N Brown Group plc 
Annual Report and Accounts 201 2
FREEDOM 
TO Young (30-45)
fashionworld.co.uk
simplybe.co.uk
simplybe.com
simplybe.de
simplybe.eu
simplyyours.co.uk
jacamo.co.uk
ﬁgleaves.com
classicconﬁdence.co.uk
vivaladiva.com
thebrilliantgiftshop.co.uk 
naturallyclose.co.uk
Midlife (45-65)
jdwilliams.co.uk
ambrosewilson.com
marisota.co.uk
oxendales.com 
oxendales.ie
ﬁftyplus.co.uk
premierman.com
shoetailor.com
shapelyﬁgures.com
classicdetail.co.uk
homeshoppingdirect.com
discountworld.com
houseofbath.co.uk
crazyclearance.co.uk
feelgoodessentials.co.uk
williamsandbrown.co.uk
thatsmystyle.co.uk
fabrici.com
highandmighty.co.uk
Elderly (65+)
julipa.com 
heathervalley.com
specialcollection.com
nightingales.com
grayandosbourn.co.uk
Our Websites
FASHION’S AT YOUR FINGERTIPS 01 N Brown Group plc Annual Report & Accounts 2012
Technology is a wonderful thing, as our 2012 
results prove. And even though, like most other 
retailers, gross margins have dipped, our core 
catalogue business remains strong and we’re 
one of the few with a higher turnover. We have 
delivered like-for-like sales growth. 
With new services such as nominated day 
delivery, and technology developments, including 
mobile-optimised checkouts, it’s no wonder 50% 
of our business is now online to the tune of a 
£377million online turnover – with growth across 
all brands.
Exciting things are happening on the high street 
too. City analysts and retail and fashion journalists 
have praised our new Simply Be stores, and 
four more High & Mighty stores have hit the high 
street. Simply Be is doing us proud in America 
too. Our US business model remains promising 
with good margins and 74,000 new customers 
joined us last year. 
Looking ahead, we’ll continue to focus on trading 
in tough economic conditions. We’ll improve the 
value for our customers, carry on developing  
and differentiating our brands, and building on  
the success of our celebrity endorsements.  
We’ll also be strengthening our e-commerce and 
online capabilities, using technology to create 
new ways to keep fashion at people’s ﬁngertips.
Introduction
02 Financial Highlights 2012
03 Five Year History
04 Designs on the High Street
06 We’re Breaking Boundaries
08 Chairman’s Statement
10 Chief Executive’s Review
14 Financial Review
16 Directors and Ofﬁcers
18 Directors’ Report
24 Corporate Governance Report 
29 Remuneration Report
39 Independent Auditor’s Report  
 – Group Accounts
40 Consolidated Income Statement
40 Consolidated Statement of 
 Comprehensive Income
41 Consolidated Balance Sheet
42 Consolidated Cash Flow Statement
42 Reconciliation of Operating Proﬁt to 
 Net Cash from Operating Activities
43 Consolidated Statement of Changes 
 in Equity
44 Notes to the Group Accounts
68 Independent Auditor’s Report  
 – Company Accounts
69 Company Balance Sheet
70 Notes to the Company Accounts
IBC Shareholder Information 02 N Brown Group plc Annual Report & Accounts 2012
2012
Financial Highlights 2012 2011
Revenue £753.2m £718.8m
Operating proﬁt £102.0m £102.6m
Adjusted proﬁt before taxation* £95.6m £98.2m
Proﬁt before taxation £96.9m £94.5m
Adjusted earnings per share** 28.91p 27.02p
Earnings per share 29.28p 26.04p
Dividends per share 13.03p 12.41p
Net assets £402.3m £360.4m
Net asset value per share 141.9p 128.5p
Gearing 48% 50%
*Excluding fair value adjustments to financial instruments.
**See note 11 on page 52.   03 N Brown Group plc Annual Report & Accounts 2012
 08 09 10 11 12
 
Dividends per share (p)
9.06
9.19
10.79
12.41
13.03
 08 09 10 11 12
*Excluding fair value adjustments to financial instruments.
**See note 11 on page 52.
Revenue –
Continuing operations (£m)
Five Year History
610.9
662.5
690.0
718.8
753.2
 08 09 10 11 12
Operating proﬁt – 
Continuing operations (£m)
Pre-tax proﬁt* – 
Continuing operations (£m)
91.8
95.5
97.6
102.6
102.0
 08 09 10 11 12
76.2
82.7
93.1
98.2
95.6
 08 09 10 11 12
Adjusted earnings per share**  
– Continuing operations (p)
20.27
21.96
24.77
27.02
28.91
 
Net assets (£m)
243.2
283.0
319.0
360.4
402.3
 08 09 10 11 12 04 N Brown Group plc Annual Report & Accounts 2012
We are a multi-channel 
business. We’re number one 
in the online and mail order 
market in our sector, and we 
want to see similar success out 
there on the high street, where 
a large proportion of the plus-
size market still shops.
 
But our sights are set higher 
than just ‘more stores’. We’re 
focused on using the high street 
as another strand in our multi-
channel offer, and an extra boost 
for our overall brand strength.
So much in store  
It’s not just city analysts, and 
fashion and retail journalists that 
love our new Simply Be stores, 
launched last year in Liverpool 
and Bury. Customers do too. 
Remember store assistants? 
We now have style advisors, 
highly trained to advise on our 
ranges and on t. nd remember 
cubicles with a curtain? Our 
changing booths are more 
thoughtfully and spaciously 
designed with an anteroom 
separate from the rest of  
the store.
Perhaps the most exciting part 
of our stores, technologically 
speaking, are the Magic Mirrors. 
These fantastic innovations mean 
customers can get a second  
 or third, fourth or fth opinion  
on their out ts by sending  
photos out to social media sites  
including Facebook and Twitter. 
DESIGNS ON 
THE HIGH  
STREET 05 N Brown Group plc Annual Report & Accounts 2012
Best of both worlds 
Having great reasons to shop 
both online and in-stores means 
customers are doing just that – 
shopping in both places rather 
than one or the other, as well  
as making Simply Be known  
to greater numbers of high  
street shoppers.
We’re rolling out a further 
 ve Simply Be stores in   
in Doncaster, Teesside,  
the Metro Centre in Gateshead, 
Leicester, plus Manchester 
 rndale. Once we’ve opened 
these stores, we’ll look at the 
potential for more. High & Mighty 
stores are also multiplying, with 
another four stores to add to the 
 we already have.
Star turns  
Big names are still big business 
for us. Our new Grazia range  
and a collection designed by  
the celebrated Zandra Rhodes 
are performing well. Freddie 
Flintoff has designed a range  
for Jacamo, and the Gok Wan 
lingerie range continues to be  
a tremendous success.  
Claire Sweeney is our ambassador 
for Fashion World and rlene 
Phillips for Marisota. Endorsements 
like these increase our brands’ 
credibility, generate awareness 
and help position us where we 
want to be: at the front of 
people’s minds today, and 
tomorrow too.  06 N Brown Group plc Annual Report & Accounts 2012
Our online business has grown 
from 45% last year to over 
50%, which adds up to a £377 
million online turnover. This 
growth has been all across the 
board. Our younger titles have 
a growth curve that level out at 
67% online, whereas our mid-
life and older titles are growing 
and have reached 41%.
 ll our brands now have mobile-
optimised checkouts, with the 
added convenience of nominated 
and next-day delivery. This is 
especially handy for Christmas 
shopping, where customers could 
order up to pm on December  
for a Christmas Eve delivery.  
 nd new and improved ‘My 
 ccount’ service facility makes 
it easier for customers to 
manage their accounts online, 
all complemented by the 
convenience of our  
 exible payment plans.
A new role for catalogues 
With so much online growth,  
we can see our catalogues  
taking on more of a browsing 
role in the future. So that when 
customers see something  
they like, they can go online  
to see the item in more detail  
to make a more informed  
choice – for example, more  
great quality images, catwalk 
shows, detailed descriptions and 
customer reviews (already active 
on our main sites .
Our American dream  
Looking to merica, we’re happy 
to say that things stateside are 
looking encouraging, with great 
margins and a return rate at sub 
 . Our Simply Be customers 
are full of praise for the ranges 
and our offer in general. With 
 , new customers last year, 
we can say, with great pride, that 
we’ve found our niche in merica.
 
A rst for igleaves  
We’re very proud to say that 
Figleaves generated its very rst 
pro t since it started trading. 
Onwards and upwards.
WE’RE  
BREAKING 
BOUNDARIES FREEDOM 
TO
Shop 08 N Brown Group plc Annual Report & Accounts 2012
Chairman’s Statement
Financial Results
Total group revenue increased by  
4.8% to £753.2m. Excluding the non-
comparable periods for newly opened 
stores, the acquisition of Figleaves and 
the 53rd week, like-for-like sales grew  
by 1.6%. The combination of rising  
input prices and falling disposable 
income inevitably subdued demand  
from our hard-pressed customers,  
so as anticipated we reduced prices  
and increased promotional activity  
to stimulate demand. This led to a  
0.8% decline in the rate of gross  
margin to 53.0%. 
Operating profit is slightly down by 
£0.6m to £102.0m, after absorbing 
£5.2m of losses on opening the Simply 
Be concept stores and expanding 
internationally (2011, £2.3m). However  
it does include the benefit of the 53rd 
week this year which has contributed 
revenue of £12.9m and operating profit 
of £2.9m. Profit before taxation is up by 
2.5% to £96.9m (2011, £94.5m) although, 
once the fair value adjustments to foreign 
exchange contracts are excluded, the 
profit before taxation is £95.6m (2011, 
£98.2m). Adjusted earnings per share 
are up by 7.0% to 28.91p, benefitting 
from a lower tax charge, primarily due  
to the utilisation of tax losses acquired 
with Figleaves. The board is proposing  
a final dividend of 7.74 pence per share, 
up 5.0% on last year and in line with  
the increase in the interim dividend.  
This gives a total dividend for the year  
of 13.03 pence, covered 2.2 times.
Net borrowings at 3 March 2012 were 
£192.5m (2011, £180.9m). As expected 
there was a higher level of capital 
expenditure to drive internet sales  
and set up the pilot Simply Be stores.  
Net finance costs have increased from 
£4.4m to £6.4m, covered 16 times by 
operating profit. The rise is due to the 
higher margin payable on £350m of 
bank facilities which have been renewed 
during 2011 for a further five years. 
Gearing has fallen from 50% to 48%  
on net assets which have risen by  
11.6% to £402.3m.
Trading Highlights
During the year the key trading highlights 
have been:

of total sales, following 16% growth to 
£377m during the year.

investment across our brand portfolio 
based on the results of recruitment 
campaigns, mailings and online 
promotions. The strongest growth was 
from the Jacamo, Marisota and House 
of Bath customer brands.
We are pleased to have delivered a solid financial 
outcome for the 53 weeks ended 3 March 2012, 
especially in light of the difficult economic conditions 
for our customers. For the first time online sales 
have reached 50% of total sales and we have  
made good progress in developing a growth 
platform for the business.
PROFITS AND 
PROGRESS IN  
TOUGH TIMES  09 N Brown Group plc Annual Report & Accounts 2012
The board is proposing a ﬁnal dividend of 7 .74 pence 
per share, up 5.0% on last year and in line with the 
increase in the interim dividend. This gives a total 
dividend for the year of 13.03 pence, covered 2.2 times.

Figleaves and High & Mighty delivering 
results. Figleaves made its first ever 
profit in 13 years of trading and  
High & Mighty opened 3 new stores 
whilst significantly reducing its losses 
to £0.2m.
 
the USA where sales increased  
from £0.8m to £4.8m. We deliberately 
slowed the rate of customer growth 
in Germany until we had reduced the 
rate of returns which improved by  
1 percentage point to 60%.

stores, and four more since the  
year-end, to test whether a full  
multi-channel operation can drive 
sufficient incremental sales to justify 
the investment and fixed costs.  
We will evaluate the performance  
of these stores towards the end  
of 2012 based on the uplift of sales  
from all channels in the postcode 
region around the store.

propositions in footwear and 
menswear to deliver growth of 6% 
and 15% respectively. The sales of 
ladieswear were up 2%.
Corporate Social Responsibility
The role of business in society has been, 
and remains, clearly in the spotlight. At 
N Brown Group we aim for continuous 
improvement in all areas from ethical 
sourcing of product through to greater 
involvement in our local community.  
A description of some of our initiatives 
are set out in the directors’ report.
Current Trading and Outlook
Sales for the 8 weeks to 28 April 2012 
are 1.0% up on last year and 0.6% up 
on a like-for-like basis. The year-on-year 
weather conditions and the earlier Easter 
break make comparisons complicated 
but overall the pattern of trading from 
the second half is continuing, with 
customers reluctant to spend unless 
the product or promotional offer is 
compelling. Consumer confidence 
remains fragile but we believe the 
situation will improve in the second 
half of the year as inflation and income 
growth become more balanced and  
our own comparatives become softer. 
In a weak economic environment any 
improvement to our competitive position 
must therefore come through our own 
actions. We believe that we have the 
required plans and platform in place  
for growth in these market conditions.
We will be offering customers lower 
prices in the autumn and will look to be 
more aggressive on key value lines. Our 
stock levels are currently well balanced 
and this will reduce the need for the level 
of discounting and promotional offers 
that were required in the second half 
last year to clear some excess stocks. 
Our online trading strategy still has 
much further to go and we can exploit 
the features and functionality we have 
already developed to deliver rich and 
relevant content, which will drive both 
incremental sales and cost savings. 
We recognise the increasing importance 
of strong brands in the online channel, 
high street stores and international 
markets and we will be concentrating our 
marketing spend on fewer of our brands 
than has previously been the case.
Customer recruitment was strong in 
the second half and we are investing 
extra resources this year to support 
this growth, in addition to campaigns 
to reactivate more of our lapsed 
customers. One of the aims of the 
multimedia Simply Be stores is to reach 
customers who are in our target market 
but prefer to shop on the high street, 
rather than online, and early indications 
are that a high proportion of store visits 
are from women who have not shopped 
with us previously.
 
International expansion is another key 
strategic development. We will focus on 
the USA, and we have now appointed 
local digital marketing agencies to boost 
Simply Be’s online recruitment and 
social media activities there. We will also 
trial both Marisota and Jacamo, initially 
on the Simply Be website, and look to 
boost Figleaves’ international sales.
Market conditions remain challenging 
but we have a competitive proposition 
for the middle-aged and plus-size 
customer groups, which have excellent 
long-term growth prospects. The 
continuing development of our unique 
product ranges, online trading capability 
and the expansion into stores and 
international markets should keep  
N Brown in the leading group of  
clothing retailers.
The ability of the business to rapidly 
adapt to changing market circumstances 
is one of its enduring qualities and I 
would like to thank all stakeholders, 
including suppliers and the trade union, 
for their contribution, but especially all 
our staff who have been both innovative 
and hard working to deliver record levels 
of service quality to our customers 
throughout the year.
Lord Alliance of Manchester, CBE 10 N Brown Group plc Annual Report & Accounts 2012
Chief Executive’s Review
Revenue
Revenue growth has been delivered 
through the core UK home shopping 
business supplemented by international 
expansion and new store openings. For 
the 53 weeks to 3 March 2012 revenue 
is up in total by 4.8% to £753.2m, and 
by 1.6% on a like-for-like basis which 
excludes the impact of newly opened 
stores, the acquisition of Figleaves in 
June 2010 and the 53rd week.
Customer Groups
Target Age Revenue £m % Change
30-50 271 +13
Over 50 482 +1
Total 753 +5
N Brown Group has a very distinctive 
customer base, comprising over 6 
million individuals with an average age 
of 58, and an average dress size of 18. 
During the year we saw a small decline 
in the number of active established 
customers but a combination of 
higher selling prices and promotional 
campaigns led to a 4% increase in 
average sales per customer. Sales from 
new customers rose by 2% for the year 
as a whole, due to improved recruitment 
campaigns in the second half.
Under 50 Customer Group
The brands in this group grew at a faster 
rate than those targeted at the 50 plus 
segment, due to the development of 
Simply Be, Jacamo and Figleaves.
Simply Be is the largest single brand in 
the group with sales of over £100m from 
all channels and geographies. The focus 
is on fashionable and flattering clothing 
in sizes 14-32 specifically designed for 
the plus-size woman. These customers 
often have difficulty finding clothes to fit 
in other retail stores, whether in the UK 
or elsewhere, which is why we chose the 
Simply Be brand for both our international 
expansion and high street store trial.
Jacamo is targeted at the brand-
conscious thirty-something male who 
either wants the convenience of online 
shopping or struggles to find branded 
clothing in his size. Good response  
rates to the improved product offer, 
coupled with significant numbers of  
new customers, led to sales increasing 
by over 50%.
Figleaves has had an excellent year 
moving into profit for the first time in its 
13 year history after radically pruning its 
cost base. Sales from Figleaves’ own 
brand rose by 20% including the new 
FGL menswear range, and the range 
extensions allied to lingerie, such as 
swimwear and pyjamas. 
The other major brand in this section, 
Fashion World, whose customers’ 
are primarily from the lower socio-
demographic groups, had flat sales  
year on year.
50 Plus Customer Group
The midlife and older customers 
aged 50 and above suffered from a 
combination of high inflation, particularly 
for food and energy costs, and a low 
return on their savings. Two thirds of 
these customers are over 65 and have 
relatively fixed incomes. Consequently 
there was a contrasting performance 
between the brands targeted at the 
younger end of this category, such as 
Marisota, and those at the older end, 
such as Heather Valley and Special 
Collection.
Marisota increased its revenues by 
24% targeting the customers aged 
about 50 with a catalogue and website 
focused on solutions for problems 
with the fit of clothing and footwear. 
For example we promote our ‘Magi’ 
range which, using the latest design 
and fabric technologies, can create 
a smoother body shape. Similarly we 
have developed our ‘Legroom’ footwear 
range which now has five different calf 
fittings for long-line ladies boots. The 
same is also true of our lingerie range 
which focuses on the fitting and comfort 
problems customers have, which, as an 
example, led to the development of the 
world’s largest strapless bra, available 
up to size 48K.
Our longest established catalogue 
is distributed under the JD Williams, 
Ambrose Wilson, Oxendales, Fifty Plus 
and That’s My Style brands which 
account for 39% of group revenue. 
Sales were slightly down even though 
the average sales per customer 
were up. However there was a small 
proportion of customers who resisted 
all our promotional activity, and we 
will especially target them in 2012 to 
reactivate their purchasing activity.
The group has continued to make progress 
this year despite a significant decline in our 
customers’ discretionary spending power.  
This has necessitated active management  
of our selling prices, marketing investment  
and overhead base across all of our brands 
portfolio to deliver this outcome. 11 N Brown Group plc Annual Report & Accounts 2012
The group of brands targeting 
customers with an average age of 70 
had mixed fortunes, and in aggregate 
sales were down by 7%. Gray & 
Osbourn, targeting the more affluent 
60+ customer, increased full margin 
sales but overall revenue was lower 
as reduced stock levels led to fewer 
discounted sales. House of Bath, which 
sells unusual items for the home and 
garden, had an excellent year with sales 
up by 12%, and Julipa also did well.
Product Groups
 Revenue % of %
Category £m Total Change
Ladieswear 365 48 +2
Footwear 84 11 +6
Menswear 95 13 +15
Home & Leisure 209 28 +5
Total 753 100 +5
During 2011 the group was operating in 
product sectors which were amongst 
the most challenging in the retail 
marketplace. The plus-size clothing 
sector did not grow at all and the sales 
of home and leisure goods were also 
weak, particularly for big ticket items. 
Against this backdrop we can be 
reasonably satisfied with a 1.6% like- 
for-like sales growth.
Ladieswear accounts for about half the 
group’s revenue, and was up by 2% for 
the year as a whole. Due to the cotton 
price bubble in 2010 input costs for 
clothing in 2011 were up by 9% on 
average, which we passed through into 
selling prices. Customers were only 
being enticed to purchase if the product 
or the price was compelling. Consequently 
we had strong sales on lines where we 
had new designs or product with unique 
features and the designer and celebrity 
endorsed ranges but sales of basic 
casual clothing were down.
Within ladieswear lingerie sales were up 
7%, partly due to Figleaves’ performance, 
but we also took market share in bras, 
swimwear and nightwear.
Footwear saw sales growth of 6%. 
Core footwear sales benefited from an 
improved range of styles and fittings but 
we also had strong growth from men’s 
footwear, sports footwear and Viva La 
Diva, our online pure play which sells 
third party brands as well as our own.
Menswear continues to be our fastest 
growing product sector. Revenue was 
up by 15%, primarily driven by the 
success of Jacamo and the expansion 
of High & Mighty’s store network. 
We have recruited Freddie Flintoff as 
Jacamo’s brand ambassador and his 
range is selling well. More branded 
menswear suppliers are manufacturing 
their ranges in larger sizes, exclusively 
for Jacamo. In addition both Premier 
Man and Williams and Brown are doing 
well, as is our sportswear range.
Home and leisure sales were up by 5% 
in total, although there was a significant 
variation within the sub-ranges. Gifts 
and toys were 18% up as we promoted 
the Brilliant Gift website throughout 
the year, rather than just at Christmas. 
Electrical and homewares also had good 
growth, helped by the availability of 
credit on customers’ personal accounts. 
However furniture, bedding and home 
decor were all down as customers 
deferred home improvement.
Multi-channel
Online sales are now the majority of 
the group sales, as a 16% increase in 
online sales to £377m enabled us to 
pass the 50% milestone. The increasing 
proportion of new customers recruited 
on our websites, the improved quality 
of our email campaigns and improved 
website functionality all contributed to 
this growth. We are the market leader for 
online sales for plus-size womenswear, 
menswear for the fifty plus age group 
and many other categories. Sales from 
product lines only available online, most 
of which are shipped directly to our 
customers by the suppliers, increased 
by 29%.
This increase in online sales improves 
profitability as web orders have a 25% 
higher value than telephone orders and 
costs reduce in the contact centre as 
volumes fall. Telephone order volumes 
have fallen 17% this year, and telephone 
enquiries and payment calls are down 
21% as customers’ switch to using our 
redesigned online ‘My Account’ facility.
Despite the increasing share of all retail 
sales transacted on or influenced by 
the web the vast majority of clothing 
and footwear sales are still conducted 
in high street stores. This is even true 
for the plus-size market which led us to 
trial some Simply Be stores to see if we 
could profitably gain more market share 
for our most fashionable clothing range. 
We opened stores in Liverpool and 
Bury in autumn 2011 and in-stores sales 
totalled £0.7m by the year-end. We will 
evaluate the stores based on the uplift 
of sales from all channels in the post 
codes influenced by the store location. 
Early indications are that there is an 
uplift in the level of online purchases in 
the catchment area. In the last month 
we have opened stores in Gateshead, 
Teesside, Leicester and Doncaster and  
a Manchester store is scheduled to open 
in September. This small portfolio of 
stores is focused on five major shopping 
centres, including one out-of-town retail 
park, plus two smaller towns so we can 
identify the ideal type of location, 
Adjusted earnings per  
share up 7.0% to
28.91p
Total dividend  
up 5% to
 13.03p
Group revenue  
up 4.8% to
£753.2m 12 N Brown Group plc Annual Report & Accounts 2012
Ladieswear sales  
up 2% to
£365m
Share of  
online sales pass
 50%
Menswear sales  
up 15% to
£95m
assuming further capital investment is 
justified by incremental sales.
High & Mighty was acquired out of 
administration in late 2009. Since then 
we have relocated the business to 
Manchester, re-platformed the website, 
relocated four stores, refurbished seven 
stores and opened six new stores, of 
which three were new in 2011/12. Total 
sales grew by 17% to £8.8m with like-
for-like sales up by 7%. Losses shrank 
from £0.8m to £0.2m and we would 
expect to move into profit in the  
current year.
International
We believe Simply Be’s fashionable 
plus-size clothing range will appeal  
to international customers, and have  
so far targeted Germany and the USA. 
Total sales were £8.4m (2011, £4.2m) 
with losses of £4.8m (2011, £2.3m).  
Our key target is the USA as the market 
opportunity for us is significant and 
the key performance indicators to 
date are favourable, with high gross 
margins and returns rates below 30%. 
Customer recruitment has been primarily 
through catalogue mailings to selected 
customer lists, supplemented by online 
recruitment through paid search and 
social media. The appointment of 
local digital agencies took longer than 
originally anticipated but they will be a 
key lever of growth in 2012.
Germany’s performance has previously 
been held back by high rates of product 
returns. A number of initiatives were 
implemented which have brought the 
rate down by 1% to 60%, although this 
is still too high. We limited the level of 
customer recruitment whilst we were 
making these changes.
We also have international sales for 
Oxendales in Ireland, a market which 
continues to be very challenging, and 
for Figleaves which has over 20% of its 
sales from overseas and an opportunity 
to grow them further.
Gross Margin and Credit
The overall rate of gross margin fell by 
0.8% to 53.0% with a reduced margin 
on product sales offset by an increase  
in net consumer credit income.
The sales of ladies clothing and 
footwear were impacted by the mild 
autumn weather and resulted in excess 
stocks of cold weather merchandise. 
As a consequence we offered more 
aggressive promotional discounts to 
customers who had not ordered and 
marked down prices to reduce inventory 
levels. Although this reduced the 
rate of gross margin by 2.2% we did 
successfully reactivate some dormant 
customers and limited the increase in 
year-end inventories to only 5.8%.
Income derived from our customers’ 
credit accounts performed well with 
revenue up 11.9% to £218.4m. Changes 
to credit policies and processes gave 
customers the options of paying their 
accounts off over a slightly longer 
period. This increased the gross margin 
rate from financial services income by 
1.4% with the increased interest income 
partly offset by a rise in the rate of 
bad debt charge, which increased as 
a percentage of revenue from 7.4% to 
7.7%. The arrears profile of the debtor 
book has improved during the year.
Overheads
The business has successfully controlled 
costs during volatile and inflationary 
trading conditions. An increase in 
average order values led to improved 
collation and a lower volume of parcels 
despatched. This offset much of the 
increases for fuel and payroll limiting the 
overall rise in distribution costs to 3.0%. 
Selling and administration costs rose by 
4.8%, in line with group turnover, but this 
included heavy investment in customer 
recruitment, both at home and abroad, 
and high rates of inflation for postage, 
paper and print.
Customer Service
Exemplary customer service is essential 
in difficult economic circumstances to 
maintain customer loyalty and in this 
respect we had an excellent year. The 
ratio of enquiries to orders improved 
further and we had the fastest delivery 
and the lowest ever levels of claims for 
goods not received. In addition our 
bi-annual surveys of customer satisfaction 
showed record approval levels.
Outlook and Current Trading
The strategic plan for the business 
is designed to develop our multi-
channel trading performance in the 
UK which will then provide a platform 
for international expansion. There are 
several components to this strategy 
which will be our key areas of focus 
during 2012/13.
Within the core home shopping business 
we will be concentrating our marketing 
investment on the key ladieswear and 
menswear brands plus the speciality 
propositions. We will improve our 
online trading capability and drive 
incremental sales which will allow us 
to reduce our mailing contacts. Our 
websites will be adapted to capitalise 
on the exponential growth of online 
access from mobile devices. We will 
review the attractiveness of further store 
openings relative to the capital outlay 
and we are testing Jacamo’s menswear  13 N Brown Group plc Annual Report & Accounts 2012
Footwear sales  
up 6% to
£84m
Home & Leisure  
sales up 5% to
 £209m
Online sales  
up 16% to
£377m
on the mezzanine floors of two Simply 
Be stores. Similarly we will testing the 
international potential of Marisota and 
Jacamo within the Simply Be website  
in the USA.
Traditionally we have dealt with 
customers who regarded it as normal 
to open a credit account even if it 
was just to try on the clothing before 
purchase. As the online audience 
becomes more diverse in its age and 
socio-demographic spread we will be 
testing simpler up-front payment options 
to determine whether this profitably 
increases the size of our customer base. 
We will also be providing more delivery 
options for our customers.
Revenue for the 8 weeks ended 28 April 
2012 shows an increase of 1.0%, and a 
like-for-like increase of 0.6%, excluding 
the sales from stores not open at this 
time last year. Consumer confidence is 
still low but the situation should improve 
later in the year as inflation and income 
growth rates start to converge. The 
recent spate of retail casualties will also 
free up some capacity in the market 
sectors in which we operate.
We have seen encouraging results from 
our Spring recruitment campaigns which 
will help to rebuild the 3% reduction 
in the active customer database we 
experienced last year. We also have 
a series of reactivation campaigns 
for lapsed customers planned. The 
second half of last year saw high levels 
of discounting activity to clear excess 
stocks both by ourselves and in the 
sector as a whole. We have bought less 
stock this year now that lead times have 
returned to normal from our suppliers 
and we expect a benefit in the rate of 
gross margin in the second half. The 
reduction in cotton and fabric prices  
will result in lower input prices in the 
autumn which we will pass on to our 
customers.
Our online capability was strengthened 
last year, both in systems functionality 
and personnel, and this will enable us  
to trade our websites even more 
effectively this year. We have already 
seen an increase of 11% in our online 
sales in March and April compared with 
last year.
The clear focus on our targeted 
customer and product groups, traded 
through multiple channels and to a  
wider geographic audience, supported 
by more credit and service options,  
will drive the business forward in the 
coming year.
Trading was extremely tough in 2011 but 
everyone in the business has risen to the 
challenges facing them. This resilience 
and our focused strategic plan leave 
N Brown Group well placed to make 
further progress this year.
Alan White 14 N Brown Group plc Annual Report & Accounts 2012
Group Trading Summary
In a difficult trading climate group sales 
increased by 4.8% to £753.2m (2011, 
£718.8m) but operating profit fell by 
0.6% to £102.0m (2011, £102.6m). 
Operating margins have fallen by  
70bps from 14.3% to 13.6% in the 
following areas:
Net operating margin last year 14.3%
Decrease in gross margin  -80bps
Decrease in operating costs +10bps
Net operating margin this year 13.6% 
The reduction in the rate of gross  
margin was due to a combination  
of lower product margins as a result  
of higher promotional discounting, 
improved financial income revenue 
offset by an expected increase in rate 
of charge for bad debts. Tight controls 
on costs generated a small margin 
improvement in operating costs. As a 
result, and together with an increase 
in group net finance charges from 
£4.4m to £6.4m, profit before taxation 
and fair value adjustments to financial 
instruments amounted to £95.6m (2011, 
£98.2m). The positive movement in 
the fair value of the group’s forward 
foreign currency contracts contributed 
a gain of £1.3m compared to a loss of 
£3.7m last year. The fair value of these 
forward contracts is based on external 
factors which are beyond the control of 
management. Profit before taxation was 
up 2.6% to £96.9m (2011, £94.5m).
Taxation
The effective rate of corporation tax for 
the year was 16.4% (2011, 24.1%), and 
arises from the recognition of tax losses 
amounting to £6.5m acquired with the 
Figleaves subsidiary and positions taken 
or settled on prior year initiatives. The 
effective tax rate for the year ahead is 
expected to return to a rate of 
approximately 23%.
Balance Sheet and Cashflow
Net assets increased by 11.6% 
to £402.3m at the year end (2011, 
£360.4m).
Capitalised expenditure for the year was 
£24.9m (2011, £22.1m) which included 
£5.0m on the High & Mighty and Simply 
Be concept stores. The majority of the 
remaining expenditure related to ongoing 
investment in our online systems.
We maintained our level of working 
capital in the year. Trade receivables 
at the year end had increased by 5.8% 
to £501.8m (2011, £474.5m), and stock 
levels by 5.8% to £82.6m (2011, £78.1m). 
The bad debt provision increased to 
£49.3m (2011, £45.1m) which equates  
to 8.9% (2011, 8.7%) of gross debtors.
The net pension position of the group’s 
defined benefit pension scheme has 
changed from a surplus of £3.3m in 
2011 to a small deficit of £1.0m at the 
year end. The movement predominately 
arises from a net actuarial loss of £6.2m 
together with net service costs of £1.5m 
offset in part by contributions of £3.4m.
Net cash generated from operating 
activities reduced slightly from £57.4m 
to £56.5m and after increased capital 
expenditure, finance costs and 
dividends, borrowings rose by £11.6m 
to £192.5m (2011 £180.9m). Gearing 
improved from 50% last year to 48%  
at the year end.
Key Financial Performance Indicators
The group employs a number of key 
performance indicators (KPIs) to monitor 
progress including;



accounts and their average debtor 
balance, which at the year end was 
1,449,000 (2011, 1,489,000) and £354 
(2011, £331) respectively.

groups (see page 10).




Risk and Uncertainties
There are a number of risks and 
uncertainties which could have an 
impact on the group’s long-term 
performance. These include:

climate and the impact it has on the 
provision of credit to our customers 
and their ability to maintain payment 
terms;
Financial Review
Net assets  
up 11.6% to
£402.3m
Bank loans in 
place until 2016
Gearing reduced to
 48%
Proﬁt before tax  
up 2.6% to
£96.9m 15 N Brown Group plc Annual Report & Accounts 2012

competitors;



information systems, warehousing or 
call centre facilities, which may arise 
from events beyond our control, and 
which could have a detrimental impact 
on sales and profit; and

in which the business operates, 
primarily with regard to the Financial 
Services Authority and the Office of 
Fair Trading.
The directors routinely monitor all  
these risks and uncertainties taking 
appropriate action to mitigate where 
necessary. Business continuity 
procedures are in place, together with  
a dedicated team assessing regulatory 
developments and ensuring that we  
treat our customers fairly. Regular 
reviews are carried out with all of our 
strategic partners. The board are also 
committed to the investment in systems 
and infrastructure to keep pace with  
new technology.
Treasury
During the year the group’s banking 
facilities have been renewed to support 
its ongoing trading and development 
activities. The group has committed 
borrowings of £370m of which £250m 
was utilised at the year end. The primary 
facilities are a £250m securitisation 
programme through an HSBC A-1/
P1 rated conduit that has a matching 
standby facility. This facility is in place 
until March 2016. Additionally, the group 
has two revolving credit loan facilities of 
£50m each with HSBC Bank plc and the 
Royal Bank of Scotland plc which also 
expire in March 2016. All current facilities 
in place at the year end are arranged 
at floating interest rates at margins 
which were favourably negotiated at 
the time of renewal. Where appropriate, 
exposure to interest rate fluctuations 
on indebtedness is managed by using 
derivatives such as interest rate swaps. 
There were no interest rate swaps used 
in the year.
Foreign exchange requirements for the 
purchase of stocks denominated in US 
dollars may be hedged for up to three 
years ahead to fix the costs of sterling. 
This hedging activity involves the use of 
spot, forward and option contracts. At 
the year end the group had outstanding 
forward foreign exchange contract 
commitments of $69m (2011, $70m).
Accounting Standards and  
Going Concern
Group accounting policies reflect 
current professional standards and 
related guidelines issued by the 
International Accounting Standards 
Board and are prepared in accordance 
with International Financial Reporting 
Standards as adopted for use in the 
European Union.
In determining whether the group’s 
accounts can be prepared on a going 
concern basis the directors consider  
the group business activities together 
with factors likely to affect its future 
development, performance, and financial 
position. These include cash flows, 
liquidity position, borrowing facilities  
and the principal risks and uncertainties 
relating to its business activities.  
These are set out within this report  
and discussed further in the  
Chairman’s Statement and the Chief 
Executive’s Review.
The group has considered carefully 
its cash flows and banking covenants 
for the next twelve months from the 
date of signing of the group’s audited 
financial statements. These have been 
appraised in the light of uncertainty 
in the current economic climate. 
Conservative assumptions for working 
capital performance have been used 
to determine the level of financial 
resources available to the company and 
to assess liquidity risk. The key trading 
risk identified by the directors for these 
assumptions is the impact that a further 
deterioration in the economic climate 
might have on the performance of the 
group’s sales and debtor book.
The group’s forecast and projections, 
after sensitivity to take account of all 
reasonably foreseeable changes in 
trading performance, show that the 
group will have sufficient headroom 
within its current loan facilities of £370m. 
These facilities have been renewed 
during the year and are committed  
until March 2016.
After making appropriate enquiries the 
directors have a reasonable expectation 
that the company and the group have 
adequate resources to continue in 
operational existence for the foreseeable 
future. Accordingly, we continue to 
adopt the going concern basis in the 
preparation of the annual report and 
accounts.
Shareholder Return
The share price of 274.7p at the start of 
the year has fallen to 238.8p at the year 
end giving a market capitalisation of 
£676.8m (2011, £770.3m). In addition the 
group’s five year performance measured 
by Total Shareholder Return compared 
with the FTSE Mid-250 index, of which 
the group is a member, show that we 
have underperformed the market in the 
last twelve months. A final dividend of 
7.74p (2011, 7.37p) per share has been 
recommended by the board giving a 
total dividend for the year of 13.03p 
(2011, 12.41p) per share, up by 5% and 
covered 2.2 times (2011, 2.2 times).
Dean Moore 16 N Brown Group plc Annual Report & Accounts 2012
Directors and Ofﬁcers
John McGuire (63) 
Non-executive Director a, b, c
Appointed a director in March 2004. Formerly 
Chairman of Corporate Banking for Royal Bank 
of Scotland Group in the North of England and 
Midland regions. Vice Chairman of Royal Bank 
of Scotland Pension Fund Trustee Ltd. Audit 
Chair of Stockport NHS Foundation Trust.  
Non-executive Director and Chairman of 
Investment Advisory Panel for North West 
Business Finance Ltd. Member General 
Assembly of The University of Manchester. 
Chairman of the audit committee.
Anna Ford (68) 
Non-executive Director a, b, c
Appointed a director on 1 March 2009.  
Non-executive director of J Sainsbury Plc,  
also Chair of their Corporate Responsibility 
Committee and member of the Remuneration 
Committee. Honorary bencher of Middle Temple.
Philip Harland (56) 
Company Secretary
Joined the company in 2000. Previously 
a commercial lawyer in private practice in 
Manchester, then company secretary and 
associate director of legal services at GUS 
Home Shopping Ltd. Admitted as a solicitor  
in 1981.
a Audit committee member
b Remuneration committee member
c Nomination committee member
Lord Alliance of Manchester CBE (79)  
Non-executive Chairman c
Appointed a director and Chairman in 1968. 
Formerly Chairman of Coats Viyella Plc.  
He is also a director of a number of private 
companies, and was appointed a life peer  
in 2004.
Alan White (57) 
Chief Executive
Chief Executive since 2002, having been CFO 
from 1985 to 1999. In between he was CFO 
for Littlewoods plc. Qualified as a chartered 
accountant with Arthur Andersen and held a 
senior financial role with Sharp Electronics. 
Also a non-executive director of Topps Tiles plc 
and a member of the CBI North West Regional 
Council and other business groups.
Dean Moore (54) 
Group Finance Director
Appointed in November 2003. Previously  
Group Finance Director at T&S Stores Plc  
and Graham Group Plc. Also held various  
roles with Lloyds Chemist Plc, Sketchley Plc, 
Blue Circle Industries and Grant Thornton.
Nigel Alliance OBE (77) 
Non-executive Director
Appointed a director in 1969, he changed to 
non-executive status in 1995. He is also a 
director of a number of private companies.
Ivan Fallon (67) 
Deputy Chairman 
Non-executive Director a, b, c 
Appointed a director in 1994 and Deputy 
Chairman on 1 March 2009. He was Chief 
Executive of Independent News & Media 
(UK) until March 2010 and a leading financial 
journalist. Chairman of the remuneration 
committee. 
Lord Stone of Blackheath (69) 
Non-executive Director a, b, c
Appointed a director in 2002. Formerly with 
Marks & Spencer Plc until he retired as Joint 
Managing Director in 1999. Currently Chairman 
of Falcon Power Holdings and the international 
health charity DIPEx. Chairman of the 
nomination committee. 17 N Brown Group plc Annual Report & Accounts 2012
Financial Statements
Directors’ Report 18
Corporate Governance Report 24
Remuneration Report 29
Independent uditor’s Report – Group ccounts 39
Consolidated Income Statement 40
Consolidated Statement of Comprehensive Income 40
Consolidated Balance Sheet 41
Consolidated Cash Flow Statement 42
Reconciliation of Operating Pro t to  
 et Cash from Operating ctivities 42
Consolidated Statement of Changes in Equity 43
 otes to the Group ccounts 44
Independent uditor’s Report – Company ccounts 68
Company Balance Sheet 69
 otes to the Company ccounts 70
Shareholder Information IBC
THE  
FACTS  
AND  
FIGURES N Brown Group plc Annual Report & Accounts 2012 18
Directors’ Report
Directors’ Report
The directors present their annual report 
and accounts for the 53 weeks ended  
3 March 2012. 
Activities and results 
The principal activity of the group is 
retailing through direct home shopping. 
The activities are more fully explained and 
reviewed in the Chief Executive’s Review 
on pages 10 to 13. Group profit before 
taxation from continuing operations for the 
53 weeks ended 3 March 2012 amounted 
to £96.9m (2011, £94.5m). No geographical 
segmentation is provided because, other 
than small operations in the Republic of 
Ireland, Germany and the United States, all 
activities take place in the United Kingdom. 
Enhanced business review
The company is required by the 
Companies Act 2006 (‘Companies Act’) 
to set out in this report a fair review of 
the business of the group during the 
53 weeks ended 3 March 2012 and the 
position of the group at the end of that 
period. The company is also required 
to set out a description of the principal 
risks and uncertainties facing the 
group. The information fulfilling these 
requirements can be found within this 
report, the Chairman’s Statement, the 
Chief Executive’s Review and the Financial 
Review (pages 8 to 15), all of which 
information is incorporated by cross-
reference into this report.
The board continuously strives to identify 
and review key business risks and 
monitors a number of financial and non-
financial Key Performance Indicators. 
The financial KPIs are detailed on page 
14 and non-financial KPIs are discussed 
further below. The board oversees the 
development of processes to manage risks 
appropriately. The executive directors and 
operating board directors implement and 
oversee risk management processes and 
report to the board on them.
As required by the Code, pages 4 to 15 
provide an explanation of the basis on 
which the company generates value and 
preserves it over the long-term and its 
strategy for delivering its objectives.
Dividends and reserves 
An interim dividend of 5.29p per share 
(2011, 5.04p) was paid on the ordinary 
shares of the company on 6 January 2012. 
The net cost of this dividend was £14.7m 
(2011, £13.8m). 
The directors recommend a final dividend 
of 7.74p per share (2011, 7.37p) for the 53 
weeks ended 3 March 2012, the net cost  
of which will be £21.5m (2011, £20.3m). 
The dividend will be paid on 27 July 2012.
Movements in reserves are shown in the 
Statement of Changes in Equity on page 43. 
Acquisitions and disposals 
In the year under review there were no 
corporate acquisitions or disposals.
Share capital 
Details of the company’s authorised and 
issued share capital are shown in note 
22 on page 61. The company has one 
class of ordinary shares which carry no 
fixed income. Each share carries the right 
to one vote at general meetings of the 
company. There are no specific restrictions 
on the size of a holding nor on the transfer 
of shares which are both governed by 
the general provisions of the Articles of 
Association and prevailing legislation 
(except as set out below in the section 
entitled “Voting Rights and Restrictions 
on Transfers”). No person has any special 
rights over the company’s share capital and 
all issued shares are fully paid.
Details of outstanding employee share 
options and the operation of the relevant 
schemes are shown in note 27 on page 63. 
Annual general meeting 
The annual general meeting will be held on 
Tuesday, 3 July 2012. The notice convening 
the annual general meeting will be sent 
to members by way of separate circular. 
Explanatory notes on each resolution to be 
proposed at the meeting will accompany 
the circular. 
Directors 
The biographies of the directors, all of 
whom served throughout the year, are 
shown on page 16. With regard to the 
appointment and replacement of directors, 
the company is governed by its Articles of 
Association, the UK Corporate Governance 
Code and the Companies Act. 
Details of directors’ interests (beneficial 
and non-beneficial) in shares of the 
company are given in the Remuneration 
Report on page 38 and are deemed to  
be incorporated into this report by  
cross-reference.
The powers of directors are described 
in the board terms of reference and the 
Corporate Governance Report on page 24.
No director had any interest in any 
disclosable contract or arrangements, 
other than a contract of service, with the 
company or any subsidiary company either 
during or at the end of the year.
Directors’ and officers’ liabilities 
The group maintains insurance for directors 
and officers of the group, indemnifying 
them against certain liabilities incurred by 
them whilst acting on behalf of the group. 
Major shareholders 
In addition to the directors’ shareholdings 
shown in the Remuneration Report on 
page 38 and in accordance with Chapter 
5 of the Disclosure and Transparency 
Rules, the following notifications had been 
received from holders of notifiable interests 
in the company’s issued share capital at 
30 April 2012:
   Holding  % of issued 
    share capital 
INVESCO Asset Management Ltd  18,900,603  6.67
Threadneedle Asset Management Ltd  18,345,773  6.47 N Brown Group plc Annual Report & Accounts 2012 19
Directors’ Report
Environmental, social and  
governance issues
Governance and risk management 
The board is committed to maintaining 
high standards of corporate governance. 
The company monitors and evaluates 
risk on an on-going basis as part of its 
commitment to sustainable business. 
Further details are contained in the 
Corporate Governance Report on  
pages 24 to 28. 
Ethical standards
The board regards the maintenance of the 
highest ethical standards in business as an 
essential characteristic of the way in which 
the group conducts all of its business. 
A code of ethical conduct covering 
commercial standards, bribery and 
corruption, conflicts of interest, gifts and 
hospitality has been adopted by the group. 
All senior managers and employees of the 
group are required to comply with both the 
letter and the spirit of the code in all their 
dealings for and on behalf of the group. 
In dealings with each other, shareholders, 
customers, suppliers, competitors, 
regulatory authorities and the wider 
community, all employees are required to: 

respect and fairness; 

and internal company policy; 

culture which promotes sound 
ethical conduct at all levels within the 
organisation; 

could cause a conflict of interest or 
damage to the group’s reputation; and

environment in which praise and 
recognition play key roles. 
Directors of all group companies are 
required to disclose details of related party 
transactions for review and authorisation 
by the audit committee and by the board. 
A Gifts and Hospitality register exists 
which requires all employees to record any 
gift or hospitality offered by suppliers and 
other parties. Monthly returns are required 
from all directors and employees declaring 
any offer with a value of £25 or more, and 
stating whether an offer was accepted or 
declined. 
 A “whistleblowing policy” and confidential 
‘hotline’ provides employees with a  
secure and private means of reporting 
any ethical concerns that they may 
have regarding the way the group or 
any employee is behaving in day-to-day 
activities. No ‘whistleblowing’ events were  
reported in the year.
Environment 
The continuous improvement of our 
environmental performance is integral 
to the success and future sustainability 
of the operations. We are committed 
to minimising any damage which our 
activities may cause to the environment. 
Day to day responsibility for sustainability 
vests in Ian Carr, director of logistics,  
who sits on the operational board of  
J.D. Williams & Company Limited and  
who reports to the Chief Executive and, 
through him, to the board of directors.
Since 2007, the group has been actively 
working with its environmental partners, 
Envantage Ltd and Viridor Ltd to minimise 
Green House Gas (GHG) emissions, 
reduce energy and water consumption, 
minimise waste and increase group-
wide environmental awareness and 
accountability. Investment in energy 
efficiency and water minimisation 
technologies has led to significant 
achievements since 2007.
The tables below illustrate our 
environmental achievements since  
2007 to date:
Energy and emissions Absolute reduction  GHG emissions reduction % reduction
  from base year
1
 from base year tCO2e
Electricity 840,214 kWh 312 3%
Natural Gas 1,443,351 kWh 274 11%
Diesel 16,157 Litres 43 10%
Total GHG tCO2 reduction 629 5%
  Reduction from base year % reduction
Water
2
  15,638 m
3
 36%
 Achieved percentage of recycled waste 2011-2012
99.8%
3
1. The group’s base year has been recalculated to take into account the acquisition of Figleaves Global Trading Ltd and High and Mighty Ltd and the divestment 
of Zendor in line with the GHG protocol base year recalculation guidelines. 
2. Based on metered sites and available data provided to Envantage Ltd.
3. Retail sites are currently excluded from this data. The aim is to include 100% of group sites by Autumn 2013 and to achieve 100% recycling across the group 
by 2015. N Brown Group plc Annual Report & Accounts 2012 20
Directors’ Report
Qualitative measures
In addition to the outlined quantitative 
achievements above, the group has 
also been working on several other 
qualitative key areas to set standards 
for our environmental responsibility and 
reputation, including the following:

next wave of our carbon abatement 
programme;

commuting among staff;
 
Carbon Disclosure Project;
 
meter reading technology and analysis 
software;

energy installations, including Solar 
PV / Voltage Optimisation and Liquid 
Pressure Amplification;

Climate Change Commitment 
programme;

from materials and processes causing 
minimum harm to the environment 
when either manufactured, processed, 
recycled or eventually disposed of 
wherever practicable;

from a minimum of 70% recycled paper 
and all other paper used by the business 
is sourced from 100% recycled paper;

catalogues is derived from managed  
and renewable sources accredited 
by the Forest Stewardship Council 
wherever possible. 
Employees
The Chief Executive has board level 
responsibility for employment matters.
- Employee involvement. Our success 
has been substantially contributed to by an 
engaged, enthusiastic, motivated and well-
trained workforce. Considerable resources 
are devoted to employee training. Frequent 
departmental team briefings are held 
and an employee engagement survey 
is conducted regularly, the most recent 
being in 2010. A Consultative Forum 
operates within the logistics division where 
employees from all levels contribute and 
share ideas that help shape the culture of 
the business. The logistics and customer 
services divisions covering over 2,000 
employees have also achieved Investors in 
People accreditation at Bronze and Silver 
standard. Over 500 group employees 
either hold shares in the company or have 
options/awards to acquire them through 
the group’s various share option and long 
term incentive schemes. A large proportion 
of the group’s training and development 
work is delivered by the HR learning and 
development team, which is supplemented 
by external training in specialist technical 
and IT training areas where necessary. 
As well as individually tailored training, 
there is also a suite of self-training 
tools available and an online database, 
“simplydevelopment” which enables 
employees to access a wide range of 
self-development activities, tools and 
information.
As mentioned above, in 2010 the group 
repeated its business-wide Employee 
Engagement Survey and over 2,300 
employees participated. As a direct result 
of this survey an employee profit share 
scheme has been introduced to enable 
employees to feel and benefit in the 
company’s success. In addition the 
company’s grading structure has been 
enhanced by the introduction of two new 
grades which allow enhanced career 
progression and better alignment of pay 
and benefits. In order for these grades to 
be introduced a new system for job 
evaluation has also been established in 
consultation with Towers Watson Limited. 
The addition of an Executive Development 
Programme to the company’s training plan 
has also been introduced as a result of the 
survey. The final and most significant 
output from the survey has been the 
introduction of a more flexible working 
policy for the company’s employees.
Each year the group rewards and 
recognises significant contribution from 
its customer contact centre employees by 
inviting them to compete for a nomination 
to receive an award for outstanding 
customer service.
- Consultation. Constructive relationships 
with the trade unions that represent the 
group’s employees (principally USDAW 
and SATA) exist. Elements of the group 
are covered by a collective bargaining 
arrangement with USDAW. Union 
membership is encouraged and regular 
communication with the union is facilitated 
through ‘partnership forums’ established 
on the principle of shared commitment to 
business success, employment security 
and development with a particular 
emphasis on quality of life, openness and 
adding value.
- Equal opportunities. The group 
supports the principle of equal 
opportunities in employment and is 
opposed to all forms of discrimination, 
including those on the grounds of colour, 
race, nationality, ethnic or national origin, 
religion, gender, age, sexual orientation, 
marital status or disability. 
Our selection processes for recruitment, 
promotion, training and development are 
non-discriminatory. We believe it is in 
the best interests of employees and the 
group to provide these opportunities to the 
most suitable candidates, and to achieve 
a balanced working population spread 
across a diverse range of ethnic origins, 
gender and age groups.
Applications for employment by 
disabled persons are thoroughly and 
sympathetically considered, with 
the aptitude of the applicant being 
regarded as foremost. In the event of 
any employee becoming disabled during 
their employment, every effort is made 
to ensure that their employment with the 
group continues. It is the policy of the 
group that the training, career development 
and promotion of disabled persons should, 
as far as possible, be identical to that of 
other employees. 
- Health and safety. The health, safety 
and welfare at work of its employees, 
contractors and visitors is paramount as 
is ensuring compliance with all relevant 
legislation. The group is also committed to 
best practice initiatives. A benchmarking 
exercise against OHSAS 18001 standards 
has taken place throughout the year and 
has helped define the groups’ strategy in 
progressing the focus of health & safety as 
a senior management level issue over the 
coming year, with programmes to include 
behavioral safety initiatives to continuously 
improve the group’s health & safety culture.
Cumulative group accident statistics  
show that for the year in review, reportable 
accidents under Reporting of Injuries, 
Diseases and Dangerous Occurrences 
Regulations 1995 (RIDDOR) have reduced 
by 22% compared to the same period  
in 2010/11.
In the year in review, we also saw a 0.5% 
reduction in the incidence of accidents per 
1,000 employees compared to the same 
period in 2010/11. An internal analysis has 
shown muscular skeletal injuries to be 
the main category of injury and therefore 
manual handling refresher training 
programmes have been put in place to 
improve standards in this area. 
We endeavour to ensure that all products 
and services sold by the group or used in  N Brown Group plc Annual Report & Accounts 2012 21
Directors’ Report
the workplace are safe and without risk 
to employees and customers when used 
properly.
Customers
A key factor of the group’s success is the 
quality of its relationship with its customers 
and their levels of satisfaction with our 
group products and services.
Regular customer satisfaction surveys are 
conducted, both directly and through third 
parties. Enquiries and complaints have 
been pro-actively reduced over recent 
years as a proportion of customer order 
transactions, reflecting the introduction 
of more customer-oriented policies, 
processes and product/service standards. 
Telephone, email and letter contacts 
received from customers are analysed  
and remedial actions taken to improve  
our levels of service.
The group operates both in-house and 
outsourced contact centres, predominantly 
located in the UK. Our international 
businesses are supported through local 
contact centres in the USA, Germany  
and Eire.
Web self-service capabilities are delivered 
through a "my account" facility for 
customer order and account management 
information. Web-enabled contact centre 
capabilities are being deployed to support 
our web-trading customers, including 
multimedia, web chat, click-to-call and 
social media. 
We aim to attract and retain customers 
through a competitive product and quality 
of customer service offering, regularly 
monitoring retail and home-shopping 
sector developments to stay ahead of 
the game. Our speed of answering for 
calls and responding to emails has been 
improved and made more consistent. 
Automated speech services handle 
a significant proportion of customer 
telephone payments and parcel collection 
requests. We continue to invest in 
improved speed of product deliveries to 
our customers and to offer more delivery 
service options such as next-day or 
nominated day of delivery. Multiple pro-
active service notification emails are being 
introduced to inform customers about 
order and account status.
 
Our overall strategy is to adopt a "multi-
channel" approach to managing our 
customer contacts, with the key aim of 
a joined-up and consistent customer 
experience across channels. Our multi-
channel service platforms will extend to 
our recently launched UK store operations.
Suppliers 
The group trades with suppliers from all 
over the world, including both developing 
and developed countries. 
Improving working conditions for all 
workers in our supply chain has been 
central to our Ethical Trading Policy which 
is aligned to the ETI (Ethical Trading 
Initiative) Base Code (www.ethicaltrade.
org). The ETI is a unique alliance of over 
70 retailers and suppliers, worldwide 
trade unions and voluntary organisations. 
It encourages partnerships between 
members to improve the working 
conditions across global supply chains. 
Our Code of Conduct includes sections 
on:
1. Forced labour
2. Child labour
3. Freedom of association and collective 
bargaining
4. Reasonable wages and benefits
5. Reasonable working hours
6. Equal opportunities
7. No harsh or inhumane treatment
8. Regular employment is provided
9. Safe and hygienic working conditions
All suppliers are asked to sign up to the 
principles of the Code of Conduct as a 
prerequisite of doing business with us.  
The Code of Conduct is included in our 
supplier manual and forms part of our 
standard terms and conditions. The Code 
of Conduct is available in six languages 
and we encourage all of our suppliers to 
display a copy within their factories.
Part of our supplier engagement is a 
self-assessment by suppliers based on 
the Code of Conduct. The results of this 
self-assessment enables the group to 
carry out an initial risk assessment of the 
factory, open dialogue with the factory 
management and carry out any necessary 
improvements to working practices. 
Below is a list of the geographical 
distribution of our current suppliers:- 
China 62%
India and Bangladesh 11%
Other Asia 7%
UK 11%
European Union 5%
Other 4%
The group has assessed 78% of our 
suppliers’ factories. We have appointed 
audit partners and launched an audit 
programme for our suppliers. We aim to 
audit all our suppliers’ sites at least every 2 
years and we are currently halfway through 
the audit plan. We have worked with some 
of our agents and larger suppliers to 
enable them to audit their own factories. 
We have developed audit methodology 
for them to use, which is relevant to our 
Code of Conduct, and assisted them in 
incorporating these as part of their normal 
verification process, when selecting new 
factories or monitoring existing factories. 
We estimate that our risk assessments and 
audits have covered over 448,000 workers. 
Our long term supplier-related goals 
include:

aid for Buying and Merchandise staff 
when visiting new or existing markets;

working programmes and rolling out any 
relevant learning to our supply base;

benefits of working ethically and 
participating in work programmes; and

within Buying and Merchandising and 
other areas of the business.
The group’s policy for the payment of 
suppliers is to ensure that all suppliers 
know and accept the group’s payment 
terms. Payment is made in accordance 
with these terms. Trade creditors of the 
group at 3 March 2012 represented 40 
days (2011, 40 days) of purchases.
Community relations
The group actively supports the 
communities in which it operates.  
It maintains close links with the Christie 
Hospital in Manchester and the Retail Trust 
and also regularly encourages employees 
to participate in fundraising activities 
for these, and other worthwhile causes. 
The group matches the money raised 
by employees to double the size of the 
donation. 
In 2011/12 a record number of employees 
were involved in charitable events raising 
more than £134,000 for both national 
charities and local good causes. 
The family, health and well-being 
programme, now in its eighth year, 
continues to provide support and real 
assistance for all of our employees.
Charitable and political donations 
During the year, the group made charitable 
donations of £71,011 (2011, £70,960).  
No political donations have been made 
(2011, nil).  N Brown Group plc Annual Report & Accounts 2012 22
Directors’ Report
Pension fund
The group continues to ensure that the 
N Brown Group Pension Fund (‘Pension 
Fund’) is managed in accordance with  
best practice and current legislation.  
A trustee company, which is controlled by 
a board of directors, administers the fund’s 
assets. One of these is an independent 
professional trustee and the rest have 
a vested interest in the performance of 
the fund, representing the interests of 
pension fund members, pensioners and 
N Brown Group plc. Mercer Investments 
provides investment advice and fiduciary 
management. The actuarial and 
administration services are provided  
by Mercer Limited.
N Brown Group plc (and some of its 
associated companies) are required to 
indemnify the trustee company and its 
officers in respect of certain liabilities 
incurred by them in the performance of  
their obligations relating to the Pension 
Fund or in administration of the Pension 
Fund. This amounts to a "qualifying 
indemnity provision" (as defined in section 
236 of the Companies Act).
The Pension Fund was closed to new 
entrants with effect from 31 January 2002. 
New employees joining the group after 
31 January 2002 and existing employees 
who had not joined the Pension Fund 
as at that date, are entitled to join a 
stakeholder pension scheme providing a 
defined contribution pension arrangement, 
administered by Prudential Stakeholder 
Pensions. 
Following the results of the 2009 triennial 
actuarial review, the group agreed to pay 
£2.5m into the Pension Fund each March 
with the aim of paying off the funding 
shortfall by 2013.
Financial risk management, objectives 
and policies 
The group is exposed to certain financial 
risks, namely interest rate risk, currency 
risk, liquidity risk and credit risk. Information 
regarding such financial risks is detailed 
in note 19 on page 57. The group’s risk 
management policies and procedures are 
also discussed in the Financial Review on 
page 15. 
Change of control
There are a number of agreements that 
take effect, alter or terminate upon a 
change of control of the company such 
as commercial contracts, bank loan 
agreements, property lease arrangements 
and employee share plans. None of these 
are considered to be significant in terms 
of their likely impact on the business of 
the group as a whole. Executive Directors’ 
service contracts are terminable by the 
company on giving 12 months’ notice. 
There are no agreements between the 
company and its directors or employees 
that provide for additional compensation 
for loss of office or employment that 
occurs because of a takeover bid.  
No events were reported in the year.
Tax status 
The company is not a close company 
within the meaning of the Corporation  
Tax Act 2010. 
Auditors 
A resolution to re-appoint Deloitte LLP as 
auditor to the company and to authorise 
the directors to fix their remuneration will 
be proposed at the annual general meeting 
on 3 July 2012. 
Voting rights and restrictions on 
transfer of shares
None of the ordinary shares carry any 
special rights with regard to control of the 
company.
There are no restrictions on transfers of 
shares other than:

time to time be imposed by laws or 
regulations such as those relating to 
insider dealing;

securities transactions whereby the 
directors and designated employees 
require approval to deal in the 


company’s shares has been served with 
a disclosure notice and has failed to 
provide the company with information 
concerning interests in those shares.
The company is not aware of any 
arrangements between shareholders that 
may result in restrictions on the transfer of 
securities or voting rights. The rights and 

ordinary shares are set out in the Articles  
of Association.
Employee share schemes –  
rights of control
The trustees of the N Brown Group plc 
Employee Share Ownership Trust and 
the trustees of the N Brown Group plc 
No. 2 Employee Share Ownership Trust 
hold shares on trust for the benefit of the 
executive directors and employees of the 
group, which are used in connection with 

plans. The trustees currently abstain from 
voting but have the power to vote for or 
against, or not at all, at their discretion 
in respect of any shares in the company 
held in the relevant trust. The trustees 
may, upon the recommendation of the 
company, accept or reject any offer 
relating to the shares in any way it sees fit, 
without incurring any liability and without 
being required to give reasons for their 
decision. In exercising their trustee powers 
the trustees may take all of the following 
matters into account:


financial interests;

capacity as employees or former 
employees or their dependents;

or not identified) who may become 
beneficiaries in the future; and

environmental or social nature. 
Going concern 
The directors have adopted the going 
concern basis in the financial statements 
and their opinion is explained in the 
Financial Review on page 15.
Liability 
All the information supplied in the 
Chairman’s Statement on pages 8 to 9, 
the Chief Executive’s Review on pages 10 
to 13, Financial Review on pages 14 to 15, 
Remuneration Report on pages 29 to 38 
and the Corporate Governance Report on 
pages 24 to 28 form part of this Directors’ 
Report. Any liability for the information is 
restricted to the extent prescribed in the 
Companies Act 2006.
Directors’ responsibilities statement
The directors are responsible for preparing 
the Annual Report and the financial 
statements in accordance with applicable 
law and regulations.
Company law requires the directors to 
prepare financial statements for each 
financial year. Under that law the directors 
are required to prepare the group 
financial statements in accordance with 
International Financial Reporting Standards 
(IFRSs) as adopted by the European 
Union and have elected to prepare the 
parent company financial statements 
in accordance with United Kingdom 
Generally Accepted Accounting Standards 
and applicable law. Under company 
law, the directors must not approve the 
accounts unless they are satisfied that they 
give a true and fair view of the state of  N Brown Group plc Annual Report & Accounts 2012 23
Directors’ Report
affairs of the company and of the profit or 
loss of the company for that period. 
In preparing the parent company financial 
statements, the directors are required to:

then apply them consistently;

estimates that are reasonable and 
prudent;

adopted by the European Union have 
been followed, subject to any material 
departures disclosed and explained in 
the financial statements; and

the going concern basis, unless it 
is inappropriate to presume that the 
company will continue in business.
The directors are responsible for keeping 
adequate accounting records that 
are sufficient to show and explain the 
company’s transactions and disclose 
with reasonable accuracy at any time the 
financial position of the company and 
enable them to ensure that the financial 
statements comply with the Companies 
Act. They are also responsible for 
safeguarding the assets of the company 
and hence for taking reasonable steps for 
the prevention and detection of fraud and 
other irregularities.
The directors are responsible for 
the maintenance and integrity of the 
company’s website. Legislation in the 
United Kingdom governing the preparation 
and dissemination of financial statements 
may differ from legislation in other 
jurisdictions.
Each person who is a director at the date 
of the approval of this report confirms that:

no relevant audit information of which 
the group’s auditors are unaware; and

he ought to have taken as a director 
in order to make himself aware of 
any relevant audit information and to 
establish that the group’s auditors are 
aware of that information. 
This confirmation is given and should 
be interpreted in accordance with the 
provisions of section 418 of the Companies 
Act 2006.
By order of the board 
Philip F Harland LL.B (Hons) (Solicitor) 
Secretary 
18 May 2012 
Responsibility statement 
We confirm that to the best of our 
knowledge:

accordance with the relevant financial 
reporting framework, 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


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 
Alan White 
Chief Executive
Dean Moore 
Finance Director
18 May 2012 N Brown Group plc Annual Report & Accounts 2012 24
Corporate Governance Report 
UK Corporate Governance Code 
The board is committed to high standards 
of corporate governance and compliance 
with the principles in the UK Corporate 
Governance Code issued by the UK 
Financial Reporting Council in 2010  
(the “Code”). 
For the year in review the board considers 
that it and the company have complied 
with the provisions of the Code. The 
following paragraphs explain how the 
main principles of the Code have been 
applied. The Director’s remuneration report 
contains further details on pages 29 to 38.
Board composition 
The board comprises eight members, six 
of whom are non-executive. There is a 
clear division of responsibilities between 
the Chairman, Lord Alliance of Manchester 
CBE, who is responsible for the effective 
operation of the board and the Chief 
Executive, Alan White, who is responsible 
for the group’s operational performance. 
The board is sensitive to the need for non-
executive directors to remain independent 
of the management in order to be able to 
exercise proper oversight and effectively 
challenge the executive directors. The non-
executive directors are:
 

(Chairman); 

both of whom are not regarded by the 
board as independent under the provisions 
of the Code, 

non-executive director); 

nominations committee);
 
committee); and 

Each of these is considered by the board 
to be independent. 
Ivan Fallon was appointed to the board 
in October 1994 and has now served on 
the board for a period beyond which the 
Code suggests that his independence 
may be affected. The board, nonetheless, 
holds Ivan Fallon to be independent and 
considers that his substantial commercial 
acumen and extensive knowledge of the 
group’s businesses gained during his 
service on the board far outweigh any 
considerations of lack of independence. 
Lord Stone was appointed to the board 
in March 2002 and at the date of this 
report has also now served for a period 
beyond which the Code suggests his 
independence may be affected. As with 
Ivan Fallon, the board considers Lord 
Stone to be an extremely effective member 
of the board and that his extensive retail 
knowledge is of great benefit to the fashion 
division of the group.
On the basis of the above, the board 
considers that it had a majority of 
independent non-executive directors 
serving during the year. It is also 
considered that the composition of the 
board during the year had the necessary 
balance of executive and non-executive 
directors to provide the requisite skills, 
experience and judgement appropriate 
for the requirements of the business and 
board effectiveness. 
At last year’s AGM, the board was an 
early adopter of the requirements in the 
Code that all directors retire and submit 
themselves for re-election annually and, 
again this year, each of the directors will 
again retire at the forthcoming AGM. All of 
them, being eligible, will offer themselves 
for reappointment at that meeting. 
Rather than serve on 3 year terms, all 
non-executive directors now serve the 
company under letters of appointment 
which stipulate rolling terms of six months 
duration. All appointments are terminable, 
without compensation, on six months’ 
notice by either party and are subject  
to other early termination provisions,  
for example all non-executives letters of 
appointment permit termination without 
compensation in the event a director is not 
re-elected upon retirement by rotation in 
accordance with the articles, or at the AGM. 
The board, having carried out a 
performance evaluation, considers that 
the performance of all directors and 
their commitment to the role of director 
continues to be effective. Biographical 
detail of each director is provided on 
page 16 of this annual report to enable 
shareholders to make an informed  
decision on the re-election resolutions.  
All appointments to the board are made 
on merit against objective criteria and with 
the intention of ensuring that all appointees 
have the requisite skills and sufficient time 
to devote themselves effectively to the 
business of the board and to discharge 
their duties.
Details of directors’ contract terms are 
shown in the Remuneration Report on 
page 34.
Directors and officers insurance cover 
has been established for all directors to 
provide cover against their reasonable 
actions on behalf of the company.
Diversity
The board recognises the importance of 
diversity, including gender, at all levels of 
the company as well as on the board and 
is supportive of the aims and objectives of 
the Davies Report on Women on Boards 
which was published in February 2011. 
The company is committed to equal 
opportunities and increasing diversity 
across our operations. During the year 
under review the board considered the 
recommendations in the Davies report 
and expressed an intention to increase 
the number of women on the board and to 
work towards the recommendation of 25% 
female representation by 2015. Further 
detail can be found in the nominations 
committee section below. The board 
currently has one female board member 
equating to 12.5% of its directors. The 
board will regularly consider how diversity 
can be enhanced through the board and 
the senior management team and across 
the group generally. At the same time it is 
of the utmost importance for the board to 
maintain strong leadership at the company 
and the board will continue to appoint 
only the most appropriate candidates to 
the board. In the coming year the board 
will consider a board diversity policy 
to be included in its board governance 
principles.
Board operation and evaluation
An effective board of directors leads and 
controls the group. The members of the 
board are shown on page 16 of this report. 
The board met nine times during the year. 
Director’s attendance at board meetings 
was as follows: 
  Attendance
Lord Alliance of Manchester CBE  9
Ivan Fallon 9
Alan White 9
Lord Stone of Blackheath 7
Nigel Alliance OBE 7
Dean Moore 9
John McGuire  9
Anna Ford 9 N Brown Group plc Annual Report & Accounts 2012 25
Corporate Governance Report 
The board is responsible for major policy 
decisions and for determining the nature 
and extent of the risks it is willing to take  
in achieving its strategic objectives.  
The board delegates detailed operational 
matters to its committees and sub-
committees, the directors and senior 
officers, including the chief executive 
and finance director, where necessary. 
The board is collectively responsible 
for providing effective leadership and 
promoting the success of the group and 
works to a formal schedule of matters 
reserved for the board (a copy of which  
is available on the company’s website, 
www.nbrown.co.uk). This document 
includes all decisions on business strategy, 
the approval of financial statements, the 
annual capital and operating expenditure 
plans, investment, treasury and dividend 
policies, governance issues, major capital 
projects, overseeing the group’s risk 
control procedures, board membership 
and the composition of its committees 
and the group’s ethical, social and 
environmental policies. Currently, the 
January board meeting each year is held 
over two days and is entirely devoted to a 
backwards-looking review and the future 
development of the group’s long-term 
strategic plan. 
The day-to-day management of the group 
is delegated to the home shopping board 
of JD Williams & Company Limited on 
which Alan White and Dean Moore sit 
as chief executive and finance director 
respectively.
The board governs through clearly 
mandated committees, accompanied by 
robust monitoring and reporting systems. 
Further detail is given below. 
A comprehensive set of board papers 
including detailed management reports 
from the Chief Executive and the Finance 
Director, management accounts, broker 
analyses, compliance and regulatory 
briefings and bespoke reports is circulated 
to each director not less than seven 
days prior to each board meeting. Non-
executive directors are encouraged to 
meet and talk to operational staff and 
undertake regular site visits to ensure 
they have the most up-to-date knowledge 
and understanding of the company and 
its activities and so that the company can 
benefit from the skills and experience of 
the non-executive directors. 
Procedures are in place to enable all 
directors to obtain independent 
professional advice in respect of their 
fiduciary duties and obligations. All 
board members have full and direct 
access to the Company Secretary, who 
is a qualified solicitor and who attends 
all board and committee meetings. The 
Company Secretary regularly briefs the 
board on legal, regulatory and compliance 
matters, shareholder engagement 
issues, continuing director education and 
development and the statutory duties and 
obligation of the directors. 
In the year under review the board 
undertook a formal appraisal of its own 
performance and effectiveness and also 
that of the Chairman and the board’s 
committees. The engagement of an 
external body to manage the performance 
evaluation process was considered but 
the board concluded that the approach 
adopted in the previous year remained 
sufficiently robust, appropriate and cost 
effective for the company. The evaluation 
process consisted of the individual 
completion of a questionnaire containing 
26 detailed questions ranging from the 
effectiveness of individual members, 
the size and number of board reports, 
relationships with management, the mix 
of skill-sets, individual contribution at 
board meetings to the effectiveness of the 
Company Secretary. The questionnaire 
was completed by all directors in relation 
to the board and also any committee of 
which they were a member. The process 
is designed to establish whether each 
director continues to meet the board’s 
requirements in terms of effective 
contribution, skills and devotion to the role. 
The evaluation results were collated by 
the Company Secretary for review by the 
Chairman and then a joint review by the 
board. The performance of the Chairman 
was reviewed and appraised by the senior 
non-executive director in consultation 
with the other board members. The Chief 
Executive’s performance was reviewed 
and appraised by the Chairman and the 
non-executive directors. The performance 
of the Finance Director (the only other 
executive director on the board) was 
carried out in a similar manner to the  
Chief Executive. 
The evaluation concluded that the board 
and committees continue to perform well 
and are effective and that robust, free 
and frank discussion and challenge to the 
operational directors and the executive 
directors exists at all levels. The survey 
also found that the board and 
committees continue to be effectively 
led by their respective Chairmen and 
that information provided to the directors 
was comprehensive and sufficient 
for the director’s needs. It was also 
concluded that each director is individually 
contributing to the overall effectiveness 
and success of the group. 
Beyond the formal annual evaluation, the 
performance of the executive directors is 
continuously monitored throughout the 
year by the Chairman and the Deputy 
Chairman. The board acknowledges the 
provisions of section B6.2 of the Code 
that an externally facilitated evaluation be 
carried out at least once in every 3 years 
and has agreed that an external evaluation 
of board effectiveness will be carried out 
for the financial year 2013/14.
The Chairman reviews and agrees 
with each director their training and 
development needs.
Director’s conflicts of interest
The articles of association of the company 
give the directors the power to consider 
and, if appropriate, authorise conflict 
situations where a director’s declared 
interest may conflict or does conflict with 
the interests of the company.
Procedures have been set in place by the 
board to regularly report and record any 
potential or actual conflicts which arise in 
a register which is then reviewed by the 
board at least annually.
No conflicts of interest were reported in 
the year under review.
Committees of the Board
The board has delegated specific 
authorities to a number of committees to 
deal with specific aspects of management 
and to maintain supervision over the 
internal control procedures of the group. 
These committees meet regularly and 
have formal written terms of reference 
which are available for inspection on 
the company’s website. The minutes of 
the meetings of these committees are 
circulated to all committee members in 
advance of the next following committee 
meeting, at which they are ratified. The 
following committees of the board have 
been established: 


 N Brown Group plc Annual Report & Accounts 2012 26
Corporate Governance Report 
After each committee meeting the 
chairman of that committee makes a 
formal report to the board of directors 
detailing the business carried out 
by the committee and setting out its 
recommendations.
Audit committee 
The audit committee consists of non-
executive directors the board consider to 
be independent. The current chairman is 
John McGuire. The other members are 
Ivan Fallon, Lord Stone of Blackheath and 
Anna Ford. The chairman of the committee 
and other members of the committee are 
regarded as having recent and relevant 
financial experience. By invitation, the audit 
committee meetings are also attended by 
the Chief Executive, the Finance Director, 
the group’s head of internal audit and the 
group’s external auditors. 
The committee met twice in the year under 
review. Committee attendance was as 
follows:
  Attendance
Lord Stone of Blackheath 2
John McGuire  2
Ivan Fallon 2
Anna Ford 2
The audit committee is charged with 
overseeing the nature and scope of the 
group audit process (both internal  
and external) and its effectiveness.  
The committee’s work includes:

internal audit programme and resources;

auditors both with and in the absence  
of the executive directors;

and interim financial statements and 
reviewing the audit reports and audit-
related reports provided by the  
external auditor;

system of internal risk control and 
sources of assurance;

secretary on environmental, social or 
governance issues; and 

in respect of its findings in respect of  
all of the above matters.
In addition to the above scheduled 
meetings, the chairman of the committee 
also regularly attends the group’s head 
office to meet with the Finance Director 
and, separately, the group’s head of 
internal audit. 
The audit committee is also charged with 
the oversight and management of the 
group’s whistleblowing procedure which 
contains procedures for the committee to 
receive, in confidence, complaints on all 
operational matters. 
The committee has established a 
continuous process for identifying, 
evaluating and managing the significant 
risks the group faces. This monitoring is 
principally based on reviewing reports 
from senior management to consider 
whether significant operational risks are 
being identified, evaluated, managed and 
controlled and whether any significant 
weaknesses exist which need to be 
addressed. Again this year, the committee 
members have received, considered and 
approved an updated risk evaluation from 
the operational directors. Further details 
are given later in the Risk Management 
section of this report. 
The board consider that the processes 
of the audit committee continue to be 
robust and effective and comply with the 
guidance issued by the Smith Committee. 
During the year under review the board  
has not been advised by the audit 
committee, nor identified itself, any failings 
or weaknesses in internal control which it 
has determined to be material. 
The audit committee periodically reviews 
the appointment of the external auditor  
as well as their relationship with the group, 
including monitoring the group’s use of  
the auditors for non-audit services and  
the balance of audit and non-audit fees 
paid to the auditors. Assignments of non-
audit services are generally subject to 
tender, and decisions on the allocation of 
work are made on the basis of competence, 
cost-effectiveness, relevant legislation and 
knowledge of the group’s business. 
Deloitte LLP has been the group’s auditor 
for a number of years. Having reviewed the 
independence and effectiveness of the 
external auditor, the committee has not 
considered it necessary to require them  
to tender for the audit work. 
Deloitte LLP have during the year also 
provided some non-audit services to the 
company in the form of tax advice. The 
audit committee is aware that providing 
audit and non-audit services could give 
rise to a potential conflict of interest.  
To address this concern, the company has 
also appointed independent advisors to 
provide advice on executive remuneration 
issues and pension matters where 
appropriate. These advisors do not 
provide the group with any other services 
which could bring into question their 
independence or provide any conflict of 
interest (further details of other advisers 
are set out in the Remuneration Report  
on page 29). 
During the year fees paid to Deloitte LLP 
for audit and non-audit services were as 
follows:-
Audit: £0.2m
Non-audit/tax £0.4m
The chairman of the audit committee has 
asked Deloitte LLP to advise him of the 
scale of non-audit fees being incurred, as 
they are incurred, throughout the year to 
enable him to report to the committee any 
concerns he may have that the auditor’s 
independence is being compromised.
As a result of its work during the year, the 
audit committee has concluded that the 
committee has acted in accordance with 
its terms of reference and has addressed 
and reasonably ensured the independence 
and objectivity of the external auditors.
There are no contractual obligations 
restricting the group’s choice of external 
auditor. The committee has recommended 
that the existing auditors, Deloitte LLP be 
reappointed. Deloitte LLP have signified 
their willingness to continue in office and 
ordinary resolutions appointing them as 
auditors and authorising the directors to 
set their remuneration will be proposed at 
the 2012 annual general meeting.
Remuneration committee 
The remuneration committee consists 
entirely of non-executive directors 
regarded by the company to be 
independent. The current chairman is  
Ivan Fallon. The other members are Lord 
Stone of Blackheath, John McGuire and 
Anna Ford. 
The remuneration committee met on four 
occasions during the year. Member’s 
attendance was as follows: 
  Attendance
Lord Stone of Blackheath 4
John McGuire 4
Ivan Fallon 4
Anna Ford 4 N Brown Group plc Annual Report & Accounts 2012 27
Corporate Governance Report 
The purpose of this committee is to review, 
formulate and determine the remuneration 
package of each executive director and 
other members of the board and to 
consider how the company is applying 
the principles of the Code in respect of 
directors’ remuneration. 
A comprehensive Remuneration Report is 
included in this Annual Report on pages 29 
to 38. The report will be put to an advisory 
vote by the members at the company’s 
2012 annual general meeting. 
Nominations committee 
The nominations committee is chaired  
by Lord Stone of Blackheath. The other 
members are currently Lord Alliance of 
Manchester CBE, Ivan Fallon, John 
McGuire and Anna Ford. The formal terms 
of reference for this committee require it  
to make recommendations to the board  
for appointments of directors including, 
when appropriate, the chairman of the 
board and also directors of the operating 
board and other senior executive staff of 
the operating company. Where appropriate, 
the Chief Executive and Company 
Secretary attend meetings of the 
nominations committee. 
The nominations committee evaluates 
board candidates on merit, against 
objective criteria, taking into account the 
skills and experience required to perform 
the duties of the post with due regard to 
diversity and gender. Where appropriate, 
external search consultants are engaged. 
The nominations committee is currently 
considering the Davies Report into Women 
on Boards and its response to the issues it 
raised. The committee is currently working 
to increase the diversity and breadth of 
skills and experience on the board and to 
this end it has engaged with and employed 
the services of an external consultancy, 
MWM Consulting LLP. The board already 
has one female director – Anna Ford – and 
aspires to increase the percentage of 
women on the board to at least 25% of 
directors by 2015.
The Company Secretary is responsible for 
the induction of new directors. New directors 
are provided with a comprehensive pack of 
information (including terms of reference, 
information regarding the business and 
guidance on their roles and duties as 
directors) and meetings/site visits with  
key employee contacts are arranged as 
appropriate. The Company Secretary 
provides an on-going programme of 
briefings for directors covering legal and 
regulatory changes and developments 
relevant to the group’s activities and 
director’s areas of responsibility. 
During the year the nominations committee 
met on 3 occasions with full attendance 
by all members. In addition there were a 
further 3 informal meetings with members 
of the committee to formulate and pursue 
the ‘diversity and breadth’ project referred 
to above. 
Finance Committee
So that actions may be taken promptly 
a finance committee comprising the 
chairman of the audit committee, the 
Chief Executive and the Finance Director 
(together with such other non-executive 
directors as the board may appoint from 
time to time) operates between scheduled 
board meetings and is authorised to make 
decisions, within limits defined by the 
board, regarding certain finance, treasury 
and tax or investment matters.
Internal control 
The directors have overall responsibility 
for ensuring that the group maintains a 
sound system of internal control. There 
are inherent limitations in any system of 
internal control and no system can provide 
absolute assurance and management 
against material misstatement, loss or 
failure. Equally, no system can guarantee 
elimination of the risk of failure to meet  
the objectives of the business. Against this 
background, the board has established 
a continuous process for identifying, 
evaluating and managing the significant 
risks the group faces in order to give 
it reasonable assurances regarding its 
operations and compliance with laws and 
regulations.
Risk Management 
In order to ensure key business 
developments are appropriately factored 
into the group’s risk management process, 
internal audit facilitated a board-level risk 
session in the year. The chief executive of 
the group and the finance director along 
with operational management identified 
and reviewed the key risks facing the 
business and appraised the structure 
of internal controls to mitigate these 
risks. The audit committee was provided 
with the output from this process and 
given the opportunity to conduct its own 
assessment of risks across strategic, 
financial and operational areas. The results 
have been collated and used as a key 
driver in the annual internal audit plan. 
A risk committee has been established as 
a sub-committee of the audit committee 
on which the chief executive, the finance 
director (chair of risk committee), 
the company secretary and head of 
internal audit sit, to focus on reviewing 

monitor and manage the risks identified. 
Operational management is asked to 
present to the risk committee on a 
cyclical basis on the progress of agreed 
actions against the major risks identified 
by the process. The output from the risk 
committee is then shared with the audit 
committee and the board. 
The board of directors (through and 
with the benefit of the reports and 
recommendations of the audit committee) 
has reviewed the effectiveness of the 
system of internal control for the year 
under review. The board (through the audit 
committee) discusses with the external 
auditors and the internal audit department, 
the results of audit work and any resulting 
internal control issues, including the 
implementation of action points arising 
from previous audits. 
The internal audit function is independent 
of management and the head of the 
function has direct access to the chairman 
of the audit committee and the chief 
executive of the group. Internal audit 
plans are discussed and agreed annually 
between the group head of internal audit 
and the audit committee. 
Appropriate internal financial controls 
are in place throughout the group, some 
of which have already been referred 
to in this statement. Other examples 
include the existence of a well-defined 
group organisation structure, with 
clear lines of responsibility and explicit 
authority delegated to divisional boards 
and executive management, and a 
comprehensive financial reporting system 
which communicates plans, budgets 
and monthly results to relevant levels of 
management, including the board. 
The company has complied, and continues 
to comply, with the provisions of the Code 
on internal controls. There is an on-going 
process in place for identifying, evaluating 
and managing the significant risks 
facing the group that has been in place 
throughout the year under review and to  N Brown Group plc Annual Report & Accounts 2012 28
Corporate Governance Report 
the date of approval of the accounts. This 
process has been reviewed by the audit 
committee and the board, and accords 
with guidance appended to the Code. The 
board has not identified nor been advised 
of any failings or weaknesses which it has 
determined to be material.
Relations with investors 
The company places considerable 
importance on good communication with 
all shareholders, be they institutional or 
individual investors. Institutional investors, 
fund managers and analysts are kept 
informed of the company’s overall strategy 
through regular meetings and investor 
‘road-shows’ and site visits. All non-
executive directors are kept informed 
of shareholders’ views through detailed 
feedback on surveys and polls and 
analyst and broker reports are tabled 
at each board meeting. The senior non-
executive director is available to meet 
with, and understand, the views of major 
shareholders. 
The company aims to ensure that all 
shareholders have full and timely access 
to the information it discloses in the 
annual report, the yearly and half yearly 
announcements and interim management 
statements and that shareholders 
have the opportunity to meet with the 
executive management team (and certain 
members of the operating division) 
at the announcement of the group’s 
results and also at the annual general 
meeting. Non-executive and executive 
directors also attend meetings with 
shareholders on request. As well as 
being provided with a copy of the annual 
report and results announcements, the 
group recently overhauled its website to 
provide shareholders with up to date and 
comprehensive material about the group 
and its activities and also real-time market 
information and prices. Shareholders also 
have the opportunity to ask questions, 
make observations or represent their views 
to the board of directors by constructive 
use of the annual general meeting. N Brown Group plc Annual Report & Accounts 2012 29
Remuneration Report
Introduction 
This report has been prepared in 
accordance with the provisions of the 
Companies Act 2006 and Schedule 8 to 
the Large and Medium-sized Companies 
and Groups (Accounts and Reports) 
Regulations 2008. This report also meets 
the relevant requirements of the listing 
rules of the UK Listing Authority and 
describes how the board have applied 
the principles relating to directors’ 
remuneration set out in the UK Corporate 
Governance Code (“the Code”). 
This report will be put to an advisory vote 
of the company’s shareholders at the 
annual general meeting on 3 July 2012. 
The auditors are required to report on 
certain parts of this report and to state 
whether, in their opinion, that part of the 
report has been properly prepared in 
accordance with the Companies Act 2006. 
The report is therefore divided into 
separate sections for audited and 
unaudited information. 
Unaudited information: 
Remuneration committee 
The board has established a remuneration 
committee (“the committee”) constituted in 
accordance with the recommendations of 
the Code.
During the financial year, the committee 
comprised Ivan Fallon (chairman), Lord 
Stone of Blackheath, John McGuire and 
Anna Ford, all of whom are non-executive 
directors. The committee members have 
no personal financial interest (other than 
as shareholders) in matters to be decided, 
no potential conflicts of interest arising 
from cross-directorships and no day-to-
day involvement in running the business 
and are considered by the company to be 
independent. The committee has formal 
written terms of reference which are 
available for shareholders to inspect and 
on the corporate website. The committee 
met four times during the year, with full 
attendance on each occasion. 
Recommendations and reports were 
provided to the committee during the year 
under review by Alan White, the Chief 
Executive. No director played any part in 
discussion about his own remuneration. 
The committee also received advice from 
external advisers during the year which 
materially assisted their consideration of 
remuneration matters as follows:

benchmarking services in setting 
executive remuneration;

other remuneration data taken from 
publications of Deloitte LLP were used. 
Deloitte LLP, in their capacity as the 
company’s auditors, also provided tax 
services to the group.

in respect of certain executive 
remuneration matters;


incentive plans and additional advice in 
relation to pension arrangements; and

Limited provided advice in relation to the 


LLP and Mercer Human Resources 
Consulting Limited were appointed by 
the committee and provided no other 
services to the company. Pinsent Masons 

and were not specifically appointed by 

other connections with the group, and 

available on request from the Company 
Secretary.
The board and the committee have reviewed 
the group’s compliance with the Code on 
remuneration-related matters. It is the 
opinion of the board that the group complied 
with the remuneration-related aspects of 
the Code during the year under review. 
At the committee meeting held on 6 
May 2011 when the remuneration policy 
for the following year was once again 
reviewed, the committee received a paper 
from Hewitt New Bridge Street which 
addressed, amongst other things, the need 
for the committee to consider whether 
it was appropriate to introduce a ‘claw-
back’ into any of the group’s incentive 
schemes. The committee has considered 
the provisions of Schedule A to the Code 
and has concluded that, in view of the 
existing safeguards built into the review 
mechanisms of the incentive schemes 
(which ensure they only pay out on the 
achievement of tangible deliverables) a 
claw-back is not required. However it is 
giving further consideration to introducing 
reclaim provisions in exceptional 
circumstances of financial misstatement or 
misconduct. The committee has resolved 
to keep the overall position under review.
Remuneration policy for executive 
directors and senior executives 
The committee’s policy is designed to 
ensure that the main elements of the 
remuneration package are linked to 
the company’s annual and long-term 
strategy and are appropriate in amount 
and capable of attracting, motivating and 
retaining executive directors. It is the aim 
of the policy to reward executive directors 
and senior executives by offering them 
competitive remuneration packages, which 
are prudently constructed, sufficiently 
stretching and linked to long-term 
profitability and which do not encourage 
excessive risk taking. 
In particular the committee strives to 
ensure that its remuneration package is:-



both in absolute and relative terms;

options; and

year performance period.
The normal remuneration package for 
executive directors comprises basic salary, 
an annual performance-related bonus 
(including a deferred element with a 
matching share award subject to a further 
performance condition), long-term share 
based incentives, a pension, a company 
car allowance and private medical insurance. 
The committee ensures that the structure 
of executive remuneration, including the 
balance between fixed and variable pay, 
remains linked to the promotion of the long- 
term success of the group and designed  
to promote the long-term success of the 

prudent risk policies and systems. 
All pay and incentives are subject to 
the individual review and scrutiny of the 
committee, particularly in the case of share 
incentives both at the award stage and 
the stage at which awards vest to ensure 
that performance has been correctly 
adjudicated and to safeguard excessive 
reward. Variable pay and remuneration is 
linked to both improvements in corporate 
and individual performance and is 
benchmarked to attract and retain the 
highest quality people. The committee 
reviews the policy on an annual basis 
and recommends changes as and when 
appropriate, guided in this process by 
external consultants it appoints from time 
to time. The policy was reviewed in March 
and April 2012 and will continue to apply 
for the current financial year.
The committee is entitled to consider the 
group’s performance on Environmental, 
Social and Governance (‘ESG’) issues 
when settling the remuneration of any 
executive director. The committee is of the 
opinion that the design of the incentive  N Brown Group plc Annual Report & Accounts 2012 30
Remuneration Report
arrangements for senior managers does 
not raise ESG risks by inadvertently 
motivating irresponsible behaviour or the 
taking of undue risks with the business.
The charts which follow demonstrate the 
potential achievable balance between fixed 
and variable performance based pay for 
each executive director.
Analysis of Performance vs Non Performance related elements of Remuneration Package
Fixed Pay
70%
30%
Alan White Dean Moore
Variable Performance Related Pay V V
70%
30%
Basic salary 
When determining the salary of the 
executive directors the committee takes 
into account the levels of base salary for 
similar positions with comparable status, 
responsibility and skills in competitor 
organisations of broadly similar size and 
complexity, in particular those existing 
in the home shopping and retail market 
sectors; the performance of the individual 
executive director; the individual executive 
director’s experience and responsibilities; 
and the pay and conditions throughout 
the group. Salaries and conditions are 
reviewed on an annual basis and are 
subject to absolute improvements in group 
profitability and performance against 
personal and corporate objectives and 
peer-group benchmarking. Salary levels 
of senior management were all reviewed 
in the context of salary levels within the 
workforce as a whole.
The current salaries of the executive 
directors are shown in the table below:
Salaries as at June 2011
Alan White £521,220
Dean Moore £293,447
The above salaries represent a 2.2% 
increase on the respective executive 
director’s salary as at June 2010, which 
is broadly in line with the percentage 
increase awarded to the workforce as a 
whole during the same period.
Annual performance-related bonus 
The executive directors and senior 
executives participate in one of a number 
of annual performance-related bonus 
schemes at the invitation of the committee. 
Each scheme is designed to thoroughly 
stretch the performance of the executive 
and is linked to absolute growth in annual 
profit, the achievement of certain business 
targets and of personal objectives. 
These targets are reviewed and agreed 
by the committee at the beginning of 
each financial year to ensure that they 
are appropriate to the current market 
conditions, the long-term strategy of the 
company and that they continue to remain 
stretching and challenging. The targets are 
linked to KPIs which are drawn from, and 
relate to, the achievement of ‘milestones’ 
contained in the company’s strategic long-
term plan. They are therefore aligned to 
the strategic objectives of the company 
and aimed at increasing shareholder value, 
whilst being prudent and safeguarding the 
long-term future of the company. 
The components of the annual bonus 
scheme are made up as follows:-



The maximum potential bonus payable 
to an executive director for 2011/12 and 
2012/13 is 100% of basic salary. 75% of 
any bonus earned is payable in cash and 
25% is deferred net of tax into company 
shares for two years under the DABs 
scheme and is eligible for a 1:1 match on 
the pre-tax value of the shares. Awards of 
matching shares are released two years 
from their date of award provided the 
executive remains in employment and 
are subject to a financial performance 
condition requiring that growth in the 
company’s earnings per share must at 
least equal the growth of the retail price 
index over the deferral period. 
The performance targets used for 2011/12 
were based on a combination of a 
profit target, improvements in customer 
service and the achievement of personal 
objectives. The performance targets for 
2012/13 have recently been reviewed 
and, once again, will be based upon a 
combination of a profit target and the 
achievement of personal and corporate 
objectives. 
For 2011/12 the achievement of each 
element the bonus was scored as follows 
for both executive directors:- 
(a) Group profit (70% of bonus)
 The targeted adjusted profit before 
tax range for bonus purposes was 
£95.0m to £103.0m, compared with the 
prior year’s adjusted result of £98.7m. 
Adjusted profit before tax for 2011/12 
was £97.0m, therefore the bonus 
payment due under this element of the 
scheme was 17.5% (of a maximum of 
70%) for both the chief executive and 
the finance director.
(b) Corporate objectives (15% of bonus)
 The corporate objective for the year in 
review was related to improvements 
in customer service targets. This was 
measured against ten leading service 
measures and benchmarked against  N Brown Group plc Annual Report & Accounts 2012 31
Remuneration Report
a range index totaling 100. A score 
of 68 was achieved and therefore the 
payment due under this element of 
the bonus scheme was 10.2% (of a 
maximum of 15%) for both executive 
directors. 
(c) Individual performance objectives 
(15% of bonus)
 Several individual performance 
objectives are established for each 
senior executive. These are stretching 
objectives designed to achieve 
exceptional improvements against the 
prior year, or budgeted results, or the 
delivery of a key strategic project linked 
to corporate strategy. In the year in 
review amongst Alan White’s personal 
objectives were to increase revenue 
and gross margin from both products 
and services, deliver key information 
technology and infrastructure projects, 
particularly to online functionality, 
deliver agreed targets for the bad debt 
charge and other major overheads, 
progress business development 
activities and update strategic options 
for the group. Amongst Dean Moore’s 
personal objectives were to manage 
group borrowings, renew the group’s 
bilateral loan facilities, deliver agreed 
targets for the bad debt charge, review 
the group’s cost base and recommend 
areas of reduction. The achievement 
for the individual performance objective 
elements of the bonus scheme for the 
executive directors was adjudged by 
the committee and the group Chairman 
to be as follows:

   (of a maximum of 15%) 

   (of a maximum of 15%) 
Based on the results of the three elements 
comprised in the annual bonus scheme, 
the bonus payable for the year under 
review, 25% of which is compulsorily 
converted into shares and deferred for  
two years, is as follows:
Share incentives 
Subject to the review of the committee, 
executive directors and senior executives 
are considered for participation in one of 
either the company’s long-term incentive 
plan or its executive share option schemes. 
The committee’s policy is that combined 
awards (ie awards under both the plan 
and the schemes) shall not be made 
other than where individual contribution 
to the performance of the group has been 
exceptional or on recruitment. In addition, 
it is the committee’s policy only to grant 
combined grants where full consideration 
has been given to the following:

the company and the dilutive cost 
for shareholders for a given share 
commitment to an executive; 

might apply to awards and options; or 

For the year under review no combined 
awards were made. 
Existing schemes
Long-term incentive share plan (“LTIP”)
At the discretion and invitation of the 
committee, executive directors and certain 
senior executives are eligible to participate 
in the group’s long-term incentive share 
plan. The plan provides appropriate 
incentives to reward sustained success 
through the achievement of challenging 
business targets, thereby better 
aligning the interests of shareholders 
and executives. It is the intention of the 
committee to recommend that awards of 
LTIPs are made again in 2012/13. 
Long-term incentive share plan Description
Maximum Annual Award (% of Salary) 150%     
Nature of Right A nil cost award over a fixed number of shares subject to the satisfaction of conditions 
Performance Period Three years    
Performance Requirements  Total shareholder return ("TSR") subject to quartile ranking of company against  
  comparator group of companies calculated over a performance  period over three years
Additional Features  None  
Currently the committee adopts a policy of granting awards of up to 100% of salary to both executive directors.
 
Name   Alan White Dean Moore 
2011/12 Bonus & Deferred Shares Paid    £201,712 £110,043
2011/12 Matching Share Award (Contingent)    £50,428 £27,511 
Total 2011/12 Bonus & Matching Share Award as a percentage of Salary   48.3% 46.9%  N Brown Group plc Annual Report & Accounts 2012 32
Remuneration Report
Performance condition
The LTIP performance condition is 
based upon TSR. TSR as a performance 
condition is considered appropriate for the 
following reasons: 

appropriate and common measure for 
long-term incentive arrangements within 
FTSE 250 companies; 

opinion of the committee more closely 
aligned with shareholder interests than 
earnings per share (“EPS”) growth; and 

closely evaluates company performance 
against a basket of comparator 
companies in the same sector.
 
The committee determines whether the 
TSR performance conditions for share 
awards are satisfied by ranking the 
company over a three-year performance 
period measured from the date of grant 
against a group of comparator companies 
currently comprising: Alexon, ASOS, 
Blacks Leisure, Debenhams, Dixons 
Retail, Dunelm, Findel, Flying Brands, 
French Connection, Halfords, HMV, 
Home Retail Group, JJB Sports, Kesa 
Electrical, Laura Ashley, Marks & Spencer, 
Moss Bros Group, Mothercare and 
Next. The committee determines from 
time to time which companies are to be 
added or removed from this comparator 
group, including the treatment of any 
company which ceases trading during any 
performance period. For 2012 Moss Bros, 
J.D. Sports and Provident Financial will 
replace Black’s Leisure, Alexon and Comet 
in the comparator list. 
Vesting of awards
For awards vesting in 2012 and beyond 
100% of the award will vest if the company’s 
TSR is ranked in the upper quartile. 
Depending on rank, where the company’s 
TSR is ranked between the median and 
upper quartiles, between 25% and 85% of 
the award will vest. The percentage award 
vesting at median performance is 25% of 
the maximum award. 
The company’s TSR performance against 
these targets is measured by reference to 
publicly available data produced by the 
company’s brokers, Credit Suisse, and by 
Datastream. The results are then reviewed 
and ratified by the committee before any 
final award is made.
There are currently 3 LTIP awards extant. 
Based on TSR performance as at 30 
April 2012, the company is situated in the 
relevant quartiles as follows:
2009/12 award - 2nd quartile
2010/13 award - 2nd quartile
2011/14 award - 2nd quartile
Executive share option schemes 
For share option schemes, including the new Unapproved and CSOP schemes approved at last year’s AGM, a performance condition of 
growth in EPS applies (see below). 
The rationale for executives participating in the option schemes is the same as for their participation in the long-term share incentive plan.
Term Description 
Schemes Unapproved and HM Revenue & Customs CSOP 2010 
Maximum Annual Award 200% of remuneration (salary, bonus and commission)  
 “Normal” maximum 100% of remuneration 
Nature of Right  A right to purchase a fixed number of shares at the market price on the date of grant 
subject to the satisfaction of conditions 
Performance Period Three years from the date of grant 
Performance Requirements Growth in EPS equal to, or greater than, the growth of the Retail Price Index (“RPI”) +9.2%
There is no plan to make any CSOP awards to executive directors in 2012/13.  N Brown Group plc Annual Report & Accounts 2012 33
Remuneration Report
  Potential termination Potential payment  Potential payment in 
Name payment upon company takeover event of liquidation
Alan White 12 month’s salary Nil (unless terminated)  Nil (unless terminated)
Dean Moore 12 month’s salary Nil (unless terminated)  Nil (unless terminated)
Apart from service contracts, no executive director has any material interest in any contract with the company or its subsidiaries.
Value creation plan 2009
In 2009 shareholders approved the 
adoption of a new one-off long-term 
incentive share plan, the Value Creation 
Plan 2009 ("VCP") under which awards 
over a total of 3.5 million shares could 
be granted. Full details of the VCP and 
how it would work were explained to 
shareholders in the notice convening  
the meeting.
The one-off awards under the VCP were 
granted on 26 February 2009 and details  
of the awards made to each of the 
directors can be found on page 38. 
Following the end of the performance 
period attaching to the 2009 VCP 
awards, the remuneration committee 
determined that the company’s average 
TSR performance over the three years to 
the end of February 2012 had not been 
sufficient for any of the awards to vest and 
consequently all awards made under the 
VCP have now lapsed in full. 
There is no current intention to replace  
the VCP with a similar scheme.
All employee share schemes 
The group operates an HM Revenue & 
Customs approved savings related share 
option scheme for the benefit of group 
employees, provided that they have 
completed at least six months’ service. 
Eligible employees, including executive 
directors and senior executives, may 
be granted options over the company’s 
shares at a discount of up to 20% to the 
prevailing market price at the time of grant 
of the option, which (subject to certain 
conditions) can be exercised after either 
three or five years. 
There is currently no intention to invite 
eligible employees to participate in the 
company’s share incentive plan (SIP). 
Shareholding guidelines
The company has introduced formal share 
ownership guidelines under which the 
Chief Executive and the Group Finance 
Director are respectively required to hold 
company shares equal in value (at the time 
of acquisition) to 200% and 100% of their 
base salary respectively. As at the date of 
this report the respective holdings are as 
follows (as a % of base salary).
Alan White 348%
Dean Moore 183%
Pension 
Defined benefit scheme 
Alan White is a member of the N Brown 
Group Pension Fund (“the fund”), which 
is a HM Revenue & Customs registered 
defined benefit scheme. The group has 
also made an unregistered promise of 
benefits in addition to those of the fund 
such that the overall group provides 
for him, at his normal retirement age of 
60, a pension accrual rate of 1/40th of 
pensionable salary, which is defined as 
base salary only, (to give a maximum 
pension of 2/3 pensionable salary at 
normal retirement age, including retained 
benefits and benefits earned in the 
fund prior to 1999). He is also provided 
with a lump sum death benefit of four 
times pensionable salary. The pension 
is calculated on a final salary basis for 
service prior to 30 June 2005 and from 
then on a career average revalued earnings 
basis. As Alan White remained in service 
until August 2010, his previous period of 
service with the group from 1985 to 1999 
will be included in full in the calculation of 
his current pension, subject to the above 
two-thirds maximum. As reported last year, 
in April 2010, Alan White waived £177,927 
of his unapproved annual accrued 
pension entitlement under the terms of the 
unapproved scheme. On 30 March 2011  
he waived a further £9,039 of his 
unapproved pension.
No part of a director’s pensionable salary 
includes remuneration other than basic pay. 
All members of the fund currently pay 
contributions (or sacrifice salary) at the  
rate of 6% or 8% of pensionable salary. 
The group bears the cost of providing the 
lump sum death benefit and the balance  
of contributions necessary to finance  
fund benefits.
The fund is now closed to new entrants. 
Eligible employees who would otherwise 
have been entitled to join the fund are now 
able to join a new defined contribution 
pension scheme. 
Defined contribution scheme 
Dean Moore is a member of the defined 
contribution scheme. Members of 
this scheme pay contributions up to a 
maximum rate of 6% of pensionable 
salary, with the Company matching  
the level of employee contribution.  
The company contributes 6% of Dean 
Moore’s annual salary into the defined 
contribution scheme. 
Benefits in kind 
Executive directors receive the following 
additional benefits: 


Directors’ contracts 
It is the company’s policy that executive 
directors should have contracts with an 
indefinite term providing for a maximum  

The policy is that the company does not 
make payments beyond its contractual 
obligations on termination. In addition, 
executive directors are expected to 
mitigate their loss or, within existing 
contractual constraints, accept phased 
payments. The committee seeks to ensure 
that there are no unjustified payments for 
failure. None of the executive directors’ 
contracts provides for liquidated damages. 
There are no special provisions contained 
in any of the executive directors’ contracts 
that provide for longer periods of notice 
on a change of control of the company. 
Further, there are no special provisions 
providing for additional compensation 
on an executive director’s cessation of 
employment with the company.  
Potential termination payments are 
summarised below:  N Brown Group plc Annual Report & Accounts 2012 34
Remuneration Report
Non-executive directors are retained on 
letters of appointment. All non-executive 
appointments are on six- month rolling 
 subject to successful re-election upon 
retirement. Termination carries no right to 
compensation other than that provided by 
general law.
Brief details of non-executive and 
executive directors’ contracts are 
summarised below: 
 
   Date of contract/letter Notice 
Name Status of appointment period
Lord Alliance of Manchester CBE non executive 16 May 2007 6 months
Alan White executive 10 August 2002 12 months
Dean Moore executive 20 December 2004 12 months
Nigel Alliance OBE non executive 16 May 2007 6 months
Ivan Fallon non executive 30 May 2007 6 months
Lord Stone of Blackheath non executive 30 May 2007 6 months
John McGuire non executive 16 May 2007 6 months
Anna Ford non executive 11 February 2009 6 months
Additional directorships
Executive directors are encouraged 
by the company to hold non-executive 
directorships in listed businesses. Fees 
for such directorships are retained by the 
executive director. Alan White currently 
holds a non-executive directorship with 
Topps Tiles Plc for which he is paid a  
fee of £42,000 per annum. Alan White  
is permitted to retain this fee.
Non-executive directors 
All non-executive directors have 
specific terms of engagement and their 
remuneration is determined by the board 
within the limits set by the Articles of 
Association and based on independent 
surveys of fees paid to non-executive 
directors of similar companies. 
The basic fee paid to each non-executive 
director in the year was within the range 
£17,000–£38,000 per annum. A further fee 
of £5,000 is payable for additional work 
performed in respect of the chairmanship 
of the remuneration committee, £6,500 for 
the chairmanship of the audit committee 
and £3,000 for chairing the nomination 
committee. The Deputy Chairman also 
receives an additional fee of £7,000 in 
recognition of the further duties which 
that post entails. Non-executive directors 
cannot participate in any of the company’s 
share incentive schemes or performance-
based plans and are not eligible to join the 
company’s pension scheme. 
Performance graph 
The graph shows the company’s five 
year performance, measured by TSR, 
compared with the performance of the 
FTSE Mid-250 Index, also measured by 
TSR. The company is a member of this 
index and accordingly it is felt to be the 
most appropriate comparator group for 
this purpose. 
 
Total Shareholder Return Performance: N Brown vs FTSE 250
0 
20 
40 
60 
80 
100 
120 
140 
Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12
Total Return (rebased to 100) 
Financial Period Source: Datastream
N Brown Group plc
FTSE Mid-250 Index N Brown Group plc Annual Report & Accounts 2012 35
Remuneration Report
Audited Information:
Directors’ remuneration and interests
Emoluments
The individual elements of directors’ emoluments for the year are as follows:
    Contribution  Performance-   
   Salaries to employee Taxable related 2012 2011 
   /fees benefit trust
1
 benefits
2
 bonuses
3
 total total
   £’000 £’000 £’000 £’000 £’000 £’000
Executive (salaries)
Alan White  528 1,146 1 202 1,877 3,210 
Dean Moore  317 71 1 110 499 595 
    
Non executive (fees)
Lord Alliance of Manchester CBE 17 – – – 17 17 
Nigel Alliance OBE  18 – – – 18 18 
Ivan Fallon  50 – – – 50 50 
Lord Stone of Blackheath  38 – – – 38 38 
John McGuire  45 – – – 45 45 
Anna Ford  38 – – – 38 38 
  1,051 1,217 2 312 2,582 4,011 
    
1. On 1 April 2011 emoluments of £1,146,606 for Alan White and £71,523 for Dean Moore have been paid directly to an employee benefits trust to be held for the 
benefit of their families.      
2. Taxable benefits comprise the provision of private medical cover.      
3. Included in the performance-related bonus awards stated above are £50,428 for Alan White and £27,511 for Dean Moore, which (after deduction of income tax)  
are shortly due to be transferred to the deferred annual bonus scheme. N Brown Group plc Annual Report & Accounts 2012 36
Remuneration Report
Pensions
Details of directors’ accrued pension entitlements under the group’s defined benefit schemes are as follows:
   Change  Value of Transfer  Transfer 
   in accrued  net change value of Change value of 
  Accrued pension Accrued in accrual accrued in transfer accrued 
  pension at during pension at during  pension at value during pension at 
  26 Feb 11
1
 year
2
 3 Mar 12
1
 year
2,3,4,6
 26 Feb 11
3
 year
3,4,5,6
 3 Mar 12
 
  £’000 £’000 £’000 £’000 £’000 £’000 £’000
Alan White 106 -6 105 64 1,813 371 2,194
1. Pension entitlements shown are those that would be paid annually on retirement, based on service to the end of the year or leaving date if earlier.
2. Change stated net of inflation.           
3. Transfer values have been calculated in accordance with the Occupational Pension Schemes (Transfer Values) Regulations 1996.

5. The change in the transfer value includes the effects of fluctuations in the transfer value due to factors beyond the control of the company and directors, such  

6. Over the year Mr White waived his unapproved accrued pension benefits under the terms set out in his unapproved arrangement.
Voluntary contributions paid by the directors and resulting benefits are not shown.

£17,512 (2011, £16,858).
Share options
Details of directors’ share options are as follows:
        Market 
        price at Date from 
  At 26 Feb Granted Lapsed Exercised At 3 Mar Exercise date of which 
  2011 in year in year in year 2012 price exercise exercisable Expiry date
Alan White
 – 222.0p  01/08/2011 31/01/2012
  4,234 – (4,234) – –
Dean Moore
 8,413 186.0p  01/08/2014 31/01/2015
  8,413 – – – 8,413
 N Brown Group plc Annual Report & Accounts 2012 37
Remuneration Report
Deferred annual bonus share awards

       Market Market 
       price at price at Date from 
  At 26 Feb Awarded Lapsed Exercised At 3 Mar date of date of which 
  2011 in year in year in year 2012 award exercise exercisable Expiry date
Alan White  45,010  –   –   (45,010)  –   247.0p   275.5p  29/05/2011 28/11/2011
   53,912  –  – –   53,912   250.0p   28/05/2012 27/11/2012
   –   38,422  –  –   38,422   288.0p   02/06/2013 01/12/2013
   98,922   38,422   –   (45,010)  92,334 
Dean Moore  23,165   –   –   (23,165) –   247.0p   275.5p  29/05/2011 28/11/2011
   28,340  –   –  –   28,340  250.0p   28/05/2012 27/11/2012
   –   21,684   –  –   21,684   288.0p   02/06/2013 01/12/2013
   51,505   21,684  –   (23,165)  50,024 
The total gains made by Alan White and Dean Moore on the exercise of the awards during the year was £124,003 and £63,820 
respectively.
Long term incentives
Details of awards of shares made to the directors are as follows:
       Market Market 
       price at price at Date from 
  At 26 Feb Awarded Lapsed Exercised At 3 Mar date of date of which 
  2011 in year in year in year 2012 award exercise exercisable Expiry date
Alan White
   277,200   –   –  (277,200) –
1
  180.0p   275.5p  02/07/2011 01/01/2012
   212,691   –   –   –  212,691
1
  235.0p   28/05/2012 27/11/2012
   204,136   –   –   –  204,136
1
  247.0p   05/07/2013 04/01/2014
   –   194,434   –   –  194,434
1
  275.0p   08/07/2014 07/01/2015
   694,027   194,434   -   (277,200)  611,261
Dean Moore
   145,530   –   –   (145,530) –
1
  180.0p   270.9p  02/07/2011 01/01/2012
   111,663   –   –   –  111,663
1
  235.0p   28/05/2012 27/11/2012
  114,928   –   –   –   114,928
1
  247.0p   05/07/2013 04/01/2014
   –   109,467   –   –   109,467
1
  275.0p   08/07/2014 07/01/2015
   372,121   109,467   –   (145,530) 336,058
1. Exercise is subject to performance condition geared to Total Shareholder Return.
The total gains made by Alan White and Dean Moore on the exercise of the awards during the year was £763,686 and £394,241 
respectively. N Brown Group plc Annual Report & Accounts 2012 38
Remuneration Report
Value creation plan
Details of awards of shares made to the directors are as follows:
       Market Market 
       price at price at Date from 
  At 26 Feb Awarded Lapsed Exercised At 3 Mar date of date of which 
  2011 in year in year in year 2012 award exercise exercisable Expiry date
Alan White
  1,200,000 – (1,200,000) – –
1, 2
 199.25p  28/02/2014 28/02/2019
  1,200,000 – (1,200,000) – –
Dean Moore
  500,000 – (500,000) – –
1, 2
 199.25p  28/02/2014 28/02/2019
  500,000 – (500,000) – –
1. Exercise was subject to performance conditions geared to Total Shareholder Return and growth in earnings per share which was not achieved and therefore  
these awards lapsed.
2. These awards were exchanged for an equivalent number of contingent share awards on 25 February 2010.
Interests
Directors’ interests in shares of the company are as follows:
    At 3 Mar At 26 Feb 
    2012 2011 
    Ordinary Ordinary 
    Shares of  Shares of  
    11
1
/19p each 11
1
/19p each
Lord Alliance of Manchester CBE   75,316,182 75,316,182 
Lord Alliance of Manchester CBE (non beneficial)   19,731,784 19,731,784 
Alan White   760,316 688,894 
Dean Moore   224,572 202,670 
Nigel Alliance OBE   24,658,313 24,658,313 
Nigel Alliance OBE (non beneficial)   6,830,943 6,830,943 
Ivan Fallon   10,000 10,000 
Lord Stone of Blackheath   9,047 9,047 
John McGuire   9,047 9,047 
Anna Ford   – – 
Together with other employees and former employees of the group, the executive directors are potential beneficiaries of the following 
trusts, and as such are deemed to have a beneficial interest in the following shares of the company held by these trusts:
    At 3 Mar At 26 Feb 
    2012 2011
N Brown Group plc No.2 Employee Share Ownership Trust   1,700,000 1,718,287 
There have been no changes in the above interests of the directors between the year end and 30 April 2012.
Approval
This report was approved by the board of directors on 18 May 2012 and signed on its behalf by:
Ivan Fallon
Chairman of the remuneration committee N Brown Group plc Annual Report & Accounts 2012 39
Independent Auditor’s Report to the 
members of N Brown Group plc.
We have audited the group financial 
statements of N Brown Group plc for the 
53 weeks ended 3 March 2012 which 
comprise the Consolidated Income 
Statement, the Consolidated Statement of 
Comprehensive Income, the Consolidated 
Balance Sheet, the Consolidated Cash 
Flow Statement, the Consolidated 
Statement of Changes in Equity, the 
Reconciliation of Operating Profit to 
Net Cash from Operating Activities and 
the related notes 1 to 29. The financial 
reporting framework that has been 
applied in their preparation is applicable 
law and International Financial Reporting 
Standards (IFRSs) as adopted by the 
European Union.
This report is made solely to the 
company’s members, as a body, in 
accordance with Chapter 3 of Part 16 of 
the Companies Act 2006. Our audit work 
has been undertaken so that we might 
state to the company’s members those 
matters we are required to state to them 
in an auditor’s report and for no other 
purpose. To the fullest extent permitted 
by law, we do not accept or assume 
responsibility to anyone other than the 
company and the company’s members as 
a body, for our audit work, for this report, 
or for the opinions we have formed.
Respective responsibilities of directors 
and auditor
As explained more fully in the Directors’ 
Responsibilities Statement, the directors 
are responsible for the preparation of the 
group 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 group 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 Ethical Standards for Auditors.
Scope of the audit of the financial 
statements
An audit involves obtaining evidence 
about the amounts and disclosures 
in the financial statements sufficient 
to give reasonable assurance that the 
financial statements are free from material 
misstatement, whether caused by fraud 
or error. This includes an assessment 
of: whether the accounting policies are 
appropriate to the group’s circumstances 
and have been consistently applied and 
adequately disclosed; the reasonableness 
of significant accounting estimates 
made by the directors; and the overall 
presentation of the financial statements.  
In addition, we read all the financial and 
non-financial information in the annual 
report to identify material inconsistencies 
with the audited financial statements.  
If we become aware of any apparent 
material misstatements or inconsistencies 
we consider the implications for our report.
Opinion on financial statements
In our opinion the group financial 
statements:

the group’s affairs as at 3 March 2012 
and of its profit for the 53 weeks then 
ended;

accordance with IFRSs as adopted by 
the European Union; and

the requirements of the Companies Act 
2006 and Article 4 of the IAS Regulation.
Opinion on other matters prescribed by 
the Companies Act 2006
In our opinion:

Report to be audited has been properly 
prepared in accordance with the 
Companies Act 2006; and

Report for the 53 week period for which 
the group financial statements are 
prepared is consistent with the group 
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:

remuneration specified by law are not 
made; or

and explanations we require for our audit.
Under the Listing Rules we are required  
to review:

within the Director’ Report, in relation  
to going concern;

Statement relating to the company’s 
compliance with the nine provisions of 
the UK Corporate Governance Code 
specified for our review; and

shareholders by the Board on directors’ 
remuneration.
Other matters
We have reported separately on the parent 
company financial statements of N Brown 
Group plc for the 53 week period ended 3 
March 2012. 
Damian Sanders ACA 
(Senior Statutory Auditor)
for and on behalf of Deloitte LLP
Chartered Accountants and  
Statutory Auditor
Manchester, UK
18 May 2012
Independent Auditor’s Report – Group Accounts N Brown Group plc Annual Report & Accounts 2012 40
    2012 2011 
For the 53 weeks ended 3 March 2012  Note £m £m
Revenue  3 753.2 718.8 
Operating profit   5 102.0 102.6 
Investment income  7 4.3 4.1 
Finance costs  8 (10.7) (8.5)
Profit before taxation and fair value adjustments to financial instruments   95.6 98.2
Fair value adjustments to financial instruments  18 1.3 (3.7)
Profit before taxation   96.9 94.5
Taxation  9 (15.9) (22.8)
Profit attributable to equity holders of the parent   81.0 71.7
Adjusted earnings per share   11
Basic   28.91p 27.02p
Diluted    28.88p 26.98p
Earnings per share   11
Basic   29.28p 26.04p
Diluted    29.24p 26.00p
Consolidated Statement of Comprehensive Income
    2012 2011 
For the 53 weeks ended 3 March 2012  Note £m £m
Profit for the period    81.0 71.7
Other items of comprehensive income
Exchange differences on translation of foreign operations    (0.2) (0.6)
Actuarial losses on defined benefit pension schemes   28 (6.2) (2.3)
Tax relating to components of other comprehensive income  9 1.6 0.6
    (4.8) (2.3)
Total comprehensive income for the period attributable to equity holders of the parent   76.2 69.4
Consolidated Income Statement N Brown Group plc Annual Report & Accounts 2012 41
Consolidated Balance Sheet
    2012 2011 
As at 3 March 2012  Note £m £m
Non-current assets 
Intangible assets  12 62.8 52.2
Property, plant & equipment  13 67.2 69.1
Retirement benefit surplus  28 – 3.3
Deferred tax assets  20 1.9 3.5
    131.9 128.1
Current assets 
Inventories  15 82.6 78.1
Trade and other receivables  16 522.0 490.8
Cash and cash equivalents  24 57.5 49.1
    662.1 618.0
Total assets   794.0 746.1
Current liabilities 
Bank loans and overdrafts  17 – (40.0)
Trade and other payables  21 (106.6) (114.5)
Derivative financial instruments  18 (0.1) (1.4)
Current tax liability   (22.9) (28.8)
    (129.6) (184.7)
Net current assets   532.5 433.3
Non-current liabilities   
Bank loans  17 (250.0) (190.0)
Retirement benefit obligation  28 (1.0) –
Deferred tax liabilities  20 (11.1) (11.0)
    (262.1) (201.0)
Total liabilities   (391.7) (385.7)
Net assets   402.3 360.4
Equity     
Share capital  22 31.3 31.0
Share premium account   11.0 11.0
Own shares  23 (1.5) (1.2)
Foreign currency translation reserve   1.9 2.1
Retained earnings    359.6 317.5
Total equity   402.3 360.4
The financial statements of N Brown Group plc (Registered Number 814103) were approved by the board of directors and authorised for 
issue on 18 May 2012.
They were signed on its behalf by:
Alan White
Dean Moore
Directors N Brown Group plc Annual Report & Accounts 2012 42
Consolidated Cash Flow Statement
    2012 2011 
For the 53 weeks ended 3 March 2012  Note £m £m
Net cash from operating activities   56.5 57.4
Investing activities 
Purchases of property, plant and equipment   (5.7) (6.4)
Purchases of intangible assets   (19.2) (15.7)
Acquisition of subsidiary   – (10.3)
Interest received   0.1 0.2
Net cash used in investing activities   (24.8) (32.2)
Financing activities
Interest paid   (7.9) (4.2)
Dividends paid   (35.0) (31.5)
Increase in bank loans   20.0 –
Purchase of shares by ESOT   (1.0) (0.8)
Proceeds on issue of shares held by ESOT   0.6 0.5
Net cash used in financing activities   (23.3) (36.0)
Net increase/(decrease) in cash and cash equivalents   8.4 (10.8)
Cash and cash equivalents at beginning of period   49.1 59.9
Cash and cash equivalents at end of period  24 57.5 49.1
Reconciliation of Operating Proﬁt to Net Cash from 
Operating Activities
    2012 2011 
For the 53 weeks ended 3 March 2012   £m £m
Operating profit   102.0 102.6
Adjustments for:
 Depreciation of property, plant and equipment   7.6 7.8
 Amortisation of intangible assets   8.6 6.9
Share option charge    2.2 2.1
Operating cash flows before movements in working capital   120.4 119.4
Increase in inventories   (4.5) (12.0)
Increase in trade and other receivables   (30.7) (29.8)
(Decrease)/increase in trade and other payables   (7.5) 3.7
Pension obligation adjustment   (1.6) (7.4)
Cash generated by operations   76.1 73.9
Taxation paid   (19.6) (16.5)
Net cash from operating activities   56.5 57.4 N Brown Group plc Annual Report & Accounts 2012 43
Consolidated Statement of Changes in Equity
      Foreign  
    currency 
  Share   Share   Own   translation   Retained   
 capital premium shares reserve earnings Total 
  £m   £m   £m   £m   £m   £m 
 Note 22  Note 23 
Changes in equity for the 53 weeks  
ended 3 March 2012
  
Balance as at 26 February 2011 31.0 11.0 (1.2) 2.1 317.5 360.4
Profit for the period  – – – – 81.0 81.0
Other items of comprehensive income  
for the period  – – – (0.2) (4.6) (4.8)
Total comprehensive income  – – – (0.2) 76.4 76.2 
for the period  
  
Equity dividends  – – – – (35.0) (35.0) 
Issue of ordinary share capital  0.3 – – – – 0.3
Purchase of own shares by ESOT  – – (1.3) – – (1.3)
Issue of own shares by ESOT  – – 1.0 – – 1.0
Adjustment to equity for share payments  – – – – (0.4) (0.4)
Share option charge  – – – – 2.2 2.2
Tax on items recognised directly in equity  – – – – (1.1) (1.1)
Balance at 3 March 2012 31.3 11.0 (1.5) 1.9 359.6 402.3
  
Changes in equity for the 52 weeks  
ended 26 February 2011   
  
Balance as at 27 February 2010 30.8 11.0 (0.4) 2.7 274.9 319.0
  
Profit for the period  – – – – 71.7 71.7 
Other items of comprehensive income   
for the period  – – – (0.6) (1.7) (2.3)
Total comprehensive income  – – – (0.6) 70.0 69.4 
for the period
Equity dividends  – – – – (31.5) (31.5)
Issue of ordinary share capital  0.2 – – – – 0.2
Purchase of own shares by ESOT  – – (1.0) – – (1.0)
Issue of own shares by ESOT  – – 0.2 – – 0.2
Adjustment to equity for share payments  – – – – 0.3 0.3
Share option charge  – – – – 2.1 2.1
Tax on items recognised directly in equity  – – – – 1.7 1.7
Balance at 26 February 2011  31.0 11.0 (1.2) 2.1 317.5 360.4 N Brown Group plc Annual Report & Accounts 2012 44
1 General information
N Brown Group plc is a company 
incorporated in the United Kingdom under 
the Companies Act 2006. The address of 
the registered office is listed at the end 
of the report. The nature of the group’s 
operations and its principal activities are 
set out on page 18 of the directors’ report. 
These financial statements are presented 
in pounds sterling because that is the 
currency of the primary economic 
environment in which the group operates. 
Foreign operations are included in 
accordance with the policies set out  
in note 2. 
 
the 53 weeks ended 3 March 2012 
have been prepared in accordance with 
International Financial Reporting Standards 
(IFRS) as adopted for use in the EU.
The accounting policies have been applied 
consistently in the current and prior 
periods, other than that as set out below.
Adoption of new and revised Standards
In the current year, the following new and 
revised Standards and Interpretations 
have been adopted and have affected 
the amounts reported in these financial 
statements.
 
Standards affecting the financial 
statements
The following amendments were made as 
part of Improvements to IFRSs (2010). 
 
Amendment to IFRS 7 Financial Instruments: 
Disclosures. The amendment clarifies the 
required level of disclosure around credit 
risk and collateral held and provides relief 
from disclosure of renegotiated financial 
assets. The impact of this amendment 
has been to reduce the level of disclosure 
provided on collateral that the entity holds 
as security on financial assets that are past 
due or impaired.
Standards not affecting the reported 
results nor the financial position
The following new and revised Standards 
and Interpretations have been adopted in 
the current year. Their adoption has not 
had any significant impact on the amounts 
reported in these financial statements but, 
with the exception of the amendment to 
IFRS 1, may impact the accounting for 
future transactions and arrangements.
Amendment to IFRS 1 - Limited Exemption 
from Comparative IFRS 7 Disclosures 
for First-time Adopters. The amendment 
provides a limited exemption for first-time 
adopters from providing comparative fair-
value hierarchy disclosures under IFRS 7.
 
IAS 24 (2009) - Related Party Disclosures. 
The revised standard has a new, 
clearer definition of a related party, 
with inconsistencies under the previous 
definition having been removed.
Amendment to IAS 32 - Classification of 
Rights Issues. Under the amendment, 
rights issues of instruments issued to 
acquire a fixed number of an entity’s own 
non-derivative equity instruments for a 
fixed amount in any currency and which 
otherwise meet the definition of equity are 
classified as equity.
Amendments to IFRIC 14 - Prepayments  
of a Minimum Funding Requirement.  
The amendments now enable recognition 
of an asset in the form of prepaid minimum 
funding contributions.
Improvements to IFRSs 2010. Aside from 
those items already identified above, the 
amendments made to standards under the 
2010 improvements to IFRSs have had no 
impact on the group.
Standards in issue not yet effective
At the date of authorisation of these 
financial statements, the following 
Standards and Interpretations which 
have not been applied in these financial 
statements were in issue but not yet 
effective (and in some cases had not yet 
been adopted by the EU):
 

and Removal of Fixed Dates for First-
time Adopters

Transfers of Financial Assets


Statements

 
Other Entities

of Other Comprehensive Income

Recovery of Underlying Assets


Statements

Associates and Joint Ventures

Production Phase of a Surface Mine
 
The directors do not expect that the 
adoption of the standards listed above 
will have a material impact on the financial 
statements of the group in future periods, 
except as follows:
- IFRS 9 will impact both the measurement 
and disclosures of Financial Instruments;
- IFRS 12 will impact the disclosure of 
interests the group has in other entities;
- IFRS 13 will impact the measurement of 
fair value for certain assets and liabilities 
as well as the associated disclosures; 
and
- IAS 19 (revised) will impact the 
measurement of the various 
components representing movements 
in the defined benefit pension obligation 
and associated disclosures, but not the 
group’s total obligation. It is likely that 
following the replacement of expected 
returns on plan assets with a net 
finance cost in the income statement, 
the profit for the period will be reduced 
and accordingly other comprehensive 
income increased.
Beyond the information above, it is not 
practicable to provide a reasonable 
estimate of the effect of these standards 
until a detailed review has been completed.
2 Accounting policies
Adoption of International Financial 
Reporting and Accounting Standards 
(IFRS).
The group has adopted Standards and 
Interpretations issued by the International 
Accounting Standards Board (IASB) and 
the International Financial Reporting 
Interpretations Committee (IFRIC) of the 
IASB that are relevant to its operations.
Individual standards and interpretations 
have to be adopted by the European 
Commission (EC) and the process leads 
to a delay between the issue and adoption 
of new standards and interpretations 
and in some cases amendments by the 
EC. Where the group has applied a new 
standard or interpretation in advance of  
EC adoption this will be noted below in  
the relevant policy statement.
Basis of accounting 
The financial statements have been 
prepared in accordance with IFRS.  
The financial statements have also  
been prepared in accordance with  
IFRSs adopted by the European Union  
and therefore comply with Article 4 of  
the EU IAS Regulation. 
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 45
The financial statements have been 
prepared on the historical cost basis, 
except for the revaluation of certain financial 
instruments. The principal accounting 
policies adopted are set out as follows. 
Accounting period 
Throughout the accounts, the directors 
report and financial review, reference to 
2012 means at 3 March 2012 or the  
53 weeks then ended; reference to 2011 
means at 26 February 2011 or the 52  
weeks then ended.
Basis of consolidation 
The consolidated financial statements 
incorporate the financial statements  
of the company and entities controlled  
by the company (its subsidiaries) made  
up to the Saturday that falls closest to  
28 February each year. The Employee 
Share Ownership Trust and the No 2 
Employee Share Ownership Trust  
(“the employee trusts”) are also made up 
to a date co-terminus with the financial 
period of the parent company. 
The results of subsidiaries acquired or 
disposed of during the period are included 
in the consolidated income statement 
from the effective date of acquisition or 
up to the effective date of disposal, as 
appropriate. Control is achieved where 
the company has the power to govern 
the financial and operating policies of an 
investee entity so as to obtain benefits 
from its activities. Where necessary, 
adjustments are made to the financial 
statements of subsidiaries to bring the 
accounting policies used into line with 
those used by the group. 
All intra-group transactions, balances, 
income and expenses are eliminated on 
consolidation. 
Business combinations 
The acquisition of subsidiaries is 
accounted for using the purchase method. 
The cost of the acquisition is measured  
at the aggregate of the fair values, at the 
date of exchange, of assets given, liabilities 
incurred or assumed, and equity instruments 
issued by the group in exchange for 
control of the acquiree. The acquiree’s 
identifiable assets, liabilities and contingent 
liabilities that meet the conditions for 
recognition under IFRS 3 are recognised  
at their fair value at the acquisition date. 
Acquisition costs are expensed as incurred. 
Goodwill 
Goodwill arising on acquisition is 
recognised as an asset and initially 
measured at cost, being the excess of 
the cost of the business combination over 
the group’s interest in the net fair value 
of the identifiable assets, liabilities and 
contingent liabilities recognised. If, after 
reassessment, the group’s interest in the 
net fair value of the acquiree’s identifiable 
assets, liabilities and contingent liabilities 
exceeds the cost of the business 
combination, the excess is recognised 
immediately in profit or loss. 
Goodwill is reviewed for impairment at least 
annually. Any impairment is recognised 
immediately in the income statement and  
is not subsequently reversed. 
On disposal of a subsidiary, the 
attributable amount of goodwill is included 
in the determination of the profit or loss  
on disposal.
Purchased goodwill arising on acquisitions 
before 1 March 1998 was charged against 
reserves in the year of acquisition in 
accordance with UK GAAP and has not been 
reinstated and is not included in determining 
any subsequent profit or loss on disposal. 
Revenue recognition 
Revenue is measured at the fair value of 
the consideration received or receivable 
and represents the total amount receivable 
for goods and services provided in the 
normal course of business net of returns, 
VAT and sales related taxes. 
Sales of goods are recognised when 
goods are delivered and title has passed 
and it is probable that the economic 
benefits associated with the transaction 
will flow to the entity. Sales of rendering 
of services include interest, administrative 
charges and arrangement fees. Interest 
income is accrued on a time basis, by 
reference to the principal outstanding and 
the applicable effective interest rate which 
is the rate that exactly discounts estimated 
future cash receipts through the expected 
life of the financial assets to that assets’ 
net carrying amount. Such revenues 
are recognised only when collectability 
is reasonably assured. Revenue from 
non-interest related financial income is 
recognised when the services have been 
performed. 
Property, plant & equipment 
Property, plant and equipment is stated  
at cost, less accumulated depreciation  
and any provision for impairment in value. 
Depreciation is charged so as to write 
off the cost of assets to their estimated 
residual values, based on current prices 
at the balance sheet date, over their 
remaining useful lives, using the straight-
line method. No depreciation is charged on 
freehold land. In this respect the following 
annual depreciation rates apply:
Freehold buildings 2% 
Leasehold property  over the period  
and improvements of the lease 
Motor vehicles 20% 
Computer equipment 20% 
Plant and machinery  between  
5% and 20% 
Fixtures and fittings  between  
10% and 20%
Assets held under finance leases are 
depreciated over their expected useful 
lives on the same basis as owned assets 
or, where shorter, over the term of the 
relevant lease. 
The gain or loss arising on the disposal 
or retirement of an asset is determined as 
the difference between the sales proceeds 
and the carrying amount of the asset and 
is recognised in income. 
Borrowing costs 
Borrowing costs directly attributable to  
the acquisition, construction or production 
of qualifying assets, which are assets that 
necessarily take a substantial period of 
time to get ready for their intended use 
or sale, are added to the cost of those 
assets, until such time as the assets are 
substantially ready for their intended use 
or sale.
All other borrowing costs are recognised 
in profit or loss in the period in which they 
are incurred. 
Intangible assets 
Computer software development costs 
that generate economic benefits beyond 
one year are capitalised as intangible 
assets and amortised on a straight-line 
basis over five years. 
Customer databases arising on 
acquisitions assessed under the 
requirements of IFRS 3 are amortised  
over their useful economic lives, which 
have been assessed as being five years. 
Legally protected or otherwise separable 
trade names acquired as part of a 
business combination are capitalised at 
fair value on acquisition. Brand names are 
individually assessed and are assumed 
to have an indefinite life and are not 
amortised, but are subject to annual 
impairment tests.
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 46
Impairment of tangible and intangible 
assets excluding goodwill 
At each balance sheet date, the group 
reviews the carrying value of its tangible 
and intangible assets to determine whether 
there is any indication that those assets 
have suffered an impairment loss. If any 
such indication exists, the recoverable 
amount of the asset is estimated in order 
to determine the extent of the impairment 
loss (if any). Where the asset does not 
generate cash flows that are independent 
from other assets, the group estimates the 
recoverable amount of the cash-generating 
unit to which the asset belongs. 
Recoverable amount is the higher of fair 
value less costs to sell and value in use. 
In assessing value in use, the estimated 
future cash flows are discounted to their 
present value using a discount rate that 
reflects current market assessments of the 
time value of money and the risks specific 
to the asset for which the estimate of 
future cash flows have not been adjusted.
 
If the recoverable amount of an asset (or 
cash-generating unit) is estimated to be 
less than its carrying amount, the carrying 
amount of the asset (cash-generating 
unit) is reduced to its recoverable amount. 
An impairment loss is recognised as an 
expense immediately.
Where an impairment loss subsequently 
reverses, the carrying amount of the asset 
(cash-generating unit) is increased to the 
revised estimate of its recoverable amount, 
but so that the increased carrying amount 
does not exceed the carrying amount 
that would have been determined had 
no impairment loss been recognised for 
the asset (cash-generating unit) in prior 
years. A reversal of an impairment loss is 
recognised as income immediately.
Leasing 
Leases are classified as finance leases 
whenever the terms of the lease transfer 
substantially all the risks and rewards of 
ownership to the lessee. All other leases 
are classified as operating leases. 
Rentals payable under operating leases are 
charged to income on a straight-line basis 
over the term of the relevant lease. 
Assets held under finance leases are 
included in tangible fixed assets at a value 
equal to the original costs incurred by the 
lessor less depreciation, and obligations to 
the lessor are shown as part of creditors. 
The interest element is charged to the 
income statement over the period of the 
lease to produce a constant rate of charge 
on the balance of capital repayments 
outstanding. 
Inventories 
Inventories have been valued at the 
lower of cost and net realisable value. 
Cost comprises direct materials and 
those overheads that have been incurred 
in bringing inventories to their present 
location and condition based on the 
standard costing method. Cost has been 
calculated on a first-in-first-out basis.  
Net realisable value means estimated 
selling price less all costs to be incurred  
in marketing, selling and distribution. 
Taxation 
The tax expense represents the sum of the 
tax currently payable and deferred tax.
The tax currently payable is based on 
taxable profit for the year. Taxable profit 
differs from net profit as reported in the 
income statement because it excludes 
items of income or expense that are 
taxable or deductible in other years and 
it further excludes items that are never 
taxable or deductible. The group’s liability 
for current tax is calculated using tax rates 
that have been enacted or substantively 
enacted by the balance sheet date.
Deferred tax is the tax expected to be 
payable or recoverable on differences 
between the carrying amounts of assets 
and liabilities in the financial statements 
and the corresponding tax bases used 
in the computation of taxable profit, and 
is accounted for using the balance sheet 
liability method. Deferred tax liabilities 
are generally recognised for all taxable 
temporary differences and deferred tax 
assets are recognised to the extent that 
it is probable that taxable profits will 
be available against which deductible 
temporary differences can be utilised. 
Such assets and liabilities are not 
recognised if the temporary difference 
arises from goodwill or from the initial 
recognition (other than in a business 
combination) of other assets and liabilities 
in a transaction that affects neither the tax 
profit nor the accounting profit. 
Deferred tax liabilities are recognised for 
taxable temporary differences arising on 
investments in subsidiaries and interests 
in joint ventures, except where the group 
is able to control the reversal of the 
temporary difference and it is probable 
that the temporary difference will not 
reverse in the foreseeable future. 
Deferred tax is calculated at the tax rates 
that are expected to apply in the period 
when the liability is settled or the asset 
is realised. Deferred tax is charged or 
credited in the income statement, except 
when it relates to items charged or 
credited directly to equity, in which case 
the deferred tax is also dealt with in equity. 
Foreign currencies 
The individual financial statements of 
each group company are presented in 
the currency of the primary economic 
environment in which it operates (its 
functional currency). For the purpose of 
the consolidated financial statements, the 
results and financial position of each group 
company are expressed in pounds sterling, 
which is the functional currency of the 
company, and the presentation currency 
for the consolidated financial statements. 
In preparing the financial statement of 
the individual companies, transactions in 
currencies other than the entity’s functional 
currency (foreign currencies) are recorded 
at the rates of exchange prevailing on 
the dates of the transactions. At each 
balance sheet date, monetary assets and 
liabilities that are denominated in foreign 
currencies are retranslated at the rates 
prevailing on the balance sheet date. Non-
monetary items carried at fair value that 
are denominated in foreign currencies are 
translated at the rates prevailing at the date 
when the fair value was determined. Non-
monetary items that are measured in terms 
of historical cost in a foreign currency are 
not retranslated. 
Exchange differences arising on the 
settlement of monetary items, and on 
the retranslation of monetary items, 
are included in profit or loss for the 
period. Exchange differences arising 
on the retranslation of non-monetary 
items carried at fair value are included 
in profit or loss for the period except for 
differences arising on the retranslation of 
non-monetary items in respect of which 
gains and losses are recognised directly in 
equity. For such non-monetary items, any 
exchange component of that gain or loss is 
also recognised directly in equity. 
In order to hedge its exposure to certain 
foreign exchange risks, the group may 
enter into forward contracts and options 
(see below for details of the group’s 
accounting policies in respect of such 
derivative financial instruments).
 
For the purpose of presenting consolidated 
financial statements, the assets and 
liabilities of the group’s foreign operations 
are translated at exchange rates prevailing 
on the balance sheet date. Income 
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 47
and expense items are translated at 
the average exchange rates for the 
period, unless exchange rates fluctuate 
significantly during that period, in which 
case the exchange rates at the date 
of transactions are used. Exchange 
differences arising, if any, are classified 
as equity and transferred to the group’s 
translation reserve. Such translation 
differences are recognised as income or 
as expenses in the period in which the 
operation is disposed of. 
Financial instruments 
Financial assets and financial liabilities are 
recognised on the group’s balance sheet 
when the group becomes a party to the 
contractual provisions of the instrument. 
Profits and losses on financial instruments 
are recognised in the income statement as 
they arise. 
Trade receivables 
Trade receivables are measured at 
amortised cost using the effective interest 
rate method. Appropriate allowances 
for estimated irrecoverable amounts are 
recognised in profit or loss when there 
is objective evidence that the asset is 
impaired based on specific customer 
patterns of behaviour which may be 
affected by external economic conditions. 
The allowance recognised is measured 
as the difference between the asset’s 
carrying amount and the present value of 
estimated future cash flows discounted 
at the effective interest rate computed at 
initial recognition. 
Cash and cash equivalents 
Cash and cash equivalents comprise cash 
on hand and demand deposits, and other 
short-term highly liquid investments that 
are readily convertible to a known amount 
of cash and are subject to an insignificant 
risk of changes in value. 
Financial liabilities and equity 
Financial liabilities and equity instruments 
are classified according to the substance 
of the contractual arrangements entered 
into. An equity instrument is any contract 
that evidences a residual interest in the 
assets of the group after deducting all of 
its liabilities. 
Bank borrowings 
Interest-bearing bank loans and overdrafts 
are recorded at the proceeds received, 
net of direct issue costs. Finance charges, 
including premiums payable on settlement 
or redemption and direct issue costs, are 
accounted for on an accrual basis in the 
profit or loss account using the effective 
interest method and are added to the 
carrying amount of the instrument to the 
extent that they are not settled in the 
period in which they arise.
Trade payables 
Trade payables are not interest bearing 
and are stated at their nominal value. 
Equity instruments 
Equity instruments issued by the company 
are recorded at the proceeds received, net 
of direct issue costs.
Derivative financial instruments 
The group’s activities expose it primarily 
to the financial risks of changes in foreign 
currency exchange rates relating to the 
purchase of overseas sourced products, 
and interest rates relating to the group’s 
debt. The group uses foreign exchange 
forward contracts and interest rate swap 
contracts where appropriate to hedge 
these exposures. In accordance with 
its treasury policy, the group does not 
use derivative financial instruments for 
speculative purposes.
The use of financial derivatives is governed 
by the group’s policies approved by 
the board of directors, which provide 
written principles on the use of financial 
derivatives. 
Derivatives are stated at their fair 
value. The fair value of foreign currency 
derivatives contracts is their quoted market 
value at the balance sheet date. 
Market values are based on the duration 
of the derivative instrument together with 
the quoted market data including interest 
rates, foreign exchange rates and market 
volatility at the balance sheet date. The 
fair value of interest rate contracts is the 
estimated amount that the group would 
receive or pay to terminate them at the 
balance sheet date, taking into account 
prevailing interest rates. 
Changes in the fair value of currency 
derivative financial instruments are 
recognised in the income statement  
as they arise. 
Share-based payments 
The group issues equity-settled share-
based payments to certain employees. 
Equity-settled share-based payments are 
measured at fair value at the date of grant. 
The fair value determined at the grant 
date of the equity-settled share-based 
payments is expensed on a straight-line 
basis over the vesting period, based on 
the group’s estimate of shares that will 
eventually vest. Fair value is measured  
by use of a Black-Scholes model. 
Retirement benefit costs 
Payments to defined contribution 
retirement benefit schemes are charged 
as an expense as they fall due. Payments 
made to state-managed retirement benefit 
schemes are dealt with as payments to 
defined contribution schemes where the 
group’s obligations under the schemes 
are equivalent to those arising in a defined 
contribution retirement benefit scheme. 
For defined benefit retirement benefit 
schemes, the cost of providing benefits is 
determined using the Projected Unit Credit 
Method, with actuarial valuations being 
carried out at each balance sheet date. 
Actuarial gains and losses are recognised 
in full in the period in which they occur. 
They are recognised outside profit or 
loss and presented in the statement of 
comprehensive income. 
Past service cost is recognised 
immediately to the extent that the benefits 
are already vested, and otherwise is 
amortised on a straight-line basis over  
the average period until the benefits 
become vested. 
The retirement benefit obligation 
recognised in the balance sheet represents 
the present value of the defined benefit 
obligation, as reduced by the fair value  
of scheme assets. Any asset resulting 
from this calculation is restricted to the 
past service cost plus the present value of 
available refunds and reductions in future 
contributions.
Critical judgements and key sources  
of estimation uncertainty 
The key assumptions concerning the 
future and other sources of estimation 
uncertainty at the year end date, that have 
a significant risk of causing a material 
adjustment to the carrying amounts 
of assets and liabilities within the next 
financial year, are discussed below. 
Trade receivables 
An appropriate allowance for estimated 
irrecoverable trade receivables is derived 
where there is an identified event which, 
based on previous experience, is evidence 
of a potential reduction in the recoverability 
of future cash flows. This estimation is 
based on assumed collection rates which, 
although based on the group’s historical 
experience of customer repayment 
patterns, remains inherently uncertain.
As a result this is continually assessed 
for relevance and adjusted appropriately. 
Further information is given in note 16. 
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 48
    2012 2011 
3 Revenue   £m £m
An analysis of the group’s revenue is as follows:
Sale of goods   534.8 523.7
Rendering of services   218.4 195.1
Revenue   753.2 718.8
Investment income   4.3 4.1
Total revenue   757.5 722.9
 
Inventory 
Provision is made for those items of 
inventory where the net realisable value 
is estimated to be lower than cost. Net 
realisable value is based on both historical 
experience and assumptions regarding 
future selling values, and is consequently  
a source of estimation uncertainty. 
Pensions
The liability recognised in the balance 
sheet in respect of the group’s defined 
benefit pension obligations represents the 
liabilities of the group’s pension scheme 
after deduction of the fair value of the 
related assets. The scheme’s liabilities 
are derived by estimating the ultimate 
cost of benefits payable by the scheme 
and reflecting the discounted value of 
the proportion accrued by the year end. 
The rate used to discount the resulting 
cash flows is equivalent to the market 
yield at the balance sheet date on high 
quality bonds with a similar duration to the 
scheme’s liabilities. This rate is potentially 
subject to significant variation and changes 
to these rates could have a significant 
impact on the net deficit.
Going concern
In determining whether the group’s 
accounts can be prepared on a going 
concern basis, the directors considered 
the group’s business activities together 
with factors likely to affect its future 
development, performance and its financial 
position including cash flows, liquidity 
position and borrowing facilities and the 
principal risks and uncertainties relating to 
its business activities. These are set out 
within the Financial Review and discussed 
further in the Chairman’s Statement and 
Chief Executive’s Review.
The group has considered carefully 
its cash flows and banking covenants 
for the next twelve months from the 
date of signing the audited financial 
statements. These have been appraised 
in light of the uncertainty in the current 
economic climate. As such, conservative 
assumptions for working capital 
performance have been used to determine 
the level of financial resources available 
to the company and to assess liquidity 
risk. The key trading risk identified by 
the directors for these assumptions is 
the impact that a further deterioration in 
the economic climate might have on the 
performance of the group’s debtor book.
The group’s forecasts and projections, 
after sensitivity to take account of all 
reasonably foreseeable changes in trading 
performance, show that the group will  
have sufficient headroom within its current 
loan facilities of £370m. The group’s  
loan facilities have been renewed during  
the year and are committed until 2016.  
After making appropriate enquiries, the 
directors have a reasonable expectation 
that the company and the group have 
adequate resources to continue in 
operational existence for the foreseeable 
future. Accordingly, they continue to adopt 
the going concern basis in the preparation  
of the annual report and accounts.
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 49
    2012 2011 
4 Business segments   £m £m
Revenue    
Home Shopping   753.2 718.8
Operating profit
Segment result & operating profit – Home Shopping   102.0 102.6
Fair value adjustments to financial instruments   1.3 (3.7)
Investment income   4.3 4.1
Finance costs   (10.7) (8.5)
Profit before taxation   96.9 94.5
Taxation   (15.9) (22.8)
Profit after tax   81.0 71.7
The group has one business segment and one significant geographical segment that operates in and derives revenue from  
UK and Ireland. Revenue derived from international markets amounted to £8.4m (2011, £4.2m) and incurred operating losses of  
£4.8m (2011, £2.3m). All segment assets are located in the UK and Ireland.
The analysis above is in respect of continuing operations. 
For the purposes of monitoring segment performance, all assets and liabilities are allocated to the sole business segment,  
being Home Shopping, with the exception of current and deferred tax assets and liabilities. There are no impairments of  
goodwill, intangible assets or tangible assets in the current period (2011, £nil).
Other information
      2012 2011 
        £m   £m
Capital additions     24.9 30.8
Depreciation and amortisation     16.2 14.7
Balance sheet
Total segment assets     792.1 742.6
Total segment liabilities   (357.7) (345.9)
Segment net assets     434.4 396.7
Unallocated assets     1.9 3.5
Unallocated liabilities   (34.0) (39.8)
Consolidated net assets   402.3 360.4
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 50
    2012 2011 
5 Profit for the period   £m £m
Continuing operations
Revenue   753.2 718.8
Cost of sales   (354.2) (331.8)
Gross profit   399.0 387.0
Distribution costs   (64.8) (62.9)
Sales and administration costs   (232.2) (221.5)
Operating profit    102.0 102.6
Profit for the period has been arrived at after (crediting)/charging:
      2012 2011 
      £m £m
Net foreign exchange gains     (2.9) (3.0)
Depreciation of property, plant and equipment      7.6 7.8
Amortisation of intangible assets     8.6 6.9
Cost of inventories recognised as expense     227.5 216.9
Staff costs     77.7 72.9
Auditor’s remuneration for audit services (see below)   0.2 0.2
Amounts payable to Deloitte LLP and their associates by the company and its UK subsidiary undertakings in respect of non-audit 
services were £0.4m (2011, £0.8m).
A more detailed analysis of auditor’s remuneration is provided below:
    2012 2011 
    £m £m
Audit fees: 
The audit of the company’s subsidiaries pursuant to legislation   0.2 0.2
Other services:
Tax services   0.4 0.8
Fees payable for tax services relate to tax advisory services of £0.3m (2011, £0.7m) and compliance of £0.1m (2011, £0.1m).
Fees payable to the company’s auditor for the audit of the company’s annual accounts were £10,000 (2011, £10,000).
 In addition to the amounts shown above, the auditors received fees of £5,000 (2011, £4,000) for the audit of the group pension scheme.
A description of the work of the audit committee is set out in the corporate governance statement and includes an explanation  
of how auditor objectivity and independence is safeguarded when non audit services are provided by the auditor.
6 Staff costs   2012 2011
The average monthly number of employees (including executive directors) was: 
Distribution   986 1,046
Sales and administration   2,283 2,210
   3,269 3,256
    2012 2011 
Their aggregate remuneration comprised   £m £m
Wages and salaries   64.4 63.4 
Social security costs   7.3 6.9 
Other pension costs (see note 28)   3.8 0.5
Share options costs (see note 27)   2.2 2.1
   77.7 72.9
Details of individual director’s remuneration is disclosed in the remuneration report on page 35.
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 51
    2012 2011 
7 Investment income   £m £m
Interest on bank deposits   0.1 0.2
Expected return on pension assets (see note 28)   4.2 3.9
   4.3 4.1
    2012 2011 
8 Finance costs   £m £m
Interest on bank overdrafts and loans   6.8 4.6
Interest on pension scheme liabilities (see note 28)   3.9 3.9 
   10.7 8.5
      2012 2011 
9 Tax     £m £m
Current tax – charge for the period     25.5 25.3
Current tax – adjustment in respect of previous periods     (10.5) (3.2)
Deferred tax (see note 20)     (0.9) 1.4
Deferred tax – adjustment in respect of previous periods (see note 20)   1.8 (0.7)
   15.9 22.8
UK Corporation tax is calculated at 26.17% (2011, 28.0%) of the estimated assessable profit for the period.  
Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.
The charge for the period can be reconciled to the profit per the income statement as follows:
    2012 2011 
   £m £m
Profit before tax:   96.9 94.5
Tax at the UK corporation tax rate of 26.17% (2011, 28.0%)   25.4 26.4
Effect of change in deferred tax rate   (0.9) (0.3)
Tax effect of expenses that are not deductible in determining taxable profit   0.5 1.1
Effect of different tax rates of subsidiaries operating in other jurisdictions   (0.4) (0.5)
Tax effect of adjustments in respect of previous periods   (8.7) (3.9)
Tax expense for the period   15.9 22.8
During the year the group has utilised tax losses of £6.5m (2011, nil) acquired with Figleaves Global Trading Limited. 
In addition to the amount charged to the income statement, tax movements recognised directly through equity were as follows:
    2012 2011 
   £m £m
Deferred tax – retirement benefit obligations   (1.6) (0.6)
Tax credit in the statement of comprehensive income   (1.6) (0.6)
    2012 2011 
   £m £m
Current tax – share based payments   (1.3) (0.9)
Deferred tax – share based payments   2.4 (0.8)
Tax charge/(credit) in the statement of changes in equity   1.1 (1.7)
On 21 March 2012 the government announced that it intends to further reduce the rate of corporation tax to 24.0% with effect  
from 1 April 2012 and by 1.0% per annum by 1 April 2014. The impact of this post-balance sheet event is not reflected in the tax  
balances reported above.
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 52
    2012 2011 
10 Dividends   £m £m
Amounts recognised as distributions to equity holders in the period:
Final dividend for the 52 weeks ended 26 February 2011 of 7.37p (2010, 6.41p) per share  20.3 17.7
Interim dividend for the 53 weeks ended 3 March 2012 of 5.29p (2011, 5.04p) per share  14.7 13.8
   35.0 31.5
Proposed final dividend for the 53 weeks ended 3 March 2012 of 7.74p (2011, 7.37p) per share  21.5 20.3
The proposed final dividend is subject to approval by shareholders at the annual general meeting and has not yet been included  
as a liability in these financial statements.
11 Earnings per share
The calculations of the basic and diluted earnings per share is based on the following data:
    2012 2011 
Earnings   £m £m
Earnings for the purposes of basic and diluted earnings per share being
net profit attributable to equity holders of the parent   81.0 71.7
 
    2012 2011 
Number of shares (’000s)   Number Number
Weighted average number of ordinary shares for the purposes of basic earnings per share  276,681 275,323
Effect of dilutive potential ordinary shares:    
Share options   367 466
Weighted average number of ordinary shares for the purposes of diluted earnings per share  277,048 275,789
    2012 2011 
   £m £m
Adjusted earnings
Net profit attributable to equity holders of the parent   81.0 71.7
Fair value adjustment to financial instruments (net of tax)   (1.0) 2.7
Adjusted earnings for the purposes of adjusted earnings per share   80.0 74.4
The denominators used are the same as those detailed above for both basic and  
diluted earnings per share.
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 53
    Customer 
  Brands Software Database Total 
12 Intangible assets £m £m £m £m
Cost
At 27 February 2010 8.9 94.1 1.9 104.9
Acquired with subsidiary 7.1 – – 7.1
Additions 0.8 14.9 – 15.7
At 26 February 2011 16.8 109.0 1.9 127.7
Additions 0.1 19.1 – 19.2
At 3 March 2012 16.9 128.1 1.9 146.9
Amortisation
At 27 February 2010 – 66.8 1.8 68.6
Charge for the period – 6.8 0.1 6.9
At 26 February 2011 – 73.6 1.9 75.5
Charge for the period – 8.6 – 8.6
At 3 March 2012 – 82.2 1.9 84.1
Carrying amount
At 3 March 2012 16.9 45.9 – 62.8
At 26 February 2011 16.8 35.4 – 52.2
At 27 February 2010 8.9 27.3 0.1 36.3
Assets in the course of construction included in intangible assets at the year end total £13.8m (2011 £16.0m). No depreciation  
is charged on these assets.
All software additions relate to internal development. The brand additions of £0.1m relate to the acquisition of Dannimac  
and the Diva brand names.
Amortisation of intangible assets is split equally between cost of sales and administration costs and is disclosed in note 5.
The amortisation periods for intangible assets are:
     Years
Software    5
Customer Database    5
The brand names arising from the acquisition of Gray & Osbourn Limited, High and Mighty and Slimma and Figleaves are deemed 
to have indefinite lives as there are no foreseeable limits to the periods over which they are expected to generate cash inflows and 
are subject to annual impairment tests.
The carrying value of the brand names have been determined from a value in use calculation. The key assumptions for this 
calculation are those regarding the discount rates, growth rates and the forecast cash flows.
The group prepares cash flow forecasts based on the most recent three year financial budgets approved by management and 
thereafter extrapolates cash flows in perpetuity (with 2.7% growth assumed) to reflect that there is no foreseeable limit to the period  
over which cash flows are expected to be generated. The rate used to discount the forecast cash flows is 5.7% (2011, 6.3%).
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 54
   Land and Fixtures and 
   Buildings Equipment Total 
13 Property, plant and equipment  £m £m £m
Cost
At 27 February 2010  46.2 91.5 137.7
Additions  – 6.4 6.4
Acquired with subsidiary  – 1.6 1.6
At 26 February 2011  46.2 99.5 145.7
Additions  – 5.7 5.7
At 3 March 2012  46.2 105.2 151.4
Accumulated depreciation and impairment    
At 27 February 2010  7.5 61.3 68.8
Charge for the period   1.0 6.8 7.8
At 26 February 2011  8.5 68.1 76.6
Charge for the period   1.0 6.6 7.6
At 3 March 2012  9.5 74.7 84.2
Carrying amount     
At 3 March 2012  36.7 30.5 67.2
At 26 February 2011  37.7 31.4 69.1
At 27 February 2010   38.7 30.2 68.9
Assets in the course of construction included in property, plant and equipment at the year end date total £1.8m (2011, £1.7m), 
no depreciation has been charged on these assets.
At 3 March 2012, the group had not entered into any contractual commitments for the acquisition  of property, plant and equipment 
(2011, £nil).
14 Subsidiaries
 A list of the significant investments in subsidiaries, including the name, country of incorporation, proportion of ownership interest  
is given in note 3 to the company’s separate financial statements.
    2012 2011 
15 Inventories   £m £m
Finished goods   78.7 73.2
Sundry stocks   3.9 4.9
   82.6 78.1
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 55
    2012 2011 
16 Trade and other receivables   £m £m
Amount receivable for the sale of goods and services   551.1 519.6
Allowance for doubtful debts   (49.3) (45.1)
   501.8 474.5
Other debtors and prepayments   20.2 16.3
   522.0 490.8
Trade receivables are measured at amortised cost. 
The average credit period given to customers for the sale of goods is 243 days (2011, 241 days). Interest is charged at 39.9%  
(2011, 39.9%) on the outstanding balance. Generally, receivables over 150 days past due are written off in full. Trade receivables that 
reach the trigger point of 56 days past due are provided for based on estimated irrecoverable amounts, determined by reference 
to past default experience. The carrying amount of trade receivables whose terms have been renegotiated but would otherwise be 
past due totalled £66.5m at 3 March 2012 (2011, £59.9m).
Before accepting any new customer, the group uses an external credit scoring system to assess the potential customer’s  
credit quality and defines credit limits by customer. Credit limits and scores attributed to customers are reviewed every  
28 days. The credit quality of trade receivables that are neither past due nor impaired, with regard to the historical default  
rate has remained stable.
    2012 2011 
Ageing of trade receivables   £m £m
Current   418.1 381.4
0 – 28 days   64.5 69.3
29 – 56 days   28.5 25.5
57 – 84 days    16.4 16.0
85 – 112 days   11.8 13.4
Over 112 days   11.8 14.0
Total   551.1 519.6
    2012 2011 
Movement in the allowance for doubtful debts   £m £m
Balance at the beginning of the period   45.1 47.0
Amounts charged net to the income statement   58.0 53.1
Net amounts written off   (53.8) (55.0)
Balance at the end of the period   49.3 45.1
The concentration of credit risk is limited due to the customer base being large and unrelated and comprising 1.5 million  
(2011, 1.5 million) customers. Accordingly, the directors believe that there is no further credit provision required in excess  
of the allowance for doubtful debts.
The directors consider that the carrying amount of trade and other receivables approximates their fair value.
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 56
    2012 2011 
17 Bank overdraft and loans   £m £m
Bank loans and overdrafts   30.0 40.0
Bank loans   220.0 190.0 
   250.0 230.0
The borrowings are repayable as follows:
Within one year   – 40.0
In the second year   – 190.0
In the third to fifth year   250.0 –
Amounts due for settlement after 12 months   250.0 190.0
All borrowings are held in sterling
    2012 2011 
The weighted average interest rates paid were as follows:   % %
Bank overdrafts   2.0 2.5
Bank loans   0.8 0.7
The principal features of the group’s borrowings are as follows:    
(i) Bank overdrafts are repayable on demand, unsecured and bear interest at a margin over bank base rates.
(ii)  The group has a bank loan of £220m (2011, £190m) secured by a charge over certain ‘eligible’ trade debtors (current and  
0-28 days past due) of the group and is without recourse to any of the group’s other assets. The facility has a current limit of 
£250m and finance costs are linked to US commercial paper rates and is committed until March 2016.
  In addition the group has unsecured bank loans of £30m (2011, £40m) drawn down under a medium term bank revolving credit 
facility, which was renegotiated in November 2011, of £100 million committed until March 2016.
(iii)  All borrowings are arranged at floating rates, thus exposing the group to cash flow interest rate risk. The group use derivatives 
such as interest rate swaps where appropriate. Based on weighted average interest rates and the value of bank loans at  
3 March 2012 the estimated future interest cost per annum until maturity would be £2.1m (2011, £1.6m).
  Financial liabilities other than financial instruments include bank loans and overdrafts and trade and other payables. Other than 
as disclosed above, all are due within one year. The maturity analysis of the group’s financial liability on an undiscounted basis, 
assuming that the facilities are retained until the end of the committed period are as follows:
    2012 2011 
   £m £m
On demand or within one year   2.1 41.6
In the second year   2.1 191.3
In the third to fourth year   2.1 –
In the fifth year   252.1 –
   258.4 232.9
At 3 March 2012, the group had available £120m (2011, £90m) of undrawn committed borrowing facilities in respect of which  
all conditions precedent had been met.
The Financial Review on page 15 summarises the objectives and policies for holding or issuing financial instruments and  
similar contracts, and the strategies for achieving those objectives that have been followed during the period.
There is no material difference between the fair value and book value of the group’s borrowings and other financial assets  
and liabilities.
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 57
18 Derivative financial instruments 
At the balance sheet date, details of outstanding forward foreign exchange contracts that the group has committed to are as follows:
    2012 2011 
   £m £m
Notional amount – Sterling contract value   43.6 45.1
Fair value of liability recognised   (0.1) (1.4)
 Changes in the fair value of assets/liabilities recognised, being non-hedging currency derivatives, amounted to a credit of £1.3m 
(2011, charge of £3.7m) to income in the period.
The financial instruments that are measured subsequent to initial recognition at fair value are all grouped into Level 2 (2011, same).
Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable 
for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices).
There were no transfers between Level 1 and Level 2 during the year (2011, same).
19 Financial instruments 
Capital risk management 
The group manages its capital to ensure that entities in the group will be able to continue as going concerns while maximising the 
return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the group consists of debt, 
which includes the borrowings disclosed in note 17, cash and cash equivalents disclosed in note 24 and equity attributable to  
equity holders of the parent, comprising issued capital, reserves and retained earnings as disclosed in notes 22 to 23 and the 
statement of changes in equity. 
Gearing ratio 
The gearing ratio at the year end is as follows:
    2012 2011 
   £m £m
Debt   250.0 230.0
Cash and cash equivalents   (57.5) (49.1)
Net Debt   192.5 180.9
Equity   402.3 360.4
Gearing ratio   48% 50%
Debt is defined as long and short-term borrowings, as detailed in note 17. 
Equity includes all capital and reserves of the group attributable to equity holders of the parent.
Externally imposed capital requirement 
The group is not subject to externally imposed capital requirements.
Significant accounting policies 
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement 
and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and 
equity instrument are disclosed in note 2.
Financial risk management objectives 
The financial risks facing the group include currency risk, credit risk, liquidity risk and cash flow interest rate risk. The group seeks 
to minimise the effects of certain of these risks by using derivative financial instruments to hedge these risk exposures as governed 
by the group’s policies. The group does not enter into or trade financial instruments, including derivative financial instruments, for 
speculative purposes.
Foreign currency risk management 
The group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations 
arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.
It is the policy of the group to enter into forward foreign exchange contracts to cover specific foreign currency payments for the 
purchase of overseas sourced products. Group policy allows for these exposures to be hedged for up to three years ahead.
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 58
19 Financial instruments continued 
 At the balance sheet date, details of the notional value of outstanding US dollar forward foreign exchange contracts that the group 
has committed to are as follows:
    2012 2011 
   £m £m
Less than 6 months   20.7 22.4
6 to 12 months   17.9 17.6
12 to 18 months   5.0 5.1
   43.6 45.1
 
Forward contracts outstanding at the period end are contracted at US dollar exchange rates ranging between 1.56 and 1.60.
The carrying amounts of the group’s foreign currency denominated monetary assets and monetary liabilities at the reporting date  
are as follows:
  Liabilities Assets
  2012 2011 2012 2011 
£m £m £m £m
Euro 2.0 2.0 11.0 10.5
US dollar 4.6 0.6 4.7 0.8
Foreign currency sensitivity analysis 
The following table details the group’s hypothetical sensitivity to a 10% increase and decrease in sterling against the relevant  
foreign currencies. The sensitivity rate of 10% represents the director’s assessment of a reasonably possible change. The sensitivity 
analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for  
a 10% change in foreign currency rates. A positive number below indicates an increase in profit before tax.
  Euro  US Dollar 
 Currency  Currency 
 Impact  Impact
  2012 2011 2012 2011 
 £m £m £m £m
Income statement
Sterling strengthens by 10% 1.0 1.1 – –
Sterling weakens by 10% (0.8) (0.7) – –
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 59
19 Financial instruments continued 
Interest rate risk management 
The group is exposed to interest rate risk, as entities in the group borrow funds at floating interest rates. Where appropriate, 
exposure to interest rate fluctuations on indebtedness is managed by using derivatives such as interest rate swaps.
Interest rate sensitivity analysis 
If interest rates had increased by 0.5% and all other variables were held constant, the group’s profit before tax for the 53 weeks  
ended 3 March 2012 would decrease by £1.25m (2011, £1.1m). 
This sensitivity analysis has been determined based on exposure to interest rates at the balance sheet date and assuming the net 
debt outstanding at the year end date was outstanding for the whole year.
Credit risk management 
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the group. 
Investments of cash surpluses, borrowings and derivative financial instruments are made through banks which are approved by  
the board.
All customers who wish to trade on credit terms are subject to credit verification procedures, supplied by independent rating 
agencies. Customer debtor balances are monitored on an ongoing basis and provision is made for estimated irrecoverable 
amounts. The concentration of credit risk is limited due to the customer base being large and unrelated, and did not exceed five 
percent of gross monetary assets at any one time during the period.
Liquidity risk management 
The group manages liquidity risk by maintaining adequate banking and borrowing facilities and by continuously monitoring  
forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Included in note 17 is a 
description of additional undrawn facilities that the group has at its disposal and details of the group’s remaining contractual 
maturity for its non-derivative financial liabilities.
Fair value of financial instruments 
Foreign currency forward contracts are measured using quoted forward exchange rates and yield curves derived from quoted 
interest rates matching maturities of the contracts.
The carrying amounts of financial assets and financial liabilities recorded at amortised cost in the financial statements approximate 
their fair values.
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 60
20 Deferred tax
The following are the major deferred tax liabilities and assets recognised by the group and movements thereon during the current 
and prior reporting periods.
  Share  Accelerated Retirement 
  based Currency tax benefit  
  payments derivatives depreciation obligations Other Total 
  £m £m £m £m £m £m
At 27 February 2010 1.8 (0.7) (10.0) 0.6 (2.5) (10.8)
Acquired with subsidiary – – 2.6 – – 2.6
Credit/(charge) to income 0.7 0.7 (0.1) (2.1) 0.1 (0.7)
Credit to equity 0.8 – – 0.6 – 1.4
At 26 February 2011 3.3 – (7.5) (0.9) (2.4) (7.5)
Credit/(charge) to income 0.6 – (1.0) (0.5) – (0.9)
(Charge)/credit to equity (2.4) – – 1.6 – (0.8)
At 3 March 2012 1.5 – (8.5) 0.2 (2.4) (9.2)
Certain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred tax balances (after offset)  
for financial reporting purposes:
    2012 2011 
   £m £m
Deferred tax assets   1.9 3.5
Deferred tax liabilities   (11.1) (11.0)
   (9.2) (7.5)
At the balance sheet date, the group has unused tax losses of £0.1m (2011, £0.1m) and capital losses of £4.4m (2011, £4.4m) 
available for offset against future profits. No deferred tax asset has been recognised due to the unpredictability of future profit 
streams within the relevant subsidiary.
    2012 2011 
21 Trade and other payables   £m £m
Trade payables   61.5 59.1
Other taxes and social security   14.7 22.5
Other creditors   0.4 3.6
Accruals and deferred income   30.0 29.3
   106.6 114.5
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit 
period taken for trade purchases is 40 days (2011, 40 days).
For most suppliers no interest is charged on the trade payables. The group has financial risk management policies in place to 
ensure that all payables are paid within agreed credit terms.
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 61
  2012 2011 2012 2011 
22 Share capital Number Number £m £m
Authorised
Ordinary shares of 11
1
/19p each 352,857,142 352,857,142 39.0 39.0
Allotted, called-up and fully paid
Ordinary shares of 11
1
/19p each
At 26 February 2011  280,429,454 278,404,714 31.0 30.8
Ordinary shares issued 3,000,000 2,024,740 0.3 0.2
At 3 March 2012 283,429,454 280,429,454 31.3 31.0
During the year 3,000,000 (2011, 2,024,740) ordinary shares were issued to the N Brown Group plc Employee Share Ownership 
Trusts for £331,736 (2011, £223,784). The company has one class of ordinary shares which carry no right to fixed income.
    2012 2011 
23 Own shares   £m £m
Balance at 26 February 2011    1.2 0.4
Additions    1.3 1.0
Issue of own shares on exercise of share options   (1.0) (0.2)
Balance at 3 March 2012   1.5 1.2
The own shares reserve represents the cost of shares in N Brown Group plc held by the N Brown Group plc Employee Share 
Ownership Trusts to satisfy options under the group’s various share benefit schemes (see note 27).
At 3 March 2012 the employee trusts held 5,911,974 shares in the company (2011, 4,693,021).
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 62
24 Cash and cash equivalents
Cash and cash equivalents (which are presented as a single class of assets on the face of the balance sheet) comprise cash at  
bank and other short-term highly liquid investments with a maturity of three months or less.
A breakdown of significant cash and cash equivalent balances by currency is as follows:
    2012 2011 
   £m £m
Sterling   50.2 46.5
Euro   2.7 1.8 
US Dollar   4.6 0.8
   57.5 49.1
25 Contingent liabilities 
Parent company borrowings which at 3 March 2012 amounted to £21.5m (2011, £15.2m) have been guaranteed by certain  
subsidiary undertakings.
    2012 2011 
26 Operating lease arrangements   £m £m
Minimum lease payments under operating leases recognised as an expense for the period  5.2 5.1
At the balance sheet date, the group had outstanding commitments for future minimum lease payments under non-cancellable 
operating leases, which fall due as follows:
    2012 2011 
   £m £m
Within one year   0.9 0.5
In the second to fifth years inclusive   20.5 13.7
After five years   7.5 8.9
   28.9 23.1
Operating lease payments represent rentals payable by the group for certain buildings, plant and equipment and motor vehicles.
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 63
27 Equity settled share based payments
The remuneration report on pages 29 to 38 contains details of management and sharesave options/awards offered to employees  
of the group.
Details of the share options/awards outstanding during the year are as follows:
    Number Number 
 Option price Exercise of shares of shares 
 in pence period 2012 2011
Option scheme
2000 Savings related scheme 186 – 269  August 2011 – February 2016 1,639,816 1,620,210
2000 Executive scheme 106 – 341 June 2007 – June 2021 1,797,485 1,873,864
Unapproved executive scheme 211 – 341 May 2009 – June 2021 1,104,730 821,539
Value Creation Plan – February 2014 – February 2019 – 3,100,000
Long-term incentive scheme awards
July 2008 – July 2011 – January 2012 – 1,550,452
May 2009 – May 2012 – November 2012 1,166,576 1,266,996
July 2010 – July 2013 – January 2014 1,180,129 1,294,758 
July 2011 – July 2014 – January 2015 1,158,928 –
Deferred annual bonus scheme awards
May 2009 – May 2011 – November 2011 – 252,348
May 2010 – May 2012 – November 2012 299,365 323,450
June 2011 – June 2013 – December 2013 233,926 –
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 64
27 Equity settled share based payments continued
Movements in share options are summarised as follows:
  2012 2011
   Weighted  Weighted 
 Number of  average exercise Number of average exercise  
 share options price share options price 
  £  £
Outstanding at the beginning of the period 4,315,613 2.24 3,944,346 2.13
Granted during the period 1,544,936 2.65 1,064,701 2.40
Forfeited during the period (521,491) 2.00 (297,140) 2.43
Exercised during the period (797,027) 2.33 (396,294) 1.37
Outstanding at the end of the period 4,542,031 2.39 4,315,613 2.24
Exercisable at the end of the period 611,602 2.34 493,857 1.86
Options were exercised on a regular basis throughout the period and the weighted average share price during this period was  
264 pence (2011, 260 pence). The options outstanding at 3 March 2012 had a weighted average remaining contractual life  
of 6.0 years (2011, 5.8 years). The aggregate estimated fair values of options granted in the period is £1,041,000 (2011, £629,000).
Movements in management share awards are summarised as follows:
  2012 2011
   Weighted  Weighted 
 Number of average exercise Number of average exercise  
 share awards price share awards price 
  £  £
Outstanding at the beginning of the period 7,788,004 – 7,211,920 –
Granted during the period 1,493,670 – 1,618,208 –
Forfeited during the period (3,427,987) – (56,340) –
Exercised during the period (1,814,763) – (985,784) –
Outstanding at the end of the period 4,038,924 – 7,788,004 –
Exercisable at the end of the period – – – –
The awards outstanding at 3 March 2012 had a weighted average remaining contractual life of 4.0 years (2011, 4.2 years).
The fair value of management and sharesave options/awards granted is calculated at the date of grant using a Black-Scholes  
option pricing model. The inputs into the Black-Scholes model are as follows:
    2012 2011
Weighted average share price at date of grant (pence)   278 252
Weighted average exercise price (pence)   135 95
Expected volatility (%)   41.0 38.3
Expected life (years)   2.5 – 5.5 2.5 – 5.5
Risk-free rate (%)   1.5 1.5
Dividend yield (%)   4.4 4.3
Expected volatility was determined by calculating the historical volatility of the group’s share price over a period equivalent to the 
expected life of the option. The expected life used in the model has been adjusted, based on management’s best estimate, for the 
effects of non-transferability, exercise restrictions, and behavioural considerations.
The group recognised total expenses of £2.2m and £2.1m related to equity-settled share based payment transactions in 2012 and 
2011 respectively.
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 65
28 Retirement benefit schemes
Defined contribution schemes 
The group operates defined contribution retirement benefit schemes for all qualifying employees.
The group is required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits.  
The only obligation of the group with respect to the retirement benefit scheme is to make the specified contributions.
The total cost charged to income of £2.0m (2011, £1.8m) represents contributions payable to the schemes by the group at rates 
specified in the rules of the plans. As at 3 March 2012, contributions of £0.2m (2011, £0.2m) due in respect of the current reporting 
period had not been paid over to the schemes.
Defined benefit scheme 
The group operates a defined benefit scheme, the N Brown Group Pension Fund. Under the scheme, the employees are entitled  
to retirement benefits based on final pensionable earnings and was closed to new members from 31 January 2002. No other  
post-retirement benefits are provided. The scheme is a funded scheme.
The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out at 30 
June 2009 by an independent qualified actuary. The present value of the defined benefit obligation, the related current service 
cost and past service cost were measured using the projected unit credit method. The principal actuarial assumptions used in 
determining the group’s net retirement benefit obligations at the balance sheet date were as follows:
    2012 2011
Discount rate   4.8% 5.6%
Expected return on scheme assets   4.6% 5.7%
Expected rate of salary increase   4.4% 4.8%
Future pension increases   2.4% 2.4%
Inflation – Retail Price Index   3.4% 3.8%
Inflation – Consumer Price Index   2.4% 2.8%
Life expectancy at age 65 (years)
Pensioner aged 65   23.8 23.8
Non-pensioner aged 45   26.8 26.8
    2012 2011 
Amounts recognised in income in respect of these defined benefit schemes are as follows:  £m £m
Current service cost   1.8 1.6
Interest cost   3.9 3.9
Expected return on scheme assets   (4.2) (3.9)
Gains on settlements    – (2.9)
   1.5 (1.3)
Actuarial gains and losses have been reported in the statement of comprehensive income. The cumulative actuarial losses since 
transition to IFRS were £0.1m (2011, actuarial gains of £6.1m).
The actual return on scheme assets was a gain of £8.4m (2011, gain of £7.3m).
The scheme is a closed scheme and therefore, under the projected unit method, the current service cost would be expected  
to increase.
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 66
28 Retirement benefit schemes continued
The amount included in the balance sheet arising from the group’s obligations in respect of its defined benefit retirement benefit 
scheme is as follows:
    2012 2011 
   £m £m
Present value of defined benefit obligations   (83.3) (68.5)
Fair value of scheme assets   82.3 71.8
(Deficit)/surplus in the scheme and (liability)/asset recognised in the balance sheet   (1.0) 3.3
    2012 2011 
Movements in the present value of defined benefit obligations were as follows:   £m £m
At 26 February 2011   68.5 66.0
Service cost   1.8 1.6
Interest cost   3.9 3.9 
Actuarial losses   10.4 5.7
Liabilities extinguished on settlements   – (6.2)
Benefits paid   (1.3) (2.5)
At 3 March 2012   83.3 68.5
    2012 2011 
Movements in the fair value of the scheme assets were as follows:   £m £m
At 26 February 2011   71.8 64.2
Expected return on scheme assets   4.2 3.9
Actuarial gains   4.2 3.4
Assets distributed on settlements   – (3.3)
Contributions from sponsoring companies   3.4 6.1
Benefits paid   (1.3) (2.5)
At 3 March 2012   82.3 71.8
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 67
28 Retirement benefit schemes continued
The analysis of the scheme assets and the expected rate of return at the balance sheet date was as follows:
  Expected Fair value
  Return of assets
  2012 2011 2012 2011 
 % % £m £m
Equities 6.8 6.8 39.5 38.1
Bonds 2.6 4.5 41.2 33.7
Cash 0.5 – 1.6 –
 4.6 5.7 82.3 71.8
Expected rates of return on the scheme assets are based on consistent assumptions with the previous period, adjusted to reflect 
changes in market conditions since that date.
The history of experience adjustments is as follows:
  2012 2011 2010 2009 2008 
 £m £m £m £m £m
Present value of defined benefit obligations (83.3) (68.5) (66.0) (50.8) (56.8)
Fair value of scheme assets 82.3 71.8 64.2 46.8 51.0
(Deficit)/surplus in the scheme (1.0) 3.3 (1.8) (4.0) (5.8)
Experience adjustments on scheme liabilities 
Amount (£m) – – 2.2 – –
Percentage of scheme liabilities (%) 0% 0% 3% 0% 0%
Difference between expected and actual return  
on scheme assets:
Amount (£m) 4.2 3.4 10.6 (11.7) (3.5)
Percentage of scheme assets (%) 5% 5% 16% (25%) (7%)
The estimated amounts of contributions expected to be paid to the scheme during the 52 week period ending 2 March 2013  
is £3.4m.
29 Related party transactions
Transactions between the company and its subsidiaries, which are related parties, have been eliminated on consolidation and are
not disclosed in this note. Transactions between the company and its subsidiaries are disclosed in the company’s separate financial 
statements. Details of remuneration paid to the group’s key management personnel is given on page 35 of the remuneration report.
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2012 68
Independent Auditor’s Report – Company Accounts
To the members of N Brown Group plc.
We have audited the parent company 
financial statements of N Brown Group 
plc for the 53 weeks ended 3 March 2012 
which comprise the Parent Company 
Balance Sheet and the related notes 1 
to 10. The financial reporting framework 
that has been applied in their preparation 
is applicable law and United Kingdom 
Accounting Standards (United Kingdom 
Generally Accepted Accounting Practice).
This report is made solely to the 
company’s members, as a body, in 
accordance with Chapter 3 of Part 16 of 
the Companies Act 2006. Our audit work 
has been undertaken so that we might 
state to the company’s members those 
matters we are required to state to them 
in an auditor’s report and for no other 
purpose. To the fullest extent permitted 
by law, we do not accept or assume 
responsibility to anyone other than the 
company and the company’s members as 
a body, for our audit work, for this report, 
or for the opinions we have formed.
Respective responsibilities of directors 
and auditor
As explained more fully in the Directors’ 
Responsibilities Statement, the directors 
are responsible for the preparation of the 
parent company 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 parent company 
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 Ethical 
Standards for Auditors.
Scope of the audit of the financial 
statements
An audit involves obtaining evidence 
about the amounts and disclosures 
in the financial statements sufficient 
to give reasonable assurance that the 
financial statements are free from material 
misstatement, whether caused by fraud 
or error. This includes an assessment 
of: whether the accounting policies are 
appropriate to the parent company’s 
circumstances and have been consistently 
applied and adequately disclosed; the 
reasonableness of significant accounting 
estimates made by the directors; and 
the overall presentation of the financial 
statements. In addition, we read all the 
financial and non-financial information 
in the annual report to identify material 
inconsistencies with the audited financial 
statements. If we become aware of 
any apparent material misstatements 
or inconsistencies we consider the 
implications for our report.
Opinion on financial statements
In our opinion the parent company financial 
statements:

the company’s affairs as at 3 March 2012;

accordance with United Kingdom 
Generally Accepted Accounting  
Practice; and
 
with the requirements of the Companies 
Act 2006.
Opinion on other matters prescribed  
by the Companies Act 2006
In our opinion:

Report to be audited has been properly 
prepared in accordance with the 
Companies Act 2006; and

Report for the financial year for which 
the financial statements are prepared 
is consistent with the parent company 
financial statements.
Matters on which we are required to 
report by exception
We have nothing to report in respect of the 
following matters where the Companies 
Act 2006 requires us to report to you if, in 
our opinion:

been kept by the parent company, or 
returns adequate for our audit have not 
been received from branches not visited 
by us; or

statements and the part of the Directors’ 
Remuneration Report to be audited are 
not in agreement with the accounting 
records and returns; or

remuneration specified by law are not 
made; or

and explanations we require for our audit.
Other matters
We have reported separately on the group 
financial statements of N Brown Group plc 
for the year ended 3 March 2012.
Damian Sanders ACA 
(Senior Statutory Auditor)
for and on behalf of Deloitte LLP
Chartered Accountants and  
Statutory Auditor
Manchester, UK
18 May 2012 N Brown Group plc Annual Report & Accounts 2012 69
Company Balance Sheet
    2012 2011 
As at 3 March 2012  Note £m £m
Fixed assets
Investments   3 267.9 267.9
    267.9 267.9
Current assets
Debtors   4 100.1 103.4
    100.1 103.4
Creditors
Amounts falling due within one year   5 (233.5) (270.0)
Net current liabilities   (133.4) (166.6)
Total assets less current liabilities   134.5 101.3
Non current liabilities
Bank loans  6 (30.0) –
Net assets   104.5 101.3
Capital and reserves
Called-up share capital   7 31.3 31.0
Share premium account   8 11.0 11.0
Profit and loss account   8 62.2 59.3
Equity shareholders’ funds   104.5 101.3 
The financial statements of N Brown Group plc (Registered Number 814103) were approved by the board of directors and authorised for 
issue on 18 May 2012.
They were signed on its behalf by:
Alan White
Dean Moore 
Directors N Brown Group plc Annual Report & Accounts 2012 70
Notes to the Company Accounts
1 Significant accounting policies
 Basis of accounting
The separate financial statements of the company are presented as required by the Companies Act 2006. They have been prepared 
under the historical cost convention and in accordance with United Kingdom Accounting Standards and law.
The principal accounting policies are summarised below. They have all been applied consistently throughout the period and the 
preceding period.
Investments 
Fixed asset investments in subsidiaries and associates are shown at cost less provision for impairment.
Bank borrowings 
Interest bearing bank loans and overdrafts are recorded at the proceeds received. Finance charges are accounted for on an 
accruals basis in the profit and loss account using the effective interest rate method.
Cash flow 
The company has taken advantage of the exemption from producing a cash flow statement afforded by FRS 1 (Revised) because 
the group accounts include a consolidated cash flow statement.
Taxation 
Corporation tax payable is provided on taxable profits at the current rate. 
2 Profit for the period
As permitted by section 408 of the Companies Act 2006 the company has elected not to present its own profit and loss account for 
the period. N Brown Group plc reported a profit for the financial period ended 3 March 2012 of £38.3m (2011, profit £34.8m).
The non executive directors’ remuneration was £206,000 (2011, £206,000) and six non executive directors were remunerated  
(2011, six). The executive directors were remunerated by a subsidiary company in both years.
The auditor’s remuneration for audit services to the company of £10,000 (2011, £10,000) was borne by subsidiary undertakings.
3 Fixed asset investment    £m
Cost and net book value   
At 3 March 2012 and at 26 February 2011    267.9
The company and group has investments in the following subsidiaries and joint ventures which principally affected the profits or net 
assets of the group. All of the below companies are held indirectly. To avoid a statement of excessive length, details of investments 
which are not significant have been omitted.
   Country of Proportion 
  incorporation held by the 
Company Principal activity and operation group (%)
J D Williams & Co. Limited Direct home shopping retailer England 100
Oxendale & Co. Limited Direct home shopping retailer Republic of Ireland 100
J D W Finance Limited Financing and ancillary services England 100
N B Insurance Guernsey Limited Insurance services Guernsey 100
Gray & Osbourn Limited Direct home shopping retailer England 100
Speciality Home Shopping (US) Limited Direct home shopping retailer England 100 N Brown Group plc Annual Report & Accounts 2012 71
Notes to the Company Accounts
    2012 2011 
4 Debtors   £m £m
Amounts falling due within one year:   
Amounts owed by group undertakings   99.6 103.3 
Prepayments and accrued income   0.5 0.1 
   100.1 103.4
    2012 2011 
5 Creditors   £m £m
Amounts falling due within one year:   
Bank loans and overdrafts   21.5 55.2 
Trade creditors   0.4 1.0 
Amounts owed to group undertakings   211.3 213.6
Accruals and deferred income   0.3 0.2
   233.5 270.0
    2012 2011 
6 Bank loans   £m £m
Bank overdrafts   21.5 15.2
Bank loans   30.0 40.0
   51.5 55.2
The borrowings are repayable as follows:
On demand within one year   21.5 55.2
In the second year   – –
In the third to fifth year   30.0 –
   51.5 55.2
Less: amounts due for settlement within 12 months (shown under current liabilities)   (21.5) (55.2)
Amounts due for settlement after 12 months   30.0 –
The company has unsecured bank loans of £30m (2011, £40m) drawn down under a medium term bank revolving credit facility 
committed until March 2016.
At 3 March 2012, the company had available £90m (2011, £80m) of undrawn committed borrowing facilities in respect of  
which all conditions precedent had been met.
The weighted average interest rate paid were as follows:
    2012 2011 
    % %
Bank overdrafts   2.0 2.5
Bank loans   1.4 1.0 N Brown Group plc Annual Report & Accounts 2012 72
Notes to the Company Accounts
  2012 2011 2012 2011 
7 Share capital Number Number £m £m
Authorised     
Ordinary shares of 11
1
/19p each 352,857,142 352,857,142 39.0 39.0
Allotted, called-up and fully paid
Ordinary shares of 11
1
/19p each
At 26 February 2011 280,429,454 278,404,714 31.0 30.8
Ordinary shares issued 3,000,000 2,024,740 0.3 0.2
At 3 March 2012 283,429,454 280,429,454 31.3 31.0
During the year 3,000,000 (2011, 2,024,740) ordinary shares were issued to the N Brown Group Employee Share Ownership Trusts 
for £331,736 (2011, £223,784). Movements in share capital during the year relate to the exercise of share options. The company has 
one class of ordinary share which carry no right to fixed income.
   Share Profit 
  Share premium and loss 
  capital account account Total 
8 Reconciliation of movements in shareholders’ funds and reserves £m £m £m £m
Balance at 27 February 2010 30.8 11.0 56.4 98.2
Dividends paid – – (31.9) (31.9)
Profit for the financial period – – 34.8 34.8
Increase in share capital 0.2 – – 0.2
Balance at 26 February 2011 31.0 11.0 59.3 101.3
Dividends paid – – (35.4) (35.4)
Profit for the financial period – – 38.3 38.3
Increase in share capital 0.3 – – 0.3
At 3 March 2012 31.3 11.0 62.2 104.5
9 Guarantees
Parent company borrowings which at 3 March 2012 amounted to £21.5m (2011, £15.2m) have been guaranteed by certain subsidiary 
undertakings.
10 Related party transactions
The company has taken advantage of the exemption under FRS8 not to disclose transactions and balances with other  
group companies. Shareholder Information
Financial Timetable
2011 11 October Announcement of interim results
 9 December Closing of register for interim dividend
2012 6 January Payment of interim dividend
 3 March Financial year-end
 1 May Preliminary announcement of annual results
 31 May Publication of 2012 annual report and accounts
 29 June Closing of register for final dividend
 3 July Annual general meeting
 27 July Payment of final dividend
Registered Office  Registrars Auditors
Griffin House  Capital IRG plc Deloitte LLP
40 Lever Street  The Registry P O Box 500
Manchester  34 Beckenham Road 2 Hardman Street
M60 6ES  Beckenham Manchester
Registered No. 814103  Kent BR3 4TU M60 2AT
Telephone 0161 236 8256  Telephone 0871 664 0300
  (Calls cost 10 pence per minute plus network extras)
Bankers  Solicitors Stockbrokers
HSBC Bank plc  Pinsent Masons LLP Credit Suisse Securities (Europe) Ltd
The Royal Bank of Scotland plc Eversheds LLP RBS Hoare Govett Limited
  Addleshaw Goddard LLP
Shareholder benefits
Subject to certain conditions, shareholders are entitled to a 20% privilege discount off the selling price of consumer merchandise in 
any of the group catalogues. Shareholders interested in these facilities should write for further information to the Company Secretary, 
N Brown Group plc, Griffin House, 40 Lever Street, Manchester, M60 6ES stating the number of shares held and the catalogue or 
product of interest.
Capital gains tax
For the purpose of capital gains tax, the value of the company’s ordinary shares of 10p each was 6.40625p per share on 31 March 
1982 and 1.328125p on 6 April 1965.
For more information and latest news on the group, visit www.nbrown.co.uk.
Design Elmwood www.elmwood.com Grifﬁn House 
40 Lever Street 
Manchester, M60 6ES
www.nbrown.co.uk