like-for-like stores. Non-store costs 
grew by £2.1m, including additional investment in advertising 
during the peak winter trading period.
During the year, we completed the roll-out of our new stock 
system to all stores, giving us for the first time full visibility of all 
stock in the business at an item level. On the basis of this 
new information, various actions have been taken to clear 
old and excess stocks. The total charge for stock write-downs 
in the year was £5.9m.
Operating profit was £49.4m, an increase of 12.4% on an 
underlying basis (i.e. after adjusting last year’s comparative 
figure to add back non-recurring items, primarily IPO costs).
EBITDA
Earnings before interest, tax, depreciation and amortisation 
were £58.9m. This has been calculated as operating profit 
(£49.4m) plus depreciation and amortisation (£9.5m) and 
represented a 10.1% increase on the previous year on an 
underlying basis. The EBITDA margin achieved, at 15.0% of 
sales, demonstrates the continuing strength of Dunelm’s 
business model.
Financial items and PBT
The net interest charge for the year was £0.3m compared 
with £3.0m in the prior year, reflecting the Group’s strong 
cash generation.
In the year to June 2007 , the Group suffered foreign 
exchange losses in respect of US dollar holdings and forward 
exchange contracts which amounted to £1.4m. We stated at 
this time last year that we would no longer take out forward 
exchange contracts and that we would reduce our US dollar 
holdings. With this reduced exposure and a relatively 
consistent exchange rate ($2.00 at last year-end, $1.99 this), 
foreign exchange losses in the most recent financial year 
amounted to £0.1m.
After accounting for interest and foreign exchange impacts, 
profit before tax for the year amounted to £49.1m, an 
increase of 19.8% on an underlying basis (29.9% on a 
statutory basis).
Tax, PAT and EPS
The tax charge for the year was 31.5% of PBT. 
Basic EPS on an underlying basis (i.e. excluding non-
recurring items from last year’s calculation) shows a rise 
of 21.7% to 16.8p, with fully diluted EPS increasing 21.3% to 
16.6p; these figures are respectively 36.6% and 36.1% above 
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Business review
Dunelm Group plc Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
Simply delivering
Implementation of IFRS
IFRS was fully implemented at Group level prior to our IPO in 
2006. In addition we have now incorporated IFRS into the 
accounts of each member Company in the Group. The 
impact of IFRS conversion on the Parent Company accounts 
is shown on pages 54 to 55 of this report. 
Factors affecting FY09
The current financial year will end on 4 July 2009, giving a 
53 week period. We will present results for the year on both 
a 52 week and 53 week basis.
Twenty four stores are scheduled to have a rent review in the 
coming year.
Major IT systems investments will become fully amortised by 
April 2009; the related amortisation charge of £2.0m per year 
will cease at that date.
The recent investment of £5.0m to acquire the rights to the 
Dorma brand will be amortised against profits over five years, 
beginning with financial year 2009.
The headline rate of corporation tax will reduce by 
1.5 percentage points.
Capital expenditure
Gross capital expenditure in the most recent financial year 
was £18.0m, up from £15.1m last year. This included one 
significant freehold store acquisition as well as the fit-out 
costs for the other new stores opened in the year, and one 
store refit.
Working capital
Stocks increased by just £0.1m during the financial year, 
despite the new store openings. Net working capital was 
reduced by £0.7m compared with the start of the year 
(net working capital consisting of stocks; trade and other 
receivables; and current liabilities (excluding interest and 
current tax)).  08/09 
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Finance Director’s 
review continued
Cash position
The Group’s profile of strong cash generation continued in 
the last financial year. Net cash generated from operations, 
after interest and tax, was £45.0m (an increase of 29.4%) and 
net debt at the year-end was just £7 .2m. This is an excellent 
position from which to fund future growth.
Dividend
Our policy is to pay dividends such that dividend cover is in 
the range 2.5x to 3.0x. 
An interim dividend of 2.0p was paid in April 2008. It is 
proposed to pay a final dividend of 3.5p per share. The total 
dividend of 5.5p gives dividend cover of 3.0x.
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:
  FY08 FY07
Like-for-like sales growth  +2.5% +6.1%
Change in gross margin  +60bp +40bp
Number of new store openings  8 4
Key risks
The Directors also consider key risks to the business in the 
areas of strategic, operational and financial risks.
Strategic risks
Competition in the homewares market has strengthened in 
recent years. Further new entrants and/or new formats are 
anticipated. 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. For example, we have recently increased the 
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Business review
Dunelm Group plc Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
Like all businesses, we face the risk of increased costs from 
compliance with new laws and regulations. In addition, 
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 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, with increasing pressures on retailers we 
anticipate greater availability of space in 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 would constitute a significant threat to 
the business, at least in the short-term. We have a disaster 
recovery plan in place 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 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.
Financial risks
The Group has a committed bank facility under a revolving 
loan agreement with Lloyds TSB Bank plc of £50m expiring in 
September 2011, and an uncommitted overdraft facility of 
£3m with Barclays Bank Plc. These facilities are considered to 
provide sufficient funding for the Group’s operations. As at  
28 June 2008, the total of committed bank facilities 
exceeded net debt by £42.8m.
With net debt of £7 .2m at the year-end and on a declining 
trend, we do not consider our direct exposure to interest rate 
fluctuations to be significant.
Surplus funds are placed on deposit with counter parties 
approved by the Board. A credit rating of at least AAA  
is required.
David Stead
Finance Director
11 September 2008 www.dunelm-mill.com
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Founder  and  life  President
Bill Adderley
Founder and Life President
Bill Adderly 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. Governance
Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
1. 2.
3. 4. 5.
1. Geoff Cooper
 Non-Executive Chairman
Geoff Cooper, aged 54, joined the Group 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.
2. Marion Sears
 Senior Independent Non-Executive Director
Marion Sears, aged 45, joined the Group in July 2004. 
Chairman of the Remuneration and Nominations 
Committees and Member of the Audit Committee. 
She is Non-Executive Director of Zetar plc and is a 
member of PricewaterhouseCoopers Advisory Panel.
3. Will Adderley
 Chief Executive
Will Adderley, aged 36, 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. 
4. David Stead
 Finance Director
David Stead, aged 50, 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..
5. Simon Emeny
 Independent Non-Executive Director
Simon Emeny, aged 42, joined the Group in June 2007 . 
He is a 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.
Directors www.dunelm-mill.com
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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 2006.
Throughout the financial year the Group has complied with 
the Combined Code except that Geoff Cooper, Company 
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.
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 Bill 
Adderley was absent from two Board meetings prior to his 
retirement and Simon Emeny was absent from one 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. 
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 and 
Simon Emeny. 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 and Simon Emeny 
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 is chaired by Geoff Cooper, the other 
members are 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 April 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 March;
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.
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> Governance
Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
The Remuneration  Committee is chaired by Marion Sears, 
the other members are Geoff Cooper and Simon Emeny.  
The Chief Executive normally attends by invitation.
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 twice with full 
attendance and:
determined the pay reviews and incentive arrangements 
for Executive Directors; 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 14.
The Nominations  Committee is chaired by Marion Sears, 
the other members are Geoff Cooper and Simon Emeny.
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 AGM).
During the year the committee met three times with full 
attendance. 
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 
and on retail sector trends.
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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.
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 
October 2005).
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 AGM to meet with 
shareholders and answer their questions. www.dunelm-mill.com
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Remuneration  report
The Directors present their Remuneration Report for the 
period ended 28 June 2008.
Introduction
The Remuneration Committee has prepared this report in 
accordance with the requirements of Schedule 7A to the 
Companies Act 1985, 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 24.
Non-audited information
Remuneration committee and advisers
During the year ended 28 June 2008, 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.
 
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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 28 June 2008, EPS performance exceeded 
budget and, taking into account Executive Directors’ 
performance against job objectives, the committee 
awarded an annual bonus to Will Adderley of £118,950 
and to David Stead of £79,950. Governance
Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
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 2007 . These will vest to the extent that the 
performance targets are met based on the Group’s results 
for the years ending 30 June 2009 and 2010 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 the 3 year 
plan period results are available to determine whether 
performance conditions have been satisfied. In respect 
of awards made to date, 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%. The award will vest on a straight-line basis 
between those two points. There will be no retesting.
As explained at IPO, the Remuneration Committee reviews 
the LTIP targets annually. In the light of current economic 
conditions, the Committee has chosen to amend the EPS 
targets used in the 2008 LTIP which will vest in 2011. This is 
because the UK retail market in which the Group is operating 
has changed significantly and the Committee believes  
that a corresponding change in LTIP hurdles is therefore  
also appropriate.
The target set for maximum vesting of shares under the 
2006 and 2007 LTIPs requires EPS growth of RPI + 20% 
annually. The Committee believes this is one of the most 
demanding targets in the UK market and will scale this back 
to RPI + 12% for the 2008 LTIP . Nevertheless, it remains the 
Committee’s intention that targets should remain 
demanding when compared with competitors.
Other share options
In 2003 and 2004 David Stead was granted options over a 
total of 600,000 shares under the Approved and Executive 
share option schemes. In December 2006 David exercised 
400,000 options including all those held under the Approved 
scheme. He exercised the remaining 200,000 options in 
March 2008. The Remuneration Committee does not intend 
to make any further option grants to Executive Directors 
under these schemes.
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 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 service 
contract is 12 months from either party. The notice period to 
terminate David Stead’s service contract is six months from 
either party, with the notice period increasing by one month 
for each year of employment in excess of one year, up to a 
maximum of 12 months notice (which will be reached in 
September 2009). 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 11 months
Geoff Cooper 08.10.04 25 months 3 months
Marion Sears 22.07 .04 22 months 1 month
Simon Emeny 25.06.07 23 months 1 month 0
18.10.06 18.12.06 18.02.07 18.04.07 18.06.07 18.08.07 18.10.07 18.12.07 18.02.08 18.04.08 18.06.08
20
40
60
80
100
120
140
160
Dunelm FTSE All Share General Retail Index FTSE Small Cap Index
Total shareholders (nos.) return
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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 and FTSE SmallCap Index. 
The Remuneration Committee has chosen these two  
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.
Remuneration  report  continued
The shares traded in the range 127 .25p to 215p during the year, and stood at 127 .25p at 28 June 2008. Governance
Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
Audited information
Details of Directors’ remuneration
Details of individual Directors’ remuneration in respect of the year ended 28 June 2008 are as follows:
 
    Contribution 
 Base salary  Vehicle Taxable to personal Annual 2008 2007 
 or fees  allowance benefits pension Bonus Total Total 
 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Executive  Directors       
Will Adderley 305 10 1 waived 119 435 388
David Stead 205 10 waived 18 80 313 304
Non-Executive  Directors
Bill Adderley 3 – – – – 3 3
Geoff Cooper 80 – – – – 80 75
Marion Sears 30 – – – – 30 25
Simon Emeny 25 – – – – 25                  –
Total 648 20 1 18 199 886 795
Bill Adderley’s remuneration has been donated to charity at his direction by the Group.
Will Adderley has waived pension contributions totalling £17 ,850 and David Stead has 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:
      End of Market Price 
    Date of Share  options performance of Shares at 
Director    award at  28  June  2008  period date of award
Will Adderley    March 2007 151,304 June 2009 227p
    Sept 2007        190,130 June 2010 193p
David Stead    March 2007 99,130 June 2009 227p
    Sept 2007 127,792 June 2010 193p
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  28  June during during during price per at date of Vesting Expiry 
Director option 2007 2008 period period period share exercise date date
Will Adderley SAYE – 6,114 6,114 – – 157p – Jan 2011 June 2011
          
David Stead Executive 200,000 – – 200,000 – 46p 156p – –
 SAYE 6,176 6,176 – – – 153p – Jan 2010 June 2010
The gain made on exercise of options during the year by David Stead was £220,500.
Approval
This report was approved by the Board of Directors on 11 September 2008 and signed on its behalf by:
Marion Sears
Chairman of Remuneration Committee
11 September 2008 www.dunelm-mill.com
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Directors’  report  and  business  review
The Directors present their report together with the audited 
financial statements for the year ended 28 June 2008. 
Together with certain information in the reports from the 
Chief Executive and the Finance Director on pages 4 to 9 
above which are incorporated into this report by reference, 
this report satisfies the requirements of the Companies Act 
1985 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 4  
to 5 and the Finance Director’s Review on pages 6 to 9.
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 arm’s 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 or other rights and 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 LR 
11.1.7R(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 any 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 of the 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 upon 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 £33.7m 
(2007: £24.6m). The results are discussed in greater detail in 
the Finance Director’s review on pages 6 to 9.
A final dividend of 3.5p per share (2007: 3.0p) is proposed in 
respect of the year ended 28 June 2008 to add to an interim 
dividend of 2.0p per share paid on 23 April 2008 (2007: 0.8p 
per share reflecting post flotation period only). The final 
dividend will be paid on 5 December 2008 to shareholders 
on the register at 21 November 2008.
Directors
Details of the Directors in office at the year end are set out on 
page 11. Bill Adderley resigned from the Board with effect 
from 29 February 2008. Governance
Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
Directors serving at the year end and their interests in the 
shares of the Company were:
  At  28  June At 30 June 
  2008  2007 
  1p  ordinary  1p Ordinary 
  shares shares
WL Adderley  50,000,000 50,000,000
D Stead  430,085 230,085
G Cooper  181,611 181,611
M Sears  100,000 100,000
S Emeny  5,000 5,000
There were no changes in the Directors’ shareholdings 
between the year end and 11 September 2008.
Details of share options held by Directors at the year end are 
given in the Remuneration Report.
Will Adderley and Marion Sears are retiring by rotation at the 
2008 Annual General Meeting and will be offering 
themselves for re- election. Biographical details of these 
Directors are set out on page 11 and details of their service 
contracts are in the Remuneration Report on page 15.
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 increased 
during the period due to the exercise of share options by 
employees. Details are set out in the Remuneration Report 
on page 15 and in notes 18 and 20 to the financial 
statements. 
During the period the Company purchased 1,195,000 
ordinary shares and held them in treasury. 243,500 shares 
were transferred to Directors and employees on the exercise 
of share options. The remaining shares are held by the 
Company for the purpose of delivery to employees under 
employee share schemes. At 28 June 2008 the Company 
held 951,500 shares in treasury.
Substantial shareholders
At 11 September 2008 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
Employee involvement
The Group is an equal opportunities employer. It recognises 
the social and statutory duties to employ disabled persons 
and pursues a policy of providing, wherever possible, the 
same employment opportunities to all persons regardless of 
disability, race, religion, gender, colour, nationality, sex, 
sexual orientation 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.
Disabled employees
The Group recognises its obligations towards disabled 
people and endeavours to provide employment where 
possible having regard to the physical demands of the 
Group’s operations and the abilities of the disabled persons. 
In the event of employees becoming disabled, every effort is 
made to retrain them in order that their employment with the 
Group may continue. It is the policy of the Group that 
training, career development and promotion opportunities 
should be available to all employees and this is reflected in 
its Equal Opportunities Policy.
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 28 June 2008 
was 27 days (2007: 26 days).
 
Corporate social responsibility
The Group recognises its duty to behave responsibly to all 
stakeholders. The Board places particular emphasis on the 
health and safety of customers and employees; on ethical 
sourcing; on environmental issues; and on charitable 
contributions.
The Chief Executive is required to report at each Board 
meeting on health and safety matters. All serious accidents 
(i.e. those which are reportable under legislation) are 
investigated and corrective action taken, e.g. additional 
training, where necessary. The Group’s Health and Safety 
Officer also plays a key role in ensuring that stores and other 
business premises remain safe places of work for staff, and 
safe places for customers to visit. www.dunelm-mill.com
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Directors’  report  and  business  review  continued
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.
The Group has an Environmental Committee, comprising 
a number of senior managers, which reviews the 
environmental impact of business activities and sets targets 
for improvement. These cover the following specific areas:
increasing the proportion of waste which is recycled;
reducing the plastic element of product packaging;
reducing fuel consumption per carton delivered to stores;
reducing the volume of carrier bags used; and
reducing energy consumption across all locations.
During the year good progress was made in all of the above 
areas, ahead of our internal target of a 10% improvement on 
all measures.
The Group’s charity of the year in the last financial year was 
Kids Kidney Research. 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 28 June 2008 was £46,000 (2007: 
£32,000). The Group made no donations to political parties 
in either financial year.
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 made appropriate enquiries and formed 
a judgement at the time of approving the financial 
statements that there is a reasonable expectation that the 
Group has 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.
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 
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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  
6 November 2008 at 10.30 am at The Hilton Hotel, Leicester. 
Special business at the Annual General Meeting will be:
requesting authority, pursuant to article 6 of the 
Company’s Articles of Association, to issue shares to the 
value of the lesser of the unissued ordinary share capital 
of the Company, and one third of the issued ordinary 
share capital of the Company. The nominal amount of 
shares covered by this authority is £665,466 (66,546,686 
ordinary shares), 33.3% of the issued share capital at  
11 September 2008. At that date the Company also  
held 951,000 ordinary shares in treasury, which  
represents approximately 0.48% of the total ordinary  
share capital. This authority will lapse at the 2009 Annual 
General Meeting or, if earlier, on 29 December 2009.  
The Directors have no present intention to exercise this 
authority except to issue shares pursuant to the Group’s 
employee share schemes;
requesting authority to distribute ordinary shares to the 
value of £100,308 (10,030,870 ordinary shares), which 
constitutes 5% of the Company’s issued share capital 
(excluding treasury shares) at 11 September 2008, without 
offering them to existing shareholders. This authority will 
lapse at the 2009 Annual General Meeting or, if earlier, on 
29 December 2009. 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 to buy up to 
19,000,000 shares, 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; and
adopting new Articles of Association. Details of the 
proposals are set out below.
Proposed changes to the Articles of Association
The proposed new articles (New Articles) update the 
Company’s current Articles of Association (Current 
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Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
Articles) primarily to take account of changes in English 
Company law brought about by certain provisions of the 
Companies Act 2006 (CA 2006) that are in force by or on 
1 October 2008.
The principal changes introduced in the New Articles are set 
out below. Other changes, which are of a minor, technical 
or clarifying nature have not been noted.
Articles which duplicate statutory provisions
Provisions in the Current Articles which replicate provisions 
contained in the CA 2006 are in the main amended to bring 
them into line with the CA 2006.
Extraordinary resolutions
The Current Articles contain a provision that, where for any 
purpose an ordinary resolution is required, a special or 
extraordinary resolution is also effective and that, where an 
extraordinary resolution is required, a special resolution is also 
effective. This provision is being amended as the concept of 
extraordinary resolutions has not been retained under the  
CA 2006.
Convening and notice of general meetings
It is proposed that the provisions in the Current Articles 
dealing with the convening of general meetings and the 
length of notice required to convene general meetings be 
amended to conform to the new provisions in the CA 2006. 
In particular, a general meeting (other than an Annual 
General Meeting) to consider a special resolution can be 
convened on 14 days’ notice whereas previously 21 days’ 
notice was required.
Quorum at a general meeting
The CA 2006 provides that in general terms the quorum for a 
general meeting be calculated by reference to the numbers 
of ‘qualifying persons’ who are present at the meeting, 
which includes an individual who is a member of the 
Company, a person authorised under section 323 of the CA 
2006 to act as the representative of a corporation, and a 
person appointed as proxy of a member. As before, it is 
proposed that the quorum for a general meeting will be two 
but, in line with the CA 2006, the New Articles make clear 
that there will be no double counting for qualifying persons 
who are representatives of the same corporation or proxies 
of the same member.
Proxies
Under the CA 2006, proxies are entitled to speak at general 
meetings and to vote on a show of hands. The CA 2006 
allows multiple proxies to be appointed provided that each 
proxy is appointed to exercise the rights attached to a 
different share or shares held by the shareholder. The New 
Articles reflect these new rules.
Vacation of office of Director
The New Articles tighten up the circumstances in which a 
Director must vacate office where the Director has become 
physically or mentally ill. The changes apply a test of whether 
in the opinion of a medical practitioner the Director is 
rendered incapable by his illness of acting as a Director for 
more than three months or is personally prevented from 
exercising any powers or rights by a court order.
Directors’ interests
The CA 2006 sets out Directors’ general duties. The provisions 
largely codify the pre-existing law, but with some changes. 
Under the CA 2006, a Director must avoid a situation where 
he has, or can have, a direct or indirect interest that conflicts, 
or possibly may conflict with the Company’s interests. The 
requirement is very broad and could apply, for example, if a 
Director becomes a Director of another Company or a 
trustee of another organisation. The CA 2006 allows Directors 
of public Companies to authorise conflicts and potential 
conflicts where the Articles of Association contain a provision 
to this effect. The CA 2006 also allows the Articles of 
Association to contain other provisions for dealing with 
Directors’ conflicts of interest to avoid a breach of duty. The 
New Articles give the Directors authority to approve such 
situations and to include other provisions to allow conflicts of 
interest to be dealt with in a similar way to the current 
position.
The CA 2006 and the New Articles contain safeguards which 
will apply when Directors decide whether to authorise a 
conflict or potential conflict. These include, first, only 
independent Directors (i.e. those who have no interest in the 
matter being considered) will be able to take the relevant 
decision, and second, in taking the decision the Directors 
must act in a way they consider, in good faith, will be most 
likely to promote the Company’s success. The Directors will 
be able to impose limits or conditions when giving 
authorisation or subsequently if they think this is appropriate.
The New Articles include provisions relating to confidential 
information, attendance at Board meetings and availability 
of Board papers to protect a Director from being in breach of 
duty if a conflict of interest or potential conflict of interest 
arises. These provisions will only apply where the position 
giving rise to the potential conflict has previously been 
authorised by the Directors.
One of the Company’s Directors, Will Adderley, is also a 
major shareholder of the Company and connected to other 
major shareholders. Subject to approval of the New Articles 
by shareholders, the independent Directors intend to 
authorise this conflict provided that Will Adderley continues 
to abide by the Relationship Agreement between himself, 
other major shareholders and the Company which was 
entered into on flotation of the Company.  www.dunelm-mill.com
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It is the Board’s intention to report annually on the 
Company’s procedures for ensuring that the Board’s powers 
of authorisation of conflicts are operated effectively and that 
the procedures have been followed.
Electronic and web communications
A resolution was passed at the Company’s AGM in 2007 
enabling the Company to take advantage of provisions in 
the CA 2006 to communicate with members by electronic 
and/or website communications. The relevant provisions are 
incorporated into the New Articles. So far the Company has 
not implemented this. If it decides to do so, each member 
must be asked individually to agree that the Company may 
send or supply documents or information to him by means 
of a website, and the Company must either have received a 
positive response or have received no response within the 
period of 28 days beginning with the date on which the 
request was sent. The Company will notify the member 
(either in writing, or by other permitted means) when a 
relevant document or information is placed on a website 
and a member can always request a hard copy version of 
the document or information.
Directors’ indemnities
The CA 2006 has widened the powers of a company to 
indemnify Directors. A company can now indemnify a 
Director of a company that is a trustee of an occupational 
pension scheme against liability incurred in connection with 
the Company’s activities as trustee of that scheme. This is 
reflected in the New Articles. The opportunity is also being 
taken to clarify that, subject to the applicable legislation, the 
Company may grant indemnities to Directors of associated 
companies.
Copies of the New Articles and the Relationship Agreement 
will be available for inspection:
during normal business hours at the Company’s 
registered office and at the offices of Allen & Overy LLP, 
One Bishops Square, London, E1 6AD, from the date of 
this circular until the close of the AGM; and 
at the AGM for at least 15 minutes before and during  
the meeting.
The Notice of the Annual General Meeting is set out on 
pages 56 to 58.
Auditors
KPMG Audit Plc offer themselves for reappointment as 
auditors in accordance with section 385 of the Companies 
Act 1985.
By order of the Board
David Stead
Company Secretary
11 September 2008
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Directors’  report  and  business  review  continued Governance
Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
Statement  of  Directors’  responsibilities
in  respect  of  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 also in accordance with IFRSs as adopted by 
the EU.
The Group and Parent Company financial statements are 
required by law and IFRSs as adopted by the EU to present 
fairly the financial position and the performance of the 
Group; the Companies Act 1985 provides in relation to such 
financial statements that references in the relevant part of 
that Act to financial statements giving a true and fair view 
are references to their achieving a fair presentation.
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.
 
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The Directors are responsible for keeping proper accounting 
records that 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 1985. They have general responsibility for 
taking such steps as are reasonably open to them to 
safeguard the assets of the Group and to prevent and 
detect fraud and other irregularities.
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.
The Directors confirm that to the best of their knowledge:
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
the report of the Directors 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.
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Independent  Auditors’  report  to  the  members  of  Dunelm  Group  plc
We have audited the Group and Parent Company financial 
statements (‘financial statements’) of Dunelm Group plc for 
the 52 week period ended 28 June 2008 which comprise 
a Consolidated Income Statement, the Consolidated and 
Parent Company Balance Sheets, the Consolidated and 
Parent Company Cash Flow, the Consolidated and Parent 
Company Statement of Changes in Equity and the related 
notes. These financial statements have been prepared under 
the accounting policies set out therein. We have also audited 
the information in the Directors’ Remuneration Report that is 
described as having been audited.
This report is made solely to the Company’s members, as a 
body, in accordance with section 235 of the Companies Act 
1985. Our audit work has been undertaken so that we might 
state to the Company’s members those matters we are 
required to state to them in an auditor’s report and for no 
other purpose. To the fullest extent permitted by law, we do 
not accept or assume responsibility to anyone other than the 
Company and the Company’s members as a body, for our 
audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and auditors
The Directors’ responsibilities for preparing the Annual Report, 
Directors Remuneration Report and the Group and Parent 
Company financial statements in accordance with 
applicable law and International Financial Reporting 
Standards (IFRSs) as adopted by the European Union (EU), 
are set out in the Statement of Directors’ Responsibilities on 
page 23.
Our responsibility is to audit the financial statements and the 
part of the Directors’ Remuneration Report to be audited in 
accordance with relevant legal and regulatory requirements 
and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial 
statements give a true and fair view and whether the financial 
statements and the part of the Directors’ Remuneration 
Report to be audited have been properly prepared in 
accordance with the Companies Act 1985, and as regards 
the Group financial statements, Article 4 of the IAS Regulation. 
We also report to you whether in our opinion the information 
given in the Directors’ Report is consistent with the financial 
statements. The information given in the Directors’ Report 
includes that specific information presented in the Chairman’s 
Statement, the Chief Executive’s Review and the Finance 
Director’s Review that is cross referred from the Business Review 
section of the Directors’ Report. In addition we report to you if, 
in our opinion, the Company has not kept proper accounting 
records, if we have not received all the information and 
explanations we require for our audit, or if information 
specified by law regarding Directors’ remuneration and other 
transactions is not disclosed.
We review whether the Corporate Governance Statement 
reflects the Company’s compliance with the nine provisions of 
the 2006 Combined Code specified for our review by the 
Listing Rules of the Financial Services Authority, and we report 
if it does not. We are not required to consider whether the 
Board’s statements on internal control cover all risks and 
controls, or form an opinion on the effectiveness of the 
Group’s corporate governance procedures or its risk and 
control procedures.
We read the other information contained in the Annual 
Report and consider whether it is consistent with the audited 
financial statements. We consider the implications for our 
report if we become aware of any apparent misstatements or 
material inconsistencies with the financial statements. Our 
responsibilities do not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with International 
Standards on Auditing (UK and Ireland) issued by the Auditing 
Practices Board. An audit includes examination, on a test 
basis, of evidence relevant to the amounts and disclosures in 
the financial statements and the part of the Directors’ 
Remuneration Report to be audited. It also includes an 
assessment of the significant estimates and judgements 
made by the Directors in the preparation of the financial 
statements, and of whether the accounting policies are 
appropriate to the Group’s and Company’s circumstances, 
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the 
information and explanations which we considered 
necessary in order to provide us with sufficient evidence to 
give reasonable assurance that the financial statements and 
the part of the Directors’ Remuneration Report to be audited 
are free from material misstatement, whether caused by fraud 
or other irregularity or error. In forming our opinion we also 
evaluated the overall adequacy of the presentation of 
information in the financial statements and the part of the 
Directors’ Remuneration Report to be audited. Financial  statements
Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
Opinion
In our opinion:
the Group financial statements give a true and fair view, in 
accordance with IFRSs as adopted by the EU, of the state 
of the Group’s affairs as at 28 June 2008 and of its profit for 
the year then ended; 
the Parent Company financial statements give a true and 
fair view, in accordance with IFRSs as adopted by the EU as 
applied in accordance with the provisions of the 
Companies Act 1985, of the state of the Parent Company’s 
affairs as at 28 June 2008;
the financial statements and the part of the Directors’ 
Remuneration Report to be audited have been properly 
prepared in accordance with the Companies Act 1985 
and, as regards the Group financial statements, Article 4 of 
the IAS Regulation; and
the information given in the Directors’ Report is consistent 
with the financial statements.
KPMG Audit Plc
Chartered Accountants
Registered Auditor
Leicester LE1 6LP
1 1 September 2008
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Consolidated  income  statement
For the 52 weeks ended 28 June 2008
      2008 2007  
     Note £’000 £’000
Revenue     1 391,795 354,721
Cost of sales      (217,018) (198,537)
Gross  profit      174,777 156,184
Operating costs     3 (125,346) (115,369)
Operating  profit     2 49,431 40,815
Financial income     5 1,075 503
Financial expenses     5 (1,365) (3,492)
Profit  before  taxation      49,141 37 ,826
Taxation     6 (15,470) (13,198)
Profit  for  the  period      33,671 24,628
Earnings per ordinary share – basic     8 16.8p 12.3p
Earnings per ordinary share – diluted     8 16.6p 12.2p
Dividend proposed per ordinary share     7 3.5p 3.0p
Dividend paid per ordinary share     7 2.0p 25.8p
All activities relate to continuing operations. All profit is attributable to equity shareholders.
There were no gains or losses for the current or comparative periods other than those reported above. Financial  statements
Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
Consolidated  balance  sheet
As at 28 June 2008
      28  June 30 June  
      2008 2007  
     Note £’000 £’000
Non-current  assets   
Intangible assets     9 2,097 3,668
Property, plant and equipment     10 77,157 67 ,064
Deferred tax asset     11 – 3,276
Total  non-current  assets      79,254 74,008
Current  assets      Inventories     12 60,710 60,657
Trade and other receivables     13 11,636 8,996
Cash and cash equivalents     14 2,853 17 ,368
Total  current  assets      75,199 87 ,021
Total  assets      154,453 161,029
Current  liabilities      Trade and other payables     15 (54,570) (51,464)
Liability for current tax      (3,840) (6,310)
Interest-bearing loans and borrowings     16 (20) (21)
Total  current  liabilities      (58,430) (57 ,795)
Non-current  liabilities   
Deferred tax liability     11 (634) –
Interest-bearing loans and borrowings     16 (10,000) (40,000)
Total  non-current  liabilities      (10,634) (40,000)
Total  liabilities      (69,064) (97 ,795)
Net  assets      85,389 63,234
Equity      Issued capital     18 2,008 2,006
Share premium      345 267
Retained earnings      83,036 60,961
Total  equity  attributable  to  equity  holders  of  the  Parent    85,389 63,234
The financial statements on pages 26 to 45 were approved by the Board of Directors on 11 September 2008 and were signed 
on its behalf by:
Will Adderley
Chief Executive www.dunelm-mill.com
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Consolidated  cash  flow  statement
For the 52 weeks ended 28 June 2008
      2008 2007  
     Note £’000 £’000
Profit before tax      49,141 37 ,826
Adjusted for:  
Net financing costs      290 2,989
Operating profit      49,431 40,815
Depreciation and amortisation      9,457 9,529
(Profit) on disposal of property, plant and equipment     (278) (1,130)
Operating cash flows before movements in working capital    58,610 49,214
(Increase) in inventories      (53) (4,312)
(Increase)/decrease in debtors      (2,640) 1,028
Increase in creditors      3,460 4,480
Net movement in working capital      767 1,196
(Decrease) in provisions      – (58)
Share based payments expense      286 234
Foreign exchange losses      (49) (1,286)
Cash flows from operating activities      59,614 49,300
Interest paid      (1,642) (1,536)
Interest received      1,075 451
Tax paid      (14,093) (13,468)
Net  cash  generated  from  operating  activities     44,954 34,747
Cash  flows  from  investing  activities
Proceeds on disposal of property, plant and equipment     303 7 ,200
Acquisition of property, plant and equipment     (17,466) (14,130)
Acquisition of intangible assets      (538) (996)
Net  cash  utilised  in  investing  activities      (17,701) (7 ,926)
Cash  flows  from  financing  activities
Proceeds from issue of share capital      80 273
Purchase of treasury shares      (1,900) –
Proceeds from issue of treasury shares      112 –
Net funds raised from bank loan      – 40,000
Repayment of bank loan      (30,000) –
Repayment of finance lease liability      – (150)
Dividends paid      (10,020) (51,605)
Net  cash  flows  utilised  in  financing  activities     (41,728) (11,482)
Net  increase/(decrease)  in  cash  and  cash  equivalents    (14,475) 15,339
Foreign exchange revaluations      (39) (956)
Cash and cash equivalents at the beginning of the period    17,347 2,964
Cash  and  cash  equivalents  at  the  end  of  the  period    14, 21 2,833 17 ,347 Financial  statements
Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
Consolidated  statement  of  changes  in  equity
For the 52 weeks ended 28 June 2008
    Issued 
    share  Share Retained Total 
    capital  premium earnings equity 
    £’000 £’000 £’000 £’000
As at 2 July 2006    2,000 – 87 ,066 89,066
Profit for the financial year    – – 24,628 24,628
Issue of share capital    6 267 – 273
Share based payments    – – 234 234
Deferred tax on share based payments    – – 327 327
Current corporation tax on share options exercised   – – 311 311
Dividends    – – (51,605) (51,605)
As at 30 June 2007    2,006 267 60,961 63,234
 
    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 www.dunelm-mill.com
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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 IFRS and these are presented on pages 46 to 55.
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.
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  Financial  statements
Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
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.
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 are stated at cost less amortisation which is charged 
on a straight-line basis over three 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 5 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.
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Accounting  policies  continued
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.
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, and gains and losses on forward exchange contracts.
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. Financial  statements
Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
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.
New accounting standards
The Group has adopted the disclosure requirements of IFRS 7 Financial instruments: disclosures and the related amendment 
to IAS 1 Presentation of Financial Statements: Capital Disclosures in the current year. Full comparative figures are presented. 
The adoption of these standards has not led to any changes in the Group’s accounting policies. 
Adopted IFRS and IFRIC not yet applied
The following adopted IFRSs and International Financial Reporting Interpretations Committee (‘IFRIC’) were available for early 
application but have not been applied by the Group in these financial statements:
IFRS 8 Operating Segments is effective for the Group’s financial statements from the year ending June 2010 and requires a 
management approach to segmental information presentation. The adoption is not expected to have any impact on the 
Balance Sheet or Income Statement as the standard is concerned only with disclosures.  www.dunelm-mill.com
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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
      2008 2007 
      £’000 £’000
Operating profit is stated after charging/(crediting) the following items:
Inventories
Cost of inventories included in cost of sales      217,018 198,537
Write down of inventories      5,867 2,228
Amortisation of intangible assets      2,134  1,742
Depreciation of property, plant and equipment
Owned       7,323  7 ,543
Leased      – 243
Operating lease rentals
Land and buildings      19,140 16,785
Plant and machinery      937 1,061
(Profit) on disposal of property, plant and equipment     (278) (1,130)
The analysis of auditors’ remuneration is as follows:
      2008 2007 
      £’000 £’000
Fees payable to the Company’s auditors for the audit of the Parent and consolidated annual accounts 15 17
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    67 58
– tax compliance      29 15
– other tax services      9 16
– corporate finance transaction services      – 416
– all other services      34 18
3  Operating costs
      2008 2007 
      £’000 £’000
Selling and Distribution      108,051 98,944
Administrative       17,573 17 ,555 
(Profit) on disposal of property, plant and equipment     (278) (1,130)
      125,346 115,369
4  Employee numbers and costs
The average number of people employed by the Group (including Directors) was:
 
    2008  2008 2007 2007 
    Number   Full  time Number Full time 
    of  heads  equivalents of heads equivalents
Selling    4,875  3,254 4,637 3,069
Distribution    217  210 207 198
Administration    144  142 127 125
    5,236  3,606 4,971 3,392 Financial  statements
Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
The aggregate remuneration of all employees including Directors comprises:
      2008 2007 
      £’000 £’000
Wages and salaries including bonuses and termination benefits    47,775 42,323
Social security costs      3,187 2,766
Share-based payment expense (note 20)      286 234
Defined contribution pension costs      172 114
      51,420 45,437
Details of Directors’ remuneration, share options, long-term incentive schemes and pension entitlements are disclosed in the 
Directors’ Remuneration Report on pages 14 to 17 .
5  Financial income and expense
      2008 2007 
      £’000 £’000
Finance  income
Interest on bank deposits      1,075 503
  
Finance  expenses
Interest on bank borrowings and overdraft      (1,278) (2,113)
Foreign exchange losses      (87) (1,379)
      (1,365) (3,492)
Net  finance  expense            (290) (2,989)
6  Taxation
      2008 2007 
      £’000 £’000
Current  taxation
UK corporation tax charge for the period      12,045 12,957
Adjustments in respect of prior periods      (255) 918
      11,790 13,875
Deferred  taxation
Origination of temporary differences      3,293 26
Adjustment in respect of prior periods      554 (914)
Tax rate differential      (167) 211
      3,680 (677)
Total  taxation  expense  in  the  income  statement          15,470 13,198
The tax charge is reconciled with the standard rate of UK corporation tax as follows:
      2008 2007 
      £’000 £’000
Profit before tax      49,141 37 ,826
UK corporation tax at standard rate of 29.5% (2007: 30%)     14,496 11,348
Factors affecting the charge in the period:
Non-deductible expenses      128 953
Ineligible depreciation      918 845
Lease incentive deductions      (128) (184)
Adjustments to tax charge in respect of prior years     299 4
Profit on disposal in excess of capital gain      (76) 21
Tax rate differential      (167) 211
      15,470 13,198
The taxation charge for the period as a percentage of profit before tax is 31.5%.  www.dunelm-mill.com
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Notes  to  the  annual  financial  statements  continued
7  Dividends
All dividends relate to the 1p ordinary shares.
      2008 2007 
      £’000 £’000
  
Interim for the period ended 30 June 2007 – paid 25.0p     – (50,000)
Interim for the period ended 30 June 2007 – paid 0.8p     – (1,605)
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) –
      (10,020) (51,605)
The Directors are proposing a final dividend of 3.5p per ordinary share for the period ended 28 June 2008 which equates  
to £7 .0m. The dividend will be paid on 5 December 2008 to shareholders on the register at the close of business on  
21 November 2008. 
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:
      52  weeks  52 weeks 
      ended ended 
      28  June  30 June 
      2008 2007 
      ’000 ‘000
Weighted average number of shares in issue during the period    200,446 200,363
Impact of share options      2,180 2,324
Number of shares for diluted earnings per share     202,626 202,687
In addition to standard earnings per share, an underlying earnings per share calculation is provided below which excludes 
non-recurring costs and income (net of tax). The earnings used for the standard and underlying calculations, together with 
the resultant earnings per share, are shown below:
      52  weeks  52 weeks 
      ended ended 
      28  June  30 June 
      2008 2007 
      £‘000 £‘000
Profit for the period      33,671 24,628
Non-recurring items (net of tax)      – 3,109
Profit for the period excluding non-recurring items     33,671 27 ,737
Basic earnings per share – standard      16.8p 12.3p
Basic earnings per share – underlying      16.8p 13.8p
Fully diluted earnings per share – standard      16.6p 12.2p
Fully diluted earnings per share – underlying      16.6p 13.7p
The interest rate risk profile of the Company’s financial assets and liabilities is set out in note 16 of the Group financial statements. Financial  statements
Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
9  Intangible assets
       Software  
       development  
       and licences  
       £’000
Cost
At 2 July 2006       4,176
Additions       996
Transfers from property, plant and equipment      749
At 30 June 2007       5,921
Additions       538
Disposals       (208)
Transfers from property, plant and equipment      362
At  28  June  2008              6,613
Amortisation
At 2 July 2006       511
Charge for the financial period       1,742
At 30 June 2007       2,253
Charge for the financial period       2,134
Disposals       (208)
Transfers from property, plant and equipment      337
At  28  June  2008              4,516
Net  book  value
At  28  June  2008       2,097
At 30 June 2007       3,668
At 2 July 2006       3,665
All additions were acquired and do not include any internal development costs.
Transfers relate to assets which were classified initially as fixtures and fittings. www.dunelm-mill.com
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Notes  to  the  annual  financial  statements  continued
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 2 July 2006  29,421 28,188 52 281 24,770 82,712
Additions  7 ,082 4,846 35 – 2,167 14,130
Transfers to intangible assets  – 11 – – (760) (749)
Disposals  – (10) – (160) (17) (187)
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
Depreciation
At 2 July 2006  1,170 4,804 13 281 14,954 21,222
Charge for financial period  483 2,307 16 – 4,980 7 ,786
On disposals  19 (10) – (160) (15) (166)
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
Net  book  value
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
At 2 July 2006  28,251 23,384 39 – 9,816 61,490
11 Deferred tax
Deferred tax is provided in full on temporary differences under the liability method using a taxation rate of 28% (2007: 28%).
Deferred taxation assets and liabilities are attributable to the following:
   Assets  liabilities  net
  2008  2007 2008 2007 2008 2007 
  £’000 £’000 £’000 £’000 £’000 £’000
Property, plant and equipment  – – (813) (547) (813) (547)
Other temporary differences  – 3,441 (3) – (3) 3,441
Share based payments  182 382 – – 182 382
  182 3,823 (816) (547) (634) 3,276 Financial  statements
Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
The movement in the net deferred tax balance is as follows: 
    Balance at  Recognised Recognised Balance at 
    2 July 2006  in income in equity 30 June 2007 
    £’000 £’000   £’000  £’000
Property, plant and equipment    (543) (4) – (547)
Employee benefits    – 55 327 382
Lease incentives    2,577 59 – 2,636
Short term temporary differences    238 567 – 805
    2,272 677 327 3,276
    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)
12  Inventories
      2008 2007 
      £’000 £’000
Goods for resale      60,710 60,657
13  Trade and other receivables
            2008 2007 
      £’000 £’000
Trade receivables      144 169
Other receivables      1,813 2,232
Prepayments and accrued income      9,679 6,595
      11,636 8,996
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
            2008 2007 
      £’000 £’000
Cash at bank and in hand      2,833 17 ,347
Cash and cash equivalents include the following for the purpose of the cash flow statement:  
Cash at bank and in hand      2,853 17 ,368
Bank overdraft      (20) (21)
      2,833 17 ,347
15  Trade and other payables
            2008 2007 
      £’000 £’000
Trade payables      22,894 22,354
Accruals and deferred income      26,429 22,510
Other taxation and social security      4,351 6,468
Other creditors      896 132
      54,570 51,464 www.dunelm-mill.com
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16  Interest bearing loans and borrowings
            2008 2007 
      £’000 £’000
Bank overdraft      20 21
Bank loan      10,000 40,000
      10,020 40,021
The Group has a £3m bank overdraft facility which is repayable on demand.
On 26 September 2006 the Group 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. £10m of the £40m facility was drawn 
down as at 28 June 2008 whilst the £10m facility was not utilised at that date.
Interest is payable on funds utilised under the £40m facility at the rate of LIBOR plus 0.35% and on funds utilised under the 
£10m facility at a rate of LIBOR plus 0.45%. LIBOR is fixed for a given loan at the date of draw down.
The facility is guaranteed by the Parent Company and its subsidiaries.
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:
 
 2008   2008  2008  Effective 2007 2007 2007 Effective 
 total   floating  rate  fixed  rate  interest total floating rate fixed rate interest rate 
 £’000  £’000  £’000  rate  % £’000 £’000 £’000   %
Revolving bank loan 10,000  –  10,000  6.31 40,000 – 40,000 5.86
Overdraft 20  20  –  6.00 21 21 – 6.04
 10,020  20  10,000  6.31 40,021 21 40,000 5.86
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 28 June consisted of £2,853,000 (2007: £17 ,368,000) 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 cashflow 
forecasts. The Group’s available facilities can be found in note 16.
Notes  to  the  annual  financial  statements  continued Financial  statements
Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
Group policy is that surplus funds are placed on deposit with counterparties approved by the Board, with a minimum of AAA 
credit rating.
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 7% 
of the total purchases in the year ended 28 June 2008. The outstanding US dollar liabilities at the year end were $870,000 
(2007: $231,000).
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 28 June 2008 the Group held US dollar balances of $7 .0m (2007: $22.1m), 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.
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 Risk Management Committee; the Group does not have a 
defined share buy-back plan.
18  Share capital
      Number of ordinary shares of 1p each  
      2008 2007
In issue at the start of the period      200,617,400 200,000,000
Issued during the period in respect of share option schemes    174,000 617 ,400
  
In issue at the end of the period      200,791,400 200,617 ,400
Proceeds received in relation to shares issued during the period were £80,000 (2007: £273,404).
    2008   2007 
    number   2008 number 2007 
    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  2,008 200,617 ,400 2,006
The holders of the ordinary shares are entitled to receive dividends as declared and are entitled to one vote per share. www.dunelm-mill.com
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Notes  to  the  annual  financial  statements  continued
19 Treasury shares 
    2008   2007 
    number   2008 number 2007 
    of  shares  £’000 of shares £’000
Purchased during year    1,195,000  1,900 – –
Reissued during the period in respect of share option schemes  (243,500)  (378) – –
Outstanding at end of year    951,500  1,522 – –
The Company acquired 1,195,000 of its own shares through purchases on the London Stock Exchange over a period from  
27 November 2007 to 20 March 2008. 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 £1,905,481. The consideration has 
been deducted from retained earnings within shareholders equity. 
The Company reissued 243,500 treasury shares for a total consideration of £112,010 on 7 March 2008 and 11 June 2008. 
The Company has the right to reissue the remaining treasury shares at a later date.
20 Share based payments
As at 28 June 2008, 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 358,800 exercisable options in total under these schemes as at 28 June 2008.
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 ten 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:
    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% Financial  statements
Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
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 
    2008    2008  2007  2007
Outstanding at beginning of year     49.8p  1,028,000 46.1p 1,507 ,700
Granted during year    –  – 62.1p 225,400
Forfeited during year    –  – 57 .0p (87 ,700)
Exercised during year    46.0p  (417,500) 44.3p (617 ,400)
Outstanding at end of year    52.4p  610,500 49.8p 1,028,000
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 2007 . Options may be exercised under the scheme on completion of the 
three year savings contract and must be exercised within 6 months from that date. There is provision for early exercise in 
certain circumstances such as death, disability, redundancy and retirement.
The fair value per option granted and the assumptions used in the calculations are as follows:
      October  November 
      2007 2006
Fair value at measurement date      70.0p 69.0p
Share price      212.0p 202.0p
Exercise price      157 .0p 153.0p
Expected volatility (weighted average volatility used in modelling 
– based on historical volatility of comparable quoted companies)    30% 30%
Option life (weighted average life used in modelling)     3.5 years 3.5 years
Expected dividends      2.5% 2.5%
Risk-free interest rate      4.8% 4.8%
Forfeiture rate      60% 50%
The forfeiture rate assumption has been increased significantly compared to 2007 due to the fall in the Group’s share price 
which has occurred.
The number and weighted average exercise price of options outstanding under the Sharesave at 28 June 2008 is as follows:
        Weighted   Weighted 
    average   Number average Number 
    exercise   of  shares exercise of shares 
    price  under  option price under option 
    2008    2008  2007  2007
Outstanding at beginning of year     153.0p  1,045,846 – –
Granted during year    157.0p  219,979 153.0p 1,169,448
Forfeited during year    153.0p  (264,552) 153.0p (123,602)
Outstanding at end of year    154.0p  1,001,273 153.0p 1,045,846
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. One grant was 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 the LTIP is ten 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 www.dunelm-mill.com
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Notes  to  the  annual  financial  statements  continued
20 Share based payments
The number and weighted average exercise price of options under the LTIP at 28 June 2008 is as follows:
          Weighted   Weighted 
    average   Number average Number 
    exercise   of  shares exercise of shares 
    price  under  option price under option 
    2008    2008  2007  2007
Outstanding at beginning of year     –  250,434 – –
Granted during year    –  317,922 – 250,434
Outstanding at end of year    –  568,356 – 250,434
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 2010, 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 2008) 
and the cost will be spread over the period from 1 July 2007 to 30 September 2010.
The total expense recognised in the income statement arising from share–based payments is as follows:
      2008 2007 
      £’000 £’000
GSOP      14 28
Sharesave      17 136
LTIP – Executive Directors      164 70
LTIP – Senior Managers share match      91 –
Total      286 234
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.
      Other 
    At 1 July   non cash At 28 June 
    2007  Cash flow changes 2008 
    £’000 £’000 £’000 £’000
Cash at bank and in hand    17 ,368 (14,515) – 2,853
Bank overdrafts    (21) 1 – (20)
    17 ,347 (14,514) – 2,833
    
Debt due after one year    (40,000) 30,000 – (10,000)
 
Net debt    (22,653) 15,486 – (7,167)
22 Commitments
As at 28 June 2008 the Group had entered into capital contracts amounting to £2.3 million. The equivalent figure as at  
30 June 2007 was £7 .2m.
The future minimum lease payments under non–cancellable operating leases were as follows:
  2008   2008  2008 2007 2007 2007 
  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  443  20,928  249 216 18,799 216
In the second to fifth year inclusive  226  77,861  540 78 71,092 454
After five years  –  108,924  – – 107 ,966 –
  669  207,713  789 294 197 ,857 670 Financial  statements
Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
The Group has 77 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.
Disclosures relating to remuneration of Directors are set out in the Remuneration Report on pages 14 to 17 . The remuneration 
of the key management personnel (executive team excluding Directors) of the Group is set out below:
 
      2008 2007 
      £’000 £’000
Salaries and other short term benefits      831 801
Post employment benefits      12 11
Share based payments      43 16
      886 828
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 is 
as below:
      2008 2007 
      £’000 £’000
Inventory purchases      – 13
Vehicle purchases – proceeds received      3 3
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
On 29 July 2008 Dunelm acquired for a consideration of £5.0m, ownership of the Dorma brand and trademarks on a 
worldwide basis, an extensive design library, and the Dorma domain name (www.dorma.co.uk). www.dunelm-mill.com
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Parent  Company  accounts  Balance  sheet
As at 28 June 2008
      2008 2007 
     Note £’000 £’000
Non-current  assets   
Investment in subsidiaries     4 2,283 2,163
Deferred tax asset      5 43 98
Total  non-current  assets      2,326 2,261
   
Current  assets   
Trade and other receivables     6 64,413 85,800
Total  current  assets      64,413 85,800
Total  assets      66,739 88,061
Current  liabilities    
Trade and other payables      7 (879) (682)
Liability for current tax       89 (10)
Interest bearing loans and borrowings     8 (20) (21)
Total  current  liabilities      (810) (713)
Non-current  liabilities   
Interest bearing loans and borrowings     8 (10,000) (40,000)
Total  non-current  liabilities      (10,000) (40,000)
Total  Liabilities      (10,810) (40,713)
Net  assets            55,929 47 ,348
Capital  and  reserves   
Issued capital     9 2,008 2,006
Share premium       346 267
Non distributable reserves      283 163
Retained earnings          53,292 44,912
Equity  shareholders’  funds            55,929 47 ,348
The financial statements on pages 46 to 55 were approved by the Board of Directors on 11 September 2008 and were signed 
on its behalf by:
David Stead
Director
11 September 2008 Financial  statements
Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
Parent  Company  accounts
Cash  flow  statement
For the 52 weeks ended 28 June 2008
      2008 2007 
      £’000 £’000
Profit before tax      19,920 17 ,967
Adjusted for:  
Net financing costs      (1,826) (1,994)
Operating profit      18,094 15,973
Operating cash flows before movements in working capital  
Decrease /(increase) in debtors      21,387 (6,894)
Increase in creditors      197 547
Net movement in working capital      21,584 (6,347)
Investment income       (20,097) (20,000)
Share based payments expense      166 79
Cash flows from operating activities      19,747 (10,295)
Interest paid      (1,249) (1,797)
Interest received      3,075 3,791
Tax received/(paid)      58 (388)
Net  cash  generated  from  operating  activities          21,631 (8,689)
   
Cash  flows  from  financing  activities   
Proceeds from issue of share capital      81 273
Purchase of treasury shares      (1,900) –
Proceeds from issue of treasury shares      112 –
Funds raised from bank loan      – 40,000
Repayment of bank loan      (30,000) –
Dividends received      20,097 20,000
Dividends paid      (10,020) (51,605)
Net cash flows utilised in financing activities      (21,630) 8,668
Net  increase/(decrease)  in  cash  and  cash  equivalents        1 (21)
Cash and cash equivalents at the beginning of the period    (21) –
Cash  and  cash  equivalents  at  the  end  of  the  period          (20) (21) www.dunelm-mill.com
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Parent  Company  accounts  Statement  of  changes  in  equity
For the 52 weeks ended 28 June 2008
   Issued share Share Non Retained 
   capital premium distributable earnings Total 
   £’000 £’000 £’000 £’000 £’000
As at 2 July 2006    2,000 – 8 78,431 80,439
Profit for the period   – – – 17 ,980 17 ,980
Issue of new share capital   6 267 – – 273
Share based payments   – – 155 79 234
Deferred tax on share based payments   – – – 27 27
Dividends   – – – (51,605) (51,605)
     
As at 30 June 2007   2,006 267 163 44,912 47 ,348
 
   Issued share Share Non Retained 
   capital premium distributable earnings Total 
   £’000 £’000 £’000 £’000 £’000
As at 1 July 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
The non distributable reserve’s purpose is to reflect all movements in share based payments. Financial  statements
Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
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’). 
The accounts of the Company are prepared under the historical cost convention, in accordance with the Companies Act 
1985, applicable accounting standards and specifically in accordance with the accounting policies set out below.
Changes in accounting policies
The Company has adopted IFRS 1 from 2 July 2006. IFRS 1 ‘First Time Adoption of IFRS’ establishes the transitional requirements 
for the preparation of financial information in accordance with IFRS for the first time. The general principle is to establish 
accounting policies under IFRS then to apply these retrospectively at the date of transition to determine the opening 
balance sheet. IFRS 1 permits a number of first time adoption exemptions, none of which are relevant to the Company.
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.
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.
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.
Accounting  policies  –  Parent  Company  accounts www.dunelm-mill.com
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Notes  to  the  Parent  Company  accounts
1 Income statement
The Company made a profit after tax of £20,036,000 (2007: £17 ,980,000). The Directors have taken advantage of the exemption 
available under section 230 Companies Act 1985 and have not presented an income statement for the Company alone.
2 Employee costs
The Company has no employees other than the two Directors. Full details of the Directors’ remuneration and interest are set 
out in the Directors’ Remuneration Report on pages 14 to 17 , and share based payments details in note 1 1 on pages 52 to 53.
3 Dividends
      2008 2007 
      £’000 £’000
Equity  –  1p  ordinary  
Interim for the period ended 30 June 2007 – paid 25.0p     – (50,000)
Interim for the period ended 30 June 2007 – paid 0.8p     – (1,605)
Final for the period ended 30 June 2007 – paid 3.0p     (6,024) –
Interim for the period ended 28 July 2008 – paid 2.0p     (3,996) –
      (10,020) (51,605)
The Directors are proposing a final dividend of 3.5p per ordinary share for the period ended 28 June 2008 which equates 
to £7 .0m. The dividend will be paid on 5 December 2008 to shareholders on the register at the close of business on 
21 November 2008. 
4 Investments
Shares in subsidiary undertakings.
       £’000
As at 2 July 2006       2,008
Share Based Payments       155
As at 30 June 2007       2,163
Share Based Payments       120
As  at  28  June  2008              2,283
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 1 July 2006       51
Reserves credit       27
Income statement credit       20
As at 30 June 2007       98
Reserves debit       (76)
Income statement credit       21
As  at  28  June  2008              43
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. Financial  statements
Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
6 Trade and other receivables
      2008 2007 
      £’000 £’000
Amounts owed by subsidiary undertakings      64,365 85,771
Prepayments and accrued income      30 29
Other taxation and social security      18 –
      64,413 85,800
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
      2008 2007 
      £’000 £’000
Trade payables      15 –
Accruals and deferred income      864 682
      879 682
8 Interest bearing loans and borrowings
      2008 2007 
      £’000 £’000
Bank loans      10,000 40,000
Bank overdraft      20 21
Total            10,020 40,021
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.
Interest is payable on the £40m facility at the rate of LIBOR plus 0.35% and on the £10m facility at a rate of LIBOR plus 0.45%.
The facility is guaranteed by the Company and its subsidiaries.
Where a Group Company enters into financial guarantee contracts to guarantee the indebtedness of other Group 
Companies within the Group, the Group considers these to be insurance arrangements for them as such. In this respect,  
the Group treats the guarantee contract as a contingent liability until such time as it becomes probable the Group will be 
required to make a payment under the guarantee.
9 Share capital
      Number of ordinary shares of 1p each 
      2008 2007
In issue at the start of the period      200,617,400 200,000,000
Issued during the period in respect of share options     174,000 617 ,400
In issue at the end of the period      200,791,400 200,617 ,400
Proceeds received in relation to shares issued during the period were £80,000 (2007: £273,404). 
    2008  2007 
    Number  2008 Number 2007 
    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 2,008 200,617 ,400 2,006
The holders of the ordinary shares are entitled to receive dividends as declared and are entitled to one vote per share. www.dunelm-mill.com
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Notes  to  the  Parent  Company  accounts  continued
10 Treasury shares 
     2008  2007 
    2008 Number  2007  Number 
    £’000 of  shares  £’000  of shares
Purchased during year    1,900  1,195,000 – –
Reissued during the period in respect of share option schemes  (378)  (243,500) – –
Outstanding at end of year    1,522  951,500 – –
The Company acquired 1,195,000 of its own shares through purchases on the London Stock Exchange over a period from  
27 November 2007 to 20 March 2008. 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 £1,905,481. The consideration 
has been deducted from retained earnings within shareholders equity. The Company reissued 243,500 treasury shares for a 
total consideration of £112,010 on 7 March 2008 and 11 June 2008. 
The Company has the right to reissue the remaining treasury shares at a later date.
11 Share based payments
As at 28 June 2008, 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 28 June 2008.
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.
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 
    2008    2008  2007  2007
Outstanding at beginning of year    46.0p  200,000 44.7p 817 ,400
Exercised during year    46.0p  (200,000) 44.2p (617 ,400)
Outstanding at end of year    –  – 46.0p 200,000 Financial  statements
Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
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 ten 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 28 June 2008 is:
          Weighted   Weighted 
    average   Number average Number 
    exercise   of  shares exercise of shares 
    price  under  option price under option 
    2008    2008  2007  2007
Outstanding at beginning of year     –  250,434 – –
Granted during year    –  317,922 – 250,434
Outstanding at end of year    –  568,356 – 250,434
The total expense recognised in the income statement arising from share-based payments is as follows:
 
      2008 2007 
      £’000 £’000
GSOP      1 9
LTIP      165 70
Total      166 79
12 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.
13 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:
      2008 2007 
      £’000 £’000
Cash paid to group undertakings      (47,267) (17 ,005)
Cash received from group undertakings      2,693 484
Dividends received      20,096 20,000
Net interest receivable      3,072 3,791 www.dunelm-mill.com
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Notes  to  the  Parent  Company  accounts  continued
14 Explanation of transition to IFRS
This is the first year that the Company has presented its financial statements under IFRS. 
The accounting policies set out on page 49 have been applied in preparing the financial statements for the year ended  
28 June 2008, the comparative information presented in these financial statements for the year ended 30 June 2007 and  
in the preparation of the opening balance sheet at 2 July 2006 (the transition date). 
In preparing its opening balance sheet, the Company has adjusted amounts previously reported in financial statements 
prepared in accordance with UK GAAP . 
The most significant changes in the Company’s accounting policies and presentation as a result of the adoption of IFRS are 
set out below:
a)  Share-based payments (IFRS 2)
Under IFRS 2, the charge recognised in the income statement for share options, long-term incentive plans, and other share-
based payments will be based on ‘fair value’ of the awards, calculated using an option pricing model. This contrasts to UK 
GAAP, where the charge recognised was based on the ‘intrinsic value’ of awards, being the difference between the market 
values of the shares at the date of the award and the option exercise price. Since this was typically nil the UK GAAP charge 
was nil.
The Company has applied the fair value model to all grants of equity instruments that had not vested as at July 2005.
For equity-settled share-based payments, the fair value determined at the date of grant is expensed through the income 
statement on a straight-line basis over the vesting period, based on the Group’s estimate of the number of shares that will 
eventually vest. Fair value is measured by use of a binomial model.
b)  Cash flow statements (IAS 7)
Under IAS 7 the Company is required to prepare a cash flow statement. This contrasts to UK GAAP which provided an 
exemption from the requirement to provide a cash flow statement.
c)  Income tax (IAS 12)
IAS 12 takes a balance sheet approach to deferred tax whereby deferred tax is recognised in the balance sheet by applying 
the appropriate tax rate to the temporary differences arising between the carrying value of assets and liabilities and their tax 
base. This contrasts to UK GAAP (FRS 19), which considers timing differences arising in the profit and loss account. 
Adjustments made to the financial statements on the transition to Adopted IFRS typically result in related adjustments to 
deferred tax. Financial  statements
Dunelm  Group  plc  Annual report & accounts 2008
Annual General Meeting Financial statements Governance Business review
In summary the impact of adopting IFRS on the financial statements previously reported under UK GAAP is set out below:
Profit for the period in 2007 increased by £9,000 from £17 ,971,000 to £17 ,980,000 due to the impact of deferred tax on share 
based payments.
Parent Company Balance Sheet
  
  As at 2 July    As at 30 June 
  2006 previously  Share  2007 previously Share 
  reported under  based As at 2 July reported under based As at 30 June 
  UK GAAP payments 2006 IFRS UK GAAP payments 2007 IFRS 
  £’000 £’000 £’000 £’000 £’000 £’000
Non-current  assets       
Investment in subsidiary  2,008 – 2,008 2,163 – 2,163
Deferred tax asset   – 51 51 – 98 98
Total  non-current  assets    2,008  51  2,059  2,163  98  2,261
       
Current  assets       
Deferred tax  12 (12) – 23 (23) –
Trade and other receivables  78,906 – 78,906 85,800 – 85,800
Total  current  assets    78,918  (12)  78,906  85,823  (23)  85,800
Total  assets    80,926  39  80,965  87,986  75  88,061
Current  liabilities        
Trade and other payables   (135) – (135) (682) – (682)
Liability for current tax   (391) – (391) (10) – (10)
Interest bearing loans and borrowings  – – – (21) – (21)
Total  current  liabilities    (526)  –  (526)  (713)  –  (713)
Non-current  liabilities       
Interest bearing loans and borrowings  – – – (40,000) – (40,000)
Total  non-current  liabilities    –  –  –  (40,000)  –  (40,000)
Total  liabilities    (526)  –  (526)  (40,713)  –  (40,713)
Net  assets    80,400  39  80,439  47,273  75  47,348
Capital  and  reserves       
Issued capital  2,000 – 2,000 2,006 – 2,006
Share premium   – – – 267 – 267
Non distributable reserves  8 – 8 163 – 163
Retained earnings     78,392 39 78,431 44,837 75 44,912
 
Equity  shareholders’  funds    80,400  39  80,439  47,273  75  47,348 www.dunelm-mill.com
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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 6 November 2008 at 10.30am 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 28 June 2008 together with the Directors’ Report, and 
the Auditors’ Report on those accounts be received and adopted.
2.  That Will Adderley, who is retiring in accordance with the Articles of Association of the Company, and being eligible, is 
offering himself for re-election, be re-appointed as an Executive Director of the Company.
3.  That Marion Sears, who is retiring in accordance with the Articles of Association of the Company, and being eligible, is 
offering herself for re-election, be re-appointed as a Non-Executive Director of the Company.
4. To declare a final dividend on the ordinary shares of 3.5p per share in respect of the year ended 28 June 2008.
5.  That KPMG Audit Plc be re-appointed as auditors to the Company and that the Directors be authorised to determine the 
auditors’ remuneration.
6. That the Directors’ Remuneration Report be approved.
Special business
To consider and if thought fit pass the following resolutions of which the resolution number 7 will be proposed as an ordinary 
resolution and the resolutions numbered 8, 9 and 10 will be proposed as a special resolution:
7 .  That:
(a)  in accordance with article 6 of the Company’s Articles of Association, the Directors be authorised to allot relevant 
securities up to a maximum nominal amount of £665,466;  
(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 2009; 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).
8.  That:
(a)  in accordance with article 7 of the Company’s Articles of Association, the Directors be given power to allot equity 
securities for cash;
 (b)  the powers under paragraph (a) above (other than in connection with article 7(a)(i) of the Company’s Articles of 
Association) shall be limited to the allotment of equity securities 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 2009; and
(d) all previous unutilised authorities under section 95 of the Companies Act shall cease to have effect. Dunelm  Group  plc  Annual report & accounts 2008
Governance Business review
9.  That, in accordance with article 11 of the Company’s Articles of Association, the Company be generally and 
unconditionally authorised to make market purchases (within the meaning of section 163(3) of the Companies Act 1985) 
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 issued ordinary share capital at 28 June 2008 (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 2009, 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.
10.  That the Articles of Association produced to the meeting and signed by the Chairman for the purposes of identification 
be approved and adopted as the Articles of Association of the Company in substitution for and to the exclusion of the 
Current Articles of Association of the Company.
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. Your Board will be voting in favour of them and unanimously recommends that you do so as well.
By Order of the Board
Signature
Date 3 October 2008
David Stead
Company Secretary
Fosse Way
Syston
Leicester
LE7 1NF
Notes
1.  The holders of the ordinary shares are entitled to attend and to speak at the Annual General Meeting and at any adjournment and to vote on all of the 
resolutions to be proposed at the meeting.
2.  A member is entitled to appoint a proxy to exercise all or any of his/her rights to attend, speak and vote instead of him/her. 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.
3.  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.
4.  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. A Form of Proxy is enclosed. Completion and return of a Form of Proxy will not preclude a member from 
attending and voting in person at the meeting.
5.  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.
6.   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 2, 4 and 5 does not apply to a Nominated Person. The 
Financial review Annual General Meeting
Annual  General  Meeting ✂
www.dunelm-mill.com
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Notice  of  Annual  General  Meeting  continued
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.
7 .  Pursuant to Regulation 34 of the Uncertificated Securities Regulations 1995 or regulation 20 and schedule 4 of the Uncertificated Securities Regulations 
2001, 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 
6pm on the day which is two 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.
8.  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.
9.   Copies of the proposed new articles of association will be available for inspection: (a) during normal business hours at the Company’s registered office 
and at the offices of Allen & Overy LLP, One Bishops Square, London, E1 6AD, from the date of this circular until the close of the Annual General Meeting; 
and (b) at the Annual General Meeting for at least 15 minutes before and during the meeting. A summary of the principal changes introduced in the 
proposed new articles is set out in the Directors’ Report above.
10.  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 7RA19) 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. 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.
11.   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.
12.   As at 11 September 2008 the Company’s issued share capital consists of 199,839,900 ordinary shares carrying one vote each (excluding treasury shares). 
Therefore, the total voting rights in the Company as at 11 September 2008 are 199,839,900.
13.  In order to facilitate voting by corporate representatives at the meeting, arrangements will be put in place at the meeting so that (a) if a corporate 
shareholder has appointed the Chairman of the meeting as its corporate representative with instructions to vote on a poll in accordance with the 
directions of all of the other corporate representatives for that shareholder at the meeting, then on a poll those corporate representatives will give voting 
directions to the Chairman and the Chairman will vote (or withhold a vote) as corporate representative in accordance with those directions: and (b) if 
more than one corporate representative for the same shareholder attends the meeting but the corporate shareholder has not appointed the Chairman 
of the meeting as its corporate representative, a designated corporate representative will be nominated, from those corporate representatives who 
attend, who will vote on a poll and the other corporate representatives will give voting directions to that designated corporate representative.
  Corporate shareholders are referred to the guidance issued by the Institute of Chartered Secretaries and Administrators on proxies and corporate 
representatives (http:/ /www.icsa.org.uk/) for further details of this procedure. The guidance includes a sample form of representation letter if the Chairman 
is being appointed as described in (a) above ✂
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 6 November 2008 at 10.30 am and at any adjournment of the meeting.
This proxy is in respect of all 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 proxy 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 not to adjourn the meeting) the proxy will act at his or her 
discretion.
Signature   ...................................................................Date ..................................... 2008
Ordinary business
1.  To receive and approve the Directors’ Report and the audited accounts for  
the period ended 28 June 2008 and the report of the auditors
2. To re-elect Will Adderley as a Director
3. To re-elect Marion Sears as a Director
4. To declare a dividend on the ordinary shares of 3.5p per share
5. To re-appoint KPMG Audit Plc as auditors of the Company and to  
 authorise the Directors to fix their remuneration
6. To approve the Directors’ Remuneration report
Special business
7 . To authorise the Directors to allot relevant securities
8. To authorise the Directors to allot equity securities for cash
9. To authorise the Company to purchase its own ordinary shares 
10. To adopt new Articles of Association  
Notes
1.  Every holder has the right to appoint some other person(s) of their choice, who need not be a shareholder as his/her proxy to exercise all or any of his/her 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 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 above 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, you may photocopy this form. Please indicate in the box above the number of shares in relation to which they are authorised to act as 
your proxy. Please also indicate by ticking the box provided that 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/her discretion both as to how he/she votes and as to whether or not he/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.
   Vote   
 For Withheld Against 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. Business 
strategy
 = Superstores open as at 30 June 2007
 = Superstores opened since 1 July 2007
Dunelm’s	 specialist	 homewares	 offering	 has	 powerful	 customer	 appeal	 and	 is	 clearly	 differentiated	 from	 other	 retailers.	 This	 has	 enabled	 the	 chain	 to	 expand	 at	 a	 rapid	 rate.	 Today	 the	 major	 focus	 is	 out-of-town	 retailing	 –	 and	 we	 now	 have	 77	 superstores	 located	 throughout	 the	 UK.
Growing	the	store	portfolio  
We are ambitious to continue driving Dunelm’s 
growth by rolling out the successful superstore 
format. Of the existing 77 superstores as of  
11 September 2008, 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.
 Developing	the	customer	offer	 	 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.
	Exploiting	our	infrastructure  
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.
Growing	Dunelm	Direct	 	 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.
>
>
>
>
Total number of superstores*
77
Total selling space
2.2m sq. ft.
Product lines available in superstores 
(Broad and deep ranges)
> 20,000
Number of employees
> 5,000
These are our key 
areas of focus 
Advisers
Corporate	Brokers UBS Investment Bank
and	Financial	Advisers 1 Finsbury Avenue
 London EC2M 2PP
 Tel: 020 7567 8000
 Landsbanki Securities (UK) Ltd
 Beaufort House
 15 St. Botolph Street
 London EC3A 7QR
 Tel: 020 7426 9000
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
Our business
at a glance
* As at 11 September 2008 mill
 mill
 Annual report  
& accounts 2008
Dunelm Group plc
www.dunelm-mill.com
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.
01	 Highlights
02	 Chairman’s statement
04	 Chief Executive’s review
06	 Finance Director’s review
10	 Directors and officers
12	 	Corporate governance report
14	 Remuneration report
18	 	Directors’ report and business review
23	 	Statement of Directors’ responsibilities
24	 	Independent Auditors’ report
26	 	Consolidated income statement
27	 	Consolidated balance sheet
28	 	Consolidated cash flow statement
29	 	Consolidated statement of changes  
in equity
30	 Accounting policies
34	 	Notes to the annual financial statements
46	 	Parent Company accounts
Dunelm	Group	plc  Annual report & accounts 2008
56	 	Notice of Annual General Meeting
59	 Form of proxy
Annual General Meeting Financial statements Governance Business review