Dunelm Group plc Annual report & accounts 2011
Simply Value...
 ...for money
Dunelm Group plc Annual report & accounts 2011
www.dunelm-mill.com
Tel: 0116 264 4356
Email: investorrelations@dunelm-mill.co.uk Dunelm is a fast growing specialist out-of-town 
homewares retailer providing a comprehensive 
range of products to a wide customer base, 
under the brand name Dunelm Mill
The Group’s ‘Simply Value for Money’ 
proposition combines market-leading choice, 
great prices, reliable quality, strong product 
availability and friendly and knowledgeable 
service.
Contents
Business overview
 1 Highlights
 2 Business overview
Business review
 8 Chairman’s statement
10 Chief Executive’s review
16 Finance Director’s review
20 Key risks and uncertainties
Governance
22 Letter from the Chairman
24 Directors
26 Directors’ report and business review
30 Corporate governance report
34 Audit Committee report
36 Nomination Committee report
38  Letter from the Chair of the 
Remuneration Committee
39 Remuneration report
47 Corporate social responsibility
51 Statement of Directors’ responsibilities
Financial statements
52 Independent Auditor’s report
53 Consolidated income statement
54  Consolidated statement of 
comprehensive income
55  Consolidated statement of financial 
position
56 Consolidated statement of cash flows
57  Consolidated statement of changes  
in equity
58 Accounting policies
62  Notes to the annual financial  
statements
74 Parent Company financial statements
84 Advisers
FSC 
LOGO 
HERE 1 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Governance Financial statements
2005
£36.2m
2006
£38.2m
2007
£40.8m
2008
£49.4m
2009
£52.6m
£51.6m
1
£83.3m
2011 2010 2009 2008 2007
£75.5m
£52.6m
£49.4m
£40.8m
£74.0m
2011 2010 2009 2008 2007
£72.0m
£67.4m
£45.0m
£34.7m
£83.6m
2011 2010 2009 2008 2007
£76.8m
£53.5m
£49.1m
£37.8m
£538.5m
2011 2010 2009 2008 2007
£492.8m
£423.8m
£391.8m
£354.7m
Operational highlights
103 superstores at 2 July 2011
10 new superstores opened in the year 
(including one relocation)
Average superstore selling area of 
approximately 30,000 square feet
Over 20,000 lines in a superstore –  
broad and deep ranges
Financial highlights FY11
Revenue increase 9.3% 
Operating margin 15.5%
Net cash generated from operations £74.0m
*  The 2007 figures for operating profit and profit before tax included non-recurring items in respect 
of IPO and warehouse relocation as well as a non-recurring gain on a property disposal. The 
combined effect of these was to reduce operating profit by £3.2m and profit before tax by £3.0m.
† The 2009 figures reflect a 53 week trading period, compared with 52 weeks in all other years.
Operating profit*
†
Net cash from operations
†
Revenue
†
Profit before tax*
† 2 Dunelm Group plc Annual report and accounts 2011
Business overview
‘Choice is at the heart of our proposition  
and allows us to attract a broad cross 
section of customers’. 3 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Governance Financial statements
3
Business Overview 
Our markets
The UK ‘Homewares’ market is estimated to be 
worth £11bn per annum, comprising ‘Textiles &  
Soft Furnishings’ (45%) and ‘Household, Hardware  
and Lighting’ (55%). Dunelm competes strongly  
in all segments.
Customer buying decisions in this market 
are primarily influenced by range, price and 
convenience with quality and service also essential 
attributes to a winning formula.
Our business model
Our offer is based on a ‘simply value for money’ 
proposition. 
We reach our customers through a UK chain of 112 
retail stores and two websites (www.dunelm-mill.com  
and www.dorma.co.uk) 103 of the stores are in our  
out-of-town ‘superstore’ format. Our key sources of 
competitive advantage are industry-leading choice, 
everyday low prices and convenient out of town locations.
Our superstores stock over 20,000 different products with 
a typical store size of approximately 30,000ft
2
.
Our strategy
Our strategy is to develop the business as follows:
1. Develop our specialist proposition.
2. Open more superstores.
3. Grow multi-channel.
4. Develop and exploit infrastructure.
How we generate shareholder value 4 Dunelm Group plc Annual report and accounts 2011
Business overview
Our focus on constantly improving 
our customer offer has allowed us 
to gain market share. 5 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Governance Financial statements
Develop 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 150-200 superstores in the medium term.
1
>  Continue new store 
opening programme
Our strategic priorities
Our near term 
objectives
Develop 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.
2
>  Continuously evolve 
product ranges
>  Develop knowledge 
based customer 
service as a point of 
differentiation
Grow multi-channel
 www.dunelm-mill.com is our No.1 store for 
revenue. We expect to increase customer 
engagement, develop new customer touch 
points, grow revenue and further develop our 
multi-channel offer through reserve & collect 
and an improved delivery service.
>  Develop collect in-store 
service
>  Establish social media 
presence
>  Extend the range on-line
>  Develop Dunelm At 
Home
3
Develop and exploit our  
infrastructure
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.
>  Exploit core retail 
systems to improve 
stock control
>  Drive efficiency through 
new store support and 
distribution facilities
4 6 Dunelm Group plc Annual report and accounts 2011
Business overview
We opened ten new superstores 
in the year adding over 300,000  
square feet of selling space. 7 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Governance Financial statements
www.dunelm-mill.com
0844 346 0022
Over 110 stores 
nationwide
  Superstores 
as at 3 July 2010
  Superstores opened 
since 3 July 2010
>  10 new stores 
opened in 2010
>  13 further 
openings 
committed
Strong superstore roll out plan
Our committed pipeline of stores, which we continue 
to add to, will provide further growth over the next 
12 to 18 months as we expand towards our target for 
national coverage in the UK of between 150 and 
200 superstores.
Superstore locations
Ways to shop  
at Dunelm 8 Dunelm Group plc Annual report and accounts 2011
Business review
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 •	
“The Board’s confidence 
in the continuing cash 
generation of the business 
is reflected in our proposal 
to reduce dividend cover 
to the bottom of our 
target range at 2.5x.”
Geoff Cooper Chairman
Chairman’ s statement
The most recent financial year has been 
a challenging period for most non-food 
retailers. In the context of subdued customer 
demand for homewares, it was a satisfactory 
achievement for Dunelm to deliver  
like-for-like (LFL) sales growth in two of  
the four quarters, with only a small decline 
in LFL sales over the year as a whole. With 
continuing progress on gross margin and 
good contribution from stores opened in  
the last 24 months, the Group was able to 
deliver a highly creditable 9.0% increase in 
profit before tax.
We have continued to generate very strong 
operating cash flows. This enabled the 
Group to fund out of current cash flow 
a record year of capital investment in the 
business, including new stores, a larger 
refit programme and also key infrastructure 
investments comprising a doubling of space 
at the central warehouse in Stoke and the 
creation of a new head office facility. 
The Board’s confidence in the continuing 
cash generation of the business is reflected in 
our proposal to reduce dividend cover to the 
bottom of our target range at 2.5x, leading 
to a recommended 60% increase in the final 
dividend to 8.0p per share (2010 – 5.0p). This 
would bring full year dividends to 11.5p per 
share (2010 – 8.0p), an increase of 43.8%. 
It is the Board’s intention to grow future 
dividends in line with earnings. In addition, 
the Board will continue to review the capital 
structure of the Group, returning excess 
capital if appropriate. 
Since taking over as Chief Executive from 
Will Adderley in the course of the year, Nick 
Wharton has assumed full responsibility for 
running Dunelm. Will continues to provide 
support to Nick on key trading issues such 
as managing the effects of cotton price 
increases, and will be able to allocate his  
time increasingly to development activities. 
Looking ahead, we have a range of exciting 
development initiatives and attractive 
network expansion opportunities. Despite 
seeing no major catalyst for significant short 
term growth in the homewares market, we 
are confident in our ‘SImply Value for Money’ 
offer and look forward to further growth in 
profits and returns.
Geoff Cooper
Chairman
15 September 2011 9 Dunelm Group plc Annual report and accounts 2011
Governance Financial statements Business review Business overview  10 Dunelm Group plc Annual report and accounts 2011
Business review
Chief Executive’ s review
Nick Wharton Chief Executive
Business highlights
10 new superstore openings •	
(including one relocation) and 
21 refits of 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
Introduction
Having assumed the role of Chief Executive 
during the year, I want to start by paying 
tribute to the significant contribution my 
predecessor Will Adderley has made over 
the 15 years in which he led Dunelm. Will 
is a first class retailer and has built on the 
foundations laid by his father to make 
Dunelm an outstanding business. As the first 
externally-appointed Chief Executive of the 
Group I am delighted to have the opportunity 
to grow and further develop the Group with 
the close support of Will in his new role as 
Executive Deputy Chairman, pursuing our 
clear strategy that has served Dunelm so  
well to date.
Trading
In the context of a consumer environment 
which has continued to be challenging, we 
are satisfied with our trading performance 
over the last financial year. Reflecting the 
opening of 10 new superstores which 
increased overall retail space by over 300,000 
square feet, our total revenue increased by 
9.3% over the financial year. Like-for-like 
sales (calculated by comparing stores which 
have traded throughout the last two financial 
years) were marginally lower by 0.6%, but 
measurably better than the decline of 1.9% 
for the home textiles market as a whole, as 
measured by the British Retail Consortium. 
The environment across the year was 
characterised by new levels of uncertainty, 
both in consumer behaviour and in the rate 
of commodity price inflation, which in cotton 
and man-made alternatives was at a level not 
experienced for a generation.
Against this backdrop we have focused on 
managing the controllable elements of our 
business model, with a particular emphasis on 
operating costs. The growth achieved in gross 
margins and the progress made in the second 
half of the year in cost management were 
particularly pleasing and have led to a 20 basis 
points expansion in operating margins year on 
year, after absorbing the costs associated with 
the expansion of retail space.
Strategy development
We continue to develop the business 
through a strong focus on our four strategic 
priorities. These priorities reflect our intention 
progressively to expand and strengthen 
our customer offer, while at the same time 
increasing scale through store and multi-
channel expansion.
Priority 1 – develop our specialist 
proposition
We continue to invest in the development 
of the Group’s ‘Simply Value for Money’ 
proposition within the £11bn UK homewares 
market. This proposition combines great 
prices, reliable quality, strong product 
availability and friendly and knowledgeable 
service, with our core differentiator of 
offering industry-leading choice.
“We have demonstrated 
through disciplined 
execution of our strategy 
and close operational 
management that our 
business can make good 
progress in challenging 
conditions.” 11 Dunelm Group plc Annual report and accounts 2011
Governance Financial statements Business review Business overview  12 Dunelm Group plc Annual report and accounts 2011
Business review
Chief Executive’ s review continued
Choice is at the heart of our proposition and 
allows us to attract a broad cross section of 
customers. Under the single Dunelm brand 
we successfully sell entry-level products 
that compete with those sold by grocery 
or discount multiples, through mid-range 
product to premium ranges, that compete 
directly with offers within department 
stores or higher end independent retailers. 
These premium ranges include bedding and 
bathroom merchandise under our owned 
Dorma brand.
Our range of choice has been particularly 
valuable during the past financial year. We 
have seen customer behaviour changing, 
with more affluent customers looking for 
greater value and more value-led customers 
seeking to trade up within our ranges to 
provide a low cost, indulgent treat. 
We continue to use our Miss it Miss Out 
(‘MIMO’) promotions and special buys to 
emphasise Dunelm’s value credentials and 
provide a seasonally relevant feel to the store. 
We have developed a new advertising 
approach during the financial year which 
is focused on brand development and on 
emphasising the Dunelm value proposition. 
This is part of a migration towards a more 
consistent presence in the national media.
Friendly, knowledgeable customer service 
is an increasingly important point of 
differentiation for Dunelm. In order to make 
more colleague time available for customer 
service without increasing overall labour cost, 
we continue to invest in a number of systems 
and process enhancements that reduce the 
level of non-customer facing tasks that are 
performed within store. For example, the 
migration from a labour intensive manual 
process to an automated system for inventory 
ordering is key. Trials completed during the 
year have confirmed its potential to reduce 
activity while maintaining availability and 
we intend to have ordering of over 50% of 
our inventory automated by the end of the 
calendar year.
We are also continuing to invest in training to 
provide our colleagues with the knowledge 
and confidence to engage with customers 
and are using tailored incentives to reward 
good customer service. 
We also see an opportunity to further 
enhance the Dunelm proposition through 
the addition of new services. Dunelm At 
Home is a relatively new service offering 
a free home consultation which allows 
customers to choose bespoke, made to 
measure window treatments in their own 
homes. Recognising that the initial execution 
of this proposition was insufficiently scalable 
without endangering quality of service, we 
have redesigned our processes to ensure 
high quality delivery and a second pilot of 
this service has been launched in three stores 
since the year end.
Priority 2 – develop the store portfolio
The Group operates from two formats. 
The vast majority of stores operate as out 
of town superstores averaging 30,000 
square feet, where Dunelm’s market leading 
range, breadth and depth stands out in 
a sector that is still characterised by small 
independent retailers and is best delivered to 
our customers. We also trade from a limited 
number of smaller high street locations where 
there are no suitable out of town alternatives.
We opened ten new superstores in the year 
(one being a relocation), over 300,000 square 
feet of selling space. As at the year-end, 
our superstore chain comprised 103 stores 
providing 3.1m square feet of selling space. 
The high street chain totalled nine, after  
we closed one shop during the year upon 
lease expiry.
Our recent openings continue to trade well 
and deliver strong returns on invested capital. 
We estimate that, on a discounted cash flow 
basis, the average payback period for stores 
opened in the last three financial years will be 
approximately 30 months. This performance 
enables us to acquire further space with 
confidence that we will continue to deliver 
our targeted payback period for new stores 
of 36 months, even allowing for potential 
cannibalisation of revenue and potentially 
higher costs associated with operating in  
the south east. 
Despite the lack of fresh retail development 
across the UK, we have opened a further 
store since the year-end in Dartford and are 
contractually committed to 13 more units, 
two of which are relocations of existing 
superstores to significantly enhanced trading 
locations. We also continue to use our strong 
balance sheet to acquire interests in freeholds 
where, for example, we wish to secure long 
term tenure or avoid onerous lease clauses. 
Our committed pipeline of stores, which we 
aim to add to, will provide further growth 
over the next 12 to 18 months as we expand 
towards our target for national coverage in 
the UK of between 150 and 200 superstores.  13 Dunelm Group plc Annual report and accounts 2011
Business overview Business review Governance Financial statements
We continue to invest in a programme 
of store refits to improve the shopping 
environment in our existing stores. These 
refits enhance revenue by introducing new 
ranges, for example kitchen concept or arts 
and crafts, and improve the overall shopping 
experience, for example through better 
department adjacencies or through the 
introduction of a Pausa coffee shop. 
Through new and refitted stores, we now 
have Dorma sub-shops in 53 stores; our arts 
and crafts offer is present in 79 stores; and 
our extended kitchen offer, now divided 
between cooking, dining and utility sub-
shops, is in 50 stores. 
Our Pausa coffee shop, now present in  
58 stores, provides both an additional  
reason to visit for new customers and 
increases dwell time. Our confidence that 
Pausa fits with our ‘Simply Value for Money’ 
proposition was reinforced during the year 
when it won the coveted Coffee Shop 
Sandwich Retailer of the Year at the British 
Sandwich Association awards.
During the year we developed a lower cost 
refit alternative, more suitable to newer or 
smaller footprint stores, and have reviewed 
the costs associated with all refit activities 
to ensure that capital is focused on those 
areas which deliver greatest financial returns. 
This review has reduced the average cost 
of a major refit by approximately 25% to 
around £0.6m, whilst a medium refit requires 
substantially lower investment (c£0.1m).
We completed eight major refits in the last 
financial year (2010 – nine) as well as a 
significant number of ‘medium’ refits.
Through this ongoing refit programme,  
49 stores (almost 50% of the superstore 
chain) are either new or have benefited from 
a major refit in the last three financial years.
Priority 3 – grow multi-channel
It is clear from the general increase in multi-
channel revenues across UK retail and from 
our own customer research that enthusiasm 
for the convenience and value that multi-
channel shopping provides continues to 
grow. Enhancing our on-line offer and 
extending our multi-channel presence is 
therefore an investment priority. 
This level of enthusiasm is illustrated by 
the number of visitors to our websites and 
their average spend which, at over £50, 
is approximately twice the level achieved 
through store transactions. Dunelm-mill.
com is our biggest shop window allowing 
the full range to be viewed and researched 
by existing customers, and providing the 
opportunity to extend our reach and establish 
brand awareness with new customers. 
During the year our investment included 
a major refresh of our website to provide 
a more contemporary, functional and user 
friendly shopping experience. Responding  
to customer feedback, this included 
significant improvements to the key home 
and landing pages and the streamlining  
of the checkout process. 
Sales from our on-line businesses (www.
dunelm-mill.com and www.dorma.co.uk) 
have continued to grow strongly over the last 
financial year. As a result of the investment 
made, the direct channel is now ranked as 
our number one store in sales terms.
During the year we invested in a dedicated 
warehouse facility for our top 4,000 selling 
lines on the web for home delivery. This 
investment increased on-line availability, 
particularly for premium delivery options, 
while eliminating the requirement for 
expensive store picking activity previously 
used to service these sales. 
Significant development is under way to 
deliver a further step-change improvement 
in the convenience of our multi-channel 
proposition. Such improvements will not only 
improve customer experience but will also 
reduce operating costs. 
In the first half of the forthcoming 
financial year we intend to offer increased 
convenience through a true ‘Reserve and 
Collect’ model as well as launching a mobile-
friendly website. Through linking individual 
store stock files to the web, customers will 
be able to check availability and reserve each 
of over 20,000 products prior to visiting the 
store to collect their purchase at a time  
of their convenience on the same day  
or beyond.  14 Dunelm Group plc Annual report and accounts 2011
Business review
Chief Executive’ s review continued
“We continue to invest in physical 
systems and human infrastructure 
in order to strengthen the current 
business and provide a sound 
foundation for our future growth.” 
Through reducing customer waiting time and 
eliminating logistics costs, this development 
will represent a major improvement 
compared with our existing proposition, 
where customers currently reserve centrally 
held stock for delivery to their local store  
for collection. 
The web will also play an increasing part in 
our overall marketing strategy with digital 
advertising planned to form a much more 
significant part of our overall advertising 
and customer engagement plan. As shown 
by the 13,000 customer recommendations 
on our site, of which two-thirds achieve 
the highest 5 Star rating, our customers are 
highly engaged with the Dunelm brand and 
products. Our recent launches on Facebook 
where 5,000 customers now follow us after 
only five weeks, and on Twitter, are part of 
a broader social media strategy which will 
further deepen this relationship. 
Priority 4 – develop and exploit our 
infrastructure
We continue to invest in our physical, and 
systems infrastructure and in our people, in 
order to strengthen the current business and 
provide a sound foundation for our future 
growth. Specifically, we continue to extract 
further benefits from our IT systems, enabling 
us to improve stock control and make in-store 
processes more efficient. 
The year saw two key developments that 
have strengthened our logistics infrastructure. 
We have doubled the space available at 
our Stoke warehouse, to 500,000 square 
feet and successfully transitioned to a new 
third party carrier to operate the delivery of 
merchandise from UK-based suppliers to our 
stores. These developments will enable us to 
accommodate future growth either in new 
stores or in the proportion of product that  
we source directly from overseas suppliers. 
Development of our new head office near 
to our existing base in Syston, Leicestershire 
was completed shortly after the year-end and 
the new building was officially opened by 
Bill Adderley (our founder and honorary Life 
President) together with his wife Jean on  
8 September 2011. We will retain our existing 
head office for a number of operational uses, 
such as the central stockholding of fabric and 
a photo studio to enhance product imagery 
on our websites.
We also continue to enhance our 
organisational capacity and capability 
through recruitment into a number of key 
management roles. The existing Operating 
Board was strengthened during the year 
through the addition of a Buying and 
Merchandise Director, and the first half of 
the current financial year will see the further 
addition of a Chief Operating Officer and a 
dedicated Director of Multi-Channel. 
Summary & Outlook
While we anticipate that the consumer 
environment will remain challenging 
through the current financial year, we have 
demonstrated, through disciplined execution 
of our strategy and close operational 
management, that our business can  
make good progress in these conditions. 
Our focus on constantly improving our 
customer offer has allowed us to gain market 
share while expanding gross margins; at the 
same time our future growth prospects have 
been enhanced through strengthening the 
pipeline of new stores and the continuing 
development of our multi-channel footprint. 
The Group’s financial position remains robust 
and the trading business is strongly cash 
generative, readily financing the investment 
required for our envisaged growth. While 
retaining a preference for capital flexibility, 
our reduction in dividend cover to 2.5x and 
our intention to grow future dividends in line 
with earnings reflect the Board’s confidence 
in the future development of the Group.
Nick Wharton
Chief Executive
15 September 2011 15 Dunelm Group plc Annual report and accounts 2011
Governance Financial statements Business review Business overview  16 Dunelm Group plc Annual report and accounts 2011
Business review
Finance Director’ s review
“The Group generated 
£74.0m net cash from 
operating activities in the 
last financial year, an 
increase of 2.8%.”
David Stead Finance Director
Operating result
Group revenue for the 52 weeks to 2 July 
2011 was £538.5m (2010: £492.8m), an 
increase of 9.3%. 
Like-for-like sales declined slightly by 0.6% 
over the period, however non-comparable 
space contributed +9.9%. The like-for-like 
sales performance strengthened in H2 at 
+0.1%, with H1 having recorded -1.2% 
against a particularly strong comparative 
performance in the equivalent period last 
year (+15.4%).
The Group continued to improve gross 
margin which, over the year, increased by 
120 basis points to 48.0% (2010: 46.8%). 
Improved life-cycle management and sell 
through of sale stock (summer 2010 & winter 
2011) in particular boosted this result. The 
market experienced some price inflation over 
the year as a result of higher commodity 
prices and an increase in VAT rates but these 
challenges were met while maintaining our 
‘Simply Value for Money’ price positioning.
Operating costs grew by 12.8% compared 
with last year, with the increase primarily 
due to investment in the store portfolio and 
supporting central infrastructure. Operating 
costs in like-for-like stores increased by just 
2.1%, despite 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 enhanced warehousing and 
distribution capacity.
Operating profit for the financial year was 
£83.3m (2010: £75.5m), an increase of £7.8m.
 
EBITDA
Earnings before interest, tax, depreciation 
and amortisation were £97.4m. This has been 
calculated as operating profit (£83.3m) plus 
depreciation and amortisation (£14.1m) and 
represents a 12.1% increase on the previous 
year. The EBITDA margin achieved was 
18.1% of sales (2010: 17.6%). 
Financial items and PBT
The Group generated £0.4m net financial 
income for the year ended 2 July 2011  
(2010: £1.3m). Financial items include  
foreign exchange losses of £0.1m  
(2010: gain of £0.8m) arising in respect  
of US dollar holdings; as at 2 July 2011 
the Group held $1.8m in US dollar cash 
deposits and had forward contracts covering 
approximately 35% of the anticipated US 
dollar spend over the next 12 months. The 
balance of net financial income, £0.5m 
(2010: £0.5m), represents interest on  
surplus cash deposits.
Financial highlights
9.3% increase in overall •	
revenues
Gross margin change +120 bps •	
Operating margin 15.5% •	
Earnings per share  •	
(diluted) 29.3p
Dividends per share 11.5p •	
(44% increase) 17 Dunelm Group plc Annual report and accounts 2011
Governance Financial statements Business review Business overview  18 Dunelm Group plc Annual report and accounts 2011
Business review
“The major investments in the 
year were in stores, including 
fit-out costs for 10 new stores 
and 8 major refits.”
Finance Director’ s review continued
Dividend
An interim dividend of 3.5p was paid in April 
2011 (2010: 3.0p). It is proposed to pay a 
final dividend of 8.0p per share (2010: 5.0p). 
The total dividend of 11.5p represents a 
43.8% 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.
Key performance indicators
In addition to the traditional accounting 
measures of sales and profits, the Directors 
review business performance each month 
using a range of other KPIs. These include 
those on the table on page 19.
David Stead
Finance Director
15 September 2011
After accounting for interest and foreign 
exchange impacts, profit before tax for the 
year amounted to £83.6m (2010: £76.8m), 
an increase of 9.0%.
Tax, PAT and EPS
The tax charge for the year was 28.5% of 
profit before tax compared with 29.2% in the 
prior year. The year on year reduction reflects 
both the lower headline rate of corporation 
tax and an increase in the level of assets 
qualifying for capital allowances following a 
review completed during the year.
Profit after tax was £59.8m (2010: 54.4m)  
an increase of 9.9%.
Basic EPS for the year ended 2 July 2011  
was 29.7p (2010: 27.1p), an increase of 
9.6%. Fully diluted EPS increased by 8.9%  
to 29.3p (2010: 26.9p).
Capital expenditure
Gross capital expenditure in the financial year 
was £37.2m compared with £24.6m last 
year. The major investments in the year were 
in stores, including fit-out costs for 10 new 
stores and 8 major refits in the period as well 
as acquisition of two freehold sites. 
In addition, central infrastructure was 
bolstered by the completion of the fit-out 
of our 250,000ft
2
 extension to our central 
warehouse as well as a £5.8m investment in 
the build of our new head office.
Working capital
Investment in working capital increased by 
£4.1m over the financial year, primarily due 
to expansion of the store chain.
 
Cash position
The Group generated £74.0m (2010: 
£72.0m) net cash from operating activities  
in the last financial year, an increase of 2.8%. 
At the end of the year net cash resources 
were £35.1m (2010: £15.4m). The Group 
cancelled its committed bank facility under a 
revolving loan agreement with Lloyds Banking 
Group plc of £40m. In light of the Group’s 
financial strength, the Board concluded that 
access to external funding would not be 
required in the near term.
During the next financial year to 1 July 
2012 Dunelm will continue to invest in the 
expansion of the business. This will include 
opening new superstores (estimated capital 
cost £1.2m per site), major and medium 
store refits and development of multi-channel 
operations. In addition the investment in 
final fit-out of the new head office will be 
completed. Further freehold acquisitions will 
be considered as opportunities arise. 19 Dunelm Group plc Annual report and accounts 2011
Governance Financial statements Business review Business overview 
Sales growth
†
2011 +9.3%
2010 +18.2%
2009 +6.4%
Operating margin
2011 15.5%
2010 15.3%
2009 12.4%
Dividend (per share)
2011 11.5p
2010 8.0p
2009 6.0p
Like-for-like sales growth
†
2011 –0.6%
2010 +8.0%
2009 +0.5%
 EBITDA £m
2011 £97.4m
2010 £86.9m
2009 £63.2m
New store openings
2011 10
2010 10
2009 6
Gross margin change (basis points)
2011 +120bps
2010 +190bps
2009 +120bps
Earnings per share (diluted)
2011 29.3p
2010 26.9p
2009 18.6p
Major refits
2011 8
2010 9
2009 6
† 2009 is treated as a 52 week period for these 
measures (53 weeks for the rest).
Key performance indicators FY11 20 Dunelm Group plc Annual report and accounts 2011
Business review
Key risks and uncertainties
Strategic risks Mitigation Strategy
Competition
The Group competes with a wide variety of retailers in both store 
format as well as 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. Various initiatives are in place to 
continue the enhancement of our specialist proposition. 
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
Availability of vacant or new retail space is essential to support our 
growth plans. Inability to secure the required retail trading space 
either in terms of the number of new locations or at the required size 
to deliver our format will limit our pace of expansion or force us to 
compromise our offer.
The Group has a strong pipeline of new space legally 
committed. The Property team has been strengthened 
to ensure that the appropriate resource can deliver a 
flexible approach to property acquisition. In addition 
the Company’s debt-free position provides an attractive 
covenant to landlords, and the ability to acquire freehold 
units if appropriate.
Information technology & systems
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. In addition, a specialist company is responsible 
for hosting Dunelm’s main ERP system off-site and a full 
backup server facility is in place for all other key systems.
Dunelm recognises that effective business management requires regular review of business risks to 
identify, evaluate and prioritise them, to assign management ownership and to ensure appropriate 
controls are in place in mitigation.
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 to consider ‘What keeps us up at night.’
The Board considers that the principal risks to Dunelm’s aims of achieving its strategic objectives are  
as follows:
Strategic objectives
Develop our specialist proposition
Develop the store portfolio
Grow multi-channel
Develop and exploit our infrastructure 21 Dunelm Group plc Annual report and accounts 2011
Business overview Business review Governance Financial statements
Strategic risks Mitigation Strategy
Infrastructure
The Group could suffer the loss of a major facility or supply partner 
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 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. Head 
office, workroom, multi-channel and distribution centre 
activities are all subject to disaster recovery plans and 
could all operate from fall back facilities.
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 Company 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 Group 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 on-going lines, overseen by 
our specialist QA team. 
Food hygiene is maintained through the adoption of 
clear operating guidelines contained in the company’s 
‘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 & safety, data 
protection, advertising, ethical standards and the environment.
Dunelm operates a number of company 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 advisors 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
15 September 2011  22 Dunelm Group plc Annual report and accounts 2011
Governance
Dear Shareholder,
Following the practice we adopted last year, I am in this letter introducing the Corporate Governance section in our Annual Report, and have 
asked Marion Sears to write a separate introduction to the Remuneration section. I hope these letters help your consideration of the various 
matters we report to you as part of our corporate governance responsibilities.
As ever, this year has been very busy on corporate governance matters, with a number of important developments in governance requirements 
and in the matters we have considered inside Dunelm. These include the introduction of the Bribery Act, the Davies report on gender diversity, 
the new stewardship code, the implementation of the UK Corporate Governance Code, and the FRC guidance on board effectiveness and risk. 
We have also actively followed up and acted upon issues raised with us by shareholders following dialogue during the course of the year.
With the benefit of a relatively small board, the whole Board’s participation and engagement in debating these issues has been very high, and 
the Board has given serious consideration to an appropriate response from the Company – one which we believe both meets our responsibilities 
and yet adopts practical, non-bureaucratic, common sense solutions.
Of particular note in the course of the Board’s deliberations on governance matters this year have been:
Managing the transition of Nick Wharton from non-executive director to Chief Executive, and the implications of this for Board and •	
committee membership;
An update to the Group’s internal certification exercise, which requires key executives to confirm their adherence to legal, governance and •	
company policies, to include the requirements of the Bribery Act;
Reviewing Board and committee terms of reference and Board processes in line with the new UK Corporate Governance Code; •	
A further annual review of the Board’s performance, which involved the whole Board in an active debate including consideration of the •	
progress on matters identified the previous year, the value of the Board in guiding strategy, individual directors’ development requirements 
and external advice on governance issues that have typically caused difficulties elsewhere;
A new review of the skills, perspectives and experiences provided by current Board members; •	
Extensive Board debate about Board composition, including its diversity; •	
Consideration by the whole Board of Non-Executive Director candidates; •	
A new process for the Executive Director team to present a review of the high level risks emerging from the Group’s system of internal •	
control (‘Things that are keeping us awake’);
The outcome of our discussions on these matters is reported below.
There remains a strong collegiate and respectful relationship between the Executive and Non-Executive Directors. We have retained our 
approach of all Non-Executive Directors aiming to visit a store once a month, often with a member of the senior management team. This 
continues to be helpful in fostering our understanding of business issues as well as communicating internally from head office to store teams 
and vice versa. In addition, Board meetings are often held at store or other Company locations and include presentations from managers within 
the business.
Our routine activity includes regular monitoring of shareholder feedback, with Non-Executive Directors joining management in a selection 
of shareholder meetings following our results announcements. We have also consulted shareholders this year on a number of matters 
raised in response to our annual report and AGM resolutions last year. However, we are conscious that it is becoming ever more difficult for 
companies and shareholders to sustain an efficient dialogue given the welter of requirements – and even more difficult to recall the nuances 
of corporate governance when responding to specific proposals. Accordingly, we plan to invite corporate governance representatives of our 
major institutional shareholders to a presentation next January and from time to time thereafter as appropriate, with the aim of increasing 
understanding of how we approach our corporate governance duties as a Board. This will be hosted by the Chairman, the Non-Executive 
Directors and Will Adderley, representing the majority family shareholding.
Geoff Cooper
Chairman
15 September 2011
Letter from the Chairman 23 Dunelm Group plc Annual report and accounts 2011
Business overview Business review Governance Financial statements 24 Dunelm Group plc Annual report and accounts 2011
Governance
Directors
2 3
4
6
5
1
1. Geoff Cooper
Non-Executive Chairman
Geoff Cooper, joined the Board in 
November 2004. Geoff is Acting 
Chairman of the Audit Committee 
and a member of the Nominations 
and Remuneration Committees. A 
qualified accountant, Geoff is currently 
Chief Executive of Travis Perkins plc. 
He is a former Director of Gateway 
(now Somerfield plc) and was Finance 
Director and then Deputy Chief 
Executive of Alliance UniChem plc.
2. Nick Wharton
Chief Executive Officer
Nick Wharton, joined the Board in 
August 2009 as an Independent 
Non-Executive Director. Nick took over 
from Will Adderley as Chief Executive 
of the Group In February 2011. Prior 
to that he was Chairman of the 
Audit Committee, and a member of 
the Remuneration and Nominations 
Committees; Nick was previously 
Finance Director of Halfords Group PLC.
3. Will Adderley
Executive Deputy Chairman
Will Adderley, joined the business in 
1992. He has worked in and is familiar 
with all major areas of the business 
and took over the day-to-day running 
of the Group from his father in 1996. 
Will remained as Chief Executive 
through the Group’s IPO in 2006 and 
until February 2011, when he took 
the new role of Executive Deputy 
Chairman. Will is a member of the 
Nominations Committee.
4. David Stead
Finance Director
David Stead, joined the Group in 
2003. Previously he spent 14 years 
at Boots where he was Finance 
Director of Boots The Chemists and 
Finance Director of Boots Healthcare 
International.
5. Marion Sears
Senior Independent 
Non-Executive Director
Marion Sears, joined the Board in 
July 2004. Marion is Chair of the 
Remuneration and Nominations 
Committees and a member of the 
Audit Committee. She is also a 
Non-Executive Director of both Zetar 
Plc and Octopus AIM VCT PLC.
6. Simon Emeny
Independent Non-Executive Director
Simon Emeny, joined the Board in 
June 2007. Member of the Audit, 
Remuneration and Nominations 
Committees. Simon is Group 
Managing Director of Fuller Smith  
and Turner Plc.
Founder and Life President
Bill Adderley founded Dunelm in 1979. He led the 
development of the business successfully for many years, 
then took a non-executive role before retiring in February 
2008. He and his wife Jean remain passionate Dunelm 
supporters and major shareholders.
Bill Adderley
Executive
Non-Executive 25 Dunelm Group plc Annual report and accounts 2011
Governance Financial statements Business review Business overview 
 Audit Committee Member  Nomination Committee Member  Remuneration Committee Member 26 Dunelm Group plc Annual report and accounts 2011
Governance
Directors’ report and business review
The Directors present their report together with the audited financial statements for the year ended 2 July 2011. Together with certain 
information in the reports from the Chief Executive and the Finance Director on pages 10 to 21 above and the Corporate Social Responsibility 
review on pages 47 to 50 below, 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 10 to 14.
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 £59.8m (2010: £54.4m). The results are discussed in greater detail in the Finance 
Director’s review on pages 16 and 18.
A final dividend of 8.0p per share (2010: 5.0p) is proposed in respect of the year ended 2 July 2011 to add to an interim dividend of 3.5p per 
share paid on 1 April 2011 (2010: 3.0p per share). The final dividend will be paid on 16 December 2011 to shareholders on the register at 
25 November 2011. 27 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Governance Financial statements
Directors
Details of the Directors in office at the year end are set out on page 24. 
Directors serving at the year end and their beneficial interests in the shares of the Company were:
At 
2 July 2011
1p ordinary shares
At 
3 July 2010 
1p ordinary shares
WL Adderley 69,943,939 69,953,809
D Stead 529,338 466,546
G Cooper 181,611 181,611
M Sears 101,313 100,000
N Wharton 30,000 12,500
S Emeny 26,400 24,000
During the period there were the following changes to Will Adderley’s shareholding:
14 July 2010 Transfer to Nadine Adderley (his spouse) –2,000,000 
11 October 2010 Exercise of nil cost options under LTIP 190,130
11 October 2010 Transfer to Nadine Adderley (his spouse) –190,130
30 November 2010 Transfer to the Leicester Foundation –200,000
All of the shares held by Nadine Adderley are included in the total beneficial interest of Will Adderley in the table above. At the period end 
Nadine Adderley’s shareholding was 2,283,939 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 167,250 Ordinary Shares (2010: 140,000), Paddocks Trust 172,750 Ordinary Shares (2010: nil). These interests 
are not included in the table above. 
David Stead exercised nil cost options over 127,792 shares under the Long Term Incentive Plan on 12 October 2010. On the same day he sold 
65,000 Ordinary Shares at a price of 445.91p per share to cover his income tax and national insurance liability, the balance of 62,792 shares 
were transferred to his wife Jane Stead. Shares held by David’s wife are included in his beneficial interest in the table above.
On 23 February 2011, Donna Wharton, the wife of Nick Wharton purchased 17,500 shares, included in Nick’s beneficial holding in the table 
above, and Marion Sears purchased 1,313 shares. Simon Emeny purchased 2,400 Ordinary Shares on 23 May 2011.
There were no changes in the Directors’ shareholdings between the year end and 15 September 2011.
Details of share options held by Directors at the year end are given in the Remuneration Report.
All Directors will be retiring at the 2011 Annual General Meeting and will be offering themselves for re-election. Biographical details of the 
Directors are set out on page 24 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 plus 99,628 shares were issued 
out of treasury due to the exercise of share options. Details of option exercises by Directors are set out above.
At 2 July 2011 the Company did not hold any Ordinary Shares in treasury. During the period 99,628 Ordinary Shares were transferred out of 
treasury to employees on the exercise of share options as noted above. There have been no movements of shares in or out of treasury since 
the period end.  28 Dunelm Group plc Annual report and accounts 2011
Governance
Directors’ report and business review continued
Substantial shareholders
At 15 September 2011 the following had notified the Company of a disclosable interest in 3% or more of the nominal value of the Company’s 
Ordinary Shares:
Ordinary 
shares
Percentage of 
share capital
WL Adderley 69,943,939 34.7
W Adderley 48,070,000 23.8
WL Adderley is also deemed to hold a legal interest in 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 31.
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 20 to 21.
Going concern
The Directors have made appropriate enquiries and formed a judgement at the time of approving the financial statements that there is a 
reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason 
the Directors continue to adopt the going concern basis in preparing the financial statements. 
Disclosure of information to auditors 
The Directors who held office at the date of approval of this Directors’ report confirm that, so far as they are each aware, there is no relevant 
audit information of which the Group’s auditors are unaware; and each Director has taken all the steps that they ought to have taken as a 
Director to make themselves aware of any relevant audit information and to establish that the Group’s auditors are aware of that information.
Disclaimer 
This Directors’ Report and Business Review and the Financial Statements contain certain forward-looking statements with respect to the 
financial condition, results, operations and business of Dunelm Group plc. These statements and 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. 29 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Governance Financial statements
Annual General Meeting
The Annual General Meeting will be held at 10.30am on Thursday 17 November at Cheshunt Marriott Hotel, Halfhide Lane,  
Turnford, Hertfordshire, EN10 6NG. 
Special business at the Annual General Meeting will be:
Requesting authority pursuant to section 551 of the Companies Act 2006, to issue shares to the value of one third of the issued Ordinary •	
Share capital of the Company. The nominal amount of shares covered by this authority is £671,637, (67,163,699 Ordinary Shares), 33.3%  
of the issued share capital at 15 September 2011. This authority will lapse at the 2012 Annual General Meeting or, if earlier, on 
31 December 2012. The Directors have no present intention to exercise this authority except to issue shares pursuant to the Group’s 
employee share schemes.
Requesting authority pursuant to section 561 of the Companies Act 2006 to distribute Ordinary Shares to the value of £100,746 •	
(10,074,555 Ordinary Shares), which constitutes 5% of the Company’s issued share capital at 15 September 2011, without offering them to 
existing shareholders. This authority will lapse at the 2012 Annual General Meeting or, if earlier, on 31 December 2012. The Directors do 
not intend to issue more than 7.5% of the issued share capital of the Company for cash on a non pre-emptive basis in any rolling three year 
period without prior consultation with the Investment Committees of the Association of British Insurers and the National Association of 
Pension Funds.
Requesting that the Directors be authorised pursuant to section 701 of the Companies Act 2006 to buy up to 5,000,000 Ordinary Shares •	
approximately 2.5% of the issued Ordinary Share capital in the Company. The Directors will only exercise this authority if it is expected to 
enhance earnings per share and is in the interests of shareholders generally. Shares purchased may be cancelled or held in treasury. If held 
in treasury and used to satisfy share options, the NAPF’s (National Association of Pension Funds) guidelines would be complied with.
Requesting a waiver of any obligation that could arise on WL Adderley to make a general offer for the entire issued capital of the Company •	
as a result of purchases by the Company of Ordinary Shares; and/or the exercise by WL Adderley of options granted to him under the 
Company’s Long-Term Incentive Plan. Voting on these resolutions will take place on a poll; WL Adderley and persons connected with him 
will not be eligible to vote.
Authorising the Board to convene a general meeting other than an Annual General Meeting on at least 14 days’ notice. The Companies •	
(Shareholders’ Rights) Regulations require that all meetings other than an Annual General Meeting must be held on at least 21 days’ notice 
unless shareholders agree to a shorter period. Under the Companies Act 2006 and the Company’s Articles of Association, the Company 
can call meetings other than an Annual General Meeting on 14 days’ notice. This resolution will allow the Company to continue to do so, 
and will be effective until the next Annual General Meeting when it is intended that a similar resolution will be proposed. The Company  
will also need to meet the requirements for electronic voting under the Regulations before it can call a meeting on 14 days’ notice.
Adopting new Articles of Association. The amendments are primarily to take account of the coming into force of the Shareholders’ Rights •	
Regulations in August 2009, and the implementation of the last parts of the Companies Act 2006. Further details are set out in the Notice 
of Annual Meeting.
Amending the rules of the Company’s Long-Term Incentive Plan, to increase the maximum annual grant from 120% of base salary to 150% •	
of base salary. Further details are set out in the Notice of Annual Meeting.
 The Notice of Annual General Meeting is set out in the separate booklet enclosed with this report.
Auditors
KPMG Audit Plc offer themselves for reappointment as auditors in accordance with section 489 of the Companies Act 2006.
By order of the Board
David Stead
Company Secretary
15 September 2011 30 Dunelm Group plc Annual report and accounts 2011
Governance
Corporate governance report
The Board is committed to high standards of corporate governance. This report explains how the Group has applied the principles of good 
governance and code of best practice set out in the Corporate Governance Code (‘the Corporate Governance Code’) published in June 2010.
The Board considers that it has complied with the Corporate Governance Code during the financial year, except in one respect: On 
1 December 2010, Nick Wharton, formerly an independent Non-Executive Director of the Company and Chairman of the Audit Committee, 
was appointed as Chief Executive Designate of the Company, succeeding to the Chief Executive position on 17 February 2011. Therefore, since 
1 December 2010, the Board has comprised the Chairman, three Executive Directors and two independent Non-Executive Directors, which 
means that the required balance is not in place. As a consequence Committee membership has also not been in accordance with the Code; 
the Chairman has been acting Chairman of the Audit Committee, and he has also sat on the Nominations and Remuneration Committee. As 
explained in the Chairman’s letter above, the Board has been actively seeking an additional Non-Executive Director during the year. The Board 
is satisfied that it has continued to operate effectively despite the lack of required balance, as demonstrated by the continuing success  
of the business.
The Board
The Board has overall responsibility for controlling the Group, making decisions relating to the Group’s strategic direction and measuring 
progress towards strategic goals.
The Board held 10 meetings in the course of the year with one meeting extended to include a formal review of strategy. Attendance at 
meetings was as follows:
Director Meetings attended
Geoff Cooper 10
Marion Sears 10
Will Adderley 10
Simon Emeny 8
Nick Wharton 10
David Stead 10
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 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. Other matters are discussed by the Board as required, supported by a briefing paper 
where a decision is to be made by the Board.
Minutes of all Board and Committee meetings are taken by the Company Secretary and committee secretaries respectively and circulated for 
approval. Any unresolved concerns raised by a Director are recorded in the minutes.
The Chairman and the other Non-Executive Directors meet from time to time without Executive Directors being present, and regularly have 
individual meetings with other senior managers in the business. In addition the Non-Executive Directors have the opportunity to meet at  
least once a year without the Chairman present as part of the Board effectiveness review process, which includes a formal review of the 
Chairman’s performance.
Directors
The Non-Executive Chairman is Geoff Cooper, the Executive Deputy Chairman is Will Adderley, and the Chief Executive is Nick Wharton. At 
the beginning of the financial year Will Adderley was the Chief Executive, however it was announced on 16 September 2010 that he would 
relinquish this role and become Executive Deputy Chairman from 17 February 2011. Nick Wharton was appointed as Chief Executive Designate 
on 1 December 2010, and became Chief Executive on 17 February 2011. 
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.
The other Non-Executive Directors are Marion Sears and Simon Emeny. David Stead is an Executive Director and Company Secretary. David will 
relinquish his role as Company Secretary in November 2011 when the Company’s newly appointed Company Secretary takes up her position.
The Senior Independent Director is Marion Sears. 31 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Governance Financial statements
The Board considers that Geoff Cooper was independent on appointment, and that Marion Sears and Simon Emeny are independent. Overall 
the Board considers that there is a good balance of Executive and Non-Executive Directors.
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.
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 at www.dunelm-mill.com 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 34 to 46.
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.
Powers of Directors
In accordance with the Companies Act 2006 and the Articles of Association, the business of the Company is managed by the Board, which 
may exercise all of the powers of the Company, subject to the requirements of the Companies Acts, the Memorandum and Articles of 
Association of the Company, and any special resolution of the Company. As stated above, the Board has adopted internal delegations of 
authority in accordance with the 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 in 2007, 2008, 2009 and 2010 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 2011 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 page 29 
of the Directors’ Report and Business Review, and 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.
 
Training
Upon joining the Board, any new Director is offered a comprehensive induction programme with visits to key sites and meetings with senior 
managers and other staff members. As part of each Director’s annual review any additional training or development needs are addressed. 
Throughout the year all Directors have maintained a regular series of visits to stores and meetings with members of the senior management 
team. The Board has also received presentations from independent advisers on financial policy and on corporate governance trends.
Geoff Cooper and Simon Emeny are considered to have relevant and up-to-date skills and experience for a listed retail business due to  
their current executive positions in businesses with similar multi-site, consumer-facing business models. Marion Sears has a different 
perspective of retail from her other Non-Executive role and also brings City and Shareholder experience due to her former executive position  
in banking. Directors also attend seminars and tutorials provided by independent organisations for NEDs which cover the whole range of 
governance topics. 32 Dunelm Group plc Annual report and accounts 2011
Governance
Corporate governance report continued
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.
There is a formal, rigorous and well established process for evaluating the performance of the Chairman, the other Non-Executive Directors, 
the Board Committees and the Board as a whole. This takes the form of a Board meeting convened solely for the purpose of such review. 
During the course of this meeting there is the opportunity for the Chairman or other individual Directors to be asked to leave the discussion 
whilst their performance is assessed. Separately the Senior Independent Director meets with the other Non-Executive Directors to evaluate the 
Chairman’s performance. Further details are included in the Nominations Committee Report.
Following the review a list of actions is formulated and progress against these is reviewed periodically by the Board.
The Board intends to appoint an external provider to carry out a Board evaluation in 2013.
Conflicts of interest
The Companies Act 2006 allows the Board of public companies to authorise conflicts and potential conflicts of interest of individual directors 
where the Articles of Association contain a provision to that effect. At the 2008 Annual General Meeting, new Articles of Association were 
adopted which give the Board this authority subject to the following safeguards:
Directors who have an interest in matters under discussion at a Board meeting must declare that interest and abstain from voting. •	
Only directors who have no interest in the matter being considered are able to approve a conflict of interest, and, in taking that decision •	
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. •	
These provisions are also in the Articles of Association being put forward for approval at the AGM.
Following the adoption of the Articles of Association, all Directors were requested to disclose any actual or potential conflicts to the Board and 
the following matters were considered and approved:
Will Adderley is a major shareholder and connected to other major shareholders. Authorised on the basis that Mr Adderley continues to •	
abide by the terms of the Relationship Agreement entered into between himself, other major shareholders and the Company on flotation 
of the Company in 2006.
Geoff Cooper is a director of Travis Perkins plc 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.
Until 30 November 2010, Nick Wharton was a director of Halfords Group PLC which potentially competes with the Company for retail •	
property. Authorised on the basis that Mr Wharton was not involved in day to day decisions in relation to the property portfolio in  
either company.
There were no other matters disclosed that were 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.
Significant shareholders
The Group’s significant shareholders are listed in the Directors’ report on page 28 and voting rights are stated on page 26.
Articles of Association
The Company’s Articles of Association may only be amended by a special resolution of shareholders.  33 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Governance Financial statements
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 and reviewed twice per annum by the Board, who also monitor the status of 
agreed actions to mitigate key risks. Management review the register once a year in a workshop and quarterly after that. During the year the 
register was expanded and each risk analysed in more detail.
In addition, during the year, the Non-Executive Directors reviewed the risk management process overall and considered how other companies 
monitor risk. Following this review a series of ‘risk’ topics were selected for in-depth discussion by the Board through department heads.  
This will now be an on-going process in which, for each risk topic, the executive staff member responsible prepares a board briefing, presents 
it to all of the Directors and answers questions. Topics covered up to the date of this Annual Report include IT capacity, key suppliers, ethical 
sourcing and fraud risk.
Internal control
The Board is ultimately responsible for the Group’s system of internal control and for reviewing its effectiveness. However such a system is 
designed to manage rather than eliminate the risk of failure to achieve business objectives and can provide only reasonable, and not absolute, 
assurance against material loss and misstatement.
The Group maintains a well established control framework comprising clear structures and accountabilities, well understood policies and 
procedures and budgeting and review processes. 
Each store manager has clear responsibilities and operates within defined policies and procedures covering such areas as financial targets, 
human resources management, customer service, health and safety. The Executive Directors monitor compliance with these policies and 
procedures in the course of regular reviews.
The Audit Committee considers annually whether an internal audit function is required. 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.
Investor relations and understanding shareholder views
There is a formal investor relations programme based around results presentations and trading statements and the Board takes a number  
of additional steps to ensure that all Directors have a clear understanding of the views of major shareholders about the Company. Analyst/
shareholder visits are arranged with the executives and comments are reported back to the Board. The Non-Executive Directors attend the 
results presentations and are available to attend meetings at shareholder request.
All Directors will be available at the Annual General Meeting to meet with shareholders and answer their questions.
As a further step to promoting communication and shareholder understanding, we plan to invite corporate governance representatives of our 
major institutional shareholders to a presentation in January 2012, and from time to time thereafter. 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.  34 Dunelm Group plc Annual report and accounts 2011
Governance
Audit Committee report
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 on the Company’s website, www.dunelm-mill.com.
The following Directors served on the Committee during the year:
Member Period from: To:
Geoff Cooper (acting Chair) 1 December 2010 To date
Marion Sears 18 January 2005 To date
Simon Emeny 25 June 2007 To date
Nick Wharton 16 September 2009 30 November 2010
Nick Wharton was the Chairman of the committee as a Non-Executive Director, prior to assuming his executive role on 1 December 2010. 
Since that date I have been acting Chairman, it being the intention of the Board to appoint an additional Non-Executive Director who will 
assume this position. Details of this process are in the Nominations Committee report.
The Board considers that I have recent and relevant financial experience by virtue of my professional qualification and my current executive role 
as Chief Executive of Travis Perkins plc. 
Committee activities in 2010/11
Two 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:
Geoff Cooper (acting Chair) 2
Marion Sears 2
Simon Emeny 1
Nick Wharton 1
The Finance Director usually attends meetings by invitation, along with representatives from the external auditors.
During the year the activities of the Committee included:
Approval of the full year results issued in September 2010 and the half year results issued in February 2011; •	
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;
Review and confirmation of the Group’s policy for use of external 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 external auditors, and approval of the scope of the audit plan and the audit fee. •	
During the year management completed a review of risks throughout the Group to refresh the Company’s risk register prior to presentation to 
the Board. Reviews were primarily focused on risk associated with delivery of the Group’s growth strategy, key operational risks, governance & 
legislative risk and financial risk management and control. A summary of the key risks is presented on pages 20 to 21. 35 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Governance Financial statements
The Audit Committee also reviewed the Group’s Treasury Policy governing cash management and interest rate optimisation as well as foreign 
exchange rate risk and associated exposures. The policy was amended to ensure that appropriate consideration was given to exposures under 
a range of future scenarios and that the effectiveness of treasury instruments was being appropriately considered.
External Auditor
The Group re-appointed KPMG LLP as external auditor for the financial year ended 2 July 2011. The Group paid KPMG £72,000 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 £43,000 in relation to other non-audit services which mainly consists of tax compliance and tax planning initiatives.
The committee met privately with the auditors in the course of each meeting during the period.
The committee has approved a policy which allows employees to raise legitimate concerns in confidence without fear of discrimination.
This report was reviewed and approved by the Board on 15 September 2011.
Geoff Cooper
Acting Chair, Audit Committee 36 Dunelm Group plc Annual report and accounts 2011
Governance
Nominations Committee report
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, www.dunelm-mill.com.
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
Nick Wharton 16 September 2009 30 November 2010
Will Adderley 17 February 2011 To date
Six 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) 6
Geoff Cooper 6
Simon Emeny 5
Nick Wharton 1
Will Adderley 3
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 FY2010/11
Most of the committee’s activities during the year have stemmed from the CEO succession during the year as described below:
CEO Succession
During the year the committee finalised the succession of Will Adderley as CEO by Nick Wharton, who was previously a Non-Executive Director 
of the Company. A search process was conducted, with the aid of an external search firm, in early 2010 which included Nick Wharton in its 
later stages as a candidate. Nick Wharton did not participate in committee discussions on CEO succession once his candidature was confirmed. 
As a result of this process we announced in September that Nick would succeed Will as CEO in February 2011, after a handover period.
NED search
Following Nick’s appointment as CEO we believe that an appropriate Board structure for the Company is comprised of a Chairman, three 
Executive and three Non-Executive Directors. We announced last September that we would seek to appoint a new non-executive director to 
replace Nick. A detailed specification was prepared including the expected time commitment and a very large number of candidates were 
screened. Following a search during the year we identified two excellent candidates both of whom, ultimately, were unable to accept the 
position due to existing business commitments. Accordingly, we have restarted our search. We are working with the assistance of an external 
search firm and the search will be conducted, and any appointment will be made, on merit against the criteria specified having regard to the 
benefits of diversity on the Board, including gender. We look forward to announcing the appointment of a new Non Executive Director in due 
course and in the meantime, as a temporary measure, Geoff Cooper acts as Chair of the Audit Committee. 37 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Governance Financial statements
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. A detailed review was conducted during 2010/11 in the light of the search process for a new Non-Executive Director. All the skills that  
a Company might require were considered and each Director assessed against these. The process enabled the committee to be specific about 
the operational expertise that we wish to identify in future senior level recruitment. 
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. The Senior 
Independent Director collected feedback about the Chairman and provided an evaluation of his performance. 
Tenure of Non-Executives
The Committee is mindful that both Geoff Cooper and Marion Sears have served on the Board for more than six years, and that the Corporate 
Governance Code and institutional shareholders expect a careful consideration of their continuing contribution, balanced against the value of 
refreshing Board membership. The Committee, in consultation with the Board as a whole, considers that each of these individuals continues to 
offer valuable leadership and challenge to the Board. In the context of the transition of the Chief Executive role and the ongoing search for an 
additional Non-Executive Director, the Committee and the Board consider that their continued membership of the Board outweighs any 
benefit that might be obtained by seeking to replace them.
Diversity
In conjunction with whole Board discussions, the committee specifically considered its approach to Board diversity, including gender diversity, 
following publication of the Davies report in February 2011. These issues were considered in the following context:
The vast majority of Dunelm customers are female •	
The majority of staff members (65%) are female, including over 50% of store management •	
7 of the 24 most senior positions in the business below Board level are held by women •	
There has been a female Board member since 2004. •	
Whilst confirming that the overriding concern is to ensure that the Board comprises outstanding individuals who can lead the Company, the 
committee also believes that the Company’s best interests are served by ensuring that these individuals represent a range of skills, experiences, 
backgrounds and perspectives, including gender. Accordingly, Dunelm’s policy is that the Board should always be of mixed gender. That said, 
we believe that whilst discussion of quotas may be needed to spur action, 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.
In the three most recent Director searches (one still in progress), specific and directed effort has been made to ensure female candidates can 
be considered. It should be noted that this approach was adopted prior to the prospect of gender quotas.
In order to ensure a strong supply of female candidates for senior positions in the future, all organisations will have to ensure that women are 
able to develop their careers. The committee has examined Dunelm’s approach to the development of talented individuals of either gender 
throughout the Group and is satisfied that current practices are ‘gender-neutral’. We will continue to ensure that the approach enables 
talented individuals, both male and female, to enjoy career progression opportunities within Dunelm.
Re-election of Directors
During the year the Board discussed the UK Corporate Governance Code’s proposal of annual re-election of directors. Whilst we have 
reservations as we believe other and better avenues exist to enable shareholders to register any dissatisfaction, we have decided to adopt  
the guidance. Accordingly all Directors will seek re-election at the 2011 and future AGMs.
This report was reviewed and approved by the Board on 15 September 2011.
Marion Sears
Chair of the Nominations Committee 38 Dunelm Group plc Annual report and accounts 2011
Governance
Letter from the Chair of the Remuneration Committee
Dear Shareholder,
I wrote to shareholders in last year’s annual report setting out the principles behind Dunelm’s approach to executive remuneration, as well as 
explaining the thinking behind the most significant remuneration event of last year which was setting the remuneration and incentive targets 
for our new Chief Executive, Nick Wharton.
There has been no change to our underlying philosophy over the past year. However, as indicated in my previous letter we have taken 
independent advice on the reward level and performance targets relating to our Long Term Incentive Plan for Executive Directors. Proposed 
changes have been discussed with major shareholders and are described fully within the Remuneration Report. We will seek shareholder 
approval for them at the forthcoming AGM.
Other than the above point, there are no plans for significant change to remuneration in the coming year. Base salary increases for Executive 
Directors will be minimal, with only David Stead receiving an increase. The performance range for awards under the annual bonus scheme will 
be tightened to 95% – 105% of EPS target (previously 93% – 112%), as we feel this is more appropriate for the size of business which Dunelm 
has become.
The Remuneration Committee has been actively involved in setting remuneration packages for senior managers below Board level. 
The principles applying to Executive Director remuneration have also been used in structuring the packages for members of the newly  
formed operating board, ensuring strong alignment of targets at that next level in the organisation.
As Chair of the Remuneration Committee, I am passionate about extending share ownership as far into the organisation as possible.  
The Committee has therefore agreed a minimum shareholding requirement for Executive Directors of twice base salary, to be acquired over 
time. At the operating board level, managers are required to build over time a holding of at least one times their base salary. Last but not  
least, I am delighted that many members of staff have had the opportunity to share in Dunelm’s wealth creation through our approved 
Sharesave scheme, under which two savings opportunities have now matured.
Yours faithfully,
Marion Sears
Chair of the Remuneration Committee
15 September 2011 39 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Governance Financial statements
The Directors present their Remuneration Report for the period ended 2 July 2011. 
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 52.
In this report Nick Wharton appears both as a Non-Executive Director and as CEO. This is because he served as Non-Executive Director until 
1 December 2010 when he was appointed as CEO designate. Nick succeeded Will Adderley as CEO on 17 February 2011 when Will became 
Executive Deputy Chairman.
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, including the remuneration package of •	
Nick Wharton on appointment as Chief Executive;
Recommending and monitoring the structure and level of pay and benefits for senior management below Board level; and •	
Implementing any awards made under share incentive schemes. •	
The full terms of reference for the Committee can be found on the Company’s website, www.dunelm-mill.com.
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
Nick Wharton 16 September 2009 30 November 2010
Marion Sears acts as Secretary to the Committee.
Six meetings were held in the year and members’ attendance was as shown in the table below.
Member
Meetings 
attended:
Marion Sears (Chair) 6
Geoff Cooper 6
Simon Emeny 5
Nick Wharton 1
Prior to his appointment as an Executive Director on 1 December 2010, Nick Wharton was a member of the committee in his role as  
Non-Executive Director. He did not participate in any decisions concerning his own remuneration. No Director is ever present when their  
own remuneration is discussed. 
During the year, the committee appointed Deloitte to review and benchmark the remuneration of the Executive Directors. Deloitte’s only other 
connection with the Company in the last financial year was to provide advice on certain taxation matters in which they were considered to 
have particular expertise.
Remuneration report 40 Dunelm Group plc Annual report and accounts 2011
Governance
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 and 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 and its terms of reference are available on the Group’s website.
Executive remuneration policy and alignment with corporate strategy
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. This is in line with our successful strategy to 
continue to grow and strengthen our business as described in the Chief Executive’s review.
The Committee considers alignment between Group strategy and the remuneration of its senior executives to be critical. In view of this 
required director shareholdings are set at above market levels. The committee also believes that senior executives should be highly rewarded 
on a market competitive basis for the delivery of stretching goals but should receive reduced rewards if the business performs poorly. The pay 
and employment conditions of employees of the Group are also taken into account when determining directors’ remuneration. 
In particular the remuneration policy aims to provide packages for Executive Directors and other senior managers in the Group which:
Align management’s interests with those of shareholders by incentivising management to deliver the Group’s long-term strategy and •	
enhance shareholder value;
Provide management with the opportunity to earn competitive remuneration through variable pay; •	
Provide upper quartile rewards compared to other FTSE 250 companies, but only if upper quartile performance is delivered; and •	
Enable the Group to attract and retain management of the calibre required to run the business and drive exceptional shareholder value •	
creation.
To strengthen further the alignment between management and long term business success, Executive Directors are required to build up,  
over time, a shareholding equivalent to at least twice their base salary.
Balance of fixed and variable remuneration
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 Company performance. The 
following illustrates the balance between fixed and variable remuneration during the year for the Executive Directors:
0
20
40
60
80
100
Maximum opportunity Target
Fixed 31%
Bonus 31%
LTIP 38%
Fixed 50%
Bonus 20%
LTIP 30%
0
20
40
60
80
100
120
140
160
180
200
220
0
20
40
60
80
100
120
140
160
180
200
220
100% 100% 100%
220%
On target
performance
Maximum 
opportunity
% of Base
salary
Fixed
Variable
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). 
Remuneration report continued 41 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Governance Financial statements
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. Each element of remuneration is designed to 
support the achievement of different corporate objectives as outlined in the following table:
Element Purpose and link to remuneration policy Maximum award Key features
Base salary •	 R e fl e c t s	a t	o r	b e l o w	m e d ia n	m a r k e t	
salary for the individual and their role
•	 T a k e s	a c c o u n t	o f	p e r s o n a l	
performance and contribution to 
corporate performance
N/A •	 P a i d	m o n t hl y	in	c a s h	
•	B a s e d	o n	in d i v i d ua l	c o n t r i b u t i o n
•	 R e v i e w e d	a n n ua l l y	–	a n y	in c re a s e	in	
context of Group wide review
Annual Bonus •	 R e w a r d s	t h e	a c hi e v e m e n t	o f	a n n ua l	
EPS targets 
100% of base salary •	 P a i d	i n	c a s h	a f t e r	y e a r	e n d	re s u l t s	a re	
audited 
•	 R e m u n e r a t i o n	C o m m i t t e e	d i s c re t i o n	
linked to achievement of personal 
objectives
LTIP •	 A l i g n s	w i t h	s h a re h o l d e r	i n t e re s t s	
through the delivery of shares 
•	 R e w a r d s	g r o w t h	in	l o n g -t e r m	
earnings and shareholder value 
120% of base salary* •	 B a s e d	o n	E P S	p e r f o r m a n c e	
•	 V e s t s	b a s e d	o n	a	t h re e	y e a r	
performance period 
•	 S h a re s	v e s t in g	m a y	c o n t r i b u t e	t o	
minimum shareholding requirement
* Will increase to 150% of base salary in 2011/12, subject to shareholder approval.
During the year the committee expressly considered whether to introduce provisions that permit the Company to reclaim variable components 
of remuneration in exceptional circumstances. It was decided that while such provisions are particularly required in other industries, they would 
be inappropriate at this time at Dunelm.
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 group of public companies and considers the operational scale and complexity of the role 
each Director performs. It also reviews published research and surveys, and considers the wage increases across the Group as a whole. The 
committee aims to set salaries at or below the median level provided by similar companies. In addition to base salary, the Executive Directors 
are entitled to benefits comprising a car allowance, a contribution to a personal pension, private medical insurance and life insurance.
During the year, Will Adderley received an increase in basic salary of 2%, in line with the pay increase across the Group. Will then took a 
reduced salary when he assumed his new role as Executive Deputy Chairman. Will’s basic salary will be unchanged in 2011/12.
Nick Wharton’s base salary and remuneration from date of joining were set out in last year’s remuneration report. Nick’s basic salary is first 
due for review from July 2012.
David Stead’s role has increased significantly over recent years as a result of the growth of the business and includes additional responsibility, 
inter alia, for the HR and IT functions. After taking these factors into account and benchmarking David’s salary against comparable roles in  
other companies, the committee awarded a base salary increase in 2010/11 of 13.6% to £255,000. It continues to be below median level for  
the FTSE 250 and below our closest competitors. In 2011/12 David’s base salary has increased in line with the Company wide review by 1.5%  
to £258,800. 42 Dunelm Group plc Annual report and accounts 2011
Governance
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 target for the relevant financial year, but also include personal objectives for the year relevant to each Director. 
In setting the budget EPS target for the year, both market consensus expectations for EPS and individual broker forecasts are considered. As 
notified in last year’s annual report, the potential reward available to Executive Directors under this scheme was increased for the year ended 
2 July 2011 as follows (with payment in each case conditional on satisfactory personal performance against job objectives):
EPS 
performance 
(percentage 
of target)
Bonus payment 
(percentage of base salary)
FY10 FY11
Threshold 93% 3% 5%
Target 100% 24% 40%
Maximum 112% 60% 100%
For the year ended 2 July 2011, EPS was 7% below target. After due consideration of job performance, the committee awarded an annual 
bonus to Nick Wharton of £11,667 (proportionate to date of joining), to Will Adderley of £15,219 and to David Stead of £12,750. 
Long-Term Incentive Plan
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 
Company, 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):
Compound Annual Growth in EPS
Amount 
of award 
to vest
Periods ending 2010 2011, 2012, 2013
Threshold RPI + 5% RPI + 3% 25%
Maximum RPI + 20% RPI + 12% 100%
The committee decided after consultation with shareholders, to reduce the performance hurdle in respect of the schemes maturing from 2011, 
recognising the challenging market conditions expected to result from global recession. 
The committee meets after the results for each three-year performance period and 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. 
Remuneration report continued 43 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Governance Financial statements
Conditional awards of nominal cost options over Ordinary Shares worth 120% of base salary were made to Will Adderley and David Stead 
in March and September 2007, in September 2008 and in September 2009; and to Nick Wharton (pro rata to service), Will Adderley and  
David Stead on 1 December 2010. In addition, on 1 December 2010, with the approval of shareholders at the Annual General Meeting,  
a ‘one off’ nominal cost option award was made to Nick Wharton under the LTIP over 198,807 Ordinary Shares. The award will vest on  
30 November 2015, subject to Nick continuing to be employed by the Company at that date. No other performance conditions apply to this 
award. The committee approved this award to Nick on his appointment as Chief Executive. It considered that a longer than usual vesting 
period (five years) would be sufficient without further performance hurdles being applied. The closing share price on the date preceding  
the options granted on 1 December 2010, which was used to calculate the number of shares covered by the award, was 503p. 
The September 2007 award was in respect of the three-year performance period to 3 July 2010, over which the compound annual fully diluted 
growth in EPS was 30.1% (27.3% above RPI). Accordingly, 100% of the conditional nominal cost options awarded in September 2007 vested 
in September 2010 and the entitlements were exercised by both Will Adderley (190,130 shares) and David Stead (127,792 shares) on 11 and 12 
October 2010. The closing share price on those days were 440p and 449p respectively.
The Remuneration Committee has reviewed the Company’s EPS record over the three-year performance period which ended on 2 July 2011. 
Reported fully diluted EPS grew at a compound annual rate of 20.8%. This is 18.0% above RPI over the same period. Accordingly, 100% of 
the September 2008 LTIP award will vest in September 2011, representing 259,459 shares in favour of Will Adderley and 178,378 shares in 
favour of David Stead. 
Changes in policy during the year
As noted in last year’s report, we increased the maximum annual cash bonus potential for Executive Directors in the year ended 2 July 2011  
to 100% of salary (previously 60%). This change was made to bring Dunelm into line with normal market practice.
During the year a requirement was introduced for Executive Directors to build a shareholding over time equivalent to at least twice their basic 
salary, further reinforcing the alignment of interests between management and shareholders.
There have been no other changes to remuneration policy during the year.
Proposed future changes in policy
From 2011/12 the annual bonus performance range will move to 95% – 105% of budget EPS. This is a narrower range than the 93% – 112% 
used in the year ended 2 July 2011 but is considered to be more appropriate for a larger company. It also harmonises the bonus structure for 
Executive Directors with that of the new operating board.
We also indicated in last year’s report that we would review the long-term incentive arrangements applicable to Executive Directors. A formal 
review was carried out in May with the benefit of external advice from Deloitte. In the review we took advice on how Dunelm’s Long-Term 
Incentive Plan (LTIP) compared to equivalent schemes in other FTSE 250 companies, as well as the overall remuneration levels of Dunelm’s 
Executive Directors compared with the median. The conclusion was that Dunelm’s overall remuneration levels are restrained. This is because 
base salaries are at or below median levels and both annual bonus and LTIP are functions of base salary. 
Whilst the Remuneration Committee is content with the positioning of Executive Directors’ base salaries, we believe that it is important to 
provide both incentive and reward for strong business performance. Accordingly, taking into account the findings of our review we wish to 
increase both the maximum reward achievable under the LTIP and the performance target required in order to achieve the maximum reward. 
Specifically, we propose that the award of conditional nominal cost share options under the LTIP should be increased to 150 per cent of salary 
(currently 120 per cent), with vesting on a straight-line basis when compound annual growth rate in EPS over the plan period falls between 
RPI+3 per cent and RPI+15 per cent (currently RPI+3 per cent to RPI+12 per cent).
This proposed change will be put to shareholders for approval at the forthcoming AGM. 44 Dunelm Group plc Annual report and accounts 2011
Governance
Remuneration report continued
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 
3 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.
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 
must 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.
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 2012.
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.
Date of 
contract
Unexpired 
term
Notice  
period
Nick Wharton 15.09.10 n/a 12 months
Will Adderley 28.09.06 n/a 12 months
David Stead 15.09.03 n/a 12 months
Geoff Cooper 08.10.04 25 months 3 months
Marion Sears 22.07.04 22 months 1 month
Simon Emeny 25.06.07 21 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.
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 
1.23% of the Company’s issued share capital. 45 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Governance Financial statements
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Dunelm
FTSE All Share General Retailers
FTSE 250
0
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100
150
200
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18.10.06
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Dunelm
FTSE All Share General Retailers
FTSE 250
Performance graph
The graph below shows the Group’s performance since flotation, measured by total shareholder return, compared with the FTSE General 
Retail Index and the FTSE 250. The Remuneration Committee has chosen these indices for comparison because they provide a range of 
comparator companies which have similar market capitalisation, which are in the same sector and which face similar market and economic 
challenges in the long term.
The shares traded in the range 326.8p to 550.0p during the year, and stood at 399.3p at 2 July 2011.
Audited information
Details of Directors’ remuneration
Details of individual Directors’ remuneration in respect of the year ended 2 July 2011 are as follows:
Base salary 
or fees 
£’000
Vehicle 
allowance 
£’000
Taxable 
benefits 
£’000
Contribution 
to personal 
pension 
£’000
Joining 
incentive 
£’000
Annual 
bonus 
£’000
2011 
Total 
£’000
Total 
2010 
£’000
Executive Directors
Nick Wharton 233 7 1 23 150 15 429 –
Will Adderley 304 12 1 20 – 13 350 533
David Stead 255 12 – 20 – 12 299 389
Non-Executive Directors
Geoff Cooper 100 – – – – – 100 86
Marion Sears 40 – – – – – 40 32
Simon Emeny 30 – – – – – 30 27
Nick Wharton 15 – – – – – 15 24
Total 977 31 2 63 150 40 1,263 1,091
Nick Wharton was appointed Chief Executive with effect from 1 December 2010. On taking up his position as an Executive Director on 
1 December 2010, Nick Wharton received a cash payment of £150,000 to compensate him for the loss of bonus and other incentives at  
his previous employment.
Will Adderley’s salary as Chief Executive was £332,500 from July to January inclusive, and as Executive Deputy Chairman was £265,000 
from February to June inclusive.
David Stead waived taxable benefits totalling approximately £1,000. 46 Dunelm Group plc Annual report and accounts 2011
Governance
Remuneration report continued
Directors’ interests in share options
The Directors’ beneficial interests in options granted under the Long-Term Incentive Plan, which (unless otherwise noted) will vest only if EPS 
performance conditions are met, are as follows:
Director
Date of 
award
Share 
options at 
2 July 2011
End of 
performance 
period
Market Price 
of Shares at 
date of award
Nick Wharton Dec 2010 198,807 Nov 2015* 503p
Dec 2010 55,666 June 2013 503p
Will Adderley Sept 2008 259,459 June 2011 148p
Sept 2009 123,949 June 2012 316p
Dec 2010 72,614 June 2013 503p
David Stead Sept 2008 178,378 June 2011 148p
Sept 2009 85,215 June 2012 316p
Dec 2010 60,835 June 2013 503p
* 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.
The Directors’ beneficial interests in options granted under other schemes are as follows:
Director
Type of 
option
Shares 
under 
option at 
3 July 2010
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
Will Adderley SAYE 7,710 7,710 – – – 124p – Jan 2012 Jun 2012
David Stead SAYE 7,710 7,710 – – – 124p – Jan 2012 Jun 2012
Approval
This report was approved by the Board of Directors on 15 September 2011 and signed on its behalf by:
Marion Sears
Chair, Remuneration Committee
15 September 2011 47 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Governance Financial statements
Corporate social responsibility
Corporate Social Responsibility (‘CSR’) is integral to meeting the long-term expectations of our customers and other stakeholders and to ensure 
the sustainable development of our business.
It is clear that protecting the environment and running our business ethically not only makes good commercial sense but also improves  
the experience for both staff and customers. The Board places particular emphasis on maintaining good relationships with its customers, 
employees, suppliers and local communities; on ethical sourcing; on environmental issues; and on charitable contributions.
The Executive Management team reports regularly to the Board on all of these issues. 
Our people
Dunelm employs over 6,600 people throughout the Group’s 113 stores, distribution, manufacturing and head office locations and the Group 
places a high priority on maintaining regular communications with all employees. This keeps colleagues engaged in the development of the 
Group and also keeps them aware of the many career development opportunities that exist.
The Group is a growing business and places an emphasis on the retention and development of its own employees. Our benefits package is 
competitive. We offer nationally accredited training programmes and ILM (Institute of Leadership and Management) qualifications to support 
the development of talented individuals at all levels of the business.
The Group is an equal opportunities employer and is committed 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.
Our suppliers 
Dunelm is clear that committed suppliers are crucial to us achieving our growth ambitions. Our products are sourced from many countries 
around the world and finding the best manufacturers to meet our high standards for design & innovation, quality and value is essential as  
we leverage our increased buying scale.
The Group continues to work in collaboration with 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 ‘Ethical Code of Conduct’ enforced by a full program of independent factory audits, based on the 
Ethical Trading Initiative (‘ETI’) base code. 
Dunelm operates standard terms and conditions ensuring that all suppliers are treated fairly and on a consistent basis. 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 2 July 2011 was 36 days (2010: 36 days).
Health and safety
Dunelm is committed to achieving high standards of health and safety in all operations and understands its duty of care to our employees, 
contractors, customers and any other visitors to our premises. 
The business has a Health & Safety Committee which meets quarterly supported by a dedicated Health & Safety manager and senior 
operational management. This committee ensures that key risks are fully understood and that all mitigating action has been taken to provide  
a safe environment. Monthly KPI reporting, outlining significant risks and incidents, is also presented to the board. 
The Group undertakes a program of risk assessments and audits to identify areas of concern whether it’s in workplace transport, safety during 
store development or a safe shopping environment. Training programs ranging from documented Safe Systems of Work (‘SSOW’) to web 
based ‘e-learning’ and testing modules are also in place to help ensure a safe and clean environment and each site is subject to an annual 
compliance review.
During the past year the number of reported accidents was 49 (2010: 46).  48 Dunelm Group plc Annual report and accounts 2011
Governance
0
20
40
60
80
100
2008 – 09
Landﬁll
yoy improvement
2009 –10 2010 –11 Target 2011 –12
Recycled
30%
50%
68%
76%
cardboard electrical metals plastics
Corporate social responsibility continued
Environment
Dunelm recognises that good environmental management makes good business sense. The Group is committed to controlling and minimising 
the impact of our operations both directly and indirectly in the key areas of waste management, energy consumption and carbon emissions.
The Company has established an ‘Environment Policy’ to determine appropriate business behaviour and has an ‘Environment Committee’ 
tasked with delivering the strategy to continually improve these key areas and to achieve high levels of environmental performance.
Our progress over the past financial year and our goals for the forthcoming year are detailed below:
1. Waste recycling 
Dunelm is aiming to maximise the volume of waste which is recycled and in so doing reduce the volume going to landfill. 
Part of our strategy is to boost recycling capabilities by accelerating our investment in balers. This year we have increased the number of sites 
with balers to 103 (2010: 43) and at the same time launched our ‘Recycle at Work’ initiative to engage colleagues in correct treatment of 
waste. A new position of ‘Group Recycling Manager’ has been created to oversee this and to deliver more effective waste management 
strategies.
In the year we have also completed the full roll-out of DMR (‘Dry Mixed Recycling’) to all Dunelm stores and central support facilities  
(2010: 12 sites). As a result we now recycle all of our plastics, paper, bottles and cans in addition to cardboard. We have also engaged our 
suppliers to review the specification of packaging used to maximise recyclable content.
These initiatives, together with enhanced volume, weight and contamination reporting of site by site performance has enabled Dunelm to 
reduce the proportion of waste to landfill from 50% (2010) to our lowest ever level of 32%.
Our target for the forthcoming year is to reduce the cube volume of waste sent to landfill by a further 25%. In addition we now 
expect to achieve our target of ‘zero waste to landfill’ within the next 3 years.
Waste recycled (all stores) – %
 
2. Energy usage
Energy reduction on a site-by-site basis has been a key focus for the Group in the last financial year. 
In addition to the AMR (‘Automatic Meter Reading’) smart meters that are in place for all electricity supplies we have applied the same 
technology to monitor and control our gas usage. Data on energy consumption is pulsed through on a half-hourly basis allowing us to profile 
high or unusual patterns, target specific sites and to monitor the success of our energy reduction initiatives.
All investments in new and refitted stores now come with a Building Management System (‘BMS’) as standard. This BMS is designed  
to optimise energy usage across the site while maintaining an appropriate shopping environment for our customers and staff. In H2 we 
commenced the trial of these systems in 3 other existing stores and we expect to roll-out more widely next year. At the end of the year  
we had 30 BMS stores (2010: 11). 
As a result of these actions we have reduced electricity usage by 6.3% and gas usage by 20% in like-for-like stores.
Our target for the forthcoming year is to reduce electricity by 5% and gas usage by 10% in like-for-like stores. 49 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Governance Financial statements
0
2
4
6
8
10
12
14
2009 – 10 2010 – 11
Cumm by 
end FY12
Target 2011 –12
2.4
6.3
5.0
12.5
0
50
100
150
200
250
300
2008 – 09 2009 – 10 2010 –11 Target 2011–12
252.0
225.0
217.5
210.0
YOY Reduction in electricity consumption (L4L stores) - %
 
3. Carbon emissions (CO
2
)
We have reduced our total CO
2
 equivalent emissions (from energy and business mileage) per ft
2
 of selling space by 15% over the year. 
Dunelm’s carbon footprint for the period ended 2 July 2010 was 23,280 tonnes of CO
2
 (Company’s Independent energy advisers).
Over the past year we have continued to source energy from ‘Green Energy’ supplies such as combined heat and power sources where CO
2
 
emissions are 30% lower than the national average. In July 2010 we agreed to switch all supplies of electricity to ‘Green Energy’ and we will 
continue to monitor this over the coming year. 
We have continued to reduce the maximum emissions tolerated within our company car fleet, this is now 135g/km (2010: 155 g/km) and 
many fuel efficient variants have been added to the scheme. 
This year we will focus on building design and efficient investments to reduce consumption further. Continued investment in BMS will remain a 
strategic goal but we will also look to invest in LED lighting solution for stores where possible. 
During the year Dunelm achieved the Carbon Trust Standard (‘CTS’) certification recognising our success in reducing our carbon footprint but 
also our continuing governance and management in this area. We have also registered for the Carbon Reduction Commitment (‘CRC’) and 
have submitted both ‘annual’ and ‘footprint’ reports as part of our commitment.
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 relative CO
2
 emissions year on year.
Carbon emissions - tonnes per store
  50 Dunelm Group plc Annual report and accounts 2011
Governance
4. 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 audited many of our waste streams to divert materials from landfill where possible. Most recently we have identified  
a particular spec of clear plastic or wrap that should be used by suppliers – LDPE (‘Low Density Polyethylene’). This product has the most  
has a much greater recyclable content. This will be the standard for all suppliers going forward. 
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. 
Charitable donations
The Group’s charity of the year in the last financial year was ‘Rays of Sunshine’ children’s charity. Collections are made in stores, specific 
fund-raising events are organised and the Group makes its own donations, from time to time the Group also makes ad hoc donations  
to local charities.
The total value of donations made by the Group in the year ended 2 July 2011 was £56,000 (2010: £60,000). Total funds raised for charity by 
the Group and its staff was £140,000 (2010: £157,000).
Corporate social responsibility continued 51 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Governance Financial statements
Statement of Directors’ responsibilities in respect  
of the Annual Report and the financial statements
The Directors are responsible for preparing the Annual Report and the Group and Parent Company financial statements in accordance with 
applicable law and regulations.
Company law requires the Directors to prepare Group and Parent Company financial statements for each financial year. Under that law they 
are required to prepare the Group financial statements in accordance with IFRSs as adopted by the European Union (‘EU’) and applicable law 
and have elected to prepare the Parent Company financial statements on the same basis.
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view  
of the state of affairs of the Group and Parent Company and of their profit or loss for that period. In preparing each of the Group and Parent 
Company financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently; •	
make judgements and estimates that are reasonable and prudent; •	
state whether they have been prepared in accordance with IFRSs as adopted by the EU; and •	
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the Parent Company •	
will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Parent Company’s 
transaction and disclose with reasonable accuracy at any time the financial position of the Parent Company and enable them to ensure that its 
financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to 
them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Directors’ Report, Directors’ Remuneration Report and 
Corporate Governance Statement that 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
15 September 2011 52 Dunelm Group plc Annual report and accounts 2011
Financial statements
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 2 July 2011 set out on pages 53 to 57. 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 
auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other 
than the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and auditors
As explained more fully in the Directors’ Responsibilities Statement set out on page 51, 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 2 July 2011 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 30 to 33 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 51, in relation to going concern; and •	
the part of the Corporate Governance Statement on pages 30 to 33 relating to the Company’s compliance with the nine provisions of •	
the UK Corporate Governance Code specified for our review.
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
15 September 2011 53 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Corporate governance Financial statements
Note
52 weeks  
2011  
£’000
52 weeks 
 2010  
£’000
Revenue 1 538,474 492,839
Cost of sales (280,125) (262,253)
Gross profit 258,349 230,586
Operating costs 3 (175,051) (155,126)
Operating profit 2 83,298 75,460
Financial income 5 523 1,361
Financial expenses 5 (172) (65)
Profit before taxation 83,649 76,756
Taxation 6 (23,814) (22,406)
Profit for the period attributable to equity shareholders of the parent 59,835 54,350
Earnings per ordinary share – basic 8 29.7p 27.1p
Earnings per ordinary share – diluted 8 29.3p 26.9p
Dividend proposed per ordinary share 7 8.0p 5.0p
Dividend paid per ordinary share 7 3.5p 3.0p
All activities relate to continuing operations. 
Consolidated income statement
For the 52 weeks ended 2 July 2011 54 Dunelm Group plc Annual report and accounts 2011
Financial statements
52 weeks 
 2011  
£’000
52 weeks 
 2010  
£’000
Profit for the period 59,835 54,350
Effective portion of movement in fair value of cash flow hedges 147 (545)
Deferred tax on hedging movements (50) 153
Total comprehensive income for the period 59,932 53,958
Consolidated statement of comprehensive income
For the 52 weeks ended 2 July 2011 55 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Corporate governance Financial statements
Note
2 July  
2011 
 £’000
3 July 
 2010 
£’000
Non-current assets
Intangible assets 9 4,692 5,202
Property, plant and equipment 10 125,850 102,599
Total non-current assets 130,542 107,801
Current assets
Inventories 12 76,455 62,583
Trade and other receivables 13 14,566 10,470
Cash and cash equivalents 14 35,139 15,369
Total current assets 126,160 88,422
Total assets 256,702 196,223
Current liabilities
Trade and other payables 15 (85,805) (71,638)
Liability for current tax (12,636) (11,200)
Financial instruments 17 (398) (545)
Total current liabilities (98,839) (83,383)
Non-current liabilities
Deferred tax liability 11 (645) (152)
Total non-current liabilities (645) (152)
Total liabilities (99,484) (83,535)
Net assets 157,218 112,688
Equity
Issued capital 18 2,015 2,010
Share premium 681 580
Capital redemption reserve 43,155 43,155
Hedging reserve (295) (392)
Retained earnings 111,662 67,335
Total equity attributable to equity holders of the Parent 157,218 112,688
The financial statements on pages 53 to 73 were approved by the Board of Directors on 15 September 2011 and were signed on its behalf by:
Nick Wharton
Chief Executive
Consolidated statement of financial position
As at 2 July 2011 56 Dunelm Group plc Annual report and accounts 2011
Financial statements
Note
52 weeks  
2011  
£’000
52 weeks 
 2010 
 £’000
Profit before taxation 83,649 76,756
Adjustment for net financing costs (351) (1,296)
Operating profit 83,298 75,460
Depreciation and amortisation 14,079 11,370
Loss on disposal of property, plant and equipment 703 13
Operating cash flows before movements in working capital 98,080 86,843
(Increase) in inventories (13,872) (4,688)
(Increase)/decrease in receivables (4,080) 269
Increase in payables 13,848 6,094
Net movement in working capital (4,104) 1,675
Share-based payments expense 1,199 1,330
Foreign exchange losses (115) 516
95,060 90,364
Interest paid (29) (71)
Interest received 507 557
Tax paid (21,513) (18,899)
Net cash generated from operating activities 74,025 71,951
Cash flows from investing activities
Proceeds on disposal of property, plant and equipment – 7
Acquisition of property, plant and equipment (36,124) (23,344)
Acquisition of intangible assets (1,085) (1,233)
Net cash utilised in investing activities (37,209) (24,570)
Cash flows from financing activities
Proceeds from issue of share capital 101 244
Proceeds from issue of treasury shares – 642
Repayment of bank loan – (10,000)
Proceeds from bank loan – 10,000
Return of capital to shareholders – (43,155)
Dividends paid (17,119) (14,029)
Net cash flows utilised in financing activities (17,018) (56,298)
Net increase/(decrease) in cash and cash equivalents 19,798 (8,917)
Foreign exchange revaluations (28) 288
Cash and cash equivalents at the beginning of the period 15,369 23,998
Cash and cash equivalents at the end of the period 14 35,139 15,369
Consolidated statement of cash flows
For the 52 weeks ended 2 July 2011 57 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Corporate governance Financial statements
Issued  
share 
 capital  
£’000
Share  
premium 
 £’000
Capital  
redemption  
reserve  
£’000
Hedging  
reserve  
£’000
Retained  
earnings  
£’000
Total  
equity  
£’000
As at 4 July 2009 2,008 345 – – 110,419 112,772
Profit for the financial year – – – – 54,350 54,350
Movement in fair value of cash flow hedges – – – (545) – (545)
Deferred tax on hedging movements – – – 153 – 153
Total comprehensive income for the financial year – – – (392) 54,350 53,958
Issue of share capital 2 235 – – – 237
Issue of B shares 43,155 – – – (43,155) –
Redemption of B shares (43,155) – 43,155 – (43,155) (43,155)
Treasury shares reissued in respect of share option schemes – – – – 649 649
Share-based payments – – – – 1,330 1,330
Deferred tax on share-based payments – – – – 320 320
Current corporation tax on share options exercised – – – – 606 606
Dividends – – – – (14,029) (14,029)
Total transactions with owners, recorded directly in equity 2 235 43,155 – (97,434) (54,042)
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
Consolidated statement of changes in equity
For the 52 weeks ended 2 July 2011 58 Dunelm Group plc Annual report and accounts 2011
Financial statements
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 53 to 73.
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 26 to 29. The financial position of the Group, its cash flows, liquidity 
position and borrowing facilities are described in the Finance Director’s review on pages 16 to 18. 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 reflects the extent to which the vesting period and 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 59 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Corporate governance Financial statements
Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the 
financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently 
are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial 
statements from the date that control commences until the date that control ceases.
Transactions eliminated on consolidation
Intragroup balances, and any unrealised gains and losses or income and expenses arising from intragroup transactions, are eliminated in 
preparing the consolidated financial statements.
Revenue
Revenue represents the proceeds from sales of goods and related services. It excludes sales between Group companies and is after deducting 
returns, discounts given and VAT. For the majority of sales, revenue is recognised at the point of sale with the exception of make-up charges for 
custom made products, where revenue is recognised at the point that the goods are collected, and gift vouchers, where revenue is recognised 
when the vouchers are redeemed.
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. 60 Dunelm Group plc Annual report and accounts 2011
Financial statements
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.
Accounting policies continued 61 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Corporate governance Financial statements
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 9   Revised IFRS 9  – Financial Instruments
IFRS 13   Revised IFRS 13  – Fair value measurement
IAS 12   Revised IAS 12  – Deferred tax
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 62 Dunelm Group plc Annual report and accounts 2011
Financial statements
1 Segmental reporting
The Group has one reportable segment, retail of homewares. 
The Chief Operating Decision Maker is the Group’s Operating Board. Internal management reports are reviewed by them on a monthly basis. 
Performance of the segment is assessed based 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:
2011  
£’000
2010 
 £’000
Inventories
 Cost of inventories included in cost of sales 280,125 262,253
 Movement on provisions for write down of inventories (787) 1,120
Amortisation of intangible assets 1,909 1,876
Depreciation of owned property, plant and equipment 12,170 9,494
Operating lease rentals
 Land and buildings 25,493 22,544
 Plant and machinery 1,522 1,351
Loss on disposal of property, plant and equipment and intangible assets 703 13
The analysis of auditors’ remuneration is as follows:
2011  
£’000
2010 
 £’000
Fees payable to the Company’s auditors for the audit of the Parent and consolidated annual accounts 16 15
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 56 52
– tax compliance 33 30
– other tax services 10 88
– all other services – 17
3 Operating costs
2011 
 £’000
 2010 
 £’000
Selling and Distribution 147,392 130,606
Administrative 26,956 24,507
Loss on disposal of property, plant and equipment and intangible assets 703 13
175,051 155,126
4 Employee numbers and costs
The average number of people employed by the Group (including Directors) was:
2011
 Number  
of heads
2011 
Full time 
equivalents
2010 
Number  
of heads
2010 
Full time 
equivalents
Selling 6,135 3,777 5,608 3,493
Distribution 261 252 285 274
Administration 228 223 198 194
6,624 4,252 6,091 3,961
Notes to the annual financial statements
For the 52 weeks ended 2 July 2011 63 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Corporate governance Financial statements
4 Employee numbers and costs continued
The aggregate remuneration of all employees including Directors comprises:
2011  
£’000
2010  
£’000
Wages and salaries including bonuses and termination benefits 69,740 61,994
Social security costs 4,715 4,324
Share-based payment expense (note 20) 1,199 1,330
Defined contribution pension costs 282 196
75,936 67,844
Details of Directors’ remuneration, share options, long-term incentive schemes and pension entitlements are disclosed in the Remuneration 
Report on pages 39 to 46.
5 Financial income and expense
2011 
£’000
2010  
£’000
Finance income
Interest on bank deposits 523 557
Foreign exchange gains – 804
523 1,361
Finance expenses
Interest on bank borrowings and overdraft (29) (65)
Foreign exchange losses (143) –
(172) (65)
Net finance income 351 1,296
6 Taxation
2011  
£’000
2010 
 £’000
Current taxation
UK corporation tax charge for the period 24,610 22,146
Adjustments in respect of prior periods (1,198) (238)
23,412 21,908
Deferred taxation
Origination of temporary differences (442) 324
Adjustment in respect of prior periods 844 174
402 498
Total taxation expense in the income statement 23,814 22,406
The tax charge is reconciled with the standard rate of UK corporation tax as follows:
2011  
£’000
2010 
 £’000
Profit before taxation 83,649 76,756
UK corporation tax at standard rate of 27.5% (2010: 28.0%) 23,002 21,492
Factors affecting the charge in the period:
Non-deductible expenses 179 128
Ineligible depreciation 1,035 972
Lease incentive deductions (120) (122)
Adjustments to tax charge in respect of prior years (354) (64)
Effect of standard rate of corporation tax change (104) –
Loss on disposal of ineligible assets 176 –
23,814 22,406
The taxation charge for the period as a percentage of profit before tax is 28.5% (2010: 29.2%). 64 Dunelm Group plc Annual report and accounts 2011
Financial statements
7 Dividends
All dividends relate to the 1p Ordinary Shares. 
2011  
£’000
2010  
£’000
Final for the period ended 4 July 2009 – paid 4.0p – (8,008)
Interim for the period ended 3 July 2010 – paid 3.0p – (6,021)
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) –
(17,119) (14,029)
The Directors are proposing a final dividend of 8.0p per Ordinary Share for the period ended 2 July 2011 which equates to £16.1m. 
The dividend will be paid on 16 December 2011 to shareholders on the register at the close of business on 25 November 2011. 
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  
2 July 2011 
’000
52 weeks 
ended 
 3 July 2010 
‘000
Weighted average number of shares in issue during the period 201,394 200,264
Impact of share options 2,506 2,047
Number of shares for diluted earnings per share 203,900 202,311
9 Intangible assets
      
Software 
development 
and licences 
£’000
Rights to 
Dorma brand 
£’000
Total 
£’000
Cost
At 4 July 2009 7,738 5,036 12,774
Additions 1,233 – 1,233
Disposals (5,444) – (5,444)
Transfers from property, plant and equipment 2 – 2
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
Amortisation
At 4 July 2009 6,008 923 6,931
Charge for the financial period 869 1,007 1,876
Disposals (5,444) – (5,444)
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
Net book value
At 4 July 2009 1,730 4,113 5,843
At 3 July 2010 2,096 3,106 5,202
At 2 July 2011 2,593 2,099 4,692
Notes to the annual financial statements continued
For the 52 weeks ended 2 July 2011 65 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Corporate governance Financial statements
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 4 June 2009 48,738 47,408 195 86 34,338 130,765
Additions 4,144 10,049 281 – 8,870 23,344
Transfers to intangible assets and reclassifications – 66 – – (68) (2)
Disposals – (319) – (33) (13,206) (13,558)
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
Depreciation
At 4 July 2009 2,715 13,272 96 86 25,825 41,994
Charge for financial period 802 3,996 43 – 4,653 9,494
On disposals – (314) – (33) (13,191) (13,538)
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
Net book value
At 4 July 2009 46,023 34,136 99 – 8,513 88,771
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
11 Deferred tax
Deferred tax is provided in full on temporary differences under the liability method using a taxation rate of 26.0% (2010: 28%).
Deferred taxation assets and liabilities are attributable to the following:
Assets Liabilities Net
2011
 £’000
2010
 £’000
2011 
£’000
2010 
£’000
2011 
£’000
2010 
£’000
Property, plant and equipment – – (1,670) (1,187) (1,670) (1,187)
Other temporary differences 103 153 (155) (169) (52) (16)
Share-based payments 1,077 1,051 – – 1,077 1,051
1,180 1,204 (1,825) (1,356) (645) (152) 66 Dunelm Group plc Annual report and accounts 2011
Financial statements
11 Deferred tax continued
The movement in the net deferred tax balance is as follows:
Balance at 
4 July 2009 
£’000
Recognised in 
income 
£’000 
Recognised in 
equity 
£’000 
Balance at 
3 July 2010 
£’000
Property, plant and equipment (634) (553) – (1,187)
Employee benefits 558 173 320 1,051
Short-term temporary differences (51) (118) 153 (16)
(127) (498) 473 (152)
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)
12 Inventories
2011 
£’000
2010 
£’000
Goods for resale 76,455 62,583
13 Trade and other receivables
2011 
£’000
2010 
£’000
Trade receivables 454 122
Other receivables 2,159 628
Prepayments and accrued income 11,953 9,720
14,566 10,470
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
2011
 £’000
2010 
£’000
Cash at bank and in hand 35,139 15,369
15 Trade and other payables
2011 
£’000
2010 
£’000
Trade payables 36,709 32,451
Accruals and deferred income 42,695 35,509
Other taxation and social security 5,163 3,283
Other creditors 1,238 395
85,805 71,638
Notes to the annual financial statements continued
For the 52 weeks ended 2 July 2011 67 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Corporate governance Financial statements
16 Interest bearing loans and borrowings
On 26 September 2006 the Group entered into a £50m revolving credit facility, repayable in full on 26 September 2011 and sub-divided  
into two elements: a £40m facility and a £10m facility. The £10m facility was cancelled on 26 May 2009. The £40m facility was cancelled  
on 30 December 2010.
Interest was payable on funds utilised under the £40m facility at the rate of LIBOR plus 0.35%. LIBOR is fixed for a given loan at the date  
of draw down.
The facility was guaranteed by the Parent Company and its subsidiaries.
On 7 February 2011 the Group entered into 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 2 July 2011 consisted of £412,000 (2010: £122,000) trade receivables and £35,139,000 (2010: £15,369,000) 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 £20m for any individual party.
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 2 July 2011. The outstanding US dollar liabilities at the year end were $353,000 (2010: $139,000).
During the year the Group entered into exchange rate swaps for $25.5m to sell sterling and buy US dollars. These swaps are accounted  
for as cash flow hedges. During the year the mark to market profit on foreign currency hedging instruments taken to equity was £0.1m  
(2010: £0.5m). At the balance sheet date the Group had six swap contracts outstanding with a maximum value of $19.8m.
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 twelve 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. 68 Dunelm Group plc Annual report and accounts 2011
Financial statements
17 Financial risk management continued
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 
Statement of comprehensive income.
The US dollar year end exchange rate applied in the above analysis is 1.6069 (2010: 1.5186). 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. 
Losses on cashflow hedges during the year amounted to £30,000 (2010: gain £313,000).
Capital management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future 
development of the business.
From time to time the Group purchases its own shares on the market; the timing of these purchases depends on market prices. 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.
The following table is a comparison by category of the carrying amounts and fair values of the Group’s financial assets and liabilities at  
2 July 2011 and 3 July 2010.
2011 
Carrying 
value 
£’000
2011 
Fair value 
£’000
2010 
Carrying 
value 
£’000
2010 
Fair value 
£’000
Cash and cash equivalents 35,139 35,139 15,369 15,369
Trade receivables 454 454 122 122
Total financial assets 35,593 35,593 15,491 15,491
Trade payables (36,709) (36,709) (32,451) (32,451)
Forward exchange contracts (398) (398) (545) (545)
Total financial liabilities (37,107) (37,107) (32,996) (32,996)
Net financial liabilities (1,514) (1,514) (17,505) (17,505)
The fair value on trade receivables and trade payables are approximate to the carrying value.
Notes to the annual financial statements continued
For the 52 weeks ended 2 July 2011 69 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Corporate governance Financial statements
17 Financial risk management continued
The currency profile of the Group’s cash and cash equivalents is as follows:
2011 
£’000
2010 
£’000
Sterling 32,870 14,057
US dollar 1,526 1,209
Euro 743 103
35,139 15,369
As at 2 July 2011, 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
3 July 2010 122 26 49 1 10 36
18 Share capital
Number of ordinary shares 
of 1p each 
2011
Number of B shares of 
21.5p each 
2010
Number of ordinary shares 
of 1p each 
2010
In issue at the start of the period 201,040,148 – 200,791,400
B shares issued via a bonus issue – 200,723,131 –
B shares redeemed in the year – (200,723,131) –
Issued during the period in respect of share option schemes 449,960 – 248,748
In issue at the end of the period 201,490,108 – 201,040,148
Proceeds received in relation to shares issued during the period were £101,000 (2010: £238,000). 
2011 
number 
of shares
2011 
£’000
2010 
number 
of shares
2010 
£’000
Ordinary shares of 1p each:
Allotted, called up and fully paid 201,490,108 2,015 201,040,148 2,010
19 Treasury shares 
2011 
number 
of shares
2011 
£’000
2010 
number 
of shares
2010 
£’000
Outstanding at beginning of year 99,628 128 837,135 1,301
Reissued during the period in respect of share option schemes (99,628) (128) (737,507) (1,173)
Outstanding at end of year – – 99,628 128
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 reissued 99,628 (2010: 737,507) treasury shares for a total consideration of £Nil (2010: £641,843). 
The Company has the right to reissue the remaining treasury shares at a later date. 70 Dunelm Group plc Annual report and accounts 2011
Financial statements
20 Share-based payments
As at 2 July 2011, 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 36,495 exercisable options in total under these schemes as at 2 July 2011.
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
June  
2008  
grant
Fair value at measurement date 145.8p 65.6p
Exercise price 420.0p 137.0p
Expected volatility (weighted average volatility 
 used in modelling – based on historical volatility
 of comparable quoted companies) 36% 35%
Option life (weighted average life used in modelling) 3 years 3 years
Expected dividends 2.5% 8.7%
Risk-free interest rate 1.7% 4.8%
The number and weighted average exercise price of options under the GSOP is as follows:
Weighted 
average 
exercise price 
2011
 Number of 
shares under 
option 
2011 
Weighted 
average 
exercise 
price 
2010 
Number of 
shares under 
option 
2010
Outstanding at beginning of year 203.8p 48,840 60.5p 427,331
Granted during year 420.0p 100,000 405.0p 12,345
Exercised during year – – 54.9p (390,836)
Lapsed during year 405.0p (12,345) – –
Outstanding at end of year 344.3p 136,495 203.8p 48,840
Notes to the annual financial statements continued
For the 52 weeks ended 2 July 2011 71 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Corporate governance Financial statements
20 Share-based payments continued
b) Dunelm Group Savings Related Share Option Plan
The Sharesave scheme was established in 2006 and is open to all staff with eligible length of service. One grant was made under the scheme 
during the year, in October 2009. 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 
2010
October 
2009
October 
2008
October 
2007
Fair value at measurement date 192.8p 180.4p 47.0p 70.0p
Share price 497.5p 376.3p 125.0p 212.0p
Exercise price 337.0p 253.0p 124.5p 157.0p
Expected volatility (weighted average volatility used in modelling 
– based on historical volatility of comparable quoted companies) 43% 57% 58% 30%
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 1.7% 2.8% 3.0% 4.8%
Forfeiture rate 48% 29% 10% 0%
The number and weighted average exercise price of options outstanding under the Sharesave at 2 July 2011 is as follows:
          
Weighted 
average 
exercise price 
2011
 Number of 
shares under 
option 
2011 
Weighted 
average 
exercise 
price 
2010 
Number of 
shares under 
option 
2010
Outstanding at beginning of year 190.4p 671,772 142.9p 867,972
Granted during year 337.0p 349,142 253.0p 347,376
Exercised during the year 139.2p (64,207) 153.0p (440,150)
Forfeited during year 252.4p (86,095) 161.5p (103,426)
Outstanding at end of year 245.7p 870,612 190.4p 671,772
The weighted average share price at the time of exercise was 490.8p
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. Four grants were made in the year, to the Executive Directors, senior 
management, selected staff and a separate grant to Nick Wharton as part of his joining package. The Executive Directors’ and selected staff 
grants in December 2010 are exercisable in December 2013, the senior management grant in October 2010 is exercisable in Oct 2013 and  
Nick Wharton’s joining grant in December 2010 is exercisable in December 2015. 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 46. 72 Dunelm Group plc Annual report and accounts 2011
Financial statements
20 Share-based payments continued
c) Long-Term Incentive Plan
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
December 
2010
September 
2009
September 
2008
Share price at date of grant 500.0p 500.0p 316.0p 148.0p
Discount factor, based on dividend yield of 2.5% to vesting date 0.881 0.927 0.913 0.889
Fair value of option 440.6p 463.4p 288.5p 132.5p
The number and weighted average exercise price of options under the LTIP at 2 July 2011 is as follows:
Weighted 
average 
exercise price 
2011
 Number of 
shares under 
option 
2011 
Weighted 
average 
exercise price 
2010 
Number of 
shares under 
option 
2010
Outstanding at beginning of year – 1,326,468 – 1,263,571
Granted during year – 664,661 – 384,164
Exercised during year – (482,482) – (155,270)
Forfeited during year – (9,381) – (165,997)
Outstanding at end of year – 1,499,266 – 1,326,468
The weighted average share price at the time of exercise was 387.3p
The total expense recognised in the income statement arising from share-based payments is as follows:
2011 
£’000
2010 
£’000
GSOP 61 2
Sharesave 240 93
LTIP 898 1,235
1,199 1,330
21 Commitments
As at 2 July 2011 the Group had entered into capital contracts amounting to £21.8m. The equivalent figure as at 3 July 2010 was £15.4m.
The future minimum lease payments under non-cancellable operating leases were as follows:
2011 
Motor 
vehicles 
£’000
2011 
Land and 
buildings 
£’000
2011 
Plant and 
machinery 
£’000
2010 
Motor 
vehicles 
£’000
2010 
Land and 
buildings 
£’000
2010 
Plant and 
machinery 
£’000
Within one year 414 27,566 380 428 23,723 292
In the second to fifth year inclusive 92 103,079 651 374 86,794 535
After five years – 134,408 – – 115,241 –
506 265,053 1,031 802 225,758 827
The Group has 101 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.
Notes to the annual financial statements continued
For the 52 weeks ended 2 July 2011 73 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Corporate governance Financial statements
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 59.1% of the voting shares of the Company.
Disclosures relating to remuneration of Directors are set out in the Remuneration Report on pages 39 to 46. The remuneration of the key 
management personnel (Executive Committee excluding Directors) of the Group is set out below:      
2011 
£’000
2010 
£’000
Salaries and other short-term benefits 1,086 1,269
Post-employment benefits 29 22
Share-based payments 186 4
1,301 1,295
From time to time the Group makes purchases on behalf of a major shareholder, Bill Adderley, and sells fully depreciated vehicles to him 
that the Group no longer requires. These amounts are billed based on normal market rates for such supplies and payable under normal 
payment terms. No balances remained unsettled at either period end. The aggregate value of these transactions in the year ended 
2 July 2011 was £1,750 (2010: £766).
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
There are no material post-balance sheet events.
  74 Dunelm Group plc Annual report and accounts 2011
Financial statements
 Note
2011 
£’000
2010 
£’000
Non-current assets
Investment in subsidiaries 4 46,719 46,134
Deferred tax asset 5 655 630
Total non-current assets 47,374 46,764
Current assets
Trade and other receivables 6 89,886 47,910
Current tax asset 591 –
Total current assets 90,477 47,910
Total assets 137,851 94,674
Current liabilities 
Trade and other payables 7 (286) (855)
Liability for current tax – (102)
Total current liabilities (286) (957)
–
Total liabilities (286) (957)
Net assets 137,565 93,717
Capital and reserves
Issued capital 10 2,015 2,010
Share premium 681 580
Non-distributable reserves 1,564 979
Capital Redemption Reserve 43,155 43,155
Retained earnings 90,150 46,993
Equity shareholders’ funds 137,565 93,717
The financial statements on pages 74 to 83 were approved by the Board of Directors on 15 September 2011 and were signed on its behalf by:
David Stead
Director
15 September 2011
Company number 4708277
Parent Company statement of financial position
As at 2 July 2011 75 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Corporate governance Financial statements
          
52 weeks 
2011 
£’000
52 weeks 
2010 
£’000
Profit before tax 59,190 38,922
Adjusted for:
Net financing costs (2,061) (2,390)
Operating profit 57,129 36,532
Operating cash flows before movements in working capital
Decrease in receivables (41,976) 16,200
(Decrease)/increase in payables (574) 266
Net movement in working capital (42,550) 16,466
Investment income (60,000) (40,000)
Share-based payments expense 614 935
Cash flows from operating activities (44,807) 13,933
Dividends received 60,000 40,000
Tax paid (236) –
Interest paid (29) (71)
Interest received 2,090 2,454
Net cash generated from operating activities 17,018 56,316
Cash flows from financing activities
Proceeds from issue of share capital 101 244
Proceeds from issue of treasury shares – 642
Proceeds from bank loan – 10,000
Repayment of bank loan – (10,000)
Return of capital – (43,155)
Dividends paid (17,119) (14,029)
Net cash flows utilised in financing activities (17,018) (56,298)
–
Net increase in cash and cash equivalents – 18
Cash and cash equivalents at the beginning of the period – (18)
Cash and cash equivalents at the end of the period – –
Parent Company statement of cash flows
For the 52 weeks ended 2 July 2011 76 Dunelm Group plc Annual report and accounts 2011
Financial statements
      
   
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 4 July 2009 2,008 346 43,155 – 616 63,068 109,193
Profit for the financial year – – – – – 39,205 39,205
Issue of share capital 2 234 – – – – 236
Treasury shares reissued in respect 
 of share option schemes – – – – – 649 649
Issue of B shares as bonus issue 43,155 – (43,155) – – – –
Redemption of B shares for cash (43,155) – – –  – – (43,155)
Creation of capital redemption reserve – – – 43,155 – (43,155) –
Share-based payments – – – – 363 935 1,298
Deferred tax on share-based payments – – – – – 284 284
Current corporation tax on share 
 options exercised – – – – – 36 36
Dividends – – – – – (14,029) (14,029)
Total transactions with owners, recorded
 directly in equity 2 234 (43,155) 43,155 363 (55,280) (54,681)
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
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 2 July 2011 77 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Corporate governance Financial statements
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. 
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. 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.
Accounting policies 78 Dunelm Group plc Annual report and accounts 2011
Financial statements
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 9  Revised IFRS 9  – Financial Instruments
IFRS 13 Revised IFRS 13  – Fair value measurement
IAS 12  Revised IAS 12  – Deferred tax
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 79 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Corporate governance Financial statements
1 Income statement
The Company made a profit after tax of £59,385,000 (2010: £39,205,000). 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 46, and share-based payments details in note 20 on pages 70 to 72.
3 Dividends
All dividends relate to the 1p Ordinary Shares.
2011 
£’000
2010 
£’000
Final for the period ended 4 July 2009 – paid 4.0p – (8,008)
Interim for the period ended 3 July 2010 – paid 3.0p – (6,021)
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) –
(17,119) (14,029)
The Directors are proposing a final dividend of 8.0p per Ordinary Share for the period ended 2 July 2011 which equates to £16.1m.  
The dividend will be paid on 16 December 2011 to shareholders on the register at the close of business on 25 November 2011. 
4 Investments
Shares in subsidiary undertakings.
Restated 
£’000
As at 4 July 2009 45,771
Share-based payments 363
As at 3 July 2010 46,134
Share-based payments 585
As at 2 July 2011 46,719
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
2011 
£’000
2010 
£’000
Employee benefits 655 630
Notes to the Parent Company financial statements
For the 52 weeks ended 2 July 2011 80 Dunelm Group plc Annual report and accounts 2011
Financial statements
5 Deferred tax assets continued
The movement in deferred tax assets is as follows: 
Balance at 
4 July 2009 
£’000
Recognised in 
income 
£’000 
Recognised in 
equity 
£’000 
Balance at 
3 July 2010 
£’000
Employee benefits 202 144 284 630
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
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
2011 
£’000
2010 
£’000
Amounts owed by subsidiary undertakings 89,848 47,870
Prepayments and accrued income 38 29
Other taxation and social security – 11
89,886 47,910
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
2011 
£’000
2010 
£’000
Trade payables 39 15
Accruals and deferred income 196 820
Other taxation and social security 31 –
Other creditors 20 20
286 855
8 Interest bearing loans and borrowings
2011 
£’000
2010 
£’000
Bank overdraft – –
– –
On 26 September 2006 the Company entered into a £50m revolving credit facility which is repayable in full on 26 September 2011. The facility 
is sub-divided into two elements: a £40m facility and a £10m facility. The £10m facility was cancelled on 26 May 2009. The £40m facility was 
cancelled on 30 December 2010.
Interest was payable on the £40m facility at the rate of LIBOR plus 0.35%.
The facility was guaranteed by the Company and its subsidiaries.
On 7 February 2011 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.
Notes to the Parent Company financial statements continued
For the 52 weeks ended 2 July 2011 81 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Corporate governance Financial statements
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 2 July 2011 and 3 July 2010.
        
2011 
Carrying 
value 
£’000
2011 
Fair value 
£’000
2010 
Carrying 
value 
£’000
2010 
Fair value 
£’000
Subsidiary loans 89,848 89,848 47,870 47,870
Total financial assets 89,848 89,848 47,870 47,870
Trade payables (39) (39) (15) (15)
Total financial liabilities (39) (39) (15) (15)
Net financial assets 89,809 89,809 47,855 47,855
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:
2011 
£m
2010 
£m
Sterling
–
–
– –
10 Share capital
       
 
Number of ordinary shares 
of 1p each 
2011
Number of B shares 
of 21.5p each 
2010
Number of ordinary shares 
of 1p each 
2010
In issue at the start of the period 201,040,148 – 200,791,400
B shares issued via a bonus issue – 200,723,131 –
B shares redeemed in the year – (200,723,131) –
Issued during the period in respect of share option schemes 449,960 – 248,748
In issue at the end of the period 201,490,108 – 201,040,148
Proceeds received in relation to shares issued during the period were £101,000 (2010: £238,000). 
     
     
2011 
number 
of shares
2011
 £’000
2010 
number 
of shares
2010 
£’000
Ordinary Shares of 1p each 
Allotted, called up and fully paid 201,490,108 2,015 201,040,148 2,010
The holders of the Ordinary Shares are entitled to receive dividends as declared and are entitled to one vote per share. 82 Dunelm Group plc Annual report and accounts 2011
Financial statements
11 Treasury shares 
2011 
number 
of shares
2011 
£’000
2010 
number 
of shares
2010 
£’000
Outstanding at beginning of year 99,628 128 837,135 1,301
Reissued during the period in respect of share option schemes (99,628) (128) (737,507) (1,173)
Outstanding at end of year – – 99,628 128
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 reissued 99,628 (2010: 737,507) treasury shares for a total consideration of £Nil (2010: £641,843).
The Company has the right to reissue the remaining treasury shares at a later date.
12 Share-based payments
As at 2 July 2011, 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 2 July 2011.
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
June 
2008 
grant
Fair value at measurement date 145.8p 65.6p
Exercise price 420.0p 137.0p
Expected volatility (weighted average volatility used in modelling 
– based on historical volatility of comparable quoted companies) 36% 35%
Option life (weighted average life used in modelling) 3 years 3 years
Expected dividends 2.5% 8.7%
Risk-free interest rate 1.7% 4.8%
The number and weighted average exercise price of options under the GSOP is as follows:
Weighted 
average 
exercise price 
2011
 Number 
of shares 
under option 
2011 
Weighted 
average 
exercise price 
2010 
Number 
of shares 
under option 
2010
Outstanding at beginning of year – – – –
Exercised during year – – – –
Outstanding at end of year – – – –
Notes to the Parent Company financial statements continued
For the 52 weeks ended 2 July 2011 83 Dunelm Group plc Annual report and accounts 2011
Business overview      Business review Corporate governance Financial statements
12 Share-based payments continued
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 46.
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
December 
2010
September 
2009
September 
2008
Share price at date of grant 500.0p 500.0p 316.0p 149.0p
Discount factor, based on dividend yield of 2.5% to vesting date 0.881 0.927 0.913 0.889
Fair value of option 440.6p 463.4p 288.5p 132.5p
The number and weighted average exercise price of options under the LTIP at 2 July 2011 is:
Weighted 
average 
exercise price 
2011
 Number 
of shares 
under option 
2011
Weighted 
average 
exercise price 
2010 
Number 
of shares 
under option 
2010
Outstanding at beginning of year – 964,923 – 1,006,193
Granted during year – 387,922 – 209,164
Exercised during year – (317,922) – (155,270)
Lapsed during year – – – (95,164)
Outstanding at end of year – 1,034,923 – 964,923
The total expense recognised in the income statement arising from share-based payments is as follows:
2011 
£’000
2010 
£’000
LTIP 614 935
614 935
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: 
2011
£’000
2010
£’000
Cash paid to Group undertakings (20,303) (69,653)
Cash received from Group undertakings 192 10,997
Dividends received 60,000 40,000
Net interest receivable 2,090 2,454
  84 Dunelm Group plc Annual report and accounts 2011
Financial statements
Advisers
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 Aspect House
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 Tel: 0871 384 2030
Financial Public Relations MHP Communications
 60 Great Portland Street
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 Tel: 020 3128 8100 Dunelm is a fast growing specialist out-of-town 
homewares retailer providing a comprehensive 
range of products to a wide customer base, 
under the brand name Dunelm Mill
The Group’s ‘Simply Value for Money’ 
proposition combines market-leading choice, 
great prices, reliable quality, strong product 
availability and friendly and knowledgeable 
service.
Contents
Business overview
 1 Highlights
 2 Business overview
Business review
 8 Chairman’s statement
10 Chief Executive’s review
16 Finance Director’s review
20 Key risks and uncertainties
Governance
22 Letter from the Chairman
24 Directors
26 Directors’ report and business review
30 Corporate governance report
34 Audit Committee report
36 Nomination Committee report
38  Letter from the Chair of the 
Remuneration Committee
39 Remuneration report
47 Corporate social responsibility
51 Statement of Directors’ responsibilities
Financial statements
52 Independent Auditor’s report
53 Consolidated income statement
54  Consolidated statement of 
comprehensive income
55  Consolidated statement of financial 
position
56 Consolidated statement of cash flows
57  Consolidated statement of changes  
in equity
58 Accounting policies
62  Notes to the annual financial  
statements
74 Parent Company financial statements
84 Advisers
FSC 
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Dunelm Group plc Annual report & accounts 2011
www.dunelm-mill.com
Tel: 0116 264 4356
Email: investorrelations@dunelm-mill.co.uk