Simply Value for Money
Dunelm Group plc Annual report & accounts 2012
Dunelm Group plc Annual report & accounts 2012 Dunelm continues to be a fast 
growing specialist out-of-town 
homewares retailer maintaining  
a strong focus on customer excellence 
through the Group’s ‘Simply Value  
for Money’ proposition. 
Our customers enjoy market-leading 
choice with a wide range of products 
available both in store and on-line. 
Our Reserve and Collect proposition 
offers greater flexibility in the way our 
customers can access our products. Business review Governance Financial statements Business overview
PB 1
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Revenue
†
£603.7m (2011: £538.5m) 
Operating Prot
†
£95.2m +14.3% (2011: £83.3m) 
Net cash from operations
†
£91.9m (2011: £74.0m)  
Prot before tax
†
£96.2m (2011: £83.6m) 
2008 2009 2010 2011 2012
£391.8
£423.8
£492.8
£538.5
£603.7
2008 2009 2010 2011 2012
£49.4
£52.6
£75.5
£83.3
£95.2
2008 2009 2010 2011 2012
£49.1
£53.5
£76.8
£83.6
£96.2
2008 2009 2010 2011 2012
£45.0
£67.4
£72.0
£74.0
£91.9
Contents
Business overview
 1 Highlights
 2 Our business model
 4 Our strategic priorities
Business review
 7 Chairman’s statement
 9 Chief Executive’s review
12 Finance Director’s review
14 Key risks and uncertainties
17 Corporate social responsibility
Governance
21 Letter from the Chairman
22 Directors and Officers
24 Directors’ report and business review
27 Corporate governance report
32 Letter from the Chair of the Audit Committee
33 Audit Committee report
35 Letter from the Chair of the Nominations Committee
36 Nominations Committee report
38  Letter from the Chair of the Remuneration 
Committee
39 Remuneration report
48  Statement of Directors’ responsibilities
Financial statements
49 Independent Auditor’s report
50 Consolidated income statement
51  Consolidated statement of comprehensive income
52  Consolidated statement of financial position
53  Consolidated statement of cash flows
54  Consolidated statement of changes in equity
55 Accounting policies
59  Notes to the annual financial statements
69  Parent Company statement of financial position
70 Parent Company statement of cash flows
71 Parent Company statement of changes in equity
72 Accounting policies
74 Notes to the Parent Company financial statements
79 Advisers
Operational highlights
115 superstores at 30 June 2012
14 new superstores opened in the 
year (including two relocations)
Continued investment in store refits, 
50% of superstores either new or 
benefited from major refit in past  
three years
Over 20,000 lines in a superstore –  
broad and deep ranges
Financial highlights FY12
Revenue increase 12.1% 
Operating margin 15.8%
Net cash generated from operations 
£91.9m
† The 2009 figures reflect a 53 week trading period, compared with 52 weeks in all other years. Like us on Facebook
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Our business model
–  Simply Value  
for Money
Dunelm’s business is based on offering our customers an 
industry leading range and choice of over 20,000 different 
homewares products. 
We aim to deliver the broadest price spectrum of quality 
products to compete at the entry level but at higher quality; 
and at the branded/quality level but at keener prices. 
The customer offer is underpinned by strong availability  
and our investment in helpful and knowledgeable colleagues 
in store.
In addition to our in-store offer we provide multi-channel 
convenience through our websites (www.dunelm-mill.com 
and www.dorma.co.uk) as well as a full Reserve and Collect 
proposition.
Multi-channel 
when and where our  
customers need us
2
Dunelm Group plc 
Annual report and accounts 2012
Choice  
& Value
one stop homewares destination Business review Governance Financial statements Business overview
Superstore 
locations
 Superstores as at 2 July 2011
  Superstores opened since 
2 July 2011
Recent Events
We ensure that our supply chain provides the 
capacity and flexibility to support our ambitions and 
to take advantage of scale benefits.
We ensure that central infrastructure is in place to 
provide a backbone to further growth e.g. through 
our new Head Office, extended distribution 
capability and strong IT platforms.
Scalability
investment ahead  
of the curve
We provide our unique offer in accessible out-of-
town locations with ample customer parking.
Our format has flexibility to deliver a full customer 
offer in a range of retail footprints, averaging  
30,000 ft
2
.
Convenient 
Locations
customer accessibility
3
Dunelm Group plc 
Annual report and accounts 2012
Social media  
launched in July 2011
1. Facebook
2. Pinterest
3. Twitter
Press advertising 
campaigns
Move from local media e.g.  
adverts in local press and local  
radio to national media e.g. features  
in national magazines and national radio
Awards 
1.  House Beautiful Awards – Home Retailer 
of the Year Gold Award 2011
2.  Coffee Bar Sandwich Retailer of the Year 
– Highly Commended 2012
3.  High Street Recycling 
Champion award 2012
Multi-channel 
1.  Mobile website launched in January 2012 
2.  First full catalogue to be distributed in 
autumn 2012 4 5
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Enhance
our specialist  
proposition
We must continue to evolve our offer so that  
we maintain and grow our competitive advantage  
in choice and price, supported by quality, service 
and availability.
Increasing awareness of the Dunelm  
brand is a clear priority.
 G r ow
 multi-channel
 www.dunelm-mill.com accounts for c. 3% of 
revenue. We plan to increase customer 
engagement, develop new customer touch points 
and grow our multi-channel participation further. 
Our strategic priorities
Our current focus
 > Continuously evolve product ranges
 > Develop knowledge-based customer 
service as a point of differentiation
 > Develop value-added services such  
as ‘made to measure’ and ‘Dunelm  
At Home’
Our current focus
 > Extend the range on-line
 > Improve delivery proposition
 > Develop collect in-store service
 > Trial catalogue Business review Governance Financial statements Business overview
4 5
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
 Exp and
 the store portfolio
We aim to grow market share and reach more 
customers by opening more superstores across  
the UK. We expect to grow our portfolio to 
200 superstores in the medium term.
Existing stores are continually improved with our 
refit programme covering 15 stores during the year.
We have a well-invested infrastructure. Our aim  
is to ensure that we continue to develop this 
ahead of our growth curve, so that it is an 
enabler and never a constraint.
Develop
and exploit our 
infrastructure
Our current focus
 > Continue new store opening 
programme
 > Consider freehold property deals 
as appropriate
 > Target payback of 36 months for 
larger catchments and 48 months 
for smaller catchments
Our current focus
 > Exploit IT systems to release time 
for customer service
 > Enhance IT infrastructure to 
support further growth 6
Dunelm Group plc 
Annual report and accounts 2012 6
Dunelm Group plc 
Annual report and accounts 2012
‘Dunelm has posted good revenue 
growth in the latest financial year, 
accompanied by further 
improvements in profitability  
and cash generation.’
Our key strengths
 > UK’s largest specialist 
homewares retailer
 > Portfolio of established  
out-of-town superstores, 
average sales area 
approximately 30,000  
square feet
 > ‘Simply Value for Money’ 
proposition:
 – Good quality products
 – Great prices
 – Industry leading choice
 – Deep availability
 – Friendly knowledgeable 
service
 > On-line store featuring 20,000 
products
 > Owner of ‘Dorma’ brand
 > Robust, scalable infrastructure 
 > Experienced management 
team, entrepreneurial culture
 > Highly cash generative
 > Strong balance sheet Governance Financial statements Business review Business overview
I am delighted once again to introduce Dunelm’s annual report 
by announcing a year of strong business performance. The 
management team continues to focus on our well-established 
strategy for developing the business, as well as keeping tight 
control on day to day operations. As a result, Dunelm has posted 
good revenue growth in the latest financial year, accompanied  
by further improvements in profitability and cash generation. 
More details on this performance are given by Nick Wharton,  
our Chief Executive, in his report.
As a result of the continuing strong business performance, the 
Board is able to recommend an increase in the final dividend to 
10.0p per share (2011: 8.0p), bringing the total dividend for the 
year to 14.0p (2011: 11.5p). In addition, the Board proposes 
returning £65.8m of excess capital to shareholders. The 
mechanism for this is explained by David Stead, our Finance 
Director, in his report and full details will be provided in a 
separate circular to shareholders.
The Board has evolved over the last financial year and now 
includes a new Non-Executive Director, Matt Davies. Matt was 
appointed in February and is already proving to be an excellent 
addition to your Board. His recent experience leading a similar 
sized, and equally young and dynamic multiple retailer has 
added to our perspectives on a number of operational and 
strategic issues including customer behaviour, supply chain 
development and colleague engagement.
Our Executive team is working very well following an exemplary 
transition of the Chief Executive role from Will Adderley to Nick 
Wharton. Nick took on the role of Chief Executive in February 2011, 
and we are benefiting greatly from his extensive executive 
experience, and the skill he is deploying in further developing our 
business. He is succeeding in building on the hungry and dynamic 
culture in key parts of our business, adding the important 
professionalism, precision and repeatability needed as we grow  
into a larger organisation.
As one of the leading retailers of his generation, Will Adderley 
was an outstanding Chief Executive of Dunelm for 15 years.  
His desire to move to his current role as Executive Deputy 
Chairman reflects his determination to continue to drive 
Dunelm’s success by dedicating himself to activities – such  
as product development and sourcing – which are the hallmark 
of Dunelm’s appeal to shoppers and where he has special 
expertise. He is clearly relishing his new role and adding 
enormous value to the business.
Looking ahead, we have a range of exciting development 
initiatives and continue to see significant potential to expand  
our store portfolio further within the UK. We remain confident  
in our ‘Simply Value for Money’ offer and look forward to further 
profitable growth.
Geoff Cooper
Chairman
13 September 2012
Business review
Chairman’s statement
Geoff Cooper
Chairman
7
Dunelm Group plc 
Annual report and accounts 2012 7
Dunelm Group plc 
Annual report and accounts 2012 ‘We remain focused on close 
operational management, while 
investing confidently in the future 
growth of the business.’
Business highlights
 > 14 new superstore openings 
(including two relocations) and 
major refits of 15 existing stores
 > Continued market share growth
 > Exciting developments in our 
customer offer
 > www.dunelm-mill.com number 
one store by turnover following 
strong revenue growth
 > Continuing investment in 
infrastructure to underpin  
future growth
8
Dunelm Group plc 
Annual report and accounts 2012 Governance Financial statements Business review Business overview
Overview
Against the background of the UK economy 
which has continued to put pressure on both 
consumer confidence and expenditure, during 
the last financial year the business has made 
further strong strategic progress and delivered 
a robust trading performance. 
We remain focused on close operational 
management, while investing confidently in the 
future growth of the business. This investment, 
consistent with our four strategic priorities, 
centres on the further strengthening of our 
market leading customer proposition, while at 
the same time increasing scale through store 
and multi-channel expansion. 
Our total revenue increased by 12.1% with 
like-for-like sales (calculated by comparing 
stores which have traded throughout the last 
two financial years) growing by 3.1%, 
considerably above the home textiles market  
as measured by the British Retail Consortium. 
The rest of our revenue growth was delivered 
through the store development programme 
which over the course of the year contributed 
14 new superstores, including two relocations.
Our strong trading performance combined with 
disciplined cost and inventory management has 
delivered a 30 basis points expansion in 
operating margin year on year. Furthermore, 
despite continued investment in new stores and 
the associated infrastructure to support further 
growth, the business remains highly cash 
generative allowing the opportunity to return 
capital of £65.8m to our shareholders in 
addition to offering a 22% increase in the  
annual dividend.
Chief Executive’s review
Nick Wharton
Chief Executive
Strategy development
We continue to invest in and develop the 
business with a strong focus on our four 
strategic priorities. 
Priority 1 – develop our specialist 
proposition
The UK homewares market is estimated by 
Verdict Research to be worth approximately 
£11bn. Within this fragmented market, where 
approximately 30% of sales remain with small 
independent operators, Dunelm’s market 
leading proposition is built on our core 
differentiator of widest choice, offering the 
broadest price spectrum of quality products, 
supported by strong availability and friendly 
knowledgeable service.
Our range and choice advantage has been 
particularly important over the last financial  
year with the Dunelm ‘Simply Value for Money’ 
proposition appealing to a wide cross-section 
of customers. Our broad price architecture is 
mirrored across each of our core categories: 
from our entry price position which competes 
with products offered by grocers and discount 
multiples but at higher quality, through a 
number of mid-market options up to our highest 
quality products associated with department 
stores and higher-end independent retailers but 
at keener prices. 
This positioning of higher quality at comparable 
entry-level prices and comparable quality at 
keener prices for mid-market and premium 
products, has helped to maintain existing 
footfall and attract new customers during the 
past financial year. 
9
Dunelm Group plc 
Annual report and accounts 2012 10 11
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
The majority of products in our stores 
carry Dunelm branding. However, 
proprietary brands such as Fogarty and 
Brabantia are an important complement 
to the offer and, reflecting our increased 
scale within the market, we are frequently 
able to stock branded products on an 
exclusive basis. Our owned brand Dorma 
re-enforces our quality credentials, 
particularly in bedding and bathroom 
categories, and we are very pleased with 
the progress made with our in-house 
developed Spectrum brand. Spectrum  
is used as a common brand for our 
contemporary bright coloured ranges 
across a number of categories, 
encouraging customers to broaden  
their basket as they adopt a specific 
colour look in a given room. Spectrum  
is now present on over 300 products 
across the offer. 
We continue constantly to re-invigorate our 
offer to ensure it remains contemporary, 
fresh and relevant. Through two seasonal 
refreshes we change approximately 25%  
of our ranges each year; Special Buys  
and Miss it Miss Out (‘MIMO’) promotions 
emphasise Dunelm’s value credentials and 
provide a seasonal feel to the store. 
Increasing awareness of the Dunelm 
brand remains a clear priority. Having 
refreshed our advertising during the year 
to provide a clearer and more consistent 
image we have continued to move away 
from local media and increase our 
presence in the national press. We have 
also significantly increased our digital 
marketing and social media activity, the 
latter being centred on Facebook, Twitter 
and Pinterest. Much of this increase in 
marketing activity has been funded by 
buying efficiencies.
Awareness and recognition of the quality 
of our customer offer is improving both 
with customers and specialist media. 
Specifically during the year we were 
delighted to be voted ‘Homewares 
Retailer of the Year’ by the readers of 
House Beautiful magazine. 
Autumn 2012 will see the next phase of 
our brand awareness activity with the trial 
of a full catalogue. We believe the 200 
page A4 catalogue will clearly illustrate 
our range breadth, quality and value.  
The distribution of the planned 700,000 
print run will be biased towards the 
introduction of the Dunelm proposition  
to new customers.
Re-assigning colleague time in store from 
non-customer facing tasks to providing 
customers with knowledgeable, friendly 
service provides another important point 
of further differentiation for Dunelm.  
Our activities in this regard, both in terms 
of task elimination and re-investment  
of the freed-up time are tangible, 
measurable and targeted. For example, 
during the year we have extended system 
based automatic replenishment to over 
60% of our products, replacing manual 
store ordering. The proportion of inventory 
checked for quantity and quality in the 
distribution centre has also increased, 
replacing time consuming in-store 
processes. We will expand both of these 
initiatives further during the coming year. 
Specific departmental rotas have been 
created to ensure that high service areas 
of the store – such as our made to 
measure curtain service – are always 
staffed during periods of higher footfall. 
Product awareness and knowledge 
amongst our colleagues remains a priority 
and we continue to invest in training to 
this end.
Our Dunelm At Home service, through 
which customers can select bespoke, 
made to measure curtains and other 
window treatments via a free home 
consultation, is now available from an 
expanded trial of 10 stores and is 
achieving good levels of customer 
satisfaction. 
Priority 2 – develop the store 
portfolio
Dunelm trades from two store formats. 
The bulk of the portfolio is represented by 
out-of-town superstores, with our average 
new store footprint now targeted towards 
30,000 square feet of retail space.  
This enables us to offer over 20,000 
homewares products with the depth  
of range and availability that customers 
expect from a specialist retailer. Our trial 
of smaller format stores continues in order 
for us to learn more about customer 
reaction and profitability at this scale. We 
also trade profitably from nine smaller 
high street locations where there are 
currently no suitable out-of-town 
alternatives.
In the last financial year we opened over 
400,000 square feet of selling space 
through fourteen new superstores  
(two being relocations) taking our 
superstore chain to 115 stores at the year 
end, providing 3.4 million square feet of 
selling space in total. Maintaining this 
strong momentum, since the end of the 
year we have opened a further four stores 
with openings in Cambridge, Oxford, and 
Barnstaple, and one relocation to deliver  
a full customer offer in Telford. A further 9 
new stores are contractually committed.
During the financial year we have updated 
our catchment analysis to reflect changes 
in demography and our latest 
understanding of catchment size from  
our 34 new store openings over the past 
three years. This modeling has confirmed 
that, despite the anticipated growth of our 
multi-channel sales, our mature UK 
superstore portfolio will consist of 
approximately 200 stores, at the top end 
of our previously indicated range.
We have until now targeted all investment in 
new store openings to achieve discounted 
cash flow payback of 36 months. We have 
consistently beaten this target and indeed 
the average payback for stores opened in 
the last three financial years is 
approximately 31 months. Nevertheless, 
as our portfolio becomes more mature we 
recognise that some locations will offer 
lower returns and going forward, we 
anticipate that a proportion of new stores 
will be targeted to achieve 48 months 
payback. This payback profile will allow 
for some cannibalisation of revenues from 
existing stores, whilst still delivering a very 
attractive return on invested capital.
Our refit programme covered 15 
superstores this year of which four were 
‘major’ refits. The programme is designed 
to improve the shopping environment in 
our existing stores and create a full and 
consistent customer experience under the 
Dunelm brand. These refits increase sales 
by introducing new product ranges such 
as Dorma sub-shops (now present in 73 
stores) and extended kitchen concepts 
(93 stores), and improves the overall 
shopping experience, for example 
through better ranging, space allocation 
or department layouts.
Chief Executive’s review continued Governance Financial statements
10 11
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Business review Business overview
In addition, our Pausa coffee shops are 
now in 74 stores, providing an additional 
reason for customers to visit and 
increasing their engagement and  
dwell time. 
As a result of this continued investment 
our portfolio is highly contemporary with 
50% of the superstore chain either new  
or having benefited from a major refit over 
the past three years. 
Priority 3 – grow multi-channel
UK consumer behaviour continues to  
evolve and a greater on-line confidence, 
enthusiasm and capability have created  
a shift in shopping preferences. Consistent 
with this, Dunelm customers are embracing 
the convenience and value of multi-
channel shopping with two thirds of total 
shopping visits now involving some 
element of on-line activity (browsing, 
research or purchasing) through our 
websites, www.dunelm-mill.com and 
www.dorma.co.uk.
In the year we successfully launched a full 
Reserve and Collect (‘R&C’) model that 
links our store stock files to the web in real 
time, enabling our customers to check 
availability and order from over 16,000 
products. R&C customers, who represent 
over a third of multi-channel revenues, 
pay for their reserved products on 
collection in store. This model lends itself 
particularly well to our product range 
which customers will often wish to touch 
and feel before committing to a purchase, 
and at the same time creates a clear 
opportunity for add-on or incremental 
sales during their visit.
Multi-channel functionality was further 
enhanced through the launch, in January,  
of our dedicated mobile friendly site. This 
development gives the increasing volume  
of new and existing customers who use a 
range of android devices better access to 
our specialist multi-channel offer.
We have continued to invest significantly 
in both website development and in digital 
marketing, where returns remain highly 
attractive. Through these investments the 
number of visitors to our websites has 
increased by over 50% during the year, 
whilst enhancements to our offer and 
customer experience on the web have 
also led to improvements in conversion.
As a consequence of all the above our 
multi-channel revenues have continued  
to grow strongly, representing 2.5% of 
revenues over the full financial year and 
approximately 3% in the final quarter.
Despite the progress we have made, 
there are a number of areas where our 
multi-channel proposition could be  
further enhanced and this provides a  
clear opportunity for further revenue 
growth. Key within this are improvements 
to our delivery proposition to provide 
speed and choice in line with market 
norms. Achieving this will require technical 
enhancements to our site and the 
expansion of our logistics operations. 
These significant developments are 
targeted during the current financial year. 
Following a successful trial of extended 
inventory within furniture, we are targeting 
further web exclusive ranges. We are also 
confident that our e:marketing and 
promotional capability will be significantly 
enhanced from a suite of developments 
scheduled to be in place before our peak 
trading period. 
 
Priority 4 – develop and exploit our 
infrastructure
The Group’s continued success is reliant 
upon a resilient, functionally rich and 
dynamic business infrastructure across IT 
systems, distribution facilities and people 
resources. Over the course of the year 
investment in our IT systems has enabled 
us to improve stock control, make in-store 
processes more efficient, and deliver an 
enhanced customer offer through Reserve 
and Collect. 
The year saw the completion and 
occupation of our new head office in 
Syston, Leicestershire, which was opened 
in September 2011. We have retained our 
former head office which now operates as 
our central fabric warehouse, a photo 
studio, a mock-shop and acts as a key 
business recovery backup facility.
The capacity and capability of the Group 
has been further strengthened by 
recruitment of experienced retail 
professionals into the key new roles of 
Chief Operating Officer and Director of 
Multi-Channel. These positions allow a 
greater focus and specialism within an 
expanded Operating Board. 
Finally, we have begun a programme of 
investment to upgrade both our customer 
facing transactional till systems and our 
central ERP system. 
Summary and outlook
Dunelm has delivered robust trading 
results in a demanding retail environment, 
with our strong focus on retailing 
excellence leading to increased market 
share on a like for like basis. We have also 
made good progress with our strategic 
development, scaling our business 
through new stores, multi-channel and 
strengthened infrastructure, while 
continuing to improve our specialist 
customer proposition. I would like to 
thank all my colleagues for their hard work 
and commitment in achieving this.
Our financial position remains extremely 
strong which, together with the Board’s 
confidence in Dunelm’s future growth 
prospects, enables us to propose an 
increase in the dividend ahead of 
earnings, together with a return of excess 
capital equal to 32.5p per share.
 
Looking ahead, we remain cautious of the 
UK consumer environment and its impact 
on our trading in the near term. However, 
with a strong new store pipeline, good 
momentum in multi-channel and a  
‘Simply Value for Money’ proposition that 
continues to resonate with a wide range 
of customers, we remain confident in the 
future growth prospects for the business.’
Nick Wharton
Chief Executive
13 September 2012 Financial highlights
 > 12.1% increase in overall revenues
 > Gross margin change +30 bps
 > Operating profit £95.2m (14.3% increase)
 > Earnings per share (diluted) 35.1p (19.8% increase)
 > Dividends per share 14.0p (21.7% increase)
Operating result
Group revenue for the 52 weeks to  
30 June 2012 was £603.7m  
(2011: £538.5m), an increase of 12.1%. 
This increase was achieved through growth 
in like-for-like sales of 3.1% and contribution 
from net new space amounting to 9.0%. 
The like-for-like sales performance 
strengthened through the year with H2 
delivering an increase of 5.2% compared 
with growth of 1.1% in H1.
Trading in the final quarter was exceptionally 
strong boosted by the unusually wet 
weather driving strong footfall. As a result 
like-for-like sales in the final quarter grew 
10.4% (2011: +1.9%). We estimate that the 
benefit to total revenues from the weather 
conditions was approximately £8m in the 
quarter.
Gross margin increased by 30 basis points 
to 48.3% (2011: 48.0%) primarily reflecting 
benefits from direct sourcing initiatives.  
We have moved a small number of ranges 
to direct sourcing where significant margin 
benefit exists; at the same time we have 
used our deepened factory relationships  
to ensure that our UK based full service 
vendors continue to provide good value.
Operating costs grew by 12.3% compared 
with last year, with the increase primarily 
due to expansion of and investment in the 
store portfolio and supporting central 
infrastructure. Operating costs in like-for-like 
stores increased by just 2.1%, including 
increased investment in multi-channel 
operations and refits. Non-store costs grew 
in line with the overall growth of the 
business, including increased marketing 
investment and strengthened central teams. 
Operating profit for the financial year was 
£95.2m (2011: £83.3m), an increase of 
£11.9m (14.3%). Adjusting for the benefit of 
unusual weather conditions, we believe that 
underlying operating profit would have been 
approximately £92.7m. 
 
EBITDA
Earnings before interest, tax, depreciation 
and amortisation were £113.9m (2011: 
£97 .4m). This has been calculated as 
operating profit (£95.2m) plus depreciation 
and amortisation (£18.7m) and represents 
an increase of 16.9% on the previous year. 
The EBITDA margin achieved was 18.9%  
of sales (2011: 18.1%).
Finance Director’s 
review
‘The Group generated £91.9m 
net cash from operating 
activities in the last financial 
year, an increase of 24.2%.’
Key performance  
indicators
12
Dunelm Group plc 
Annual report and accounts 2012
18.2
12.1 2012
9.3 2011
2010
Sales growth %
15.3
15.8 2012
15.5 2011
2010
Operating margin %
190
30 2012
120 2011
2010
Gross margin change (basis points)
26.9
35.1 2012
29.3 2011
2010
Earnings per share (diluted) p
10
14 2012
10 2011
2010
New store openings
9
4 2012
8 2011
2010
Major reﬁts
8.0
14.0 2012
11.5 2011
2010
Dividend per share p
8.0
3.1 2012
-0.6 2011
2010
Like for like sales growth %
86.9
113.9 2012
97.4 2011
2010
EBITDA £m Governance Financial statements Business review Business overview
Finance Director’s 
review
David Stead
Finance Director
Financial items and PBT
The Group generated £1.0m net financial 
income for the year (2011: £0.4m). Financial 
items include interest earned on surplus 
cash deposits of £0.8m (2011: £0.5m) and 
foreign exchange gains arising from the 
translation of dollar denominated assets 
and liabilities at the end of the period, worth 
£0.2m (2011: loss of £0.1m). As at 30 June 
2012 the Group held $1.4m in US dollar 
cash deposits and additional forward 
contracts for $22.3m representing 
approximately 35% of the anticipated US 
dollar spend over the next 12 months. 
After accounting for interest and foreign 
exchange impacts, profit before tax  
for the year amounted to £96.2m  
(2011: £83.6m), an increase of 15.1%.
Tax, PAT and EPS
The tax charge for the year was 26.0%  
of profit before tax compared with 28.5%  
in the prior year. This year on year 
improvement reflects the reduction in the 
headline rate of corporation tax, as well as 
an increase in the level of assets qualifying 
for capital allowances following a review 
completed in the year.
Profit after tax was £71.2m (2011: 59.8m), 
an increase of 19.1%.
Basic earnings per share for the year ended 
30 June 2012 was 35.3p (2011: 29.7p),  
an increase of 18.9%. Fully diluted EPS 
increased by 19.8% to 35.1p (2011: 29.3p).
Capital expenditure
Gross capital expenditure in the financial 
year was £38.6m compared with £37 .2m 
last year. The most significant investments 
were made in order to support continued 
growth and development of the superstore 
portfolio with the addition of 14 new stores 
(which included 2 relocations and 2 
freeholds) and major refits in 4 further 
stores. Investment was also made to 
support our multi-channel offer and our 
infrastructure was bolstered by the 
completion of our new Head Office in 
Leicestershire, fully operational since 
September 2011.
Working capital
Investment in working capital has increased 
by just £0.3m over the financial year as a 
result of additional stock to support new 
store openings partially offset by an 
increase in deferred rent in the same sites 
and a growth in VAT liabilities as a 
consequence of increased trading.
 
Cash position and dividend
The Group generated £91.9m  
(2011: £74.0m) net cash from operating 
activities in the last financial year, an 
increase of 24.2%. Net cash resources  
at the end of the year were £65.2m  
(2011: £35.1m), with average cleared funds 
across the year of £57 .6m (2011: £35.9m).
An interim dividend of 4.0p was paid in  
April 2012 (2011: 3.5p). It is proposed to  
pay a final dividend of 10.0p per share 
(2011: 8.0p). The total dividend of 14.0p 
represents a 21.7% increase over last year 
reflecting the Group’s strong financial 
performance and leaves dividend cover  
of 2.5x, within our target range of  
2.5x–3.0x earnings. This dividend will be 
paid on 21 December 2012 to shareholders 
on the register at the close of business on 
30 November 2012.
 The Board reviews the Group’s funding 
position on a regular basis and has 
concluded that access to external funding  
is not required in the short term.
The Group maintains uncommitted lines of 
funding with partner banks whilst trading 
with a positive net cash position.
Return of capital
The Group’s policy is to maintain cash 
resources such that it is able to take 
advantage of investment opportunities as 
and when they arise, for example freehold 
property acquisitions. Periodically the Board 
will seek to return to shareholders any cash 
accumulated in excess of likely 
requirements. 
Taking into account the Group’s financial 
strength; its known and anticipated 
investment plans; the level of cash available 
as at the date of this report; and allowing for 
potential further weakness in the UK 
consumer environment the Board is 
proposing that surplus capital amounting to 
£65.8m (32.5p per share) be returned to 
shareholders in November 2012. It is 
proposed that this will be accomplished  
via a B/C share scheme which allows 
shareholders the option of receiving the 
return as capital or income. Full details will 
be announced in due course and provided 
in a circular to shareholders accompanying 
the annual report.
Financial risk and treasury 
management
The Board has established an overall 
treasury policy and approves authority 
levels within which the Group may operate. 
This policy ensures that risk is managed 
within the agreed framework. 
Key performance indicators
In addition to the traditional financial 
measures of sales and profits, the Directors 
review business performance each month 
using a range of other KPIs. These include 
those in the table on page 12.
David Stead
Finance Director
13 September 2012
13
Dunelm Group plc 
Annual report and accounts 2012 Key
 
Develop our specialist proposition
  
Develop the store portfolio
 
Grow multi-channel
  
Develop and exploit our infrastructure
Key risks and 
uncertainties
In common with all businesses Dunelm faces risks and uncertainties 
that could impact the achievement of its core strategic objectives. 
The Board of Dunelm has overall responsibility for risk management, 
internal control and business continuity and determines the nature 
and extent of the risks it is willing to take. Continual review is 
required to identify, evaluate and prioritise risks and to ensure that 
appropriate controls are in place to manage these effectively.
An annual risk identification and assessment workshop is in place to 
review the risk profile of the organisation and to compile the Group’s 
Risk Register. Quarterly reviews of these risks are undertaken by 
management and the Board gains assurance through twice yearly 
reviews, as well as by regular challenge to the executive team.
The Board considers that the principal risks to Dunelm’s aims of 
achieving its strategic objectives are as follows:
Strategy Risks Mitigation
Competition
The Group competes with a wide variety of retailers both 
in-store and on-line. Failure to withstand increased 
competition in the Homewares market on multiple fronts 
(price, range, quality and service) could materially impact 
returns and limit opportunities for growth.
The Board continually monitors Group performance within 
the Homewares market and against specific competitive 
threats. Continuous brand tracking also operates to gauge 
relative customer perception and experience. Initiatives seek 
to develop and enhance the multi-channel customer offer 
and thus strengthen our specialist proposition and brand.
Economic uncertainty
Uncertainty surrounding the resilience of the UK 
economy and effectiveness of fiscal and monetary 
measures will continue to put pressure on consumer 
expenditure. This is likely to result in difficult trading 
conditions in the retail sector as a whole limiting 
profitability and growth opportunities.
The Group mitigates this by reacting quickly to consumer 
changes and adjusting its offer in response. In addition our 
focus on maintaining a low cost base helps us to maintain 
our affordable ‘Simply Value for Money’ proposition.
Commodity prices
Significant cost price increases and high levels of 
volatility have been a feature of retailing over recent years 
particularly freight rates, raw materials, energy and 
exchange rates. Failure to manage and control these 
changes will lead to pressure on margins and adversely 
impact the financial results.
Dunelm uses its scale, buying power and growth to secure 
supply of key raw materials at competitive prices. Freight 
rates, energy and currency are bought forward to help 
mitigate volatility and aid margin management.
Portfolio expansion
Vacant or new retail space is essential to deliver our growth 
plans. In addition, the quality and location of the Group’s 
store portfolio are key contributors to the Group’s strategy. 
Inability to secure or develop the required retail trading 
space to deliver our optimal store format will limit our pace 
of expansion or force us to compromise our offer.
The Group’s strong cash generation and debt-free status 
provide an attractive covenant to landlords, and the ability 
to acquire freehold units if appropriate.
14
Dunelm Group plc 
Annual report and accounts 2012 Governance Financial statements Business review Business overview
15
Dunelm Group plc 
Annual report and accounts 2012
Strategy Risks Mitigation
Information technology
Dunelm is dependent on the reliability and capability of 
key information systems and technology. A major 
incident or sustained performance problems with regard 
to store, logistics, multi-channel or head office systems 
could constitute a significant threat to the business, at 
least in the short term. Trading performance could be 
adversely impacted by this reliance.
All business critical systems are established, industry 
leading package solutions. They are supported by a 
disaster recovery strategy designed to ensure continuity of 
trade.
Infrastructure
The Group could suffer the loss of a major facility with a 
consequent impact on short term trading or diversion of 
focus from longer term strategy and planning. This could 
materially affect the profitability of the business.
The Group could suffer the loss of a major supply partner 
also impacting short term trading.
Physical infrastructure - Head office, workroom, multi-
channel and distribution centre activities are all subject to 
disaster recovery plans and could all operate from fall 
back facilities.
Suppliers – The Group seeks to mitigate this risk by 
limiting the dependency on individual suppliers and by 
actively managing key supplier relationships. High stock 
service levels and a high proportion of direct-to-store 
deliveries further mitigate supply chain risk. 
Key personnel
The success of Dunelm is dependent upon senior 
management closely supervising all aspects of Group 
performance, growth and development. The business 
could be vulnerable to the loss of individual key 
managers.
The Group’s remuneration policy detailed on page 40 
ensures that high calibre executives are attracted and 
retained. In addition the Board has ensured that the Board 
continues to build strength in-depth in the operating 
management team. Lock-in of senior management is 
supported by awards under the Long-Term Incentive Plan. 
The Operating Board seeks to develop high calibre 
individuals through sponsored talent management and 
succession planning.
Product & service quality
The Board recognises that the quality and safety of our 
products and services (including coffee shops) is 
essential to the business. If our specialist proposition fails 
to deliver this there is a risk that individuals could be 
harmed and that reputational damage could lead to 
consumers losing confidence in the brand.
Dunelm operates a full test schedule for all new products 
and on a sample basis for ongoing lines, overseen by our 
specialist Technology team.
Food hygiene is maintained through the adoption of clear 
operating guidelines contained in the Groups ‘Food Safety 
Manual’. Staff certification is compulsory and risk 
assessments, equipment inspections and compliance 
audits are in constant use to ensure standards are 
maintained.
Compliance
The Group risks incurring penalties or punitive damages 
arising from failure to comply with legislative or regulatory 
requirements across many areas including but not limited 
to, trading, health and safety, data protection, 
advertising, ethical standards and the environment.
Dunelm operates a number of policies and codes of 
practice outlining mandatory requirements within the 
business governing behaviours in all key areas. 
Operational management are also responsible for liaising 
with external advisers to ensure that potential issues from 
new legislation are identified and managed.
Finance & treasury
Lack of appropriate levels of cash resources or exposure 
to significant variations in interest rates or exchange rates 
could have an impact on the Group’s operations and 
growth plans.
Dunelm has significant cash surpluses and further 
uncommitted borrowing facilities with partner banks to 
fund growth plans. In addition, cash flows are monitored 
weekly against agreed budgets. A Group Treasury Policy 
is in place to govern cash management strategies and to 
control foreign exchange exposures.
Nick Wharton David Stead
Chief Executive Finance Director
13 September 2012 Key performance  
indicators
12/13
11/12
10/11
09 /10
08 /09
Recycled waste (all stores) – %
Target 12/13      100% 
76% 
68% 
50% 
30% 
YOY Reduction in electricity consumption (L4L stores) – %
Carbon footprint - CO
2
 tonnes per store*
100%
100%
100%
100%
100%
12/13
11/12
10/11
09/10
08/09
Target 12/13      188 
194 
220 
235 
262 
12/13
11/12
10/11
09/10
Target 12/13      5.0% 
3.2% 
6.3% 
2.4% 
Recycled ■
Recycled ■
(previous years)
Landll ■
* ‘Core Supplies’ as deﬁned by Environment Agency CRC Energy Efﬁciency Scheme
‘ Our target for the forthcoming 
year is to reduce relative CO
2
 
emissions per ft
2
 year on year.’
16
Dunelm Group plc 
Annual report and accounts 2012 Governance Financial statements Business review Business overview
Corporate social 
responsibility
17
Dunelm Group plc 
Annual report and accounts 2012
Why does it matter to Dunelm?
We take Corporate social responsibility 
(‘CSR’) seriously because it matters to our 
customers and our colleagues, it affects 
profitability and it is important for our 
reputation.
Our key CSR considerations
Customers
Colleagues
Health and Safety
Suppliers
Environment
Community
How do we manage CSR?
The Board has overall responsibility for 
CSR, which includes approving our CSR 
policies and monitoring performance.
The Chief Executive, Nick Wharton, is 
responsible for reporting to the Board on 
all CSR matters. Each month the Board 
receives a ‘scorecard’ which includes 
CSR measures, and there is a separate 
Health and Safety report.
Our approach is to embed CSR into the 
responsibilities of members of the 
Operating Board, as identified below. 
Each individual then reports to the Chief 
Executive in respect of those matters.
We report to colleagues on our 
achievements regularly through our 
in-house magazine, the ‘Gazette’.
Customers
Champion: Chief Operating Officer
Why does it matter?
The success and future growth of our 
business depend on us being able to 
deliver a range of products to our 
customers that meet our ‘Simply Value for 
Money’ ethos, together with a great 
customer experience.
What do we do?
Our aim is to consistently deliver great 
products, that are safe, legally compliant 
and competitively priced.
We want our customers to experience 
excellent service in store, on-line and 
through customer care.
We want our stores to be safe and 
accessible.
Our marketing will be fair and truthful.
What have we achieved this year?
We were the UK’s fourth favourite 
homewares retailer according to the 2012 
Verdict survey. Readers of House 
Beautiful magazine also voted us the 
Home Retailer of the year Gold Award for 
2011. We were also ‘highly commended’ 
in the Coffee Bar Sandwich Retailer of the 
year award for 2012.
We have worked with a third party to help 
us to better understand what our 
customers like about us, and where we 
can improve.
We introduced a number of convenient 
new services, such as Reserve and 
Collect and ordering via mobile phone.
We launched our social media service 
including Facebook and Twitter pages,  
to enable us to communicate better with 
our customers and to gain their feedback.
2012/13 objectives:
•	 We will continue our work to better 
understand what our customers want 
from us, and to assess whether 
actions being taken by us are 
improving their customer experience.
•	 We will refocus the activities of our 
colleagues in-store, to enhance the 
service they offer to customers.
•	 We will continue to improve the service 
offered by our on-line store, in terms of 
choice, the overall website experience, 
and delivery of the product.
Colleagues
Champion: Finance Director
Why does it matter?
We employ nearly 7,000 colleagues 
across our stores, and in our distribution, 
manufacturing and store support centre 
locations. Without their hard work and 
dedication we would be unable to deliver 
great products and services to our 
customers and successfully grow and 
develop our business.
What do we do?
We are a growing business and we need 
to be able to attract and retain colleagues 
to help us deliver our development plans. 
We offer a competitive remuneration and 
benefits package, including our annual 
sharesave scheme which is open to all 
colleagues with three months’ service.
We are an equal opportunities employer; 
our policy is to recruit, develop, promote 
and retain skilled and motivated people 
regardless of disability, race, religion or 
belief, sex, sexual orientation, gender 
reassignment, marital status or age.
We maintain regular communication with 
all colleagues, through store manager 
‘huddles’, our Gazette magazine which  
is published at least quarterly, and via the 
computer-based ‘Dunelm Academy’,  
to which all colleagues have access.  
We also operate a Colleagues’ Council, 
through which colleague representatives 
can raise and discuss ideas and concerns 
with senior management. Concerns 
raised are then fed back to the Operating 
Board for consideration and action.
We offer a range of training and 
development opportunities to colleagues 
at all levels of the business. These include:
•	 Nationally accredited modern 
apprenticeships and NVQs.
•	 Our graduate programme, which leads 
to an Institute of Leadership and 
Management qualification.
•	 Support for colleagues studying for 
professional qualifications, such as in 
finance and IT.
•	 A range of workshops in key 
management skills, such as leadership 
and communications.
•	 Interactive computer based product 
knowledge and other training.
What have we achieved this year?
We have taken part in the Government’s 
work placement scheme, offering short 
term training opportunities to the 
unemployed.
We have an arrangement with Jobcentre 
Plus, offering preferential treatment to job 
applicants who have been unemployed 
for six months or more.
Access to computer based training has 
been extended to all store colleagues.
A plan has been implemented to ensure 
that every colleague in the business will 
receive a formal appraisal at least annually 
from 2012.
Our management induction training has 
been restructured, and the outcome will 
Include a personal development plan for 
all management recruits. 18 19
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
2012/13 objectives
•	 We aim to double the number of 
places on our graduate programme 
in 2012.
•	 We will conduct an employee 
engagement survey across the Group.
•	 Our Colleagues’ Council will be 
relaunched.
•	 We will continue to improve our 
colleague training opportunities, 
through structured programmes and 
additional modules on the Dunelm 
academy.
•	 We will work with partners to provide 
opportunities to the unemployed.
Health and safety
Champion: Director of Central Operations
Why does It matter?
The Board recognises that we have a duty 
of care to ensure the health and safety of 
customers, colleagues, contractors and 
all other visitors to our premises. Health 
and safety risk management is an integral 
part of the core standards that we set for 
our business.
What do we do?
The Board is ultimately responsible for the 
creation and implementation of our health 
and safety policy and procedures, which 
include an effective system of ‘upward’ 
and ‘downward’ communication, 
appropriate standards for monitoring 
performance, and for ensuring that 
sufficient resources are available to 
support this activity.
Health and safety Is a standard agenda 
item at every Board meeting, and the 
Board receives a monthly report and a 
formal annual presentation from the 
Central Operations Director.
Regular Health & Safety review meetings 
are held with our dedicated Health & 
Safety manager and senior management 
from the key operational functions: Stores, 
Development, Manufacturing and 
Logistics. These meetings ensure 
respective risks are understood and that 
relevant mitigating action has been taken 
to provide a safe environment.
Each store manager is responsible for 
ensuring the implementation of health and 
safety policy and procedures in his or her 
store, supported by the area manager 
and the Group Health and Safety 
manager. Risk assessments are in place 
and updated as required.
We have an in-house health and safety 
audit document, which pro-actively 
addresses health and safety risk and is 
updated every six months. The audit 
covers stores, workplace transport, store 
development, warehousing and the store 
support centre. Our stores complete an 
on-line self audit monthly, and area 
managers audit all of their stores at least 
once a year. This is backed up by our 
in-house operational audit team and 
followed up by the Group Health and 
Safety Manager.
We have an on-going programme of 
education and training, including DVDs 
and interactive computer based learning.
What have we done this year?
By targeting high standards of compliance 
to company procedures and using 
positive reinforcement of success 
achieved, we have been able to improve 
compliance against our internal audit to 
82% (2010/11 – 65%). Despite opening an 
additional 14 superstores during the year, 
we have seen a reduced accident rate of 
3.5 accidents for every 100,000 visits.
A great deal of our focus and 
development this year has been on 
management and colleague training with 
further additions to our e-learning titles 
and bespoke DVDs on the following 
topics; Health and Safety induction,  
Fire Safety and Preventing Customer/
Colleague Accidents. Our insurers have 
recognised the improvements made in 
public and employee claims and 
supported us by providing DVD players 
for stores.
We have developed a Workplace 
Transport/Delivery Area Database to; 
assess risk, monitor compliance and 
identify remedial actions required from 
delivery driver surveys completed six 
monthly. The database will give clearer 
visibility of risk management issues and 
actions required/taken.
Our non store activities have been focused 
on developing Business Continuity Plans, 
with support from specialist consultants,  
to cover Emergency Response, Crisis 
Management and Recovery. This pro-active 
planning approach further embeds a 
positive health and safety culture and risk 
management commitment.
2012/13 objectives
•	 To further utilise and develop the 
intranet and e-learning systems for 
training and central recording of site 
documentation.
•	 To review and develop further our 
business continuity plans for non-store 
sites.
•	 To review and improve our key risk 
controls for:
 – Fire Safety
 – Work Related Road Safety
 – Workplace Transport.
Suppliers
Champion: Buying Director
Why does it matter?
Our suppliers are crucial to help us 
achieve our growth ambitions. We need to 
maintain long term relationships with 
manufacturers worldwide who can meet 
our high standards for design, innovation, 
quality and value, but can also 
demonstrate that they operate in 
accordance with recognised standards 
that uphold human rights.
What do we do?
We aim to treat all of our suppliers fairly 
and consistently. We ask all of our 
suppliers to sign our standard terms and 
conditions. All new suppliers are made 
aware of the basis of trade with Dunelm 
and in particular our standard payment 
terms in advance of commencing trade. 
The number of days’ purchases 
outstanding for payment at 30 June 2012 
was 27 days (2011: 36 days).
We continue to work in collaboration with 
our suppliers to ensure that our products 
are produced in clean and safe 
environments, that workers are treated with 
respect and earn a reasonable wage and 
that suppliers work within the relevant local 
laws and legislation. All direct suppliers are 
required to sign up to our ‘Code of 
Conduct’ enforced by a full programme of 
independent factory audits at least every 
three years, based on the Ethical Trading 
Initiative (‘ETI’) base code. Our Technology 
department also covers Code of Conduct 
matters through routine quality audits.
Where non-conformities are discovered we 
have a formal procedure for working with a 
supplier to help them achieve compliance, 
usually within three months – although 
critical non-conformances such as use of 
child labour are escalated immediately. 
Ultimately if progress is inadequate we will 
cease to trade with the supplier.
Corporate social  
responsibility continued Governance Financial statements
18 19
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Business review Business overview
What have we done this year?
We updated and relaunched our standard 
supplier terms and conditions, amongst 
other things to include a warranty that the 
supplier has systems in place to prevent 
bribery and corruption.
Our Code of Conduct was updated.
We held supplier conferences in China to 
educate suppliers on our Code of Conduct 
and other regulatory requirements.
All product suppliers were required to 
demonstrate an ethical audit by June 
2012. This was completed, with no critical 
issues outstanding; over two thirds of 
suppliers passed the audit with no follow 
up action required.
2012/13 objectives
•	 We will work with selected partners  
to develop our in-house ethical 
auditing expertise.
•	 Our supplier ethical audit database  
will be developed to give us greater 
visibility of up to date audit status.
Environment
Champion: Deputy Finance Director
Why does it matter? 
As a responsible business Dunelm is 
committed to minimising the impact of its 
operations on the environment and 
recognises that good environmental 
management makes good business sense. 
What have we done this year?
Dunelm operates an ‘Energy Policy’ 
overseen by an Environment Steering 
Group made up of senior management 
from across the business. This framework 
allows us to embed environmental 
considerations into our business and to 
deliver a strategy to achieve high levels of 
environmental performance. 
The key areas of focus are waste 
management, energy consumption and 
carbon emissions. In these areas our 
progress over the past financial year and 
our goals for the forthcoming year are 
detailed as follows:
Waste recycling
0
20
40
60
80
100
yoy improvement
cardboard electrical metals plastics
08/09
Landﬁll
09/10 10/11 11/12 Target 
12/13
Recycled
Recycled (previous years)
30%
50%
68%
76%
100%
70% 50% 32% 24%
Dunelm has established the specialist 
position of ‘Group Recycling Manager’. 
This role reports into the Environment 
Steering Group and focuses on the 
effective optimisation and delivery of our 
waste management strategies.
The Group is focused on minimising the 
volume of waste sent to landfill. To this 
end, we target year-on-year increases in 
the proportion of waste recycled across 
all areas of the business. Our progress 
during the year is detailed below:
•	 A new in-house recycling centre has 
been built at our central warehouse in 
Stoke. This facility now enables the 
Group to recycle all types of plastic 
waste, back-hauled from stores, in 
addition to cardboard and paper. As a 
result we have seen significant increases 
in recycled material and revenues.
•	 Investment has been made to provide 
every store with an industrial baler. 
This enables efficient local processing 
of recyclable material and boosts our 
capability to manage volume through 
our business.
•	 We have engaged in a new partnership 
with a specialist waste management 
company to deliver reductions in the 
volume of waste to landfill. 
•	 An initiative to ‘Recycle at Work’ was 
re-launched at our annual store 
manager’s conference. This established 
local ownership of our waste strategy 
through a network of ‘Recycling 
Champions’ in stores. These principles 
were also applied to all other sites 
including our new head office at Syston.
•	 This year every site has had a waste 
audit designed to challenge and improve 
waste management practices. As a 
result the capacity of ‘general waste’ 
containers has been reduced. These 
audits will be conducted every year.
•	 Through the year we have partnered 
with a number of charities to re-use our 
fabric waste in creative ways culminating 
in our current agreement to supply 
waste material for use in acoustic 
panelling in the motor industry.
These initiatives have enabled Dunelm to 
reduce the proportion of waste to landfill 
from 32% (2011) to our lowest ever level of 
24% and our effort has been recognised 
externally by the award of ‘High Street 
Recycling Champion’ as part of the Lets 
Recycle.com Rewards for Excellence.
Waste recycled (all stores) - %
0
20
40
60
80
100
yoy improvement
cardboard electrical metals plastics
08/09
Landﬁll
09/10 10/11 11/12 Target 
12/13
Recycled
Recycled (previous years)
30%
50%
68%
76%
100%
70% 50% 32% 24%
2012/13 objectives
•	 We have already commenced trials  
of glass recycling, food recycling and 
replacement of cardboard outer 
packaging by reusable ‘Tote’ boxes  
for some stock.
•	 We have set our target for the 
forthcoming year to reduce all waste 
sent to landfill to zero.
Energy use
Energy reduction on a site-by-site basis 
continues to be a key focus for the Group. 
During the year we have completed a 
project to equip our superstore chain with 
Building Management Systems (‘BMS’) 
designed to optimise and control energy 
usage across the site while maintaining an 
appropriate shopping environment for our 
customers and staff. With BMS systems 
continuing to be fitted as standard to all 
new stores Dunelm now has 101 stores 
(30 in 2011) controlled by this energy 
saving technology.  Our entire superstore 
estate reports energy consumption on a 
half hourly basis typically through AMR 
(‘Automatic Meter Reading’) smart meters. 
Data captured in this way enables the 
Group to report on energy trends and 
volumes to understand high or unusual 
patterns and to target specific sites for 
reduction or to monitor the success of our 
energy reduction initiatives.
We have engaged with a specialist 
partner in energy management to monitor 
energy usage and to control our BMS 
systems with the goal of reducing 
consumption. 20 PB
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
During the year we have also invested  
in a lighting solution for one of our High 
Street stores. This trial successfully 
reduced the energy consumption of the 
store by 40% and we now intend to 
retro-fit this solution into other High  
Street stores.
As a result of these actions we have 
reduced electricity usage by 3.2% and 
gas usage by 25.1% in like-for-like stores.
YOY Reduction in electricity 
consumption (L4L stores)
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
09/10 10/11 Target 
12/13
11/12
2.4
6.3
3.2
5.0
5.0
2012/13 objectives
•	 Our target for the forthcoming year is 
to reduce electricity and gas usage by 
5% in like-for-like stores.
Carbon emissions (CO
2
)
Over the past year we have continued to 
procure energy from ‘Green Energy’ 
supplies such as combined heat and 
power sources where CO
2
 emissions are 
30% lower than the national average. 
We have continued to reduce the 
maximum emissions tolerated within our 
company car fleet, this is now 135g/km 
(2011: 155g/km) and many fuel efficient 
models have been added to the scheme. 
Dunelm holds the Carbon Trust Standard 
(‘CTS’) certification recognising our 
success in reducing our carbon footprint 
but also our continuing governance and 
management in this area. 
As participants in the Environment 
Agency’s Carbon Reduction Commitment 
(‘CRC’) we have submitted both ‘annual’ 
and ‘footprint’ reports. This is the second 
year we have submitted an ‘annual’ report 
and our progress has been to reduce 
average carbon emissions per site  
by 11.6%. 
Dunelm’s carbon footprint from ‘core’ 
supplies as defined by the CRC scheme 
was 23,234 tonnes of CO
2.
 
Carbon footprint - CO
2
 tonnes per site*
0
50
100
150
200
250
300
08/09 09/10 10/11 11/12 Target
12/13
262
235
220
194
188
*  ‘Core Supplies’ as defined by Environment Agency 
CRC Energy Efficiency Scheme
2012/13 objectives
•	 We will continue to partner with an 
external consultancy to further focus 
on reducing our carbon emissions.
 
•	 Our target for the forthcoming year is  
to reduce CO
2
 emissions per sq ft year  
on year.
Product packaging
Dunelm continues to work with suppliers 
to reduce both the absolute level and 
recyclability of packaging in our products. 
In the year we have commenced the trial  
of a new ‘tote’ delivery system for our 
product. In addition to operational benefits 
of a more efficient flow-through of stock  
to the sales floor, this initiative reduces the 
level of outer packaging per delivery by up 
to 40% and has the potential to increase 
vehicle fill and thereby reduce miles 
travelled and carbon.
The Group is promoting a reduction in the 
use of ‘single-use’ carrier bags and we 
ensure that Eco-bags are offered in all 
stores. In October, in line with a new 
initiative from the Welsh Development 
Agency, we started charging for all 
single-use carrier bags in our Welsh 
stores. As a result the use of these bags 
has dropped by 75% and net revenues 
earned through the charges have been 
donated to ‘Groundwork Wales’, 
supporting sustainable communities.
Over the course of the year the number of 
plastic carrier bags used in the course of 
trade was flat YOY, only growing in line 
with new store openings.
2012/13 objectives
•	 Our target for the forthcoming year is 
to reduce the number of carrier bags 
used per store by 10%.
•	 We also plan to further roll-out our 
reusable ‘Tote’ delivery initiative to 
reduce the volume of outer packaging.
Community
Champion: Marketing Director
Why does it matter?
As a responsible retailer, we are 
committed to supporting charities,  
both on a national and a local basis.
What do we do?
We adopt a ‘charity of the year’, for which 
collections are made in-store, specific 
fund-raising events are organised, and  
the Group makes its own donations.  
Each store has a ‘Charity Champion’  
and amounts raised by store are reported 
monthly, the top 3 are named in the 
colleague magazine ‘The Gazette’.  
We also support colleagues who are 
raising money for charities of their choice, 
often by matching the sums raised.
We do not make any political donations.
What have we done this year?
Our charity of the year was Wallace and 
Gromit’s children’s charity, whose 
objectives are to improve the quality of life 
of sick children in hospitals and hospices 
across the United Kingdom. We have 
raised funds through a variety of ways, 
including our Friends and Family night,  
a themed fancy dress fundraising evening 
in store, through sale of pin badges, bake 
sales, fancy dress days and the ‘Wrong 
Trousers’ day on 29 June.
We introduced a monthly payroll lottery, 
half of the proceeds of which go to our 
chosen charity.
We also supported a variety of other 
events such as ‘Children in Need’.
The total value of donations made by the 
Group in the year ended 30 June 2012 
was £97,000 (2011: £56,000). Total funds 
raised for charity by the Group and 
colleagues was £192,000 (2011: 
£140,000).
2012/13 objectives
•	 During 2012/13 The Wallace and 
Gromit children’s charity will continue 
to be our charity of the year, and we 
will support our colleagues in their 
charitable fundraising efforts as 
described above.
Corporate social  
responsibility continued Business review Business overview
PB 21
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Financial statements Governance
Governance
Letter from the Chairman
Geoff Cooper
Chairman
Dear Shareholder,
Significant developments occurred in both external and internal 
governance matters in the last financial year:
 
Externally there was heightened public awareness and debate 
about governance matters and their wider impact; important 
government consultation; and new guidance on remuneration.
Dunelm’s governance activities included our first governance 
presentation to shareholders; an initiative by us to engage 
pro-actively with voting services; our new Chief Executive’s first 
full year leading the company; and the appointment of a new 
Non-Executive Director, Matt Davies.
I have asked Marion Sears, who chairs our Remuneration and 
Nominations committees to write a separate personal letter to 
you as part of this annual report, to cover, particularly in 
remuneration matters, our response to relevant governance 
matters dealt with by those committees.
Overriding our approach to governance is our view that good, 
sensible and pragmatic application of governance requirements 
leads to stronger value creation and lower risks for shareholders 
– and our starting position is that we will seek to comply with all 
requirements. However, our judgment is that good governance is 
ensured more by the culture and ethics of the boardroom than 
by rote application of guidelines. ‘Is this the right thing for 
Dunelm?’ is the most frequent point raised when your Board is 
handling governance matters. As a relatively young, and fast 
growing plc with a dynamic trading culture, we are always careful 
to ensure the essence of good governance whilst implementing 
simple, cost-effective and practical governance arrangements 
– to which the Board pays real attention.
Our governance presentation, our increased contact with voting 
services and the individual contact by NEDs with shareholders 
has generally met with a positive response and we intend to 
repeat these activities in 2012/13. These have allowed us to 
discuss our approach to governance interactively and go beyond 
formal reporting to explain the thinking behind our current 
arrangements.
Amongst the various factors that help create the right approach 
by the Board, the most important are; the skills, experience and 
diversity of individuals around the board table; a small, unified 
team and yet a challenging debating environment; and a high level 
of engagement by all directors. In particular, NEDs are expected 
to engage regularly with senior and middle management 
colleagues, visit stores and other facilities, report on their activities 
and observations at every board meeting and attend selected 
family and institutional shareholder meetings and events.
Your Board now comprises three excellent executive directors 
and three diligent NEDs, together with myself as Chairman.  
We believe this ‘3 plus 3 plus 1’ model is right for the business. 
Succession, both to the Board, and in senior management has 
been given a lot of attention and remains under constant review.
The Board conducted an internal review, led by me, of its 
performance and processes towards the end of the year.  
Key recommendations related to focusing our attention more 
onto key strategic developments and metrics, giving more 
attention to the top level risks emerging from the Group’s risk 
management framework and widening the Board’s exposure to 
experts in emerging aspects of our business environment and 
operations. The review also involved feedback to individual 
Board members on their performance as directors.
In the present environment, we expect the attention on companies’ 
governance arrangements to continue. Through the approach I 
have described, we hope to keep pace with developments whilst 
retaining an efficient and effective governance environment for the 
Dunelm business.
I look forward to meeting shareholders at the AGM in November.
Yours sincerely,
Geoff Cooper
Chairman of the Board
13 September 2012 22 23
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Nick Wharton Chief Executive Officer
Key strengths: Finance background, plc board experience and shareholder 
understanding, predominantly in retail. Strong process and operational focus. Knowledge 
and experience of e-commerce and Continental European retail markets. 
Dunelm role: Leads the Company and chairs the Operating Board. In addition to his 
Board role, provides liaison with the Remuneration Committee for pay below board level.
Joined Dunelm Board: August 2009 as an Independent Non-Executive Director. 
Appointed as CEO-designate in December 2010 and became CEO in February 2011.
Previous Experience: Qualified accountant. Formerly Finance Director of Halfords  
Group Plc.
Other Commitments: None.
Will Adderley Executive Deputy Chairman
Attends Remuneration Committee by request.
Key strengths: Has worked in, and is familiar with, all parts of the Group. Specific 
product strengths in buying and trading with strong and long-standing supplier 
relationships. Has been instrumental in growing the Group to its current size having, as the 
former CEO, developed the out-of-town format in the late 1990s. 
Dunelm role: Is a major shareholder and spends the majority of his time out in stores and 
with a focus on long term strategy.
Joined Dunelm Board: 1992, and has worked for Dunelm for his whole career. He took 
over the day-to-day running of the Group from his father in 1996. Remained as Chief 
Executive through the Group’s IPO in 2006. Became Deputy Chairman in February 2011.
Previous Experience: All parts of Dunelm’s business.
Other Commitments: None.
Geoff Cooper Non-Executive Chairman
Attends Audit Committee by invitation.
Key strengths: A current CEO with extensive experience in international general 
management, the retail sector, finance and IT. Long-standing Plc experience and 
shareholder understanding. 
Dunelm role: Chairs the Board. Attends and speaks at Store Managers Seminars. 
Regularly visits stores to meet store colleagues and members of the senior management 
team. Leads investor presentations and attends shareholder meetings. 
Joined Dunelm Board: November 2004.
Previous Experience: Qualified accountant. Formerly a Director of Gateway 
(subsequently Somerfield plc). Then Finance Director and subsequently Deputy Chief 
Executive of Alliance UniChem Plc.
Other Commitments: Chief Executive of Travis Perkins Plc.
Directors 
and Officers
22
Dunelm Group plc 
Annual report and accounts 2012
 
Audit Committee Member 
 
Nominations Committee Member 
 
Remuneration Committee Member
Bill Adderley Founder and Life President
Bill Adderley, together with his wife Jean, founded the business in 1979. Although no 
longer on the Board or actively involved in management, Bill and Jean remain major 
shareholders. Business review Business overview
22 23
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Financial statements Governance
Matt Davies Non-Executive Director
Chair of Audit Committee.
Key strengths: A former CEO with extensive general management experience in retail 
with focus on HR, marketing, trading and customer service. A successful track record of 
building a branded out-of-town retail group nationwide in the UK with a strong service 
offer. Experience of the private equity industry and business model.
Dunelm role: Regularly visits stores to meet store colleagues and members of the senior 
management team. Attends investor presentations and shareholder meetings. Chairs the 
Audit Committee.
Joined Dunelm Board: February 2012.
Previous Experience: Qualified accountant. Formerly CEO of Pets at Home.
Other Commitments: None.
Dawn Durrant Company Secretary
Key strengths: Extensive Plc company secretarial and legal experience including 
corporate governance, legal and regulatory compliance, mergers and acquisitions, 
company and commercial, retail and consumer law.
Dunelm role: Responsible for governance, legal and regulatory matters.
Joined Dunelm Board: November 2011
Previous Experience: Qualified as a solicitor at Allen & Overy. Company Secretary of 
Geest Plc.
Other Commitments: Company secretarial consultant to Spicers Limited.
Marion Sears Non-Executive Senior Independent Director
Chair of Nominations and Remuneration Committees.
Key strengths: Extensive City, investor and banking experience including mergers and 
acquisitions. Customer focused and strategic. Long-standing Plc experience and 
shareholder understanding. 
Dunelm role: Regularly visits stores to meet store staff and members of the senior 
management team. Together with the Chairman, takes specific responsibility for 
co-ordinating the Board’s corporate governance duties and for liaising with shareholders 
on corporate governance matters. Attends investor presentations and shareholder 
meetings. 
Joined Dunelm Board: July 2004.
Previous Experience: Robert Fleming, JP Morgan Investment Banking. 
Other Commitments: Senior Independent Director of Zetar Plc, Non-Executive Director 
of Octopus AIM VCT Plc.
Simon Emeny Non-Executive Director
Key strengths: A current CEO with extensive general management experience in a retail 
model, customer service and hospitality expertise. Long-standing Plc experience and 
shareholder understanding.
Dunelm role: Regularly visits stores to meet store colleagues and members of the senior 
management team. Attends investor presentations and shareholder meetings. 
Joined Dunelm Board: June 2007.
Previous Experience: Sales and marketing, customer service and general management 
in the brewing and hospitality sector.
Other Commitments: Group Managing Director of Fuller Smith and Turner Plc.
David Stead Executive Finance Director
Key strengths: Finance background and extensive Plc experience. Understanding of 
investor community and company secretarial matters. An experienced strategic and 
financial perspective across all Group functions. 
Dunelm role: Leads the finance department. Also has responsibility for HR and IT. 
Participates in Audit Committee meetings by request and sits on the Operating Board.
Joined Dunelm Board: September 2003.
Previous Experience: Qualified accountant. Formerly 14 years at Boots where he was 
Finance Director of Boots The Chemists and Finance Director of Boots Healthcare 
International.
Other Commitments: None.
23
Dunelm Group plc 
Annual report and accounts 2012 24 25
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
The Directors present their report together with the audited financial statements for the year ended 30 June 2012. Together with certain 
information in the reports from the Chief Executive and the Finance Director on pages 9 to 13 and the Corporate Social Responsibility 
review on pages 17 to 20, which are incorporated into this report by reference, this report satisfies the requirements of the Companies  
Act 2006 to produce a Business Review.
The purpose of this Business Review is to provide to shareholders a review of the Group’s business over the period, and to describe the 
principal risks and uncertainties facing the Group.
Principal activity
The principal activity of the Group is that of a specialist UK homewares retailer selling to customers through stores and over the internet.
Review of business and future developments
A review of the business and future developments of the Group is given in the Chief Executive’s Review on pages 9 to 11.
Shareholder and voting rights
All members who hold Ordinary Shares are entitled to attend and vote at the Annual General Meeting. On a show of hands at a general 
meeting every member present in person shall have one vote and on a poll, every member present in person or by proxy shall have one 
vote for every Ordinary Share held.
On 2 October 2006, Jean Adderley, Bill Adderley and Will Adderley (all shareholders) entered into a Relationship Agreement with the 
Company, pursuant to which each of Jean Adderley, Bill Adderley and Will Adderley undertook to the Company that, for so long as, 
individually or together, they are entitled to exercise, or to control the exercise of, 30 per cent or more of the rights to vote at general 
meetings of the Company or they are able to control the appointment of directors who are able to exercise a majority of votes at Board 
meetings of the Company, they will:
(a) conduct all transactions and relationships with any member of the Group on arms length terms and on a normal commercial 
basis;
(b) not take any action which precludes or inhibits any member of the Group from carrying on its business independently of Jean and 
Bill Adderley and their associates (as defined in the Listing Rules);
(c) not exercise any of their voting rights or other powers to procure any amendment to the Articles of Association of the Company 
which would be inconsistent with or undermine any of the provisions of the Relationship Agreement;
(d) abstain from voting on any resolution to which LR11.7.R(4) of the Listing Rules applies involving Jean Adderley, Bill Adderley or Will 
Adderley or any of their associates as the related party;
(e) not carry on (other than through their holding of securities of the Company) or have any financial interest (other than a financial 
interest in securities which are held for investment purposes only) in any person who carries on a business as a homewares 
retailer, to the extent that it would be inconsistent with or undermine any provisions of the Relationship Agreement; and
(f) only enter into, amend or terminate any transaction, agreement or relationship between themselves or any of their associates and 
any member of the Group with the approval of a majority of the independent Non-Executive Directors.
There are no restrictions on the transfer of Ordinary Shares in the Company other than certain restrictions imposed by laws and 
regulations (such as insider trading and marketing requirements relating to close periods) and requirements of the Listing Rules whereby 
Directors and certain employees of the Company require Board approval to deal in the Company’s securities.
Change of control
The Company is not party to any significant agreements which take effect, alter or terminate solely on a change of control of the Company 
following a takeover bid.
There are no agreements between the Company and its Directors or employees providing for additional compensation for loss of office or 
employment (whether through resignation, redundancy or otherwise) that occurs because of a takeover bid.
Results and dividends
The consolidated profit for the year after taxation was £71.2m (2011: £59.8m). The results are discussed in greater detail in the Finance 
Director’s review on pages 12 and 13.
A final dividend of 10.0p per share (2011: 8.0p) is proposed in respect of the year ended 30 June 2012 to add to an interim dividend of 
4.0p per share paid on 13 April 2012 (2011: 3.5p). The final dividend will be paid on 21 December 2012 to shareholders on the register at 
30 November 2012.
Together with this annual report and accounts is a circular containing proposals for a return of capital to shareholders. This will be 
subject to approval of shareholders, to be sought at a general meeting of the company to take place immediately after the annual 
general meeting on 16 November 2012.
Directors’ report and business review Business review Business overview
24 25
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Financial statements Governance
Directors
Details of the Directors in office at the year end are set out below.
Matt Davies was appointed on 8 February 2012. 
Directors serving at the year end and their beneficial interests in the shares of the Company were:
At 
 30 June 2012 
1p ordinary shares
At 
 2 July 2011  
1p ordinary shares
WL Adderley 61,703,398 69,943,939
D Stead 625,426 529,338
G Cooper 181,611 181,611
M Sears 101,313 101,313
N Wharton 39,500 30,000
S Emeny 26,400 26,400
M Davies 4,500 0
During the period there were the following changes to Will Adderley’s shareholding:
11 October 2011 Transfer to Nadine Adderley (his wife) -259,459 
13 October 2011 Exercise of nil cost options under LTIP 259,459
5 March 2012 Placing (4,956,602 sold by Will Adderley and 2,543,398 sold by Nadine Adderley) -7,500,000
8 March 2012 Transfer to the Leicester Foundation -1,000,000
4 May 2012 Transfer to WA Capital Limited
1
-50,600,000
1
  WA Capital Limited is a company established by Will Adderley to act as a long term holding company for his Dunelm shareholding. It is a United Kingdom limited company 
of which he is the sole director and shareholder, and is UK resident for tax purposes. Shares held by WA Capital Limited and by Nadine Adderley are included in the total 
beneficial interest of Will Adderley in the table above. At the period end WA Capital Limited’s shareholding was 50,600,000 Ordinary Shares and Nadine Adderley’s 
shareholding was nil Ordinary Shares.
Will Adderley is deemed to retain a legal interest in shares held by two trusts, the Leicester Foundation and the Paddocks Discretionary 
Trust, by virtue of the fact that he and his wife are trustees, although not beneficiaries, of those trusts. At the period end the shareholdings 
of these trusts were: Leicester Foundation: 1,167 ,250 Ordinary Shares (2011: 167 ,250), Paddocks Trust: 172,750 Ordinary Shares  
(2011: 172,750). These interests are not included in the table above. In total therefore, Will Adderley’s legal and beneficial interest in 
Ordinary Shares totals 63,043,398 representing 31.2% of the issued Ordinary Share Capital.
David Stead exercised nil cost options over 178,378 shares under the Long Term Incentive Plan on 13 October 2011. On the same day he 
sold 90,000 Ordinary Shares at a price of 465.1p per share to cover his income tax and national insurance liability, the balance of 88,378 
shares were transferred to his wife Jane Stead. On 22 February 2012, David Stead exercised options over 7 ,710 shares under the 
Sharesave scheme, at a price of 124.5p per share, following exercise the shares were transferred to his wife. Shares held by David’s wife 
are included in his beneficial interest in the table above.
On 6 March 2012, Donna Wharton, the wife of Nick Wharton purchased 9,500 shares at a price of 480p per share, included in Nick’s 
beneficial holding in the table above; and on the same day Matt Davies purchased 4,500 shares at a price of 499p per share.
There were no changes in the Directors’ shareholdings between the year end and 13 September 2012.
Details of share options held by Directors at the period end are given in the Remuneration Report.
All Directors will be retiring at the 2012 Annual General Meeting and will be offering themselves for re-election. Biographical details of the 
Directors are set out on page 22 and 23 and details of their service contracts are in the Remuneration Report on page 44.
Share capital and treasury shares
The Company has only one class of shares, Ordinary Shares of 1p each. 
The issued Ordinary Share capital of the Company has increased by 449,960 Ordinary Shares during the period due to the exercise of 
share options. Details of option exercises by Directors are set out above.
At 30 June 2012 the Company did not hold any Ordinary Shares in treasury (2011: nil). There were no movements of shares in or out of 
treasury during the period, and there have been no movements of shares in or out of treasury since the period end.  26 27
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Substantial shareholders
At 13 September 2012 the following had notified the Company of a disclosable interest in 3 per cent or more of the nominal value of the 
Company’s Ordinary Shares:
Ordinary  
shares
Percentage of  
share capital
WL Adderley 61,703,398 30.5
W Adderley 48,070,000 23.8
Kames Capital 10,147,214 5.0
WL Adderley is also deemed to hold a legal interest in 1,167 ,250 Ordinary Shares held by The Leicester Foundation and 172,750 Ordinary 
Shares held by the Paddocks Discretionary Trust, by virtue of the fact that he is a trustee of those trusts.
Powers of Directors
Specific powers of the Directors in relation to shares and the Company’s Articles of Association are referred to in the Corporate Governance 
report on page 28.
Treasury and risk management
The Group’s approach to treasury and financial risk management is explained in the Key Risks and Uncertainties section on pages 14  
and 15.
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. 
Auditor
KPMG Audit Plc offer themselves for reappointment as auditors in accordance with section 489 of the Companies Act 2006.
Disclosure of information to auditor 
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 auditor is 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 auditor is 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 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 at 9.30 am on Friday 16 November 2012 at The Holiday Inn Express, Rockingham Road, 
Kettering, NN14 1UD. 
A formal notice of meeting, explanatory circular and a form of proxy will accompany this report and accounts.
By order of the Board
Dawn Durrant
Company Secretary
13 September 2012
Directors’ report and business review continued Business review Business overview
26 27
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Financial statements Governance
2011/12 summary
•	 Matt Davies appointed to the Board as Non-Executive Director and Audit Committee Chair.
•	 Full compliance with the Corporate Governance Code at year end.
•	 Corporate Governance presentation to investors held In January 2012.
•	 All Directors submitted for re-appointment at the AGM.
•	 Bribery Act procedures implemented.
•	 Pro-active engagement with proxy advisers.
At our first Corporate Governance presentation held in January 2012, to which our major institutional investors were invited, we explained 
our approach to governance. A copy of the presentation is available in the ‘presentations’ section of our corporate website.
Our policy can be summarised as folllows:
•	 We believe that good governance leads to stronger value creation and lower risks for shareholders.
•	 We support corporate governance guidelines and seek to apply them in a way that is meaningful to our business and consistent 
with our culture and values. 
•	 If we decide that the interests of the Company and its shareholders can be better served by doing things in a different way, we will 
explain the reasons why. 
•	 We believe that the Board’s governance role consists of instilling and maintaining a culture of honesty, integrity and transparency 
throughout the business, through our policies, communications and by the way in which we act.
This report explains how we have applied the principles of good governance and code of best practice set out in the Corporate 
Governance Code (‘the Corporate Governance Code’) published in June 2010.
At the end of the financial year, the Board considers that it is fully compliant with the Corporate Governance Code.
Board role and composition
The Board has overall responsibility for controlling the Group, making decisions relating to the Group’s strategic direction and measuring 
progress towards strategic goals.
Following the appointment of Matt Davies as a Non-Executive Director and Chairman of the Audit Committee on 8 February 2012, the 
Board balance and committee membership is now fully compliant with the requirements of the Corporate Governance Code.
The names and roles of each of the Directors is set out in the table below. David Stead was also the Company Secretary prior to the 
appointment of Dawn Durrant on 17 November 2011. 
The Board considers that Geoff Cooper was independent on appointment, and that Marion Sears, Simon Emeny and Matt Davies are 
independent. Overall the Board considers that there is a good balance of Executive and Non-Executive Directors.
The Board has adopted written statements setting out the respective responsibilities of the Chairman, Executive Deputy Chairman and 
the Chief Executive, these are available on the Group’s website or from the Company Secretary. In general terms, the Chairman is 
responsible for running the Board and the Chief Executive is responsible for running the Group’s business, supported by the Executive 
Deputy Chairman who focuses specifically on strategic activities which protect and enhance shareholder value and embed the 
Company’s culture and values.
Board process
The Board held 11 meetings in the course of the year, one of which was dedicated to a formal review of strategy, and one of which 
comprised the Board evaluation. Attendance at meetings was as follows:
Director Role Meetings attended:
Geoff Cooper Non-Executive Chairman 11
Marion Sears Senior Independent Director and Chair of Remuneration and Nominations Committees 11
Will Adderley Executive Deputy Chairman 8
Simon Emeny Independent Non-Executive Director 10
Nick Wharton Chief Executive 11
David Stead Finance Director 11
Matt Davies Independent Non-Executive Director and Chair of Audit Committee 5
 1
1
 Matt Davies attended all Board meetings since his appointment.
Corporate governance report 28 29
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Corporate governance report continued
There is a schedule of matters reserved to the Board for decision or approval, which was reviewed in 2011 and 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 significant Group-wide policies.
At each meeting, the Chief Executive and the Finance Director report on operational performance (including health and safety) and the 
Finance Director reports on financial performance and position. There is a rolling schedule of other operational, strategic and risk topics  
to be discussed, and other matters are debated by the Board as required, supported by a briefing paper where a decision is to be made.
Minutes of all Board and Committee meetings are taken by the Company Secretary and committee secretaries respectively and 
circulated for approval. Any unresolved concerns raised by a Director are recorded in the minutes.
The Chairman and the other Non-Executive Directors meet from time to time without Executive Directors being present, and regularly 
have individual meetings with other senior managers in the business, usually at a store location. In addition the Non-Executive Directors 
have the opportunity to meet at least once a year without the Chairman present as part of the Board effectiveness review process, which 
includes a formal review of the Chairman’s performance.
Board committees
The Board has appointed three committees, an Audit Committee, a Nominations Committee and a Remuneration Committee. The terms 
of reference of each of these committees, which were updated in 2011, can be found on the Group’s website and are available from the 
Company Secretary.
Details of the membership of the committees and of their activities during the past financial year, can be found in the reports from the 
Chair of each of the committees on pages 33 to 47 .
Appointment and removal of Directors
The Articles of Association of the Company provide that a Director may be appointed by ordinary resolution of the Company’s 
shareholders in general meeting, or by the Board so long as the Director stands down and offers himself for election at the next Annual 
General Meeting of the Company. The Articles also provide that each Director must stand down and offer him or herself for re-election by 
shareholders at the Annual General Meeting at least every three years. The Board has decided to adopt the requirement of the Corporate 
Governance Code, that all Directors should stand down and offer themselves for re-election at the Annual General Meeting.
Directors may be removed by a special resolution of shareholders, or by an ordinary resolution of which special notice has been given in 
accordance with the Companies Act 2006. The Articles also provide that the office of a Director shall be vacated if he is prohibited by law 
from being a director, or is bankrupt; and that the Board may resolve that his office be vacated if he is of unsound mind or is absent from 
Board meetings without consent for six months or more. A Director may also resign from the Board.
The Nominations Committee makes recommendations to the Board on the appointment and removal of Directors.
In accordance with the Corporate Governance Code, all Directors will retire from the Board and offer themselves for re-election at the 
Annual General Meeting.
Powers of Directors
In accordance with the Companies Act 2006 and the Articles of Association, the business of the Company is managed by the Board, 
which may exercise all of the powers of the Company, subject to the requirements of the Companies Acts, the Articles of Association of 
the Company, and any special resolution of the Company. As stated above, the Board has adopted internal delegations of authority in 
accordance with the Code, and these set out matters which are reserved to the Board or committees and the powers and duties of the 
Chairman, the Executive Deputy Chairman and the Chief Executive respectively.
At the Annual General Meetings of the Company from 2007 onwards, the Board sought and was given authority to issue shares and to 
buy back and re-issue shares, subject to the limits imposed by law and those set out in the text of the resolution. Similar resolutions are 
being tabled at the 2012 Annual General Meeting, together with a waiver of any obligation of Will Adderley under the City Code on 
Takeovers and Mergers to make an offer for all of the shares of the Company if the authority to buy back shares is used. For further 
details see the Notice of Annual General Meeting which accompanies this report.
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. Business review Business overview
28 29
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Financial statements Governance
Training
Upon joining the Board, any new Director is offered a comprehensive and tailored induction programme with visits to key sites and 
meetings with senior managers and other colleagues. As part of each Director’s annual review any additional training or development 
needs are addressed. Please see the Directors’ biographies on pages 22 and 23 for details of the specific skills and experience of  
each Director.
Throughout the year all Directors have maintained a regular series of visits to stores and meetings with members of the senior 
management team. The Company Secretary reports monthly to the Board on new legal, regulatory and governance developments that 
affect the Company. The Board also received presentations from independent advisers on financial and governance issues. Directors 
attend seminars and tutorials provided by independent organisations which cover the whole range of governance topics.
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 other Executive Directors. Separately the Senior Independent Director 
meets with the other Non-Executive Directors to evaluate the Chairman’s performance. 
There is a formal, rigorous and well established process for evaluating the performance of the other Non-Executive Directors, the Board 
Committees and the Board as a whole. A questionnaire is circulated to all Directors, to seek their views on matters such as the 
effectiveness of meetings, the approach to strategy and risk, succession planning and the AGM. The completed questionnaire forms the 
basis of a discussion between the Chairman and each Director. The Chairman presents the overall result back to the Board at a Board 
meeting convened solely for this purpose. During the course of this meeting there is the opportunity for the Chairman or other Directors  
to be asked to leave the discussion whilst their performance is assessed. 
Following the Board review a list of actions is formulated and progress against these is monitored periodically by the Board. In the review 
which took place during the period these actions included a restructuring of Board agendas to provide additional focus on strategic 
issues, a review of how the Board communicates with all of its stakeholders and an extension of the Board’s review of succession 
planning activity below senior management level.
The Board considers that this process is effective for a small and very open Board; it will be assessing tenders for an external review of 
the Board during the next financial year.
Conflicts of interest
The Companies Act 2006 allows the Board of a public company to authorise conflicts and potential conflicts of interest of individual 
directors where the Articles of Association contain a provision to that effect. The Company’s Articles of Association give the Board this 
authority subject to the following safeguards:
•	 Directors who have an interest in matters under discussion at a Board meeting must declare that interest and abstain from voting.
•	 Only Directors who have no interest in the matter being considered are able to approve a conflict of interest and, in taking that 
decision the Directors must act in a way they consider, in good faith, would be most likely to promote the success of the 
Company. 
The Directors are able to impose limits or conditions when giving authorisation if they feel this is appropriate. 
All Directors are required to disclose any actual or potential conflicts to the Board and the following existing conflicts have been 
considered and approved:
•	 Will Adderley is a major shareholder and connected to other major shareholders. Authorised on the basis that Mr Adderley 
continues to abide by the terms of the Relationship Agreement entered into between himself, other major shareholders and the 
Company on flotation of the Company in 2006.
•	 Geoff Cooper is a Director of Travis Perkins plc which potentially competes with the Company for retail property. Authorised on 
the basis that Mr Cooper is not involved in day to day decisions in relation to the property portfolio in either company.
There were no other matters disclosed that are considered by the Board to give rise to a conflict of interest.
Any conflicts considered by the Board and any authorisations given are recorded in the Board minutes and reviewed annually by the 
Board.
The Board considers that its procedures to approve conflicts of interest and potential conflicts of interest are operating effectively. 30 31
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Corporate governance report continued
Risk management
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. The process has been reviewed by the Audit Committee 
and the Board and is in accordance with the Turnbull Guidance on Internal Control for Directors.
•	 A register of major strategic and operational risks is maintained. Each risk is documented, together with the mitigating factors and 
controls in place to manage it. Risks are assessed in terms of impact and likelihood, and the ‘top 10’ risks are identified for 
specific focus. A member of the Operating Board is allocated responsibility for management of each risk.
•	 The register is reviewed twice per annum by the Board, which also monitors the status of agreed actions. 
•	 The Operating Board and other senior colleagues review the risks once a year in a workshop and the Operating Board reviews 
the register quarterly throughout the year. 
•	 Important strategic or operational risk areas, such as loss of competitive position, health and safety, property portfolio, attracting 
and retaining key personnel, are considered regularly by the Board. 
•	 Risk topics selected by the Audit Committee are considered ‘in-depth’ at Board meetings, supported by a paper prepared  
by the relevant executive. In the period topics covered included IT security, supply chain security, property risk, disaster planning 
and insurance.
Internal control
The Board accepts its responsibility 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 system of internal control comprises:
•	 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. 
•	 The Executive Directors monitor compliance with these policies and procedures in the course of regular reviews.
•	 In addition there is a rolling programme of review of store compliance by the operational audit team.
The Audit Committee considers annually whether an internal audit function is required, and did so again in May 2012. It does not currently 
consider that this is necessary in view of the adequacy of internal and risk management controls and reporting in place, the relatively low 
level of complexity in the business and the close involvement of the Executive Directors in the operation of the business. This assessment 
was supported by KPMG.
In the financial year, as part of our increased focus on fraud risk, a third party end to end review of all our payment controls, processes 
and authorities was performed. Whilst there were no significant deficiencies resulting from this review, there were a series of 
recommended actions, which have been implemented during the year.
Bribery Act 2010
Following the coming into force of the Bribery Act in July 2011, we have reviewed the procedures in place to ensure that we are able 
to comply with its requirements. Actions taken include:
•	 Anti-corruption and anti-bribery policy implemented.
•	 The policy on acceptance of gifts and other privileges has been updated and a formal procedure has been implemented for 
signing off and logging hospitality.
•	 Operating Board members and Heads of Department have received training and also signed a declaration of compliance, which 
will be an annual process.
•	 Standard terms and conditions for suppliers have been amended to include a Bribery Act clause.
•	 The Whistleblowing Policy has been amended to specifically refer to the Bribery Act.
Further actions are planned in the next financial year, to include additional training and more detailed due diligence with suppliers.
Investor relations and understanding shareholder views
There is a formal investor relations programme based around results presentations and trading statements, as well as the corporate 
governance presentation referred to above. We also periodically hold a specific presentation to analysts in store, the most recent event 
was on 13 July 2012 at our Milton Keynes store.
The Chief Executive and the Finance Director report back to the Board after meetings with analysts and shareholders and the Company 
brokers attend a Board meeting annually to feed back investor views. The Non-Executive Directors are present at results presentations 
and also attend meetings with shareholders.
All Directors will be available at the Annual General Meeting to meet with shareholders and answer their questions.  Business review Business overview
30 31
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Financial statements Governance
We plan to repeat our invitation to the corporate governance representatives of our major institutional shareholders to attend a 
presentation in January 2013. This is designed to allow us to communicate our approach to governance and to facilitate discussion with 
our shareholders outside of the busy Annual Report and AGM timetable. Again, this will be hosted by the Chairman, the Non-Executive 
Directors and Will Adderley, the Executive Deputy Chairman, representing the majority family shareholding. The other executives will not 
be present. 
During the year we also met or had contact with representatives of the main proxy advisers in the United Kingdom and have planned 
follow-up meetings with them. The purpose of this is to explain our approach to governance topics outside of the short timescales 
dictated by the AGM timetable, to enable a better evaluation of our Annual Report.
Significant shareholders
The Group’s significant shareholders are listed in the Directors’ report on page 26 and voting rights are stated on page 24.
Articles of Association
The Company’s Articles of Association may only be amended by a special resolution of shareholders.  32 33
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Dear Shareholder,
I was appointed to the Board on 8 February 2012, and became Chair of the Audit Committee on that date. My thanks go to Geoff 
Cooper who ably chaired the committee on a temporary basis over the previous 15 months.
Since my appointment, I have held discussions with David Stead, the Finance Director, and members of his team, and with KPMG.  
I have also reviewed the controls and systems in place at Dunelm. I am pleased to say that controls appear to be sound and that 
management has adopted an appropriate attitude to financial control and risk management. I look forward to working with the other 
members of the committee and the Board as a whole to ensure that this is maintained and enhanced.
Yours sincerely,
Matt Davies
Chair of the Audit Committee
13 September 2012.
Letter from the Chair of the Audit Committee Business review Business overview
32 33
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Financial statements Governance
2011/12 summary
•	 Matt Davies becomes committee Chair in February 2012.
•	 More focus on fraud risk, including detailed review of payment controls by a third party, leading to strengthened 
anti-fraud measures.
•	 Introduction of a schedule of risk topics to be reviewed in-depth by the Board.
This report provides details of the role of the Audit Committee and the work it has undertaken during the year.
The purpose of the committee is to oversee the integrity of the Group’s financial statements and public announcements relating to 
financial performance, to oversee the audit process, monitor the effectiveness of financial controls and the process for identifying 
and managing risk throughout the Group. The full terms of reference for the committee can be found via the Company’s website, 
www.dunelm-mill.com.
The committee has approved a policy which allows employees to raise legitimate concerns in confidence without fear of 
discrimination.
The following Directors served on the committee during the year:
Member Period from: To:
Matt Davies (Chair) 8 February 2012 To date
Geoff Cooper (acting Chair) 1 December 2010 8 February 2012
Marion Sears 18 January 2005 To date
Simon Emeny 25 June 2007 To date
I have been Chairman of the committee since my appointment to the Board on 8 February 2012. Prior to that, Geoff Cooper was 
acting Chair following the resignation of Nick Wharton when he assumed his executive role on 1 December 2010. 
The Board considers that I have recent and relevant financial experience by virtue of my professional qualification and my recent 
executive role as Chief Executive of Pets at Home Limited. 
The Finance Director and the Chairman of the Board usually attend meetings by invitation, along with a representative from the 
external auditors. 
Committee activities in 2011/12
Three meetings were held in the year and members’ attendance was as shown in the table below. Marion Sears also acted as 
Secretary to the committee until the appointment of Dawn Durrant as Company Secretary in November 2011.
Member Meetings attended:
Matt Davies 1
 1
Geoff Cooper (acting Chair until 8 February 2012) 2
Marion Sears 3
Simon Emeny 2
1
 Matt Davies has attended all committee meetings since his appointment.
During the year the activities of the committee included:
•	 Approval of the full year results issued in September 2011 and the half year results issued in February 2012.
•	 Review of the requirement for an internal audit function – we continue to consider that this is not required in view of the adequacy 
of financial controls in place and the relatively low level of complexity in the business, and this is supported by KPMG.
•	 Introduction of a schedule of risk topics to be considered in-depth at Board meetings (these included IT security, supply chain 
security, property risk, disaster planning and insurance during the period).
•	 End to end review by a third party of all of our payment controls, processes and authorities. Whilst there were no significant 
deficiencies resulting from this review, there were a series of recommended actions, which have been implemented during the 
year. The Finance Director also now presents a fraud report at each committee meeting.
•	 Review and confirmation of the Group’s policy for use of the auditors for non-audit work; the committee has 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.
•	 Verification of the independence of the auditor, and approval of the scope of the audit plan and the audit fee. 
•	 Review of the processes that have been introduced following the Bribery Act (for further details please see the Corporate 
Governance report).
•	 Monitoring the current proposals by the United Kingdom Financial Reporting Council and by the European Union that would 
require companies to tender their external auditor.
Audit Committee report 34 35
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
External auditor
The Group reappointed KPMG Audit Plc as external auditor for the financial year ended 30 June 2012. The Group paid KPMG 
£75,000 in relation to the statutory audit of the Group and Company financial statements and the audit of Group subsidiaries 
pursuant to legislation. The Group also paid KPMG £74,000 in relation to other non-audit services which mainly consisted of tax 
compliance and tax planning initiatives.
The committee had the opportunity to meet privately with the auditor in the course of each meeting during the period. In addition,  
I held private discussions with the audit partner following my appointment.
This report was reviewed and approved by the Board on 13 September 2012.
Matt Davies
Chair of the Audit Committee
Audit Committee report continued Business review Business overview
34 35
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Financial statements Governance
Dear Shareholder,
The focus for the Nominations Committee over the past year has been to find a new Non-Executive Director to chair the Audit 
Committee as a final step following the CEO succession which took place in 2010/11. We were delighted to announce the 
appointment of Matt Davies as our new Non-Executive in February and as expected, he has already contributed in many ways to 
strategic discussions as well as demonstrating that he is very able to chair the Audit Committee.
With Matt’s appointment we are compliant in terms of Board balance between executives and independent directors. Having regard 
to our diversity policy, as we did on Matt’s appointment, we will make a specific effort to ensure that suitably qualified female 
candidates are brought forward for consideration as Board vacancies arise.
During the year we have reviewed, as a full Board, the talent in the business across all levels of management in store and in support 
functions. The purpose of the exercise has been to create an on-going process which identifies and can nurture a supply of future 
executives required within our expanded business. As Dunelm continues to grow it will be important to balance internal promotion, 
key to preserving our culture, with external recruitment to provide new capability and fresh perspective. As part of our approach to 
ensure this blend we had a successful first graduate recruitment process in 2010/11 and in 2011/12 we have hired 21 new graduates 
to help boost the early stages of our human talent supply pipeline.
Looking forward, we will address the fact that Geoff, Simon and I all joined the Board around the time of IPO. We are proceeding on 
the basis that a continual, but measured, refreshment programme over the medium term will maintain the strength and unity of the 
Board whilst at the same time bringing fresh thinking in areas that will be important to Dunelm’s future.
The evaluation of the Nominations Committee took place as part of the Board evaluation. We continue to regard Board appointments 
as whole Board business which must be unanimous and we have just completed an updated Board skills analysis which will inform 
future recruitment.
Yours sincerely,
Marion Sears
Chair of the Nominations Committee
13 September 2012
Letter from the Chair of the Nominations Committee 36 37
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
2011/12 summary
•	 Appointment of Matt Davies as Non-Executive Director and Audit Committee Chair.
•	 Detailed review of Board skills and experience repeated.
•	 Update of Board succession plan.
•	 Review of talent supply within the business.
This report provides details of the role of the Nominations Committee and the work it has undertaken during the year.
The purpose of the Committee is to assist the Board by keeping the composition of the Board under review and conducting a 
rigorous and transparent process when new appointments to the Board are made. The full terms of reference for the committee can 
be found on the Company’s website.
The following Directors served on the committee during the year:
Member Period from: To:
Marion Sears (Chair) 18 January 2005 To date
Geoff Cooper 18 January 2005 To date
Simon Emeny 25 June 2007 To date
Will Adderley 17 February 2011 To date
Matt Davies 8 February 2012 To date
Four meetings were held in the year and members’ attendance was as shown in the table below. Marion Sears also acts as 
Secretary to the Committee.
Member Meetings attended:
Marion Sears (Chair) 4
Geoff Cooper 4
Simon Emeny 4
Will Adderley 3
Matt Davies 0
1
1
 There were no meetings between 8 February (when Matt Davies joined the Board) and the year end.
General succession planning
The Committee keeps under review the balance of skills on the Board as a whole and the knowledge, experience, length of service 
and performance of the Directors. On at least an annual basis each Director’s intentions are discussed with regard to serving on the 
Board and their succession is considered in the context of the shape of the overall Board and the corporate governance guidance on 
NED tenure. This transparency amongst a small and collegiate Board allows for an open discussion about succession for each 
individual, both for short term emergency purposes as well as longer term retirement plans.
While all Board appointment processes and succession discussions are led by the Nominations Committee these are viewed as 
important whole-Board topics and no appointment will be made to the Board without unanimous agreement of all Directors.
Committee activities in 2011/12
NED search
Last year we stated that we were continuing to search for an additional Non-Executive Director to replace Nick Wharton. In February 
2012 we were pleased to announce the appointment of Matt Davies as Non-Executive Director and Chair of the Audit Committee. 
We engaged an executive search firm to conduct this search on our behalf.
Matt’s most recent executive role was as Chief Executive of Pets at Home. He held that position between 2004 and 2012, having 
joined the business as Group Finance Director in 2001. During his time at Pets at Home he developed the business significantly, 
organically through new store openings, through services, and by e-commerce. Prior to Pets at Home Matt was Finance Director of 
a distribution business within Caudwell Communications before which he worked in mergers and acquisitions. Matt began his career 
at Arthur Anderson where he qualified as a chartered accountant in 1995.
Nominations Committee report Business review Business overview
36 37
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Financial statements Governance
In our search for an additional Non-Executive Director to join the Board, the Nominations Committee set out a number of criteria, 
consistent with Dunelm’s strategy and likely development. Matt matches these criteria very closely: 
•	 Strong relevant experience in retail or similar business.
•	 An executive with up-to-date operational experience.
•	 Experience of the strategy and practical application of branding and marketing in a retail business.
•	 Relevant financial experience to chair the Audit Committee, but not only having had financial roles.
•	 Awareness of the particular culture of entrepreneurially led businesses, and of the challenges they face with rapid growth.
The Board also had regard to the requirement to achieve a diversity of characters, backgrounds and experiences amongst Board 
members. In particular, notwithstanding that there has been female representation on the Board since 2004, it asked its nominated 
search adviser to prioritise the presentation of suitably qualified women. Although females were equally represented on our shortlist, 
Matt was clearly the best candidate.
Board succession
As stated in last year’s report, the committee is aware that both Geoff Cooper and I have served on the Board for more than six 
years since flotation of the Company, and that the Corporate Governance Code requires a careful consideration of our continued 
contribution, balanced against the value of refreshing Board membership. In the past financial year, in the context of the Chief 
Executive succession, we considered that maintaining Board stability outweighed other considerations. In addition Matt Davies has 
introduced another perspective to Board debate. The Nominations Committee and the Board have increased their focus on 
succession planning activities at Board level, and as a result we now have a formal plan for how Board membership should develop 
over the coming years, and we are taking actions to implement this. 
Skills balance and Directors’ Performance Evaluation
The Nominations Committee reviews Board composition and the balance of skills provided by the directors in a whole Board session 
each year. In 2012 we have repeated the detailed review conducted during 2010/11 of the skills that a company might require and 
each director has been assessed against these. The results of this have been incorporated into our Board succession plan.
 
In addition, the performance of all of the directors has been assessed individually. The Chairman of the Board led a process of 
collecting feedback on each director’s performance and provided them with a one-to-one evaluation and discussion of training needs. 
As Senior Independent Director I collected feedback about the Chairman and provided him with an evaluation of his performance. 
Diversity
In 2011 we set out the Board’s policy on diversity which can be summarised as follows:
•	 Whilst confirming that our overriding concern is to ensure the Board comprises outstanding individuals who can lead the 
Company, we also believe the Company’s best interests are served by ensuring that these individuals represent a range of skills, 
experiences, backgrounds and perspectives, including gender.
•	 Accordingly, it is our policy that the Board should always be of mixed gender. 
•	 Quotas are not appropriate as a target for female representation on company Boards, since they are likely to lead to compromised 
decisions on Board membership, quality and size. 
•	 We will seek to ensure that specific effort is made to bring forward female candidates for Board appointments.
•	 We will monitor the Company’s approach to development to ensure that it continues to enable talented individuals, both male and 
female, to enjoy career progression activities within Dunelm.
Re-election of Directors
In accordance with the UK Corporate Governance Code, all Directors will seek re-election at the 2012 AGM.
This report was reviewed and approved by the Board on 13 September 2012.
Marion Sears
Chair of the Nominations Committee 38 39
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Dear Shareholder,
In the year to 30 June 2012, Dunelm performed well in a difficult retail market. The management team performed strongly  
and exceeded budget. I hope shareholders will appreciate their efforts under Nick Wharton who was in his first full year as  
Chief Executive. 
We exceeded budget EPS by 6.7% and accordingly the Executive Directors will receive an annual bonus equivalent to 100% of the 
maximum opportunity. The compound annual growth rate in EPS over the last three years has exceeded RPI by more than 12%, 
therefore the LTIP award made to Will Adderley and David Stead in 2009 will vest in full. Nick Wharton participates in the LTIP but 
was not in the 2009 scheme as he became an executive in 2010. In accordance with best practice and a desire to be fully 
transparent we are publishing what has become known as ‘the Single Number’ for each of the Executive Directors and this can be 
found in the Remuneration Report, together with an explanation of the assumptions we have made in calculating this.
We have communicated more than ever with institutional shareholders this year and much of the discussion has focused on 
remuneration. We held a meeting for corporate governance analysts which we intend to repeat annually, we had meetings with voting 
advisory services, we held a number of one-to-one meetings between independent Directors and shareholders and, as usual, the 
independent Directors attended a selection of post-results shareholder meetings together with the executive team. We have noted 
the feedback, predominantly about base salaries, and been pleased with the recognition of our simple, transparent and 
straightforward remuneration policy.
Looking forward, in 2012/13 the Executive Directors will receive a 2% increase in base salary, in line with the company average.  
Will Adderley has declined this increase and will be paid the same base salary as last year. As a major shareholder, Will has also 
declined any future grants under the LTIP scheme so we will not be seeking a rule 9 waiver for this purpose at this year‘s AGM. 
We have consciously sought to leave the remuneration structure unchanged this year following changes to the bonus and LTIP in 
2010 and 2011 respectively. However, we have included a new claw back provision which covers unvested pay and details can be 
found in the Remuneration Report.
We are aware of an emerging issue that if Dunelm continues to grow as the market expects, inflation-linked base salaries will mean 
that our executive team reward will increasingly lag behind those of our peer group as our peer group changes. While we have a 
stated policy that fixed pay is ‘median-or-below’ and that variable pay is upper quartile, we do not wish to fall too far out of line.  
We will continue to monitor this and consider ways to ensure our executives are motivated and, most importantly, aligned with 
shareholders for long term value creation. We will not introduce any new elements of remuneration structure without consultation.
I look forward to meeting shareholders at the AGM in November.
Yours sincerely,
Marion Sears
Chair of the Remuneration Committee
13 September 2012
Letter from the Chair of the Remuneration Committee Business review Business overview
38 39
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Financial statements Governance
The Directors present their Remuneration Report for the period ended 30 June 2012. 
2011/12 summary
•	 Significantly increased engagement with shareholders through direct meetings.
•	 Corporate governance presentation held in January 2012, to be repeated annually.
•	 No change to remuneration policy in the year except that pension contributions have been harmonised for all 
Executive Directors at 10% of base salary with effect from 1 January 2012.
•	 New LTIP quantum of 150%, approved by shareholders in 2011, with increased stretch performance criteria.
•	 Only David Stead received an increase to base salary (1.5%) during the period, in line with Group-wide pay award.
•	 Strong operating performance gives rise to cash bonus 100% payable in respect of the period to Nick Wharton,  
Will Adderley and David Stead.
•	 LTIP awards from 2009 vesting to Will Adderley and David Stead. 
•	 Disclosure of single figure for the remuneration of each Executive Director. In 2011/12 total executive remuneration 
amounted to £3.2m.
•	 Required shareholding introduced for senior management group.
Looking forward
•	 Executive Directors awarded 2% increase to basic salary from July 2012 in line with Group-wide pay award  
(waived by Will Adderley).
•	 Policy will remain structured around low fixed proportion (30%) and high performance-related proportion (70%) of 
maximum earnings opportunity.
•	 Claw back to be introduced to cash bonus and unvested share awards from 2012/13. 
•	 As a major shareholder, Will Adderley has indicated his wish not to participate in further conditional share awards 
under the LTIP scheme.
Introduction
The Remuneration Committee has prepared this report in accordance with the requirements of Section 420 Companies Act 2006 
and the Listing Rules. The report and the Group’s remuneration policy comply with the UK Corporate Governance 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 49.
Non-audited information
Remuneration Committee membership and advisers
The purpose of the Committee is to assist the Board by:
•	 Recommending to the Board the specific pay and benefits packages for the Executive Directors.
•	 Recommending and monitoring the structure and level of pay and benefits for senior management below Board level; and
•	 Approving any awards made under share incentive schemes.
The full terms of reference for the committee can be found on the Company’s website.
The following Directors served on the committee during the year:
Table 1 – Committee membership
Member Period from: To:
Marion Sears (Chair) 18 January 2005 To date
Geoff Cooper 18 January 2005 To date
Simon Emeny 25 June 2007 To date
Matt Davies
1
8 February 2012 To date
1
 Matt Davies was appointed to the Board on 8 February 2012.
Marion Sears acts as Secretary to the Committee.
Remuneration report 40 41
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Four meetings were held in the year and members’ attendance was as shown in the table below.
Table 2 – Attendance at committee meetings
Member Meetings attended:
Marion Sears (Chair) 4
Geoff Cooper 4
Simon Emeny 3
Matt Davies
1
2
1
 Matt Davies has attended all committee meetings since his appointment.
No Director is ever present when their own remuneration is discussed. 
During the year, the committee took advice from Deloitte in respect of the remuneration of the Executive Directors. Deloitte had no 
other connection with the Company in the last financial year. 
Remuneration Committee role, responsibility and meetings
The Board has delegated to the Remuneration Committee responsibility for reviewing and recommending the pay and benefits and 
contractual arrangements of the Executive Directors, for monitoring the structure and level of pay and benefits for senior managers 
and for overseeing the operation of the Group’s share schemes. The Remuneration Committee is committed to principles of 
accountability and transparency to ensure that remuneration arrangements demonstrate a clear link between performance and 
reward. The committee considers fully the principles and provisions of the UK Corporate Governance Code.
Executive remuneration policy 
The Remuneration Committee’s policy is to provide an executive remuneration structure that will pay fairly for the roles and 
responsibilities of each Director and incentivise strongly for value creation, with an emphasis on the long term. It is our intention to 
maintain a simple and transparent remuneration structure that does not frequently change. 
Base salaries are set at, or below, the median for comparable companies and increases are expected to be in line with Group-wide 
awards unless merited by specific circumstances. In setting base salaries a retail peer group is considered within the FTSE 250 as 
well as industry wide surveys which cover the FTSE 250 and small-cap sector. It is our policy that base salary should comprise a 
minority of the total remuneration that an Executive Director can earn.
The opportunity is available for executives to earn a multiple of base pay if the Group delivers strong results. Potential performance 
pay currently comprises just over two thirds of maximum potential earnings at up to 2.5x base salary. It is set at the median for the 
annual cash bonus but in the upper quartile for the three-year Long Term Incentive Plan (‘LTIP’) in order to incentivise consistent 
above-market-average growth.
Policy alignment with corporate strategy
Our corporate strategy is centred around the growth and development of our specialist product offer, our stores, our multi-channel 
capability and our infrastructure. These are all long-term objectives and the Committee has, since IPO, structured senior executive 
remuneration in three specific ways: to be aligned in share ownership terms, to reward performance and to be focused on long term 
value creation. This is in keeping with the family origin of the business and is important to the Adderley family who remain our 
majority shareholders.
In view of this, required Director shareholdings are set at above market levels (two times base salary for Executive Directors) and 
senior executives will be highly rewarded on a market competitive basis for the delivery of stretching goals. However they will receive 
reduced rewards if the business performs less strongly. 
On an annual basis, around 70% of the maximum earnings opportunity is performance related and over 40% is measured on a three 
year cumulative performance. Our new CEO has an additional five-year LTIP award, which was approved by shareholders in 2010, 
which runs until 2015 and which aligns him to share price performance over and above the regular three year LTIP.
To strengthen further the alignment between management and long term business success, members of the Operating Board are 
required to build a shareholding equivalent to at least one times their base salary and other senior management who receive 
discretionary share awards are required to build a holding of 50% of their salary.
Remuneration report continued Business review Business overview
40 41
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Financial statements Governance
Balance of fixed and variable remuneration
As described above, the Remuneration Committee’s policy is that a substantial proportion of the Executive Directors’ remuneration 
should be variable and performance-related in order to encourage and reward superior business performance and shareholder 
returns. Through performance criteria and the setting of personal objectives each Director’s remuneration is individually linked to 
both personal and Group performance. The following illustrates the balance between fixed and variable remuneration during the year 
for the Executive Directors:
Table 3 – Balance of fixed and variable remuneration
0
50
100
150
200
250
300
350
400
 On target performance
Base 100%
Bonus 40%
LTIP 37.5%
177.5%
Base 100%
Bonus 100%
LTIP 150%
350%
Maximum opportunity
(% ﬁgures
indicate
proportion
of base salary)
Variable
Variable
Fixed
The breakdown does not include any share price growth or other benefits (e.g. cash car allowance, value of private medical 
insurance, pension contribution or all employee share ownership plans). 
Summary of Remuneration
The Remuneration Committee selects performance measures that it believes are aligned with the Group’s strategic goals, that are 
unambiguous and easy to calculate and that are transparent to Directors and shareholders. 
Table 4 – Summary of Remuneration
Element Purpose and link to remuneration policy Maximum award Key features
Base salary •	 Reflects at or below median market 
salary for the individual  
and their role
•	 Takes account of personal 
performance and contribution to 
corporate performance
N/A •	 Paid monthly in cash 
•	 Based on individual contribution
•	 Reviewed annually – any increase in 
context of Group wide review
Annual bonus •	 Rewards the achievement of annual 
budget measured by EPS 
100% of base salary •	 Paid in cash after year end results are 
audited 
•	 No bonus paid if EPS is less than 95% 
of budget; maximum paid if EPS is 
105% of budget
•	 Payment conditional on satisfactory 
performance against personal job 
objectives, as judged by the 
Remuneration Committee
•	 Will be subject to claw back from 
2012/13
LTIP •	 Aligns with shareholder interests 
through the delivery of shares 
•	 Rewards growth in long-term earnings 
and increase in shareholder value
•	 Executive Directors required to build a 
holding equal to twice base salary over 
time
150% of base salary •	 Based on EPS performance 
•	 Vests based on a three year 
performance period 
•	 Shares vesting may contribute to 
minimum shareholding requirement 
•	 Will be subject to claw back from 
2012/13 42 43
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Further details are provided about each element of remuneration below.
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 retail peer group of public companies and also considers all-industry 
surveys for the FTSE 250 and small cap sectors. In addition the operational scale and complexity of the role each Director performs 
is discussed and adjustments are applied to reflect these. In setting base salaries any increase for Executive Directors is expected to 
be in line with Group-wide staff increases unless specific circumstances merit a different approach. Base salary comprises just 
under one third of the total potential remuneration that an Executive Director can earn.
In addition to base salary, the Executive Directors are entitled to benefits comprising a car allowance, a contribution of 10% of base 
salary to a personal pension, private medical insurance and life insurance.
Nick Wharton’s base salary of £400,000 was set on his appointment in December 2010, with the first review due In July 2012. 
Accordingly Nick did not receive an increase in base salary in July 2011. Will Adderley waived any increase to his reduced salary of 
£265,000 during the year. In July 2011 David Stead was awarded an increase in base salary of 1.5%, in line with the pay increase 
across the Group, to £258,800.
Executive Directors have been awarded a 2% increase in basic salary from July 2012, in line with the Group-wide award. Will 
Adderley has waived this increase. Therefore, from July 2012 Nick Wharton’s base salary is £408,000, Will Adderley’s base salary is 
£265,000 and David Stead’s base salary is £264,000.
Annual bonus
The Group operates a discretionary annual cash bonus scheme. Any bonus amounts determined to be payable are paid after the 
year-end results are finalised. The Remuneration Committee has established bonus objectives that are principally financial, based on 
the level of EPS achieved against budget target for the relevant financial year, but also include personal objectives for the year 
relevant to each Director. 
For Nick Wharton and David Stead 100% of the annual bonus is calculated according to the performance against budget but may be 
adjusted at the discretion of RemCo depending on an individual’s performance against personal objectives. For Will Adderley, 50% of 
the annual bonus is calculated according to the performance against budget and 50% is awarded for performance on strategic 
projects which are an important focus of his time.
The prospects for the market and the Company are considered when setting the budget EPS target for the year. In addition we have 
regard to both market consensus expectations for EPS and individual broker forecasts. 
Table 5 – bonus parameters
EPS performance  
(percentage of target)
Percentage of maximum  
bonus payable
Threshold 95% 5%
Target 100% 40%
Maximum 105% 100%
For the year ended 30 June 2012, the EPS budget target set by the Committee was 32.9p, an increase of 12.3% over the prior year. 
Market consensus for the period at the date the target was set was 32.6p. Reported EPS of 35.1p was 6.7% above target. After due 
consideration of job performance, the committee awarded an annual bonus to Nick Wharton of £400,000, to Will Adderley of 
£265,000 and to David Stead of £258,800.
Long-Term Incentive Plan (‘LTIP’)
Under the LTIP, Executive Directors are awarded nominal cost share options annually. These awards will vest three years after date of 
grant, to the extent that the applicable performance target is met. 
If there is a change of control of the Company, any awards under the LTIP that have not yet vested will be exercisable, at the 
discretion of the Remuneration Committee taking into account the period of time that has elapsed since grant of the award, and to 
the extent that any performance target has been met.
The Remuneration Committee has chosen growth in fully diluted EPS over each three-year performance period 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 is satisfied that capital 
expenditure controls exercised by the Board are sufficiently rigorous to avoid EPS accretion by means of ineffective investment of 
capital, and in any event reserves the right to adjust the target in the event of a major capital transaction. 
The LTIP is structured as follows (awards vest on a straight-line basis between the threshold and maximum points):
Remuneration report continued Business review Business overview
42 43
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Financial statements Governance
Table 6 – LTIP performance parameters
Compound Annual Growth in EPS Amount of award to vest
Plan period 2009/2012 and 2010/2013 2011/2014 onwards
Threshold RPI + 3% RPI + 3% 25%
Maximum RPI + 12% RPI + 15% 100%
The maximum point was increased for awards made from 2011 onwards, in line with the increase In maximum annual award to 150% 
of base salary. This was part of an overall review of Executive Directors’ remuneration. It was explained fully in last year’s annual 
report and approved by shareholders at the AGM in November 2011.
The committee meets after the results for each three-year performance period are available to determine the extent to which 
performance conditions have been satisfied. There is no retesting.
Awards cannot be granted to Executive Directors under the LTIP over Ordinary Shares in excess of 5% of the issued Ordinary Share 
capital in any rolling 10 year period. 
Details of outstanding awards made to Executive Directors under the LTIP and awards made and exercised during the financial year 
are set out in tables 11 to 14 of this report.
The Remuneration Committee has reviewed the Company’s EPS record over the three-year performance period which ended on 30 
June 2012. Reported fully diluted EPS grew at a compound annual rate of 23.6%. This is 19.3% above the compound annual growth 
in RPI over the same period. Accordingly, 100% of the September 2009 LTIP award will vest in September 2012 representing 
123,949 shares in favour of Will Adderley and 85,215 shares in favour of David Stead. 
Nick Wharton, who became an Executive Director in December 2010, was not a participant of the 2009 LTIP and therefore does not 
receive any shares under the 2011/12 vesting.
The 2009 LTIP shares which vested in favour of Will Adderley and David Stead as described above are included in the single number 
for total remuneration for 2011/12 set out in table 10. Their value has been calculated using the average share price over the three 
months preceding the end of the performance period on 30 June 2012, which is 501p. See table 13 and the note to table 10 below.
Changes in policy 
Annual bonus range – agreed in 2010/11, implemented in 2011/12
As noted in last year’s report, with effect from 1 July 2011 we amended the bonus range for the annual performance bonus to 
95%–105% of budget, compared with 93% to 112% previously. This narrower range is considered to be more appropriate for a larger 
company, and also harmonises the bonus structure for the Executive Directors with that of the Operating Board.
LTIP quantum – approved in 2010/11, implemented in 2011/12
In addition, as mentioned above, with the approval of shareholders at the AGM, the maximum potential annual award of nominal cost 
options under the LTIP was increased to 150% of base salary, compared with 120% previously. At the same time the performance 
target required to achieve the maximum award was made more stretching; compound annual growth rate in EPS over the plan 
period of between RPI+3% and RPI+15% is now required , compared to RPI+3% to RPI+12%. These new criteria apply to all awards 
made in 2011 and future years.
Future LTIP participation by Will Adderley
With effect from 1 January 2012, and in response to shareholder concerns about Will Adderley obtaining ‘creeping control’ of the 
company through vesting of share incentive awards, Will Adderley has indicated that he no longer wishes to receive further awards 
under the LTIP. He will be entitled to receive shares under existing awards, subject to performance criteria being met.
Pension payments
We decided to harmonise the pension contributions made to Executive Directors at 10% of basic salary. This is the entitlement of 
Nick Wharton. Previously Will Adderley and David Stead received a fixed contribution of £20,000 per annum, subject to annual 
review by the Committee. This change took effect from 1 January 2012, and so the payments will be as follows:
Table 7 – Executive Director pension entitlements
Past 2011/12
2012/13 @ 10% base salary 
(based on salary from July 2012)
Nick Wharton 10% of base salary £40,000 £40,800
Will Adderley £20,000 pa £23,250 £26,500
David Stead £20,000 pa £22,940 £26,400
There have been no other changes to remuneration policy during the year. 44 45
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Proposed future changes in policy
Claw back
From 2012 the committee has decided to introduce a claw back provision under which cash bonus entitlements and unvested  
LTIP awards made from 2012 onwards will not be paid in certain circumstances. Claw back will take place at the Remuneration 
Committee’s discretion if:
•	 Performance to which a bonus or LTIP award relates proves to have been mis-stated; or
•	 There has been a mis-calculation in the extent to which performance conditions have been met in respect of previous awards 
made to the individual that have vested and been exercised; or
•	 Where there has been gross misconduct on the part of an individual.
Other share options
The Group operates an all-employee SAYE scheme in which Executive Directors are also entitled to participate after having been 
employed for three months.
Pension arrangements
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 overall remuneration levels for an Executive, the 
Remuneration Committee takes account of contributions to pension plans.
As noted above in the section headed ‘changes in policy’, in January we decided to harmonise the sum paid by the company on a 
Director’s behalf into a personal pension at 10% of salary. 
Share ownership requirements
Executive Directors are required to build a shareholding equal to at least twice their base salary over time and shares vesting under 
the LTIP should be held for this purpose. Below Board level, members of the Operating Board are required to own shares equal to at 
least one times their base salary, to be accumulated over time; and other members of senior management in receipt of discretionary 
share incentives are required to build up a holding equal to 50% of their salary over time.
Non-Executive remuneration policy
Non-Executive Directors’ remuneration is determined by the Executive Directors. The Non-Executive Directors do not receive bonuses 
or participate in any incentive plans. They are paid annual fees which reflect additional responsibilities taken when chairing a committee 
of the Board. Fees were reviewed and amended in the light of market practice in July 2010. The next review will be in July 2013. 
Service contracts
In accordance with the Group’s policy, the service contracts of the Executive Directors have no fixed term, the notice period for 
termination is 12 months from either party and payments on termination are restricted to a maximum of the value of salary for the 
notice period. The Remuneration Committee will apply mitigation rigorously in respect of any post remuneration payment.
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.
Table 8 – Directors’ service contracts
Date of contract Unexpired term
Notice  
period
Nick Wharton 15 September 2010 N/A 12 months
Will Adderley 28 September 2006 N/A 12 months
David Stead 15 September 2003 N/A 12 months
Geoff Cooper 8 October 2004 13 months 3 months
Marion Sears 22 July 2004 10 months 1 month
Simon Emeny 25 June 2007 9 months 1 month
Matt Davies 8 February 2012 30 months 1 month
Senior Executive remuneration
The Remuneration Committee provides oversight and guidance on the remuneration structure for below Board management. The 
package for new appointments is formally presented to the committee for approval. In conducting its assessment of senior executive 
remuneration the committee pays particular regard to whether any individual is incentivised to take risks inappropriate to their role 
and responsibilities. In the finance function, managers are not remunerated against individual financial performance, but against 
corporate performance and personal qualitative objectives.
Remuneration report continued Business review Business overview
44 45
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Financial statements Governance
Share options and dilution
It is Group policy to comply with the provisions of the Association of British Insurers’ Guidelines on Executive Remuneration when 
determining the number of shares over which share scheme incentive awards may be made. At the date of this report options have 
been granted over 1.15% of the Company’s issued share capital.
Performance graph
The graph below shows the Group’s performance over 5 years, measured by total shareholder return, compared with the FTSE 
General Retail Index and the FTSE 250. The Remuneration Committee has chosen these indices for comparison because they 
provide a range of comparator companies which have similar market capitalisation, which are in the same sector and which face 
similar market and economic challenges in the long term.
Table 9 – total shareholder return performance graph (re-based to 29 June 2007 = 100)
29.06.2012
29.03.2012
29.12.2011
29.09.2011
29.06.2011
29.03.2011
29.12.2010
29.09.2010
29.06.2010
29.03.2010
29.12.2009
29.09.2009
29.06.2009
29.03.2009
29.12.2008
29.09.2008
29.06.2008
29.03.2008
29.12.2007
29.09.2007
29.06.2007
Dunelm
FTSE All Share 
General Retailers
FTSE 250
0
50
100
150
200
250
300
350
The shares traded in the range 393p to 533p during the year, and stood at 519p at 30 June 2012.
Audited information
Details of Directors’ remuneration
Details of individual Directors’ remuneration in respect of the year ended 30 June 2012 are as follows:
Table 10 – Directors’ remuneration
Base salary 
or fees 
£’000
Vehicle 
allowance 
£’000
Taxable 
benefits 
£’000
Contribution 
to personal 
pension 
£’000
Annual 
bonus  
£’000
Actual gain 
on SAYE 
exercise 
£’000
Realisable 
gain on 
share 
incentives 
vesting in 
2012  
(table 13)
2012 
Total
 £’000
Realisable 
gain on 
share 
incentives 
vesting in 
2011 
(table 12)
2011 
Total 
£’000
Executive Directors
Nick Wharton 400 12 1 40 400 – – 853 – 429
Will Adderley 265 12 1 23 265 – 621 1,187 1,144 1,494
David Stead 259 12 – 23 259 30 427 1,010 787 1,086
Non-Executive Directors
Geoff Cooper 100 – – – – – – 100 – 100
Marion Sears 40 – – – – – – 40 – 40
Simon Emeny 30 – – – – – – 30 – 30
Matt Davies
1
12 – – – – – – 12 – –
Total 1,106 36 2 86 924 30 1,048 3,232 1,931 3,179
 
1 
Reflects fees since appointment on 8 February 2012. 46 47
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
David Stead waived taxable benefits totalling approximately £1,000.
The realisable gain on LTIP awards vesting in the relevant financial period is calculated using the LTIP award whose performance 
period ends on the last day of the financial period being reported on ( so for 2011/12, the LTIP award used is the 2009 award, with a 
performance period of July 2009 to June 2012 inclusive). The realisable value of the award is then calculated by multiplying the 
number of shares which will vest after applying the performance criteria, by the average share price for the three months ended on 
the last day of the performance period. 
Directors’ interests in share options
Long-Term Incentive Plan (‘LTIP’)
As at 30 June 2012, the Directors’ beneficial interests in options granted under the LTIP, which (unless otherwise noted) will vest only 
if EPS performance conditions are met, are as follows:
Table 11 – Directors’ interests in LTIP
Director Date of award Nature of award
Share options at  
30 June 2012
End of 
performance 
period
Market price of 
shares at date of 
award
Nick Wharton Dec 2010 One-off joining award 198,807 Nov 2015
1
503p
Dec 2010 2010/13 LTIP – 120% quantum  
(pro-rata to time served)
55,666 Jun 2013 503p
Nov 2011 2011/14 LTIP – 150% quantum 139,211 Jun 2014 431p
Will Adderley Sep 2009 2009/12 LTIP – 120% quantum 123,949 Jun 2012 316p
Dec 2010 2010/13 LTIP – 120% quantum  
(pro rata salary 2010/11)
72,614 Jun 2013 503p
Nov 2011 2011/14 LTIP – 150% quantum 92,227 Jun 2013 431p
David Stead Sep 2009 2009/12 LTIP – 120% quantum 85,215 Jun 2012 316p
Dec 2010 2010/13 LTIP – 120% quantum 60,835 Jun 2013 503p
Nov 2011 2011/14 LTIP – 150% quantum 90,070 Jun 2014 431p
1  
The nominal cost options over 198,807 shares made to Nick Wharton on 1 December 2010 can only vest if he remains an employee for five years. There is no vesting 
entitlement if Nick leaves the company, for any reason, before 1 December 2015. This award was made in compensation for LTIP benefits left behind with Nick’s previous 
employer and there are no other performance conditions attached to it.
LTIP options exercised during the period
The September 2008 award was in respect of the three-year performance period to 2 July 2011, over which the compound annual 
fully diluted growth in EPS was 21% (19% above RPI). Accordingly, 100% of the conditional nominal cost options awarded 
in September 2008 vested in September 2011. The entitlements were exercised by both Will Adderley and David Stead and details 
are set out below:
Table 12 – LTIP options exercised during 2011/12
Name
No of shares 
vested Date of vesting
3 month average 
share price to 
2 July 2011
Realisable gain on 
2 July 2011 
(end of performance 
period) 
£
Exercise  
date
Share price on 
exercise date
Actual gain on 
exercise date 
£
Will Adderley 259,459 18 Sep 2011 441p 1,144,214 11 Oct 2011 470p 1,219,457
David Stead 178,378 18 Sep 2011 441p 786,647 13 Oct 2011 474p 845,512
 
Remuneration report continued Business review Business overview
46 47
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Financial statements Governance
LTIP options to vest in 2012/13
The Remuneration Committee has reviewed the Company’s EPS record over the three-year performance period which ended on  
30 June 2012. Reported fully diluted EPS grew at a compound annual rate of 23.6%. This is 19.3% above RPI over the same period. 
Accordingly, 100% of the September 2009 LTIP award will vest in September 2012 and details are set out below:
Table 13 – Directors’ LTIP options vesting in 2012/13
Name
No of shares  
to vest Date of vesting
3 month average 
share price to 
30 June 2012
Realisable gain on 
30 June 2012  
(end of performance 
period)
Will Adderley 123,949 24 Sep 2012 501p £620,984
David Stead 85,215 24 Sep 2012 501p £426,927
Other options
The Directors’ beneficial interests in options granted under the savings related share plan (SAYE or sharesave) plan are as follows:
Table 14 – Directors’ options under SAYE
Director Type of option
Shares under 
option at 
30 June 2012
Shares under 
option at 
2 July 2011
Granted 
during period
Exercised 
during period
Lapsed 
during period
Exercise price 
per share
Market price 
of shares 
at date of 
exercise Vesting date Expiry date
Nick Wharton SAYE 2012 2,493 – 2,493 – – 361p – Jan 2015 Jun 2015
Will Adderley SAYE 2009 – 7,710 – – 7,710 124p – Jan 2012 Jun 2012
David Stead
SAYE 2009 – 7,710 – 7,710 – 124p 506.5p Jan 2012 Jun 2012
SAYE 2012 2,493 – 2,493 – – 361p – Jan 2015 Jun 2015
David Stead exercised 7,710 shares under the 2009 sharesave on 22 February 2012. The closing share price on that date was 
506.5p and so the actual gain made by him on that date was £29,491. Will Adderley waived his entitlement to exercise his options 
under this scheme and they lapsed on 30 June 2012.
The table above sets out the entire history of SAYE options granted to and exercised by Directors.
The Directors do not have entitlements under any other share based incentive plan.
Total remuneration figure
In line with developing requirements to set out total remuneration in a transparent way as a ‘single number’ we have included a Total 
Remuneration figure for each Executive Director in Table 10. This total includes all rewards that the Director received or will receive 
pertaining to the year being reported. 
In the case of Dunelm our simple remuneration structure means that the total remuneration includes: base salary, value of benefits, 
pension contribution, cash bonus relating to the year, the actual value of SAYE options vesting and exercised in the year and the 
value of the (gross) LTIP shares vesting in respect of the performance period ended in the year, calculated using the average share 
price over the three months ended on the last day of the performance period (which we refer to in the tables as ‘realisable value’).
Total remuneration earned by the Executive Directors in 2011/12 was £3.0m and by the Non-Executive Directors was £0.2m. The 
total remuneration of all Directors was £3.2m.
Approval
This report was approved by the Board of Directors on 13 September 2012 and signed on its behalf by:
Marion Sears
Chair, Remuneration Committee
13 September 2012 48 49
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
The Directors are responsible for preparing the Annual Report and the Group and Parent Company financial statements in 
accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and Parent Company financial statements for each financial year. Under that 
law they are required to prepare the Group financial statements in accordance with IFRSs as adopted by the European Union (‘EU’) 
and applicable law and have elected to prepare the Parent Company financial statements on the same basis.
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair 
view of the state of affairs of the Group and Parent Company and of their profit or loss for that period. In preparing each of the Group 
and Parent Company financial statements, the Directors are required to:
•	 select suitable accounting policies and then apply them consistently;
•	 make judgements and estimates that are reasonable and prudent;
•	 state whether they have been prepared in accordance with IFRSs as adopted by the EU; and
•	 prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the Parent 
Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Parent Company’s 
transactions and disclose with reasonable accuracy at any time the financial position of the Parent Company and enable them to 
ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as 
are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Directors’ Report, Directors’ Remuneration 
Report and Corporate Governance Statement that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the  
Company’s website.
Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in  
other jurisdictions.
Responsibility Statement
We confirm that to the best of our knowledge:
(a) The financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the 
assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as 
a whole; and
(b) the management report includes a fair review of the development and performance of the business and the position of the 
Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks 
and uncertainties that they face.
By order of the Board
Geoff Cooper  Nick Wharton
Chairman  Chief Executive
13 September 2012
Statement of Directors’ responsibilities in respect  
of the Annual Report and the financial statements Business review Governance Financial statements Business overview
48 49
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Independent Auditor’s report to the members  
of Dunelm Group plc
We have audited the financial statements of Dunelm Group plc for the financial year ended 30 June 2012 set out on pages 50 to 78. 
The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting 
Standards (‘IFRSs’) as adopted by the EU and, as regards the Parent Company financial statements, as applied in accordance with 
the provisions of the Companies Act 2006.
This report is made solely to the Company’s members, as a body, in accordance with chapter 3 of part 16 of the Companies Act 
2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to 
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume 
responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for this report, or for 
the opinions we have formed.
Respective responsibilities of Directors and auditors
As explained more fully in the Directors’ Responsibilities Statement set out on page 48, the Directors are responsible for the 
preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and 
express an opinion on, the financial statements in accordance with applicable law and International Standards on Auditing (UK and 
Ireland). Those standards require us to comply with the Auditing Practices Board’s (‘APB’s’) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the APB’s website at www.frc.org.uk/apb/scope/private.cfm.
Opinion on financial statements
In our opinion:
•	 the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 
30 June 2012 and of the Group’s profit for the year then ended;
•	 the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the EU;
•	 the Parent Company financial statements have been properly prepared in accordance with IFRSs as adopted by the EU and as 
applied in accordance with the provisions of the Companies Act 2006; and
•	 the financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the 
Group financial statements, Article 4 of the IAS Regulation.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion:
•	 the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 
2006; 
•	 the information given in the Directors’ Report for the financial year for which the financial statements are prepared is consistent 
with the financial statements; and
•	 the information given in the Corporate Governance Statement set out on pages 27 to 31 with respect to internal control and  
risk management systems in relation to financial reporting processes and about share capital structures is consistent with the  
financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report to you if, in our opinion:
•	 adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been 
received from branches not visited by us; or
•	 the Parent Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement 
with the accounting records and returns; or
•	 certain disclosures of Directors’ remuneration specified by law are not made; or
•	 we have not received all the information and explanations we require for our audit; or
•	 a Corporate Governance Statement has not been prepared by the company.
Under the Listing Rules we are required to review:
•	 the Directors’ statement, set out on page 48, in relation to going concern
•	 the part of the Corporate Governance Statement on pages 27 to 31 relating to the Company’s compliance with the nine 
provisions of the UK Corporate Governance Code specified for our review; and
•	 certain elements of the report to shareholders by the Board on directors’ remuneration.
Wayne Cox 
(Senior Statutory Auditor)
for and on behalf of KPMG Audit Plc, Statutory Auditor
Chartered Accountants
Leicester
13 September 2012 50 51
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Consolidated income statement
For the 52 weeks ended 30 June 2012 
Note
  
2012  
£’000
 
 2011  
£’000
Revenue 1 603,729 538,474 
Cost of sales (311,992) (280,125) 
Gross profit 291,737 258,349 
Operating costs 3 (196,537) (175,051) 
Operating profit 2 95,200 83,298 
Financial income 5 1,048 523 
Financial expenses 5 – (172) 
Profit before taxation 96,248 83,649 
Taxation 6 (25,026) (23,814) 
Profit for the period attributable to equity shareholders of the parent 71,222 59,835 
Earnings per ordinary share – basic 8 35.3p 29.7p 
Earnings per ordinary share – diluted 8 35.1p 29.3p 
Dividend proposed per ordinary share 7 10.0p 8.0p 
Dividend paid per ordinary share 7  4.0p 3.5p 
All activities relate to continuing operations.  Business review Governance Financial statements Business overview
50 51
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Consolidated statement of comprehensive income
For the 52 weeks ended 30 June 2012
 
 2012  
£’000
 
 2011  
£’000
Profit for the period 71,222 59,835 
Effective portion of movement in fair value of cash flow hedges 343 147 
Deferred tax on hedging movements (90) (50) 
Total comprehensive income for the period 71,475 59,932  52 53
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Consolidated statement of financial position
As at 30 June 2012
Note
30 June  
2012 
 £’000
2 July 
 2011 
£’000
Non-current assets 
Intangible assets 9 3,238 4,692 
Property, plant and equipment 10 146,313 125,850 
Total non-current assets 149,551 130,542 
Current assets 
Inventories 12 86,221 76,455 
Trade and other receivables 13 17,054 14,566 
Cash and cash equivalents 14 65,190 35,139 
Total current assets 168,465 126,160 
Total assets 318,016 256,702 
Current liabilities 
Trade and other payables 15 (97,442) (85,805) 
Liability for current tax (13,195) (12,636) 
Financial instruments 17 (56) (398) 
Total current liabilities (110,693) (98,839) 
Non-current liabilities 
Deferred tax liability 11 (297) (645) 
Total non-current liabilities (297) (645) 
Total liabilities (110,990) (99,484) 
Net assets 207,026 157,218 
Equity 
Issued capital 18 2,023 2,015 
Share premium 1,025 681 
Capital redemption reserve 43,155 43,155 
Hedging reserve (42) (295) 
Retained earnings 160,865 111,662 
Total equity attributable to equity holders of the Parent 207,026 157,218 
The financial statements on pages 50 to 68 were approved by the Board of Directors on 13 September 2012 and were signed on its 
behalf by:
Nick Wharton
Chief Executive Business review Governance Financial statements Business overview
52 53
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Consolidated statement of cash flows
For the 52 weeks ended 30 June 2012
Note
  
2012  
£’000
 
 2011 
 £’000
Profit before taxation 96,248 83,649 
Adjustment for net financing costs (1,048) (351) 
Operating profit 95,200 83,298 
Depreciation and amortisation 18,678 14,079 
(Profit)/loss on disposal of property, plant and equipment (15) 703 
Operating cash flows before movements in working capital 113,863 98,080 
(Increase) in inventories (9,766) (13,872) 
(Increase) in receivables (2,465) (4,080) 
Increase in payables 11,955 13,848 
Net movement in working capital (276) (4,104) 
Share-based payments expense 1,803 1,199 
Foreign exchange gains/(losses) 218 (115) 
115,608 95,060 
Interest paid – (29) 
Interest received 756 507 
Tax paid (24,473) (21,513) 
Net cash generated from operating activities 91,891 74,025 
Cash flows from investing activities 
Proceeds on disposal of property, plant and equipment 634 – 
Acquisition of property, plant and equipment (37,030) (36,124) 
Acquisition of intangible assets (1,594) (1,085) 
Net cash utilised in investing activities (37,990) (37,209) 
Cash flows from financing activities 
Proceeds from issue of share capital 346 101 
Dividends paid (24,248) (17,119) 
Net cash flows utilised in financing activities (23,902) (17,018) 
Net increase in cash and cash equivalents 29,999 19,798 
Foreign exchange revaluations 52 (28) 
Cash and cash equivalents at the beginning of the period 35,139 15,369 
Cash and cash equivalents at the end of the period 14 65,190 35,139  54 55
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Consolidated statement of changes in equity
For the 52 weeks ended 30 June 2012
Issued  
share 
 capital  
£’000
Share  
premium 
 £’000
Capital  
redemption  
reserve  
£’000
Hedging  
reserve  
£’000
Retained  
earnings  
£’000
Total  
equity  
£’000
As at 3 July 2010 2,010 580 43,155 (392) 67,335 112,688 
Profit for the financial year – – – – 59,835 59,835 
Movement in fair value of cash flow hedges – – – 147 – 147 
Deferred tax on hedging movements – – – (50) – (50) 
Total comprehensive income for the financial year – – – 97 59,835 59,932 
Issue of share capital 5 101 – – – 106 
Treasury shares reissued in respect of share option schemes – – – – (9) (9) 
Share-based payments – – – – 1,199 1,199 
Deferred tax on share-based payments – – – – (41) (41) 
Current corporation tax on share options exercised – – – – 462 462 
Dividends – – – – (17,119) (17,119) 
Total transactions with owners, recorded directly in equity 5 101 – – (15,508) (15,402) 
As at 2 July 2011 2,015 681 43,155 (295) 111,662 157,218 
Profit for the financial year – – – – 71,222 71,222
Movement in fair value of cash flow hedges – – – 343 – 343
Deferred tax on hedging movements – – – (90) – (90) 
Total comprehensive income for the financial year – – – 253 71,222 71,475
Issue of share capital 8 344 – – (6) 346 
Treasury shares reissued in respect of share option schemes – – – – – – 
Share-based payments – – – – 1,803 1,803 
Deferred tax on share-based payments – – – – (199) (199) 
Current corporation tax on share options exercised – – – – 631 631 
Dividends – – – – (24,248) (24,248) 
Total transactions with owners, recorded directly in equity 8 344 – – (22,019) (21,667) 
As at 30 June 2012 2,023 1,025 43,155 (42) 160,865 207,026 Business review Governance Financial statements Business overview
54 55
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
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’) and in accordance with the provisions of the Companies Act 2006  
and these are presented on pages 50 to 68.
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 except where financial instruments have been 
stated at fair value. The financial statements are prepared in pounds sterling, rounded to the nearest thousand.
Going concern 
The Group has considerable financial resources together with long standing relationships with a number of key suppliers and an 
established reputation in the retail sector across different geographic areas. As a consequence, the Directors believe that the Group 
is well placed to manage its business risks successfully despite the current economic outlook. The Directors have a reasonable 
expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable 
future. Accordingly, they continue to adopt the going concern basis in preparing the Annual Report and financial statements.
Further information regarding the Group’s business activities, together with the factors likely to affect its future development, 
performance and position is set out in the Directors’ Report and Business Review on pages 24 to 26. The financial position of the 
Group, its cash flows, liquidity position and borrowing facilities are described in the Finance Director’s review on pages 12 and 13.  
In addition note 17 to the financial statements includes the Group’s objectives, policies and processes for managing its capital; its 
financial risk management objectives; and its exposures to credit risk and liquidity risk.
Use of estimates and judgements
The presentation of the annual financial statements requires the Directors to make judgements, estimates and assumptions that 
affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated 
assumptions are based on historical experience and various other factors that are believed to be reasonable under the 
circumstances. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the 
period in which the estimate is revised and in any future periods affected.
The key estimates and judgements used in the financial statements are as follows:
Inventory provisions
The Group provides against the carrying value of inventories held, based upon average losses incurred to clear old and discounted lines.
Dilapidations
The Group provides for the full estimated costs of any dilapidations on stores where required.
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.
Equity-settled share-based payments
Certain employees and Directors of the Group receive equity-settled remuneration in the form of equity-settled share-based payment 
transactions, whereby employees render services in exchange for shares or rights over shares. The cost equity-settled transactions 
with employees is measured by reference to the fair value, determined using an appropriate pricing model, at the date at which they 
are granted. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period 
in which the non-market vesting conditions are expected to be fulfilled, ending on the relevant vesting date. The cumulative expense 
recognised for equity-settled transactions at each reporting date until the vesting date is adjusted to reflect the Directors’ best 
available estimate of the number of equity instruments that will ultimately vest based upon non-market conditions.
Accounting policies 56 57
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern 
the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights 
that presently are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the 
consolidated financial statements from the date that control commences until the date that control ceases.
Transactions eliminated on consolidation
Intragroup balances, and any unrealised gains and losses or income and expenses arising from intragroup transactions, are 
eliminated in preparing the consolidated financial statements.
Revenue
Revenue represents the proceeds from sales of goods and related services. It excludes sales between Group companies and is after 
deducting returns, discounts given and VAT. For the majority of sales, revenue is recognised at the point of sale with the exception of 
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 trademarks and are stated at cost less amortisation (see below).
Amortisation
Amortisation is charged to the income statement on a straight-line basis over the estimated useful life of the asset. These are as 
follows:
•	 software development 3 years
•	 trademarks 5 years
Property, plant and equipment
Owned assets
Items of property, plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of 
property, plant and equipment.
Depreciation
Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of 
property, plant and equipment. Land is not depreciated. The estimated useful lives are as follows:
•	 computer equipment 3 years
•	 freehold buildings 50 years
•	 fixtures and fittings 4 years
•	 motor vehicles 4 years
•	 office equipment 5 years
•	 plant and machinery 4 years
•	 leasehold improvements over the period of the lease
The residual value of an asset, if significant, is reassessed annually.
Current assets
Trade and other receivables
Trade and other receivables are initially recognised at fair value and then carried at amortised cost net of impairment provisions.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is derived using the average cost method and includes costs 
incurred in bringing the inventories to their present location and condition. Net realisable value is the estimated selling price less cost 
to sell in the ordinary course of business.
Accounting policies continued Business review Governance Financial statements Business overview
56 57
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
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.
Derivative financial instruments
Derivative financial instruments used are forward exchange contracts and are measured at fair value. The fair values are determined 
by reference to the market prices available from the market on which the instruments involved are traded.
Certain derivative financial instruments are designated as hedges in line with the Group’s treasury policy. Cash flow hedges that 
hedge exposure to variability in cash flows that is either attributable to a particular risk associated with a recognised asset or a 
liability or a highly probable forecasted transaction.
For cash flow hedges that proportion of the gain or loss on the hedging instrument that is determined to be an effective hedge, as 
defined by IAS 39 ‘Financial Instruments: Recognition and Measurement’, is recognised in equity, directly in the hedge reserve with 
any ineffective portion recognised in the income statement. Such hedges are tested, both at inception to ensure they are expected to 
be effective and periodically throughout their duration to assess continuing effectiveness. When the forecast transaction results in 
the recognition of a non-financial asset or liability, the associated gains or losses previously recognised in equity are included in the 
initial measurement of the asset or liability. For all other cash flow hedges, the gains or losses that are recognised in equity are 
transferred to the income statement in the same period in which the hedge cash flows affect the income statement.
Any gains or losses arising from changes in fair value derivative financial instruments not designated as hedges are recognised in the 
income statement.
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 recognised 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 recognised 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. 58 59
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Financing income/expense
Financing income/expense comprises interest payable on borrowings calculated using the effective interest rate method, interest 
receivable on funds invested and foreign exchange gains and losses.
Retirement benefits
The Group operates a defined contribution pension plan using a third-party provider. Obligations for the contributions to this plan are 
recognised as an expense in the income statement as incurred.
Share-based payment transactions
The Group operates an employee share save scheme open to all employees with over three months’ service, enabling them to save 
money which may be used after three years to acquire shares in the Company at a predetermined price.
The Group also operates other share option schemes enabling certain employees to acquire shares of the Company.
The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. Fair value is measured 
at grant date and spread over the period during which the employees become unconditionally entitled to the options. Fair value is 
measured using the binomial model, taking into account the terms and conditions applicable to the options.
At each balance sheet date the Group revises its estimates of the number of share incentives that are expected to vest and amends 
the charge accordingly. 
Dividends
Dividends are recognised as a liability in the period in which they are approved such that the Company is obligated to pay the dividend.
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement except to the 
extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax represents the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted 
at the balance sheet date, together with any adjustment to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts 
of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the 
asset can be recognised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will 
be recognised.
Adopted IFRS and IFRIC not yet applied
At the date of approval of these financial statements, the following standards, amendments and interpretations were in place but not yet 
effective:
IFRS 7 Revised IFRS 7 - Financial Instruments: Disclosure
IFRS 9 New standard  - Financial Instruments
IFRS 10 New standard - Consolidated Financial Statements
IFRS 12 New standard - Disclosure of Interests in Other Entities
IFRS 13 New standard - Fair Value Measurement
IAS 32 Revised IAS 32 - Financial Instruments: Presentation
 
The above will be adopted in the Group and Company’s financial statements when they become effective. 
When adopted none of the above standards or amendments are expected to have any significant impact on the financial statements 
of the Group or Company.
IFRS 9 will replace IAS 39 Financial Instruments: Recognition and Measurement. The standard contains two primary measurement 
categories for financial assets:
•	 amortised cost; and
•	 fair value.
Accounting policies continued Business review Governance Financial statements Business overview
58 59
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
1 Segmental reporting
The Group has one reportable segment, retail of homewares. 
The Chief Operating Decision Maker is Dunelm Group plc Board. Internal management reports are reviewed by them on a monthly 
basis. Performance of the segment is assessed based on a number of financial and non-financial KPI’s as well as on profit before 
taxation.
All material operations of the reportable segment are carried out in the UK. The Group’s revenue is driven by the consolidation of 
individual small value transactions and as a result Group revenue is not reliant on a major customer or group of customers.
Management believe that these measures are the most relevant in evaluating the performance of the segment and for making 
resource allocation decisions.
2 Operating profit
Operating profit is stated after charging the following items:
2012  
£’000
2011 
 £’000
Inventories 
 Cost of inventories included in cost of sales 310,971 280,912 
 Movement on provisions for write down of inventories 1,021 (787) 
Amortisation of intangible assets 2,445 1,909 
Depreciation of owned property, plant and equipment 16,233 12,170 
Operating lease rentals 
 Land and buildings 28,287 25,493 
 Plant and machinery 1,310 1,522 
(Profit)/loss on disposal of property, plant and equipment and intangible assets (15) 703 
The analysis of auditors’ remuneration is as follows:
2012  
£’000
2011 
 £’000
Fees payable to the Company’s auditors for the audit of the Parent and consolidated annual accounts 17 16 
Fees payable to the Company’s auditors and their associates for other services to the Group 
– audit of the Company’s subsidiaries pursuant to legislation 58 56 
– tax compliance 28 33 
– other tax services 46 10 
Total audit fees amounted to £75,000, fees for non-audit services amounted to £74,000.
3 Operating costs
2012 
 £’000
 2011 
 £’000
Selling and Distribution 162,097 147,392 
Administrative 34,455 26,956 
(Profit)/loss on disposal of property, plant and equipment and intangible assets (15) 703 
196,537 175,051 
4 Employee numbers and costs
The average number of people employed by the Group (including Directors) was:
2012 
Number  
of heads
2012
 Full time 
equivalents
2011
 Number  
of heads
2011
 Full time 
equivalents
Selling 6,380 3,823 6,135 3,777 
Distribution 290 283 261 252 
Administration 241 235 228 223 
6,911 4,341 6,624 4,252 
 
Notes to the annual financial statements
For the 52 weeks ended 30 June 2012 60 61
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Notes to the annual financial statements continued
For the 52 weeks ended 30 June 2012
4 Employee numbers and costs continued
The aggregate remuneration of all employees including Directors comprises:
2012  
£’000
2011  
£’000
Wages and salaries including bonuses and termination benefits 77,248 69,740 
Social security costs 5,370 4,715 
Share-based payment expense (note 20) 1,803 1,199 
Defined contribution pension costs 426 282 
84,847 75,936 
Details of Directors’ remuneration, share options, long-term incentive schemes and pension entitlements are disclosed in the 
Remuneration Report on pages 39 to 47.
5 Financial income and expense
2012 
£’000
2011  
£’000
Finance income 
Interest on bank deposits 778 523 
Foreign exchange gains (net) 270 – 
1,048 523 
Finance expenses 
Interest on bank borrowings and overdraft – (29) 
Foreign exchange losses (net) – (143) 
– (172) 
Net finance income 1,048 351 
6 Taxation
2012  
£’000
2011 
 £’000
Current taxation 
UK corporation tax charge for the period 26,342 24,610 
Adjustments in respect of prior periods (679) (1,198) 
25,663 23,412 
Deferred taxation 
Origination of temporary differences (768) (442) 
Adjustment in respect of prior periods 131 844 
(637) 402 
Total taxation expense in the income statement 25,026 23,814 
The tax charge is reconciled with the standard rate of UK corporation tax as follows:
2012  
£’000
2011 
 £’000
Profit before taxation 96,248 83,649 
UK corporation tax at standard rate of 25.5% (2011: 27.5%) 24,543 23,002 
Factors affecting the charge in the period: 
Non-deductible expenses 78 179 
Ineligible depreciation 1,206 1,035 
Lease incentive deductions (109) (120) 
Adjustments to tax charge in respect of prior years (548) (354) 
Effect of standard rate of corporation tax change (63) (104) 
(Profit)/loss on disposal of ineligible assets (81) 176 
25,026 23,814 
The taxation charge for the period as a percentage of profit before tax is 26.0% (2011: 28.5%).
A reduction in the UK corporation tax rate from 26% to 25% (effective from 1 April 2012) was substantively enacted on 5 July 2011, 
and further reductions to 24% (effective from 1 April 2012) and 23% (effective from 1 April 2013) were substantively enacted on 26 
March 2012 and 3 July 2012 respectively.  Business review Governance Financial statements Business overview
60 61
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
6 Taxation continued
This will reduce the company’s future current tax charge accordingly and further reduce the deferred tax liability at 30 June 2012 
(which has been calculated based on the rate of 24% substantively enacted at the balance sheet date) by £12,000.
 
It has not yet been possible to quantify the full anticipated effect of the government’s further 1% rate reduction to 22%, although this 
will further reduce the company’s future current tax charge and reduce the company’s deferred tax liability accordingly.
7 Dividends
All dividends relate to the 1p Ordinary Shares. 
2012  
£’000
2011  
£’000
Final for the period ended 3 July 2010 – paid 5.0p – (10,067) 
Interim for the period ended 2 July 2011 – paid 3.5p – (7,052) 
Final for the period ended 2 July 2011 – paid 8.0p (16,158) – 
Interim for the period ended 30 June 2012 – paid 4.0p (8,090) – 
(24,248) (17,119) 
 
The Directors are proposing a final dividend of 10.0p per Ordinary Share for the period ended 30 June 2012 which equates to £20.2m. 
The dividend will be paid on 21 December 2012 to shareholders on the register at the close of business on 30 November 2012. 
 
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 
ended  
30 June 2012 
’000
52 weeks 
ended 
 2 July 2011 
‘000
Weighted average number of shares in issue during the period 201,968 201,394 
Impact of share options 1,008 2,506 
Number of shares for diluted earnings per share 202,976 203,900 
 
9 Intangible assets
      
 
Software 
development 
and licences 
£’000
Rights to 
Dorma brand 
£’000
Total  
£’000
Cost 
At 3 July 2010 3,529 5,036 8,565 
Additions 1,399 – 1,399 
Disposals (3) – (3) 
At 2 July 2011 4,925 5,036 9,961 
Additions 1,590 4 1,594 
Transfers from tangible assets 26 – 26
Disposals (639) – (639) 
At 30 June 2012 5,902 5,040 10,942
Amortisation 
At 3 July 2010 1,433 1,930 3,363 
Charge for the financial period 902 1,007 1,909 
Disposals (3) – (3) 
At 2 July 2011 2,332 2,937 5,269 
Charge for the financial period 1,438 1,007 2,445 
Disposals (10) – (10) 
At 30 June 2012 3,760 3,944 7,704 
Net book value 
At 3 July 2010 2,096 3,106 5,202 
At 2 July 2011 2,593 2,099 4,692 
At 30 June 2012 2,142 1,096 3,238 62 63
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Notes to the annual financial statements continued
For the 52 weeks ended 30 June 2012
9 Intangible assets continued
All additions were acquired and do not include any internal development costs.
Transfers relate to assets which were classified initially as fixtures and fittings and leasehold improvements.
10 Property, plant and equipment
Land and 
buildings 
£’000 
Leasehold 
improvements 
£’000
Plant and 
machinery 
£’000
Motor 
vehicles 
£’000 
Fixtures and 
fittings 
£’000
Total 
£’000
Cost 
At 3 July 2010 52,882 57,204 476 53 29,934 140,549 
Additions 13,806 12,004 1,166 – 9,148 36,124 
Transfers to intangible assets and reclassifications 34 (34) (14) – 14 – 
Disposals (515) (665) (28) (8) (766) (1,982) 
At 2 July 2011 66,207 68,509 1,600 45 38,330 174,691 
Additions 12,826 13,279 727 – 10,198 37,030
Transfers to intangible assets and reclassifications – 25 14 – (65) (26) 
Disposals – (347) (23) (26) (294) (690) 
At 30 June 2012 79,033 81,466 2,318 19 48,169 211,005 
Depreciation 
At 3 July 2010 3,517 16,954 139 53 17,287 37,950 
Charge for financial period 896 5,032 242 – 6,000 12,170 
On disposals (127) (413) (2) (8) (729) (1,279) 
At 2 July 2011 4,286 21,573 379 45 22,558 48,841 
Charge for financial period 1,794 6,051 497 – 7,891 16,233
On disposals – (160) (6) (26) (190) (382) 
At 30 June 2012 6,080 27,464 870 19 30,259 64,692 
Net book value 
At 3 July 2010 49,365 40,250 337 – 12,647 102,599 
At 2 July 2011 61,921 46,936 1,221 – 15,772 125,850 
At 30 June 2012 72,953 54,002 1,448 – 17,910 146,313 
11 Deferred tax
Deferred tax is provided in full on temporary differences under the liability method using a taxation rate of 24% (2011: 26%).
Deferred taxation assets and liabilities are attributable to the following:
Assets Liabilities Net
2012 
£’000
2011 
£’000
2012
 £’000
2011 
£’000
2012
£’000
2011 
£’000
Property, plant and equipment – – (1,331) (1,670) (1,331) (1,670) 
Other temporary differences 13 103 (83) (155) (70) (52) 
Share-based payments 1,104 1,077 – – 1,104 1,077 
1,117 1,180 (1,414) (1,825) (297) (645) 
The movement in the net deferred tax balance is as follows:
Balance at  
3 July 2010
 £’000
Recognised 
in income 
£’000 
Recognised 
in equity 
£’000 
Balance at 
2 July 2011 
£’000
Property, plant and equipment (1,187) (483) – (1,670) 
Employee benefits 1,051 67 (41) 1,077 
Short-term temporary differences (16) 14 (50) (52) 
(152) (402) (91) (645) 
Balance at 
2 July 2011 
£’000
Recognised 
in income 
£’000 
Recognised 
in equity 
£’000 
Balance at 
30 June 2012 
£’000
Property, plant and equipment (1,670) 339 – (1,331)
Employee benefits 1,077 226 (199) 1,104
Short-term temporary differences (52) 72 (90) (70)
(645) 637 (289) (297) Business review Governance Financial statements Business overview
62 63
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
12 Inventories
2012 
£’000
2011 
£’000
Goods for resale 86,221 76,455 
13 Trade and other receivables
2012 
£’000
2011 
£’000
Trade receivables 345 454 
Other receivables 2,969 2,159 
Prepayments and accrued income 13,740 11,953 
17,054 14,566 
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
2012 
£’000
2011
 £’000
Cash at bank and in hand 65,190 35,139 
15 Trade and other payables
2012 
£’000
2011 
£’000
Trade payables 30,156 36,709 
Accruals and deferred income 53,773 42,695 
Other taxation and social security 9,333 5,163 
Other creditors 4,180 1,238 
97,442 85,805 
All amounts fall due within one year. All trade payables are current. No interest is charged on trade payables, whilst these remain 
current.
16 Interest bearing loans and borrowings
The Group maintains a £10m overdraft facility. Interest is payable on funds utilised under the facility at the rate of 1.5% above the 
bank’s base rate.
Financial assets at 30 June 2012 consisted of £345,000 (2011: £412,000) trade receivables and £65,190,000 (2011: £35,139,000) 
cash at bank and on deposit; interest earned is at normal commercial rates.
17 Financial risk management
The Board of Directors has overall responsibility for the oversight of the Group’s risk management framework. A formal process for 
reviewing and managing risk in the business has been developed. A register of strategic and operational risks is maintained and 
reviewed quarterly by the Board, who also monitor the status of agreed actions to mitigate key risks.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual 
obligations and arises principally from the Group’s receivables from customers. The Group only deals with creditworthy 
counterparties, and uses publicly available financial information to rate its customers. 
As the principal business of the Group is retail related, trade receivables consist of a relatively small number of customers, which 
tend to be charity or local authority based. The carrying amount of financial assets recorded in the financial statements represents 
the Group’s maximum exposure to credit risk. 
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to 
managing liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under 
both normal and extreme circumstances. The Group manages this risk by continuously monitoring cash flow forecasts. The Group’s 
available facilities can be found in note 16.
Group policy is that surplus funds are placed on deposit with counterparties approved by the Board, with a minimum of ‘A’ credit 
rating. Credit limits with approved counterparties are limited to £25m for any individual party. 64 65
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Notes to the annual financial statements continued
For the 52 weeks ended 30 June 2012
17 Financial risk management continued
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Group’s income. 
Interest rate risk
The Group’s bank borrowings incur variable interest rate charges linked to LIBOR and Barclays Bank Base Rate. The Directors do 
not consider that future changes in interest rates are likely to cause a material direct impact on profitability. The Group’s exposure to 
interest rates on financial assets and liabilities are detailed in note 16.
Foreign currency risk
The Group is exposed to foreign currency risk on purchases denominated in US dollars. These amounted to approximately 10%  
of the total stock purchases in the year ended 30 June 2012. The outstanding US dollar liabilities at the year end were $256,000 
(2011: $353,000) and payments on account were $6,227,000 (2011: $4,141,000).
During the year the Group entered into exchange rate swaps for $41.6m to sell sterling and buy US dollars. These swaps are 
accounted for as cash flow hedges. During the year the net mark to market profit on foreign currency hedging instruments taken  
to equity was £0.3m (2011: £0.1m). At the balance sheet date the Group had 11 swap contracts outstanding with a maximum value  
of $40.1m.
All of the Group’s revenues are in sterling. Purchases of promotional goods are generally in US dollars. Purchase of regular range 
goods are generally in sterling, although some lines are now being imported directly and paid for in dollars. We will cover exchange 
rate exposure on expected promotional product purchases up to a maximum of 100% of forecast purchases over a four month 
horizon. We will cover exchange rate exposure on expected regular range purchases up to a maximum of 50% of forecast purchases 
over a 12 month horizon. We will use various means to cover the above currency exposures; hold excess funds in US dollars, take 
out forward contracts for the purchase of US dollars, enter into forward rate options.
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.
Sensitivity analysis
The Group’s principal foreign currency exposure is to the US dollar. 
The Directors believe that an increase or decrease of 10% in the US dollar/sterling exchange rates would not have a material effect 
on the Consolidated Statement of Comprehensive Income.
The US dollar year end exchange rate applied in the above analysis is 1.5617 (2011: 1.6069). Strengthening and weakening of sterling  
may not produce symmetrical results depending on the proportion and nature of foreign exchange derivatives which do not qualify 
for hedge accounting.
Fair values
The fair value of the Group’s financial assets and liabilities is not materially different from their carrying value. The fair value of foreign 
currency contracts are sums required by the counterparties to cancel the contracts at the end of the year.
Fair value hierarchy
Financial instruments carried at fair value are required to be measured by reference to the following levels:
•	 Level 1: quoted prices in active markets for identical assets or liabilities;
•	 Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly  
(i.e. as prices) or indirectly (i.e. derived from prices); and 
•	 Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
All financial instruments carried at fair value have been measured by a Level 2 valuation method. 
Gains on cash flow hedges during the year amounted to £476,000 (2011: loss £284,000).
Capital management
The Board’s objective with respect to capital management is to ensure the Group continues as a going concern in order to optimise 
returns to shareholders. The Board’s policy is to retain a strong capital base so as to maintain investor, creditor and market 
confidence and to sustain future development. The Board regularly monitors the level of capital in the Group to ensure that this can 
be achieved.
From time to time the Group purchases its own shares on the market; the timing of these purchases depends on market prices. The 
shares are intended to be used for issuing shares under the Group’s share option programmes. Buy and sell decisions are made on 
a specific transaction basis by the Board. The Group does not have a defined share buy-back plan. Business review Governance Financial statements Business overview
64 65
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
17 Financial risk management continued
Capital management
The following table is a comparison by category of the carrying amounts and fair values of the Group’s financial assets and liabilities 
at 20 July 2011 and 30 June 2012.
2012 
Carrying 
value 
£’000
2012 
Fair value 
£’000
2011 
Carrying 
value 
£’000
2011
 Fair value 
£’000
Cash and cash equivalents 65,190 65,190 35,139 35,139 
Trade receivables 345 345 454 454 
Total financial assets 65,535 65,535 35,593 35,593 
Trade payables (30,156) (30,156) (36,709) (36,709) 
Forward exchange contracts – current (56) (56) (398) (398) 
Total financial liabilities (30,212) (30,212) (37,107) (37,107) 
Net financial liabilities 35,323 35,323 (1,514) (1,514) 
The fair value of trade receivables and trade payables are approximate to their carrying value.
The currency profile of the Group’s cash and cash equivalents is as follows:
2012 
£’000
2011 
£’000
Sterling 64,116 32,870 
US dollar 878 1,526 
Euro 196 743 
65,190 35,139 
As at 30 June 2012, the analysis of trade receivables that were past due but not impaired is as follows:
Total 
£’000
Neither past 
due nor 
impaired 
£’000
Less than 
30 days 
£’000
31-60 
days 
£’000
61-90 
days
 £’000
More than 
90 days 
£’000
2 July 2011 496 112 315 44 – 25 
30 June 2012 345 30 296 – 3 16
18 Share capital
Number of ordinary shares of 
1p each 
2012
Number of ordinary shares of 
1p each 
2011
In issue at the start of the period 201,490,108 201,040,148 
Issued during the period in respect of share option schemes 765,140 449,960 
In issue at the end of the period 202,255,248 201,490,108 
Proceeds received in relation to shares issued during the period were £346,000 (2011: £101,000). 
2012
 Number of shares
2012 
£’000
2011 
Number of shares
2011 
£’000
Ordinary shares of 1p each: 
Allotted, called up and fully paid 202,255,248 2,023 201,490,108 2,015 
19 Treasury shares  
2012 
Number of 
shares
2012
 £’000
2011 
Number of 
shares
2011 
£’000
Outstanding at beginning of year – – 99,628 128 
Reissued during the period in respect of share option schemes – – (99,628) (128) 
Outstanding at end of year – – – – 
In the past the Company has acquired its own shares (‘treasury shares’) for the purpose of delivery to employees under employee 
share schemes. No such purchases were made during the financial year. 
The Company did not reissue any treasury shares during the year. (2011: 99,628 treasury shares were reissued for a total 
consideration of £nil).  66 67
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Notes to the annual financial statements continued
For the 52 weeks ended 30 June 2012
20 Share-based payments
As at 30 June 2012, 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 128,228 exercisable options in total under these schemes as at 30 June 2012.
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 October 2006 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:
October  
2010  
grant
Fair value at measurement date 145.8p 
Exercise price 420.0p 
Expected volatility (weighted average volatility used in modelling – based on historical volatility of comparable quoted companies) 36% 
Option life (weighted average life used in modelling) 3 years 
Expected dividends 2.5% 
Risk-free interest rate 1.7% 
The number and weighted average exercise price of options under the GSOP is as follows:
Weighted 
average 
exercise price 
2012
 Number of 
shares under 
option 
2012 
Weighted 
average 
exercise price 
2011 
Number of 
shares under 
option 
2011
Outstanding at beginning of year 344.3p 136,495 203.8p 48,840 
Granted during year – – 420.0p 100,000 
Exercised during year 137.0p (36,495) – – 
Lapsed during year – – 405.0p (12,345) 
Outstanding at end of year 420.0p 100,000 344.3p 136,495 
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 November 2011. Options may be exercised under the scheme on completion of the three year savings 
contract and must be exercised within six months from that date. There is provision for early exercise in certain circumstances such 
as death, disability, redundancy and retirement.
The fair value per option granted and the assumptions used in the calculations are as follows:
October 
2011
October 
2010
October 
2009
October 
2008
Fair value at measurement date 160.2p 192.8p 180.4p 47.0p 
Share price 503.5p 497.5p 376.3p 125.0p 
Exercise price 361.0p 337.0p 253.0p 124.5p 
Expected volatility (weighted average volatility used in modelling 
– based on historical volatility of comparable quoted companies) 31% 43% 57% 58% 
Option life (weighted average life used in modelling) 3.5 years 3.5 years 3.5 years 3.5 years 
Expected dividends 2.5% 2.5% 2.5% 2.5% 
Risk-free interest rate 1.1% 1.7% 2.8% 3.0% 
Forfeiture rate 48% 29% 10% 0%  Business review Governance Financial statements Business overview
66 67
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
20 Share-based payments continued
b) Dunelm Group Savings Related Share Option Plan
The number and weighted average exercise price of options outstanding under the Sharesave at 30 June 2012 is as follows:
         
 
 
Weighted 
average 
exercise price 
2012
 Number of 
shares under 
option 
2012 
Weighted 
average 
exercise price 
2011 
Number of 
shares under 
option 
2011
Outstanding at beginning of year 245.7p 870,612 190.4p 671,772 
Granted during year 361.0p 325,879 337.0p 349,142 
Exercised during the year 127.3p (230,051) 139.2p (64,207) 
Forfeited during year 263.4p (145,687) 252.4p (86,095) 
Outstanding at end of year 321.5p 820,753 245.7p 870,612 
The weighted average share price at the time of exercise was 453.7p.
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. Three grants were made in the year, to the 
Executive Directors, senior management and selected staff. The Executive Directors’ and selected staff grants in October 2011 are 
exercisable in October 2014 and the Executive Directors’ grant in November 2011 is exercisable in November 2014. The grant to the 
Executive Directors is dependent on the level of growth in Group EPS relative to RPI, as well as continuing employment. The grants 
to senior management and selected staff and the separate grant to Nick Wharton are dependent on continuing employment within 
the Group. The maximum life of options under the LTIP is 10 years from the date of grant. Full details of this plan are included in the 
Remuneration Report on pages 39 to 47.
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:
December 
2010
October 
2010
December 
2009
September 
2009
September 
2008
Share price at date of grant 500.0p 440.1p 313.0p 316.0p 148.0p 
Discount factor, based on dividend yield of 2.5% to vesting date 0.927 0.927 0.330 0.913 0.889 
Fair value of option 463.4p 407.9p 103.4p 288.5p 132.5p 
November 
2011
October 
2011
October 
2011
December 
2010
Share price at date of grant 431.0p 499.0p 451.0p 500.0p 
Discount factor, based on dividend yield of 2.5% to vesting date 0.927 0.927 0.927 0.881 
Fair value of option 399.8p 462.9p 408.3p 440.6p 
The number and weighted average exercise price of options under the LTIP at 30 June 2012 is as follows:
Weighted 
average 
exercise price 
2012
 Number of 
shares under 
option 
2012 
Weighted 
average 
exercise price 
2011 
Number of 
shares under 
option 
2011
Outstanding at beginning of year – 1,499,266 – 1,326,468 
Granted during year – 441,477 – 664,661 
Exercised during year – (498,594) – (482,482) 
Forfeited during year – (14,881) – (9,381) 
Outstanding at end of year – 1,427,268 – 1,499,266 
The weighted average share price at the time of exercise was 473.6p.
The total expense recognised in the income statement arising from share-based payments is as follows:
2012 
£’000
2011 
£’000
GSOP 45 61 
Sharesave 337 240 
LTIP 1,421 898 
1,803 1,199  68 69
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Notes to the annual financial statements continued
For the 52 weeks ended 30 June 2012
21 Commitments
As at 30 June 2012 the Group had entered into capital contracts amounting to £15.3m. The equivalent figure as at 2 July 2011 was 
£21.8m.
The future minimum lease payments under non-cancellable operating leases were as follows:
2012
 Motor 
vehicles 
£’000
2012
 Land and 
buildings 
£’000
2012 
Plant and 
machinery 
£’000
2011
 Motor 
vehicles 
£’000
2011
 Land and 
buildings 
£’000
2011 
Plant and 
machinery 
£’000
Within one year 552 31,005 287 414 27,566 380 
In the second to fifth year inclusive 392 111,904 840 92 103,079 651 
After five years – 142,666 102 – 134,408 – 
944 285,575 1,229 506 265,053 1,031 
The Group has 109 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.
22 Contingent liabilities
The Group had no contingent liabilities at either period end date.
23 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 31.0% of the voting shares of the Company.
Disclosures relating to remuneration of Directors are set out in the Remuneration Report on pages 39 to 47. The remuneration of the 
key management personnel (Executive Committee excluding Directors) of the Group is set out below:
2012 
£’000
2011 
£’000
Salaries and other short-term benefits 1,753 1,086 
Post-employment benefits 34 29 
Share-based payments 217 186 
2,004 1,301 
The Group has not entered into any transactions during the period with Bill Adderley, a major shareholder. In 2011 the aggregate 
value of these transactions was £1,750. These amounts were billed based on normal market rates for such supplies and payable 
under normal payment terms. No balances remain unsettled at either period end.
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 values involved are trivial.
24 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.
25 Subsequent events
The Board have announced an intention to return capital to the shareholders in November 2012 amounting to £65.8m  
(32.5p per share).  Business review Governance Financial statements Business overview
68 69
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
 Note
2012
 £’000
2011 
£’000
Non-current assets
Investment in subsidiaries 4 47,500 46,719 
Deferred tax asset 5 611 655 
Total non-current assets 48,111 47,374 
Current assets 
Trade and other receivables 6 168,949 89,886 
Current tax asset 916 591 
Total current assets 169,865 90,477 
Total assets 217,976 137,851 
Current liabilities 
Trade and other payables 7 (2,612) (286) 
Liability for current tax – – 
Total current liabilities (2,612) (286) 
Total liabilities (2,612) (286) 
Net assets 215,364 137,565 
Capital and reserves 
Issued capital 10 2,023 2,015 
Share premium 1,025 681 
Non-distributable reserves 2,345 1,564 
Capital Redemption Reserve 43,155 43,155 
Retained earnings 166,816 90,150 
Equity shareholders’ funds 215,364 137,565 
The financial statements on pages 69 to 78 were approved by the Board of Directors on 13 September 2012 and were signed on its 
behalf by:
David Stead
Director
13 September 2012
Company number 4708277
Parent Company statement of financial position
As at 30 June 2012 70 71
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Parent Company statement of cash flows
For the 52 weeks ended 30 June 2012
       
 
 
2012  
£’000
 
2011 
£’000
Profit before tax 99,617 59,190 
Adjusted for: 
Net financing costs (5,223) (2,061) 
Operating profit 94,394 57,129 
Operating cash flows before movements in working capital 
Increase in receivables (79,063) (41,976) 
Increase/(decrease) in payables 2,325 (574) 
Net movement in working capital (76,738) (42,550) 
Investment income (100,000) (60,000) 
Share-based payments expense 1,022 614 
Cash flows from operating activities (81,322) (44,807) 
Dividends received 100,000 60,000 
Tax paid – (236) 
Interest paid – (29) 
Interest received 5,223 2,090 
Net cash generated from operating activities 23,901 17,018 
Cash flows from financing activities 
Proceeds from issue of share capital 347 101 
Dividends paid (24,248) (17,119) 
Net cash flows utilised in financing activities (23,901) (17,018) 
– – 
Net increase in cash and cash equivalents – – 
Cash and cash equivalents at the beginning of the period – – 
Cash and cash equivalents at the end of the period – –  Business review Governance Financial statements Business overview
70 71
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
      
   
 
Issued share 
capital 
£’000
Share 
premium 
£’000
Merger 
reserve 
£’000
Capital 
redemption 
reserve 
£’000
Non-
distributable 
reserve 
£’000
Retained 
earnings 
£’000
Total 
£’000
As at 3 July 2010 2,010 580 – 43,155 979 46,993 93,717 
Profit for the financial year – – – – – 59,385 59,385 
Total comprehensive income for the financial year – – – – – 59,385 59,385 
Issue of share capital 5 101 – – – – 106 
Treasury shares reissued in respect 
 of share option schemes – – – – – (9) (9) 
Share-based payments – – – – 585 614 1,199 
Deferred tax on share-based payments – – – – – 52 52 
Current corporation tax on share 
 options exercised – – – – – 234 234 
Dividends – – – – – (17,119) (17,119) 
Total transactions with owners, recorded directly in 
equity 5 101 – – 585 (16,228) (15,537) 
As at 2 July 2011 2,015 681 – 43,155 1,564 90,150 137,565 
Profit for the financial year – – – – – 99,677 99,677 
Total comprehensive income for the financial year – – – – – 99,677 99,677 
Issue of share capital 8 344 – – – (6) 346 
Treasury shares reissued in respect 
 of share option schemes – – – – – – – 
Share-based payments – – – – 781 1,022 1,803 
Deferred tax on share-based payments – – – – – (157) (157) 
Current corporation tax on share 
 options exercised – – – – – 378 378 
Dividends – – – – – (24,248) (24,248) 
Total transactions with owners, recorded directly in 
equity 8 344 – – 781 (23,011) (21,878) 
As at 30 June 2012 2,023 1,025 – 43,155 2,345 166,816 215,364 
The non-distributable reserve’s purpose is to reflect movements in share-based payments in respect of awards given by the Parent 
Company to employees of subsidiaries. 
Parent Company statement of changes in equity
For the 52 weeks ended 30 June 2012 72 73
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Accounting policies
Basis of preparation
The Company financial statements have been prepared and approved by the Directors in accordance with International Financial 
Reporting Standards as adopted by the EU (‘Adopted IFRSs’) and as applied in accordance with the provisions of the Companies 
Act 2006. 
The accounts of the Company are prepared under the historical cost convention, in accordance with the Companies Act 2006, 
applicable accounting standards and specifically in accordance with the accounting policies set out below.
After making enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in 
operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the 
financial statements.
Investments
Investments in subsidiary undertakings are stated at the adjusted cost of the investment, IFRIC 8 ‘Scope of IFRS 2 share-based 
payments’ requires the Parent Company to recognise an increase in the cost of its investment in a subsidiary which has issued share 
options in the Parent Company’s shares to its employees.
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. 
Bank borrowings and borrowing costs
Interest bearing bank loans and overdrafts are recorded at the proceeds received. 
Borrowing costs are recognised as an expense in the financial period in which they are incurred.
Borrowings are classed as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 
12 months from the balance sheet date.
Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a 
component of cash and cash equivalents for the purpose of the statement of cash flows.
Where a Group Company enters into financial guarantee contracts to guarantee the indebtedness of other Group Companies within 
the Group, the Company considers these to be insurance arrangements for them as such. In this respect, the Company treats the 
guarantee contract as a contingent liability until such time as it becomes probable the Company will be required to make a payment 
under the guarantee.
Share capital
Where the Company purchases its own equity share capital (treasury shares) the consideration paid, including any directly 
attributable incremental costs is deducted from equity attributable to the Company’s equity holders until the shares are cancelled or 
reissued. Where such shares are subsequently sold or reissued, any consideration received net of any directly attributable 
incremental transactions costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.
Share-based payments
The Company operates three share option schemes details of which are set out in note 12. 
The fair value of options granted is realised as an employee expense with a corresponding increase in equity. The fair value of employee 
services received in the subsidiaries under these schemes are recognised as an expense in the financial statements of the subsidiary 
undertakings which benefit from the employee services. The company has recognised the fair value of the share-based payments as an 
increase in equity with a corresponding adjustment to investments. 
Fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the 
options. Fair value is measured using the binomial model, taking into account the terms and conditions applicable to the options.
At each balance sheet date the Company revises its estimates of the number of share incentives expected to vest. Any impact of this 
revision is recognised as an adjustment to equity with a corresponding adjustment to investments.
Dividends
Dividends are recognised as a liability in the period in which they are approved such that the Company is obligated to pay 
the dividend. Business review Governance Financial statements Business overview
72 73
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
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.
 
Adopted IFRS and IFRIC not yet applied
At the date of approval of these financial statements, the following standards, amendments and interpretations were in place but not 
yet effective:
IFRS 7 Revised IFRS 7  - Financial Instruments: Disclosure
IFRS 9 New standard  - Financial Instruments
IFRS 10 New standard  - Consolidated Financial Statements
IFRS 12 New standard - Disclosure of Interests in Other Entities
IFRS 13 New standard - Fair Value Measurement
IAS 32 Revised IAS 32 - Financial Instruments: Presentation
The above will be adopted in the Group and Company’s financial statements when they become effective. 
When adopted none of the above standards or amendments are expected to have any significant impact on the financial statements 
of the Group or Company.
IFRS 9 will replace IAS 39 Financial Instruments: Recognition and Measurement. The Standard contains two primary measurement 
categories for financial assets:
•	 amortised cost; and
•	 fair value. 74 75
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Notes to the Parent Company financial statements
For the 52 weeks ended 30 June 2012
1 Income statement
The Company made a profit after tax of £99,677,000 (2012: £59,385,000). The Directors have taken advantage of the exemption 
available under section 408 Companies Act 2006 and have not presented an income statement for the Company alone.
The Company is not required to give details of the fees paid to its auditors in accordance with the Companies (Disclosure of Auditor 
Remuneration) Regulations 2005.
2 Employee costs
The Company has no employees other than the three Executive Directors. Full details of the Directors’ remuneration and interest are 
set out in the Remuneration Report on pages 39 to 47, and share-based payments details in note 20 on pages 66 to 67.
3 Dividends
All dividends relate to the 1p Ordinary Shares.
2012 
£’000
2011 
£’000
Final for the period ended 3 July 2010 – paid 5.0p – (10,067) 
Interim for the period ended 2 July 2011 – paid 3.5p – (7,052) 
Final for the period ended 3 July 2011 – paid 8.0p (16,158) – 
Interim for the period ended 30 June 2012 – paid 4.0p (8,090) – 
(24,248) (17,119) 
The Directors are proposing a final dividend of 10.0p per Ordinary Share for the period ended 30 June 2012 which equates to £20.2m.  
The dividend will be paid on 21 December 2012 to shareholders on the register at the close of business on 30 November 2012. 
4 Investments
Shares in subsidiary undertakings.
 
£’000
As at 3 July 2010 46,134 
Share-based payments 585 
As at 3 July 2011 46,719 
Share-based payments 781 
As at 30 June 2012 47,500 
Principal subsidiaries
The following are the principal subsidiaries as at the end of the year: 
Subsidiary Proportion of ordinary shares held Nature 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
Assets
2012 
£’000
2011 
£’000
Employee benefits 611 655 
The movement in deferred tax assets is as follows: 
Balance at 
3 July 2010 
£’000
Recognised 
in income  
£’000 
Recognised 
in equity  
£’000 
Balance at  
2 July 2011 
£’000
Employee benefits 630 (27) 52 655 
Balance at  
2 July 2011 
£’000
Recognised 
in income 
£’000 
Recognised 
in equity 
£’000 
Balance at 
30 June 2012 
£’000
Employee benefits 655 113  (157) 611 Business review Business overview
74 75
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Financial statements Governance
5 Deferred tax assets continued
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.
6 Trade and other receivables
2012 
£’000
2011 
£’000
Amounts owed by subsidiary undertakings 168,912 89,848 
Prepayments and accrued income 37 38 
Other taxation and social security – – 
168,949 89,886 
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
2012 
£’000
2011 
£’000
Trade payables 24 39 
Accruals and deferred income 2,388 196 
Other taxation and social security 180 31 
Other creditors 20 20 
2,612 286 
8 Interest bearing loans and borrowings
2012
 £’000
2011 
£’000
Bank overdraft – – 
– – 
On 7 February 2012 the Company entered into a £10m overdraft facility. Interest is payable on funds utilised under the facility at the 
rate of 1.5% above the banks’ base rate.
9 Financial risk management
Capital management
The following table is a comparison by category of the carrying amounts and fair values of the Company’s financial assets and 
liabilities at 30 June 2012 and 2 July 2011.
        
 
2012  
Carrying 
value 
£’000
2012  
Fair value  
£’000
2011 
Carrying 
value 
£’000
2011  
Fair value  
£’000
Subsidiary loans 168,912 168,912 89,848 89,848 
Total financial assets 168,912 168,912 89,848 89,848 
Trade payables (24) (24) (39) (39) 
Total financial liabilities (24) (24) (39) (39) 
Net financial assets 168,888 168,888 89,809 89,809 
The fair value on subsidiary loans and trade payables are approximate to the carrying value.
The currency profile of the Company’s net debt is as follows:
2012 
£m
2011
 £m
Sterling – – 
– –  76 77
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Notes to the Parent Company financial statements continued
For the 52 weeks ended 30 June 2012
10 Share capital
        
 
Number of 
ordinary shares 
of 1p each 
2012
Number of 
ordinary shares 
of 1p each 
2011
In issue at the start of the period 201,490,108 201,040,148 
Issued during the period in respect of share option schemes 765,140 449,960 
In issue at the end of the period 202,255,248 201,490,108 
Proceeds received in relation to shares issued during the period were £343,000 (2011: £101,000). 
2012
 Number of shares
2012 
£’000
2011 
Number of shares
2011 
£’000
Ordinary Shares of 1p each 
Allotted, called up and fully paid 202,255,248 2,023 201,490,108 2,015 
The holders of the Ordinary Shares are entitled to receive dividends as declared and are entitled to one vote per share.
11 Treasury shares 
2012 
Number of 
shares
2012 
£’000
2011 
Number of 
shares
2011 
£’000
Outstanding at beginning of year – – 99,628 128 
Reissued during the period in respect of share option schemes – – (99,628) (128) 
Outstanding at end of year – – – – 
In the past the Company has acquired its own shares (‘treasury shares’) for the purpose of delivery to employee share schemes.  
No such purchase was made during the year.
The Company did not reissue any treasury shares during the year (2011: 99,628) treasury shares for a total consideration of £nil.
The Company has the right to reissue the remaining treasury shares at a later date.
12 Share-based payments
As at 30 June 2012, 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 30 June 2012.
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:
October  
2010 
grant
Fair value at measurement date 145.8p 
Exercise price 420.0p 
Expected volatility (weighted average volatility used in modelling 
– based on historical volatility of comparable quoted companies) 36% 
Option life (weighted average life used in modelling) 3 years 
Expected dividends 2.5% 
Risk-free interest rate 1.7%  Business review Business overview
76 77
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Financial statements Governance
12 Share-based payments continued
a) Dunelm Group Share Option Plan
The number and weighted average exercise price of options under the GSOP is as follows:
Weighted 
average 
exercise price 
2012
 Number of 
shares under 
option 
2012 
Weighted 
average 
exercise price 
2011 
Number of 
shares under 
option
 2011
Outstanding at beginning of year – – – – 
Exercised during year – – – – 
Outstanding at end of year – – – – 
b) Long-Term Incentive Plan
The LTIP was approved by the Board prior to IPO enabling the Company to award shares to particular individuals, normally in the 
form of nominal cost options. The LTIP is administered by the Remuneration Committee. Two grants have been made in the year, to 
the Executive Directors and Nick Wharton, the Executive Director’s grant is exercisable in December 2013 depending on the level of 
growth in Group EPS relative to RPI, the grant awarded to Nick is exercisable in December 2015 and dependent on continuing 
employment. The maximum life of options under LTIP is 10 years from the date of grant. Full details of this plan are included in the 
Remuneration Report on pages 39 to 47.
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:
December 
2010
September 
2009
September 
2008
Share price at date of grant 500.0p 316.0p 149.0p 
Discount factor, based on dividend yield of 2.5% to vesting date 0.927 0.913 0.889 
Fair value of option 463.4p 288.5p 132.5p 
November 
2011
October 
2011
December 
2010
Share price at date of grant 431.0p 499.0p 500.0p 
Discount factor, based on dividend yield of 2.5% to vesting date 0.927 0.927 0.881 
Fair value of option 399.8p 462.9p 440.6p 
The number and weighted average exercise price of options under the LTIP at 30 June 2012 is:
Weighted 
average 
exercise price 
2012
 Number of 
shares under 
option 
2012
Weighted 
average 
exercise price 
2011 
Number of 
shares under 
option 
2011
Outstanding at beginning of year – 1,034,923 – 964,923 
Granted during year – 321,508 – 387,922 
Exercised during year – (437,837) – (317,922) 
Lapsed during year – – – – 
Outstanding at end of year – 918,594 – 1,034,923 
The total expense recognised in the income statement arising from share-based payments is as follows:
2012 
£’000
2011 
£’000
LTIP 1,022 614 
1,022 614  78 79
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Notes to the Parent Company financial statements continued
For the 52 weeks ended 30 June 2012
13 Contingent liability
The Company and certain subsidiaries have given joint and several guarantees in connection with all bank facilities provided by the  
Group’s principal bankers.
The Group’s banking facilities are subject to a netting facility whereby credit balances may be offset against indebtedness of other  
Group companies.
14 Related party disclosure
The amount due to the Company from subsidiary undertakings is set out in note 6. Transactions between the Company and its 
subsidiaries were as follows: 
2012
£’000
2011
£’000
Cash paid to Group undertakings (26,590) (20,303) 
Cash received from Group undertakings 432 192 
Dividends received 100,000 60,000 
Net interest receivable 5,223 2,090 
  Business review Business overview
78 79
Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
Financial statements Governance
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Dunelm Group plc 
Annual report and accounts 2012
Dunelm Group plc 
Annual report and accounts 2012
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Dunelm Group plc Annual report & accounts 2012