N Brown Group plc 
Annual Report and Accounts 2011
F ASHION 
GOING
FORW ARD.
New channels,  
 New directions, 
 New audiences.  N Brown Group plc Annual Report & Accounts 2011 1
We’ve been busy. Working hard, 
yes, but also working smarter to  
grow our business across countries,  
across audiences and across channels.
And it’s paying off. 
Our biggest successes of 2010 include the acquisition of 
Figleaves.com, enhancing our position as the UK’s largest online 
lingerie retailer, the launch of Simply Be in the US, as well as 
developing High & Mighty. These investments have been made 
whilst continuing to develop our portfolio of established brands, 
including JD Williams and Ambrose Wilson, and newer brands like 
Jacamo and Marisota.
Understanding that people are shopping differently 
to how they once were is key to our future success.
So to support all this growth, we’re investing 
significantly into online activities. We’re continually 
improving our websites, and we’re using our new 
multi-channel, 365-trading strategy to make our 
brands and ranges more visible, desirable and 
accessible than ever before. 
It’s been a year of positive change, and looking 
ahead, the opportunities for yet more growth  
look plentiful. If we can carry on spotting and 
seizing these opportunities, we can feel confident 
that new audiences and new horizons await.
Contents
2 Financial Highlights 3 Five Year History 4 The Fabric of our Success 8 Chairman’s Statement 10 Chief Executive’s 
Review 14 Financial Review 16 Directors and Officers 18 Directors’ Report 24 Corporate Governance Report 
28 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 N Brown Group plc Annual Report & Accounts 2011 2
Financial Highlights  2011 2010
Revenue £718.8m £690.0m
Operating profit £102.6m £97.6m
Adjusted profit before taxation* £98.2m £93.1m
Profit before taxation £94.5m £85.7m
Adjusted earnings per share** 27.02p 24.77p
Earnings per share 26.04p 22.83p
Dividends per share 12.41p 10.79p
Net assets £360.4m £319.0m
Net asset value per share 128.5p 114.6p
Gearing 50% 53%
*Excluding fair value adjustments to financial instruments.
**See note 11 on page 52. N Brown Group plc Annual Report & Accounts 2011 3
Adjusted earnings per share**  
– Continuing operations (p)
Five Year History
Pre-tax profit* –
Continuing operations (£m)
Operating profit –
Continuing operations (£m)
*Excluding fair value adjustments to financial instruments.
**See note 11 on page 52.
Revenue –
Continuing operations (£m)
Dividends per share (p) Net assets (£m)
11 10 09 08 07
523.8
610.9
662.5
690.0
718.8
11 10 09 08 07
76.3
91.8
95.5
97.6
102.6
11 10 09 08 07
67.7
76.2
82.7
93.1
98.2
11 10 09 08 07
16.43
20.27
21.96
24.77
27.02
11 10 09 08 07
7.53
9.06
9.19
10.79
12.41
11 10 09 08 07
202.5
243.2
283.0
319.0
360.4 N Brown Group plc Annual Report & Accounts 2011 4
International growth, acquisitions, multi-channel strategies, 
innovative products. There’s a lot to feel excited about.  
To paint a picture of the breadth and depth of our achievements  
in 2010, we’ve picked out these highlights for you.
The fabric 
of our success
Going international with Simply Be
We recently launched our Simply Be brand in 
the USA. So far sales are encouraging, buoyed 
by groundbreaking new products such as Wow 
jeans and the Simply Voluptuous range. After 
mailing out one million catalogues in the first 
season, we’re following up with three million in 
the second season complementing our focus  
on the UK and German markets.
www.simplybe.co.uk 
www.simplybe.com 
www.simplybe.de Thinking bigger with Figleaves
Our acquisition of Figleaves.com  
in June 2010 strengthened our 
position as the UK’s largest 
online lingerie retailer. Our plans 
to develop the brand’s lifestyle 
appeal will create exciting new 
cross-selling opportunities. 
www.figleaves.com
The power of now
With online sales penetration at 45% and now exceeding the value  
of orders taken in our contact centres, it’s clear that our customers 
are opting for the ease and convenience of online shopping.  
So we’re continuing to invest in our websites to make the experience 
as simple, intuitive and rewarding as possible. Features include 
catwalk shows and ‘how-to’ measuring videos.
N Brown Group plc Annual Report & Accounts 2011 5 N Brown Group plc Annual Report & Accounts 2011 6
Heritage, expertise and product innovation
Finding new ways to please longstanding 
customers and attract new ones takes fresh 
thinking and innovation. We’re particularly 
proud of Magisculpt, Simply Voluptuous and 
Wow jeans – three of our most recent ‘fitted’ 
ranges. It’s essential to stay focused on our 
longstanding brands of course, and our more 
established brands, including Ambrose  
Wilson and JD Williams, are performing 
consistently well.
Transcending boundaries
365 trading is our new all-year-round strategy.  
This extra flexible business model means our  
marketing is more targeted, reactive and efficient, 
keeping our profile raised and our brands highly  
visible. We’re concentrating our efforts across more 
channels, such as television, press, online and social 
networking, the catwalk and retail display advertising, 
and using pay-per-click and traffic generation too. Reaching higher
Jacamo, boasting exclusive ranges from  
40 brands, including Penguin and Voy, has 
played a large part in the stellar performance  
of our menswear brands over the past year.  
High & Mighty is also playing its part, with  
new high street stores and refits. Meanwhile,  
our ambassador for Marisota, Arlene Phillips,  
is helping to boost the brand’s growing profile,  
and is working with us to design her own 
exclusive clothing range. 
N Brown Group plc Annual Report & Accounts 2011 7 Chairman’s Statement
I am pleased to report that the group has continued to  
make good progress in the 52 weeks to 26 February 2011. 
This has been achieved against a challenging economic 
backdrop by focussing on our core business whilst investing 
in our recent acquisitions and international expansion.
Financial Results
Total group revenues increased by 4.2% 
to £718.8m and by 1.3% on a like-for-like 
basis, excluding the sales from our recent 
acquisitions, High & Mighty and Figleaves. 
Revenue growth has been restricted by 
the more conservative credit policies we 
adopted for higher value items but this has 
been a major contributor to the improved 
net bad debt charge to sales ratio which 
has fallen from 9.0% to 7.4%. This in turn 
is the main reason why we have managed 
to achieve a gross margin rate of 53.8%, 
up by 1.3% from last year’s rate of 52.5%.
Operating profit is up by 5.1% to £102.6m 
giving an operating margin of 14.3% 
(2010, 14.1%). Profit before taxation is up 
10.3% to £94.5m, or by 5.5% to £98.2m, 
after excluding fair value adjustments to 
financial instruments. Adjusted earnings 
per share are up by 9.1% to 27.02p.
The board has a medium term target  
for full year dividend cover of twice 
earnings per share and to this end it is 
proposing a final dividend of 7.37p, up  
by 15.0%. This gives a total dividend  
for the year of 12.41p, up by 15.0%  
and covered 2.2 times.
Net borrowings at 26 February 2011 
were £180.9m, an increase of £10.8m 
from a year earlier. The principal reasons 
for the increase were the acquisition of 
Figleaves for £10.3m, higher levels of 
capital expenditure, predominantly to 
create state-of-the-art online functionality, 
and working capital, principally due to an 
accelerated intake of stock. Net finance 
costs have remained flat at £4.4m,  
covered 23 times by operating profits. 
Gearing has fallen from 53% to 50%  
on net assets which have risen by 13.0% 
to £360.4m. We have renegotiated a 
£200m securitisation facility for five years 
with HSBC a year ahead of schedule  
in order to avoid the risk of any turmoil in 
financial markets at a later date, albeit at  
a higher interest margin than we were 
paying previously.
Measuring our 
achievements
N Brown Group plc Annual Report & Accounts 2011 8 Trading Highlights
During the year the highlights have been:
• 	 C o n t i n u e d 	 i m pr o v e m e n t 	 i n 	 o u r	
targeted brand portfolio, with notable 
performances from Marisota, Jacamo 
and House of Bath.
• 	 G r o w t h 	 a c r o s s 	 a l l 	 o f 	 o u r 	 m a j o r 	 pr o d u c t	
categories as we expand the ranges 
both online and in the catalogues.  
Both menswear and footwear did 
especially well, with sales up 25%  
and 10% respectively.
• 	 A 	 1 9 % 	 i n c r e a s e 	 t o 	 £ 3 2 4 m 	 i n	
e-commerce sales, which now  
account for 45% of total revenue.
• 	 G r o w i n g 	 t h e 	 S i m p l y 	 B e 	 br an d	
domestically and internationally  
with the launch in the USA in August 
2010 to complement the growing 
German operation.
• 	 T h e 	 a cq u i s i t i o n 	 o f 	 F i g l e a v e s 	 an d	
development of High & Mighty.
Corporate Social Responsibility
Activities demonstrating our corporate 
social responsibility are at an all time high. 
We are now ranked in the top quartile of 
retailers for our environmental behaviour, 
and continue to reduce our carbon 
footprint. The scale of charitable activities 
undertaken by our employees, both in 
donations and participation, is at record 
levels. We continue to strengthen our 
ethical sourcing policies and procedures.
Outlook
The UK consumer is facing rising costs 
and falling incomes in 2011, but we 
anticipate a slow but steady rising trend in 
disposable income thereafter. The cost of 
goods from the Far East has risen sharply 
as a result of increases in labour costs  
and commodities, such as cotton.  
We are doing everything we can to cushion 
our customers from these rising costs  
but inevitably, in line with the entire 
clothing retail sector, there will have to be 
increases in selling prices. Furthermore we 
anticipate an increased level of targeted 
promotional campaigns may be needed 
to stimulate sales activity at various times 
during the year.
In our core home shopping business we 
continue to see the development of our 
online activities as the key to growth, since 
this enables us to have a wider product 
range and greater flexibility to change 
our promotional focus cost effectively. 
We will also be exploring the benefits of 
full multi-channel capability by trialling 
three concept stores during the year for 
our Simply Be brand. Success will be 
determined by whether the cost is justified 
by the incremental customers and revenue 
generated across all channels.
We expect further improvements in the 
trading performances of our two most 
recent acquisitions, Figleaves and High & 
Mighty, where we have been investing in 
systems and store openings respectively, 
as well as product development. 
International expansion of our Simply 
Be brand is an important element of the 
group’s growth strategy. We have been 
encouraged by the first few months’ 
trading in the USA and are planning to 
double our planned marketing spend  
this year to accelerate the rate of growth.  
Sales from Simply Be in Germany were 
up by 41% although returns rates remain 
higher than we would like.
Sales for the 10 weeks to 7 May 2011 are 
4.8% up on last year or up by 1.5% on  
a like-for-like basis. This includes the 
distorting effects of the late Easter,  
the Royal Wedding and the warm April 
weather. We have also managed to 
maintain the rate of gross margin during 
this period, despite a 9% rise in cost 
prices and a higher rate of VAT. We  
believe that a combination of a strong 
focus on our chosen customer and 
product groups, coupled with growing  
our online penetration, enhancing our 
recent acquisitions and building Simply  
Be in international markets will continue  
to put N Brown amongst the leading 
clothing retailers, and leave us well 
positioned for when the market improves.
The group has, yet again, performed well 
in difficult economic conditions, which is 
a testimony to the efforts of everyone who 
works in the business and the support 
from our suppliers and trade union.  
I would like to thank them all for their 
excellent contribution.
Lord Alliance of Manchester, CBE
N Brown Group plc Annual Report & Accounts 2011 9 N Brown Group plc Annual Report & Accounts 2011 10
Chief Executive’s Review
Revenue
These results have been achieved in a 
period when consumer confidence has 
been at very low levels so to deliver 
positive like-for-like growth is encouraging. 
It has required us to focus on the areas  
of our business with the highest growth 
potential and allocate the marketing 
investment accordingly. All of our  
brands have a very clear proposition  
and points of difference which  
encourages customer loyalty. 
In addition we have concentrated on 
driving sales through the online channel 
recognising that multi-channel customers 
spend more and cost less to service.  
We have continued the overseas expansion 
of Simply Be, launching in the USA in 
addition to our German operations. Finally, 
we have continued to rejuvenate High & 
Mighty and the acquisition of Figleaves 
in June 2010 has enhanced our strong 
position in the online lingerie market.
   £m % 
Financial Highlights  2011 Growth
Revenue  718.8  +4.2
Operating Profit  102.6  +5.1
Adjusted Pre-Tax Profit*  98.2  +5.5
Profit Before Tax  94.5  +10.3
Total Dividend Per Share  12.41p  +15.0
Adjusted Earnings Per Share*  27.02p  +9.1
Net Borrowings 180.9 +6.3
Net Assets  360.4  +13.0
*Excluding fair value adjustments to financial instruments
Record results for revenue and profits, the acquisition 
of Figleaves and the launch of Simply Be in the USA 
demonstrate that this has been another exciting and 
positive year for the group.
Revenue for the 52 weeks to 26 February 2011 is up by 
4.2% to £718.8m in total, and by 1.3% on a like-for-like 
basis, excluding the impact of the acquisition of  
High & Mighty and Figleaves. N Brown Group plc Annual Report & Accounts 2011 11
Customer Groups
The younger brands, targeted at customers 
aged between 30 and 45 years of age 
continued to be the fastest growing part  
of the overall portfolio. Sales, including the 
first time contribution from Figleaves, were 
up by 11% to £240m, or 4% on a like-for-
like basis accounting for 33% of group 
sales. Simply Be reached revenues of 
£100m for the first time with growth in the 
UK and international markets. Jacamo 
offers a mix of branded and unbranded 
fashionable menswear, all in a very wide 
range of sizes through to 5XL, and was the 
fastest growing brand with total revenue 
up by 66%, backed by substantial 
expenditure on customer recruitment from 
television advertising and online search.  
A number of the younger brands, such  
as Fashion World, lost sales due to  
more conservative credit policies, which 
particularly impacted the higher-priced 
home and leisure products.
Sales from the mid-life brands, targeted 
at customers aged 45-65 grew by 2% 
to £431m, accounting for 60% of group 
sales. J D Williams, the traditional core of 
the business, had revenue slightly below 
last year but this was more than offset by 
good performances from the menswear 
brands, Premier Man and Williams & 
Brown, and growth of 16% in sales at 
House of Bath, which sells unusual home 
and garden items. Marisota continued its 
strong growth by attracting customers to 
its ladieswear and footwear ranges based 
on our expertise in sizing and fit, as well  
as fashionability, for the 45-plus woman. 
The older titles declined by 9% to £48m, 
although this now only represents 7% of 
group revenues. We switched much of the 
recruitment activity from Heather Valley, 
Special Collection and Nightingales to 
Julipa, which has a more comprehensive 
range of products. However the target 
customer is finding economic conditions 
tough and this age-group has been an 
underperforming part of the retail sector 
generally. Gray & Osbourn struggled in 
2010 for this same reason but finished  
the year on a high with encouraging results 
from the refreshed Spring 2011 catalogues.
Customer Base
We have a customer base of over 6m who 
have purchased at least once in the last 
two years. The sales per customer from 
the established customer base was up 
by a healthy 4%, a function of the sales 
mix favouring higher value clothing and 
footwear. The number of active established 
customers fell by 3% as we switched some 
of our marketing activity from reactivation 
of lapsed established customers to new 
customer recruitment, where the sales 
rose by 4%.
Product Categories
We have a very high number of stock 
options in order to accommodate  
women’s clothing from size 10 to 38, 
lingerie from A-L Cup and 34" to 58"  
back size, menswear from 38" to 70"  
chest measurements, and footwear in 
a vast array of width fittings as well as 
lengths, up to size 9 for ladies and 15 
for men. Our ability to have clothing and 
footwear to fit our customers, regardless  
of their size or shape, is a fundamental 
point of difference to our competitors. 
The range has been expanded even more 
this year as, using the online integration 
software we have developed internally, 
we have enabled our suppliers to upload 
a further 30,000 product lines onto our 
websites. All of these extra products are 
delivered directly by the supplier to the 
customer, giving incremental sales without 
increasing working capital.
  Revenue % of %
Category £m Total Change
Ladieswear 361 50 +1
Footwear 80 11 +10
Menswear 84 12 +25
Home & Leisure 194 27 –
Total 719 100 +4
Ladieswear sales have been mixed. 
Fashionable clothing for our younger 
customers, including our own brand fast 
fashion online collections and sportswear, 
has done well. Customers have opted to 
buy the exclusive branded or celebrity-
inspired ranges relative to the core  
lines. This suggests that customers  
are extending the replacement cycle on 
basic clothing, such as jeans, trousers, 
knitwear, outerwear and jersey tops, and 
concentrating their disposable income on 
pieces with an impact factor. Even within 
the basic categories the mix of sales has 
moved towards garments with unique 
features such as our “Magifit” control 
jeans, trousers and skirts. The situation 
was similar with lingerie sales. Figleaves 
saw like-for-like sales growth to the 
younger, more affluent customers but the 
sales of core basic bra packs were below 
last year’s level.
In contrast menswear sales were strong 
in all areas, recording a 25% increase in 
aggregate. The strongest growth was in 
the younger menswear and sportswear 
where sales were up over 40%, but even 
the core menswear range was up by 9%.
Footwear sales rose by 10%, with good 
growth in all areas. We saw exceptional 
growth in footwear sales from our younger 
brands as we expanded the range in 
response to the demands of our Simply  
Be customers. Men’s footwear has 
previously been under-represented in the 
mix of sales but is now growing rapidly.
Home and leisure sales were flat on last 
year. There were strong performances 
in gifts and homewares but the impact 
of asking for deposits on higher value 
furniture and electrical items reduced  
sales by £4m. The benefit of this policy  
is seen in the increased rate of gross 
margin from lower bad debts.
One of the notable features last year 
was the 7% increase in average selling 
prices. Whilst some of this is a function of 
increased prices from our suppliers in the 
Far East, much of it was due to the mix of 
sales favouring higher value lines. 
Group revenue up 4.2% to
£718.8m
Total dividend up 15% to
12.41p
Adjusted earnings per share  
up 9.1% to
27.02p N Brown Group plc Annual Report & Accounts 2011 12
Online Sales
The value of sales transacted online 
totalled £324m, up by 19%, maintaining 
our position as one of the top online 
retailers. We are ranked number one online 
for ladies clothing in size 16 and above, 
for the 50-plus age group and for ladies 
underwear. One of our key corporate 
objectives last year was to drive up the 
proportion of online business as we 
achieve incremental sales and reduced 
operating costs. To this end we invested 
£10m in upgrading our online systems, the 
benefits of which will be realised over the 
next few years. For example we re-wrote 
the registration and checkout pages 
which resulted in increases in attributable 
conversion rates. In addition we have 
reorganised the buying and marketing 
functions to give greater emphasis to 
online trading relative to the catalogues.
Online sales now account for 45% of 
total revenues, compared with 39% last 
year, and they have overtaken the value of 
orders taken in our contact centres, with 
the balance coming by post. In the coming 
year we expect online sales to account 
for the majority of all sales. The growth 
is coming from all age groups but in the 
next few years we are aiming to grow the 
proportion of online sales from our mid-life 
customers, currently 37%, as the younger 
customers are already at 64%, including 
some brands which are almost at 80%.
Gross Margin and Credit
Credit is an important part of the offer to 
our customer, and the income of £195m 
(up 2.5%) derived from our debtor book 
accounts for 27% of total group revenues. 
Approximately two-thirds of sales are 
made by customers who use the credit 
facilities, although in customer numbers  
it is less than half.
Bad debts rose during the recession but 
the changes we made to credit policies 
on customer vetting, credit limits and 
collections in the wake of this increased 
default risk have been effective. In the 52 
weeks ended 26 February 2011 the charge 
for bad debts fell by £9.1m to £53.1m, 
reducing the net bad debt charge to 
sales ratio from 9.0% to 7.4%. Inevitably 
the credit restrictions have reduced 
sales growth but we believe the balance 
between risk and reward on the credit 
book is now about right.
The overall rate of gross margin is 53.8%, 
up from 52.5% last year. The bulk of this 
improvement is the result of the lower bad 
debt rate, although the margin on product 
is also slightly favourable despite a higher 
level of promotional activity in the sector 
from our competitors.
Supply Chain
The last year has been the most challenging 
our buying team has faced for many years. 
There has been a step change in the 
price of goods from the Far East, driven 
principally by a reduction in capacity in 
China, a 160% increase in the price of 
cotton during the year, and significant 
price rises in other raw materials, 
especially those linked to the price of 
oil such as polyester and acrylic fibres. 
This has led to a squeeze on capacity in 
markets, such as Bangladesh, as retailers 
looked for alternative, lower labour cost 
markets to offset the price rises. Some of 
the rises in commodity prices are cyclical 
and we expect to see the price of cotton 
moderate by 2012 but the changes in the 
labour markets are structural and signal 
the end of the regular deflation in clothing 
prices we have enjoyed for the last 15 
years. We have been doing everything 
we can to mitigate the price increases 
for our customers through negotiation 
with suppliers, moving between markets 
and garment re-engineering, but we still 
expect to see price increases of around 
9% in 2011. However we also expect to 
see customers continuing to focus their 
spending on the clothing lines which clearly 
make a fashion statement, which will 
favour branded, celebrity-designed and 
higher-priced ranges which will increase 
the average selling price even further.
We have finished the year with stock 
levels up 18.1% on last year, excluding 
the stock acquired for Figleaves. There 
was a conscious decision to bring Spring/
Summer 2011 stock in earlier than in 2010 
because of the volatility in the supply 
chain we experienced in the autumn, to 
ensure high levels of stock availability for 
customer orders. As commodity prices 
settle down we would expect a return to 
normal lead times.
Overheads
Costs have been contained at the previous 
year’s level with the exception of marketing 
costs where we spent 9% more to increase 
customer recruitment, promote Simply Be 
abroad, and support the growing brands 
like Jacamo and Marisota. Distribution 
costs benefited from higher average order 
values due to higher selling prices and the 
switch to online. We have moved all our 
parcel deliveries to Hermes resulting in 
improvements to both service and costs.
Customer Service
The vast majority of our key performance 
indicators were positive with improvement 
in the contact centres, online service 
and distribution. This was despite the 
disruption in December from the bad 
weather and the mailing delays to 
catalogues and statements experienced 
subsequently. We are now asking 
customers to submit product reviews 
online which will give us early indicators 
of any quality issues, but so far the vast 
majority of comments posted are highly 
complimentary. We will continue to focus 
on further improvements to the quality 
of our service and increasing the options 
available to our customers.
International
Our international strategy is based on 
utilising existing product lines and images 
from our Simply Be brand, and distributing 
Menswear sales up 25% to
84m
Sales from mid-life brands  
up 2% to
£431m
Younger customer sales up  
11% to
240m N Brown Group plc Annual Report & Accounts 2011 13
direct to the overseas customer from our 
UK warehouses. This should allow us to 
break even by year 3 or 4 assuming we can 
recruit reasonable volumes of customers 
at an acceptable cost per customer.
Revenues from our Simply Be brand in 
Germany and the USA totalled £4.2m 
(2010, £2.4m), over 70% of which was 
transacted online. In Germany sales were 
up by 41% and we reduced the rate of 
returns by two percentage points but at 
61% it is still higher than we would like. 
The new season has started well and we 
anticipate a further increase in revenue, 
which, coupled with cost efficiencies,  
will reduce the losses this year.
We launched Simply Be in the USA 
through the distribution of 1 million 
catalogues to targeted customer lists 
during the autumn of 2010. Revenues in the 
USA were just under £1m, and the low rate 
of returns and high gross margin are both 
encouraging. Based on these early positive 
indications we are planning to despatch 
3 million catalogues in Summer 2011 and 
have started to increase the online activity. 
We will be accelerating our recruitment 
plans further in the autumn campaigns.
Acquisitions
Figleaves, the leading online lingerie 
retailer, was acquired in June 2010 for a 
net cash consideration of £10.3m. Since 
then we have achieved revenues of over 
£16m, a 4% like-for-like increase for 
the business, on which we incurred an 
underlying loss of £0.9m. The strategy  
is to build up the proportion of own brand 
sales from the current 17% level and 
to expand the product ranges offered 
to the customer, either through organic 
development or alternatively from those 
products already within the group.
High & Mighty was acquired out of 
administration in September 2009 for 
a consideration of £1.6m. Sales of over 
£7m and losses of £0.8m represented 
good progress for the first full year, with 
like-for-like store sales up by 8%. It was 
a busy year with three of the fourteen 
stores relocated, three more refurbished 
and three new stores opened in Liverpool, 
Newcastle and Belfast. We have migrated 
the website onto the N Brown platform  
and we are now seeing positive growth  
in online sales.
Outlook and Current Trading
We will continue with our strategy of 
focusing on our core home shopping 
business in the UK whilst establishing the 
Simply Be brand in the USA and Germany 
and turning Figleaves and High & Mighty 
into profitable businesses. The combination 
of lower disposable incomes and cost 
inflation will put consumer spending under 
severe pressure, but we believe our 
strategy of focusing on niche customer 
and product groups, coupled with our 
credit offer, is the right one.
Within the core business we expect to see 
continued high growth rates from Marisota 
and Jacamo, and we have launched a new 
brand, Fabrici, which offers a range of 
clothes with natural fibres, such as linen 
and silk, at higher price points. We will 
again be working with a number of 
celebrities and designers on capsule 
ranges, including an expanded range  
from Arlene Phillips. 
E-commerce remains fundamental to  
the growth of the business and we will  
be continuing our investment program  
to upgrade and exploit the online platform. 
We will complete the new content 
management system by the summer  
which will provide a platform for greater 
personalisation of the websites in  
the future as well as speeding up the 
publication of new offers, products  
and promotions. 
N Brown Group’s extensive portfolio of 
brands, allied with the credit offer, means 
it is a complex business to manage. 
However, we have a loyal and experienced 
management and workforce, and everyone 
who works in the business can take 
immense credit for producing increased 
revenues and profits for a seventh 
consecutive year, despite the unhelpful 
economic environment. The current year 
will be at least as challenging but I am 
confident that our strategy will develop 
new areas for future growth and deliver 
another good result.
Alan White
Online sales up 19% to
£324m
Ladieswear sales up 1% to
£361m
Footwear sales up 10% to
£80m N Brown Group plc Annual Report & Accounts 2011 14
Financial Review
The 52 weeks to 26 February 2011 
was another record year for the group 
reflecting the successful continuation 
of our strategy to develop our home 
shopping business. Group sales 
increased by 4.2% to £718.8m.
Group operating profit for the same 
period increased by 5.1% to £102.6m 
(2010, £97.6m). This was achieved 
with the help of a 1.3% increase in the 
rate of gross margin arising from a 
lower rate of charge for bad debts of 
7.4% (2010, 9.0%) partially offset by an 
adverse margin mix. 
Group Trading Summary
Distribution costs rose by only 1.6% to 
£62.9m (2010, £61.9m) benefiting from 
a higher average selling price per order. 
Sales and administration costs increased 
by 9.4% to £221.5m (2010, £202.5m) as 
we have invested in additional marketing 
activity to sustain sales and drive customer 
recruitment. As a result, the group’s 
operating margin improved slightly to 
14.3%, compared with 14.1% last year. 
Profit before taxation and fair value 
adjustments to financial instruments 
amounted to £98.2m (2010, £93.1m), 
benefiting from a small reduction in net 
finance charges from £4.5m to £4.4m.  
An adverse movement in the fair value 
of the group’s forward foreign currency 
contracts contributed a loss of £3.7m 
compared to a £7.4m loss last year.  
The fair value of the forward contracts  
is based on external factors and is  
outside the control of management.  
Profit before taxation was up 10.3%  
to £94.5m (2010, £85.7m).
Taxation
The effective rate of corporation tax for 
the year was 24.1% (2010, 27.1%) arising 
from clarification in the year of draft tax 
legislation which affects a number of 
initiatives taken in previous years.  
We expect our tax rate for the year  
ahead to be similar to this year. 
Balance Sheet and Cash Flow
The strong trading performance has 
resulted in net assets increasing to 
£360.4m at the year-end from £319.0m  
last year.
 
The acquisition of Figleaves resulted in a 
net cash outflow of £10.3m. Total capital 
expenditure, excluding Figleaves, for  
the year was £22.1m (2010, £13.2m).  
The majority of the expenditure related to 
the ongoing development of our websites 
and supply chain management and logistic 
systems plus refurbishment of several 
High and Mighty stores. Year-end stock 
levels were 25.2% higher than last year 
at £78.1m (2010, £62.4m), in line with our 
plans to accelerate purchasing to improve 
customer service.
Trade debtors at the year-end were up 
6.2% to £474.5m compared to £447.0m 
last year. The bad debt provision has 
reduced to £45.1m (2010, £47.0m),  
which equates to 8.7% (2010, 9.5%)  
of gross debtors. 
The net pension position of the group’s 
defined benefit pension scheme has 
changed from a £1.8m deficit at February 
2010 to a £3.3m surplus at the year-end 
primarily as a result of the additional 
contribution of £4.0m paid during the  
year. Net cash generated from operating 
activities decreased from £91.7m to  
£57.4m mainly as a result of higher 
customer receivables and higher stock 
levels. After paying for Figleaves, capital 
expenditure, finance costs and dividends, 
net debt increased by £10.8m to £180.9m 
(2010, £170.1m) but gearing improved from 
53% to 50%. 
Key Financial Performance Indicators
The directors use a number of key financial 
performance indicators (KPIs) to monitor 
the progress of the group, including:
• 	 L i k e 	 f o r 	 l i k e 	 s a l e s 	 ( s e e 	 p a g e 	 8 ) .
• 	 I n t e r n e t 	 s a l e s 	 ( s e e 	 p a g e 	 1 2 ) .
• 	 T h e 	 n u m b e r 	 o f 	 c u s t o m e r 	 d eb t o r	
accounts and their average debtor 
balance, which at the year-end was 
1,489,000 (2010, 1,577,000) and £331 
(2010, £303) respectively.
• 	 M i x 	 o f 	 s a l e s 	 b y 	 pr o d u c t 	 an d 	 c u s t o m e r	
groups (see page 11).
• 	 G r o s s 	 m a r g i n 	 ( s e e 	 p a g e 	 1 2 ) .
• 	 O p e r a t i n g 	 m a r g i n 	 ( s e e 	 p a g e 	 1 4 ) .
• 	 I n t e r e s t 	 co v e r 	 ( s e e 	 p a g e 	 8 ) .
• 	 E a r n i n g s 	 p e r 	 s h a r e 	 ( s e e 	 p a g e 	 8 ) .
Risks and Uncertainties
There are a number of risks and 
uncertainties which could have an impact 
on the group’s long-term performance. 
These include: N Brown Group plc Annual Report & Accounts 2011 15
• 	 co n s i d e r a t i o n 	 o f 	 t h e 	 g e n e r a l 	 e co n o m i c	
climate and the impact it has on the 
provision of credit to our customers and 
their ability to maintain payment terms;
• 	 t h e 	 p o t e n t i a l 	 t h r e a t 	 f r o m 	 o u r 	 co m p e t i t o r s ;
• 	 o u r 	 r e l a t i o n s h i p 	 w i t h 	 k e y 	 s u p p l i e r s ;
• 	 t h e 	 l o s s 	 o f 	 k e y 	 p e r s o n n e l ;	
• 	 p o t e n t i a l 	 d i s r u p t i o n 	 t o 	 o u r 	 k e y	
information systems, warehousing or 
call centre facilities arising from events 
beyond our control such as fire or other 
issues which could have a detrimental 
impact on sales and profit; and
• 	 c h an g e s 	 t o 	 t h e 	 r e g u l a t o r y 	 e n v i r o n m e n t	
in which the business operates under, 
primarily regulated by the Financial 
Services Authority and the Office of  
Fair Trading.
The directors routinely monitor all these 
risks and uncertainties taking appropriate 
actions to mitigate where necessary. 
Business continuity procedures are in 
place, together with a dedicated team 
assessing regulatory developments, 
ensuring we treat our customers fairly 
and hosting regular reviews with all of 
our strategic partners. The board are 
also committed to continually invest in 
updating the group’s business systems 
and infrastructure to keep pace with new 
technology.
Treasury
Funding arrangements have been set to 
adequately support the ongoing trading 
and development activity of the group.  
The group has committed borrowing 
facilities of £320m of which £230m were 
utilised at the year-end. The primary 
facilities are a £200m securitisation 
programme through an HSBC A-1/P1  
rated conduit that has no exposure to the 
US sub-prime mortgage market and has  
a matching standby facility. This facility  
has recently been renewed for a further  
5 years until March 2016. In addition,  
the group also has two five-year revolving 
credit loan facilities of £50m each with 
HSBC Bank plc and The Royal Bank of 
Scotland plc, which expire in January 
2012. All the current facilities in place at the 
year end are arranged at floating interest 
rates at favourable margins compared to 
current market rates. 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 in  
place in the year.
Anticipated foreign exchange requirements 
for the purchase of stocks denominated  
in US dollars may be hedged for up to 
three years ahead to fix the cost 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 $70m (2010, $60m). 
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 EU. 
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 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 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 group’s audited financial 
statements. These have been appraised  
in light of the 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 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 £320m. The £200m 
securitisation facility has recently been 
renewed for a further 5 years until 2016 
and it is the group’s intention to renew 
the remaining loan facilities that expire in 
January 2012 for a further 5 years. Loans 
drawn down under these facilities of £40m 
have been included within current liabilities 
for the period ended 26 February 2011.
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 even in the unlikely event that  
the remaining facilities are not renewed. 
Accordingly, they continue to adopt the 
going concern basis in the preparation  
of the annual report and accounts.
Shareholder Return
The share price of 215.6p at the start of 
the year had risen to 274.7p at the year 
end giving a market capitalisation of 
£770.3m (2010, £600.2m). In addition, 
the company’s five year performance 
measured by Total Shareholder Return 
compared with the FTSE Mid-250 Index, 
which the company is a member of, shows 
that we are outperforming the market.  
A final dividend of 7.37p (2010, 6.41p)  
per share has been recommended by  
the board giving a total dividend for the 
year of 12.41p (2010, 10.79p) per share,  
up by 15.0%, covered 2.2 times (2010,  
2.3 times).
Dean Moore N Brown Group plc Annual Report & Accounts 2011 16
Directors and Officers
A) Lord Alliance of Manchester CBE (78)
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.
B) Alan White (56)
Chief Executive
Qualified as a chartered accountant with 
Arthur Andersen and was finance director 
for Sharp Electronics, N Brown Group 
and Littlewoods before returning as Chief 
Executive in 2002. He is a non-executive 
director of Topps Tiles plc and Chairman  
of CBI in the North West.
 
C) Dean Moore (53)
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.
D) Nigel Alliance OBE (76)
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.
E) Ivan Fallon (66) 
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; director of Truphone. 
Chairman of the remuneration committee. 
F) Lord Stone of Blackheath (68)
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 Sindicatum Climate Change 
Foundation and the health charity DIPEx. 
Chairman of the nomination committee.
G) John McGuire (62)
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. 
H) Anna Ford (67)
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.
I) Philip Harland (55)
Company Secretary
Joined the company in 2000. Previously 
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 N Brown Group plc Annual Report & Accounts 2011 17
Financial Statements
18 Directors’ Report
24 Corporate Governance Report
28 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
The Facts  
and Figures N Brown Group plc Annual Report & Accounts 2011 18
Directors’ Report
The directors present their annual report 
and accounts for the 52 weeks ended  
26 February 2011. 
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 52 weeks ended 26 February 2011 
amounted to £94.5m (2010, £85.7m).  
No geographical segmentation is provided 
as, apart from small operations in the 
Republic of Ireland, Germany and the 
United States of America, 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 52 
weeks ended 26 February 2011 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 the above 
requirements can be found within this 
report, within the Chairman’s Statement, 
the Chief Executive’s Review and the 
Financial Review (pages 8 to 15) all of  
which information is deemed to be 
incorporated in this report by this  
cross-reference.
The board continuously identifies and 
reviews 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 ensure risks are managed 
appropriately. Executive directors and 
operational directors implement and 
oversee these processes and report on 
them to the board.
Dividends and reserves 
An interim dividend of 5.04p per share 
(2010, 4.38p) was paid on the ordinary 
shares of the company on 7 January 2011.
The net cost of this dividend was £13.8m 
(2010, £12.0m). 
The directors recommend a final dividend 
of 7.37p per share (2010, 6.41p) for the 
52 weeks ended 26 February 2011, the 
net cost of which will be £20.6m (2010, 
£17.7m). The dividend will be paid on 29 
July 2011.
Movements in reserves are shown in  
the Statement of Changes in Equity  
on page 43. 
 
Acquisitions and disposals 
As announced in June 2010 the group 
acquired the entire issued share capital of 
Figleaves Global Trading Limited for a total 
cash consideration of £11.9m. Its principal 
activity is that of an online lingerie retailer.
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 28 on page 63. 
Annual general meeting 
The annual general meeting is to be held on 
Tuesday, 5 July 2011. The notice convening 
the annual general meeting is being sent 
to members by way of separate circular 
together with full explanatory notes on each 
resolution to be proposed at the meeting. 
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 Combined Code 
and the Companies Act. The board has 
resolved to adopt with immediate effect 
the requirement in the UK Corporate 
Governance Code that all directors retire 
and submit themselves for re-election 
annually. Therefore each of the directors 
will retire at the forthcoming AGM and, 
being eligible, offer themselves for 
re-appointment at that meeting. 
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.
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 2011: 
   Holding  % of issued 
    share capital 
Threadneedle Asset Management Ltd  18,461,603  6.58
INVESCO Asset Management Ltd (Europe)  10,998,930  3.92 N Brown Group plc Annual Report & Accounts 2011 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 ongoing basis as part of its 
commitment to sustainable business. 
Further details are contained in the 
Corporate Governance Report on  
pages 24 to 27. 
Ethics 
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, conflicts of interest, 
gifts and hospitality has been circulated 
to all employees. 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 their dealings with each other, other 
group companies, and their shareholders, 
customers, suppliers, competitors, 
regulatory authorities and the wider 
community, employees are required to: 
• 	 co n d u c t 	 a l l 	 d e a l i n g s 	 w i t h 	 e a c h 	 o t h e r 	 an d	
externally with honesty, integrity, respect 
and fairness; 
• 	 co m p l y 	 w i t h 	 a l l 	 r e l e v an t 	 l a w s , 	 r e g u l a t i o n s	
and internal company policy; 
• 	 e n co u r a g e 	 an d 	 s u p p o r t 	 a 	 b u s i n e s s	
culture which exhibits and promotes 
ethical conduct at all levels within the 
organisation; 
• 	 a v o i d 	 an y 	 s i t u a t i o n 	 o r 	 a c t i o n , 	 w h i c h	
could cause damage to the group’s 
reputation; and
• 	 f o s t e r 	 a 	 t e a m w o r k i n g 	 e n v i r o n m e n t 	 i n 	 w h i c h	
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 register of gifts and benefits offered 
by suppliers and other parties whether 
accepted or declined is maintained under 
the control of the group head of internal 
audit. All employees, managers and 
directors are required, each month,  
to declare any offer of gifts or hospitality 
with a value of £25 or more, offered, 
accepted or declined. 
The group has drawn up and issued a 
comprehensive “whistleblowing policy” 
providing employees with a confidential 
means of reporting any ethical concerns 
that they may have regarding the way the 
group operates in its day-to-day activities.  
No ‘whistleblowing’ events were reported 
in the year.
Environment 
The group recognises the continuous 
improvement of our environmental 
performance as an integral component to 
the success and future sustainability of our 
business operation. As a result the group 
is highly committed to minimising any 
damage which its activities may cause to 
the environment and has delegated specific 
responsibility for environmental matters to 
Keith Risk, director of logistics, who sits  
on the operational board of J.D. Williams  
& Company Limited. 
Since 2007, the group has been actively 
working alongside Envantage Limited and 
Storm Waste Limited to reduce energy 
and water consumption, minimise waste, 
reduce carbon dioxide emissions and 
boost environmental responsibility and 
reputation. Significant achievements since 
2007-2008 figures have been realised due 
to the introduction of a robust energy, 
water and waste management strategy and 
investment into energy efficiency and water 
minimisation technologies.
The following environmental improvements 
have been achieved:
• 	 A 	 r e d u c t i o n 	 i n 	 C O 2 	 e m i s s i o n s 	 ( g a s ,	
electricity and diesel) by 292 tonnes  
or 2.4% since 2008;
• 	 A 	 r e d u c t i o n 	 i n 	 e l e c t ri c i t y 	 co n s u m p t i o n	 
by 1,013,869 kWh;
• 	 A 	 r e d u c t i o n 	 i n 	 d i e s e l 	 f u e l 	 f o r 	 l o g i s t i c s	 
of 35,056 litres;
• 	 1 0 0 % 	 o f 	 w a s t e 	 i s 	 n o w 	 r e c y c l e d	 
in all group owned properties; and
• 	 A 	 r e d u c t i o n 	 i n 	 w a t e r 	 co n s u m p t i o n	 
by over 46%.
In addition to the outlined quantitative 
achievements above, the group has also 
been working on several other key areas 
to set standards for our environmental 
responsibility and reputation, including  
the following:
• 	 T h e 	 pr o m o t i o n 	 an d 	 f a c i l i t a t i o n 	 o f 	 g r e e n	
commuting among staff, with a target 
to reduce commuting related CO2 
emissions by 5% over the next 12 
months;
• 	 A n n u a l 	 v o l u n t a r y 	 r ep o r t i n g 	 t o 	 t h e 	 C a r b o n	
Disclosure Project, where the group has 
been again ranked in the top 3 FTSE 350 
companies in our sector; 
• 	 C o n s i d e ri n g 	 o p t i o n s 	 f o r 	 r e n e w a b l e	
energy installations, including Solar 
PV / Voltage Optimisation and Liquid 
Pressure Amplification;
• 	 P l an n e d 	 f u r t h e r 	 i n v e s t m e n t 	 i n t o 	 t h e	
next wave of our energy efficiency 
programme;
• 	 I n s t a l l a t i o n 	 o f 	 a u t o m a t e d 	 e n e r g y	
monitoring; 
• 	 P l an n i n g 	 t o 	 j o i n 	 t h e 	 B ri t i s h 	 R e t a i l	
Consortium’s Climate Change 
Commitment;
• 	 W h e r e v e r 	 pr a c t i ca b l e , 	 p a c k a g i n g	
components are made from materials 
and processes causing minimum 
harm to the environment when either 
manufactured, processed, recycled or 
eventually disposed of;
• 	 T h e 	 g r o u p ’ s 	 p a p e r 	 p a c k a g i n g 	 i s	 
made from a minimum of 70% recycled 
paper and all other paper used by the 
business is sourced from 100% recycled 
paper; and 
• 	 W h e r e v e r 	 p o s s i b l e , 	 p a p e r 	 u s e d 	 i n 	 t h e	
printing of our catalogues is derived 
from managed and renewable sources 
accredited by the Forest Stewardship 
Council.
Employees 
- Employee involvement. Continuing 
success can only be achieved 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 
service divisions have also achieved 
Investors in People accreditation and it is 
planned that the whole group will in due 
course achieve this 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. N Brown Group plc Annual Report & Accounts 2011 20
Directors’ Report
As mentioned above, in 2010 the group 
repeated its business-wide Employee 
Engagement Survey and over 2,300 
employees participated. The results have 
been collated and reviewed and the board 
are working on an action plan to address 
the survey’s findings.
In early 2011, the company’s senior 
management completed a pioneering 
e-learning course designed to strengthen 
knowledge and understanding of various 
processes by which the business is using 
the internet and social media to better 
engage our customers and understand 
their needs.
- 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. 
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. 
- Health and safety (‘H&S’). The group’s 
policy is to ensure compliance with all 
relevant legislation to ensure, as far as is 
reasonably practicable, the health, safety 
and welfare at work of its employees, 
contractors and visitors. The group is also 
committed to best practice initiatives. 
Benchmarking against OHSAS 18001 
standards has taken place throughout  
the year and have helped define the 
group’s strategy in progressing H&S as 
a senior level issue over the coming year 
including behavioral safety initiatives  
which will continuously improve the 
group’s H&S culture.
The group’s accident statistics for 2010  
are the lowest on group record to date. 
Cumulative group accidents statistics 
show that in the year in review, reportable 
accident ratios per 100,000 hours worked 
under Reporting of Injuries, Diseases and 
Dangerous Occurrences Regulations 1995 
(‘RIDDOR’) were 0.93 in the warehousing 
division. Our RIDDOR Accident Incident 
Ratio (per 100,000 employees) was 1,027, 
which compared favourably with the UK 
HSE figure of 1,181 for the transport/logistic 
sectors. Benchmarking studies with our 
close competitors has also shown that  
we out-perform them against this and 
other measures. 
Accident statistics for the group show 
a reduction of 10%, at 163 accidents, 
with most significant reductions being 
evident across all accident types, with 
the exception of manual handling. This 
area provides some of the focus for the 
coming year’s objectives and will be 
supported through a forum approach 
with Occupational Health, H&S, company 
physiotherapy and emphasis on 
rehabilitation through case management 
with HR and operational management.
As a responsible retailer and employer 
we endeavour to ensure that all products 
and services sold by us or used in the 
workplace are designed so that they are 
safe and without risk to employees and 
customers in proper use.
Customers 
A key factor of the group’s success is the 
quality of its relationship with its 
customers. Regular customer satisfaction 
surveys are conducted, both directly 
and through third parties. Telephone 
enquiry and complaint calls received from 
customers are analysed and remedial 
action taken to improve the levels of 
customer service. 
Suppliers 
The group is aware of the potential social 
impact of its business dealings wherever 
the goods are manufactured, particularly 
in developing countries. Now forming part 
of our standard conditions of contract for 
the purchase of products for resale, we 
require all suppliers to agree to adopt the 
principles of our Code of Conduct. This 
Code of Conduct is based on the ETI 
(Ethical Trade Initiative – www.ethicaltrade.
org) Base Code. This includes sections on:
1. Freedom of employment;
2. Freedom of association and collective 
bargaining;
3. No recruitment of child labour;
4. A living wage is paid for the country of 
manufacture;
5. Excessive working hours are not worked;
6. No discrimination is practised;
7. No harsh or inhumane treatment;
8. Regular employment is provided; and
9. Safe and hygienic working conditions.
In addition, we require that all suppliers 
adhere to all relevant local and national 
labour and health and safety laws in the 
country of manufacture. All new suppliers 
to the group are required to agree to this 
Code of Conduct before any business is 
placed with them. Supplier Self Assessment 
forms are used to assess how our 
suppliers integrate the principles outlined 
in the Code of Conduct into their day-to-
day operations. This detailed questionnaire 
contains several questions based on the 
above sections of the Code of Conduct. 
Once completed by the supplier for each 
factory that manufactures goods for the 
group, the results are compiled and 
suppliers are given an initial rating.  
This is based on a traffic light system 
enabling the group to assess common 
patterns of working depending on the 
sector and country or region of manufacture.
If a supplier does not reach the required 
standard and further work or evidence of 
working processes is required, a detailed 
Corrective Action Plan is compiled which 
will include any remedial action that is 
required from the supplier. A realistic 
timescale is then agreed with the supplier 
to adopt these proposals and improve the 
working conditions within the factory. N Brown Group plc Annual Report & Accounts 2011 21
Directors’ Report
At the time of writing over 1,375 suppliers 
have been issued with a Code of Conduct 
and Self Assessment Form.
This year the group has undertaken a 
comprehensive in-house training course 
for all Buying and Merchandise staff 
that visit our supply base. The training 
course covers all aspects of the Code 
of Conduct and what this means on a 
practical basis. The course also covers 
the working practices that staff are likely 
to encounter when they visit suppliers, 
with some examples of best practice and 
questioning techniques that can be used. 
The course also highlights a process 
for Buying and Merchandise to highlight 
concerns they may have when visiting 
suppliers. Continued non-compliance by 
a supplier will lead to de-listing from all 
group companies.
The group is also in the process of 
appointing an audit partner to ensure 
compliance and document any further 
work needed within the supply base to 
improve working conditions. It is hoped 
that the audit process will highlight areas 
of best practice that can be applied across 
all sectors and other group suppliers. 
Suppliers have been prioritised by the 
value of business placed with them, the 
country of manufacture and the results 
of the initial Supplier Self Assessment 
forms. The audit process will begin rolling 
out across the group later in the year with 
all factories being audited at least once 
every two years. Most of the audits will be 
carried out on a semi-announced basis 
with some being carried out unannounced. 
The group has further confirmed its 
commitment to improving the working 
conditions of people within our supply 
chain by joining the Ethical Trading 
Initiative (‘ETI’) as a foundation member. 
ETI is an alliance of companies, 
trade unions and non-governmental 
organisations (‘NGO’) which seeks to 
work together to improve workers’ lives. 
The group will be taking an active part in 
membership of ETI by partaking in relevant 
working groups, sharing and learning 
best practice from other members. As a 
requisite of membership of ETI the group 
will also be compiling a detailed annual 
report which will outline the progress of 
ethical trade work already completed as 
well as helping to focus and prioritise areas 
of work for the forthcoming year. 
This report is in turn audited by an external 
agency as well as a relevant NGO to help 
benchmark the group’s progress against 
other members of ETI and to highlight 
areas of work for the forthcoming year. 
The group is also currently undertaking an 
audit of factory locations and countries of 
manufacture as an additional method of 
mapping the supply chain and prioritising 
resources where the greatest impact will 
be felt in the future. 
Trade creditors of the group at 26 February 
2011 represented 40 days (2010, 38 days) 
of purchases. 
Community relations
The group actively supports, the communities 
in which it operates. The family, health and 
well-being programme, now in its seventh 
year, continues to provide additional 
benefits for all our employees. 
The group maintains its close links with  
the Christie Hospital in Manchester and the 
Retail Trust. It also regularly encourages 
employees to participate in fundraising 
activities for these, and other worthwhile 
causes. These events can be anything 
from national support such as Children 
in Need and the Alzheimer’s Society 
to very local causes for hospices and 
children’s hospitals in and around Greater 
Manchester. The group maximises the 
potential donation by matching the level of 
money raised by employees to double the 
size of the donation. 
In the last financial year, money was raised 
for a number of noteworthy causes, such 
as £21,000 for Access and 180 employees 
taking part in the Manchester Bupa 10k 
run. The group once again supported 
the Canal Boat adventure charity where 
employees paid for more than 100 deprived 
and disabled children to enjoy a holiday. 
In addition the group’s employees have 
organised fund-raising activities to assist 
the following good causes:
• 	 B a r n a r d o s ;
• 	 C h r i s t i e s ;
• 	 H e l p 	 f o r 	 H e r o e s ;
• 	 C r o s s r o a d s 	 c a r e 	 a s s o c i a t i o n ;
• 	 M a c M i l l a n 	 c a n c e r 	 c a r e ;
• 	 B e e c h w o o d 	 C a n c e r 	 C a r e ;
• 	 C h i l d r e n 	 i n 	 N e e d ;
• 	 F A C T 	 ( f a m i l i e s 	 f o r 	 a u t i s t i c 	 c h i l d r e n ) ;
• 	 W h e n 	 y o u 	 w i s h 	 u p o n 	 a 	 s t a r ; 	 a n d
• 	 C h e t h a m ’ s 	 S c h o o l 	 o f 	 M u s i c .
Once again in 2010/11 a record number 
of employees were involved in charitable 
events. Numerous separate charitable 
fundraising events were held by employees 
and sponsored, or participated in, by the 
group, raising more than £60,000. 
The group assisted Comic Relief this year 
when 120 of our employees gave up six 
hours of their own time to take donation 
calls during the live Comic Relief TV 
broadcast.
Charitable and political donations 
During the year, the group made charitable 
donations of £70,960 (2010, £70,569).  
No political donations have been made 
(2010, nil). 
Pension fund 
The group continues to ensure that the  
N Brown Group 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. 
The fund’s investments are managed by 
Aberdeen Asset Management Limited and 
Legal and General Assurance (Pensions 
Management) Limited and the actuarial 
and administration services are provided 
by Mercer Human Resource Consulting 
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 N Brown 
Group Pension Fund or in administration  
of the Fund. This amounts to a “qualifying 
indemnity provision” (as defined in section 
236 of the Companies Act).
The N Brown Group 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 N Brown Group 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. 
Further to the arrangement agreed with  
the Pensions Regulator in January 2007  
as part of the company’s ‘B’ share return  
of value scheme, the company paid an 
extra £4m into the pension fund during the 
relevant year in continued reduction of the 
funding deficit. N Brown Group plc Annual Report & Accounts 2011 22
Directors’ Report
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 67. The group’s 
risk management policies and procedures 
are also discussed in the Financial Review 
on page 14. 
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. Directors’ service 
contracts are terminable by the company 
on giving 12 month’s 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. 
Auditor 
A resolution to reappoint 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 5 July 2011.
 
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:
• 	 C e r t a i n 	 r e s t r i c t i o n s 	 w h i c h 	 m a y 	 f r o m 	 t i m e	
to time be imposed by laws or regulations 
such as those relating to insider dealing;
• 	 P u r s u a n t 	 t o 	 t h e 	 c o m p a n y ’ s 	 c o d e 	 f o r	
securities transactions whereby the 
directors and designated employees 
require approval to deal in the company’s 
shares; and
• 	 W h e r e 	 a 	 p e rs o n 	 w i t h 	 a n 	 i n t e r e s t 	 i n 	 t h e	
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 
obligations attaching to the company’s 
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 
the company’s various share incentive 
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:
• 	 T h e 	 l o n g - t e r m 	 i n t e r e s t s 	 o f 	 b e n e f i c i a r i e s ;
• 	 T h e 	 i n t e r e s t s 	 o f 	 b e n e f i c i a r i e s 	 o t h e r 	 t h a n	
financial interests;
• 	 T h e 	 i n t e r e s t s 	 o f 	 b e n e f i c i a r i e s 	 i n 	 t h e i r	
capacity as employees or former 
employees or their dependants;
• 	 T h e 	 i n t e r e s t s 	 o f 	 p e rs o n s 	 ( w h e t h e r 	 o r 	 n o t	
identified) who may become beneficiaries 
in the future; and
• 	 C o n s i d e r a t i o n 	 o f 	 a 	 l o c a l , 	 m o r a l , 	 e t h i c a l ,	
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 14.
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 28 to 38 
and the Corporate Governance Report on 
pages 24 to 27 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 Article 4 of the IAS 
Regulation and have elected to prepare 
the parent company financial statements 
in accordance with United Kingdom 
Generally Accepted Accounting Practice 
(United Kingdom 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 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:
• 	 S e l e c t 	 s u i t a b l e 	 a c c o u n t i n g 	 p o l i c i e s	 
and then apply them consistently;
• 	 M a k e 	 j u d g m e n t s 	 a n d 	 a c c o u n t i n g	
estimates that are reasonable and 
prudent;
• 	 E n s u r e 	 a p p l i c a b l e 	 U K 	 A c c o u n t i n g	
Standards have been followed; and
• 	 P r e p a r e 	 t h e 	 f i n a n c i a l 	 s t a t e m e n t s 	 o n	
the going concern basis unless it is 
inappropriate to presume that the 
company will continue in business.
In preparing the group financial 
statements, International Accounting 
Standard 1 requires that directors:
• 	 p r o p e r l y 	 s e l e c t 	 a n d 	 a p p l y 	 a c c o u n t i n g	
policies;
• 	 p r e s e n t 	 i n f o r m a t i o n , 	 i n c l u d i n g 	 a c c o u n t i n g	
policies, in a manner that provides 
relevant, reliable, comparable and 
understandable information; 
• 	 p r o v i d e 	 a d d i t i o n a l 	 d i s c l o s u r e s	
when compliance with the specific 
requirements in IFRSs are insufficient to 
enable users to understand the impact 
of particular transactions, other events 
and conditions on the entity’s financial 
position and financial performance; and
• 	 m a k e 	 a n 	 a s s e s s m e n t 	 o f 	 t h e 	 c o m p a n y ’ s	
ability to continue as a going concern. N Brown Group plc Annual Report & Accounts 2011 23
Directors’ Report
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 corporate 
and financial information included on 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:
• 	 s o 	 f a r 	 a s 	 t h e 	 d i r e c t o r 	 i s 	 a w a r e , 	 t h e r e 	 i s 	 n o	
relevant audit information of which the 
group’s auditor is unaware; and
• 	 t h e 	 d i r e c t o r 	 h a s 	 t a k e n 	 a l l 	 s t e p s 	 t h a t 	 h e	
ought to have taken as a director in order 
to make himself aware of any information 
to establish that the group’s auditor is 
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 
17 May 2011 
Responsibility statement 
We confirm that to the best of our 
knowledge:
• 	 t h e 	 f i n a n c i a l 	 s t a t e m e n t s , 	 p r e p a r e d 	 i n	
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
• 	 t h e 	 m a n a g e m e n t 	 r e p o r t , 	 w h i c h 	 i s	
incorporated into the directors’ report, 
includes a fair review of the development 
and performance of the business 
and the position of the company 
and the undertakings included in the 
consolidation taken as a whole, together 
with a description of the principal risks 
and uncertainties that they face.
By order of the board 
Alan White 
Chief Executive
Dean Moore 
Finance Director
17 May 2011 N Brown Group plc Annual Report & Accounts 2011 24
Corporate Governance Report 
Combined code 
The board is committed to maintaining 
high standards of corporate governance 
and compliance with the principles in the 
Combined Code on Corporate Governance 
issued by the UK Financial Reporting 
Council in 2008 (the “Code”).
For the year in review the group and 
the directors have complied with the 
provisions set out in section 1 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 page 28 to 38.
The board has noted and is aware of the 
recent changes in corporate governance; 
in particular the new UK Corporate 
Governance Code (the “New Code”) which 
was issued by the FRC in June 2010. 
The board is reviewing the New Code in 
relation to financial years commencing 
March 2011 and will report on it in the 
Annual Report in 2012.
Board composition 
The board currently 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 non-executive directors are, Lord 
Alliance of Manchester CBE, (Chairman), 
Nigel Alliance OBE, both of whom are not 
regarded by the board as independent 
under the provisions of the Code, the 
deputy chairman Ivan Fallon, Lord Stone of 
Blackheath, John McGuire and Anna Ford. 
All of these are considered by the board to 
be independent. 
Ivan Fallon was appointed to the board in 
October 1994 and he 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 that his 
commercial experience, acumen and 
extensive knowledge of the group’s 
businesses gained during his tenure on the 
board are of such great value to the board 
that this far outweighs any considerations 
of non-independence. Ivan Fallon is also 
our senior independent non-executive 
director and deputy chairman. 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 such 
strategic value to the board that this far 
outweighs any considerations of non-
independence.
The board considers that it had a majority 
of independent non-executive directors 
during the year. It is considered that the 
composition of the board during the year 
had the necessary balance of executive 
and non-executive directors providing the 
requisite skills, experience and judgement 
appropriate for the requirements of the 
business and board effectiveness. 
Under the articles one third of the  
board is required to retire every year.  
All directors joining the board are required 
to submit themselves for election at the 
annual general meeting following their 
appointment. All non-executive directors 
serve the company under formal written 
terms and conditions of appointment. 
These terms of appointment stipulate 
a period of service of an indefinite 
duration but terminable on six months 
notice by either party. All non-executive 
appointments are subject to early 
termination provisions, for example 
allowing earlier termination without 
compensation in the event a director  
is not re-elected upon retirement by  
rotation in accordance with the articles.  
Notwithstanding the foregoing, the board 
has resolved to adopt, with immediate 
effect, the requirement in the New 
Code that all directors retire and submit 
themselves for re-election annually. 
Therefore each of the directors will retire  
at the forthcoming AGM and, being 
eligible, offer themselves for reappointment 
at that meeting. 
The board, having carried out a recent 
performance evaluation, considers that the 
commitment of all directors to the role and 
the performance of all directors, continues 
to be effective. Sufficient biographical 
detail 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.
Board operation 
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 8 times during the year. 
Director’s attendance at board meetings 
was as follows: 
  Attendance
Lord Alliance of  
Manchester CBE  8
Ivan Fallon 8
Alan White 8
Lord Stone of Blackheath 8
Nigel Alliance OBE 8
Dean Moore 8
John McGuire  8
Anna Ford 8
The board is responsible for major policy 
decisions, delegating detailed operational 
matters to its committees and sub-
committees and senior officers where 
necessary. The board is collectively 
responsible for providing effective 
leadership and promoting the success of 
the group and has established a formal  
schedule of matters reserved for its 
approval (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 is held over two days and is 
entirely devoted to the development and 
review of long-term corporate strategy and 
the development of the group’s long-term 
strategic plan. This year’s meeting was 
facilitated by external consultants who were 
given the brief by the Deputy Chairman 
to challenge and evaluate the long-term 
growth and strategic plan drawn up by the 
executive directors. The consultants did 
not find any material weakness or omission 
in the group’s strategic plan but made a 
number of recommendations which are 
being worked upon. Day-to-day operational 
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 
Financial Director respectively. N Brown Group plc Annual Report & Accounts 2011 25
Corporate Governance Report 
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 from the 
home shopping board 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. Procedures are 
in place to enable all directors to obtain 
independent professional advice in respect 
of their fiduciary duties and obligations  
and all board members have full and direct 
access to the Company Secretary, who is 
a fully qualified solicitor and who attends 
all board and committee meetings.  
The Company Secretary regularly briefs 
the board on regulatory and compliance 
matters, shareholder engagement, 
continuing director education and the 
statutory duties and obligation of the 
directors. 
In the year under review, the board 
undertook an appraisal of its own 
performance and effectiveness, that of 
the Chairman and that of its 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 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 operate well, are 
effectively led and that robust, free and 
frank discussion and challenge to the 
operational divisional directors and the 
executive directors exists. The survey 
also found that the board continues to 
be effectively led by the Chairman and 
that information provided in the form of 
board papers remains comprehensive and 
sufficient for the director’s needs and that 
each director is individually contributing  
to the overall effectiveness and success  
of the group. With the growth of regulatory 
and compliance matters some directors 
reported that consideration be given to 
holding more meetings per year and this  
is being considered.
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 has noted that 
the New Code will require an external 
evaluation to be carried out in future, at 
least once in every 3 years.
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 were reported in the year 
under review.
Committee structure 
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: 
• 	 A u d i t 	 co m m i t t e e ;
• 	 R e m u n e r a t i o n 	 co m m i t t e e ; 	 an d	
• 	 N o m i n a t i o n 	 co m m i t t e e .	
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 entirely 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 members of the committee 
are regarded as having recent and relevant 
financial experience. By invitation, the 
audit committee meetings are attended by 
the Chief Executive, the Finance Director, 
the group’s head of internal audit and the 
group’s external auditors.
The committee met 2 times 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. In the year 
under review the committee has: 
• 	 	 R e v i e w e d 	 an d 	 a p pr o v e d 	 t h e 	 an n u a l	
internal audit programme and resources;
• 	 	 M e t 	 w i t h 	 t h e 	 i n t e r n a l 	 an d 	 e x t e r n a l	
auditors in the absence of the  
executive directors;
• 	 	 C o n s i d e r e d 	 t h e 	 an n u a l 	 an d 	 i n t e ri m	
financial statements before submission 
to the board, received and reviewed the 
audit reports and audit-related reports 
provided by the external auditor,  
Deloitte LLP; 
• 	 	 R e v i e w e d 	 an d 	 a s s e s s e d 	 t h e 	 g r o u p ’ s	
system of internal risk control and 
reported its findings twice to the  
board; and
• 	 	 R e ce i v e d 	 p a p e r s 	 f r o m 	 t h e 	 co m p an y	
secretary on CSR and governance issues. N Brown Group plc Annual Report & Accounts 2011 26
Corporate Governance Report 
On each occasion it meets, the committee 
discusses audit and audit-related matters 
with the external auditor both with, and 
in the absence of, the executive directors 
and the internal auditor. Additionally, 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 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 
effective and to 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 has it 
identified itself, any failings or weaknesses 
in internal control which it has determined 
to be material. 
The audit committee periodically reviews 
the appointment and independence 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. 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 are set out in the 
Remuneration Report on page 28).
As a result of its work during the year,  
the audit committee has concluded 
that it has acted in accordance with its 
terms of reference and has 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 auditor, 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 2011 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 4 
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
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 28 
to 38. The report will be put to an advisory 
vote by the members at the company’s 
2011 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 
directors of the operating company 
board J D Williams & Company Limited) 
and other senior executive staff. 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. Where appropriate, 
external search consultants are engaged. 
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 
ongoing 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 
did not have occasion to meet.
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, to give them 
reasonable assurance regarding effective 
and efficient operations and compliance 
with laws and regulations. There are, of 
course, inherent limitations in any system 
of internal control and accordingly even 
the most effective system can provide 
only reasonable, and not absolute, 
assurance and management against 
material misstatement, loss or failure. No 
system can guarantee elimination of the 
risk of failure to meet the objectives of 
the business. The board has established 
a continuous process for identifying, 
evaluating and managing the significant 
risks the group faces. N Brown Group plc Annual Report & Accounts 2011 27
Corporate Governance Report 
Risk Management 
The group’s ongoing assessment of risk 
and continual review of the structure of 
internal controls remains in place. In order 
to ensure key business developments 
are appropriately factored into the risk 
management process, internal audit 
facilitated two specific board-level risk 
sessions in the period. The chief executive 
of the group and the finance director along 
with operational management reviewed 
the key risks facing the business and 
appraised the structure of internal controls 
to mitigate these risks. In a separate 
session the audit committee provided a 
top-down view of risks across strategic, 
financial and operational areas. The results 
were collated by internal audit and have 
been used as a key driver for the annual 
internal audit plan and have been reported 
to the board. 
The risk committee focuses on reviewing 
management's activities to continually 
monitor, reduce and eliminate the risks 
identified. Operational management are 
asked to present to the risk committee on 
a cyclical basis on the progress of agreed 
actions against each major risk identified. 
The output from the risk committee is 
shared with the audit committee twice 
annually, and the chief executive of the 
group and audit committee chairman by 
exception, if required. The group head of 
internal audit acts as the chairman of the 
risk committee.
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 risk control for the year 
under review. As well as receiving regular 
reports from the risk committee, the board 
(through the audit committee) discusses 
with the external auditor and the internal 
audit department, the results of their 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, and the relevant 
parts of the Turnbull and Smith Guidance. 
There is an ongoing 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 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 shareholders, both institutional and 
individual investors. Institutional investors, 
fund managers and analysts are kept 
informed of the company’s overall strategy 
through regular meetings and company 
‘roadshows’. 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 makes himself 
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 board of the operating division) at 
least twice a year at the announcement of 
the group’s results at the analyst’s financial 
presentation and also by constructive 
use of 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, our recently 
upgraded website provides shareholders 
with up to date, comprehensive and 
accessible information about the group 
and its activities. Shareholders views and 
feedback reports are also included in 
the director’s board packs as and when 
received. N Brown Group plc Annual Report & Accounts 2011 28
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 Financial Services Authority 
and describes how the board have 
applied the principles relating to directors’ 
remuneration set out in the Combined 
Code on Corporate Governance (2008) 
(“the Code”). 
This report will be put to an advisory vote 
of the company’s shareholders at the 
annual general meeting on 5 July 2011.  
The auditor is 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 their own remuneration. 
The Committee also received advice from 
external advisers during the year which 
materially assisted their consideration of 
remuneration matters as follows:
• 	 H e w i t t 	 N e w 	 B ri d g e 	 S t r e e t 	 pr o v i d e d	
benchmarking services in setting 
executive remuneration;
• 	 D e l o i t t e 	 L L P , 	 i n 	 t h e i r 	 ca p a c i t y 	 a s 	 t h e	
company’s auditors, also provided tax 
services to the group. Remuneration 
benchmarking and other remuneration 
data taken from Deloitte publications 
were also used;
• 	 E r n s t 	 & 	 Y o u n g 	 L L P 	 pr o v i d e d 	 a d v i ce	
in respect of certain executive 
remuneration matters;
• 	 P i n s e n t 	 M a s o n s 	 L L P 	 pr o v i d e d 	 a d v i ce 	 i n	
respect of the company’s share incentive 
plans and additional advice in relation to 
pension arrangements; and
• 	 M e r ce r 	 H u m an 	 R e s o u r ce 	 C o n s u l t i n g	
Limited provided advice in relation to the 
Chief Executive’s pension arrangements.
Hewitt New Bridge Street, Ernst & Young 
LLP and Mercer Human Resources 
Consulting Limited were appointed by 
the committee and provided no other 
services to the company. Pinsent Masons 
LLP are the group’s general legal advisers 
and were not specifically appointed by 
the committee. Details of these advisors’ 
other connections with the group, and 
the advisors’ terms of engagement, are 
available on request from the Company 
Secretary.
The board and the remuneration 
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. 
During the year the committee discussed 
the following matters:
• 	 R e v i e w i n g 	 an d 	 b e n c h m a rk i n g 	 t h e	
competitiveness of the remuneration 
policy and arrangements for executive 
directors, the Chairman and other 
members of senior management as well 
as other board and committee members;
• 	 R e v i e w i n g 	 t h e 	 s a l a r y 	 l e v e l s 	 f o r 	 e x e c u t i v e	
directors and the senior members of the 
operating division;
• 	 A g r e e i n g 	 t h e 	 b o n u s 	 p a y a b l e 	 f o r 	 t h e	 
2010/2011 period;
• 	 S e t t i n g 	 t h e 	 p a r am e t e r s 	 f o r 	 t h e 	 b o n u s	
scheme for 2011/2012;
• 	 A g r e e i n g 	 t h e 	 i n d i v i d u a l 	 l o n g- t e r m	
share awards for executives and 
senior management for 2010-2013 and 
reviewing the performance measures 
and targets applying to these awards;
• 	 A p pr o v i n g 	 v e s t i n g 	 l e v e l s 	 o f 	 l o n g 	 t e r m	
and deferred bonus incentive schemes 
for the 2007-2010 and 2008-2010 
schemes respectively;
• 	 A p pr o v i n g 	 t h i s 	 r e m u n e r a t i o n 	 r ep o r t ;
• 	 R e v i e w i n g 	 c u r r e n t 	 i n v e s t o r 	 g u i d e l i n e s	 
on executive remuneration; and
• 	 R e v i e w i n g 	 t h e 	 r e l a t i o n s h i p 	 b e t w e e n 	 t h e	
long-term strategy of the company and 
executive remuneration with a view to 
ensuring the two are in line with each other. 
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 long-term strategy capable 
of attracting, motivating and retaining 
executive directors and senior executives 
by offering them competitive remuneration 
packages, which are prudently 
constructed, sufficiently stretching and 
linked to long-term profitability. 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 regularly reviews the 
structure of executive remuneration, 
including the balance between fixed and 
variable pay, to ensure that it remains 
competitive and stretching and linked to 
the promotion of the long-term success of 
the group. Executive pay is aligned with, 
and designed to promote the long-term 
success of the company, compatible with 
the company’s 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 granting and 
the vesting stage to safeguard against 
excessive reward. All remuneration 
is set and reviewed by reference to 
improvements in financial and individual 
performance and is benchmarked to 
attract and retain the highest quality 
people. This policy will continue to 
apply for the current financial year. 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 committee is entitled 
to consider corporate performance on 
Environmental, Social and Governance 
(‘ESG’) issues when settling the 
remuneration of any executive director. 
The committee is of the opinion that the 
structure of the incentive arrangements for 
senior managers does not raise ESG risks 
by inadvertently motivating irresponsible 
behaviour or the taking of undue risks with 
the business. N Brown Group plc Annual Report & Accounts 2011 29
Remuneration Report
Following expiration of the company’s 
deferred annual bonus scheme and 
company share option scheme, the 
committee obtained shareholder approval 
for a replacement Deferred Annual Bonus 
scheme (“DABs”), and an Unapproved 
Discretionary Share Option Scheme 
(the “Unapproved Scheme”) and HM 
Revenue & Customs Company Share 
Option Plan (“CSOP”) to replace the 
share option scheme. The company also 
obtained approval for a replacement of 
the employee Savings-Related Share 
Option Scheme (“SAYE”) following similar 
expiration of the previous plan. Each 
new plan replicates the structure of its 
predecessor.
Basic salary 
When determining the salary of the 
executive directors the committee takes 
into consideration 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 2010
Alan White £510,000
Dean Moore £287,130
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 the achievement 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 KPI’s 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:
• 	 G r o u p 	 pr o f i t a b i l i t y 	 ( 7 0 % 	 o f 	 b o n u s ) ;
• 	 C o r p o r a t e 	 o b j e c t i v e s 	 ( 1 5 % 	 o f 	 b o n u s ) ; 	 a n d
• 	 I n d i v i d u a l 	 o b j e c t i v e s 	 ( 1 5 % 	 o f 	 b o n u s ) .
The maximum potential bonus payable 
to an executive director for 2010/11 and 
2011/12 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 2010/11 
were based on a combination of absolute 
growth in profit over the previous year’s 
reported profit before tax, the increase 
in online order penetration and the 
achievement of personal objectives. The 
performance targets for 2011/12 have 
recently been reviewed and, again, will be 
based upon a combination of profit growth 
and the achievement of personal and 
corporate objectives.
For 2010/11 the achievement of each 
element of 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 £97.5m, compared with the prior year 
adjusted result of £93.4m. Adjusted 
profit before tax for 2010/11 was 
£98.7m, therefore the bonus payment 
due under this element of the scheme 
was 70%.
Analysis of Performance vs Non Performance element of Remuneration Package
Fixed Pay
70%
30%
Alan White Dean Moore
Variable Performance Related Pay
70%
30%
The charts which follow demonstrate 
the balance between fixed and variable 
performance based pay for each executive 
director. N Brown Group plc Annual Report & Accounts 2011 30
Remuneration Report
(b) Corporate objectives (15% of bonus)
  The corporate objective for the year in 
review was to increase online order 
penetration. Internet sales of 45% were 
achieved and therefore the payment 
due under this element of the bonus 
scheme was 9.6%. 
(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 
product sales, deliver better internet 
functionality and exploit social media, 
launch the USA catalogue, improve 
profitability in acquired businesses, 
increase speed of despatch of products 
and deliver improvements in customer 
service. Amongst Dean Moore’s 
personal objectives were objectives 
to manage group borrowings, renew 
the group’s banking facilities, achieve 
procurement savings, improve bad 
debt performance and residual debt 
recovery. 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:
• 	 A l an 	 W h i t e 	 1 1 . 0 3 %	
• 	 D e an 	 M o o r e 	 1 1 . 2 5 %
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 to participate in one of 
either the company’s long-term incentive 
plan or one of its executive share option 
schemes. The committee’s policy is 
that combined awards under both plans 
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:
• 	 T h e 	 a c c o u n t i n g 	 i m p a c t 	 a n d 	 c o s t 	 f o r	
the company and the dilutive cost 
for shareholders for a given share 
commitment to an executive; 
• 	 D i f f e r e n t 	 p e r f o r m a n c e 	 c o n d i t i o n s 	 t h a t	
might apply to awards and options; or 
• 	 T h e 	 r e c r u i t m e n t 	 o f 	 a 	 s e n i o r 	 e x e c u t i v e .	
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 2011/12. 
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  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 
2010/11 Bonus & Deferred Shares Paid   £462,188 £260,858
2010/11 Matching Share Award (Contingent)   £115,547 £65,214 
Total 2010/11 Bonus & Matching Share Award as a percentage of Salary   113.3% 113.6%  N Brown Group plc Annual Report & Accounts 2011 31
Remuneration Report
Performance condition
The LTIP performance condition is based 
upon total shareholder return (“TSR”). TSR 
as a performance condition is considered 
appropriate for the following reasons: 
• 	 M a r k e t 	 r e s e a r c h 	 i n d i c a t e d 	 t h a t 	 T S R 	 i s 	 a	
more appropriate and common measure 
for long-term incentive arrangements 
within FTSE 250 companies; 
• 	 T S R 	 p e r f o r m a n c e 	 c o n d i t i o n 	 i s 	 i n 	 t h e	
opinion of the committee more closely 
aligned with shareholder interests than 
earnings per share (“EPS”) growth; 
• 	 T S R 	 p e r f o r m a n c e 	 c o n d i t i o n 	 m o r e 	 c l o s e l y	
evaluates company performance against 
a basket of comparator companies in the 
same sector; and
• 	 T S R 	 p e r f o r m a n c e 	 c o n d i t i o n 	 i s 	 m o r e	
easily understood and measurable by 
eligible executives and is considered to 
be a suitably challenging measure in the 
current retail sector trading environment. 
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. 
Vesting of awards
For existing awards made prior to 2009 
(vesting 2010 and 2011 respectively) the 
company’s TSR must be ranked at least 
at the median of the comparators in order 
for any of the award to vest (at which level 
50% of the award vests), between 50% 
and 90% vests if the company’s TSR is 
ranked between the median and upper 
quartile and 100% of the award will vest 
if the company is ranked in the upper 
quartile.
For 2009 awards onwards (vesting in 
2012 onwards) the percentage award 
vesting at median performance, has 
been reduced from 50% to 25% of the 
maximum award. 100% will vest if the 
company’s TSR is ranked in the upper 
quartile and, depending on rank, between 
25% and 85% of the award vesting where 
the company’s TSR is ranked between the 
median and upper quartiles.
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 remuneration committee 
before any final award is made.
There are currently three awards 
outstanding under the long-term share 
incentive plans granted in 2008, 2009 and 
2010. Based on performance as at 30 April 
2011, the company’s TSR is currently (at 
the date of this report) ranked as follows:
2008-11 Upper quartile
2009-12 Second quartile
2010-13 Second 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 earnings per share ("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%  N Brown Group plc Annual Report & Accounts 2011 32
Remuneration Report
Performance conditions
The first condition is related to the 
company’s absolute TSR performance. 
The committee believes that under the 
VCP senior management should only be 
rewarded for delivering superior absolute 
shareholder returns and that therefore 
the TSR performance targets should be 
expressed in absolute terms. Accordingly, 
in order for awards to begin to vest, the 
company’s average TSR performance 
over the three years to the end of February 
2012 must have increased by at least 40% 
compared with the company’s average 
share price from the announcement of the 
2008 interim financial results to the date 
of grant, on 26 February 2009 (202.869p), 
and in order for awards to be capable of 
vesting in full, the TSR performance must 
have increased by at least 200%. At 26 
February 2011 TSR performance for the 
relevant period had increased by 150%.
In addition to this TSR condition, the 
committee believes that the company’s 
financial position should be robust 
and therefore there is an additional 
performance condition that can reduce 
the percentage of an award that will 
vest. Accordingly, in order for the award 
determined by performance against TSR 
performance condition to vest in full, the 
company’s cumulative normalised EPS 
over the period of four financial years from 
1 March 2008 to 28 February 2012 must be 
at least 100p. From a base of 20.75p on 1 
March 2008, this is equivalent to a year-on-
year growth rate of 7.6%. If the company’s 
cumulative normalised EPS over this 
period is less than 100p but 90p or more, 
awards would vest between 50% and 
100% on a straight-line basis. If cumulative 
normalised EPS is less than 90p, awards 
would lapse in full. ‘Cumulative’ means the 
aggregate of the normalised EPS figures 
over the four-year performance period.
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.
These 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. Selected other senior executives have also been granted awards over an additional 1.4 million shares. In total awards 
over 3.1 million shares have been made. No further awards will be made except for senior new hires or to take account of promotions.
Term Description 
Nature of Right  A nil cost award over a fixed number of shares subject to the satisfaction of certain 
performance conditions
Performance Period  Measured to the end of February 2012. Options will vest as to one-third on each of the 
third, fourth and fifth anniversaries of the date of grant (and on the fifth anniversary the 
vested option can be exercised)
Performance Requirements  Absolute TSR and cumulative normalised EPS targets. Both of the performance conditions 
must be satisfied in order for awards to vest N Brown Group plc Annual Report & Accounts 2011 33
Remuneration Report
All employee share schemes 
The group operates a 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. 
As mentioned previously, the company’s 
shareholders approved the adoption of 
a new SAYE at the 2010 AGM which will 
operate in exactly the same manner as the 
outgoing scheme.
There is currently no intention to invite 
eligible employees to participate in the 
company’s share incentive plan (SIP). 
Shareholding guidelines
Under the VCP the company is making 
arrangements to introduce formal share 
ownership guidelines under which the 
Chief Executive and the Group Finance 
Director will respectively be 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).
• 	 A l a n 	 W h i t e 	 3 7 1 %
• 	 D e a n 	 M o o r e 	 1 9 5 %
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. During the year Alan 
White waived £177,927 of his unapproved 
annual accrued pension entitlement under 
the terms of the unapproved scheme.  
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 at the rate of 
6% of pensionable salary. 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: 
• 	 a 	 c a r 	 a n d 	 f u e l 	 a l l o w a n c e ; 	 a n d	
• 	 p r i v a t e 	 m e d i c a l 	 i n s u r a n c e	
Directors’ contracts 
It is the company’s policy that executive 
directors should have contracts with an 
indefinite term providing for a maximum of 
12 month’s notice. 
The policy, on termination, is that the 
company does not make payments 
beyond its contractual obligations. 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 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. N Brown Group plc Annual Report & Accounts 2011 34
Remuneration Report
0 
20 
40 
60 
80 
100 
120 
140 
160 
180 
200 
Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 
Total Return (rebased to 100) 
Financial Period 
Total Shareholder Return Performance: N Brown vs FTSE 250 
N Brown Group plc
FTSE Mid-250 Index
Total Shareholder Return Performance: N Brown vs FTSE 250
Source: Datastream
Non-executive directors are retained 
on letters of appointment. All non-
executive appointments are for indefinite 
terms terminable upon six months 
notice and are subject to successful 
re-election upon retirement by rotation 
as required by the company’s articles of 
association. Termination carries no right to 
compensation other than that provided by 
general law.
The details of directors’ contracts are 
summarised below: 
 
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 £34,000 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 nominations 
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. 
Name Status Date of contract/letter Notice 
   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 N Brown Group plc Annual Report & Accounts 2011 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 2011 2010 
   /fees benefit trust
1
 benefits
2
 bonuses
3
 total total
4
   £’000 £’000 £’000 £’000 £’000 £’000
Executive (salaries)
Alan White  517 2,230 1 462 3,210 997 
Dean Moore  306 27 1 261 595 542 
    
Non executive (fees)
Lord Alliance of Manchester CBE 17 – – – 17 17 
Nigel Alliance OBE  18 – – – 18 18 
Ivan Fallon  50 – – – 50 41 
Lord Stone of Blackheath  38 – – – 38 36 
John McGuire  45 – – – 45 38 
Anna Ford  38 – – – 38 32 
  1,029 2,257 2 723 4,011 1,721 
    
1. During the year emoluments of £2,229,765 for Alan White and £27,497 for Dean Moore have been paid directly to an employee benefit 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 £115,547 for Alan White and £65,214 for Dean Moore which (after deduction of income tax) 
are shortly due to be transferred to the deferred annual bonus scheme.
4. In 2010 Alan White and Dean Moore both waived their rights to the cash based element of the performance-related bonus prior to its determination. The amounts 
of £997,000 and £542,000 shown as emoluments for Alan White and Dean Moore included amounts of £363,375 and £190,969 respectively which have been 
appointed to an employee benefit trust to be held for the benefit of their families. N Brown Group plc Annual Report & Accounts 2011 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 
  27 Feb 10
1
 year
2
 26 Feb 11
1
 year
2,3,4,6
 27 Feb 10
3
 year
3,4,5,6
 26 Feb 11
  £’000 £’000 £’000 £’000 £’000 £’000 £’000
Alan White 266 -172 106 -2,654 4,064 -2,261 1,813
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.
4. Stated after deduction of the directors’ contribution.
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 as 
gilt yield changes, and also the effects of the change in the Fund’s transfer value basis.
6. Over the year Mr White waived the majority of 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.
Contributions paid by the company into the group’s defined contribution scheme during the year in respect of Dean Moore amounted to 
£16,858 (2010, £15,750)
Share options
Details of directors’ share options are as follows:
        Market 
        price at Date from 
  At 27 Feb Granted Lapsed Exercised At 26 Feb Exercise date of which 
  2010 in year in year in year 2011 price exercise exercisable Expiry date
Alan White
SAYE 4,234 – – – 4,234 222.0p  01/08/2011 31/01/2012
  4,234 – – – 4,234
Dean Moore
SAYE 8,413 – – – 8,413 186.0p  01/08/2014 31/01/2015
  8,413 – – – 8,413
The market price of the company's shares at 26 February 2011 was 274.7p (2010, 215.6p) and the range during the year was 213.0p to 
311.2p. N Brown Group plc Annual Report & Accounts 2011 37
Remuneration Report
Deferred annual bonus share awards
Details of awards made to the directors under the group’s deferred annual bonus scheme are as follows:
       Market Market 
       price at price at Date from 
  At 27 Feb Awarded Lapsed Exercised At 26 Feb date of date of which 
  2010 in year in year in year 2011 award exercise exercisable Expiry date
Alan White 49,353 – – (49,353) –
1
 230.0p 263.5p 29/05/2010 28/11/2010
  45,010 – – – 45,010 247.0p  29/05/2011 28/11/2011
  – 53,912 – – 53,912 250.0p  28/05/2012 27/11/2012
  94,363 53,912 – (49,353) 98,922
Dean Moore 26,058 – – (26,058) –
1
 230.0p 263.5p 29/05/2010 28/11/2010
  23,165 – – – 23,165 247.0p  29/05/2011 28/11/2011
  – 28,340 – – 28,340 250.0p  28/05/2012 27/11/2012
  49,223 28,340 – (26,058) 51,505
1. These awards were exchanged for an equivalent number of forfeitable share awards on 25 February 2010.
The total gains made by Alan White and Dean Moore on the exercise of the awards during the year was £130,524 and £68,662 
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 27 Feb Awarded Lapsed Exercised At 26 Feb date of date of which 
  2010 in year in year in year 2011 award exercise exercisable Expiry date
Alan White
  150,560 – – (150,560) –
1, 2
 325.0p 263.5p 18/06/2010 17/12/2010
  2,180 – – (2,180) –
1, 2
 322.0p 245.0p 16/07/2010 15/01/2011
  277,200 – – – 277,200
1
 180.0p  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
  642,631 204,136 – (152,740) 694,027
Dean Moore
  57,664 – – (57,664) –
1, 2
 325.0p 263.5p 18/06/2010 17/12/2010
  145,530 – – – 145,530
1
 180.0p  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
  314,857 114,928 – (57,664) 372,121
1. Exercise is subject to performance condition geared to Total Shareholder Return.
2. These awards were exchanged for an equivalent number of forfeitable share awards on 25 February 2010.
The total gains made by Alan White and Dean Moore on the exercise of the awards during the year was £402,066 and £151,944 
respectively. N Brown Group plc Annual Report & Accounts 2011 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 27 Feb Awarded Lapsed Exercised At 26 Feb date of date of which 
  2010 in year in year in year 2011 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 is subject to performance condition geared to Total Shareholder Return and growth in earnings per share.
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 26 Feb At 27 Feb 
    2011 2010 
    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   688,894 610,405 
Dean Moore   202,670 204,135 
Nigel Alliance OBE   24,658,313 24,658,313 
Nigel Alliance OBE (non beneficial)   6,830,943 6,830,943 
Ivan Fallon   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 26 Feb At 27 Feb 
    2011 2010
N Brown Group plc No.2 Employee Share Ownership Trust   1,718,287 2,004,102 
There have been no changes in the above interests of the directors between the year end and 30 April 2011.
Approval
This report was approved by the board of directors on 17 May 2011 and signed on its behalf by:
Ivan Fallon
Chairman of the remuneration committee N Brown Group plc Annual Report & Accounts 2011 39
Independent Auditor’s Report to the 
members of N Brown Group plc.
We have audited the financial statements 
of N Brown Group plc for the 52 weeks 
ended 26 February 2011 which comprise 
Consolidated Income Statement, 
the Consolidated Balance Sheet, the 
Consolidated Cash Flow Statement, the 
Consolidated Statement of Comprehensive 
Income, the Consolidated Statement of 
Changes in Equity, the Reconciliation 
of Operating Profit to Net Cash from 
Operating Activities and the related notes 
1 to 30. The financial reporting framework 
that has been applied in the preparation 
of the group financial statements is 
applicable law and International Financial 
Reporting Standards (IFRSs) as adopted 
by the European Union. The financial 
reporting framework that has been applied 
in the preparation of the parent company 
financial statements 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 financial statements and for being 
satisfied that they give a true and fair view. 
Our responsibility is to audit and express 
an opinion on the financial statements 
in accordance with applicable law and 
International Standards on Auditing (UK 
and Ireland). Those standards require us to 
comply with the Auditing Practices Board’s 
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 and 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.
Opinion on financial statements
In our opinion:
• 	 t h e 	 f i n an c i a l 	 s t a t e m e n t s 	 g i v e 	 a 	 t r u e	
and fair view of the state of the group’s 
affairs as at 26 February 2011 and of its 
profit for the 52 weeks then ended;
• 	 t h e 	 g r o u p 	 f i n an c i a l 	 s t a t e m e n t s 	 h a v e	
been properly prepared in accordance 
with IFRSs as adopted by the European 
Union; and
• 	 t h e 	 f i n an c i a l 	 s t a t e m e n t s 	 h a v e 	 b e e n	
prepared in accordance with the 
requirements of the Companies  
Act 2006 and, as regards the group  
financial statements, Article 4 of the  
IAS Regulation.
Opinion on other matters prescribed by 
the Companies Act 2006
In our opinion:
• 	 t h e 	 p a r t 	 o f 	 t h e 	 D i r e c t o r s ’ 	 R e m u n e r a t i o n	
Report to be audited has been properly 
prepared in accordance with the 
Companies Act 2006; and
• 	 t h e 	 i n f o r m a t i o n 	 g i v e n 	 i n 	 t h e 	 D i r e c t o r s ’	
Report for the financial period for which 
the financial statements are prepared is 
consistent with the financial statements.
Matters on which we are required to 
report by exception
We have nothing to report in respect of the 
following matters where the Companies 
Act 2006 requires us to report to you if, in 
our opinion:
• 	 a d e q u a t e 	 a c co u n t i n g 	 r e co r d s 	 h a v e 	 n o t	
been kept by the parent company, or 
returns adequate for our audit have not 
been received from branches not visited 
by us; or
• 	 t h e 	 p a r e n t 	 co m p an y 	 f i n an c i a l	
statements and the part of the Directors’ 
Remuneration Report to be audited are 
not in agreement with the accounting 
records and returns; or
• 	 ce r t a i n 	 d i s c l o s u r e s 	 o f 	 d i r e c t o r s ’	
remuneration specified by law are not 
made; or
• 	 w e 	 h a v e 	 n o t 	 r e ce i v e d 	 a l l 	 t h e 	 i n f o r m a t i o n	
and explanations we require for our audit.
Damian Sanders  
(Senior Statutory Auditor) for  
and on behalf of Deloitte LLP
Chartered Accountants and  
Statutory Auditor
Manchester, UK
17 May 2011
Independent Auditor’s Report – Group Accounts N Brown Group plc Annual Report & Accounts 2011 40
    2011 2010 
For the 52 weeks ended 26 February 2011  Note £m £m
Revenue  3 718.8 690.0 
Operating profit   5 102.6 97.6 
Investment income  7 4.1 2.9 
Finance costs  8 (8.5) (7.4)
Profit before taxation and fair value adjustments to financial instruments   98.2 93.1
Fair value adjustments to financial instruments  18 (3.7) (7.4)
Profit before taxation   94.5 85.7
Taxation  9 (22.8) (23.2)
Profit attributable to equity holders of the parent   71.7 62.5
Adjusted earnings per share   11
Basic   27.02p 24.77p
Diluted    26.98p 24.73p
Earnings per share   11
Basic   26.04p 22.83p
Diluted    26.00p 22.79p
Consolidated Statement of Comprehensive Income
    2011 2010 
For the 52 weeks ended 26 February 2011  Note £m £m
Profit for the period    71.7 62.5
Other items of comprehensive income
Exchange differences on translation of foreign operations    (0.6) (0.2)
Actuarial losses on defined benefit pension schemes   29 (2.3) (1.2)
Tax relating to components of other comprehensive income  9 0.6 0.3
    (2.3) (1.1)
Total comprehensive income for the period attributable to equity holders of the parent   69.4 61.4 
Consolidated Income Statement N Brown Group plc Annual Report & Accounts 2011 41
Consolidated Balance Sheet
    2011 2010 
As at 26 February 2011  Note £m £m
Non-current assets 
Intangible assets  12 52.2 36.3
Property, plant & equipment  13 69.1 68.9
Retirement benefit surplus  29 3.3 –
Deferred tax assets  20 3.5 3.6
    128.1 108.8 
Current assets 
Inventories  15 78.1 62.4
Trade and other receivables  16 490.8 461.3
Derivative financial instruments  18 – 2.3
Cash and cash equivalents  25 49.1 59.9
    618.0 585.9
Total assets   746.1 694.7 
Current liabilities 
Bank loans and overdrafts  17 (40.0) –
Trade and other payables  21 (114.5) (105.4)
Derivative financial instruments  18 (1.4) –
Current tax liability   (28.8) (24.1)
    (184.7) (129.5)
Net current assets   433.3 456.4
Non-current liabilities   
Bank loans  17 (190.0) (230.0)
Retirement benefit obligation  29 – (1.8)
Deferred tax liabilities  20 (11.0) (14.4)
    (201.0) (246.2)
Total liabilities   (385.7) (375.7)
Net assets   360.4 319.0 
Equity     
Share capital  22 31.0 30.8
Share premium account   11.0 11.0
Own shares  23 (1.2) (0.4)
Foreign currency translation reserve   2.1 2.7
Retained earnings    317.5 274.9
Total equity   360.4 319.0
The financial statements of N Brown Group plc (Registered Number 814103) were approved by the board of directors and authorised for 
issue on 17 May 2011.
They were signed on its behalf by:
Alan White
Dean Moore
Directors N Brown Group plc Annual Report & Accounts 2011 42
Consolidated Cash Flow Statement
    2011 2010 
For the 52 weeks ended 26 February 2011  Note £m £m
Net cash from operating activities   57.4 91.7
Investing activities 
Purchases of property, plant and equipment   (6.4) (2.4)
Purchases of intangible assets   (15.7) (10.8)
Acquisition of subsidiary  24 (10.3) –
Proceeds on disposal of property, plant and equipment   – 1.9
Interest received   0.2 0.1
Net cash used in investing activities   (32.2) (11.2)
Financing activities
Interest paid   (4.2) (4.0)
Dividends paid   (31.5) (29.5)
Decrease in bank loans   – (40.0)
Purchase of shares by ESOT   (0.8) –
Proceeds on issue of shares held by ESOT   0.5 1.2
Net cash used in financing activities   (36.0) (72.3)
Net (decrease)/increase in cash and cash equivalents   (10.8) 8.2 
Cash and cash equivalents at beginning of period   59.9 51.7
Cash and cash equivalents at end of period  25 49.1 59.9
Reconciliation of Operating Profit to Net Cash from Operating Activities
    2011 2010 
For the 52 weeks ended 26 February 2011   £m £m
Operating profit   102.6 97.6 
Adjustments for:
 Depreciation of property, plant and equipment   7.8 7.0 
 Amortisation of intangible assets   6.9 7.3 
Share option charge    2.1 1.9
 Profit on disposal of property, plant and equipment   – (0.4) 
Operating cash flows before movements in working capital   119.4 113.4
(Increase)/decrease in inventories   (12.0) 7.4 
Increase in trade and other receivables   (29.8) (10.2) 
Increase/(decrease) in trade and other payables   3.7 (0.5) 
Pension obligation adjustment   (7.4) (4.0)
Cash generated by operations   73.9 106.1
Taxation paid   (16.5) (14.4)
Net cash from operating activities   57.4 91.7 N Brown Group plc Annual Report & Accounts 2011 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 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 
  
Changes in equity for the 52 weeks  
ended 27 February 2010   
  
Balance as at 28 February 2009 30.3 11.0 (0.2) 2.9 239.0 283.0
  
Profit for the period  – – – – 62.5 62.5 
Other items of comprehensive income   
for the period  – – – (0.2) (0.9) (1.1)
Total comprehensive income  – – – (0.2) 61.6 61.4
for the period
Equity dividends  – – – – (29.5) (29.5)
Issue of ordinary share capital   0.5 – – – – 0.5 
Purchase of own shares by ESOT  – – (0.5) – – (0.5)
Issue of own shares by ESOT   – – 0.3 – – 0.3
Adjustment to equity for share payments  – – – – 0.9 0.9 
Share option charge  – – – – 1.9 1.9 
Tax on items recognised directly in equity  – – – – 1.0 1.0
Balance at 27 February 2010  30.8 11.0 (0.4) 2.7 274.9 319.0  N Brown Group plc Annual Report & Accounts 2011 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 group's financial statements for  
the 52 weeks ended 26 February 2011 
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
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 may impact the accounting for future 
transactions and arrangements.
IFRS 3 (revised 2008) ‘Business 
Combinations’. Following an amendment 
to IFRS 3, all acquisition costs are charged 
to the income statement as incurred for  
all business combinations acquired after  
1 July 2009.
IFRIC 17 ‘Distributions of Non-cash  
Assets to Owners’. The Interpretation 
provides guidance on when an entity 
should recognise a non-cash dividend 
payable, how to measure the dividend 
payable and how to account for any 
difference between the carrying amount 
of the assets distributed and the carrying 
amount of the dividend payable when the 
payable is settled.
The following amendments were made  
as part of Improvements to IFRSs (2009):
Amendments to IFRS 2 ‘Share-based 
Payment’. IFRS 2 has been amended 
following the issue of IFRS 3 (2008), to 
confirm that the contribution of a business 
on the formation of a joint venture and 
common control transactions are not 
within the scope of IFRS 2. In addition, 
the amendments to IFRS 2 clarify the 
accounting for share-based payment 
transactions between group entities.
Amendments to IAS 17 ‘Leases’. IAS 17 
has been amended such that it may be 
possible to classify a lease of land as a 
finance lease if it meets the criteria for  
that classification under IAS 17.
Amendments to IAS 39 ‘Financial 
Instruments: Recognition and 
Measurement’. IAS 39 has been amended 
to state that options contracts between 
an acquirer and a selling shareholder to 
buy or sell an acquiree that will result 
in a business combination at a future 
acquisition date are not excluded from  
the scope of the standard.
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):
• 	 I F R S 	 9 : 	 F i n an c i a l 	 I n s t r u m e n t s
• 	 I A S 	 2 4 	 ( am e n d e d ) : 	 R e l a t e d 	 P a r t y	
Disclosures
• 	 I A S 	 3 2 	 ( am e n d e d ) : 	 C l a s s i f i ca t i o n	 
of Rights Issues
• 	 I F R I C 	 1 9 : 	 E x t i n g u i s h i n g 	 F i n an c i a l	
Liabilities with Equity Instruments
• 	 I F R I C 	 1 4 	 ( am e n d e d ) : 	 P r ep a y m e n t s	 
of a Minimum Funding Requirement
• 	 I F R S 	 7 	 ( am e n d e d ) : 	 D i s c l o s u r e 	 –	
Transfers of Financial Assets
• 	 I A S 	 1 2 	 ( am e n d e d ) : 	 D e f e r r e d 	 T a x :	
Recovery of Underlying Assets
• 	 I m pr o v e m e n t s 	 t o 	 I F R S s 	 ( M a y 	 2 0 1 0 )
The adoption of IFRS 9, which the group 
plans to adopt for the financial year 
commencing March 2013, will impact 
both the measurement and disclosures 
of Financial Instruments. The directors do 
not expect that the adoption of the other 
standards listed above will have a material 
impact on the financial statements of the 
group in future periods.
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. 
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 
2011 means at 26 February 2011 or the  
52 weeks then ended; reference to 2010 
means at 27 February 2010 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. 
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2011 45
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 an 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.
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, 
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2011 46
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 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. 
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2011 47
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 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. 
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, 
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2011 48
    2011 2010 
3 Revenue   £m £m
An analysis of the group’s revenue is as follows:
Sale of goods   523.7 499.6
Rendering of services   195.1 190.4 
Revenue   718.8 690.0 
Investment income   4.1 2.9 
Total revenue   722.9 692.9
 
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 £320m. The £200m 
securitisation facility has recently been 
renewed for a further 5 years until 2016 
and it is the group’s intention to renew 
the remaining loan facilities that expire in 
January 2012 for a further 5 years. 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 2011 49
    2011 2010 
4 Business segments   £m £m
Revenue   
Home Shopping   718.8 690.0
Operating profit
Segment result & operating profit – Home Shopping   102.6 97.6 
Fair value adjustments to financial instruments   (3.7) (7.4)
Investment income   4.1 2.9 
Finance costs   (8.5) (7.4)
Profit before taxation   94.5 85.7 
Taxation   (22.8) (23.2)
Profit after tax   71.7 62.5
The group has one business segment and one significant geographical segment that operates in and derives revenue from  
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 (2010, £nil).
Other information
      2011 2010 
        £m   £m
Capital additions     30.8 13.2
Depreciation and amortisation     14.7 14.3
Balance sheet
Total segment assets     742.6 691.1
Total segment liabilities   (345.9) (337.2)
Segment net assets     396.7 353.9
Unallocated assets     3.5 3.6
Unallocated liabilities   (39.8) (38.5)
Consolidated net assets   360.4 319.0
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2011 50
    2011 2010 
5 Profit for the period   £m £m
Continuing operations
Revenue   718.8 690.0
Cost of sales   (331.8) (328.0)
Gross profit   387.0 362.0
Distribution costs   (62.9) (61.9)
Sales and administration costs   (221.5) (202.5)
Operating profit    102.6 97.6
Profit for the period has been arrived at after (crediting)/charging:
      2011 2010 
      £m £m
Net foreign exchange gains     (3.0) (2.5)
Depreciation of property, plant and equipment      7.8  7.0 
Amortisation of intangible assets     6.9 7.3
Cost of inventories recognised as expense     216.9 208.5
Staff costs     72.9 72.3
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 £0.8m (2010, £0.9m).
A more detailed analysis of auditor’s remuneration is provided below:
    2011 2010 
    £m £m
Audit fees: 
The audit of the company’s subsidiaries pursuant to legislation   0.2 0.2
Other services:
Tax services   0.8 0.8
Corporate Finance services   – 0.1
   0.8 0.9
Fees payable for tax services relate to tax planning and compliance.
Fees payable to the company’s auditors for the audit of the company’s annual accounts were £10,000 (2010, £10,000).
 In addition to the amounts shown above, the auditors received fees of £4,000 (2010, £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 auditors.
6 Staff costs   2011 2010
The average monthly number of employees (including executive directors) was: 
Distribution   1,046 1,092
Sales and administration   2,210 2,097
   3,256 3,189
    2011 2010 
Their aggregate remuneration comprised   £m £m
Wages and salaries   63.4 61.4 
Social security costs   6.9 6.5 
Other pension costs (see note 29)   0.5 2.5 
Share options costs (see note 28)   2.1 1.9
   72.9 72.3
Details of individual director’s remuneration is disclosed in the remuneration report on page 38.
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2011 51
    2011 2010 
7 Investment income   £m £m
Interest on bank deposits   0.2 0.1
Expected return on pension assets (see note 29)   3.9 2.8
   4.1 2.9
    2011 2010 
8 Finance costs   £m £m
Interest on bank overdrafts and loans   4.6 4.0
Interest on pension scheme liabilities (see note 29)   3.9 3.4 
   8.5 7.4
      2011 2010 
9 Tax     £m £m
Current tax – charge for the period     25.3 23.9
Current tax – adjustment in respect of previous periods     (3.2) 1.9
Deferred tax (see note 20)     1.4 1.1
Deferred tax – adjustment in respect of previous periods (see note 20)   (0.7) (3.7)
   22.8 23.2 
UK Corporation tax is calculated at 28.0% (2010, 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:
    2011 2010 
   £m £m
Profit before tax:   94.5 85.7
Tax at the UK corporation tax rate of 28.0% (2010, 28.0%)   26.4 24.0
Effect of change in deferred tax rate   (0.3) –
Tax effect of expenses that are not deductible in determining taxable profit   1.1 1.6
Effect of different tax rates of subsidiaries operating in other jurisdictions   (0.5) (0.6)
Tax effect of adjustments in respect of previous periods   (3.9) (1.8)
Tax expense for the period   22.8 23.2
In addition to the amount charged to the income statement, tax movements recognised directly through equity were as follows:
    2011 2010 
   £m £m
Deferred tax – retirement benefit obligations   (0.6) (0.3)
Tax credit in the statement of comprehensive income   (0.6) (0.3)
    2011 2010 
   £m £m
Current tax – share based payments   (0.9) (1.1)
Deferred tax – share based payments   (0.8) 0.1
Tax credit in the statement of changes in equity   (1.7) (1.0)
On 23 March 2011 the government announced that it intends to further reduce the rate of corporation tax to 26.0% with effect  
from 1 April 2011 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 2011 52
    2011 2010 
10 Dividends   £m £m
Amounts recognised as distributions to equity holders in the period:
Final dividend for the 52 weeks ended 27 February 2010 of 6.41p (2009, 6.41p) per share  17.7 17.5
Interim dividend for the 52 weeks ended 26 February 2011 of 5.04p (2010, 4.38p) per share  13.8 12.0
   31.5 29.5 
Proposed final dividend for the 52 weeks ended 26 February 2011 of 7.37p (2010, 6.41p) per share  20.6 17.7
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:
    2011 2010 
Earnings   £m £m
Earnings for the purposes of basic and diluted earnings per share being
net profit attributable to equity holders of the parent   71.7 62.5
 
    2011 2010 
Number of shares (’000s)   Number Number
Weighted average number of ordinary shares for the purposes of basic earnings per share  275,323 273,772 
Effect of dilutive potential ordinary shares:    
Share options   466 435
Weighted average number of ordinary shares for the purposes of diluted earnings per share  275,789 274,207 
    2011 2010 
   £m £m
Adjusted earnings
Net profit attributable to equity holders of the parent   71.7 62.5
Fair value adjustment to financial instruments (net of tax)   2.7 5.3 
Adjusted earnings for the purposes of adjusted earnings per share   74.4 67.8
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 2011 53
    Customer 
  Brands Software Database Total 
12 Intangible assets £m £m £m £m
Cost
At 28 February 2009 7.9 84.3 1.9 94.1
Additions 1.0 9.8 – 10.8
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
Amortisation
At 28 February 2009 – 59.8 1.5 61.3
Charge for the period – 7.0 0.3 7.3
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
Carrying amount
At 26 February 2011 16.8 35.4 – 52.2
At 27 February 2010 8.9 27.3 0.1 36.3
At 28 February 2009 7.9 24.5 0.4 32.8
Assets in the course of construction included in intangible assets at the year end total £16.0m (2010 £9.8m). No depreciation  
is charged on these assets.
All software additions relate to internal development. The brand additions of £7.9m relate to the acquisition of Figleaves  
and the Slimma 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 6.3% (2010, 6.9%).
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2011 54
   Land and Fixtures and 
   Buildings Equipment Total 
13 Property, plant and equipment  £m £m £m
Cost
At 28 February 2009  48.0 89.5 137.5
Additions  – 2.4 2.4
Disposals  (1.8) (0.4) (2.2)
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
Accumulated depreciation and impairment   
At 28 February 2009  6.9 55.6 62.5
Charge for the period   0.9 6.1 7.0
Released on disposals  (0.3) (0.4) (0.7)
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
Carrying amount     
At 26 February 2011  37.7 31.4 69.1 
At 27 February 2010  38.7 30.2 68.9
At 28 February 2009   41.1 33.9 75.0
Assets in the course of construction included in property, plant and equipment at the year end date total £1.7m (2010, £2.0m), 
no depreciation has been charged on these assets.
At 26 February 2011, the group had not entered into any contractual commitments for the acquisition  of property, plant and 
equipment (2010, £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. Acquisitions in the year are disclosed in note 24.
    2011 2010 
15 Inventories   £m £m
Finished goods   73.2 58.5 
Sundry stocks   4.9 3.9 
   78.1 62.4 
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2011 55
    2011 2010 
16 Trade and other receivables   £m £m
Amount receivable for the sale of goods and services   519.6 494.0
Allowance for doubtful debts   (45.1) (47.0)
   474.5 447.0
Other debtors and prepayments   16.3 14.3
   490.8 461.3
Trade receivables are measured at amortised cost. 
The average credit period given to customers for the sale of goods is 241 days (2010, 236 days). Interest is charged at 39.9%  
(2010, 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 £59.9m at 26 February 2011 (2010, £59.2m).
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.
    2011 2010 
Ageing of trade receivables   £m £m
Current   381.4 362.2
0 – 28 days   69.3 62.7
29 – 56 days   25.5 26.7
57 – 84 days    16.0 16.1
85 – 112 days   13.4 13.3
Over 112 days   14.0 13.0
Total   519.6 494.0
    2011 2010 
Movement in the allowance for doubtful debts   £m £m
Balance at the beginning of the period   47.0 41.1
Amounts charged net to the income statement   53.1 62.2
Net amounts written off   (55.0) (56.3)
Balance at the end of the period   45.1 47.0
The concentration of credit risk is limited due to the customer base being large and unrelated and comprising 1.5 million  
(2010, 1.6 million) customers. Accordingly, the directors believe that there is no further credit provision required in excess  
of the allowance for doubtful debts. All customer receivables are unsecured.
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 2011 56
    2011 2010 
17 Bank overdraft and loans   £m £m
Bank loans and overdrafts   40.0 – 
Bank loans   190.0 230.0 
   230.0 230.0
The borrowings are repayable as follows:
Within one year   40.0 –
In the second year   190.0 40.0
In the third to fifth year   – 190.0
Amounts due for settlement after 12 months   190.0 230.0
All borrowings are held in sterling
    2011 2010 
The weighted average interest rates paid were as follows:   % %
Bank overdrafts   2.5 1.5
Bank loans   0.7 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 £190m (2010, £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 which was renegotiated 
in March 2011 has a current limit of £200m 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 £40m (2010, £40m) drawn down under a medium term bank revolving credit 
facility of £100 million committed until January 2012.
(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  
26 February 2011 the estimated future interest cost per annum until maturity would be £1.6m (2010 £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:
    2011 2010 
   £m £m
On demand or within one year   41.6 1.6
In the second year   191.3 1.6
In the third to fifth year   1.3 230.1
   234.2 233.3
At 26 February 2011, the group had available £90m (2010, £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 2011 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:
    2011 2010 
   £m £m
Notional amount – Sterling contract value   45.1 37.3
Fair value of (liability)/asset recognised   (1.4) 2.3
 Changes in the fair value of assets/liabilities recognised, being non-hedging currency derivatives, amounted to a charge of £3.7m 
(2010, £7.4m) to income in the period.
The financial instruments that are measured subsequent to initial recognition at fair value are all grouped into Level 2 (2010, 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 (2010, 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 25 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:
    2011 2010 
   £m £m
Debt   230.0 230.0
Cash and cash equivalents   (49.1) (59.9)
Net Debt   180.9 170.1
Equity   360.4 319.0
Gearing ratio   50% 53%
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 2011 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:
    2011 2010 
   £m £m
Less than 6 months   22.4 19.6
6 to 12 months   17.6 17.7
12 to 18 months   5.1 –
   45.1 37.3
 
Forward contracts outstanding at the period end are contracted at US dollar exchange rates ranging between 1.49 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
  2011 2010 2011 2010 
 £m £m £m £m
Euro 2.0 1.5 10.5 13.9
US dollar 0.6 1.4 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 directors 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
  2011 2010 2011 2010 
 £m £m £m £m
Income statement
Sterling strengthens by 10% 1.1 1.3 – (0.2)
Sterling weakens by 10% (0.7) (1.2) – 0.1
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2011 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 52 weeks  
ended 26 February 2011 would decrease by £1.1m (2010, £0.8m). 
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 2011 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 28 February 2009 1.4 (2.7) (10.3) 1.2 (3.2) (13.6)
Credit/(charge) to income 0.5 2.0 0.3 (0.9) 0.7 2.6
(Charge)/credit to equity (0.1) – – 0.3 – 0.2
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)
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:
    2011 2010 
   £m £m
Deferred tax assets   3.5 3.6
Deferred tax liabilities   (11.0) (14.4)
   (7.5) (10.8)
At the balance sheet date, the group has unused tax losses of £0.1m (2010, £0.1m) and capital losses of £4.4m (2010, £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.
    2011 2010 
21 Trade and other payables   £m £m
Trade payables   59.1 48.7
Other taxes and social security   22.5 23.8
Other creditors   3.6 0.7
Accruals and deferred income   29.3 32.2
   114.5 105.4
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 (2010, 38 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 2011 61
  2011 2010 2011 2010 
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 27 February 2010  278,404,714 274,104,714 30.8 30.3
Ordinary shares issued 2,024,740 4,300,000 0.2 0.5
At 26 February 2011 280,429,454 278,404,714 31.0 30.8
During the year 2,024,740 (2010, 4,300,000) ordinary shares were issued to the N Brown Group plc Employee Share Ownership 
Trusts for £223,784 (2010, £475,263). The company has one class of ordinary share which carry no right to fixed income.
    2011 2010 
23 Own shares   £m £m
Balance at 27 February 2010    0.4 0.2
Additions    1.0 0.5
Issue of own shares on exercise of share options   (0.2) (0.3)
Balance at 26 February 2011   1.2 0.4
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 28).
During the year the employee trusts subscribed for 2,024,740 (2010, 4,300,000) shares in N Brown Group plc for a consideration  
of £223,784 (2010, £475,263). In addition, the trusts purchased in the market 309,440 (2010, nil) shares for a consideration of 
£805,326 (2010, nil).
At 26 February 2011 the employee trusts held 4,693,021 shares in the company (2010, 3,737,682).
24 Acquisitions of subsidiaries
In June 2010 the group acquired the entire share capital of Figleaves Global Trading Limited for a total cash consideration of 
£11.9m. Its principal activity is that of an online retailer.
The fair value of net assets acquired are as follows:
     £m
Plant and equipment    1.6
Inventories    3.7
Trade and other receivables    0.5
Cash and cash equivalents    1.6
Trade and other payables    (5.2)
Deferred tax asset    2.6
Net assets acquired    4.8
Intangible brand asset arising on acquisition    7.1
Total consideration    11.9
Satisfied by:
Cash    11.9
Cash acquired with business    (1.6)
Net cash outflow    10.3
Fair value adjustments included above relate to the separate identification of brand intangibles (£7.1m) and recognition of deferred 
tax assets (£2.6m). Revenues and loss before tax of £16.3m and £0.9m respectively were recognised in the period since acquisition.
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2011 62
25 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:
    2011 2010 
   £m £m
Sterling   46.5 55.5
Euro   1.8 4.4
US Dollar   0.8 –
   49.1 59.9
26 Contingent liabilities 
Parent company borrowings which at 26 February 2011 amounted to £15.2m (2010, £2.0m) have been guaranteed by certain  
subsidiary undertakings.
    2011 2010 
27 Operating lease arrangements   £m £m
Minimum lease payments under operating leases recognised as an expense for the period  5.1 4.6
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:
    2011 2010 
   £m £m
Within one year   0.5 0.3
In the second to fifth years inclusive   13.7 8.5
After five years   8.9 13.2
   23.1 22.0
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 2011 63
28 Equity settled share based payments
The remuneration report on pages 28 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 2011 2010
Option scheme
2000 Savings related scheme 181 – 290  August 2011 – February 2016 1,620,210 1,680,424 
1990 Executive scheme 284 May 2003 – May 2010 – 51,800 
2000 Executive scheme 106 – 341 June 2007 – May 2020 1,873,864 1,583,007 
Unapproved executive scheme 211 – 341 May 2009 – May 2020 821,539 629,115
Value Creation Plan – February 2014 – February 2019 3,100,000 3,100,000
Long-term incentive scheme awards
June 2007 – June 2010 – December 2010 – 648,043
August 2007 – August 2010 – February 2011 – 38,480
July 2008 – July 2011 – January 2012 1,550,452 1,595,982
May 2009 – May 2012 – November 2012 1,266,996 1,301,930
July 2010 – July 2013 – January 2014 1,294,758 –
Deferred annual bonus scheme awards
May 2008 – May 2010 – November 2010 – 266,721
May 2009 – May 2011 – November 2011 252,348 260,764
May 2010 – May 2012 – November 2012 323,450 –
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2011 64
28 Equity settled share based payments continued
Movements in share options are summarised as follows:
  2011 2010
   Weighted  Weighted 
 Number of  average exercise Number of average exercise  
 share options price share options price 
  £  £
Outstanding at the beginning of the period 3,944,346 2.13 3,863,445 1.91
Granted during the period 1,064,701 2.40 1,362,452 2.14
Forfeited during the period (297,140) 2.43 (356,504) 2.01
Exercised during the period (396,294) 1.37 (925,047) 1.27
Outstanding at the end of the period 4,315,613 2.24 3,944,346 2.13
Exercisable at the end of the period 493,857 1.86 696,835 1.87
Options were exercised on a regular basis throughout the period and the weighted average share price during this period was  
260 pence (2010, 232 pence). The options outstanding at 26 February 2011 had a weighted average remaining contractual life  
of 5.8 years (2010, 5.6 years). The aggregate estimated fair values of options granted in the period is £629,000 (2010, £784,000).
Movements in management share awards are summarised as follows:
  2011 2010
   Weighted  Weighted 
 Number of average exercise Number of average exercise  
 share awards price share awards price 
  £  £
Outstanding at the beginning of the period 7,211,920 – 6,921,510 –
Granted during the period 1,618,208 – 1,567,349 –
Forfeited during the period (56,340) – (109,010) –
Exercised during the period (985,784) – (1,167,929) –
Outstanding at the end of the period 7,788,004 – 7,211,920 –
Exercisable at the end of the period – – – –
The awards outstanding at 26 February 2011 had a weighted average remaining contractual life of 4.2 years (2010, 4.9 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:
    2011 2010
Weighted average share price at date of grant (pence)   252 236
Weighted average exercise price (pence)   95 99
Expected volatility (%)   38.3 35.1
Expected life (years)   2.5 – 5.5 2.5 – 5.5
Risk-free rate (%)   1.5 2.6
Dividend yield (%)   4.3 4.2
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 £2.1m and £1.9m related to equity-settled share based payment transactions in 2011 and 
2010 respectively.
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2011 65
29 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 £1.8m (2010, £0.8m) represents contributions payable to the schemes by the group at rates 
specified in the rules of the plans. As at 26 February 2011, contributions of £0.2m (2010, £0.1m) 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:
    2011 2010
Discount rate   5.6% 5.9%
Expected return on scheme assets   5.7% 5.9%
Expected rate of salary increase   4.8% 4.8%
Future pension increases   2.4% 2.4%
Inflation – Retail Price Index   3.8% 3.8%
Inflation – Consumer Price Index   2.8% n/a
Life expectancy at age 65 (years)
Pensioner aged 65   23.8 21.3
Non-pensioner aged 45   26.8 23.2
    2011 2010 
Amounts recognised in income in respect of these defined benefit schemes are as follows:  £m £m
Current service cost   1.6 1.7
Interest cost   3.9 3.4 
Expected return on scheme assets   (3.9) (2.8)
Gains on settlements    (2.9) –
   (1.3) 2.3
Actuarial gains and losses have been reported in the statement of comprehensive income. The cumulative actuarial gains since 
transition to IFRS were £6.1m (2010, £8.4m).
The actual return on scheme assets was a gain of £7.3m (2010, gain of £13.4m).
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 2011 66
29 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:
    2011 2010 
   £m £m
Present value of defined benefit obligations   (68.5) (66.0)
Fair value of scheme assets   71.8 64.2
Surplus/(deficit) in the scheme and asset/(liability) recognised in the balance sheet   3.3 (1.8)
    2011 2010 
Movements in the present value of defined benefit obligations were as follows:   £m £m
At 27 February 2010   66.0 50.8
Service cost   1.6 1.7 
Interest cost   3.9 3.4 
Actuarial losses   5.7 11.8
Liabilities extinguished on settlements   (6.2) –
Benefits paid   (2.5) (1.7)
At 26 February 2011   68.5 66.0
    2011 2010 
Movements in the fair value of the scheme assets were as follows:   £m £m
At 27 February 2010   64.2 46.8
Expected return on scheme assets   3.9 2.8 
Actuarial gains   3.4 10.6
Assets distributed on settlements   (3.3) –
Contributions from sponsoring companies   6.1 5.7 
Benefits paid   (2.5) (1.7)
At 26 February 2011   71.8 64.2
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2011 67
29 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
  2011 2010 2011 2010 
 % % £m £m
Equities 6.8 7.1 38.1 32.7
Bonds 4.5 4.7 33.7 31.5
 5.7 5.9 71.8 64.2
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:
  2011 2010 2009 2008 2007 
 £m £m £m £m £m
Present value of defined benefit obligations (68.5) (66.0) (50.8) (56.8) (63.5) 
Fair value of scheme assets 71.8 64.2 46.8 51.0 35.8
Surplus/(deficit) in the scheme 3.3 (1.8) (4.0) (5.8) (27.7)
Experience adjustments on scheme liabilities 
Amount (£) – 2.2 – – 1.2
Percentage of scheme liabilities (%) 0% 3% 0% 0% 2%
Difference between expected and actual return  
on scheme assets:
Amount (£) 3.4 10.6 (11.7) (3.5) 1.0
Percentage of scheme assets (%) 5% 16% (25%) (7%) 3%
The estimated amounts of contributions expected to be paid to the scheme during the 52 week period ending 25 February 2012  
is £3.4m.
30 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 38 of the remuneration report.
Notes to the Group Accounts N Brown Group plc Annual Report & Accounts 2011 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 52 weeks ended 26 February 
2011 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 auditors’ report and for no other 
purpose. To the fullest extent permitted 
by law, we do not accept or assume 
responsibility to anyone other than the 
company and the company’s members as 
a body, for our audit work, for this report, 
or for the opinions we have formed.
Respective responsibilities of directors 
and 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 
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.
Opinion on financial statements
In our opinion the parent company financial 
statements:
• 	 g i v e 	 a 	 t r u e 	 an d 	 f a i r 	 v i e w 	 o f 	 t h e 	 s t a t e	 
of the parent company’s affairs as at  
26 February 2011; 
• 	 h a v e 	 b e e n 	 pr o p e rl y 	 pr ep a r e d 	 i n	
accordance with United Kingdom 
Generally Accepted Accounting  
Practice; and
• 	 h a v e 	 b e e n 	 pr ep a r e d 	 i n 	 a c co r d an ce	 
with the requirements of the Companies 
Act 2006.
Opinion on other matters prescribed by 
the Companies Act 2006
In our opinion:
• 	 t h e 	 p a r t 	 o f 	 t h e 	 D i r e c t o r s ’ 	 R e m u n e r a t i o n	
Report to be audited has been properly 
prepared in accordance with the 
Companies Act 2006; and
• 	 t h e 	 i n f o r m a t i o n 	 g i v e n 	 i n 	 t h e 	 D i r e c t o r s ’	
Report for the financial period 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:
• 	 a d e q u a t e 	 a c co u n t i n g 	 r e co r d s 	 h a v e 	 n o t	
been kept by the parent company, or 
returns adequate for our audit have not 
been received from branches not visited 
by us; or
• 	 t h e 	 p a r e n t 	 co m p an y 	 f i n an c i a l	
statements and the part of the Directors’ 
Remuneration Report to be audited are 
not in agreement with the accounting 
records and returns; or
• 	 ce r t a i n 	 d i s c l o s u r e s 	 o f 	 d i r e c t o r s ’	
remuneration specified by law are not 
made; or
• 	 w e 	 h a v e 	 n o t 	 r e ce i v e d 	 a l l 	 t h e 	 i n f o r m a t i o n	
and explanations we require for our 
audit.
Damian Sanders  
(Senior Statutory Auditor) for  
and on behalf of Deloitte LLP
Chartered Accountants and  
Statutory Auditor 
Manchester, UK
17 May 2011 N Brown Group plc Annual Report & Accounts 2011 69
Company Balance Sheet
    2011 2010 
As at 26 February 2011  Note £m £m
Fixed assets
Investments   3 267.9 267.9 
    267.9 267.9
Current assets
Debtors   4 103.4 103.3 
    103.4 103.3
Creditors
Amounts falling due within one year   5 (270.0) (233.0)
Net current liabilities   (166.6) (129.7)
Total assets less current liabilities   101.3 138.2
Non current liabilities
Bank loans  6 – (40.0)
Net assets   101.3 98.2
Capital and reserves
Called-up share capital   7 31.0 30.8
Share premium account   8 11.0 11.0
Profit and loss account   8 59.3 56.4
Equity shareholders’ funds   101.3 98.2 
The financial statements of N Brown Group plc (Registered Number 814103) were approved by the board of directors and authorised for 
issue on 17 May 2011.
They were signed on its behalf by:
Alan White
Dean Moore 
Directors N Brown Group plc Annual Report & Accounts 2011 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 26 February 2011 of £34.8m (2010, profit £31.1m).
The non executive directors’ remuneration was £207,000 (2010, £182,000) and six non executive directors were remunerated  
(2010, 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 (2010, £10,000) was borne by subsidiary undertakings.
3 Fixed asset investment    £m
Cost and net book value   
At 26 February 2011 and at 27 February 2010    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 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
Figleaves Global Trading Limited Direct home shopping retailer England 100 N Brown Group plc Annual Report & Accounts 2011 71
Notes to the Company Accounts
    2011 2010 
4 Debtors   £m £m
Amounts falling due within one year:   
Amounts owed by group undertakings   103.3 103.1 
Prepayments and accrued income   0.1 0.2 
   103.4 103.3 
    2011 2010 
5 Creditors   £m £m
Amounts falling due within one year:   
Bank loans and overdrafts   55.2 2.0 
Trade creditors   1.0 0.7 
Amounts owed to group undertakings   213.6 229.1
Accruals and deferred income   0.2 1.2
   270.0 233.0
    2011 2010 
6 Bank loans   £m £m
Bank overdrafts   15.2 2.0
Bank loans   40.0 40.0
   55.2 42.0
The borrowings are repayable as follows:
On demand within one year   55.2 2.0
In the second year   – 40.0
In the third to fifth year   – –
   55.2 42.0
Less: amounts due for settlement within 12 months (shown under current liabilities)   (55.2) (2.0)
Amounts due for settlement after 12 months   – 40.0
The company has unsecured bank loans of £40m (2010, £40m) drawn down under a medium term bank revolving credit facility 
committed until January 2012.
At 26 February 2011, the company had available £80m (2010, £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:
    2011 2010 
    % %
Bank overdrafts   2.5 1.5
Bank loans   1.0 1.2 N Brown Group plc Annual Report & Accounts 2011 72
Notes to the Company Accounts
  2011 2010 2011 2010 
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 27 February 2010 278,404,714 274,104,714 30.8 30.3
Ordinary shares issued 2,024,740 4,300,000 0.2 0.5
At 26 February 2011 280,429,454 278,404,714 31.0 30.8
During the year 2,024,740 (2010, 4,300,000) ordinary shares were issued to the N Brown Group Employee Share Ownership Trusts 
for £223,784 (2010, £475,263). 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 28 February 2009 30.3 11.0 55.0 96.3
Dividends paid – – (29.7) (29.7)
Profit for the financial period – – 31.1 31.1
Increase in share capital 0.5 – – 0.5
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
At 26 February 2011 31.0 11.0 59.3 101.3
9 Guarantees
Parent company borrowings which at 26 February 2011 amounted to £15.2m (2020, £2.0m) 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
2010 12 October Announcement of interim results
  10 December Closing of register for interim dividend
2011 7 January Payment of interim dividend
  26 February Financial year-end
  10 May Preliminary announcement of annual results
  31 May Publication of 2011 annual report and accounts
  1 July Closing of register for final dividend
  5 July Annual general meeting
  29 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
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