annual report 2003
silentnight holdings plc   annual report 2003 silentnight holdings plc
contents
financial highlights and company profile 1
chairman’s statement 2
chief executive’s review 4
financial review 8
directors and advisers 12
directors’ report 14
directors’ remuneration report 17
corporate governance statement 25
auditors’ report 29
consolidated profit and loss account 30
consolidated balance sheet 31
company balance sheet 32
consolidated cash flow statement 33
consolidated statement of total recognised gains and losses 34
consolidated reconciliation of movements in shareholders’ funds 34
note of historical cost profits and losses 34
notes to the financial statements 35
notice of annual general meeting 56
five year summary 58
form of proxy enclosed on a separate sheet
financial calendar
record date 6 june 2003
annual general meeting 25 june 2003
dividend payable 4 july 2003
half year results announcement october 2003
end of financial year 1 31 january 2004  annual report 2003 silentnight holdings plc 1
financial highlights
results 2003 2002
turnover £2773m £3003m
operating profit before exceptional operating costs £56m £125m
operating lossprofit £106m £123m
lossprofit before interest £109m £129m
lossprofit before taxation £112m £121m
lossearnings per ordinary share 1875p 1814p
normalised earnings per share 1272p 1861p
dividends per ordinary share 850p 1350p
net assets £823m £950m
net fundsdebt £76m £54m
capital spend as a  of depreciation 83 172
headlines
group turnover down 8
increased losses in furniture division
dividend per share reduced in recognition of poor results
property disposals realised £7m in cash
year of support to the furniture businesses
closure of keighley factory and consolidation at sunderland
company profile
silentnight holdings plc is the market leader in two sectors of the uk domestic furniture market – beds and
assembled cabinet furniture the bed division includes silentnight beds sealy and rest assured wellknown
brands with high levels of consumer awareness the furniture division includes the ducal
nathan stag and homeworthy brand names and is the largest uk manufacturer of
assembled cabinet furniture additionally it includes parker knoll a leading
upholstery brand the portfolio therefore includes some of the uk’s best known
furniture brands this affords the group a presence in all key market sectors whilst
generating high levels of synergy within the group the group
strongly believes that branded businesses add
value to the market place
the group remains the largest carrier of
furniture direct into uk homes having the
capacity to deliver nationwide at short
notice chairman’s statement
since i only assumed the role of chairman of
silentnight holdings plc in january the final month of
our financial year this statement is necessarily brief as
regards the past and is more concerned with the
policies and actions required to return the group to
satisfactory profitability
as can be seen from the financial statements on page
30 the year witnessed a further 22 fall in the turnover
of the furniture division comprised of the cornwell
parker and ducal businesses acquired in 2000 and
silentnight furniture this resulted in precipitously
increased losses before exceptional operating costs of
£99 million more than 10 of turnover the bedrock
of the company the bed division comprised of
silentnight beds sealy and other group brands did
well to hold its profit on marginally increased turnover
in an increasingly competitive market as reduced
consumer expenditure took hold overall operating
profit before exceptional operating costs fell to £56
million more than 50 down on 200102
to deal with this situation new management under
chief executive nino allenza has carried out a full
strategic review of the business and has concluded a
fundamental restructure and rebasing of the furniture
division is essential if current losses are to be
stemmed  the actions necessary include the closure
of the ducal factories in andover the closure and
subsequent local relocation of cornwell parker’s
upholstery factory in chipping norton and the cabinet
making facility in edmonton  other options including
full closure were considered but on balance it was
concluded that the retention of the brand values
exceeded the management effort and turnaround
costs
roger pedder
chairman
also a closure of the group’s keighley factory was
achieved in july 2002 and its operations transferred to
the silentnight furniture site in sunderland as a result
of these and other restructuring and reorganisational
activities exceptional operating costs of £161 million
have been set against trading profit to produce an
operating loss after exceptional operating costs of
£109 million and a pretax loss of £112 million the
exceptional operating costs include £70 million fixed
asset impairment and reorganisation and redundancy
costs of £37 million in the furniture division at the
half year £92 million of these exceptional operating
costs had been taken and another £10 million was
indicated to fall in the second half year
it will obviously take time and considerable
management effort to implement such a radical
programme and there will be substantial disruption to
ongoing operations in the medium term  this will
cause further operating losses and exceptional
operating costs at a similar level before control is re
established in the furniture division trading conditions
in the bed division also continue to be increasingly
difficult
in august 2002 the board received an indicative
approach from famco holdings limited the company’s
2 silentnight holdings plc annual report 2003 annual report 2003 silentnight holdings plc 3
majority shareholder  it was withdrawn due to the scale
of problems which came to light in the furniture
division since this time there has been a decline in
profitability notably with increased losses in the
furniture division and exceptional operating costs
which have been incurred in rationalisation and
restructuring it
keith ackroyd and bill simpson respectively chairman
and chief executive resigned from the board in
september 2002 and were succeeded by nino allenza
and michelle scott in the same month as chief
executive and director of people and communications
and myself as chairman in january 2003 malcolm
little also resigned from the board in september 2002
as a nonexecutive director david adam presently
finance director is going to become a nonexecutive
director in august 2003 and will be replaced by a new
finance director
nino as i have already indicated has instituted a
thorough going review of the business embracing not
only the competitiveness of our production capacity but
also the quality specification and appeal of our
products the competence and organisation of our
management and the segmentation of our markets and
the direction of the marketing effort within them  such
initiatives take time to work through and significant
risks remain to the success of the turnaround plan
in line with many other uk companies the company
pension scheme is showing a deficit under frs 17
‘retirement benefits’ accounting to £27 million at 1
february 2003 this is further discussed in the
financial review on page 9
in such circumstances as outlined here the board has
considered the issue of the dividend  given the drop
into loss at the post exceptional level and the serious
erosion of net worth the board would feel justified in
cancelling the final dividend however the company
still has the benefit of a strong balance sheet including
net cash of £76 million and is also mindful of its
shareholders’ wish for dividend it has therefore been
decided that for the current year it will pay a final
dividend of 60p per share making the dividend for the
year 85p as against the 135p paid last year however
on the basis of trading expectations for the new
financial year shareholders should not presume that a
dividend will be paid
ra pedder
chairman chief executive’s review
“a shared vision”
one of the most important aspects of leadership is to
ensure that all of the group’s employees have and
share a positive vision for the business  our working
environment must therefore allow us to do the things
that will deliver that shared vision at the senior
management’s first strategic planning conference
since the management change in november 2002
we debated and agreed a new vision statement for the
group which i am pleased to be able to share with you
so quickly …
although succinct i believe that this is a powerful and
ambitious vision that all of the group’s employees will
be proud to aspire to our longterm strategies going
forward will be geared to delivering this vision so that
we maintain and build on our no 1 position in the uk
bed and furniture market
overview
the last six months have seen a change of leadership
of the group which can be disruptive i have been very
impressed by the commitment i see within our
businesses and the enthusiasm many of our
employees have expressed for our future plans and the
challenges ahead how well we manage and
communicate change will determine our success
the management team has been strengthened in a
number of our businesses this coupled with a more
consensual style of decisionmaking has been well
received within the organisation this is particularly
important given the challenges of a more difficult
trading climate
total sales in the year declined by 8 to £2773
million and operating profits before exceptional costs
have reduced to £56 million from £125 million the
uk bed division grew sales by 4 to £1686 million
with profits declining by 1 to £155 million but in an
increasingly competitive market  in addition a
continuing decline in the furniture division saw sales
in the year reduce by 22 to £973 million and
operating losses before exceptional costs increase to
£99 million from £32 million
uk bed division
our commissioned market statistics from gfk indicate
that the retail market for beds increased by just 1 in
2002 but which is still lower than the 2000 level the
market grew in volume by 7 reflecting the negative
impact of falling average selling prices caused by
pressure from a very competitive market place and a
continuing trend towards lower cost bedsteads
source  gfk
there are a number of new product initiatives
underway to address this static market silentnight
beds has launched “my first bed” which won the best
bed design award at the january 2003 furniture show
and is achieving its target for retailer floor model sets
sealy will be introducing a new addition to its product
range in the summer of 2003 building on its
outstanding reputation for high quality beds layezee
is investing more in marketing to increase its retailer
profile as part of a substantial new product launch in
august 2003 rest assured and pocket spring bed
company continue to enjoy an increasing market
share of the pocket beds sector on the back of a high
quality product range and excellent customer service
nino allenza
chief executive
silentnight group’s bed and
furniture brands will be the
most innovative and sought
after in the uk market
4 silentnight holdings plc annual report 2003
sept
1998
sept
1999
sept
2000
sept
2001
sept
2002
uk bed market volume and value
4500
4000
3500
3000
2500
2000
1500
1000
500
0
£1400000
£1200000
£1000000
£800000
£600000
£400000
£200000
£0
market value £’000
market volume ‘000
volume
value annual report 2003 silentnight holdings plc 5
furniture division
the branded furniture businesses cornwell parker and
ducal have never been properly integrated into the
group since their acquisition in 2000 the true cost of
this strategy has been substantial original gross
purchase price including debt taken over of £45
million operating losses of £131 million and
substantial exceptional operating costs as we now try
to restructure the businesses  asset disposals etc
have realised £23 million  if we couple this with their
deteriorating market position and the drain on group
management time it has been an unhappy and
demanding episode for all concerned
i am pleased to say that new management has been
installed within both businesses they are working hard
to try to lift morale and steer our people through a new
strategy which is aimed at putting the brands on a
stronger footing from the beginning of 2004 the plans
involve a radical restructuring which includes changes
to the product range improved customer service and
more efficient organisational structures competition
from low cost imports has intensified we are
responding to this by adapting the business model to
incorporate where appropriate the retention of highly
skilled assembly and finishing capability whilst putting
in place a supply chain to exploit the opportunities that
exist in low cost countries we will not compromise on
quality or design as these are essential ingredients for
the success of our brands 
hence it is with great regret that we have had to
announce a high level of redundancies as a
consequence of this restructuring as a group we take
any loss of jobs extremely seriously we are providing
outplacement counselling and working hard to help our
people back into good employment as soon as
possible
silentnight furniture in sunderland has successfully
incorporated the transfer of our keighley operation
which has helped to realign capacity with lower
demand and reduce our operational gearing the
business however continues to suffer a reduction in
sales and operating performance  it is trying to rebuild
confidence within its workforce and improve quality
and has agreed a three year pay deal with the unions
which is linked to more flexible working this is an
important move forward which will provide a valuable
platform to drive through its operational improvement
program on quality costs and delivery
against this background the furniture division’s sales
reduced by 22 to £973  million and losses
increased by £67 million to £99 million this is
clearly an unsustainable position which is now being
tackled with a high level of urgency  the aggregate
exceptional operating costs of turning these
businesses round are expected to be over two years
in the order of £29 million 6 silentnight holdings plc annual report 2003 7 annual report 2003 silentnight holdings plc
chief executive’s review
germany
the german market remains very weak resulting in a
further fall of 12 in sales to £114 million with a
resultant reduction of £02 million in profits to a small
loss of £2000 the business has a high exposure to
the low cost discounting sector which makes it
vulnerable to continuing margin pressure a new
marketing plan is being put in place to help reposition
the business to give it a broader customer base within
higher value added sectors
operational excellence
a detailed review of operations was carried out in
october 2002 this has led to the launch of
operational excellence a groupwide initiative to help
bring a substantial improvement at all of our sites and
introduce a culture of continuous improvement
this initiative is being led by peter marchant group
operations director and includes the implementation
of a scorecard of key performance indicators by which
all of the businesses are now measured
at each site the operational excellence programme
will consist of a different set of projects and initiatives
depending on the current size and situation of that
company it has like any other major change to be
directed led and controlled to assure success
standard project management procedures establish
the principle of a steering group to approve monitor
and close all the various initiatives supporting the
overall programme
an extensive program of training for first line
management has begun to ensure that those most
affected by the new ways of working are equipped with
the necessary skills to lead and manage their teams
and the change process the training will include
leadership skills communication project management
and problemsolving techniques as well as an
introduction to the principles of lean manufacturing
prospects
the current market conditions continue to be
challenging we have seen consumer demand for our
products tailing off in all channels during february
march and april 2003 there is usually a seasonal
decline as the january sales come to an end but
retailers are concerned that things seem worse than
usual this year continued uncertainty about the gulf
situation a declining stock market and a stalling
house market are all mentioned as contributory
factors weakening consumer demand coupled with
pressure from key customers for improved trading
terms and rising raw material prices mean that uk
bed and furniture manufacturers are currently facing
an extremely difficult trading climate
this trading background places even more importance
on the initiatives underway on new product
introductions the repositioning and relaunch of our
furniture businesses and the improvement in our
operational processes these will undoubtedly bring
improved performance in the medium term 
nino allenza
chief executive financial review
this review is intended to serve as an additional
explanation to the financial statements which follow
together with the chief executive’s review it complies
with the ‘operating and financial review’ guidelines
published by the accounting standards board in
1993
accounting policies
the financial statements have been prepared using the
same accounting policies adopted for the 200102
financial statements the group has reported in
accordance with the prevailing transitional provisions
of frs 17 ‘retirement benefits’ all other applicable
accounting standards continue to be adopted the
group makes up its accounts to the saturday nearest
to the end of january
turnover and operating results before
exceptional operating costs
overall group turnover decreased by 8 to £2773
million predominantly due to the fall in the furniture
division’s order intake a total operating profit of £56
million before exceptional operating costs was
recorded 2002 £125 million a description of the
performance is given in the chief executive’s review
beginning on page 4
exceptional operating costs
exceptional operating costs totalled £161 million of
which £17 million was accounted for by the write
down of the esop with a further £37 million
expended on reorganisation and redundancy costs in
the furniture division the majority of this was incurred
in closing the silentnight furniture factory at keighley
and merging its operations at their sunderland factory
goodwill of £21 million was included on the balance
sheet as at 2 february 2002 based on the
assessment of the net assets acquired on the
purchase of ducal limited in view of the trading
results and adjudged future prospects this was fully
written off in our interim accounts
additionally particularly in view of the strategic re
organisation being undertaken in the new financial
year in the furniture division we have written down as
impaired fixed assets to the value of £70 million
other exceptional operating costs of £16m were also
incurred
property disposals
in the year we disposed of for a total cash
consideration of £70 million our factory at keighley
cornwell parker eurohub’s warehouse at burnley and
the fardis building in paris
pension schemes
the accounting treatment of the group’s contributions
to the defined benefit pensions scheme and of the net
surplus under the prevailing actuarial valuations
currently follows the accounting standard ssap 24
david adam
finance director
8 silentnight holdings plc annual report 2003 9 annual report 2003 silentnight holdings plc
‘accounting for pension costs’ and is shown in note
24 a new actuarial valuation of the ongoing
silentnight group db scheme is being undertaken as
at 1 december 2002 and this will determine future
ssap 24 accounting this scheme was formed by the
merger of the traditional silentnight scheme the
silentnight staff retirement benefits scheme and the
former cornwell parker scheme
in summary the provisions of the silentnight group db
scheme for future service accrual require increased
employee contributions and reduced benefits for
existing members entry to new members is restricted
the group has provided alternative money purchase
schemes for most new pension scheme entrants
employer contributions to the old silentnight defined
benefit pension scheme were maintained up to 30
november 2002 the employer’s contribution holiday
in the former cornwell parker scheme ceased upon the
merger as at 1 december 2002 employer
contributions to the combined scheme since have
been maintained in full
note 24 also summarises the effects of the adoption
of frs 17 ‘retirement benefits’ as at 1 february
2003 which would show a deficit of £271 million in
the merged scheme on the basis of the assumptions
made  the full adoption of frs 17 would have the
effect of reducing shareholders’ funds by £216
million as shown in note 24 after the associated
deferred tax
tax
the effective rate of tax credit for the group is 246
2002 charge 322 the tax credit is comprised of
a charge on the trading profits a prior year credit and
a credit on the exceptional operating costs
capital expenditure and tangible assets
capital expenditure of £65 million compared to
depreciation of £78 million 83 the largest
element of this investment was £37 million in
manufacturing plant and factory development in order
to maintain the group’s competitive position and
improve efficiencies also £10 million was spent on
commercial vehicles with a further £11 million
expenditure on information technology
the decrease in tangible fixed assets in the year from
£752 million to £628 million principally reflects the
accounting write downs at cornwell parker furniture
and ducal of £70 million the excess of depreciation
over capital expenditure both referred to above and
the disposal of the silentnight furniture factory at
keighley 10 silentnight holdings plc annual report 2003 11 annual report 2003 silentnight holdings plc
financial review
cash flow
the consolidated cash flow statement on page 33
shows a cash inflow from operating activities of £155
million proceeds from the disposals of properties
totalled £70 million after payments for the purchase
of fixed assets of £65 million and dividends of £54
million there was a net cash inflow before financing
and management of liquid resources of £135 million
information technology
at cornwell parker furniture an independent new
computer system has been implemented at their
cabinets business and is being developed at their
upholstery business
websites are established for cornwell parker furniture
ducal layezee pocket spring bed company rest
assured sealy silentnight beds silentnight furniture
and silentnight holdings plc development of
information websites for the other businesses within
the group is continuing
financing
shareholders’ funds reduced by 13 to £823 million
of which £04 million was accounted for by the share
buyback note 21 there was net interest paid of
£05 million 2002 net interest paid of £08 million
there was net cash of £76 million at the yearend
2002 net debt of £54 million
the group has broadly hedged its german investment
with a mediumterm currency loan of approximately
£22 million in euros this means that currency
movements between balance sheet dates can produce
only nominal foreign exchange adjustments
dividend policy
the group has a dividend policy which is reflective of
earnings and dividend cover thereon normalised
earnings per share as defined in note 11 to the
accounts are 1272p 2002 1861p accordingly
the board feels it is appropriate that the dividend
should be limited to 850p 2002 1350p per share
creditor payment policy
in the uk our general policy is to pay suppliers in
accordance with agreed terms the group does not
follow any external code or standard on payment
practice it is always our policy to agree the terms of
payment with each supplier and to pay in accordance
with our contractual and other legal obligations
trade creditors shown in the group’s balance sheet at
1 february 2003 represent 49 days 2002 46 days
of average purchases during the year
silentnight holdings plc the company is a holding
company and has no meaningful equivalent of creditor
days
d w adam
finance director 12 silentnight holdings plc annual report 2003
directors and advisers
roger pedder
nonexecutive chairman
elected to the board in january 2003 he is a
member of the remuneration committee and
the audit committee also chairman of c  j
clark limited clark shoes and robert dyas
holdings ltd previously a director and
founder of pet city plc harris queensway plc
ward white group plc and burmah oil trading
limited
age 62age 67
nino allenza
chief executive 
elected to the board in september 2002
also a director of soundersleep limited
previously director of ortrud gmbh and
rubicon group plci
age 48age 54
david w adam ma fca
finance director and company secretary 
elected to the board in august 1999
previously finance director of carclo plc
age 55 13 annual report 2003 silentnight holdings plc
john clarke
nonexecutive deputy chairman
elected to the board in 1987 appointed
deputy chairman in 1991 chairman of the
audit committee and a member of the
remuneration committee
age 51
peter clarke
nonexecutive
elected to the board in 1987 chairman of
the remuneration committee and a member
of the audit committee
age 54
auditors
ernst  young llp
cloth hall court
14 king street 
leeds ls1 2jn
bankers
lloyds tsb bank plc
the royal bank of scotland plc
registered office
silentnight house
salterforth barnoldswick
lancashire bb18 5ue
wwwsilentnightholdingscouk
tel 01282 815888
fax 01282 850409
registrar
northern registrars 
northern house 
woodsome park 
fenay bridge 
huddersfield hd8 0la
wwwnorthernregistrarscouk
tel 01484 600900
fax 01484 600911
solicitors
addleshaw booth  co
100 barbirolli square
manchester m2 3ab
hammonds 
2 park lane
leeds ls3 1es
stockbroker  financial
advisers
evolution beeson gregory limited
the registry
royal mint court
london ec3n 4lb
michelle scott
director of people and communications 
elected to the board in september 2002
also a director of soundersleep limited
previously director of ortrud gmbhi
age 44k silentnight holdings plc annual report 2003
directors’ report
the directors of silentnight holdings plc present their
annual report together with the audited financial
statements for the 52 weeks ended 1 february 2003
principal activities and review of the businesses
the group manufactures and distributes beds and
furniture including mattresses divans bedsteads
headboards cabinets and upholstery a detailed
review of the group’s activities the development of its
business and an indication of likely future
developments are dealt with on pages 4 to 7
results and dividends
the group trading results for the year are set out in the
consolidated profit and loss account and an analysis
of turnover and operating profit is set out in note 2 a
more detailed review of operations and results is
included in the chairman’s statement the chief
executive’s review and the financial review the
directors recommend a final dividend of 60p per
share 2002 94p per share making a total dividend
for the year of 85p per share 2002 135p per
share subject to confirmation by the shareholders at
the annual general meeting the final dividend will be
paid on 4 july 2003 to shareholders on the register at
6 june 2003 and the loss of £123 million will be
deducted from the reserves
corporate activity
on 20 august 2002 famco holdings limited famco
made an approach to the board of silentnight
holdings plc to purchase the shares in the company
not owned by famco on 19 september 2002 famco
withdrew this approach and took steps to requisition
an extraordinary general meeting in order to replace
the chief executive and chairman the chief
executive chairman and mr m little senior non
executive director subsequently resigned from the
board on 28 september 2002 and mr n allenza and
ms m scott were appointed to the board on 30
september 2002 famco then confirmed that in view
of the board changes it did not require the company
to act on the requisition
during the year the group also disposed of three
surplus properties the property in burnley which was
part of the acquisition of cornwell parker plc was sold
for a total cash consideration of £38 million and the
fardis building in paris for £02 million the property in
keighley was sold for a total cash consideration of
£30 million following the transfer of the operation
carried out there to silentnight furniture in
sunderland
events since the balance sheet date
the company announced its proposal to close ducal’s
andover and bridgend sites with effect from 4 july
2003
share capital
on 11 september 2002 famco transferred 361446
ordinary shares 077 of the issued share capital of
the company to soundersleep limited a company
controlled by famco 
on 16 september 2002 famco entered into a
conditional agreement to transfer 23306024
ordinary shares 4973 of the issued share capital of
the company to soundersleep limited 
on 23 december 2002 famco notified the company
that it had transferred 23306024 ordinary shares to
soundersleep limited pursuant to the conditional
agreement
accordingly as at 1 april 2003 soundersleep limited
held 23667470 shares of the company which
represents 5081 of the issued share capital
soundersleep limited is a subsidiary of and controlled
by famco which owns 75 of its ordinary share
capital and all of its preference share capital mr n
allenza and ms m scott each subscribed for 125 of
the ordinary share capital of soundersleep limited
prior to their appointment to the board of the company
and consequently have an indirect interest in the
ordinary share capital of the company under section
736 of the companies act 1985 famco is the holding
company of silentnight holdings plc
as at 28 april 2003 insofar as is known to the
company the following persons were also interested
directly or indirectly in 3 per cent or more of the issued
share capital of the company
the company has an ongoing contract with famco its
ultimate holding company principally in respect of the
provision of taxation and pension advice and another
with soundersleep limited in repect of the provision of
the services of mr n allenza and ms m scott
on 17 february 2003 the company announced that it
had received an undertaking from soundersleep
limited and famco addressing the relationship
between themselves as the majority shareholders
and the company and its subsidiaries with regard to
name number of shares percentage
phoenix asset management 3512044 754
fidelity investments 2408126 517
merrill lynch investment managers 1625601 349
silentnight share scheme trustee limited 1585230 340
14 annual report 2003 silentnight holdings plc 15
renewal of authority to purchase the company’s
shares
resolution 9 in the notice of the annual general
meeting which will be proposed as a special
resolution at the annual general meeting seeks to
renew for a further year the general authority for the
company to make market purchases of its own shares
the authority if renewed would expire at the
conclusion of the 2004 annual general meeting the
board intends to seek renewal of this authority at
subsequent annual general meetings
the maximum number of shares which may be
purchased is 4657000 ordinary shares representing
10 of the company’s issued share capital at 28 april
2003 and the maximum and minimum prices at
which they may be bought reflecting the requirements
of the companies act 1985 and the listing rules
issued by the financial services authority are
specified in the resolution under this authority the
company purchased 195000 ordinary shares at
130p per share on 13 november 2002 50000 at
13250p per share on 27 november 2002 and
30000 at 130p per share on 13 december 2002
the aggregate nominal value of the shares redeemed
was £27500 and this represented 06 of the issued
share capital of the company as at 2 february 2002
the directors have no immediate intention of
exercising the authority sought under this resolution
and it will in any event only be used in circumstances
where the directors after careful consideration
believe that any such purchase would result in an
increase in earnings per share and would be in the
best interests of the company and its shareholders
generally
the total number of ordinary shares over which options
were outstanding as at 28april 2003 the latest
practicable date prior to the publication of this annual
report was 1175180 which represents 252 of
the issued ordinary share capital of the company as at
that date and would represent 280 of the
company’s issued ordinary share capital if the
maximum of 4657000 shares were to be purchased
by the company
the ukla listing rule 312 the undertaking includes
the following terms
 all transactions between the company and famco
and soundersleep limited will be effected on normal
arm’s length commercial terms for the benefit of the
company
 neither famco nor soundersleep limited will cause
the company to take action that is against the
interests of the company and all of its shareholders as
a whole
 famco and soundersleep limited have committed to
adhere to such undertaking the undertaking shall
continue in full force and effect until withdrawn giving
not less than 28 days notice in writing to the company
or unless and until terminated by either famco or
soundersleep limited ceasing to be the controlling
shareholders of the company or by the company no
longer retaining a quotation on a recognised
investment exchange
board of directors and their interests
the directors of the company are shown on pages 12
and 13 mr dw adam mr j clarke and mr p clarke all
held office throughout the period to which these
financial statements relate
mr n allenza and ms m scott were appointed to the
board on 30 september 2002 and details of their
service contracts with soundersleep limited are set
out in the directors’ remuneration report on pages 17
to 24 mr ra pedder does not have a service contract
he was appointed to the board by a letter of
appointment on 6 january 2003 for a period of 3 years
which may be renewed for a further 3 years if he and
the company agree mr n allenza ms m scott and mr
ra pedder offer themselves for election at the agm
mr dw adam is the director retiring by rotation he has
a service contract which in normal circumstances is
terminable by the company after a notice period of 12
months
biographical details of mr dw adam mr ra pedder mr
n allenza and ms m scott are set out on pages 12 and
13
the interests of the directors in the ordinary shares of
the company of famco holdings limited and of
soundersleep limited are shown in the directors’
remuneration report on pages 17 to 24 both mr j
clarke and mr p clarke are interested in the share
capital of famco holdings limited and mr n allenza
and ms m scott are both interested in the share
capital of soundersleep limited
save as disclosed in this annual report none of the
directors had any interest in any significant contract
other than service contracts with the company or any
subsidiary undertaking during the year nor any
beneficial interests in shares or debentures of the
company’s subsidiary undertakings silentnight holdings plc annual report 2003 16
directors’ report
disabled persons
the group recognises its legal and social obligations
for the employment of disabled persons and does what
is practical to fulfil them disabled persons’
applications for employment are carefully considered
and their aptitudes and abilities are taken fully into
account if employees become disabled while
employed by the group every effort is made to retain
them in the same job general training and
promotional opportunities are available to disabled
employees according to individual ability in the same
way as they are to other employees
employee communications
during the year the group has continued to inform
employees about matters which affect their working
lives and to share the group’s vision and key business
goals with them a group newsletter is issued three
times a year which is circulated to all employees and
twice yearly presentations are made to all employees
by local management and the chief executive these
are in addition to the regular employee team briefings
where the emphasis is on providing information of
local interest
tangible fixed assets
the directors are of the opinion that any difference
between the book value and the market value of the
land and buildings of the company and its subsidiary
undertakings is not significant
the directors have scheduled a full property valuation
of its existing portfolio to be completed in 2003 this
will update the previous valuation carried out in
december 2000 for the former cornwell parker
properties and july 2000 for the other properties this
revaluation will in particular recognise the re
organisation now underway in the branded furniture
businesses
payment of creditors
the policy on the payment of creditors is included in
the financial review on page 11
donations
during the year the company made charitable
contributions of £12320 2002 £17145 the
company continues its policy of not making
contributions for political purposes
environment
the company recognises the importance of
responsible environmental management and its
obligation to protect the environment the company
therefore gives high priority to all environmental
matters and concerns and is committed to compliance
with applicable environmental regulations in all
territories where it conducts business
auditor
a resolution will be put to the annual general meeting
proposing that ernst  young llp be reappointed as
auditors of the company
by order of the board
dw adam director and company secretary
silentnight house salterforth barnoldswick
lancashire bb18 5ue
30 april 2003 annual report 2003 silentnight holdings plc 17
directors’ remuneration report
information not subject to audit
the company’s remuneration policy and the remuneration packages of individual directors are the responsibility
of the board as a whole in order to avoid any director having any involvement in determining or influencing any
part of the sums or benefits which he receives from the company the following apply
the remuneration of the nonexecutive directors is fixed by the executive directors who take independent
advice
acting on behalf of the board is the remuneration committee which meets twice a year and consists of mr p
clarke chairman mr j clarke and mr ra pedder mr ra pedder is considered to be independent until their
resignation on 28 september 2002 mr k ackroyd and mr m little were members of the remuneration
committee the remuneration committee is responsible for defining the group’s remuneration policy for
executive directors and senior executives and for determining the specific remuneration packages of each
executive director and senior executive and 
the remuneration committee also seeks the view of the chief executive mr n allenza in setting overall policy
on remuneration and the packages of the other executive directors and senior executives but not in relation
to himself
remuneration policy for executive directors
in framing its remuneration policy the remuneration committee has given full consideration to the provisions of
the combined code as set out in the listing rules issued by the financial services authority ‘the combined
code’ the remuneration committee’s overall policy regarding remuneration is to provide competitive packages
having regard to personal performance pay and conditions prevailing in comparable companies as well as within
the group the group aims to attract retain and motivate executive directors of the quality required to maintain
the group’s position as a market leader
however the remuneration committee also seeks to pay no more than is necessary and if appropriate takes
specialist independent advice to assist it the remuneration committee seeks to achieve demanding targets in
setting performancerelated elements of the remuneration package in order to ensure that the interests of
shareholders are furthered by the performance of the individual executive directors the committee’s view is that
the performancerelated elements of the remuneration package for executive directors should be a significant
element of the total this serves to align the interests of such directors with shareholders assuming full payment
of all elements for the current year bonus of more than 25 of the total remuneration of the executive directors
ignoring pension contributions would be performance related
this report sets out the group’s policy on directors’ remuneration for 2003 and so far as practicable for
subsequent years the inclusion in the report of remuneration policy in respect of years after 2003 is required by
the legislation under which this report is prepared the remuneration committee is able to state its remuneration
policy for 2003 with reasonable certainty but is less certain that this policy will continue without amendment in
subsequent years this is because the committee considers that a successful remuneration policy needs to be
sufficiently flexible to take account of future changes in the group’s business environment and remuneration
practice any changes in policy for years after 2003 will be described in future remuneration reports all
statements in this report in relation to remuneration policy for years after 2003 should be read in the light of this
paragraph
the remuneration package of each executive director comprises the following elements
a salary and benefits
basic salary is set at a level after taking account of the factors mentioned above the remuneration committee
believes that too great a reliance on performancerelated elements may produce a culture where shortterm gain
may result at the expense of longterm returns and sets basic pay accordingly in addition to basic pay the
company provides noncash benefits which consist of a fully expensed company car private medical insurance
permanent health insurance and pension provision a cash payment in lieu of such benefits is also provided the
value of these benefits which are included in the table of remuneration on page 22 are not pensionable but are
assessable to tax where the legislation so provides silentnight holdings plc annual report 2003 18
the remuneration committee’s policy is to phase the grant of options over a period of time so as to ensure long
term incentivisation of the individual on a basis as close as possible to shareholders’ interests options to acquire
shares of the company are offered subject to the rules of the schemes and never at a discount to the prevailing
share price the award of options is not subject to performance conditions the current policy is that during the
life of the cash long term incentive plan ‘ltip’ further options will not be granted to any individual who holds
an ltip award 
d the ltip
an ltip was approved by shareholders at the annual general meeting on 6 june 2002 the ltip is available to
selected executive directors and senior executives of the group and relates to the four financial years of the
company ending 29 january 2005 the award is not subject to performance conditions the ltip will enable
participants to earn a cash payment of between 80 and 120 of basic salary if the group’s profit before tax in
the 200405 financial year is between £22 million and £26 million if the group’s profit before tax falls between
these minimum and maximum targets the vesting percentage will be calculated on a straightline basis there will
be a full vesting if the maximum target is achieved and no vesting if the group’s profit before tax is below the
minimum target the remuneration committee determines whether the targets have been achieved using the
audited annual report and financial statements of the group after taking the advice of the auditors as to whether
any adjustments are required to take account of any exceptional items as disclosed in the annual report and
financial statements the remuneration committee believes that these are stretching targets which support the
objective of delivering maximum value from the group
as mr n allenza and ms m scott joined the board in september 2002 neither participates in the ltip 
directors’ remuneration report
b performancerelated bonus
having achieved an acceptable platform the remuneration committee seeks to incentivise executive directors
by their participation in a bonus scheme which can pay up to 40 of basic salary having given full consideration
to the provisions of schedule a of the combined code demanding performance targets to achieve bonus have
been designed to ensure sustainable longterm performance as well as shortterm gain no bonus is payable
unless predefined minimum profit targets are achieved
c executive share option schemes
the group operates an inland revenue approved share option scheme for executive directors and senior
executives which was approved by shareholders on 21 june 1994 the group also operates an unapproved share
option scheme for executive directors and senior executives which was adopted by the board on 3 september
1996 the rules of both schemes are substantially the same following the 1996 finance act grants of inland
revenue approved options are limited to a maximum value of £30000 per participant and are made under the
approved share option scheme options in excess of £30000 are granted under the unapproved share option
scheme the total market value of shares which a participant is permitted to acquire under both schemes is
limited to a maximum of four times annual remuneration in aggregate
options issued under both schemes may be exercised between three and ten years after the date granted subject
to the achievement of a performance criterion which requires that the percentage growth in earnings per share
of the company over a three year period is at least 6 greater than the percentage increase in inflation over the
same period the remuneration committee determines whether the performance condition has been met using
the earnings per share eps information contained in the company’s annual report and accounts after taking
the advice of the auditors as to whether adjustments are required to ensure consistency in accordance with the
terms of the performance condition this procedure is followed in order to ensure that no executive director is in
a position to rule on whether the performance conditions applying to his or her own incentives have been satisfied
eps was chosen as the appropriate measure of performance at the time the share option schemes were first
introduced and is the most common measure used in traditional share option schemes  annual report 2003 silentnight holdings plc 19
directors’ remuneration report
e pension arrangements
mr dw adam is a member of the silentnight group db scheme “the scheme”  the scheme is a funded inland
revenue approved final salary occupational pension scheme all benefits are subject to inland revenue limits
mr dw adam is required to make a contribution of 6 of pensionable salary
pensionable salary for mr dw adam is basic salary which is subject to the earnings cap the company has set
up a funded unapproved retirement benefits scheme ‘furbs’ to which it contributes 30 of that part of his
basic salary which exceeds the earnings cap
in addition to retirement benefits the scheme also provides a deathinservice lump sum and dependents’
benefits
mr j clarke and mr p clarke as employees of famco holdings limited the company’s holding company and an
associated employer within the scheme are members of the scheme in respect of their pensionable salary the
calculation of pensionable salary for mr j clarke and mr p clarke does not include any bonuses mr p clarke is
subject to the earnings cap whereas mr j clarke is not both mr j clarke and mr p clarke are required to
contribute to the scheme at the rate of 6 of pensionable earnings
as the employer of mr j clarke and mr p clarke famco holdings limited pays contributions to the scheme which
are assessed by the scheme’s actuary to be equivalent to the actuarial cost of providing their respective benefits
under the scheme deathinservice benefits relating to mr j clarke and mr p clarke are insured by the scheme
and famco holdings limited pays the cost of such insurance
neither mr n allenza nor ms m scott are members of the scheme the company pays an amount equal to 25
per cent of their annual salaries in lieu of benefits provided by the company from time to time which sum is
deemed to include an element to enable them to fund their own personal pension arrangements should they so
wish the company in addition pays life insurance premiums for both mr n allenza and ms m scott to provide
cover of an amount equivalent to four times their basic salary
service contracts
the service contracts and letters of appointment of the directors include the following terms
date unexpired term notice period
of contract months months
executive directors
n allenza 30 september 2002 24 24
dw adam 1 august 1999 12 12
m scott 30 september 2002 24 24
w simpson 27 june 1995 note i na
nonexecutive directors
ra pedder 6 january 2003 35 na
j clarke 30 june 2002 17 na
p clarke 30 june 2002 17 na
k ackroyd 30 june 2002 note i na
m little 10 april 2002 note i na
notes
i  mr w simpson mr k ackroyd and mr m little resigned during the year
mr n allenza and ms m scott have service agreements with soundersleep limited dated 30 september 2002
which are terminable by soundersleep limited giving 12 months notice in the case of underperformance and
24 months notice in any other case soundersleep limited has an ongoing contract with the company whereby
it provides the services of mr n allenza and ms m scott on the basis that the company pays their basic salary
and other benefits  silentnight holdings plc annual report 2003 20
directors’ remuneration report
mr dw adam has a service contract with the company which in normal circumstances is terminable by the
company after a notice period of 12 months mr dw adam’s service contract dated 1 august 1999 allows the
company to make a payment in lieu of notice this is consistent with the remuneration committee’s overall policy
on the duration of directors’ contracts which is that
 executive directors should have rolling service contracts terminable on no more than one year’s notice served
by the company on the grounds of performance or by the director and 
 nonexecutive directors do not have service contracts and are appointed by way of letter for fixed terms of up
to 3 years renewable on the agreement of both the company and the director
nonexecutive directors are not eligible to participate in any incentive plans or share option schemes and save
in the case of mr j clarke and mr p clarke the company’s pension arrangements
there are no predetermined special provisions for executive or nonexecutive directors with regard to
compensation in the event of loss of office the remuneration committee considers the circumstances of
individual cases of early termination the company does not normally make payments beyond its contractual
obligations including any payment in respect of notice to which a director is entitled after mitigation is
considered
shares in famco holdings limited ‘famco’
the directors’ interests in shares of famco the ultimate holding company were as follows
number of shares at 1 february 2003
john clarke          peter clarke
beneficial           beneficial
number of famco ordinary shares 1254098 1231827 1298667
number of famco 1st preference shares 1 20994
number of famco 2nd cumulative preference shares 862200 651627
number of shares at 2 february 2002
john clarke          peter clarke
beneficial beneficial
number of famco ordinary shares 1267610 1298667
number of famco 1st preference shares 315025 306281
number of famco 2nd cumulative preference shares 9638273122      651627
these interests duplicate holdings of 1081660 2002 1117443 ordinary shares nil 2002 247858 1st
preference shares and 550000 2002 651627 2nd cumulative preference shares which are held in trust for
the benefit of the families of mr j clarke and mr p clarke
shares in soundersleep limited
the directors’ interests in shares in soundersleep limited were as follows
number of  of ordinary number of  of preference 
ordinary shares share capital preference shares share capital
n allenza 125000 125 –– ––
m scott 125000 125 –– ––
famco holds the balance of the ordinary shares and 100 of the preference shares in soundersleep limited directors’ remuneration report
performance graph
as required by recent
legislation governing the
directors’ remuneration
report this graph illustrates
the performance of silentnight
holdings plc measured by the
total shareholder return share
price growth plus dividends
reinvested for each period
against the total shareholder
return on a notional
investment made up of shares
in the group of companies
which a ‘broad equity market
index’ over the past five years
is calculated the ftse 350
index was selected as it
contains companies of a
similar size
directors’ interests
shares in the company
the beneficial interests of the directors in the ordinary shares of the company were as follows
number of shares 
1 february 2 february
2003 2002
ra pedder ——
n allenza ——
dw adam 6878 6878
m scott ——
p clarke 660 660
j clarke ——
there have been no changes since 1 february 2003
in addition mr j clarke and mr p clarke jointly have a nonbeneficial interest in 25000 ordinary shares of the
company as two of the trustees of the estate of the late mr t clarke obe dsm
annual report 2003 silentnight holdings plc 21
140
130
120
110
100
90
80
70
60
50
1998 1999 2000 2001 2002 2003
silentnight holdings
ftse 350 index
silentnight holdings tsr vs the ftse 350 index
total shareholder return  silentnight holdings plc annual report 2003 22
directors’ remuneration report
information subject to audit
directors’ remuneration
52 weeks ended 1 february 2003
other performance compensation
salary emoluments related for loss 2003 2002
fees incl benefits bonus of office total total
£’000 £’000 £’000 £’000 £’000 £’000
ra pedder  note i 1 — — — 1 —
n allenza  notes ii  iii 66 4 — — 70 —
dw adam  note iv 160 21 — — 181 191
m scott  notes ii  iii 39 2 — — 41 —
j clarke  note v 23——— 23 21
p clarke  note v 23——— 23 21
w simpson  notes iv vi  vii 171 12 23 505 711 293
k ackroyd  note vi  vii 37 6 — 60 103 61
m little  note vii 14——— 14 21
—— —— —— —— ——— ——
534 45 23 5565 1167  608
—— —— —— —— ——— ——
notes
i mr ra pedder was appointed to the board on 6 january 2003
ii mr n allenza and ms m scott were appointed to the board on 30 september 2002
iii soundersleep limited has an ongoing contract with the company whereby it provides the services of mr n
allenza and ms m scott on the basis that the company pays their basic salary and other benefits
iv the remuneration package of mr dw adam and mr w simpson includes noncash benefits comprising the
provision of a fully expensed company car and private health insurance 
v the fees of j clarke and mr p clarke are paid to famco
vi the amounts paid as compensation for loss of office to mr w simpson and mr k ackroyd were made after
the receipt of independent legal advice from hammonds and were within the terms of their contract and
reflect the issue of mitigation the amount includes £40000 as the estimated money value for mr w
simpson for the use of a company car for two years
vii mr w simpson mr k ackroyd and mr m little resigned from the board on 28 september 2002
pension entitlement
the table below sets out information regarding the accrued pension entitlement of certain executive and non
executive directors
increase in accrued total accrued
age at member’s pension during pension at
1 february contribution 200203 excluding 1 february
2003 during 200203 inflation 2003
£’000 £’000 £’000
n allenza — — — —
dw adam 54 6 3 47
m scott — — — —
j clarke 51 6 2 53
p clarke 54 5 3 36
w simpson  note vii 54 9 4 165
the pension entitlement shown is that which would be paid annually on retirement based on service to the end of
the year annual report 2003 silentnight holdings plc 23
directors’ remuneration report
pension entitlement continued
the following additional information relates to directors’ pensions
i normal retirement age is 60
ii dependents’ pensions on deathinretirement a spouse’s pension equal to onehalf of the director’s
pension is payable in respect of service in the group db scheme from 1 december 2002 plus twothirds
of that part of the director’s pension which relates to service in the silentnight staff retirement benefits
scheme up to that date
on deathinservice before normal retirement date a spouse’s pension of 50 of the pension that would
have been payable to the director on retirement at age 60 based on pensionable salary at the date of
death in addition a childrens pension in respect of each child under 18 or age 25 if continuing in full
time education or vocational training of onesixth of the director’s prospective pension at retirement with
a maximum of three children
iii early retirement can be taken from age 50 or at any time on account of incapacity provided the company
gives its consent the accrued pension is reduced to take account of any early payment
iv pension increases pensions in payment are increased annually by the increase in rpi up to a maximum
of 5
v there are no discretionary benefits which affect or are taken into account when calculating the value of
benefits
vi the above amounts in relation to mr dw adam do not include an employer’s contribution of £16790
2002 £13245 to a furbs
vii the additional pension accrual during the year in respect of mr w simpson was the amount which would
have been payable at his normal retirement date mr w simpson took early retirement with effect from 28
september 2002 and the pension payable was therefore reduced from that shown above
the table below sets the accrued pension entitlement of certain executive and nonexecutive directors
increase in
change in transfer value
accrued benefit over the year
over previous year transfer value at transfer value at net of directors’
including inflation 1 february 2003 2 february 2002 contributions
£’000 £’000 £’000 £’000
n allenza ————
dw adam 3 582 462 114
m scott ————
j clarke 3 616 556 54
p clarke 4 474 385 84
w simpson  note i 4 2496 2072 415
i  mr w simpson took early retirement from the scheme on 28 september 2002
the requirements of the listing rules differ from those of the companies act the listing rules require the
additional pension earned over the year to be calculated as the difference between the pension accrued at the
end of the financial year and that accrued at the start of the financial year less the increase in the pension earned
over the year solely due to inflation the change in the transfer value required by the companies act will also be
significantly influenced by the assumptions underlying the calculation at the beginning and the end of the
financial year and market conditions
3 582 462 114 silentnight holdings plc annual report 2003 24
directors’ remuneration report
directors’ interests
executive share options
the share options in issue to the executive directors during the year were as follows
number of options
granted normal date
2 february during 1 february option from which expiry
2002 year 2003 price exercisable date
dw adam 17045 — 17045 176p 18122003 17122010
60694 — 60694 173p 18122003 17122010
75000 — 75000 1875p 04072004 03072011
w simpson 155398 — 233p 10111997 28032003
13100 — 212p 07061998 28032003
51815 — 318p 22052000 28032003
15112 — 192p 26102001 28032003
83200 — 2465p 19102002 28032003
the middle market price of the company’s shares at 31 january 2003 was 1275p during the year the middle
market price of the company’s shares ranged between 1225p and 2575p
options may be exercised between three and ten years after the date granted subject to the achievement of a
performance criterion which requires that the percentage growth in earnings per share of the company over a
three year period is at least 6 greater than the percentage increase in inflation over the same period the
remuneration committee determines whether the performance condition has been met using the earnings per
share eps information contained in the company’s annual report and accounts after taking the advice of the
auditors as to whether adjustments are required to ensure consistency in accordance with the terms of the
performance condition eps was chosen as the appropriate measure of performance at the time the share option
schemes were first introduced and is the most common measure used in traditional share option schemes 
there was no exercise or lapse of share options during the year and there has been no change in the directors’
interests since 1 february 2003 their award of options is not subject to performance conditions
no price was paid for any option
mr w simpson who resigned as a director on 28 september 2002 was entitled in accordance with the rules
of the share option schemes to exercise the above options within a period of six months commencing on 28
september 2002
approval by shareholders
at the annual general meeting of the company to be held on 25 june 2003 a resolution approving this
report is to be proposed as an ordinary resolution
this report was approved by the board on 30 april 2003
signed on behalf of the board
dw adam
finance director corporate governance statement
the directors recognise the importance of adopting good governance practices in the interests of shareholders
this statement together with the directors’ remuneration report explains how the company has throughout
the financial year complied with section 1 of the combined code contained in the listing rules issued by the
financial services authority ‘the combined code’
the group has complied with the provisions of the combined code throughout the financial year with the
exception of the following
up to 28 september 2002 independent nonexecutive directors comprised onethird of the board since this
date there has been only one independent nonexecutive director comprising onesixth of the board the two
other nonexecutive directors were nominated by famco holdings limited ‘famco’ 
the remuneration committee does not consist exclusively of independent nonexecutive directors
the audit committee does not consist of a majority of independent nonexecutive directors
the bonus earned by mr w simpson in the year was pensionable and
since 28 september 2002 the company does not have a senior independent director although as part of the
undertaking granted to the company details of which are set out in the directors’ report famco and
soundersleep limited have agreed to endeavour to ensure that the company retains at all times two
independent directors one being the nonexecutive chairman on appointment the second independent
director would fulfil the role of senior independent director
directors
the directors supervise the management of the business and the affairs of the company and see their principal
responsibilities as being to determine the broad strategy of the company and to ensure its implementation
the company has both a chairman and a chief executive each having their own separate responsibilities
essentially the chairman is responsible for overseeing the board and the chief executive for running the
business the board is made up of six directors three of whom are nonexecutive one is an independent non
executive director being mr ra pedder the chairman and he has substantial experience as a director in both
executive and nonexecutive capacities of uk listed companies and major private companies the other two non
executive directors being mr j clarke and mr p clarke are not regarded by the board as independent the three
executive directors are mr n allenza the chief executive mr dw adam the finance director and ms m scott
the director of people and communications the structure of the board effectively ensures that no single director
or group of directors can dominate board decisiontaking
the independent nonexecutive director therefore comprises onesixth of the board famco holdings limited has
nominated two nonexecutive directors but they are not considered to be independent in terms of the combined
code soundersleep limited a company controlled by famco nominated two of the executive directors mr n
allenza and ms m scott however the board believes that it is reasonable and appropriate that the ultimate
holding company and its controlled subsidiary should have the right to nominate directors biographies of the
board members appear on pages 12 and 13
each director is provided with sufficient information to enable them to discharge their duties and responsibilities
as a director where appropriate the directors engage the services of external professionals to assist them
individual directors also have access at the company’s expense to external advisers at their discretion
the company has a formal induction policy for new directors whilst training is not always provided to directors
when first appointed particularly if they have relevant experience appropriate training for any new and existing
directors is constantly kept under review and provided where necessary
annual report 2003 silentnight holdings plc 25 silentnight holdings plc annual report 2003 26
corporate governance statement
the board meets regularly normally eleven times each year and has reserved for its review and approval certain
items including the annual and interim results annual budgets and plans acquisitions and divestments
significant capital expenditure and board appointments other matters are delegated to the remuneration
committee and audit committee whose duties and memberships are set out below 
due to the small size of the board there is no formal committee dealing with nominations in the event of a future
appointment to the board it is anticipated that the selection would be dealt with by the board as a whole
the company’s articles of association require that in addition to any director who is appointed following the date
of an annual general meeting and who must seek reelection at the next annual general meeting not more than
onethird of directors will seek reelection each year and that any director who has been in office for three years
or more since their last appointment or reelection must subject to continued satisfactory performance seek re
election at the next annual general meeting of the company also any director on attaining the age of 65 is
required to seek reelection annually
as noted in the directors’ report mr ra pedder mr n allenza and ms m scott will seek election and mr dw adam
will seek reelection at the company’s annual general meeting
in addition to their letters of appointment with the company mr j clarke and mr p clarke have employment
contracts with famco which company makes their services available to the company mr n allenza and ms m
scott have service agreements with soundersleep limited who make their services available to the company
directors’ remuneration
the board has established a remuneration committee the terms of reference of which are in summary to
recommend to the board the remuneration policy for executive directors and senior executives in the company
to determine the remuneration of the executive directors and senior executives and to exercise the powers of
the directors under the share option schemes and the ltip 
each executive director abstains from any discussion or voting at full board meetings on remuneration
committee recommendations where recommendations have a direct bearing on his or her own remuneration
package the details of each executive director’s individual package are fixed by the remuneration committee in
line with the policy adopted by the full board
the committee comprises mr p clarke chairman mr ra pedder and mr j clarke all are nonexecutive directors
but only mr ra pedder is independent the committee normally meets once a year but convenes whenever
necessary the directors’ remuneration report is set out on pages 17 to 24
relationships with shareholders
the company seeks to ensure that all shareholders are kept informed of the company’s affairs there is an annual
report including reviews from the chief executive and the finance director and an interim report is also sent
to all shareholders there is a regular dialogue with individual institutional shareholders particularly after the full
year and half year results there is an opportunity for individual shareholders to question the chairman at the
agm furthermore there is an opportunity for shareholders to question the chairmen of the audit and
remuneration committees at the agm
in recent years only a small proportion of members have attended the agm most votes are taken on a show of
hands which does not reflect a true weight of shareholder opinion at the agm held in 2000 the chairman
adopted the practice of announcing the total proxy votes for and against each resolution this practice will
continue as will the practice of proposing each resolution separately the notice of the 2003 agm is as on
previous occasions being sent to all shareholders at least 20 working days before the meeting
the group’s full and half year results are displayed on the group’s corporate website wwwsilentnightholdingscouk annual report 2003 silentnight holdings plc 27
corporate governance statement
accountability and audit
in submitting this annual report and the financial statements to the shareholders the board has sought to
ensure that a balanced and understandable assessment of the company’s position and prospects has been
presented
the board has established an audit committee whose primary role is to keep under review the group’s financial
and other systems and controls and its financial reporting procedures in fulfilling this role the committee
receives and reviews work carried out by the internal and external auditors and their findings the company’s
internal audit department works to an annual programme developed in consultation with the committee as well
as covering specific matters arising during the year
the committee also keeps the scope and costeffectiveness of both the internal audit function and the external
audit under review the independence and objectitvity of the external auditors is also considered on a regular
basis with particular regard to the level of nonaudit fees the split between audit and nonaudit fees for the year
under review appears on page 38 the nonaudit fees were paid principally in respect of taxation advice and are
considered by the committee not to affect the independence or objectivity of the auditors 
the committee comprises of mr j clarke chairman mr ra pedder and mr p clarke all are nonexecutive
directors but only mr ra pedder is independent the committee meets at least twice a year and receives reports
from the internal and external auditors on a regular basis
internal controls
the board of directors is ultimately responsible for the group’s system of internal control and for reviewing its
effectiveness however such a system is designed to manage rather than eliminate the risk of failure to achieve
business objectives and can provide only reasonable and not absolute assurance against material misstatement
or loss
the board confirms that there is an ongoing process for identifying evaluating and managing the significant risks
faced by the group this includes financial operational and compliance controls and risk management this
process has been in place for the year under review and up to the date of approval of this annual report is
regularly reviewed by the board and accords with the combined code
the board has reviewed the effectiveness of the system of internal control by considering the output of the
processes described in this and subsequent paragraphs in particular it has reviewed and updated the process
for identifying and evaluating the significant risks affecting each of the businesses and the policies and
procedures by which these risks are managed
the management of each business is responsible for the identification and evaluation of any significant risks
applicable to its business together with the design and operation of suitable internal controls these risks are
assessed on a continual basis and may be associated with a variety of internal or external sources including
control breakdowns disruption in information systems competition natural catastrophe and regulatory
requirements
a process of control selfassessment and hierarchical reporting has been established for all businesses which
provides a documented and auditable trail of accountability these procedures are relevant across the group’s
businesses and provide for successive assurances to be given at higher levels of management and finally to the
board
the senior executives review on behalf of the board the significant risks inherent in the group and the system
of control necessary to manage such risks and present their findings to the board
the chief executive also reports to the board on significant changes in the business and the external environment
which represent significant risks to the group as a whole the group finance director provides the board with
monthly financial information which includes key performance indicators silentnight holdings plc annual report 2003 28
corporate governance statement
summary terms of reference of board committees
audit
review the company’s financial and other systems and controls and the company’s financial reporting
remuneration
make recommendations to the board on the company’s framework of existing remuneration determine 
remuneration packages for executive directors and other senior executives
going concern
on the basis of current financial projections and existing bank facilities the directors have a reasonable
expectation that the group has adequate resources to continue in operational existence for the foreseeable
future for this reason they continue to adopt the going concern basis in preparing the financial statements
statement of directors’ responsibilities in relation to the financial statements
the directors are required by the companies act 1985 to prepare financial statements for each financial year
which give a true and fair view of the state of affairs of the company and the group as at the end of the financial
year and of the profit or loss for that year in preparing the financial statements the directors are required to
select appropriate accounting policies and apply them consistently
make judgements and estimates that are reasonable and prudent and
state whether applicable accounting standards have been followed
the directors are responsible for ensuring that the company keeps accounting records which disclose with
reasonable accuracy at any time the financial position of the company and which enable them to ensure that
the financial statements comply with the companies act 1985 they have general responsibility for taking such
steps as are reasonably open to them to safeguard the assets of the group and to prevent and detect fraud and
other irregularities annual report 2003 silentnight holdings plc 29
independent auditors’ report to the members of silentnight holdings plc
we have audited the group’s financial statements for the 52 weeks ended 1 february 2003 which comprise the
consolidated profit and loss account consolidated balance sheet company balance sheet consolidated cash flow
statement consolidated statement of total recognised gains and losses consolidated reconciliation of movements
in shareholders’ funds note of historical cost profits and losses and the related notes 1 to 31 these financial
statements have been prepared on the basis of the accounting policies set out therein we have also audited the
information in the directors’ remuneration report that is described as having been audited
this report is made solely to the company’s members as a body in accordance with section 235 of the companies
act 1985 our audit work has been undertaken so that we might state to the company’s members those matters we
are required to state to them in an auditors’ report and for no other purpose to the fullest extent permitted by law
we do not accept or assume responsibility to anyone other than the company and the company’s members as a body
for our audit work for this report or for the opinions we have formed
respective responsibilities of directors and auditors
the directors are responsible for preparing the annual report including the financial statements which are required
to be prepared in accordance with applicable united kingdom law and accounting standards as set out in the
statement of directors’ responsibilities in relation to the financial statements
our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements
united kingdom auditing standards and the listing rules of the financial services authority
we report to you our opinion as to whether the financial statements give a true and fair view and whether the
financial statements and the part of the directors’ remuneration report to be audited have been properly prepared
in accordance with the companies act 1985 we also report to you if in our opinion the directors’ report is not
consistent with the financial statements if the company has not kept proper accounting records if we have not
received all the information and explanations we require for our audit or if information specified by law or the listing
rules regarding directors’ remuneration and transactions with the group is not disclosed
we review whether the corporate governance statement reflects the company’s compliance with the seven
provisions of the combined code specified by the listing rules and we report if it does not we are not required
to consider whether the board’s statements on internal control cover all risks and controls or form an opinion on
the effectiveness of the group’s corporate governance procedures or its risks and control procedures
we read the other information contained in the annual report and consider whether it is consistent with the audited
financial statements this other information comprises the directors’ report chairman’s statement chief
executive’s review financial review the unaudited part of the directors’ remuneration report corporate
governance statement financial highlights and company profile directors and advisers notice of annual general
meeting and five year summary we consider the implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the financial statements our responsibilities do not extend to any
other information
basis of audit opinion
we conducted our audit in accordance with united kingdom auditing standards issued by the auditing practices
board an audit includes examination on a test basis of evidence relevant to the amounts and disclosures in the
financial statements and the part of the directors’ remuneration report to be audited it also includes an
assessment of the significant estimates and judgements made by the directors in the preparation of the financial
statements and of whether the accounting policies are appropriate to the group’s circumstances consistently
applied and adequately disclosed
we planned and performed our audit so as to obtain all information and explanations which we considered
necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements
and the part of the directors’ remuneration report to be audited are free from material misstatement whether
caused by fraud or other irregularity or error in forming our opinion we also evaluated the overall adequacy of the
presentation of the information in the financial statements
opinion
in our opinion
the financial statements give a true and fair view of the state of affairs of the company and of the group as at 
1 february 2003 and of the loss of the group for the year ended and
the financial statements and the part of the directors’ remuneration report to be audited have been properly 
prepared in accordance with the companies act 1985
ernst  young llp
registered auditor
leeds
30 april 2003 silentnight holdings plc annual report 2003 30
consolidated profit and loss account
for the 52 weeks ended 1 february 2003
2003 2002
notes £’000 £’000
turnover 2 277311 300293
———— ————
operating profit before exceptional operating costs 5570 12506
exceptional operating costs 4 16120 210
———— ————
operating lossprofit 2 10550 12296
———— ————
lossprofit on sale of property 313 571
———— ————
lossprofit on ordinary activities before interest 5 10863 12867
net interest payable 7 384 757
———— ————
lossprofit on ordinary activities before taxation 11247 12110
tax creditcharge on lossprofit on ordinary activities 8 2770 3898
———— ————
lossprofit for the financial year 8477 8212
dividends 10 3832 6111
———— ————
retained lossprofit for the financial year 22 12309 2101
———— ————
lossearnings per share 11 1875p 1814p
diluted lossearnings per share 11 1875p 1814p
normalised earnings per share 11 1272p 1861p
dividends per ordinary share 10 1850p 1350p annual report 2003 silentnight holdings plc 31
consolidated balance sheet
at 1 february 2003
2003 2002
notes £’000 £’000
fixed assets
intangible assets 12 — 2099
tangible assets 13 62827 75198
investments 14 2021 3782
———— ————
64848 81079
———— ————
current assets
stocks 15 15465 19677
assets held for resale 16 — 4000
debtors amounts falling due
after more than one year 17 511828 5124
within one year 17 40002 45076
cash at bank and in hand 17338 4615 
———— ————
74633 78492
creditors amounts falling due within one year 18 44386 50199
———— ————
net current assets 30247 28293
———— ————
total assets less current liabilities 95095 109372
———— ————
creditors amounts falling due after more than one year 19 10381 10772
provision for liabilities and charges 20 2444 3628
———— ————
12825 14400
———— ————
net assets 82270 94972
———— ————
capital and reserves
called up share capital 21 4658 4685
share premium account 22 1084 1084
revaluation reserve 22 5643 8355
capital redemption reserve 22 27 —
profit and loss account 22 70858 80848
———— ————
equity shareholders’ funds 982270 94972
———— ————
the financial statements were approved by the board of directors on 30 april 2003 and signed on its behalf by
ra pedder dw adam
chairman finance director silentnight holdings plc annual report 2003 32
company balance sheet
at 1 february 2003
2003 2002
notes £’000 £’000
fixed assets
tangible assets 13 1065 1113
investments 14 10107664 108716
———— ————
108729 109829
———— ————
current assets
debtors amounts falling due
after more than one year 17 1828 —
within one year 17 6256 3583
cash at bank and in hand 1 7224
———— ————
8085 10807
———— ————
creditors amounts falling due within one year 18 7529 10913
———— ————
net current assetsliabilities 556 106
———— ————
total assets less current liabilities 109285 109723
———— ————
creditors amounts falling due after more than one year 19 9592 9939
provision for liabilities and charges 20 — 118
———— ————
9592 9821
———— ————
net assets 99693 99902
———— ————
capital and reserves
called up share capital 21 4658 4685
share premium account 22 1084 1084
capital redemption reserve 22 27 —
profit and loss account 22 93924 94133
———— ————
equity shareholders’ funds 99693 99902
———— ————
the financial statements were approved by the board of directors on 30 april 2003 and signed on its behalf by
ra pedder dw adam
chairman finance director annual report 2003 silentnight holdings plc 33
consolidated cash flow statement
for the 52 weeks ended 1 february 2003
2003 2002
£’000 £’000 £’000 £’000
net cash inflow from operating activities note 25 15456 12675
returns on investments and servicing of finance
interest received 195 65
interest paid 660 870
——— ———
465 805
taxation 3063 3136
capital expenditure and financial investment
purchase of fixed assets 6461 13532
sale of fixed assets 3320 303
proceeds from sale of assets for resale 4000 9975  
sale of shares by executive share option scheme 16 —
——— ———
875 3254
acquisitions and disposals
proceeds of sale of subsidiary undertaking 2450 — 2450
equity dividends paid 5387 6111
——— ———
net cash inflow before management of liquid
resources and financing 13542 1819
management of liquid resources
increasedecrease in shortterm cash deposits 10433 2245
financing
repayment of bank loans 5303 483
share buy back 368 —
——— ———
898 483
——— ———
increase in cash 2211 3581
——— ———
reconciliation of net debtfunds note 25
at 3 february 2002 5387 7380
increase in cash 2211 3581
increasedecrease in shortterm cash deposits 10433 2245
decrease in bank loans 530 483
exchange differences 210 174
——— ———
at 1 february 2003 7577 5387
——— ——— silentnight holdings plc annual report 2003 34
consolidated statement of total recognised gains and losses
for the 52 weeks ended 1 february 2003
2003 2002
£’000 £’000
lossprofit for the financial year 8477 8212
currency translation differences on foreign currency net investments 25 41
——— ——— 
total recognised gains and losses for the financial year 8502 8253
——— ———
consolidated reconciliation of movements in shareholders’ funds
for the 52 weeks ended 1 february 2003
note 2003 2002
£’000 £’000
lossprofit for the financial year 8477 8212
dividends 3832 6111
——— ———
retained lossprofit for the financial year 12309 2101
currency translation differences on foreign currency net investments 25 41
share buy back 368 —
——— ———
net reductionaddition to shareholders’ funds 12702 2142
——— ———
opening shareholders’ funds 94972 92830
—————— ———
closing shareholders’ funds 82270 94972
——— ——————
note of historical cost profits and losses
for the 52 weeks ended 1 february 2003
2003 2002
£’000 £’000
reported lossprofit on ordinary activities before taxation 11247 12110
realisation of property revaluation gains of previous years 2712 —
——— ——— 
historical cost lossprofit on ordinary activities before taxation 8535 12110
——— ———
historical cost lossprofit for the year after taxation and dividends 9597 2101
——— ——— annual report 2003 silentnight holdings plc 35
notes to the financial statements
1 accounting policies
a accounting convention
the financial statements have been prepared under the historical cost convention as amended by the revaluation
of freehold property in the uk and in accordance with applicable accounting standards
b basis of consolidation
the consolidated financial statements include the financial statements of the parent company and its subsidiary
undertakings made up to 1 february 2003
c intangible assets
goodwill arising on the acquisition of subsidiaries and businesses prior to 31 january 1998 was written off to
reserves as incurred such goodwill is charged against profit for the year in which any disposal of the relevant
subsidiaries takes place 
goodwill arising on the acquisition of subsidiaries and businesses completed after 31 january 1998 is being
capitalised as an intangible asset and written off over its useful economic life
d foreign exchange
transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction
or at the contracted rate if the contract is covered by a forward foreign currency contract monetary assets and
liabilities denominated in foreign currencies are translated using the rate of exchange ruling at the balance sheet
date or if appropriate at the forward contract rate and gains or losses on translation are included in the profit
and loss account
the assets and liabilities of overseas subsidiary undertakings and associated undertakings are translated at the
closing exchange rate profit and loss accounts of such undertakings are consolidated at the average rates of
exchange during the year gains and losses arising on these translations are taken to reserves
e stocks
all stocks have been valued at the lower of cost and net realisable value the cost of finished goods and work
inprogress includes direct labour and appropriate production overheads
f tangible fixed assets
freehold and leasehold property is revalued such that its carrying amount is its current value as at the balance
sheet date all other fixed assets are included in the financial statements at cost 
depreciation is provided to write off the cost or valuation less the estimated residual value in equal instalments
over the estimated useful lives of the assets the rates of depreciation are as follows
freehold property 2 per annum
long and short leasehold property over the period of the lease
plant 10 per annum
motor cars 25 per annum
commercial vehicles 14 per annum
trailers 10 per annum
office fixtures and fittings 
including computers and office equipment 10 – 33 per annum
government grants relating to capital expenditure are included in accruals and deferred income and released to
profit and loss over the estimated useful life of the asset  silentnight holdings plc annual report 2003 36
notes to the financial statements
1 accounting policies continued
g deferred taxation
deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance
sheet date where transactions or events have occurred at that date that will result in an obligation to pay more
or a right to pay less or to receive more tax with the following exceptions
provision is made for tax on gains arising from the revaluation and similar fair value adjustments of fixed
assets and gains on disposal of fixed assets that have been rolled over into replacement assets only to the extent
that at the balance sheet date there is a binding agreement to dispose of the assets concerned however no
provision is made where on the basis of all available evidence at the balance sheet date it is more likely than
not that the taxable gain will be rolled over into replacement assets and charged to tax only where the
replacement assets are sold
provision is made for deferred tax that would arise on remittance of the retained earnings of overseas
subsidiaries associates and joint ventures only to the extent that at the balance sheet date dividends have been
accrued as receivable
deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not
that there will be suitable taxable profits from which the future reversal of the underlying timing differences can
be deducted
deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in
which timing differences reverse based on tax rates and laws enacted or substantively enacted at the balance
sheet date
h finance leases
assets held under finance leases are capitalised and included in tangible fixed assets at fair value the obligations
relating to finance leases net of finance charges in respect of future periods are included as appropriate under
creditors due within or creditors due after one year finance charges are amortised over the lease term to reflect
a constant rate of interest on the remaining balance of the obligation
i operating leases
rentals under operating leases are charged to the profit and loss account on a straightline basis over the period
of the lease
j pension costs
the expected cost of providing pensions under the group’s defined benefit schemes as calculated periodically by
professionally qualified actuaries is currently charged to the profit and loss account so as to spread the cost over
the service lives of employees in the schemes in such a way that the pension cost is a substantially level
percentage of current and expected future pensionable payroll
costs incurred in respect of defined contribution schemes are charged to the profit and loss account in
accordance with the period to which the contributions relate
the transitional disclosures required by frs 17 are included in these financial statements
k investments
shares in group companies are stated at cost less provisions for any impairment in value
l executive share option schemes
the assets and liabilities of silentnight share scheme trustee limited the trustee of the silentnight holdings plc
employee benefit trust are recognised as the assets and liabilities of the company
m research and development
research and development expenditure is written off as incurred annual report 2003 silentnight holdings plc 37
notes to the financial statements
2 segmental analysis
turnover is attributable to continuing activities being the manufacture of beds cabinet furniture and upholstery
i turnover and operating profitloss by sector
2003 2002
turnover  operating turnover      operating
profitloss profitloss
£’000 £’000 £’000 £’000
uk bed division 168636 15471 162029 15516
furniture division 97273 9899 125246 3210
overseas bed division 11402 2 13018 200
———— ———— ———— ————
277311 5570 300293 12506
exceptional operating costs
 furniture division –– 12744 –– 508
 other –– 3376 –– 298
———— ———— ———— ————
–– 16120 –– 210
———— ———— ———— ————
277311 10550 300293 12296
———— ———— ———— ————
ii turnover by ultimate destination 2003 2002
£’000 £’000
united kingdom and eire 263681 282957
mainland europe 13414 16716
rest of world 216 620
———— ————
277311 300293
———— ————
iii analysis of capital employed by sector 2003 2002
£’000 £’000
uk bed division 41544 39044
furniture division 33508 57240
overseas bed division 2407 2035
———— ————
capital employed 77459 98319
———— ————
reconciliation of capital employed to net assets
capital employed 77459 98319
assets held for resale –– 4000
intangible assets –– 2099
net fundsdebt 7577 5387
tax provision 2694 3901
dividends 2700 4255
net pension prepayment 2628 4097
———— ————
total net assets 82270 94972
———— ————
3 cost of sales and operating costs 2003 2002
£’000 £’000
cost of sales 206060 210188
distribution expenses 53295 54484
administration expenses 28506 23325
———— ————
287861 287997
———— ———— silentnight holdings plc annual report 2003 38
notes to the financial statements
4 exceptional operating costs 2003 2002
£’000 £’000
furniture division
reorganisation and redundancy costs 3670 508
fixed asset impairment 7031 ––
goodwill impairment 2043 ––
———— ————
12744 508
other
esop impairment 1745 ––
compensation for loss of office 565 ––
other severance costs 382 ––
legal and professional costs associated with abortive take private bid 476 ––
executive recruitment costs 208 ––
release of unrequired provisions –– 298
———— ————
3376 298
———— ————
16120 210
———— ————
the reorganisation and redundancy costs in the furniture division consist largely of the closure costs of the
keighley site of silentnight furniture following the transfer of manufacturing and distribution activities to
sunderland these costs also include redundancy costs at ducal and cornwell parker furniture
the group has carried out a review to determine whether there has been an impairment of its fixed assets and
goodwill as a result these assets have been written down to their appropriate value
the cash payments for reorganisation and redundancy costs were £2709000 2002 £208000
compensation for the loss of office £525000 other severence costs £130000 legal and professional costs
associated with the abortive take private bid £476000 and executive recruitment costs £193000
5 lossprofit before interest 2003 2002
£’000 £’000
lossprofit before interest is stated after chargingcrediting
depreciation 7677 7870
amortisation of intangible assets 56 123
lossprofit on disposal of fixed assets 248 49
impairment                       fixed assets 7031 ––
goodwill 2043 ––
esop 1745 ––
auditors’ remuneration     audit 198 188
other fees paid to the auditor and its associates 75 59
leasing and hire charges plant and machinery 1867 1982
other 1298 1484 1298
exchange gain on foreign currency borrowingsdeposits 41 48
government grants 142 161
research and development costs 876 822
audit fees in respect of the company were £5000 2002 £5000
depreciation charged to operating profit in the year represents the full amount written off fixed assets as
adjusted for the amounts included in the valuation of opening and closing stocks annual report 2003 silentnight holdings plc 39
notes to the financial statements
6 employee information 2003 2002
£’000 £’000
i staff costs
wages and salaries 89432 94175
social security costs 8053 8650
other pension costs 2884 2415
———— ————
100369 105240
———— ————
average number of persons employed by the group 2003 2002
production 3727 4002
sales and distribution 963 992
administration 380 481
———— ————
5070 5475
———— ————
ii directors’ emoluments 2003 2002
£’000 £’000
directors’ emoluments 602 608
———— ————
aggregate contributions to money purchase scheme 17 13
———— ————
number of directors accruing benefits under
defined benefit scheme 4 4
money purchase scheme 1 1
7 net interest payable 2003 2002
£’000 £’000
interest payable on
finance leases –– 6
bank loans and overdrafts
repayable within five years 584 387
repayable beyond five years –– 441
———— ————
584 834
interest receivable 200 77
———— ————
384 757
———— ————
8 tax on lossprofit on ordinary activities
i  analysis of tax creditcharge in the year 2003 2002
£’000 £’000
current tax
uk corporation tax at 30 2002 30 –– 3859
adjustments in respect of prior year 2548 294
———— ————
2548 3565
foreign tax 1 98
———— ————
2547 3663
deferred tax
origination and reversal of timing differences 223 235
———— ————
2770 3898
———— ———— notes to the financial statements
8 tax on lossprofit on ordinary activities continued
ii  factors affecting tax creditcharge for the year
the tax assessed for the year is lower than the standard rate of corporation tax in the uk 30 
the differences are explained below
2003 2002
£’000 £’000
group lossprofit on ordinary activities before tax 11247 12110
———— ————
group lossprofit on ordinary activities before tax at 30 3374 3633
effects of
expenses not deductible for tax purposes 1769             634
movement on timing differences not recognised under frs 19 2036            310
group relief not paid for 440 —
adjustments to tax charge in respect of prior years                                       2548         294
other 10 —
———— ————
total current tax 2547 3663
———— ————
iii factors that may affect future tax charges
a net deferred tax asset of £1158000 2002 liability £463000 has not been recognised due to uncertainty
over its recoverability in the foreseeable future see note 20
the deferred tax asset consists of £1570000 2002 £188000 arising on £5233000 2002 £627000 of
depreciation charged in excess of capital allowances £1061000 2002 £1417000 arising from
£3536000 2002 £4723000 of tax losses carried forward and £511000 asset 2002 liability £84000
arising from £1703000 2002 £280000 of other timing differences the group also has an unprovided
deferred tax liability of £1984000 2002 £1984000 in respect of tax arising on chargeable gains in previous
periods that have been deferred by means of hold over or rollover relief
the assets relating to accelerated capital allowances and other timing differences may be recovered if there are
taxable profits arising in the period of reversal
the group has tax losses arising of £3536000 2002 £4723000 that are available indefinitely for offset
against future taxable profits of those companies in which the losses arose deferred tax assets have not been
recognised in respect of these losses as they may not be used to offset taxable profits elsewhere in the group
and they have arisen in subsidiaries that have been lossmaking for some time   
the liability relating to the gains deferred will only crystallise as a result of the sale of the replacement assets or
if the replacement assets cease to be used for qualifying purposes or in the case of certain assets on the tenth
anniversary of the acquisition of the replacement asset it may be possible that any future tax arising may be
deferred by subsequent group reinvestment into a qualifying asset it is not anticipated that any of this deferred
tax will become payable in the foreseeable future
9 profit for the financial year
as permitted by section 2304 of the companies act 1985 the profit and loss account of silentnight holdings
plc is not presented as part of these financial statements the profit dealt with in the financial statements of the
company  for the financial year is £4116000 2002 £13356000
10 dividends 2003 2002
£’000 £’000
equity shares
interim paid 25p per share 2002 41p per share 1132 1856
proposed final 60p per share 2002 94p per share 2700 4255
————    ————
total 85p per share 2002 135p per share 3832 6111
————    ————
silentnight holdings plc annual report 2003 40 notes to the financial statements
2001 2000
11 earnings per share
the calculations of loss per ordinary 10p share are based on a loss of £8477000 2002 £8212000 profit
and on the weighted average number of ordinary shares in issue during the year of 45210526 2002
45261280
as described in note 14 the trustee of the employee benefit trust has waived the right to the dividends other
than 001p per share on the shares held by the trustee consequently these shares have been excluded from
the calculation of the weighted average number of shares in accordance with frs14 ‘earnings per share’
diluted earnings per loss have been calculated based on a loss of £8477000 2002 £8212000 profit as
stated above and on the following number of shares
2003 2002
number number
of shares of shares
weighted average number of shares in issue 45210526 45261280
effect of share options 6585 9504
————— —————
45217111 45270784
————— —————
the calculation of normalised earnings per share is based on earnings of £5751000 2002 £8422000 and
on the weighted average number of ordinary shares in issue of 45210526 2002 45261280 the normalised
earnings exclude exceptional operating costs net of tax of £14228000 2002 £210000
12 intangible fixed assets group
goodwill
trademarks
£’000
cost or valuation
at 3 february 2002 and 1 february 2003 2239
—————
provision for amortisation
at 3 february 2002 140
charge for the year 56
impairment 2043
—————
at 1 february 2003 2239
—————
net book value
at 1 february 2003 ––
—————
at 2 february 2002 2099
—————
goodwill arose on the acquisition of ducal limited this year £2043000 of goodwill impairment has been
recognised such that goodwill is written off in full
annual report 2003 silentnight holdings plc 41 silentnight holdings plc annual report 2003 42
plant 
company vehicles
cost £’000
at 3 february 2002 3469
additions 284
intergroup transfers 36
disposals 119
———
at 1 february 2003 3670
———
depreciation
at 3 february 2002 2356
charge for the year 307
intergroup transfers 22
disposals 80
———
at 1 february 2003 2605
———
net book value
at 1 february 2003 1065
———
at 2 february 2002 1113
———
freehold property includes £7199000 2002 £7522000  in respect of land that is not depreciated
prior to the two company acquisitions in december 2000 a professional revaluation of group freehold property
in the uk was undertaken in july 2000 by atl surveys chartered surveyors of nelson lancashire the valuation
was undertaken on the basis of open market value for existing use with the exception of two specialised
properties which were valued on a depreciated replacement cost basis and three other properties which were
valued at open market value with a view to disposal the valuation was prepared in accordance with the
statement of asset valuation practice and guidance notes published by the royal institute of chartered
surveyors
notes to the financial statements
13 tangible fixed assets                                           long           short
freehold leasehold leasehold plant 
group property property property vehicles total
cost or valuation £’000 £’000 £’000 £’000 £’000
at 3 february 2002 34801 35 5755 72045 112636
foreign exchange movements — 1 — 257 258
additions 348 — — 6113 6461
disposals 3376 — — 3641 7017
——— ——— ——— ——— ———
at 1 february 2003 31773 36 5755 74774 112338
——— ——— ——— ——— ———
depreciation
at 3 february 2002 723 34 113 36568 37438
foreign exchange movements — 1 — 206 207
charge for the year 521 — 69 7164 7754
disposals 123 — — 2796 2919
impairment — — — 7031 7031
——— ——— ——— ——— ———
at 1 february 2003 1121 35 182 48173 49511
——— ——— ——— ——— ———
net book value
at 1 february 2003 30652 1 5573 26601 62827
——— ——— ——— ——— ———
at 2 february 2002 34078 1 5642 35477 75198
——— ——— ——— ——— ——— notes to the financial statements
13 tangible fixed assets continued
following the acquisition of cornwell parker plc a professional revaluation of the acquired freehold properties was
undertaken as at december 2000 by hbsv chartered surveyors of london the valuation was undertaken on
the basis of open market value for existing use
the directors have scheduled a full valuation of its existing property portfolio to be completed in 2003 this
valuation will in particular recognise the reorganisation now underway in the branded furniture businesses
on an historical cost basis freehold and leasehold property would have been included at the following amounts
2003 2002
£’000 £’000
cost 33011 34202
aggregate depreciation 3459 3202
———— ————
net book value 29552 31000
———— ————
the net book value of tangible fixed assets under finance leases included in tangible fixed assets amounted to £nil
2002 £8000 the depreciation charge for the year in respect of finance leases was £8000 2002 £80000
group company
2003 2002 2003 2002
future capital expenditure £’000 £’000 £’000 £’000
contracted but not provided for 1319 924 37 60
———— ———— ———— ————
14 investments group company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
investment in subsidiary undertakings — — 105643 104934
investment in own shares 2021 3782 2021 3782
———— ———— ———— ————
2021 3782 107664 108716
———— ———— ———— ————
i
ii
i investment in subsidiary undertakings
company
cost
at 3 february 2002
net movement on loans
liquidation of subsidiary
at 1 february 2003
amount provided
at 3 february 2002
amount provided in the year 
at 1 february 2003
net book value
at 1 february 2003
at 2 february 2002
details of subsidiary undertakings are given in note 29
shares in loans to
subsidiaries subsidiaries total
£’000 £’000 £’000
47877 60010 107887
— 17469 17469
92 — 92
———— ———— ————
47785 77479 125264
47877 60010 107———— ———— ————
1334 1619 2953
16668 — 16668
———— ———— ————
18002 1619 19621
———— ———— ————
465429783 75860 105643 3
———— ———— ————
46543 58391 104934
———— ———— ————
annual report 2003 silentnight holdings plc 43 notes to the financial statements
14 investments continued
ii investment in own shares
group and company
cost £’000
at 3 february 2002 3782
disposals 16
———
at 1 february 2003 3766
———
amount provided
at 3 february 2002 ––
impairment 1745
———
at 1 february 2003 1745
———
net book value
at 1 february 2003 2021
———
at 2 february 2002 3782
———
at 1 february 2003 silentnight share scheme trustee limited held 1585230 2002 1593000 ordinary
shares of which 94 were subject to options granted to employees as trustee of the silentnight holdings plc
executive share option scheme and has waived the right to dividends other than 001p per share on these
shares the market value of the shares held by the trustee at the yearend was £2021000
the impairment in the year recognises the fall in value of the esop shares which have been valued at their
market price as at the year end
details of options granted to directors of the company and the way in which the scheme operates are disclosed
in the directors’ remuneration report on pages 17 to 24
under frs 5 ‘reporting the substance of transactions’ and as required in the uitf abstract 13 ‘accounting for
esop trusts’ the assets and liabilities of an esop employee share ownership plan trust are required to be
recognised as the assets and liabilities of the sponsoring company any administration costs of the silentnight
holdings plc employee benefit trust are charged to the profit and loss account as they accrue
15 stocks
group 2003 2002
£’000 £’000
raw materials and consumables 6777 8089
workinprogress 3616 5665
finished goods 5072 5923
———— ————
15465 19677
———— ————
silentnight holdings plc annual report 2003 44 notes to the financial statements
16 assets held for resale
group 2003 2002
£’000 £’000
cornwell parker plc wholesale fabrics business and associated freehold properties 7671 4— 4000
———— ————
the assets held for resale in 2002 related to cornwell parker plc properties that remained to be sold these
properties have been sold in the year
17 debtors                                                                        group company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
due after more than one year
pension scheme prepayment 1828 5124 1828 —
———— ———— ———— ————
due within one year
trade debtors 34315 38872 1 5
amounts owing by subsidiary undertakings — — 2401 1183
other debtors 742 1393 2548 2052
pension scheme prepayment 800 445 800 —
other prepayments 4145 4366 506 343
———— ———— ———— ————
40002 45076 6256 3583
———— ———— ———— ————
18 creditors amounts falling due within one year group company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
bank overdrafts 169 63 7822 —
amounts owing to parent undertaking 13 18 13 18
amounts owing to subsidiary undertakings —— — 63 88
trade creditors 21866 22834 1172 1055
corporation tax 250 1234 451 3088
other taxation and social security 6280 6898 234 218
deferred pension credit 5— 511 — —
accruals and deferred income 11084 12963 645 2079
proposed dividend 2700 4255 2700 4255
other creditors 2024 1423 1429 112
———— ———— ———— ————
44386 50199 7529 10913
———— ———— ———— ————
19 creditors amounts falling due after more than one year group company
2003 2002 2003 2002
£’000 £’000        £’000 £’000
bank loans 9592 9939 9592 9939
accruals deferred income and other creditors 789 833 — —
———— ———— ———— ————
10381 10772 9592 9939
———— ———— ———— ————
bank loans are repayable as follows
in two to five years 9592 2439 9592 2439
after more than five years — 7500 — 7500
———— ———— ———— ————
9592 9939 9592 9939
———— ———— ———— ————
as at 1 february 2003 the group had £10552000 of undrawn committed borrowing facilities 2002
£13000000 due to expire in more than two years
note
24
24
annual report 2003 silentnight holdings plc 45 notes to the financial statements
20 provision for liabilities and charges group company
deferred
pension credit provided   provided
deferred deferred deferred
pension credit taxation total taxation
£’000 £’000 £’000 £’000
at 3 february 2002 961 2667 3628 118
charged in the year — — — 118
arising in the year — 223 223 —
transferred to pension prepayment 961 — 961 —
———— ———— ———— ————
at 1 february 2003 — 2444 2444 —
———— ———— ———— ————
deferred taxation is included in the financial statements as follows
group 2003 2002
amount amount amount amount
provided unprovided provided unprovided
£’000 £’000 £’000 £’000
capital allowances in advance of depreciation 2890 1570 3164 188
trading losses 145 1061 66 1417
other timing differences 301 1473 431 2068
———— ———— ———— ————
2444 1158 2667 463
———— ———— ———— ————
company 2003 2002
amount amount amount amount
provided unprovided provided unprovided
£’000 £’000 £’000 £’000
capital allowances in advance of depreciation — 6 276 —
trading losses —— 394 175
other timing differences — 320 ——
———— ———— ———— ————
— 326 118 175
———— ———— ———— ————
21 called up share capital number of
shares £’000
ordinary shares of 10p each
authorised at 2 february 2002 and 1 february 2003 60000000 6000
—————— —————
allotted called up and fully paid
at 1 february 2003 46578831 4658
—————— —————
at 2 february 2002 46853831 4685
—————— —————
the reduction in share capital in the year represents the buyback of 275000 shares at a cost of £368000
silentnight holdings plc annual report 2003 46 notes to the financial statements
22 retained profits and reserves share capital
premium revaluation redemption retained
account reserve reserve profit
group £’000 £’000 £’000 £’000
at 3 february 2002 1084 8355 — 80848
retained loss for the year — — —— 12309
revaluation reserve transferred to retained profit — 2712 — 2712
redemption of ordinary shares — — 27 368
foreign exchange adjustments — —— —— 25
———— ———— ———— ————
at 1 february 2003 1084 5643 27 70858
———— ———— ———— ————
the transfer between the revaluation reserve and retained profit results from the sale of properties that had
previously been revalued
the capital redemption reserve arises from the repurchase of the company’s ordinary shares of 10p each
the cumulative total goodwill written off against group retained profits in respect of acquisitions prior to 31
january 1998 when frs 10 ‘goodwill and intangible assets’ was adopted amounts to £6516000 2002
£6516000
no negative goodwill is included within reserves
share capital
premium redemption retained
account reserve profit
company £’000 £’000 £’000
at 3 february 2002 1084 — 94133
retained profit for the year — — 284
redemption of ordinary shares — 27 368
foreign exchange adjustments — — 125
———— ———— ————
at 1 february 2003 1084 27 93924
———— ———— ————
23 lease commitments land and buildings other assets
2003 2002 2003 2002
operating leases £’000 £’000 £’000 £’000
group
at 1 february 2003 the group had annual
commitments under operating leases expiring
as follows
within one year 92 32 379 351
in two to five years 384 335 1065 897
in over five years 657 896 —                —
———— ———— ———— ————
1133 1263 1444 1248
———— ———— ———— ————
other assets
2003 2002
company £’000 £’000
at 1 february 2003 the company had annual
commitments under operating leases expiring as follows
within one year 20 27
in two to five years 112 93
———— ————
132 120
———— ————
annual report 2003 silentnight holdings plc 47 silentnight holdings plc annual report 2003 48
notes to the financial statements
24 pensions
i ssap 24 disclosures
the group operates a number of pension schemes the schemes are funded by contributions from the group and
employees and their assets held in separate trustee administered funds on 1 december 2002 the silentnight
staff retirement benefits scheme and the silentnight holdings plc scheme no 1 merged the ongoing scheme
being renamed the silentnight group db scheme dbs
the total pension cost for the group was £2884000 2002 £2415000 made up as follows
2003 2002
£’000 £’000
uk defined benefit schemes
 dbs 245 —
 silentnight staff retirement benefits scheme 1372 1592
 silentnight holdings plc scheme no 1 400 430
———— ————
2017 2022
 ssap 24 net credit 356 832
———— ————
1661 1190
uk defined contribution schemes 1185 1160
overseas schemes 38 65
———— ————
2884 2415
———— ————
the pension cost relating to the defined benefit schemes is assessed in accordance with the advice of
professionally qualified actuaries using the projected unit method
the last formal valuation of the silentnight staff retirement benefits scheme took place as at 1 january 1999
and this showed the market value of the assets to be £27098000 the actuarial value of the assets was
sufficient to cover 102 of the benefits due to members calculated on the basis of pensionable earnings and
service as at the date of the valuation and on an ongoing basis
the last formal valuation of the silentnight holdings plc scheme no 1 took place as at 5 april 2000 and this
showed the market value of the assets to be £64019000 the actuarial value of the assets was sufficient to
cover 108 of the benefits due to members calculated on the basis of pensionable earnings and service as at
the date of the valuation and on an ongoing basis
the principal assumptions used for the purposes of these financial statements are
rate of investment growth 85 per annum
rate of salary growth 65 per annum
rate of dividend growth 4 per annum
rate of pension increases 425 per annum
a prepayment of £2628000 is included in debtors in respect of the dbs as at 2 february 2002 a provision
of £1472000 was included in creditors in respect of the silentnight staff retirement benefits scheme and a
prepayment of £5569000 was included in debtors in respect of the silentnight holdings plc scheme no 1
the unpaid contributions outstanding at the year end in respect of the uk defined contribution schemes included
in creditors note 18 are £88000 2002 £90000
the charge of £37800 2002 £64700 relating to an overseas scheme has been determined in accordance
with the local best practice and regulations in the relevant country annual report 2003 silentnight holdings plc 49
notes to the financial statements
24 pensions continued
ii frs 17 disclosures
the information disclosed is required by the transitional provisions of frs 17
frs 17 if implemented in full will require immediate recognition in the balance sheet of the net surplus or deficit
in the dbs calculated as at the balance sheet date the standard requires the assets to be measured at their
market value and the liabilities to be discounted at the rate of return available on high quality corporate bonds
both at the balance sheet date
the values of the defined benefit scheme assets under frs 17 have been determined by the actuary based on
the results of the actuarial valuation as at 1 february 2003 and 2 february 2002 and using the following
assumptions
silentnight  silentnight
silentnight staff retirement holdings plc
db scheme benefits scheme scheme no 1
 per annum  per annum  per annum
rate of increase in salaries 35 40 40
rate of increase in pensions in payment
 all 22 25  — 
 pre 6 april 1997 — — 35
 post 6 april 1997 — — 25
rate of revaluation of pensions in deferment 22 25 25
price inflation 22 25 25
discount rate 54 56 56
the assets in the scheme and the expected rates of return were as follows
expected market expected market expected market
longterm value of longterm value of longterm value of
return assets return assets return assets
 £’000  £’000  £’000
equities 79 48855 75 26094 75 41500
bonds  government 44 20472 49 11317 49 3800
bonds  corporate 52 6250 56 2553 56 7200
property 79 1808 — — 75 2000
cash 35 958 45 170 45 600
———— ———— ————
total 78343 40134 55100
———— ———— ————
an analysis of the defined benefit cost for the year to 1 february 2003 is as follows
£’000
current service cost 3575
settlements or curtailments 1579
————
total operating charge 1996
————
expected return on pension scheme assets 6499
interest on pension scheme liabilities 5709
————
total other finance income 790
————
2003 2002
2003
silentnight db scheme
silentnight holdings plc
scheme no 1
silentnight staff retirement
benefits scheme
2002 notes to the financial statements
24 pensions continued
analysis of the amount recognised in the consolidated statement of total recognised gains and losses
2003
£’000
actual return less expected return on pension scheme assets 21890
experience gains and losses arising on the scheme liabilities 1611
changes in assumptions underlying the present value of the scheme liabilities 1900
————
actuarial loss that would be recognised in the consolidated statement 
of total recognised gains and losses 21601
————
analysis of movements in deficit during the year
2003
£’000
deficit in scheme at beginning of the year 6705
movement in year
current service costs 3575
contributions 2448
settlementscurtailments 1579
other finance income 790
actuarial loss 21601
————
deficit in scheme at end of the year 27064
————
following the merger of the two schemes employer contributions have been agreed at 125 and employee
contributions at 6
history of experience gains and losses 2003
difference between the expected and actual return on scheme assets
amount £’000 21890
percentage of scheme assets 28
experience gains and losses on scheme liabilities
amount £’000 1611
percentage of scheme liabilities 2
total amount recognised in consolidated statement of total recognised gains and losses
amount £’000 21601
percentage of scheme liabilities 20
the estimated financial position as at 1 february 2003 and 2 february 2002 was as follows
silentnight staff silentnight
silentnight retirement benefits holdings plc
db scheme scheme scheme no 1
£’000 £’000 £’000
total market value of assets 78343 40134 55100
present value of scheme liabilities 105407 47539 54400
———— ———— ————
deficitsurplus in the scheme 27064 7405 700
———— ———— ————
related deferred tax assetliability 8120 2222 210
———— ———— ————
net pension liabilityasset 18944 5183 490
———— ———— ————
2003 2002
silentnight holdings plc annual report 2003 50 notes to the financial statements
24 pensions continued
reconciliations of the profit and loss account and net assets under frs 17
a  profit and loss account
group 2003 2002
£’000 £’000
profit and loss reserve as stated in the balance sheet 70858 80848
ssap 24 balance 2628 4097
———— ————
profit and loss reserve excluding amounts relating to defined benefit asset 68230 76751
frs 17  deficit in the dbs 18944 —
frs 17  deficit in the silentnight staff retirement benefits scheme — 5183
frs 17  surplus in the silentnight holdings plc scheme no 1 — 490
———— ————
profit and loss reserve including amounts relating to defined benefit liabilitiesasset 49286 72058
———— ————
company 2003 2002
£’000 £’000
profit and loss reserve as stated in the balance sheet 93924 94133
ssap 24 balance 2628 —
———— ————
profit and loss reserve excluding amounts relating to defined benefit asset 91296 94133
frs 17  deficit in the dbs 18944 —
———— ————
profit and loss reserve including amounts relating to defined benefit liability 72352 94133
———— ————
b  net assets
group 2003 2002
£’000 £’000
net assets as stated in the balance sheet 82270 94972
ssap 24 balance 2628 4097
———— ————
net assets excluding defined benefit asset 79642 90875
frs 17  deficit in the dbs 18944 —
frs 17  deficit in the silentnight staff retirement benefits scheme — 5183
frs 17  surplus in the silentnight holdings plc scheme no 1 — 490
———— ————
net assets including defined benefit liabilitiesasset 60698 86182
———— ————
company 2003 2002
£’000 £’000
net assets as stated in the balance sheet 99693 99902
ssap 24 balance 2628 —
———— ————
net assets excluding defined benefit asset 97065 99902
frs 17  deficit in the dbs 18944 —
———— ————
net assets including defined benefit liability 78121 99902
———— ————
annual report 2003 silentnight holdings plc 51 ii analysis of net debtfunds
cash at           short debt due
bank and term bank after net
in hand deposits overdraft 1 year debtfunds
£’000 £’000 £’000 £’000 £’000
at 3 february 2002 4128              487 63 9939 5387
cash flow
increase in cashbank overdraft 2317 —    106 — 2211    
increase in shortterm cash deposits — 10433                    — — 10433
decrease in bank loans — — — 530 530
exchange differences 27 — — 183 210
——— ——— ——— ——— ———
at 1 february 2003 6418 10920 169 9592 7577
——— ——— ——— ——— ———
the group includes shortterm cash deposits as liquid resources
26 financial instruments
the group’s financial instruments comprise borrowings some cash and liquid resources and various items such
as trade debtors and trade creditors that arise directly from its operations the main purpose of these financial
instruments is to raise finance for the group’s operations
treasury management
the group’s treasury policy is designed to minimise risk whilst ensuring that adequate and costeffective
arrangements are in place to support planned activities
in the analysis overleaf the group has taken advantage of the exemption contained within frs 13 ‘derivatives
and other financial instruments’ to exclude disclosures relating to shortterm debtors and creditors
silentnight holdings plc annual report 2003 52
notes to the financial statements
25 notes to the consolidated cash flow statement
i reconciliation of operating lossprofit to operating cash flow 2003 2002
£’000 £’000
operating lossprofit 10550 12296
depreciation 7754 7885
amortisation of intangible assets 56 123
lossprofit on sale of fixed assets 248 49
fixed asset impairment in the furniture division 7031 —
goodwill impairment 2043 —
esop impairment 1745 —
decrease in stocks 3595 113
decreaseincrease in debtors 8352 2960
decrease in creditors 4818 4733
———— ————
net cash inflow from operating activities 15456 12675
———— ———— notes to the financial statements
26 financial instruments continued
interest rate risk
the group finances its operations through a mixture of retained profits bank overdrafts and mediumterm loans
the currency profile of the group’s floating cash holdings and shortterm investments was
1 february 2 february
2003 2002
£’000 £’000
sterling 16908 4004
euros 186 416
us dollars 197 160
other 47 35
———— ————
17338 4615
———— ————
the floating rate financial assets comprise other deposits that earn interest based on shortterm deposit rates
and local currency base interest rates
the interest rate and currency profile of the group’s financial liabilities was
1 february 2 february
2003 2002
£’000 £’000
sterling 7500 7503
euros 2261 2499
———— ————
9761 10002
———— ————
the floating rate financial liabilities comprise mediumterm loans bank borrowings and overdrafts that bear
interest rates linked to base interest rates
currency risk
as at 1 february 2003 after taking into account the effects of forward foreign exchange contracts the group had
no material currency exposures relating to trading activities
the group limits its foreign currency exposure through normal market mechanisms such as forward currency
purchases where goods are bought in foreign currencies the group aims to cover forward the full value of all
committed purchases the group does not enter into speculative arrangements in that all transactions in
financial products are matched to an underlying business requirement such as planned purchases
there are no material unrecognised gains or losses on instruments used for hedging
liquidity risk
the group’s policy has throughout the year been to ensure continuity of funding the group has mediumterm
loan facilities which are sufficient for current needs shortterm flexibility is achieved by overdraft facilities the
group’s borrowings are all unsecured and its borrowing capacity is greatly in excess of that which is taken the
maturity profile of the group debt and borrowing facilities are set out in notes 18 and 19
given the nature of the group’s financial assets and liabilities it is the directors’ opinion that there is no material
difference between their reported book values and estimated fair values
27 ultimate holding company
the largest and only group in which the results of the company are consolidated is that headed by the company’s
ultimate holding company famco holdings limited ‘famco’ which is incorporated in great britain the
consolidated accounts of famco are available to the public and may be obtained from companies house crown
way cardiff cf14 3uz
annual report 2003 silentnight holdings plc 53 notes to the financial statements
28 related party transactions
as noted in the directors’ report on page 14 the company has a contract with famco principally in respect of
the provision of taxation and pensions advice payments to famco in respect of these services during the year
ended 1 february 2003 amounted to £109000 2002 £123000 as at 1 february 2003 amounts owed to
famco in respect of these services totalled £13000 2002 £18000 apart from these charges the group
was reimbursed £99000 2002 £94000 by famco for pension and similar benefits incurred by the group in
respect of employees of famco as at 1 february 2003 amounts owed by famco in respect of these costs
totalled £nil 2002 £nil
during the year purchases were made of £582000 2002 £395000 at normal market prices by group
companies from marsden vanplan plc of which mr j clarke is a director and controlling shareholder £2000
was outstanding at 1 february 2003 2002 £55000
29 principal subsidiary undertakings
i  companies incorporated in great britain
company location
abf limited 100 of ordinary shares of £1 each
directly held which trades as
silentnight beds barnoldswick lancashire
pl beds batley west yorkshire and           
wombwell south yorkshire
sealy united kingdom aspatria cumbria
pocket spring bed company skipton north yorkshire
silentnight furniture sunderland tyne  wear 
westminster bedsteads wrexham clwyd
sherbury salterforth lancashire
ossett felts ossett west yorkshire
silentnight ireland mallusk northern ireland
silentnight limited salterforth lancashire
100 of ordinary shares of £1 each indirectly held
rest assured limited batley west yorkshire
100 of ordinary shares of £1 each directly held
ducal limited andover hampshire
100 of ordinary shares of £1 each directly held
cornwell parker properties limited salterforth lancashire
100 of ordinary shares of 5p each directly held
cornwell parker furniture limited chipping norton oxfordshire
100 of ordinary shares of £1 each indirectly held edmonton london and high wycombe 
buckinghamshire
ii  overseas company  directly 
issued share capital held
silentnight houben gmbh germany c2173000 100
other subsidiaries have not been shown because they are either dormant or not material 
all the listed subsidiary undertakings are involved in the manufacture of beds and furniture with the exception
of silentnight limited and cornwell parker properties limited the group’s property companies
–
silentnight holdings plc annual report 2003 54 annual report 2003 silentnight holdings plc 55
notes to the financial statements
30 contingent liabilities
i  bank guarantees
the company has provided cross guarantees in respect of certain bank loans and overdrafts of its subsidiary
undertakings the gross cross guarantees at 1 february 2003 totalled £7263000 2002 £13096000
ii  potential insurance premium
the company has a maximum exposure of £307000 in respect of the premium payable for its employers
liability insurance policy for the period from 31 october 2001 to 1 february 2003
iii  potential defined benefit pension liability
as part of the process of the merging of our two defined benefit pension schemes in the year and based on
actuarial advice the company has undertaken to pay up to £2000000 into the merged scheme in the event
of its windup within a period of five years commencing on 1 january 2002
31 post balance sheet event
on 4 april 2003 the company announced its proposal to close ducal’s andover and bridgend sites with effect
from 4 july 2003 silentnight holdings plc annual report 2003 56
notice of annual general meeting
notice is hereby given that the thirty third annual general meeting of the company will be held at the silentnight
exhibition centre salterforth barnoldswick lancashire on wednesday 25 june 2003 at 12 noon for the following
purposes
ordinary business
1 to receive and consider the company’s annual financial statements for the 52 weeks ended 1 february
2003 together with the directors’ report and the auditors’ report thereon
2 to approve the directors’ remuneration report
3 to declare a final dividend
4 to reelect mr dw adam as a director
5 to elect mr ra pedder as a director
6 to elect mr n allenza as a director
7 to elect ms m scott as a director
8 to reappoint ernst  young llp as auditor and to authorise the directors to agree their remuneration
special business
9 to consider and if thought fit pass the following resolution which will be proposed as a special resolution
a that in accordance with article 48 of the company’s articles of association and chapter vii of part v of the
companies act 1985 ‘the act’ and subject to paragraph b of this resolution the company be and is
hereby granted general and unconditional authority pursuant to section 163 3 of the act to make market
purchases of its own ordinary shares of 10p each ‘ordinary shares’ on such terms and in such manner as
the board of directors of the company may from time to time determine
b the authority conferred by paragraph a of this resolution shall
i expire at the conclusion of the next annual general meeting of the company save that the company
before the expiry of the authority may enter into any contract for the purchase of ordinary shares which
might be executed and completed wholly or partly after its expiry
ii be limited to the purchase of a maximum of 4657000 ordinary shares and
iii not permit the payment per ordinary share of more than 5 per cent above the average of the middle
market quotations for an ordinary share derived from the london stock exchange daily official list for
the five business days immediately preceding the day on which any purchase by the company of
ordinary shares is made or less than 10p exclusive in each case of expenses payable by the company
c the authority conferred by this resolution shall only be capable of variation revocation or renewal by the
company in general meeting
on behalf of the board
dw adam director
silentnight house
salterforth barnoldswick lancashire bb18 5ue                                                                 16 may 2003 annual report 2003 silentnight holdings plc 57
notice of annual general meeting
notes
1 a shareholder entitled to attend and vote at the above meeting is entitled to appoint one or more proxies
to attend and vote instead of himher a proxy need not be a shareholder of the company a form of proxy
is enclosed with this annual report for the use of shareholders unable to attend the meeting returning a
proxy card duly completed will not preclude a shareholder from attending the meeting and voting in person
2 the register of directors’ interests in shares of the company and copies of directors’ service contracts are
available for inspection during business hours at the registered office of the company from the date of this
notice until the date of the meeting and at the place of the meeting for at least fifteen minutes prior to and
during the meeting
3 if approved the dividend will be paid on 4 july 2003 to shareholders registered on 6 june 2003
4 pursuant to regulation 41 of the uncertified securities regulations 2001 the company specifies that only
those holders of ordinary shares registered in the register of members of the company as at 6pm on monday
23 june 2003 shall be entitled to attend or vote at the meeting in respect of the number of shares
registered in their names at that time changes to entries on the register of members after 6pm on monday
23 june 2003 shall be disregarded in determining the rights of any person to attend or vote at the meeting silentnight holdings plc annual report 2003 58
five year summary
1999 2000 2001 2002 2003
profit and loss account £’000 £’000 £’000 £’000 £’000
turnover 236074 219682 230082 300293 277311
———— ———— ———— ———— ————
profitloss before taxation 16289 40013 13949 12110 11247
taxation 5278 14531 4644 3898 2770
———— ———— ———— ———— ————
profitloss attributable to shareholders 11011 25482 9305 8212 8477
dividends 5431 5839 6111 6111 3832
———— ———— ———— ———— ————
retained earnings 5580 19643 3194 2101 12309
———— ———— ———— ———— ————
earningsloss per ordinary 10p share 2433p 5630p 2056p 1814p 1875p
normalised earnings per ordinary 10p share 2433p 2890p 2290p 1861p 1272p
net dividends per share 1200p 1290p 1350p 1350p 850p
balance sheet £’000 £’000 £’000 £’000 £’000
fixed assets 60200 47133 78263 81079 64848
net current assets 14924 43030 29198 28293 30247
longterm liabilities 13747 2969 14631 14400 12825
———— ———— ———— ———— ————
capital and reserves 61377 87194 92830 94972 82270
———— ———— ———— ———— ————
net assets value per 10p share 1310p 1861p 1981p 2027p 1766p
includes £21472000 profit on disposals of businesses and properties
results for the years prior to 2001 have not been restated to reflect the effects of frs 19 ‘deferred tax’ annual report 2003 silentnight holdings plc 59
five year summary
1999 2000 2001 2002 2003
£m
2361
2197
1999 2000 2001 2002 2003
£m
163
400
1999 2000 2001 2002
pence
2433
5630
1999 2000 2001 2002 2003
£m
614
872
turnover profit before taxation
earnings per ordinary share capital and reserves
185

2890

  before profits on disposals of businesses and properties
 after exceptional operating costs of £161m
2301
139
2056
928
3003
121
1814
950
restated restated
2773
49
112
823
2003
1875 c  2003 silentnight holdings plc silentnight holdings plc
registered office 
silentnight house salterforth barnoldswick lancashire bb18 5ue
tel 01282 815888  fax 01282 850409
wwwsilentnightholdingscouk
registered no 971583


Summary:
 chief executive’s review
“a shared vision”
one of the most important aspects of leadership is to
ensure that all of the group’s employees have and
share a positive vision for the business  our working
environment must therefore allow us to do the things
that will deliver that shared vision at the senior
management’s first strategic planning conference
since the management change in november 2002
we debated and agreed a new vision statement for the
group which i am pleased to be able to share with you
so quickly …
although succinct i believe that this is a powerful and
ambitious vision that all of the group’s employees will
be proud to aspire to our longterm strategies going
forward will be geared to delivering this vision so that
we maintain and build on our no 1 position in the uk
bed and furniture market
overview
the last six months have seen a change of leadership
of the group which can be disruptive i have been very
impressed by the commitment i see within our
businesses and the enthusiasm many of our
employees have expressed for our future plans and the
challenges ahead how well we manage and
communicate change will determine our success
the management team has been strengthened in a
number of our businesses this coupled with a more
consensual style of decisionmaking has been well
received within the organisation this is particularly
important given the challenges of a more difficult
trading climate
total sales in the year declined by 8 to £2773
million and operating profits before exceptional costs
have reduced to £56 million from £125 million the
uk bed division grew sales by 4 to £1686 million
with profits declining by 1 to £155 million but in an
increasingly competitive market  in addition a
continuing decline in the furniture division saw sales
in the year reduce by 22 to £973 million and
operating losses before exceptional costs increase to
£99 million from £32 million
uk bed division
our commissioned market statistics from gfk indicate
that the retail market for beds increased by just 1 in
2002 but which is still lower than the 2000 level the
market grew in volume by 7 reflecting the negative
impact of falling average selling prices caused by
pressure from a very competitive market place and a
continuing trend towards lower cost bedsteads
source  gfk
there are a number of new product initiatives
underway to address this static market silentnight
beds has launched “my first bed” which won the best
bed design award at the january 2003 furniture show
and is achieving its target for retailer floor model sets
sealy will be introducing a new addition to its product
range in the summer of 2003 building on its
outstanding reputation for high quality beds layezee
is investing more in marketing to increase its retailer
profile as part of a substantial new product launch in
august 2003 rest assured and pocket spring bed
company continue to enjoy an increasing market
share of the pocket beds sector on the back of a high
quality product range and excellent customer service
nino allenza
chief executive
silentnight group’s bed and
furniture brands will be the
most innovative and sought
after in the uk market
4 silentnight holdings plc annual report 2003
sept
1998
sept
1999
sept
2000
sept
2001
sept
2002
uk bed market volume and value
4500
4000
3500
3000
2500
2000
1500
1000
500
0
£1400000
£1200000
£1000000
£800000
£600000
£400000
£200000
£0
market value £’000
market volume ‘000
volume
value annual report 2003 silentnight holdings plc 5
furniture division
the branded furniture businesses cornwell parker and
ducal have never been properly integrated into the
group since their acquisition in 2000 the true cost of
this strategy has been substantial original gross
purchase price including debt taken over of £45
million operating losses of £131 million and
substantial exceptional operating costs as we now try
to restructure the businesses  asset disposals etc
have realised £23 million  if we couple this with their
deteriorating market position and the drain on group
management time it has been an unhappy and
demanding episode for all concerned
i am pleased to say that new management has been
installed within both businesses they are working hard
to try to lift morale and steer our people through a new
strategy which is aimed at putting the brands on a
stronger footing from the beginning of 2004 the plans
involve a radical restructuring which includes changes
to the product range improved customer service and
more efficient organisational structures competition
from low cost imports has intensified we are
responding to this by adapting the business model to
incorporate where appropriate the retention of highly
skilled assembly and finishing capability whilst putting
in place a supply chain to exploit the opportunities that
exist in low cost countries we will not compromise on
quality or design as these are essential ingredients for
the success of our brands 
hence it is with great regret that we have had to
announce a high level of redundancies as a
consequence of this restructuring as a group we take
any loss of jobs extremely seriously we are providing
outplacement counselling and working hard to help our
people back into good employment as soon as
possible
silentnight furniture in sunderland has successfully
incorporated the transfer of our keighley operation
which has helped to realign capacity with lower
demand and reduce our operational gearing the
business however continues to suffer a reduction in
sales and operating performance  it is trying to rebuild
confidence within its workforce and improve quality
and has agreed a three year pay deal with the unions
which is linked to more flexible working this is an
important move forward which will provide a valuable
platform to drive through its operational improvement
program on quality costs and delivery
against this background the furniture division’s sales
reduced by 22 to £973  million and losses
increased by £67 million to £99 million this is
clearly an unsustainable position which is now being
tackled with a high level of urgency  the aggregate
exceptional operating costs of turning these
businesses round are expected to be over two years
in the order of £29 million 6 silentnight holdings plc annual report 2003 7 annual report 2003 silentnight holdings plc
chief executive’s review
germany
the german market remains very weak resulting in a
further fall of 12 in sales to £114 million with a
resultant reduction of £02 million in profits to a small
loss of £2000 the business has a high exposure to
the low cost discounting sector which makes it
vulnerable to continuing margin pressure a new
marketing plan is being put in place to help reposition
the business to give it a broader customer base within
higher value added sectors
operational excellence
a detailed review of operations was carried out in
october 2002 this has led to the launch of
operational excellence a groupwide initiative to help
bring a substantial improvement at all of our sites and
introduce a culture of continuous improvement
this initiative is being led by peter marchant group
operations director and includes the implementation
of a scorecard of key performance indicators by which
all of the businesses are now measured
at each site the operational excellence programme
will consist of a different set of projects and initiatives
depending on the current size and situation of that
company it has like any other major change to be
directed led and controlled to assure success
standard project management procedures establish
the principle of a steering group to approve monitor
and close all the various initiatives supporting the
overall programme
an extensive program of training for first line
management has begun to ensure that those most
affected by the new ways of working are equipped with
the necessary skills to lead and manage their teams
and the change process the training will include
leadership skills communication project management
and problemsolving techniques as well as an
introduction to the principles of lean manufacturing
prospects
the current market conditions continue to be
challenging we have seen consumer demand for our
products tailing off in all channels during february
march and april 2003 there is usually a seasonal
decline as the january sales come to an end but
retailers are concerned that things seem worse than
usual this year continued uncertainty about the gulf
situation a declining stock market and a stalling
house market are all mentioned as contributory
factors weakening consumer demand coupled with
pressure from key customers for improved trading
terms and rising raw material prices mean that uk
bed and furniture manufacturers are currently facing
an extremely difficult trading climate
this trading background places even more importance
on the initiatives underway on new product
introductions the repositioning and relaunch of our
furniture businesses and the improvement in our
operational processes these will undoubtedly bring
improved performance in the medium term 
nino allenza
chief executive