2315804  proof 2  14032014
annual report and accounts
january 2014 2315804  proof 2  14032014
next is a uk based 
multichannel 
retailer offering 
exciting beautifully 
designed excellent 
quality clothing 
footwear 
accessories and 
home products
next distributes through 
three main channels next 
retail a chain of more than 
500 stores in the uk and eire 
next directory our home 
shopping division with almost 
4 million active customers in 
the uk and overseas and next 
international retail with almost 
200 mainly franchised stores
consolidated accounts
72 consolidated income 
statement
73 consolidated statement 
of comprehensive 
income
74 consolidated balance 
sheet
75 consolidated statement 
of changes in equity
76 consolidated cash flow 
statement
77 group accounting 
policies
81 notes to the 
consolidated financial 
statements
parent company accounts
108 independent auditor’s 
report on the parent
109 parent company  
balance sheet
110 parent company 
statement of changes  
in equity
111 notes to the parent 
company financial 
statements
additional information
112 half year and sector 
analysis
112 five y ear history
113 notice of meeting
120 other information
business reports
  1 highlights
  2 strategic report
  2 chairman’s statement
  3 chief executive’s review
18 business model
19 key performance   
indicators
20 risks  uncertainties
22 employees
23 social community  
human rights
24 environmental matters
26 directors’ report 
including annual general 
meeting   other matters
governance
31 directors’ responsibilities 
statement
32 directors and officers
33 corporate governance
38 remuneration report
70 independent auditor’s 
report on the group
this document contains forward looking statements 
— see the important information on page 121 2315804  proof 2  14032014
highlights
•	sales up 54 to over £37bn and 
underlying profit growth of 118 to 
£695m
•	strong net cash generation of £271m 
before share buybacks of £296m
•	eps and ordinary dividend both up 
23 dividend remains covered 28 
times
•	special dividends announced for 
2014 50p paid in february and 50p 
payable in may
•	strategy remains focused on products 
profitability and returning cash to 
shareholders
revenue
underlying continuing 
business
54
jan 14 £3740m
jan 13 £3548m
jan 12 £3441m
jan 11 £3298m
jan 10 £3261m
profit before tax
underlying continuing 
business
118
jan 14 £695m
jan 13 £622m
jan 12 £570m
jan 11 £543m
jan 10 £499m
earnings per share
underlying
230
jan 14 3661p
jan 13 2977p
jan 12 2554p
jan 11 2219p
jan 10 1885p
dividends per share
excluding special 
dividends
229
jan 14 129p
jan 13 105p
jan 12 90p
jan 11 78p
jan 10 66p
additional information parent company accounts governance consolidated accounts business reports
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strategic report
chairman’s statement 
the year to january 2014 was a great year for next  underlying earnings per share grew by 23 to 366p and we 
propose to increase our full year ordinary dividends by 23 to 129p in total  this is the fifth consecutive year that 
our earnings per share and ordinary dividend have grown by over 15  in addition in february we paid a special 
dividend of 50p a share and have announced a further special dividend of 50p to be paid in may  
sales for next directory our online and catalogue business grew by 124 narrowing the gap with next retail 
which grew by 17  the two businesses are complementary and support each other in an effective and  
efficient way  operating margins in both businesses increased during the year  the group’s underlying profit  
before tax rose 118 to £695m
cash flow was again strong and we continued our share buybacks purchasing 62 million shares at an average 
price of £4740 and reducing our shares in issue by 38  during the year we returned £461m to shareholders 
through share buybacks and dividends
our share price again performed well rising by 55 to £6280  as a result of the increase we stopped buying  
back our own shares at the end of october and have instead started to return surplus cash to shareholders 
through special dividends  we will reconsider buybacks when to do so would give an effective 8 return on the 
cash invested
during the year there have been a number of changes to the board  andrew varley who had been a director for  
23 years retired from the board in may 2013  andrew has been with next for 29 years serving in various  
senior roles  on behalf of the board i would like to thank him for all he has done for next particularly as our  
group property director
christine cross who has made a much valued and active contribution to the group as a nonexecutive 
director has served for 9 years and will step down from the board at the agm in may  we are currently  
searching for a new nonexecutive and will make an announcement in due course  jonathan dawson  
our senior independent director who has also served 9 years has agreed to stay on the board for one further year
i am delighted to welcome onto the board michael law our group operations director and jane shields our 
group sales and marketing director  both joined the board last july
the strength of our group is built on the hard work and productivity of our management team and all the 
people who work for next  i would like to thank them all for their contribution during the year and especially for  
the excellent performance through the busy christmas period
that performance gives us a solid platform for 2014  our strategy remains the same focused on our products  
our profitability and returning cash to our shareholders  notwithstanding the continued pressure on the uk 
consumer we anticipate another year of growth for next
john barton 
chairman
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chief executive’s review
overview
next has had another good year achieving 54 growth in sales and 118 growth in underlying profit before tax  
strong cash generation enabled us to buy back 38 of shares outstanding without increasing financial leverage 
which along with a lower tax rate resulted in earnings per share eps growing much faster than profits
in the year to january 2014 underlying posttax eps grew by 23  our full year dividend is being increased in 
line with eps to 129p in total  we have announced two special dividends each of 50p per share  the first was  
paid on 3 february and the second is payable on 1 may
revenue excluding v at
january 
2014 
£m
january 
2013 
£m
next retail 22276 21909 17
next directory 13410 11926 124
next brand 35686 33835  55
other 1714 1643  43
total 37400 35478  54
profit and eps 
underlying excluding 2013 exceptionals
january 
2014 
£m
january 
2013 
£m
next retail 3477 3311  50
next directory 3585 3021 187
other 166 170
operating profit 7228 6502 112
net interest 276 286
profit before tax 6952 6216 118
taxation 1420 1485
profit after tax 5532 4731 169
eps 3661p 2977p 230
ordinary dividends per share 1290p 1050p 229
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strategic report
next plc economics
2014 profit drivers
the table below sets out the main drivers of the group’s profit and loss account for the year  this shows how the 
sales from 1 new retail space and 2 online increased profit  our existing stores 3 made the same profit as 
last year  it also shows how 4 cost inflation has been more than offset by 5 cost savings
profit year ending jan 2013 £622m
profit from sales increasesdecreases
1 profit from new space  £12m
2 profit from additional online sales growth  £48m
3 costprofit of existing stores –
 £60m  97
cost increases and savings 
4 inflation in cost base – £59m
5 cost savings  £72m
 £13m  21
profit year ending jan 2014 £695m 118
  
 
201213
£622m
201314
£695m
directory
£48m
space
£12m
cost savings
£72m
cost increases
£59m
550 560 570 580 590 600 610 620 630 640 650 660 670 680 690 700 710
straightforward objectives
next’s operating objectives
the company has five operational objectives as set out in the table below  these aims remain broadly  
unchanged from those given in this report last year  the only significant change is the addition of  
improving customer service as a goal for the year ahead
develop the next 
brand
develop improve and expand our product ranges with particular emphasis on 
improving design across all our ranges
invest in online 
growth
invest in growth from our online business through improving uk delivery services 
developing new overseas markets and expanding our online product offer   
invest in profitable 
new space
open profitable new retail space maintaining the company’s strict payback and 
profitability hurdles of 15 net store profit before central overheads and payback on 
net capital invested in 24 months   
improve service improve the quality of our service to customers provided by staff both in stores and in 
our call centres
control costs control costs through constantly developing more efficient ways of operating  this must 
be done without detracting from the quality of our products and services   
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next’s financial objective
for the last ten years next has had one clear financial objective to deliver long term sustainable growth in 
earnings per share eps  this objective is grounded in the belief that over time share price growth will follow 
growth in eps  the graph below shows how our share price has indeed tracked eps over the last 15 years  
albeit that some patience has been required
1999 00 01 02 03 04 05 06 07 08 09 10 11 12 2013
■ pe ratio
■ eps
    share price right hand scale
 2013 pe based on share price of £65
255p
£70
£60
£50
£40
£30
£20
£10
£0
39p
46p
58p
69p
94p
120p
127p
146p
169p
156p
188p
222p
298p
366p
127 167 163 111 138 132 133 133 82 70 104 90 103 136 178
the graph also demonstrates the historically high rating the shares currently enjoy  in our annual report last 
year we set out the criteria by which we would decide the maximum price we would pay to buy back shares  
we introduced the concept of equivalent rate of return err  err is the return required from an alternative  
investment if that investment were to produce the same level of earnings enhancement as the proposed buyback
we set the minimum err at 8 which we consider a reasonable target for a return on equity investments  in 
november last year as our shares continued to rise the err on share buybacks fell below the 8 threshold  
as a result we introduced rolling special dividends in place of buybacks  we intend to continue distributing  
surplus cash through special dividends paid on a quarterly basis until such time as the err rises above 8  
whilst the underlying financial objective of the group remains unchanged in principle the introduction of special 
dividends mean that our financial goal is now better expressed as the delivery of long term sustainable growth 
in total shareholder returns where total shareholder returns are defined as growth in eps added to the total 
annual dividend yield
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strategic report
product and the next brand
unlike many high street retailers next designs and directly sources the vast majority of its products  we can  
do more to leverage our design resources and sourcing base to produce better quality fabrics print designs 
trim detailing and make up  in particular we will continue to push our design teams to adopt new trends in  
depth and with conviction  this approach of taking greater fashion risks may sound counterintuitive but in today’s 
fast moving fashion environment to fall back on “safe” historical ranges would merely guarantee failure  on  
the whole our experience is that where we have been braver in buying into new trends we have been successful
we have also adjusted our buying cycle to reflect the continuing trend for consumers to buy closer to the point 
at which they need the clothing  our aim is to increase the availability of cold weather clothing in january 
february and march and warm weather clothing in august and september  going forward we will move  
away from a two season buying cycle to a four season cycle and our customers will see a bigger change from 
spring into summer in april and autumn into winter in october
over the last 6 years we have made significant progress in developing our home business  trading space has  
more than doubled to 17 million square feet and home sales now account for 18 of our total turnover  over  
the next few years we intend to grow home further by adding retail space and improving our online functionality
retail
retail sales
total retail sales were 17 ahead of last year of which new space contributed 31
full price sales grew by 29  markdown sales were 11 down as a result of stock for sale being 15 lower than 
last year  this unusually low level of markdown came as a result of a last minute sales surge immediately before the 
summer and winter sales  in the year ahead we expect markdown levels to return to more normal levels
retail space expansion
space added in the year
trading space increased by 280000 square feet over the year taking us to 7 million as shown below  
store 
numbers
sq  ft
000’s
january 2013  540 6728
new stores 11 192
closures –10 – 67
resites 8 and extensions 13 – 155
january 2014 541 7008  4
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portfolio shape and profitability
whilst our space increased by 4 the number of stores barely changed  much of our new space has come 
from extending and relocating in existing trading locations  stores in new locations have been offset by the 
closure of smaller less profitable shops  as a result of this active management of our less profitable stores  
our mainline portfolio remains highly profitable despite continuing negative like for like sales in many locations  
more than 90 of our sales come from stores which deliver more than 15 profit contribution on sales  
mainline store profitability percentage of turnover
20
15
10
5
0
76
91
96
98
995
rental inflation remains very low with most stores experiencing little or no increase at rent review  in the vast 
majority of cases when stores reach the end of their lease we have been able to reduce rents
returns on capital and profitability
profitability of stores opened in the last 12 months is forecast to average 22 and payback on the net capital 
invested is expected to be 19 months  both figures are within company investment hurdles of 15 store profitability 
and 24 months capital payback  
new space
sales vs 
target
forecast 
profitability
forecast 
payback
fashion  44 22 19 months
large home format  35 21 22 months
total  43 22 19 months
retail space – pipeline 
we continue to look for opportunities to profitably increase uk selling space  for the coming year we expect  
to add 360000 square feet net of closures  we expect 113000 of this to come from three large home  
format outoftown stores  for two of these shops maidstone kent and hedge end near southampton they  
are being built from the ground up to our own design enabling us to ensure that the architecture of the building 
reflects the aspirations of our brand
retail service
if our customers were to be asked to rate next’s service we believe many would say it was generally good 
but not consistently exceptional  we think that we have an opportunity to improve both the consistency and  
quality of our retail customer service  during the last six months we have changed our recruitment processes  
appraisal systems training materials manhour planning systems and monthly bonus scheme with a view 
to focussing our store teams on providing better service  initial results have been encouraging but there is a  
way to go  
in addition we aim to improve the levels of staff experience in the business by increasing the average weekly 
contract worked by our staff  this change will take time and will be achieved through natural staff turnover  so 
that as and when staff leave the business some of their hours will be reallocated to existing team members  
who want the extra work
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strategic report
retail profit analysis 
full year operating margin improved by 05 to 156  the table below sets out significant margin movements by 
major heads of costs  
net operating margin last year 151
boughtin gross 
margin 
in line with last year 00
lower markdown retail stock for sale was down 15 with markdown sales down only 11  
margin improved as a result of 1 higher participation of full price sales during 
the year and 2 improved clearance rates of sale stock
 08
reduction in freight 
fabric and stock loss
lower freight costs improved fabric utilisation and reduced stock loss all 
served to increase margin
 05
reduction in store 
payroll
instore efficiency initiatives covered the cost of the annual pay review  01
increase in store 
occupancy
rents and rates increased as a percentage of sales due to 1 negative like for 
like sales 2 business rates and some rent inflation and 3 additional repair 
and store equipment write off costs
 07
central overheads increased cost mainly due to staff incentives  02
net operating margin this year 156
directory
sales analysis
directory sales were 124 ahead of last year  the table below shows the contribution to growth made by our uk 
and overseas online businesses
contribution to 
sales growth
uk 85
international 39
total sales growth 124
new customers
directory active customer numbers increased year on year by 108 to 37 million with growth coming from uk 
credit uk cash and overseas customers
average customers ‘000s
jan  
2014
jan 
2013 change
contribution 
to customer 
growth
 uk cash customers  633 493
 uk credit customers 2798 2697
total uk customers 3431 3190  241 72
overseas customers 268 148  120 36
total active customers 3699 3338  361 108
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directory development – uk
service improvements
in october of this year we introduced free nextday delivery to stores for customers who ordered before 10pm   
this service is now available in 341 stores which account for 74 of our retail turnover  as a result the  
percentage of orders made from home and delivered to store has risen from 30 to around 45  in the  
year ahead we intend to extend this service to stores accounting for 99 of our retail turnover
going forward we will increase focus on improving the reliability of our directory services  we fail to deliver  
around 2 of our parcels at the promised time but know that there is an opportunity to improve this reliability  
however whatever improvements we make there will always be a small number of errors  how our staff handle 
these rare events is central to developing our reputation  a company’s ability to rectify mistakes is for many  
customers the litmus test of great service  we can do much to respond better to these occasions through  
improved recruitment staff training and systems  
directory product offer 
our retail stores receive injections of new lines roughly every six weeks with the year being divided into nine 
retail phases  directory has been reliant on the publication of four big catalogues and has missed out on some  
of the newest retail stock  in future we will be adding stock to our website to coincide with our retail  
phases this stock will be supported by a number of “newin” brochures
for some years now next has sold noncompeting nonnext brands through the next directory  this year  
we are further expanding the branded offer in the directory itself and more importantly trialling a standalone 
publication devoted exclusively to third party brands  this publication which is currently called label  
has been distributed to 400000 customers
directory development – international
we continue to make good progress developing our internet business overseas  international online sales grew by 
86 and contributed 39 to directory growth  however with a turnover of just over £100m it is still relatively small 
and it would be a mistake to overemphasise its importance  all overseas sales are currently serviced from our uk 
warehouses through third party distribution networks
sales initiatives
growth has been driven through a combination of improved pricing site translations the acceptance of new 
domestic currencies and the development of new territories  of these factors permanent price reductions  
have been by far the most important  the table below sets out the international growth drivers for last  
year and those planned for the year ahead  in addition to the initiatives listed in the table we will be investigating 
ways to improve our delivery service in key territories
growth driver completed january 2014 planned by january 2015
lower prices prices lowered in 28 territories representing 
52 of turnover
prices to be lowered in 5 countries 
representing only 23 of turnover
translations traditional chinese script taiwan new languages including french 
spanish polish arabic simplified 
chinese script and hebrew 
domestic currencies five countries converted to domestic 
currency
11 countries converting to domestic 
currencies
new territories china egypt brazil oman saudi 
arabia belarus libya malta cyprus 
lebanon and azerbaijan
new tender types qiwi russian ewallet paypal klarna germany
additional information parent company accounts governance consolidated accounts business reports
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strategic report
online overseas profitability and the year ahead
net margins on our overseas business fell from 19 to 18 reflecting keener prices and some marketing initiatives  
we expect net margins in the year ahead to remain at 18  
going forward we expect growth rates to ease a little as the price adjustments made in 2013 begin to 
annualise  we are currently forecasting for international online sales to grow by 50 to £150m  the table  
below sets out the last two years sales profits and net margins alongside our budget for the current year
£m
january 
2013
january 
2014
january 
2015 e
sales £54m £101m £150m
net profit £10m £18m £27m
net margin 19 18 18
directory profit analysis
full year operating margin improved by 14 to 267  the table below sets out significant margin  
movements by major heads of costs  
net operating margin last year 253
boughtin gross margin boughtin gross margin improved due to a planned reduction in 
sales of lower margin electrical products
 02
lower markdown directory stock for sale was down 9 whereas markdown sales were 
level  margin improved as a result of 1 higher participation of full  
price sales during the year and 2 improved clearance rates of  
sale stock
18
freight fabric and stock loss lower freight costs improved fabric utilisation and reduced stock loss  02
service charge  bad debt service charge income increased but at a lesser rate than total sales 
due to the increased participation of international and uk cash sales
– 04
increase in warehouse and 
distribution costs
international sales increased distribution costs reducing margin by 
07  using our store network for more uk parcel collections and 
returns improved margin by  02
– 05
catalogue production costs catalogue production costs increased but at a lesser rate than sales  02
central overheads reduced margin mainly due to increased staff incentives – 01
net operating margin this year 267
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cost inflation and cost control
this year we have more than offset cost increases with cost savings  the tables below outline the main  
contributors to cost increases and cost savings over the last year  cost control remains at the heart of the  
business and we remain determined that cost savings must come through innovation and efficiency rather than 
any compromise to our product quality or services  
cost increases £m
cost of living awards other wage related inflation and staff incentives 28
rent rates  other occupancy costs 13
costs of directory delivery service improvements 9
warehouse capacity 5
systems investments and other 4
total cost increases 59
cost savings £m
lower markdown 18
freight fabric and stock loss 15
directory operating efficiencies 15
retail manpower efficiencies and other cost savings 13
nonstock purchasing improvements eg  paper 7
other 4
total cost savings 72
in the year ahead we expect cost increases of around £44m  anticipated wage increases account for £27m  
of this rise the majority of which comes from our annual cost of living award  we expect these cost  
increases to be more than offset by cost savings
head office warehouse and systems projects 201415
the rapid growth of our online and home businesses means that we have an unusual number of big systems 
and warehousing projects starting in the current year   these projects will give some operational benefits but are  
mainly required to facilitate continued growth or replace obsolete systems  most systems development costs  
are revenue costs and written off in the year they are incurred  hardware and other infrastructure are depreciated 
over the life of the asset  
the table below sets out the largest projects and their estimated capital and revenue costs
project
life y ears
revenue 
costs e 
capital 
costs e
store till back office and payment systems upgrade 1 £3m £8m
mainframe upgrade and modernisation 2 £3m –
international website rewrite and convergence with uk 2 £1m –
systems office refurbishment and data centres 1 – £5m
home warehouse expansion including £8m for land 2 – £11m
total £7m £24m
total likely to be incurred in year ending january 2015 £5m £20m
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strategic report
other group businesses
next sourcing
next sourcing ns had a good year increasing sales and achieving a profit of £34m  ns competes for  
business against the many other suppliers to next retail and next directory it continued to provide more than 
40 of next brand stock  each of its incountry offices operates in a very competitive environment both against  
external suppliers and other ns offices
£m 2014 2013
sales  5712 5071 13
operating profit 341 308 11
operating margin 60 61
we are forecasting next sourcing profits of £36m in the year ahead
international retail and franchise stores
our franchise business with partners operating 173 stores in 35 countries continued to grow both sales and 
profits  the number of directly owned stores has been reduced to 16 and they broke even for the first time  
our 11 stores in central europe made a small profit offset by a small loss in china  we do not aim to expand  
our directly owned international stores  revenue and profit are set out below
£m 2014 2013
franchise income 710 615
owned store sales 146 162
total revenue 856 777 10
operating profit 121 84  44
we are budgeting for international retail to make a profit of £14m in the year ahead
lipsy
full year sales of £63m and operating profit of £5m before amortisation and profit share of £2m was the best 
performance in our five years of ownership  lipsy’s retail sales were £20m taken from 49 stores trading 57000 
square feet and sales to wholesale customers were £22m  online sales through lipsy’s own site and the next 
directory were £21m  we expect further sales and profit growth from lipsy in the years ahead
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central costs and other activities
the table below sets out other group and nontrading activities
£m 2014 2013
property management 18 35
central costs 333 353
pension variation 26 36
unrealised foreign exchange 59 34
associates 25 06
total 323 242
unrealised foreign exchange ias 39
the £6m loss for the year compares with a £3m gain in the prior year  at this time it is not possible to predict the 
year ahead so group profit guidance assumes no ias 39 gain or loss
interest and taxation
the interest charge was £28m £1m less than last year  for the coming year we expect net debt to  
again range between £500m and £750m  this will result in an interest charge of £30m due to the higher  
level of bond debt and low interest rates available on cash deposits
our tax rate reduced as expected to 204 due to the reduction in headline uk corporation tax rates and 
agreement of prior year items with hmrc  we expect our effective rate will be no higher than 21 in each  
of the next two years
balance sheet and ordinary dividends
the balance sheet remains strong with year end net debt of £517m and forecast peak borrowing requirements 
being very securely financed by our bonds and committed bank facilities of £1088m  during the last six  
months we repaid the 2013 bond issued a new 12 year bond and extended our bank facility all as set out below
£m
2016 bonds 213
2021 bonds 325
2026 bonds 250
total bonds nominal value 788
2019 committed bank facility 300
total debt facilities available 1088
final dividend
we have proposed raising our final dividend to 93p taking the total dividend for the year to 129p  the increase  
of 23 is in line with growth in underlying eps  dividend cover remains at 28 times
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strategic report
cash generation share buybacks and special dividends
cash generation
over the last year we generated £326m of surplus cash after capex interest dividends and tax of which £26m 
was used to maintain our esot  the balancing £300m was returned to shareholders through share buybacks and 
permanently increasing the level of cover in our esot which enhances eps by as much as a buyback  
we expect to generate around the same amount of free cash in the year ahead and are again budgeting 
to return £300m of cash to shareholders during the year  we paid a £75m special dividend in february and 
have committed to a further £75m special dividend which will be paid in may  assuming the share price  
remains at its current level and our profit expectations remain unchanged it is our intention to carry on paying 
quarterly special dividends for the remainder of the current year  
share buyback price limit going forward
in the chief executive’s review last year we set out the criteria by which we would decide the maximum price 
the company would pay to buy back shares  we introduced the concept of equivalent rate of return err   
err is the return required from an alternative investment if that investment were to produce the same level 
of earnings enhancement as the proposed buyback  we set the minimum err at 8 which we consider  
a reasonable target for a return on equity investments
over the course of the year we have discussed this concept with our shareholders  most agree that the 8  
limit is reasonable but many have commented that it would be more logical to use the company’s guidance for 
forward profits as a basis for calculating the 8 err rather than historic profits  we agree with this point and going  
forward will set our price limit on the basis of the midpoint of our forward guidance
for year ending january 2015 the midpoint of our guidance is for profit before tax to be £750m see below   
on this basis a buyback of £300m at £6245 would give an err of 8 and this figure now represents our upper 
limit for share buybacks  for clarity in order for us to revert back to a buyback programme we would need  
to be convinced that any share price move below our target was likely to be sustained and that our profit 
expectations had not changed
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outlook for 2014
the consumer economy
the consumer economy has steadily improved over the course of the last year  this modest improvement  
looks set to continue  however conditions are likely to remain far from buoyant and there are real risks  
to the sustainability of the current recovery 
employment remains strong
the most positive aspect of the economy remains employment which continues to rise to record highs  
300m
295m
290m
285m
jan 10 jan 11 jan 12 jan 13 jan 14
three month rolling average
source ons 19 feb 2014
total uk employment
dec 2013
3015m
credit constraints recede
consumer credit has been steadily flowing back into the market  the graph below shows the reversal of  
credit flows back into the market during 2013 with positive flows of around £7bn during the year which equates 
to around 1 of uk earnings  mortgage approvals are also growing strongly and housing transactions are  
following suit this change has been reflected in strong growth in our home division over the last six months
15bn
10bn
05bn
00bn
05bn
10bn
jan 10 jul 10 jan 11 jul 11 jan 12 jul 12 jan 13 jul 13 jan 14
uk credit flow
source bank of england 3 march 2014
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strategic report
real earnings pressure easing but still negative
throughout 2013 growth in earnings began to close the gap with inflation  encouragingly in january there was 
little or no decline in real earnings  if this trend continues and real earnings move into growth it will be good  
news for the uk consumer environment  it would be the first time we have seen growth in real earnings for  
over five years  
jan 10
uk real earnings  cpi and earnings growth
60
50
40
30
20
10
00
jul 10 jan 11 jul 11 jan 12 jul 12 jan 13 jul 13 jan 14
■ cpi
■ average earnings
nonetheless it is worth noting that last year’s increase in spending appears to have been driven through 
increased credit see above  if anything has been learnt from the last ten years it is that credit cannot  
continue to grow faster than wages forever  until we see significant increase in the supply side of the 
economy profitable investment and improved productivity we cannot bank on a return to sustained growth   
consequently we remain cautious in our budgeting for the year ahead
outlook for next brand sales 2014
we are budgeting for total next brand sales growth of between 4 and 8 in the year ahead this compares 
to the 1 to 4 estimate we gave at this time last year  it reflects the underlying improvement in the economy  
and the fact that we are opening 1 more new space than last year
some might argue that our sales range is conservative when compared to the 55 growth we achieved last 
year  however last year’s total was significantly enhanced by the exceptional last quarter  in the year ahead we  
expect the fourth quarter to provide tough comparatives and it will be hard to beat  accordingly we are  
budgeting very cautiously for the final quarter  the chart below illustrates the anomalous performance in q4
q1 2013
201314 full year growth 55
2013 q1  q3 growth 30
next brand quarterly sales growth 201314
12
11
10
9
8
7
6
5
4
3
2
1
0
q2 2013 q3 2013 q4 2013 201415  e
low 4
top end
guidance 8
25 43 115 22
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guidance – group profits and eps for the year ahead
the table below sets out our guidance for the full year  for the purposes of this guidance we have assumed that 
surplus cash of £300m is returned as special dividends in reality this will depend on the prevailing share price as 
explained above
guidance estimates 
lower end  
of guidance
upper end  
of guidance
total brand sales  growth  4  8
profit before tax £730m £770m
profit before tax  growth  5 11
ordinary dividend yield assuming £65 share price  2  2
special dividend yield assuming £65 share price  3  3
total shareholder returns 10 16
interim management statement
our next statement will cover the first thirteen weeks of the year to 26 april 2014 and is provisionally scheduled for 
wednesday 30 april 2014
lord wolfson of aspley guise 
chief executive  
20 march 2014
additional information parent company accounts governance consolidated accounts business reports
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strategic report
business model
next is a uk based multichannel retailer offering exciting beautifully designed excellent quality clothing footwear 
accessories and home products  next is one of the largest clothing and home products retailers in the uk by sales 
and a member of the ftse100 index  the group is primarily comprised of
 ❚ next retail a chain of more than 500 stores in the uk and eire
the majority of our stores sell clothing footwear accessories and home products we also operate over 50 large home standalone and 
department style stores  the predominantly leased store portfolio is actively managed with openings and closures based on store profitability 
and cash payback  around 60 of group sales are from next retail
 ❚ next directory an online and catalogue shopping business with almost 4 million active customers and 
international websites serving approximately 70 countries
by embracing the internet providing exceptional customer service and developing overseas opportunities over the last ten years next 
directory’s sales have grown by more than 150 and now represent over one third of group sales
there are strong synergies between next retail and next directory through efficient stock management and customer service opportunities 
such as handling directory collections and returns instore the group has been able to successfully develop both parts of the business
 ❚ next international retail with almost 200 mainly franchised stores around the world
next’s franchise partners operate over 170 stores in 35 countries there are also a small number of stores which next operates directly  
international retail accounts for around 2 of group sales
 ❚ next sourcing which designs sources and buys next branded products
last year over 40 of the group’s products were procured or produced by next sourcing  further information on the group’s supply chain and 
next’s commitment to ethical trading can be found on page 23
 ❚ lipsy which designs and sells lipsy branded younger women’s fashion products
lipsy trades from around 50 stores online and through wholesale and franchise channels  lipsy contributes around 2 of group sales
further detail on the performance and development of the group’ s businesses can be found in the chief executive’ s 
review on pages 3 to 17 which forms part of this strategic report along with key performance indicators page 
19 risks  uncertainties page 20 employees page 22 social community and human rights page 23 and 
environmental matters page 24
business strategies and objectives
the primary financial objective of the group is to deliver long term returns to shareholders through a combination 
of sustainable growth in earnings per share “eps” and payment of cash dividends  underlying eps increased 
by 23 from last year  over the last ten years eps has increased by almost 300 and the share price has  
increased by almost 400  this long term value has been created through the consistent pursuit of the  
following strategies
 ❚ improving and developing next product ranges success in which is measured by sales performance
 ❚ profitably increasing retail selling space  new store appraisals must meet demanding financial criteria before 
the investment is made and success is measured by achieved profit contribution and return on capital against 
appraised targets
 ❚ increasing the number of profitable next directory customers and their spend both in the uk and through 
international online sales
 ❚ managing gross and net margins through efficient product sourcing stock management and cost control
 ❚ maintaining the group’s financial strength through an efficient balance sheet and secure financing structure
 ❚ generating and returning surplus cash to shareholders by way of share buybacks or more recently special 
dividends  further information on the criteria we use to determine the method by which surplus cash is returned 
can be found in the chief executive’s review
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key performance indicators
kpi’s of earnings per share group cash flows and divisional revenues and profits are detailed in the chief executive’s 
review and elsewhere in this annual report  details of other key performance indicators used in the management 
of the business are provided below
next retail selling space 2014 2013
annual 
change
store numbers 541 540 1
square feet 000’s 7008 6728  42
selling space is defined as the trading floor area of a store which excludes stockroom and administration areas
2014 2013
next retail stores and sales no  stores
lfl
sales  no  stores
lfl 
sales 
total like for like 535 –18 530 – 38
underlying 498 –14 473 – 32
next defines like for like stores as those that have traded for at least one full year and have not benefited from significant capital expenditure  sales 
from these stores for the current year are then compared with the same period in the previous year to calculate like for like sales figures  underlying 
like for like sales applies the same calculation but excludes stores impacted by new store openings
next retail operating margin movement 2014 2013
net operating margin last year 151 148
increase in achieved gross margin 13  06
decreaseincrease in store payroll  01 – 01
increase in store occupancy – 07 – 04
increasedecrease in other costs – 02  02
net operating margin this year 156 151
gross margin is the difference between the cost of stock and the initial selling price achieved gross margin is after markdown and stock related 
costs  net operating margin is profit after deducting markdowns and all direct and indirect trading costs  all are expressed as a percentage of 
achieved vat exclusive sales
next directory customers 2014 2013
annual 
change
average active customers – credit 2798000 2697000  37
average active customers – cash 901000 641000  406
average active customers – total 3699000 3338000 108
average sales per customer £363 £357 17
active customers are defined as those who have placed an order or made a payment in the last 20 weeks calculated as a weighted average of each 
week’s figure  credit customers are those who order using a directory credit account whereas cash customers are those who pay when ordering  
average sales per customer are calculated as vat exclusive sales including service charge divided by the average number of active customers  
next directory operating margin movement 2014 2013
net operating margin last year 253 241
increase in achieved gross margin  22  08
decrease in bad debt  01  03
decreaseincrease in service charge income – 05  02
increase in other costs – 04 – 01
net operating margin this year 267 253
share buybacks 2014 2013
number of shares purchased ‘000 6202 7510
 of opening share capital 38 45
total cost £2958m £2413m
average cost per share £4770 £3213
total cost of shares purchased includes stamp duty and associated costs  the average price before costs was £4740 2013 £3192
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strategic report
risks  uncertainties
the board has a policy of continuous identification and review of key business risks and oversees the development 
of processes to ensure that these risks are managed appropriately  executive directors and operational  
management are delegated with the task of implementing these processes and reporting to the board  
on their outcomes  the key risks identified by the board are summarised below
 ❚ business strategy development  implementation  
if the board adopts the wrong business strategy or does not implement its strategies effectively the business 
may suffer  the board needs to understand and properly manage strategic risk in order to deliver long 
term growth for the benefit of next’s stakeholders  the board reviews business strategy on a regular basis to  
determine how sales and profit budgets can be achieved or bettered and business operations made more efficient   
this process involves the setting of annual budgets and longer term financial objectives to identify ways in which 
to increase shareholder value  critical to these processes are the consideration of wider economic and industry 
specific trends that affect the group’s businesses the competitive position of its product offer and the financial 
structure of the group
 ❚ liquidity  credit risk
the group has adequate medium and long term financing in place to support its business operations  the board 
continues to assess its exposure to counterparty risk in the light of the prevailing economic climate both in the 
uk and globally and its treasury policy is amended as necessary to manage counterparties with which deposits 
investments and other transactions may be made  
next is exposed to credit risk in respect of its directory and other business customers  rigorous procedures are 
in place with regard to the group’s credit customers and these are regularly reviewed and updated as required  
key suppliers whose services are essential to the successful running of the business also face credit risk  these 
include the production of the directory provision of it systems and certain systems and suppliers to the group’s 
warehouse and distribution network  the group’s risk assessment procedures for key suppliers identify alternatives 
and develop contingency plans in the event any of these suppliers fail
 ❚ management team
the success of next relies on the continued service of its senior management and technical personnel and on its 
ability to continue to attract motivate and retain highly qualified employees  the retail sector is very competitive and 
next staff are frequently targeted by other companies  the remuneration committee identifies senior personnel 
reviews remuneration at least annually and formulates packages to retain and motivate these employees  in 
addition the board considers the development of senior managers to ensure adequate career development 
opportunities for key personnel with orderly succession and promotion to important management positions  
 ❚ product design  selection
the success of next depends on providing exciting beautifully designed excellent quality clothing and homeware  
success also depends upon its ability to anticipate and respond to changing consumer preferences and trends  
many of next’s products represent discretionary purchases and demand for these products can decline in periods 
of weaker consumer confidence  as a consequence next may be faced with surplus stocks that cannot be sold 
at full price and have to be disposed of at a loss  executive directors and senior management continually review 
the design and selection of next’s product ranges  this ensures so far as possible that there is a wellbalanced 
product mix that is good value for money and available in sufficient quantities and at the right time to meet 
customer demand
 ❚ key suppliers  supply chain management
next relies on its supplier base to deliver products on time and to the quality standards it specifies  it continually 
seeks ways to develop its supplier base so as to reduce overreliance on individual suppliers of product and 
services and to improve the competitiveness of its product offer  if input costs rise for example raw materials or 
labour costs next will work with existing suppliers to mitigate the inflationary impact  new sources of supply will be 
developed in conjunction with next sourcing external agents and direct suppliers  
noncompliance by suppliers with the next code of practice may increase reputational risk  next carries out 
regular inspections of its suppliers’ operations to ensure compliance with the standards set out in this code 
covering production methods employee working conditions quality control and inspection processes  further 
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details can be found on page 23  next also monitors and reviews the financial political and geographical 
aspects of its supplier base to identify any factors that may affect the continuity or quality of supply of its products
 ❚ retail store network 
growth of next retail is dependent upon developing the trading space within its store network and customers 
spending more  next will continue to invest in new stores where its financial criteria are met and refurbish its 
existing portfolio when appropriate  new store appraisals estimate the effects of sales deflection from existing 
stores although the performance of new stores and sales deflection may differ from estimates
successful development of new stores is dependent upon a number of factors including the identification of suitable 
properties obtaining planning permissions and the negotiation of acceptable lease terms  notwithstanding there 
have been a number of retail failures in recent years prime sites will generally remain in demand and increased 
competition can result in higher future rents
 ❚ directory customer base
growth of the next directory depends upon the recruitment and retention of customers and increasing the 
average spend per customer  next will continue to recruit new credit customers where they satisfy its credit score 
requirements  however there can be no assurance that new customers will result in higher sales per customer or 
lower incidence of bad debts compared with the existing customer base
in addition next requires its internet website to attract new customers and encourage existing customers to 
continue ordering from the directory  management continually review the configuration content and functionality 
of the website to ensure it provides a positive customer shopping experience  service levels and response times 
are monitored to ensure that the website is both resilient and secure at all times
 ❚ warehousing  distribution
next regularly reviews the warehousing and distribution operations that support the business  risks include 
business interruption due to physical damage access restrictions breakdowns capacity shortages inefficient 
processes and delivery service failures  planning processes are in place to ensure there is sufficient warehouse 
handling capacity for expected future business volumes over the short and longer terms  in addition service levels 
warehouse handling and delivery costs are monitored continuously to ensure goods are delivered to retail stores 
directory customers and third party clients in a timely and costefficient manner  
 ❚ it systems business continuity  cyber risk
next is dependent upon the continued availability and integrity of its it systems which must record and process 
a substantial volume of data and conduct inventory management accurately and quickly  the group expects 
that its systems will require continuous enhancement and investment to prevent obsolescence and maintain 
responsiveness  the threat of unauthorised or malicious attack is an ongoing risk the nature of which is constantly 
evolving  systems penetration testing business continuity plans and back up facilities are in place and are tested 
regularly to ensure that business interruptions are minimised and data is protected from corruption or unauthorised 
access or use
 ❚ call centre capacity  service levels
next is dependent on the efficient operation of its own and third party call centres to receive and respond to 
customer orders and enquiries  insufficient manpower supplier failures and interruption in the availability of 
telephony systems to meet customer service requirements are the principal risks  the group continuously monitors 
call centre operations that support the business to ensure that there is sufficient capacity to handle call volumes  
capacity forecasting is used to manage peak demands and growth in business volumes and customer satisfaction 
is measured on a regular basis  business continuity plans minimise the risk of business interruption  
 ❚ treasury  financial risk management
the main financial risks are the availability of funds to meet business needs default by counterparties to financial 
transactions see liquidity  credit risk and fluctuations in interest and foreign exchange rates  in addition 
business expansion and share buybacks may necessitate the raising of additional finance which can in turn 
increase interest costs and give rise to fluctuations in profit  higher debt could also increase the proportion of 
cash flow required to service debt and potentially increase exposure to interest rate fluctuations  next operates a 
centralised treasury function which is responsible for managing its liquidity interest and foreign currency risks  the 
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strategic report
group’s treasury policy allows the use of derivative instruments provided they are not entered into for speculative 
purposes  further details of the group’s treasury operations are given in note 27 to the financial statements
in addition next has to fund its defined benefit pension scheme and ensure that sufficient contributions are made 
to meet outstanding liabilities as they fall due  if next fails to provide sufficient and timely funding action may be 
taken by the pension scheme trustees or the pensions regulator which could result in an acceleration andor 
an increase in overall contributions towards any deficit  management meets regularly with the trustees to assess 
fund performance as well as to agree future contribution levels and any necessary changes to members’ future 
benefits
employees
next’s employees are key to achieving business objectives  next has established policies for recruitment training 
and development of personnel and is committed to achieving excellence in the areas of health safety welfare 
and protection of employees and their working environment
equal opportunities and diversity
next is an equal opportunities employer and will continue to ensure it offers career opportunities without 
discrimination  full consideration is given to applications for employment from disabled persons having regard to 
their particular aptitudes and abilities  the group has continued the employment wherever possible of any person 
who becomes disabled during their employment  opportunities for training career development and promotion 
do not operate to the detriment of disabled employees  the following table shows the gender mix of the group’s 
employees at the end of the financial year
2014 2013
males females males females
directors of next plc 8 3 8 2
subsidiary directors and other senior managers 29 13 27 17
total employees 15929 34138 16856 36369
training and development
next aims to realise the potential of its employees by supporting their career progression and promotion wherever 
possible  it makes significant investment in the training and development of staff and in training and education 
programmes which contribute to the promotion prospects of employees
employee communication
next has a policy of providing employees with financial and other information about the business and ensures 
that the suggestions and views of employees are taken into account  next has an employee forum made up of 
elected representatives from throughout the business who attend meetings at least twice a year with directors and 
senior managers  this forum enables and encourages open discussion on key business issues policies and the 
working environment
employee share ownership
approximately 9800 employees held options over 74 million shares in next at january 2014 being 48 of the total 
shares in issue  its employee share ownership trust “esot” purchases shares for issue to employees when their 
options are exercised  at the year end the esot held 62 million shares the voting rights of which are exercisable 
by the trustee
pension provision
next offers valuable pension benefits to participating employees details of which are set out in the remuneration 
report and in note 21 to the financial statements  at january 2014 there were 1169 2013 1242 active members 
in the defined benefit section of the next group pension plan and 2775 2013 2375 uk employees with defined 
contribution arrangements
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social community and human rights
next is committed to the principles of responsible business  this means addressing key business related social 
ethical and environmental matters in a way that aims to bring value to all of its stakeholders including customers 
and shareholders  continuous improvement lies at the heart of next’s approach and is achieved by acting 
in an ethical manner developing positive relationships with suppliers recruiting and retaining successful and 
responsible employees taking responsibility for our impact on the environment and through contributions to 
charities and community organisations
next has a corporate responsibility “cr” forum of 15 senior managers and directors representing key areas 
of the business to develop and implement strategy  the forum identifies potential issues and opportunities and 
evaluates the success of next’s response  the cr manager holds regular updates with the executive director 
responsible for cr
a third party provides independent assurance on the group’s cr report which is published on the company’s 
website each year  commitment to cr matters is recognised externally by its membership of the ftse4good index 
series
suppliers
in common with other retailers next’s product supply chain is both diverse and dynamic  last year next used 
over 500 third party suppliers with products manufactured across some 40 countries  the challenge of trading 
ethically and acting responsibly towards the workers within our own and our suppliers’ factories is a key priority  
next is a member of the ethical trading initiative and operates its code of practice “cop” an established set of 
ethical trading standards as an integral part of its operations  the next cop has ten key principles that stipulate 
the minimum standards with which suppliers are required to comply in relation to workers’ rights and conditions 
of work including working hours minimum age of employment health safety welfare and environmental issues  
next seeks to ensure all products bearing the next brand are produced in a clean and safe environment and in 
accordance with all relevant laws
next is committed to its supplier audit and management programme and has a cop audit team of 45 staff 
2013 44 which carried out more than 1500 factory audits last year  the cop team works directly with suppliers 
to identify and address causes of noncompliance  each audited factory is measured against the cop’s six tier 
rating system and the supplier is made aware of its rating and what is required to improve via a corrective action 
plan  this direct approach allows next to build knowledge and understanding in local communities and monitor 
suppliers through its auditing process
human rights
next is committed to upholding all basic human rights and welcomes the implementation of the united nations’ 
guiding principles of business and human rights  our supplier cop reflects relevant international labour 
conventions  where next employees are based in countries with recognised concerns over human and labour 
rights as determined by the ftse4good index all employees are specifically required to uphold the declaration of 
human rights and the ilo core conventions and receive annual training to ensure their understanding of those 
principles
customers
next is committed to offering stylish excellent quality products to its customers which are well made functional 
safe and are sourced in a responsible manner  next works closely with buyers designers and suppliers to ensure 
next products comply with all relevant legislation and its own internal standards where these are higher  the 
expertise of independent safety specialists for clothing footwear accessories beauty and home products is used 
where required
next endeavours to provide a high quality service to its customers whether they are shopping through its stores 
catalogues or website  these different ways of shopping must be easily accessible for all customers and be 
responsive to their needs
next customer services interacts with retail and directory customers to resolve enquiries and issues  findings are 
recorded and the information is used by other areas of the business to review how a product or service can be 
improved
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strategic report
health and safety
next recognises the importance of health and safety and its management is designed to contribute to business 
performance  policies and procedures are reviewed and audited regularly to make safety management more 
robust and current
the group’s objective is to manage all aspects of its business in a safe manner and take practical measures to 
ensure that its activities and products do not harm the public customers employees or contractors  procedures 
exist to enable two way communication and consultation about health safety and welfare issues in order to 
achieve a high level of safety awareness  
community
next supports a wide range of charities and organisations and provided the following financial support during 
the year
2014
£000
2013
£000
registered charities 945 911
individual requests local and national groups and organisations 115 110
commercial support 120 83
this support was supplemented by the following additional activities
2014
£000
2013
£000
next charity events 34 182
gifts in kind – product donations 1613 2187
charity linked sales 363 357
employee fundraising 37 22
no donations were made for political purposes 2013 nil
environmental matters
next recognises that it has a responsibility to manage the impact of its business on the environment both now and 
in the future  for several years we have measured and reported against environmental targets for next in the uk 
and eire  the targets are measured from 2007 and look forward to 2015
key areas of focus are
 ❚ energy use and emissions from stores warehouses distribution centres and offices 
target electricity consumption – 35 reduction in kg co
2
em
2
 
progress 4 reduction compared with last year and 33 electricity reduction achieved to date
 ❚ fuel emissions from the transportation of products  
target retail distribution – 10 reduction in litres of fuel usedm
2
 
progress target achieved in 2012 with 16 reduction
 ❚ waste created in stores warehouses distribution centres and offices 
target to send less than 5 of operational waste to landfill 
progress 93 of operational waste diverted from landfill achieved to date
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greenhouse gas emissions
in our corporate responsibility report last year we provided detailed information on next’s global emissions 
footprint  in accordance with the new disclosure requirements for listed companies under the companies act the 
table below shows the group’s greenhouse gas emissions during the financial year 
2014
tonnes 
of co
2
 
equivalent
2013
tonnes 
of co
2
 
equivalent
combustion of fuel  operation of facilities scope 1 38576 38506
electricity heat steam and cooling purchased for own use scope 2 117950 122794
total scope 1 and scope 2 emissions 156526 161300
intensity metric tonnes of co
2
e per £m of turnover 419 453
methodology
the methodology used to calculate our emissions is in compliance with the ‘environmental reporting guidelines 
including mandatory greenhouse gas emissions reporting guidance’ and the uk government’s ghg conversion 
factors for company reporting june 2013 issued by the department for environment food and rural affairs 
defra  we report our emissions data using an operational control approach to define our organisational 
boundary which meets the definitional requirements of the regulations in respect of those emissions for which we 
are responsible following the guidelines and principles of the wbcsdwri greenhouse gas protocol
next remains committed to reducing its carbon footprint by reducing energy consumption throughout its operations 
minimising and recycling waste cutting transport emissions and reducing the packaging in our products
on behalf of the board
david keens 
director 
20 march 2014
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directors’ report
disclosures required under the 2013 amendment to the large and mediumsized companies and groups 
accounts and reports regulations 2008 in respect of employee matters including the employment training 
and advancement of disabled persons political donations and greenhouse gas emissions are given in the 
strategic report  
annual general meeting  other matters
notice of the annual general meeting “agm” is on pages 113 to 119 and includes the following business
dividends
the directors recommend that a final dividend of 93p per share be paid on 1 august 2014 to shareholders on 
the register of members at close of business on 11 july 2014  this resolution relates only to the final dividend  as 
described in the chief executive’s review on page 14 the directors may in future decide to pay special dividends 
as long as next’s share price remains consistently above the board’s buyback price limit  this arrangement will 
ensure the company continues to return surplus cash to shareholders whilst maintaining the flexibility to return to 
buying back shares if and when the share price returns to levels commensurate with the required equivalent rate 
of return  any such special dividends will be declared by the directors as interim dividends  the announcement 
of any dividend will clearly indicate whether it is an interim or final dividend and whether it is a special dividend 
or not
the trustee of the next employee share ownership trust “esot” has waived dividends paid in the year on the 
shares held by it see note 26
directors 
michael law group operations director and jane shields group sales and marketing director were appointed 
executive directors on 1 july 2013  jane joined next retail in 1985 as a sales assistant in one of our london stores  
jane worked her way through store management to be appointed sales director in 2000 responsible for all store 
operations and training  in 2006 jane took additional responsibility for retail marketing and in 2010 was appointed 
group sales and marketing director adding directory and online marketing to her portfolio  michael law joined 
the group in 1995 as call centre manager for the next directory  michael was appointed call centre director in 
2003  in 2006 michael took responsibility for group it and in 2010 was appointed group operations director adding 
warehousing and logistics to his portfolio  michael is now responsible for all systems warehousing logistics and 
call centres within the group
jonathan dawson and christine cross are the longest serving nonexecutive directors having both been first 
elected at the 2005 agm the ninth anniversary of their first election is therefore may 2014  in order to manage their 
succession christine cross will not stand for reelection at the 2014 agm and a replacement will be announced 
in due course  it is intended that jonathan dawson will stand down in 2015 and a replacement nonexecutive 
will be appointed
the uk corporate governance code recommends that all directors of ftse companies stand for election every 
year and all members of the board other than christine cross will do so at this year’s agm  directors’ biographies 
are set out on page 32  
each of the directors standing for election has undergone a performance evaluation and has demonstrated that 
they remain committed to the role and continue to be an effective and valuable member of the board  the board 
is satisfied that each nonexecutive director offering themselves for reelection including jonathan dawson are 
independent in both character and judgement and their knowledge and other business interests continue to 
enable them to contribute significantly to the work and balance of the board  
the interests of the directors who held office at 25 january 2014 and their families are shown in the remuneration 
report on page 60
annual report and accounts january 2014
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auditor
ernst  young llp have expressed their willingness to continue in office and their reappointment will be proposed 
at the agm  
disclosure of information to the auditor
in accordance with the provisions of section 418 of the companies act 2006 the “2006 act” each of the persons 
who is a director at the date of approval of this report confirms that
 ❚ so far as the director is aware there is no relevant audit information of which the company’s auditor is unaware 
and
 ❚ each director has taken all the steps that they ought to have taken as a director to make themselves aware of 
any relevant audit information and to establish that the company’s auditor is aware of that information
authority to allot shares
under the 2006 act the directors may only allot shares or grant rights to subscribe for or convert any security into 
shares if authorised to do so by shareholders in general meeting  the authority conferred on the directors at last 
year’s agm under section 551 of the 2006 act expires on the date of the forthcoming agm and ordinary resolution 
16 seeks a new authority to allow the directors to allot ordinary shares up to a maximum nominal amount of 
£5100000 representing approximately one third of the company’s existing issued share capital as at 19 march 
2014  in accordance with institutional guidelines resolution 16 will also allow directors to allot further ordinary 
shares in connection with a preemptive offer by way of a rights issue up to a total maximum nominal amount of 
£10200000 representing approximately two thirds of the company’s existing issued share capital as at that date  
as at 19 march 2014 being the latest practicable date prior to publication of this document the company’s 
issued share capital amounted to £15503232 comprising 155032317 ordinary shares of 10 pence each none of 
which are held in treasury  the directors have no present intention of exercising this authority which will expire at 
the conclusion of the agm in 2015 or if earlier 1 august 2015
authority to disapply preemption rights
special resolution 17 will if passed renew the directors’ authority pursuant to sections 570 to 573 of the 2006 act to 
allot equity securities for cash without first offering them to existing shareholders in proportion to their holdings  this 
resolution limits the aggregate nominal value of ordinary shares which may be issued by the directors on a non 
preemptive basis to £775000 being less than 5 of the issued ordinary share capital as at 19 march 2014  this 
authority also allows the directors within the same aggregate limit to sell for cash shares that may be held by the 
company in treasury  the directors do not have any present intention of exercising this authority which will expire 
at the agm in 2015 or if earlier 1 august 2015  in accordance with the preemption group’s statement of principles 
the directors do not intend to issue more than 75 of the issued share capital of the company for cash under this 
or previous authorities in any rolling three year period without prior consultation with shareholders
onmarket purchase of own shares
next has been returning capital to its shareholders by share repurchases as well as dividends since march 2000 
as part of its strategy for delivering sustainable long term growth in earnings per share  over this period and up 
to 19 march 2014 next has returned over £31bn to shareholders by way of share buybacks and almost £16bn in 
dividends of which £74m comprised special dividends  this buyback activity has enhanced earnings per share 
given shareholders the opportunity for capital returns as well as dividends and has been transparent to the 
financial markets  share buybacks have not been made at the expense of investment in the business  over the 
last five years next has invested over £550m in capital expenditure to support and grow the business
special resolution 18 will renew the authority for the company to make market purchases as defined in section 
693 of the 2006 act of its ordinary shares of 10p each provided that
a the aggregate number of ordinary shares authorised to be purchased shall be the lesser of 23239000 ordinary 
shares of 10p each being less than 15 of the issued share capital at 19 march 2014 and no more than 
1499 of the issued ordinary share capital outstanding at the date of the agm such limits to be reduced by 
the number of any shares to be purchased pursuant to ordinary resolution 19 offmarket purchases of own 
shares see below
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directors’ report
b the payment per ordinary share is not less than 10p and not more than 105 of the average of the middle 
market price according to the daily official list of the london stock exchange for the five business days 
immediately preceding the date of purchase or if higher the amount stipulated by article 51 of the buy
back and stabilisation regulation 2003 and
c  the renewed authority will expire at the agm in 2015 or if earlier 1 august 2015
the directors intend that this authority to purchase the company’s shares will only be exercised if doing so will 
result in an increase in earnings per share and being in the interests of shareholders generally it is considered to 
promote the success of the company  the directors will also give careful consideration to financial gearing levels 
of the company and its general financial position  the purchase price would be paid out of distributable profits  
it is the directors’ present intention to cancel any shares purchased under this authority  
the repurchase of ordinary shares would give rise to a stamp duty liability of the company at the rate of 05 of 
the consideration paid
the total number of employee share options to subscribe for shares outstanding at 19 march 2014 was 7242592  
this represents 47 of the issued share capital at that date  if the company were to buy back the maximum 
number of shares permitted pursuant to both the existing authority granted at the 2013 agm which will expire at 
the 2014 agm and the authority sought by this resolution then the total number of options to subscribe for shares 
outstanding at 19 march 2014 would represent 64 of the reduced issued share capital
offmarket purchases of own shares
the directors consider that share buybacks are an important means of returning value to shareholders and 
maximising sustainable long term growth in eps  contingent contracts for offmarket share purchases are an 
integral part of the company’s buyback strategy and offer a number of additional benefits compared to on
market share purchases
 ❚ contingent contracts allow the company to purchase shares at a discount to the market price prevailing at 
the date each contract is entered into  pursuant to the authority granted at the 2013 agm and up to 19 march 
2014 the company bought back 50000 shares for cancellation under such contracts at a discount of 50
 ❚ low share liquidity can often prevent the company from purchasing sufficient numbers of shares on a single day 
without risk of affecting the prevailing market price  contingent contracts enable the company to purchase 
shares over time without risk of distorting the prevailing share price and also spread the cash outflow
 ❚ contingent contracts entered into prior to any close period allow the company to take delivery of shares during 
these periods  
 ❚ competitive tendering involving up to five banks is used which minimises the risk of hidden purchase costs  the 
pricing mechanism ensures the company retains the benefit of declared and forecast dividends
 ❚ in future the company would also have the option to set a suspension price in individual contracts whereby 
they would automatically terminate if the company’s share price was to fall
as with any share buyback decision the directors would use this authority only after careful consideration taking 
into account market conditions prevailing at the time other investment opportunities and the overall financial 
position of the company  the directors will only purchase shares using such contracts if based on the contract 
discounted price rather than any future price it is earnings enhancing and promotes the success of the company 
for the benefit of its shareholders generally  it is the directors’ present intention to cancel any shares purchased 
under this authority  
ordinary resolution 19 will give the company authority to enter into contingent purchase contracts with any of 
goldman sachs international ubs ag deutsche bank ag hsbc bank plc and barclays bank plc under which 
shares may be purchased offmarket at a discount to the market price prevailing at the date each contract is 
entered into  the maximum which the company would be permitted to purchase pursuant to this authority would 
be the lower of 4000000 shares or a total cost of £200 million
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the principal features of the contracts are set out in appendix 1 to the notice of the agm  copies of the agreements 
the company proposes to enter into with any of the banks the “programme agreements” will be available for 
inspection at the registered office of the company and at the offices of pinsent masons 30 crown place earl street 
london ec2a 4es during normal working hours from the date of the notice of the agm up to the date of the agm 
and at the meeting itself
notice of general meetings
the notice period required by the 2006 act for general meetings of the company is 21 days unless shareholders 
approve a shorter notice period which cannot however be less than 14 clear days  however the company’s agm 
must always be held on at least 21 clear days’ notice  at the agm of the company held in 2013 shareholders 
authorised the calling of general meetings other than an agm on not less than 14 clear days’ notice and it is 
proposed that this authority be renewed  the authority granted by special resolution 20 if passed will be effective 
until the company’s agm in 2015  in order to be able to call a general meeting on less than 21 clear days’ notice 
the company will make electronic voting available to all shareholders for that meeting  the flexibility offered by 
this resolution will not be used as a matter of routine for such meetings but only where the directors consider it 
appropriate taking account of the business to be considered at the meeting and the interests of the company 
and its shareholders as a whole
recommendation
your board are of the opinion that all resolutions which are to be proposed at the 2014 agm will promote the 
success of the company and are in the best interests of its shareholders as a whole and accordingly unanimously 
recommend that you vote in favour of the resolutions  
share capital and major shareholders
details of the company’s share capital are shown in note 23 to the financial statements
the company was authorised by its shareholders at the 2013 agm to purchase its own shares  during the year 
the company purchased and cancelled 6201920 ordinary shares with a nominal value of £620192 of which 
50000 were purchased offmarket at a cost of £2958m representing 38 of its issued share capital at the start 
of the year
on 25 january 2014 the company had 155032317 shares in issue which remained the same as at 19 march 
2014
the following information has been received from holders of notifiable interests in the company’s issued share 
capital
notifications received up to 25 january 2014
no  of 
voting 
rights
 of 
voting 
rights nature of holding
fmr llc fidelity 23068634 1414 indirect interest
blackrock inc 15449829 997 indirect interest
schroders plc 8817239 479 indirect interest
next plc employee share option trust 6190747 399 direct interest
 at date of notification
no other notifications were received after 25 january up to 19 march 2014
additional information parent company accounts governance consolidated accounts business reports
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additional information
shareholder and voting rights
all members who hold ordinary shares are entitled to attend and vote at the agm  on a show of hands at a 
general meeting every member present in person and every duly appointed proxy shall have one vote and on a 
poll every member present in person or by proxy shall have one vote for every ordinary share held or represented  
it is intended that voting at the 2014 agm will be on a poll  the notice of meeting on pages 113 to 119 specifies 
deadlines for exercising voting rights
the company is not aware of any agreements between shareholders that may result in restrictions on the transfer 
of securities and voting rights  there are no restrictions on the transfer of ordinary shares in the company other 
than certain restrictions imposed by laws and regulations such as insider trading laws and market requirements 
relating to close periods and requirements of the listing rules whereby directors and certain employees of the 
company require board approval to deal in the company’s securities
the company’s articles of association may only be amended by a special resolution at a general meeting  
directors are elected or reelected by ordinary resolution at a general meeting the board may appoint a director 
but anyone so appointed must be elected by ordinary resolution at the next general meeting  under the articles 
of association directors retire and may offer themselves for reelection at a general meeting at least every three 
years  however in line with the provisions of the uk corporate governance code all directors will stand for election 
at the 2014 agm other than christine cross who is retiring from the board  
change of control
the company is not party to any significant agreements which take effect alter or terminate solely upon a change 
of control of the company following a takeover bid  however in the event of a change of control the company’s 
medium term borrowing facilities may be subject to early repayment if a majority of the lending banks give written 
notice to the company within 30 days of the change of control  in addition should a change of control cause a 
downgrading in the credit rating of the company’s corporate bonds to subinvestment grade which is not rectified 
within 120 days after the change in control holders of the bonds have the option to call for redemption of the 
bonds by the company at their nominal value together with accrued interest  
the company’s share option plans and its long term incentive and share matching plans contain provisions 
regarding a change of control  outstanding options and awards may vest on a change of control subject to the 
satisfaction of any relevant performance conditions
directors’ service contracts are terminable by the company on giving one year’s notice  there are no agreements 
between the company and its directors or employees providing for additional compensation for loss of office or 
employment whether through resignation redundancy or otherwise that occurs because of a takeover bid  
corporate governance
the corporate governance statement as required by the uk financial conduct authority’s disclosure and 
transparency rules dtr 726 comprises the additional information section of the directors’ report and the 
corporate governance statement included in this annual report
by order of the board
david keens 
director 
20 march 2014
directors’ report
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additional information parent company accounts consolidated accounts governance business reports
directors’ responsibilities
the directors are responsible for preparing the strategic report directors’ report and the financial statements in 
accordance with applicable law and regulations
as a listed company within the european union the directors are required to prepare the group financial 
statements in accordance with international financial reporting standards “ifrss” as adopted by the eu  the 
directors have elected to prepare the parent company financial statements in accordance with companies act 
2006 and uk accounting standard frs 101 “reduced disclosure framework”
under company law the directors must not approve the financial statements unless they are satisfied that they give 
a true and fair view of the state of affairs of the group and the company and of the profit or loss of the group for 
that period  in preparing the group financial statements the directors are required to
 ❚ select suitable accounting policies and then apply them consistently
 ❚ make judgments and estimates that are reasonable and prudent
 ❚ present information including accounting policies in a manner that provides relevant reliable comparable 
and understandable information
 ❚ in respect of the group financial statements to provide additional disclosures when compliance with the 
specific requirements of ifrs is insufficient to enable users to understand the impact of particular transactions 
other events and conditions on the group’s financial position and performance and
 ❚ to state that the group has complied with ifrs subject to any material departures disclosed and explained in 
the financial statements
 ❚ in respect of the parent company financial statements to state whether applicable uk accounting standards 
have been followed subject to any material departures disclosed and explained in the financial statements 
and
 ❚ prepare the financial statements on a going concern basis unless they consider that to be inappropriate  
the directors confirm that the financial statements comply with the above requirements
the directors are responsible for keeping adequate accounting records that are sufficient to show and explain 
the company’s transactions and disclose with reasonable accuracy at any time the financial position of the 
company and the group and enable them to ensure that the financial statements comply with the companies 
act 2006 and as regards the group financial statements article 4 of the ias regulation  they are also responsible 
for safeguarding the assets of the group and hence for taking reasonable steps for the prevention and detection 
of fraud and other irregularities
responsibilities statement 
we confirm that to the best of our knowledge
a the group financial statements which have been prepared in accordance with ifrss as adopted by the eu 
give a true and fair view of the assets liabilities financial position and results of the group and 
b the strategic report contained in this annual report includes a fair review of the development and performance 
of the business and the position of the company and the group together with a description of the principal 
risks and uncertainties that they face and
c the annual report and accounts taken as a whole is fair balanced and understandable and provides the 
information necessary for shareholders to assess the company’s performance business model and strategy
on behalf of the board
 
lord wolfson of aspley guise 
chief executive 
20 march 2014
 
david keens 
group finance director
directors’ responsibilities statement
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directors and officers
chairman of the board
john barton
aged 69  became a member of the board in 2002 and was 
appointed deputy chairman in 2004 and chairman in 2006  
he is also chairman of catlin group limited and easyjet plc 
and a nonexecutive director of ssp  john previously served 
as chief executive of jib group plc chairman of cable 
and wireless worldwide plc jardine lloyd thompson group 
plc wellington underwriting plc and brit insurance holdings 
plc and as a nonexecutive director of wh smith plc and 
hammerson plc
executive directors
lord wolfson of aspley guise chief executive 
aged 46  joined the group in 1991  appointed retail sales 
director in 1993 became responsible for next directory in 
1995 and was appointed to the board in 1997 with additional 
responsibilities for systems  appointed managing director of the 
next brand in 1999 and chief executive in 2001  
christos angelides group product director
aged 50  joined the group in 1986 and has a wealth of 
experience in the product area starting at next as a trainee 
menswear buyer and became general manager of next’s 
sourcing office in hong kong in 1989 menswear product 
director in 1994 and womenswear product director in 1998  
he was appointed to the board in 2000 and has overall 
responsibility for all aspects of the design buying quality and 
merchandising of next products
david keens group finance director
aged 60  joined next in 1986 as group treasurer and 
was appointed to the board in 1991  previous experience 
includes seven years in the accountancy profession and 
nine years in the uk and overseas operations of multinational 
manufacturers of consumer goods with roles including group 
treasurer and finance director  professional qualifications 
include the association of chartered certified accountants 
and the association of corporate treasurers
michael law group operations director 
aged 52  joined the group in 1995 as call centre manager 
for the next directory  michael was appointed call centre 
director in 2003 and in 2006 took responsibility for group it  
in 2010 he was appointed group operations director adding 
warehousing and logistics to his portfolio  michael is now 
responsible for all systems warehousing logistics and call 
centres within the group and was appointed to the board in 
2013
jane shields group sales and marketing director
aged 50  joined next retail in 1985 as a sales assistant in 
one of our london stores  jane worked her way through 
store management to be appointed sales director in 2000 
responsible for all store operations and training  in 2006 jane 
took additional responsibility for retail marketing and in 2010 
was appointed group sales and marketing director adding 
directory and online marketing to her portfolio  she was 
appointed to the board in 2013
company secretary 
seonna anderson
independent nonexecutive directors
jonathan dawson 
senior independent nonexecutive director
aged 62  became a member of the board in 2004  he 
is also a nonexecutive director of jardine lloyd thompson 
group plc and national grid plc and a partner in penfida 
partners llp  previous experience includes nonexecutive 
directorships of national australia group europe ltd standard 
life investments holdings limited and galliford try plc eight 
years in the ministry of defence and over twenty years in 
investment banking with lazard
steve barber
aged 62  became a member of the board in 2007  previous 
experience includes almost thirty years in the accountancy 
profession principally with price waterhouse where he was a 
senior partner  formerly finance director of mirror group and 
chief operating officer of whitehead mann  founder of the 
objectivity partnership a member of the audit quality forum 
and chairman of design objectives  
christine cross
aged 62  became a member of the board in 2005  she is 
also a nonexecutive director of sonae group ltd portugal 
woolworths limited australia brambles limited australia 
and kathmandu limited new zealand  christine is also 
a retail advisor to apax partners and warburg pincus  
previous experience includes chief retail advisor to 
pricewaterhousecoopers fourteen years as a director at tesco 
plc and fifteen years lecturing and course director roles at 
edinburgh and bath universities
francis salway
aged 56  joined the board in june 2010  he is also chairman 
of town  country housing group and a nonexecutive 
director of cadogan group limited  formerly chief executive 
of land securities group plc and past president of the british  
property federation
caroline goodall
aged 58  became a member of the board in january 2013  
caroline has thirty years’ experience in the legal profession 
with twenty years as a corporate finance partner at herbert 
smith including five years as head of the global corporate 
division  she is currently a nonexecutive director of svg 
capital plc and a nonexecutive on the partnership board of 
grant thornton uk llp  as well as a trustee and member of the 
council of the national trust
board committees
audit committee
steve barber committee chairman caroline goodall
christine cross francis salway
jonathan dawson
remuneration committee
jonathan dawson committee chairman christine cross
steve barber caroline goodall
john barton francis salway
nomination committee 
john barton committee chairman jonathan dawson
steve barber caroline goodall
christine cross francis salway
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additional information parent company accounts consolidated accounts governance business reports
chairman’s introduction
effective corporate governance is essential to the success of our business
as chairman my role is to manage the board ensuring it operates effectively and contains the right balance of 
skills and experience to successfully execute the strategy  the board is collectively responsible for the long term 
success of the company and for setting and executing the strategy
over many years next has successfully grown its business and created significant shareholder value against the 
backdrop of a challenging and changing external environment  this is the ultimate measure of our success and 
reflects our strong corporate governance structure and the stable effective management team we have in place  
we remain committed to the robust approach to governance which has served the business well
code compliance
the group complied throughout the year under review with the provisions set out in the uk corporate governance 
code and the uk fca disclosure and transparency rules  disclosures required by dtr726 with regard to share 
capital are presented in the ‘share capital and major shareholders’ and ‘additional information’ sections of the 
directors’ report
board composition and succession
the board includes five independent nonexecutive directors and the chairman who bring considerable knowledge 
judgement and experience to the group  the board has a good record of recruiting new nonexecutive directors 
at regular intervals to achieve appropriate rotation and continuity  the uk corporate governance code states that 
boards should pay particular attention to the independence of nonexecutives if they have served on the board 
for more than nine years from the date of their first election  jonathan dawson and christine cross are the longest 
serving nonexecutive directors having both been first elected at the agm in 2005 the ninth anniversary of their first 
election is therefore may 2014  in order to manage their succession in an orderly way it is intended that christine 
cross will not stand for reelection at the 2014 agm and an announcement on her replacement will be made in 
due course  it is also intended that jonathan dawson will stand down in 2015 again to be replaced by a new non
executive appointment at that time  notwithstanding this the board considers that all of its nonexecutive directors 
remain independent in character and judgement and their knowledge experience and other business interests 
continue to enable them to contribute significantly to the work of the board  terms and conditions of appointment of 
nonexecutive directors are available for inspection at the company’s registered office during normal business hours
next has a successful history of promoting internal candidates to most senior management and executive board 
positions through career development as demonstrated by the board appointments in 2013 of jane shields and 
michael law  it is expected that most future appointees will come from within the group
the company’s articles of association require directors to submit themselves for reelection by shareholders at 
least once every three years however the board has determined that all directors will stand for election at each 
agm in accordance with the uk corporate governance code
board responsibilities
the board is responsible for major policy decisions whilst delegating more detailed matters to its committees 
and officers including the chief executive  the board is responsible for the group’s system of internal control and 
for monitoring implementation of its policies by the chief executive  the system of internal control is designed to 
manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable 
and not absolute assurance against material misstatement or loss
the board holds regular meetings where it approves major decisions including significant items of capital 
expenditure investments treasury and dividend policy  board papers including reports from the chief executive 
and other executive directors are circulated in advance of each board meeting  the board is responsible for 
approving semiannual group budgets  performance against budget is reported to the board monthly and any 
substantial variances are explained  forecasts for each half year are revised and reviewed monthly  certain other 
important matters are subject to weekly or monthly reporting to the board or board committee including sales 
treasury operations and capital expenditure  there is a regular flow of written and verbal information between all 
directors irrespective of the timing of meetings
corporate governance
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corporate governance
all new directors receive a personalised induction programme tailored to their experience background and 
understanding of the group’s operations  individual training needs are reviewed regularly and training is provided 
where a need is identified or requested  all directors receive frequent updates on a variety of issues relevant to the 
group’s business including regulatory and governance issues
meetings of the nonexecutive directors without the executive directors being present are held at least annually 
both with and without the chairman  the company secretary attends all board meetings and is responsible for 
advising the board on corporate governance matters and facilitating the flow of information within the board
the board has appointed committees to carry out certain of its duties three of which are detailed below  each of 
these is chaired by a different director and has written terms of reference which are available for inspection on the 
company’s website wwwnextplccouk or on request  
attendance at meetings
the board held nine formal meetings during the year and these were fully attended with the exception that 
christine cross jane shields and jonathan dawson each missed one meeting  the audit committee held four 
meetings which were fully attended with the exception of one meeting which jonathan dawson did not attend  
the remuneration committee held six meetings which were fully attended with the exception that jonathan 
dawson and christine cross each missed one meeting  the nomination committee held two meetings which 
were fully attended with the exception of one meeting which christine cross did not attend
audit committee and external audit
the committee consists of the five independent nonexecutive directors including the senior nonexecutive director 
and at least one member steve barber the committee chairman with recent and relevant financial experience
the committee holds regular structured meetings and consults with external auditors and senior management 
including internal audit where appropriate  the committee frequently requests that executive directors and senior 
managers attend meetings in order to reinforce a strong culture of risk management  the chairman and group 
finance director have attended all of this year’s meetings
the committee’ s review of the interim and full year financial statements focused on the following areas of significance
a directory receivables and related provisions for doubtful debts  these at £682m represent the largest asset class 
on the group’s balance sheet  the committee reviewed the basis and level of provisions with management and 
the external auditor and was satisfied that the judgments taken were reasonable consistent and appropriate  
b pension scheme funding accounting and actuarial reports  prepared in accordance with international 
accounting standards the group’s balance sheet shows a net surplus of £70m comprised of £668m assets 
and £597m liabilities  the assumptions underlying the calculations are highly sensitive to small changes 
particularly in respect of discount rates see note 21 to the accounts and are not intended to reflect the full 
cost of a fully funded pension buyout
c foreign currency hedging  forward contracts and options are used to manage the sterling cost of future 
product purchases this enables selling prices and gross margins to be set  the systems and processes in 
relation to the valuation and accounting treatment of such contracts are regularly reviewed
d judgmental accounting areas  there is a requirement for industry specific and general accounting estimates 
including those in respect of stock valuation product returns rates onerous leases gift card redemptions 
taxation and share schemes  the committee satisfied itself as to the reasonableness and consistency of these 
estimates through discussions with management and the external auditor
these items were also addressed at the planning stage of the external audit and there were no significant 
differences between management and external auditor conclusions
the committee received reports and presentations from senior management on significant activities of the group 
including next sourcing directory international franchise legal treasury pensions corporate responsibility and 
code of practice ethical and responsible sourcing  the group’s internal control functions in areas such as 
finance it cyber security and product are regularly reviewed by the committee  frequent briefings are received 
on health and safety risk management business continuity whistleblowing and corporate governance generally
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additional information parent company accounts consolidated accounts governance business reports
the committee had discussions with the external auditor ey on audit planning fees accounting policies audit 
findings and internal control  ey also reported to the committee on the extraction of financial information and 
changes in financial position in respect of the £250m 2026 bond issued during the year  meetings were held 
with the auditor without management present and the independence of the auditor has been assessed  the 
effectiveness of the audit is assessed through the review of audit plans reports and conclusions and discussions 
with management  during the year the audit quality review team of the financial reporting council frc 
reviewed ey’s january 2013 audit of the group  the frc has given us a copy of their confidential report which has 
been reviewed and discussed by the committee and separately with the external auditor and the committee is 
satisfied that the matters raised do not give it concerns over the quality objectivity or independence of the audit 
and have been appropriately addressed by ey in this year’s audit  
the committee is aware of the international accounting standards board iasb proposal for bringing all leases 
on to the balance sheet  the chairman of the committee and group finance director have had meetings with 
representatives of accounting standard setters and other interested parties to express the group’s opposition to 
the current proposals  implementation of the iasb proposal would fundamentally change the group’s balance 
sheet by bringing on some £18bn undiscounted of theoretical “right to use” assets together with broadly 
matching lease liabilities  the proposals would have no impact on the group’s cash flows and minimal impact on 
reported profits but would add volatility to the balance sheet as the group actively manages the 500 properties 
from which it trades or leases as well as adding compliance costs
the audit committee is responsible for recommending the appointment reappointment and removal of the 
external auditor  consideration is given each year to an audit tender process however a tender was not considered 
necessary during the current year  ey or its predecessor firms have been the group’s auditor for over 20 years  
there has been regular partner rotation most recently in 2012  the committee is satisfied that ey continues to 
possess the skills and experience required to fulfill its duties effectively and efficiently  the appointment of the 
external auditor will continue to be reviewed annually and a tendering process will be undertaken to coincide with 
the rotation of the current audit partner in 2017 or earlier if the committee considers it appropriate
ey have reported to the committee that in their professional judgement they are independent within the meaning 
of regulatory and professional requirements and the objectivity of the audit engagement partner and audit staff 
is not impaired  the audit committee has reviewed this statement and concurs with its conclusion
in order to ensure the continued independence and objectivity of the group’s external auditor the board has strict 
policies regarding the provision of nonaudit services by the external auditor  the audit committee’s approval is 
required in advance for any nonaudit services to be provided where the fees exceed £100000 for an individual 
assignment or £150000 in aggregate for the year  the committee reviews audit and nonaudit fees twice a year  
proposed assignments of nonaudit services with anticipated fees in excess of £50000 are generally subject to 
competitive tender and decisions on the award of work are made on the basis of competence costeffectiveness 
and legislation  a tender process may not be undertaken where existing knowledge of the group enables the 
auditor to provide the relevant services more costeffectively than other parties for example in connection with 
bond issues or overseas taxation compliance services  the group’s external auditor is prohibited from providing 
any services that would conflict with their statutory responsibilities  during the year ey’s audit fee amounted to 
£05m and ey’s nonaudit fees were £01m in total  
the committee has reviewed its terms of reference and composition and believes that both are appropriate
remuneration committee
the committee consists of the chairman and five independent nonexecutive directors  the committee which is 
chaired by the senior nonexecutive director determines the remuneration of the executive directors in accordance 
with the remuneration policy and reviews the remuneration of senior management  the remuneration report on 
page 68 summarises the activities of the committee  
nomination committee
the committee consists of the chairman and five independent nonexecutive directors including the senior non
executive director  the committee meets whenever necessary to consider succession planning for directors and 
other senior executives to ensure that requisite skills and expertise are available to the board to address future 
challenges and opportunities
external consultants may be used to assist in identifying suitable external board candidates based on a written 
specification for each appointment  the chairman is responsible for providing a shortlist of candidates for 
consideration by the committee which then makes its recommendation for final approval by the board
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corporate governance
appointments to the board as with other positions within the group are made on merit according to the balance 
of skills and experience offered by prospective candidates  whilst acknowledging the benefits of diversity individual 
appointments are made irrespective of personal characteristics such as race religion or gender  the number of 
directors senior managers and employees by gender is given in the strategic report
chairman
there is a clear division of responsibilities between the offices of chairman and chief executive which is set out in 
writing and agreed by the board  the chairman manages the board to ensure that the group has appropriate 
objectives and an effective strategy that there is a high calibre chief executive with a team of executive directors 
able to implement the strategy that there are procedures in place to inform the board of performance against 
objectives and that the group is operating in accordance with a high standard of corporate governance
the current chairman became a member of the board in 2002 and was an independent nonexecutive director 
of the company prior to his appointment as chairman on 17 may 2006  his other significant commitments are 
noted on page 32 and the board considers that these are not a constraint on his agreed time commitment to 
the company
chief executive
the board sets objectives and annual targets for the chief executive to achieve  the board is responsible for 
general policy on how these objectives are achieved and delegates the implementation of that policy to the chief 
executive  the chief executive is required to report at each board meeting all material matters affecting the group 
and its performance
management delegation
the chief executive has delegated authority for the day to day management of the business to operational 
management drawn from executive directors and other senior management who have responsibility for the 
respective areas  the most important management meetings are the weekly next brand trading and capital 
expenditure meetings which consider the performance and development of the next brand through its different 
distribution channels  these meetings cover risk management of all business areas in respect of the next brand 
including product sales property warehousing systems and personnel  key performance indicators are monitored 
daily and weekly  
directors’ conflicts of interest
in accordance with the company’s articles of association the board has a formal system in place for directors to 
declare situational conflicts to be considered for authorisation by those directors who have no interest in the matter 
being considered  in deciding whether to authorise a situational conflict the nonconflicted directors consider 
the situation in conjunction with their general duties under the companies act 2006  they may impose limits 
or conditions when giving an authorisation or subsequently if considered appropriate  any situational conflicts 
considered by the board and any authorisations given are recorded in the board minutes and in a register of 
conflicts which is reviewed annually by the board  
performance evaluation
the senior independent nonexecutive director appraises the performance of the chairman through discussions 
with all the directors individually and together with the chairman appraises the performance of the chief 
executive  the performance of the executive directors is monitored throughout the year by the chief executive 
and the chairman  the chairman also monitors the performance of the nonexecutive directors
an externally facilitated review was carried out in 2013 by pricewaterhousecoopers this concluded that there were 
no significant weaknesses or risks that required attention  the board intends to conduct an externally facilitated 
review every three years in line with the uk corporate governance code
risk management
the board is responsible for the group’s risk management process and has delegated responsibility for its 
implementation to the chief executive and senior management best qualified in each area of the business  
the board sets guidance on the general level of risk which is acceptable and has a considered approach to 
evaluating risk and reward
the board confirms that it has carried out a review of the effectiveness of the group’s system of internal control 
including financial operational compliance and risk management  this includes identifying and evaluating key 
risks determining control strategies and considering how they may impact on the achievement of the business 
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objectives  the risk management process has been in place for the year under review and up to the date of 
approval of the annual report
risk management and internal control is a continuous process and has been considered by the board on a 
regular basis during the year  the board promotes the development of a strong control culture within the business  
during the year the board addressed the business risks which had been identified as key taking into account any 
changes in circumstances over the period  the audit committee has reviewed the level of internal audit resource 
available within the group and believes that it is adequate for the size structure and business risks of the group 
and is supplemented with appropriate external resources where needed
the board considers that the group’s management structure and continuous monitoring of key performance 
indicators provide the ability to identify promptly any material areas of concern  business continuity plans 
procedures manuals and codes of conduct are maintained in respect of specific major risk areas and business 
processes  through these measures the management of business risk is an integral part of group policy and the 
board will continue to develop risk management and internal controls where necessary
the use of a group accounting manual and prescribed reporting requirements for finance teams throughout the 
group ensures that the group’s accounting policies are clearly established and consistently applied  information 
is appropriately reviewed and reconciled as part of the reporting process and the use of a standard reporting 
package by all entities in the group ensures that information is presented consistently to facilitate the production 
of the consolidated financial statements
personal use of company assets
the board carried out a review during the year and confirmed that there has been no improper personal use of 
company assets by directors  policies are in place to ensure approval procedures are applied to expense claims 
and that these are in accordance with service agreements  the remuneration committee has reviewed the level 
of benefits in kind provided to executive directors
relations with shareholders
the board’s primary role is to promote the success of the company and the interests of shareholders  the board is 
accountable to shareholders for the performance and activities of the group
the board communicates with its shareholders in respect of the group’ s business activities through its annual report 
yearly and half yearly announcements interim management statements and other regular trading statements  
full year interim and other public announcements are presented in a consistent format with a particular focus on 
making the presentations as meaningful understandable and comparable as possible  this information is also 
made publicly available via the company’s website  
all shareholders have an opportunity to ask questions or represent their views to the board at the annual general 
meeting  the company’s largest shareholders are invited to the annual and interim results presentations at which 
executive and nonexecutive directors are present  nonexecutive directors attend other meetings with shareholders 
if requested  shareholder views are also communicated to the board through the inclusion in board reports of 
shareholder feedback and statements made by representative associations  whilst the board recognises that it is 
primarily accountable to the company’s shareholders the views of other providers of capital are also considered
the board takes care not to disseminate information of a share price sensitive nature which is not available to the 
market as a whole
going concern
the group’s business activities together with the factors likely to affect its future development performance and 
position are set out in the strategic report  the strategic report also describes the group’s financial position cash 
flows and borrowing facilities further information on which is detailed in the financial statements  information on 
the group’s financial management objectives and how derivative instruments are used to hedge its capital credit 
and liquidity risks is provided in note 27 of the financial statements
the directors report that having reviewed current performance and forecasts they have a reasonable expectation 
that the group has adequate resources to continue its operations for the foreseeable future  for this reason they 
have continued to adopt the going concern basis in preparing the financial statements
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remuneration report
this report sets out the remuneration of next’s directors for the year to january 2014 and is in three parts 1 
remuneration committee chairman’s statement 2 directors’ remuneration policy and 3 annual report on 
remuneration each prepared in accordance with schedule 8 to the large and mediumsized companies and 
groups accounts and reports amendment regulations 2013 “the new regulations” uk listing rules and uk 
corporate governance code  
separate resolutions to approve the directors’ remuneration policy and to approve the directors’ remuneration 
report excluding the directors’ remuneration policy will be proposed at the 2014 agm  
part 1 remuneration committee chairman’s statement 
this year’s remuneration report for next is the first prepared in accordance with the new regulations  whilst 
its format has changed to reflect the greater complexity of the regulations the approach of the remuneration 
committee has remained consistent with previous years 
we seek to avoid significant increases in base salaries and associated costs and prefer to offer annual and 
longer term incentives which reward strong business and financial performance measured against challenging 
benchmarks and reflecting the experience of shareholders  during the year next has achieved record pre
tax profits of £695m and eps of 3661p representing annual growth of 118 and 23 respectively over the 
past 3 years eps have grown by a compound annual average of 182  we consider that this consistently 
strong eps performance fully justifies the bonuses and long term incentives earned by the executive directors 
and other senior executives during the year  this performance has also been aligned with shareholders as  
dividends have grown by a compound annual average of 18 and the share price has risen 215 from £1994 to 
£6280 over the past 3 financial years
the committee has addressed the following areas over the past year
annual bonus and base salaries
at the start of the year the committee set targets for eps growth details of which are shown on page 43 
this year’s strong growth in eps resulted in a maximum payout under the annual bonus for executive directors  
base salaries for executive directors were increased by 2 in february 2014 having increased by 25 in 2012 and 
20 in 2013 in line with wider company cost of living awards and our general approach of restraint
long term incentive plan “ltip” 
since 2008 next has granted smaller awards twice a year rather than annually and accordingly this year the 
committee approved two further grants  in addition two awards matured  over the performance periods  
for these awards ie  between august 2010 to january 2014 next’s share price rose from £2150 to £6280 
and its market capitalisation grew from £40 billion to £97 billion  £492m was paid in dividends and a further  
£894m was returned to shareholders through share buybacks  the ltip for the three year performance  
period to july 2013  vested  100 when next’s tsr ranked  fourth  out of 21 companies in the comparator 
group and 100 of the ltip for the three year performance period to january 2014 has also vested as next’s 
tsr ranked third in the comparator group  
the estimated total value of these two ltips is substantial see the single total figure of remuneration table 
on page 56  however as there was no change in the basis of grant this is largely due to the 192 rise in  
share price over the performance periods  in 2011 we decided that the maximum value of ltips vesting for 
any participant in any one year irrespective of the underlying strength of performance or share price growth 
would be capped at £25m  the cap will be applied again this year and as a result lord wolfson’s and  
christos angelides’ ltip payments are expected to be reduced by an estimated £1097k and £762k respectively 
based on the calculation method prescribed by the new regulations  
in recognition of wider investor concern over the complexity of some annual and long term incentive plans 
the committee decided that executive directors should only participate in the ltip and will not be granted 
any further awards under the next share matching plan  instead the maximum value of ltip awards  
granted to executive directors each year will now be 200 of base salary previously 200 for lord wolfson and 
150 for other executive directors thereby consolidating the maximum value of awards that may otherwise be  
received if executive directors continued to participate in both plans  the combined level of awards for each 
executive director falls in consequence  
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to further align the interests of executive directors with shareholders the committee determined that any ltip 
awards granted to executive directors after january 2014 will be subject to the condition that any vesting on 
maturity will only be settled in shares and that after payment of tax and nic the net shares received should 
ordinarily be retained for a period of two further years  executive directors will retain dividend and voting  
rights during this holding period  
in light of the changes noted above the committee reviewed the cap on the maximum value of ltips vesting 
for any participant in any one year and decided it is appropriate to remove the cap for ltip awards granted 
to executive directors after january 2014  the £25m cap will remain in force for ltips with performance  
periods ending in the financial years to january 2015 and 2016
share matching plan “smp”
although the committee decided that executive directors should no longer participate in the smp  the committee 
considers that the smp still continues to meet its objectives for other members of the senior management team 
and intends to invite senior executives below board level to participate in 2014  we closely monitor the level of 
payouts under the smp and over the past 2 years we have made a number of changes to the original smp which 
have reduced the amounts that can be invested as well as the maximum level of matching award  
the 2011 smp will vest in full in april 2014 subject to the continued employment of participants  lord wolfson 
has waived his potential entitlement under the 2011 smp as he also did last year with his 2010 smp on the 
understanding that all next employees who have been employed since april 2011 will share an equivalent amount 
by way of a special bonus in may 2014 pro rata to their annual salary  the estimated value of the amount waived 
by lord wolfson based on the average next share price over the last 201314 financial quarter of £5647 is £38m
eps and performance measurement
the committee reviews each year the basis and performance measures used for the annual bonus ltip and smp   
the performance measures for both the annual bonus and the smp have hitherto been based solely on growth in 
eps – pretax eps for the annual bonus and fully diluted posttax eps for the smp 
the principal reasons for using the eps measure have been set out in previous remuneration reports  they are
 ❚ it is consistent and transparent to participants and shareholders
 ❚ next is predominantly a single business selling products through a number of channels under the next brand  
no significant earnings are derived from uncorrelated businesses and therefore a group metric such as eps is 
logical and consistent with strategy
 ❚ eps continues to be the core financial measure by which the board assesses overall performance and
 ❚ the use of eps is complemented by the application of tsr and consideration of the general economic underpin 
condition for the ltip  
as explained in previous years we consider it right that the impact of share buybacks on eps should be included 
in performance measurement as for more than a decade share buybacks have been one of next’s primary 
strategies in generating value for shareholders  share buybacks are regularly considered by the board  
and are subject to prior approval as to timing price and volume  shares are only bought after the board  
is fully satisfied that the ability to invest in the business and to continue to grow the regular dividend would 
not be impaired  following the board’s decision to set a minimum required return from any share buybacks  
as described in detail in the chief executive’s review and to make special dividend payments where the 
return cannot be met the committee felt that some changes were needed to the performance measure for the  
annual bonus  the committee concluded that the basis of calculation for this purpose should incorporate  
an appropriate adjustment to reflect the benefit to shareholders from any special dividends paid in the period  
this is in order to ensure that there is no unintentional reward or penalty for management arising from one means 
or another of returning value to shareholders  the board will maintain the same robust discipline over the level  
of special dividends as it does with regard to share buybacks
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remuneration report
the policy vote
as referred to earlier this report is split between a remuneration policy section and an annual report which 
sets out actual remuneration  each section will be subject to a separate vote at the agm  if approved the  
policy section will become binding on the board which means that payments outside the policy would be 
unauthorised  we believe that our policy as set out in this report strikes a balance between having the legal 
authority to make payments which we consider to be in shareholders’ interests whilst limiting the committee’s 
discretion appropriately  our policy therefore focuses on our actual approach to pay but includes the required 
formal caps at higher levels than we envisage needing so as to preserve some flexibility  the committee  
believes that it has demonstrated an appropriately conservative approach to pay decisions over many years and 
i wish to reassure shareholders that we will continue to do so
recommendation
each year the committee carefully reviews the level of performancerelated remuneration earned by the 
executive directors  the committee considers that the remuneration earned is a reflection of next’s strong  
operating and financial performance over the past three years  moreover we  believe that next’s  
remuneration strategy and the structures implementing that strategy have contributed positively to  
maintaining the stable and highly motivated management team at next who have continued to  
deliver consistently strong performances for shareholders 
we pay close attention to ensuring that there is an appropriate balance in the remuneration structure between 
annual and long term rewards as well as between cash and sharebased payments to ensure that the way next 
remunerates its senior executives drives the right behaviours and rewards the right outcomes  we believe that 
the present weighting towards rewarding sustainable long term performance is well aligned with shareholders’ 
interests  this is evident from the high proportion of directors’ performancerelated pay in the year that  
derived from growth in eps and share price
i hope very much that shareholders will support the committee’s continuing overall approach to remuneration 
and on behalf of the committee i commend both the policy and our report to you
jonathan dawson 
chairman of the remuneration committee
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part 2 remuneration policy
it is the company’s intention that the directors’ remuneration policy as set out in this part of the report should 
apply from the date of the company’s 2014 annual general meeting subject to its approval by shareholders at 
that meeting  
background
the committee’s objective is to ensure that the remuneration paid to senior executives is appropriate in both 
amount and structure is directly linked to the company’s annual and long term performance and aligned 
with the interests of shareholders  we believe that stable and transparent remuneration structures are key  
elements in a fair system for rewarding personal and collective contribution across the business  there are  
bonus structures throughout the company including head office stores call centres and warehouses
the focus is on ensuring that a competitive and appropriate base salary is paid to directors and senior managers 
together with incentive arrangements that are
 ❚ appropriate in both amount and structure
 ❚ directly linked to the company’s annual and long term performance
 ❚ in alignment with the interests of shareholders and our long term strategy and
 ❚ stable and transparent
pay and employment conditions elsewhere in the group are considered to ensure that differences for directors 
are justified  remuneration policy does not conflict with the company’s approach to environmental social  
and corporate governance matters and we believe the current arrangements do not encourage directors to take 
undue business risks
the table below summarises the company’s policies with regard to each of the elements of remuneration for 
existing directors and the approach to payments on external recruitment and termination
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element
purpose and link to 
strategy operation maximum potential value performance measures and targets
changes for 2013 and 2014
this column is to provide information and is not  
formally part of the directors’ remuneration policy but is 
part of the annual report on remuneration
salary
to provide a satisfactory 
base salary within a total 
package comprising 
salary and performance
related pay 
performancerelated 
components and certain 
benefits are calculated 
by reference to base 
salary  the level of salary 
broadly reflects the value 
of the individual their role 
skills and experience  
reviewed annually generally effective 1 february the 
committee focuses particularly on ensuring that an 
appropriate base salary is paid to directors and senior 
managers the committee considers salaries in the 
context of overall packages with reference to market 
data individual experience and performance and the 
level and structure of remuneration for other employees 
and the external environment  external benchmarking 
analysis is only occasionally undertaken and the 
committee has not adopted a prescribed objective of 
setting salaries by reference to a particular percentile 
or benchmark
there is no guaranteed annual increase  the committee 
considers it important that base salary increases are 
kept under tight control given the multiplier effect of 
such increases on future costs  in recent years increases 
in executive directors’ salaries have been in line with the 
wider company cost of living awards  
under the new regulations the company is required to 
specify a maximum potential value for each component 
of pay  accordingly for the period of this policy no salary 
paid to an executive director in any year will exceed 
the median base salary of ftse 100 chief executives 
as confirmed by independent advisers  currently this is 
circa £850000 per annum
not applicable base salaries of the executive directors increased by 2 in february 
2014 in line with the wider company cost of living awards
base salaries for the executive directors from february 2014 are
£’000
lord wolfson 743
christos angelides 539
david keens 496
michael law 306
jane shields 306
annual bonus
to incentivise delivery 
of stretching annual 
financial goals  
to provide focus on 
the company’s key 
financial objectives
to provide a retention 
element in the case 
of the chief executive 
as any annual bonus 
in excess of 100 of 
base salary is payable 
in shares deferred for a 
period of two years and 
subject to forfeiture if 
he voluntarily resigns 
prior to the end of that 
period
performance measures and related performance 
targets are set at the commencement of each financial 
year by the committee  company policy is to set 
such measures by reference to pretax eps but the 
committee retains flexibility to use different performance 
measures during the period of this policy if it considers it 
appropriate to do so
at the threshold level of performance 20 of the 
maximum bonus may be earned  a straight sliding 
scale of payments operates for performance between 
the minimum and maximum levels  there is no inline 
target level although for the purposes of the scenario 
charts on pages 52 and 53 50 of maximum bonus 
has been assumed because it is the midpoint
at present company policy is to provide a maximum 
bonus of 150 of salary for the chief executive and 100 
of salary for other executive directors
although the committee has no current plan to make 
any changes for the period of this policy the committee 
reserves flexibility to
 ❚ increase maximum bonus levels for executive 
directors in any financial year to 200 of salary  
this flexibility would be used only in exceptional 
circumstances and where the committee considered 
any such increase to be in the best interests of 
shareholders and after appropriate consultation with 
key shareholders
 ❚ lessen the current differentials in bonus maximums 
which exist between the chief executive and other 
executive directors and 
 ❚ introduce or extend an element of compulsory 
deferral of bonus outcomes if considered appropriate 
by the committee 
while the committee reserves flexibility to apply different performance 
measures it currently uses stretching pretax eps growth targets set 
annually which take account of factors including the company’s 
budgets and the wider background of the uk economy  pretax eps 
has been chosen as the basic metric to avoid executives benefitting 
from external factors such as reductions in the rate of corporation 
tax  there has to be growth in eps before any bonus is payable to 
executive directors  by contrast the threshold for staff bonuses is set 
at a lower level than for directors  the committee reserves flexibility 
to apply discretion in the interests of fairness to shareholders and 
executives by making adjustments it considers appropriate  
as noted in the committee chairman’s statement on page 39 the 
basis of performance measurement is changing to incorporate 
an appropriate adjustment to eps growth to reflect the benefit to 
shareholders from special dividends paid in any period
for the year to january 2014 performance targets were set 
requiring pretax eps of 408p before any bonus became payable 
being growth of 43 on the prior year  maximum bonus of 150 
and 100 of salary for the chief executive and the other executive 
directors respectively was payable if pretax eps exceeded 446p 
being growth of 14
actual pretax eps achieved was 460p growth of 176  accordingly  
a bonus of 150 of salary for the chief executive and 100 for the 
other executive directors was earned  
bonus performance targets for the year ahead have been set but 
are not disclosed in advance for reasons of commercial sensitivity  
the targets and performance will be disclosed in next year’s 
remuneration report
ltip
to incentivise manage
ment to deliver superior 
total shareholder 
returns “tsr” over 
three year performance 
periods relative to a 
selected group of retail 
companies
retention of key 
employees over three
year performance 
periods
a variable percentage of a predetermined maximum 
number of shares can vest depending on relative 
tsr performance against the comparator group the 
committee selects at grant current practice is to 
select a comparator group of retail companies shown 
on page 64
the maximum number of shares that may be awarded 
to each director is a percentage of each director’s 
base salary at the date of each grant divided by 
next’s average share price over the three months prior 
to the start of the performance period
ltip awards are made twice a year to reduce the 
volatility inherent in the tsr performance measure and 
to enhance the portfolio effect for participants of more 
frequent but smaller grants
the company has the option to settle vested ltip 
awards in cash
the ltip does not credit participants with additional 
value in respect of dividends paid over any vesting 
period except that the committee has discretion to 
award such credit for special dividends
since 2008 the maximum aggregate annual award 
allowed under the current plan rules has been over 
shares worth 200 of base salary and up to 300 in 
exceptional circumstances  with effect from 2012 
the maximum value of any ltip awards that vest for a 
participant in a year has been capped at £25m
within this maximum the chief executive and other 
executive directors receive grants equal to 100 and 
75 of annual salary respectively every six months  the 
committee reserves the right to vary these levels within 
the overall annual limits described above
for 2014 onwards the committee has decided that the 
maximum possible aggregate value of awards granted 
to all executive directors will be 200 of annual salary 
ie  100 every six months  the committee reserves 
the right to vary these levels within the overall annual 
limits described above  in addition awards granted to 
executive directors which vest must be taken in shares 
and the net shares after payment of tax and nic 
must be held for a minimum period of two further years  
the committee reserves the right to lengthen but not 
reduce the performance period and to introduce a 
retention period or to further increase this holding period
in light of the cessation of further grants under the smp 
see below the committee has reviewed the cap on 
the maximum value of ltips vesting for any participant 
in any one year and has decided it is appropriate to 
remove the cap for ltip awards granted to executive 
directors after january 2014  the £25m cap will remain 
in force for vesting ltips with three year performance 
periods ending in financial years to january 2015 and 
january 2016
performance is measured over periods of three years which 
commence in february and august by measuring next’s tsr against 
a group currently 20 other uk listed retail companies which are 
in the view of the committee most comparable with next in size or 
nature of their business  comparison against such a group is more 
likely to reflect the company’s relative performance against its peers 
thereby resulting in grants being made on an appropriate basis
relative performance percentage vesting
below median 0
median 20
upper quintile 100
if no entitlement has been earned at the end of a three year 
performance period then that award will lapse there is no retesting
before any of the awards vest the committee must have regard to the 
performance of the company in the light of underlying economic and 
other circumstances including eps performance of the company and 
of other uk retailers over the period  whilst not disclosed in advance 
the factors taken into account for these purposes are disclosed in the 
relevant year’s remuneration report
the committee reserves flexibility to apply different performance 
measures and targets in respect of new grants for the period of this 
policy
the grant that matured in july 2013 vested 100 as the tsr 
ranked fourth out of 21 in the comparator group  the committee 
also assessed the performance of next during the performance 
period and determined that the economic underpin performance 
condition had been satisfied
the grant that matured in january 2014 also vested at 100 as the 
tsr ranked third out of 21 in the comparator group  the committee 
also determined that the economic underpin performance 
condition had been satisfied
for recent policy related changes please see commentary in the 
maximum potential value column to the left  
remuneration report
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additional information parent company accounts consolidated accounts governance business reports
element
purpose and link to 
strategy operation maximum potential value performance measures and targets
changes for 2013 and 2014
this column is to provide information and is not  
formally part of the directors’ remuneration policy but is 
part of the annual report on remuneration
salary
to provide a satisfactory 
base salary within a total 
package comprising 
salary and performance
related pay 
performancerelated 
components and certain 
benefits are calculated 
by reference to base 
salary  the level of salary 
broadly reflects the value 
of the individual their role 
skills and experience  
reviewed annually generally effective 1 february the 
committee focuses particularly on ensuring that an 
appropriate base salary is paid to directors and senior 
managers the committee considers salaries in the 
context of overall packages with reference to market 
data individual experience and performance and the 
level and structure of remuneration for other employees 
and the external environment  external benchmarking 
analysis is only occasionally undertaken and the 
committee has not adopted a prescribed objective of 
setting salaries by reference to a particular percentile 
or benchmark
there is no guaranteed annual increase  the committee 
considers it important that base salary increases are 
kept under tight control given the multiplier effect of 
such increases on future costs  in recent years increases 
in executive directors’ salaries have been in line with the 
wider company cost of living awards  
under the new regulations the company is required to 
specify a maximum potential value for each component 
of pay  accordingly for the period of this policy no salary 
paid to an executive director in any year will exceed 
the median base salary of ftse 100 chief executives 
as confirmed by independent advisers  currently this is 
circa £850000 per annum
not applicable base salaries of the executive directors increased by 2 in february 
2014 in line with the wider company cost of living awards
base salaries for the executive directors from february 2014 are
£’000
lord wolfson 743
christos angelides 539
david keens 496
michael law 306
jane shields 306
annual bonus
to incentivise delivery 
of stretching annual 
financial goals  
to provide focus on 
the company’s key 
financial objectives
to provide a retention 
element in the case 
of the chief executive 
as any annual bonus 
in excess of 100 of 
base salary is payable 
in shares deferred for a 
period of two years and 
subject to forfeiture if 
he voluntarily resigns 
prior to the end of that 
period
performance measures and related performance 
targets are set at the commencement of each financial 
year by the committee  company policy is to set 
such measures by reference to pretax eps but the 
committee retains flexibility to use different performance 
measures during the period of this policy if it considers it 
appropriate to do so
at the threshold level of performance 20 of the 
maximum bonus may be earned  a straight sliding 
scale of payments operates for performance between 
the minimum and maximum levels  there is no inline 
target level although for the purposes of the scenario 
charts on pages 52 and 53 50 of maximum bonus 
has been assumed because it is the midpoint
at present company policy is to provide a maximum 
bonus of 150 of salary for the chief executive and 100 
of salary for other executive directors
although the committee has no current plan to make 
any changes for the period of this policy the committee 
reserves flexibility to
 ❚ increase maximum bonus levels for executive 
directors in any financial year to 200 of salary  
this flexibility would be used only in exceptional 
circumstances and where the committee considered 
any such increase to be in the best interests of 
shareholders and after appropriate consultation with 
key shareholders
 ❚ lessen the current differentials in bonus maximums 
which exist between the chief executive and other 
executive directors and 
 ❚ introduce or extend an element of compulsory 
deferral of bonus outcomes if considered appropriate 
by the committee 
while the committee reserves flexibility to apply different performance 
measures it currently uses stretching pretax eps growth targets set 
annually which take account of factors including the company’s 
budgets and the wider background of the uk economy  pretax eps 
has been chosen as the basic metric to avoid executives benefitting 
from external factors such as reductions in the rate of corporation 
tax  there has to be growth in eps before any bonus is payable to 
executive directors  by contrast the threshold for staff bonuses is set 
at a lower level than for directors  the committee reserves flexibility 
to apply discretion in the interests of fairness to shareholders and 
executives by making adjustments it considers appropriate  
as noted in the committee chairman’s statement on page 39 the 
basis of performance measurement is changing to incorporate 
an appropriate adjustment to eps growth to reflect the benefit to 
shareholders from special dividends paid in any period
for the year to january 2014 performance targets were set 
requiring pretax eps of 408p before any bonus became payable 
being growth of 43 on the prior year  maximum bonus of 150 
and 100 of salary for the chief executive and the other executive 
directors respectively was payable if pretax eps exceeded 446p 
being growth of 14
actual pretax eps achieved was 460p growth of 176  accordingly  
a bonus of 150 of salary for the chief executive and 100 for the 
other executive directors was earned  
bonus performance targets for the year ahead have been set but 
are not disclosed in advance for reasons of commercial sensitivity  
the targets and performance will be disclosed in next year’s 
remuneration report
ltip
to incentivise manage
ment to deliver superior 
total shareholder 
returns “tsr” over 
three year performance 
periods relative to a 
selected group of retail 
companies
retention of key 
employees over three
year performance 
periods
a variable percentage of a predetermined maximum 
number of shares can vest depending on relative 
tsr performance against the comparator group the 
committee selects at grant current practice is to 
select a comparator group of retail companies shown 
on page 64
the maximum number of shares that may be awarded 
to each director is a percentage of each director’s 
base salary at the date of each grant divided by 
next’s average share price over the three months prior 
to the start of the performance period
ltip awards are made twice a year to reduce the 
volatility inherent in the tsr performance measure and 
to enhance the portfolio effect for participants of more 
frequent but smaller grants
the company has the option to settle vested ltip 
awards in cash
the ltip does not credit participants with additional 
value in respect of dividends paid over any vesting 
period except that the committee has discretion to 
award such credit for special dividends
since 2008 the maximum aggregate annual award 
allowed under the current plan rules has been over 
shares worth 200 of base salary and up to 300 in 
exceptional circumstances  with effect from 2012 
the maximum value of any ltip awards that vest for a 
participant in a year has been capped at £25m
within this maximum the chief executive and other 
executive directors receive grants equal to 100 and 
75 of annual salary respectively every six months  the 
committee reserves the right to vary these levels within 
the overall annual limits described above
for 2014 onwards the committee has decided that the 
maximum possible aggregate value of awards granted 
to all executive directors will be 200 of annual salary 
ie  100 every six months  the committee reserves 
the right to vary these levels within the overall annual 
limits described above  in addition awards granted to 
executive directors which vest must be taken in shares 
and the net shares after payment of tax and nic 
must be held for a minimum period of two further years  
the committee reserves the right to lengthen but not 
reduce the performance period and to introduce a 
retention period or to further increase this holding period
in light of the cessation of further grants under the smp 
see below the committee has reviewed the cap on 
the maximum value of ltips vesting for any participant 
in any one year and has decided it is appropriate to 
remove the cap for ltip awards granted to executive 
directors after january 2014  the £25m cap will remain 
in force for vesting ltips with three year performance 
periods ending in financial years to january 2015 and 
january 2016
performance is measured over periods of three years which 
commence in february and august by measuring next’s tsr against 
a group currently 20 other uk listed retail companies which are 
in the view of the committee most comparable with next in size or 
nature of their business  comparison against such a group is more 
likely to reflect the company’s relative performance against its peers 
thereby resulting in grants being made on an appropriate basis
relative performance percentage vesting
below median 0
median 20
upper quintile 100
if no entitlement has been earned at the end of a three year 
performance period then that award will lapse there is no retesting
before any of the awards vest the committee must have regard to the 
performance of the company in the light of underlying economic and 
other circumstances including eps performance of the company and 
of other uk retailers over the period  whilst not disclosed in advance 
the factors taken into account for these purposes are disclosed in the 
relevant year’s remuneration report
the committee reserves flexibility to apply different performance 
measures and targets in respect of new grants for the period of this 
policy
the grant that matured in july 2013 vested 100 as the tsr 
ranked fourth out of 21 in the comparator group  the committee 
also assessed the performance of next during the performance 
period and determined that the economic underpin performance 
condition had been satisfied
the grant that matured in january 2014 also vested at 100 as the 
tsr ranked third out of 21 in the comparator group  the committee 
also determined that the economic underpin performance 
condition had been satisfied
for recent policy related changes please see commentary in the 
maximum potential value column to the left  
annual report and accounts january 2014
43 2315804  proof 2  14032014
remuneration report
element
purpose and link to 
strategy operation maximum potential value performance measures and targets
changes for 2013 and 2014
this column is to provide information and is not  
formally part of the directors’ remuneration policy but is 
part of the annual report on remuneration
smp
to encourage greater 
ownership of next 
shares by senior 
executives excluding 
executive directors 
and thereby further 
align their interests 
with shareholders  
participants who invest a proportion of any annual 
cash bonus in next shares can receive up to a 
maximum of two times the original number of shares 
they purchase with their bonus  any matching is 
conditional upon achieving performance measures 
over the following three years  
the committee’s policy is to set such performance 
measures by reference to fully diluted posttax 
earnings per share but the committee retains flexibility 
to use different measures during the period of this 
policy if it considers it appropriate to do so including 
adjustments to reflect the benefit to shareholders from 
special dividends  
as noted in the committee chairman’s statement 
executive directors will no longer be granted awards 
under the smp after january 2014 and participation 
will be restricted to senior executives below board 
level although the committee reserves flexibility to re
introduce executive director participation within the 
period of this policy if it considers it appropriate to do 
so
the smp does not credit participants with additional 
value in respect of dividends paid over any vesting 
period except that the committee has discretion to 
award such credit for special dividends
the maximum matching ratio available under smp is 31 
matching the pretax equivalent of the amount invested 
in shares  
within this maximum matching ratio a match of up to 21 
based on the actual number of investment shares has 
been offered in practice although the company retains 
flexibility within the period of this policy to offer a different 
matching ratio within the scope of the maximum ratio 
set out above
although the company reserves flexibility to apply different 
performance measures the committee currently uses measures 
based on stretching fully diluted posttax eps targets
the targets for awards in each year will be detailed in the report and 
accounts
participants ie  senior executives below board level only can 
invest all of their posttax bonus in the smp in 2014  in 2013 the 
chief executive was allowed to invest £200000 and other executive 
directors £150000  the matching award remains at a maximum of 
two times the number of shares purchased by the participants
the minimum match of 05 of a share requires fully diluted eps 
growth of 12 and the maximum match of two times requires 
growth of 30 over the three year performance period
pension
to provide for 
retirement through 
company sponsored 
schemes or a cash 
alternative for personal 
pension planning
all executive directors are deferred members of the 
defined benefit “db” section of the 2013 next group 
pension plan “the plan”  
in addition to being deferred members of the 
db section of the plan lord wolfson and christos 
angelides are members of the unfunded unapproved 
supplementary pension arrangement “spa” 
described on page 59  their future pensions will be 
calculated by reference to their october 2012 salaries 
rather than final earnings and future salary changes 
will have no effect  
jane shields and david keens ceased to contribute 
to the plan in 2011 and michael law in 2012  their 
pensions are no longer linked to salary and will 
increase in line with statutory deferred revaluation only 
ie  in line with cpi  
executive directors receive salary supplements of 15 
in lieu of past changes to their pension arrangements 
in line with other senior employee members of the db 
benefit section of the plan  
new employees of the group can join the defined 
contribution “dc” section of the next plan or the 
statutory autoenrolment plan described on page 59
bonuses are not taken into account in assessing 
pensionable earnings in the plan
under the db section and the spa the maximum 
potential pension is only achieved on completion of at 
least 20 years pensionable service at age 65 when two 
thirds of the executive director’s annual pensionable 
salary at october 2012 could become payable  the 
lump sum payable on death is four times base salary  
no dc contributions or equivalent salary supplement 
payments will be made to an executive director in any 
year that will exceed the median level of contributions 
or payments made to ftse 100 chief executives as at 
the time the rate is set as confirmed by independent 
advisers to the committee
not applicable not applicable
annual report and accounts january 2014
44 2315804  proof 2  14032014
additional information parent company accounts consolidated accounts governance business reports
element
purpose and link to 
strategy operation maximum potential value performance measures and targets
changes for 2013 and 2014
this column is to provide information and is not  
formally part of the directors’ remuneration policy but is 
part of the annual report on remuneration
smp
to encourage greater 
ownership of next 
shares by senior 
executives excluding 
executive directors 
and thereby further 
align their interests 
with shareholders  
participants who invest a proportion of any annual 
cash bonus in next shares can receive up to a 
maximum of two times the original number of shares 
they purchase with their bonus  any matching is 
conditional upon achieving performance measures 
over the following three years  
the committee’s policy is to set such performance 
measures by reference to fully diluted posttax 
earnings per share but the committee retains flexibility 
to use different measures during the period of this 
policy if it considers it appropriate to do so including 
adjustments to reflect the benefit to shareholders from 
special dividends  
as noted in the committee chairman’s statement 
executive directors will no longer be granted awards 
under the smp after january 2014 and participation 
will be restricted to senior executives below board 
level although the committee reserves flexibility to re
introduce executive director participation within the 
period of this policy if it considers it appropriate to do 
so
the smp does not credit participants with additional 
value in respect of dividends paid over any vesting 
period except that the committee has discretion to 
award such credit for special dividends
the maximum matching ratio available under smp is 31 
matching the pretax equivalent of the amount invested 
in shares  
within this maximum matching ratio a match of up to 21 
based on the actual number of investment shares has 
been offered in practice although the company retains 
flexibility within the period of this policy to offer a different 
matching ratio within the scope of the maximum ratio 
set out above
although the company reserves flexibility to apply different 
performance measures the committee currently uses measures 
based on stretching fully diluted posttax eps targets
the targets for awards in each year will be detailed in the report and 
accounts
participants ie  senior executives below board level only can 
invest all of their posttax bonus in the smp in 2014  in 2013 the 
chief executive was allowed to invest £200000 and other executive 
directors £150000  the matching award remains at a maximum of 
two times the number of shares purchased by the participants
the minimum match of 05 of a share requires fully diluted eps 
growth of 12 and the maximum match of two times requires 
growth of 30 over the three year performance period
pension
to provide for 
retirement through 
company sponsored 
schemes or a cash 
alternative for personal 
pension planning
all executive directors are deferred members of the 
defined benefit “db” section of the 2013 next group 
pension plan “the plan”  
in addition to being deferred members of the 
db section of the plan lord wolfson and christos 
angelides are members of the unfunded unapproved 
supplementary pension arrangement “spa” 
described on page 59  their future pensions will be 
calculated by reference to their october 2012 salaries 
rather than final earnings and future salary changes 
will have no effect  
jane shields and david keens ceased to contribute 
to the plan in 2011 and michael law in 2012  their 
pensions are no longer linked to salary and will 
increase in line with statutory deferred revaluation only 
ie  in line with cpi  
executive directors receive salary supplements of 15 
in lieu of past changes to their pension arrangements 
in line with other senior employee members of the db 
benefit section of the plan  
new employees of the group can join the defined 
contribution “dc” section of the next plan or the 
statutory autoenrolment plan described on page 59
bonuses are not taken into account in assessing 
pensionable earnings in the plan
under the db section and the spa the maximum 
potential pension is only achieved on completion of at 
least 20 years pensionable service at age 65 when two 
thirds of the executive director’s annual pensionable 
salary at october 2012 could become payable  the 
lump sum payable on death is four times base salary  
no dc contributions or equivalent salary supplement 
payments will be made to an executive director in any 
year that will exceed the median level of contributions 
or payments made to ftse 100 chief executives as at 
the time the rate is set as confirmed by independent 
advisers to the committee
not applicable not applicable
annual report and accounts january 2014
45 2315804  proof 2  14032014
remuneration report
element
purpose and link to 
strategy operation maximum potential value performance measures and targets
changes for 2013 and 2014
this column is to provide information and is not  
formally part of the directors’ remuneration policy but is 
part of the annual report on remuneration
other benefits
to provide market 
competitive noncash 
benefits
executive directors receive benefits which may include 
the provision of a company car or cash alternative 
private medical insurance subscriptions to professional 
bodies and staff discount on group merchandise  a 
driver is also made available to the executive directors 
for business purposes
the committee reserves discretion to introduce new 
benefits where it concludes that it is in the interests 
of next to do so having regard to the particular 
circumstances and to market practice and reserves 
flexibility to make relocation related payments  
whilst not considered necessarily to be benefits 
the committee reserves the discretion to authorise 
attendance by directors and their family members at 
the company’s cost if required at corporate events 
and to receive reasonable levels of hospitality in 
accordance with company policies
during the policy period the value of benefits other 
than relocation costs paid to an executive director 
in any year will not exceed £100000  in addition the 
committee reserves the right to pay up to £250000 
relocation costs in any year to an executive director 
if considered appropriate to secure the better 
performance by an executive director of their duties
 
during the policy period the actual level of taxable 
benefits provided will be included in the single total 
figure of remuneration
not applicable not applicable
save as y ou 
earn scheme
to encourage all 
employees to make a 
long term investment in 
the company’s shares
executive directors can participate in the company’s 
save as you earn sharesave scheme which is hmrc 
approved and open to all employees  option grants 
are generally made annually with the exercise price 
discounted by a maximum of 20 of the share price at 
the date an invitation is issued  options are exercisable 
three or five years from the date of grant  alternatively 
participants may ask for their contributions to be 
returned
investment currently limited to a maximum amount of 
£250 per month but may increase in line with new limits 
set by hmrc
not applicable monthly savings limit may be increased to £500 in line with new 
limits set by hmrc
annual report and accounts january 2014
46 2315804  proof 2  14032014
additional information parent company accounts consolidated accounts governance business reports
element
purpose and link to 
strategy operation maximum potential value performance measures and targets
changes for 2013 and 2014
this column is to provide information and is not  
formally part of the directors’ remuneration policy but is 
part of the annual report on remuneration
other benefits
to provide market 
competitive noncash 
benefits
executive directors receive benefits which may include 
the provision of a company car or cash alternative 
private medical insurance subscriptions to professional 
bodies and staff discount on group merchandise  a 
driver is also made available to the executive directors 
for business purposes
the committee reserves discretion to introduce new 
benefits where it concludes that it is in the interests 
of next to do so having regard to the particular 
circumstances and to market practice and reserves 
flexibility to make relocation related payments  
whilst not considered necessarily to be benefits 
the committee reserves the discretion to authorise 
attendance by directors and their family members at 
the company’s cost if required at corporate events 
and to receive reasonable levels of hospitality in 
accordance with company policies
during the policy period the value of benefits other 
than relocation costs paid to an executive director 
in any year will not exceed £100000  in addition the 
committee reserves the right to pay up to £250000 
relocation costs in any year to an executive director 
if considered appropriate to secure the better 
performance by an executive director of their duties
 
during the policy period the actual level of taxable 
benefits provided will be included in the single total 
figure of remuneration
not applicable not applicable
save as y ou 
earn scheme
to encourage all 
employees to make a 
long term investment in 
the company’s shares
executive directors can participate in the company’s 
save as you earn sharesave scheme which is hmrc 
approved and open to all employees  option grants 
are generally made annually with the exercise price 
discounted by a maximum of 20 of the share price at 
the date an invitation is issued  options are exercisable 
three or five years from the date of grant  alternatively 
participants may ask for their contributions to be 
returned
investment currently limited to a maximum amount of 
£250 per month but may increase in line with new limits 
set by hmrc
not applicable monthly savings limit may be increased to £500 in line with new 
limits set by hmrc
annual report and accounts january 2014
47 2315804  proof 2  14032014
remuneration report
element
purpose and link to 
strategy operation maximum potential value performance measures and targets
changes for 2013 and 2014
this column is to provide information and is not  
formally part of the directors’ remuneration policy but is 
part of the annual report on remuneration
termination 
payments
consistent with market 
practice to ensure 
next can recruit and 
retain key executives 
whilst protecting the 
company from making 
payments for failure
the committee will consider the need for and quantum 
of any termination payments having regard to all of 
the relevant facts and circumstances at that time  
future service contracts will take into account relevant 
published guidance
each of the executive directors has a rolling service 
contract which commenced on either 14 march 2013 
or for michael law and jane shields on 1 july 2013  the 
contract is terminable by the company on giving one 
year’s notice  the company has reserved the right to 
make a payment in lieu of notice on termination of an 
executive director’s contract equal to their base salary 
and contractual benefits excluding performance
related pay  
if notice of termination is given immediately following a 
change of control of the company the executive director 
may request immediate termination of his contract and 
payment of liquidated damages equal to the value of his 
base salary and contractual benefits  
in normal circumstances executives have no entitlement 
in respect of loss of performance bonuses and all share 
awards would lapse following resignation  however under 
certain circumstances eg  ‘good leaver’ or change in 
control and solely at the committee’s discretion annual 
bonus payments may be made and would ordinarily be 
calculated up to the date of termination only  in addition 
awards made under the ltip and smp would in those 
circumstances generally be time prorated and remain 
subject to the application of the performance conditions 
at the normal measurement date  the committee also 
has a standard discretion to vary the application of time 
prorating in such cases  “good leaver” treatments are 
applied in exceptional cases only  
in the event of any termination payment being made 
to a director including any performancerelated 
pay elements the committee will take full account 
of that director’s duty to mitigate any loss and where 
appropriate may seek independent professional advice 
and consider the views of shareholders as expressed in 
published guidance prior to authorising such payment
consistent with market practice in the event of removal 
from office of an executive director the company may 
pay a contribution towards the individual’s legal fees and 
fees for outplacement services as part of a negotiated 
settlement and such other amounts as the committee 
considers to be necessary having taken legal advice in 
settlement of potential claims  any such fees would be 
disclosed with all other termination arrangements  the 
committee reserves the right if necessary to authorise 
additional payments in respect of such professional fees if 
not ascertained at the time of reporting such termination 
arrangements up to a maximum of £10000  
a departing gift may be provided up to a value of £1000 
plus related taxes per director
not applicable no compensation payments on termination of employment were 
made during the year
clawback
malus
to ensure the 
company can recover 
any payments made 
or potentially due to 
executive directors 
under performance
related remuneration 
structures
clawback provisions are in service contracts of 
all executive directors and will be enforced where 
appropriate to recover performancerelated 
remuneration which has been overpaid due to a 
material misstatement of the company’s accounts 
errors made in the calculation of an award or a 
director’s misconduct  these provisions allow for the 
recovery of sums paid andor withholding of sums to 
be paid
not applicable not applicable no clawback or malus adjustments made in period
chairman and 
nonexecutive 
director fees
to ensure fees paid 
to the chairman and 
nonexecutive directors 
are competitive and 
comparable with 
other companies of 
equivalent size and 
complexity
remuneration of the nonexecutive directors is reviewed 
annually and determined by the chairman and the 
executive directors  the chairman’s fee is determined 
by the committee excluding the chairman
additional fees are paid to nonexecutive directors who 
chair the remuneration and audit committees and 
act as the senior independent director  the structure 
of fees may be amended within the overall limits
external benchmarking is undertaken only occasionally 
and there is no prescribed policy regarding the 
benchmarks used or any objective of achieving a 
prescribed percentile level
the total of fees paid to the chairman and the non
executive directors in any year will not exceed the 
maximum level for such fees from time to time prescribed 
by the company’s articles of association currently 
£750000 per annum
nonexecutive directors receive staff discount on group merchandise 
but do not participate in any of the group’s bonus pension share 
option or other incentive schemes
the fees of the chairman and nonexecutive directors were 
increased by 2 in february 2014 in line with the wider company 
cost of living awards  the chairman will be paid an annual fee 
of £260100 201314 £255000  the basic nonexecutive director 
fee is £53550 201314 £52500 with a further £10710 201314 
£10500 paid to the chairmen of the audit and remuneration 
committees and to the senior independent director
annual report and accounts january 2014
48 2315804  proof 2  14032014
additional information parent company accounts consolidated accounts governance business reports
element
purpose and link to 
strategy operation maximum potential value performance measures and targets
changes for 2013 and 2014
this column is to provide information and is not  
formally part of the directors’ remuneration policy but is 
part of the annual report on remuneration
termination 
payments
consistent with market 
practice to ensure 
next can recruit and 
retain key executives 
whilst protecting the 
company from making 
payments for failure
the committee will consider the need for and quantum 
of any termination payments having regard to all of 
the relevant facts and circumstances at that time  
future service contracts will take into account relevant 
published guidance
each of the executive directors has a rolling service 
contract which commenced on either 14 march 2013 
or for michael law and jane shields on 1 july 2013  the 
contract is terminable by the company on giving one 
year’s notice  the company has reserved the right to 
make a payment in lieu of notice on termination of an 
executive director’s contract equal to their base salary 
and contractual benefits excluding performance
related pay  
if notice of termination is given immediately following a 
change of control of the company the executive director 
may request immediate termination of his contract and 
payment of liquidated damages equal to the value of his 
base salary and contractual benefits  
in normal circumstances executives have no entitlement 
in respect of loss of performance bonuses and all share 
awards would lapse following resignation  however under 
certain circumstances eg  ‘good leaver’ or change in 
control and solely at the committee’s discretion annual 
bonus payments may be made and would ordinarily be 
calculated up to the date of termination only  in addition 
awards made under the ltip and smp would in those 
circumstances generally be time prorated and remain 
subject to the application of the performance conditions 
at the normal measurement date  the committee also 
has a standard discretion to vary the application of time 
prorating in such cases  “good leaver” treatments are 
applied in exceptional cases only  
in the event of any termination payment being made 
to a director including any performancerelated 
pay elements the committee will take full account 
of that director’s duty to mitigate any loss and where 
appropriate may seek independent professional advice 
and consider the views of shareholders as expressed in 
published guidance prior to authorising such payment
consistent with market practice in the event of removal 
from office of an executive director the company may 
pay a contribution towards the individual’s legal fees and 
fees for outplacement services as part of a negotiated 
settlement and such other amounts as the committee 
considers to be necessary having taken legal advice in 
settlement of potential claims  any such fees would be 
disclosed with all other termination arrangements  the 
committee reserves the right if necessary to authorise 
additional payments in respect of such professional fees if 
not ascertained at the time of reporting such termination 
arrangements up to a maximum of £10000  
a departing gift may be provided up to a value of £1000 
plus related taxes per director
not applicable no compensation payments on termination of employment were 
made during the year
clawback
malus
to ensure the 
company can recover 
any payments made 
or potentially due to 
executive directors 
under performance
related remuneration 
structures
clawback provisions are in service contracts of 
all executive directors and will be enforced where 
appropriate to recover performancerelated 
remuneration which has been overpaid due to a 
material misstatement of the company’s accounts 
errors made in the calculation of an award or a 
director’s misconduct  these provisions allow for the 
recovery of sums paid andor withholding of sums to 
be paid
not applicable not applicable no clawback or malus adjustments made in period
chairman and 
nonexecutive 
director fees
to ensure fees paid 
to the chairman and 
nonexecutive directors 
are competitive and 
comparable with 
other companies of 
equivalent size and 
complexity
remuneration of the nonexecutive directors is reviewed 
annually and determined by the chairman and the 
executive directors  the chairman’s fee is determined 
by the committee excluding the chairman
additional fees are paid to nonexecutive directors who 
chair the remuneration and audit committees and 
act as the senior independent director  the structure 
of fees may be amended within the overall limits
external benchmarking is undertaken only occasionally 
and there is no prescribed policy regarding the 
benchmarks used or any objective of achieving a 
prescribed percentile level
the total of fees paid to the chairman and the non
executive directors in any year will not exceed the 
maximum level for such fees from time to time prescribed 
by the company’s articles of association currently 
£750000 per annum
nonexecutive directors receive staff discount on group merchandise 
but do not participate in any of the group’s bonus pension share 
option or other incentive schemes
the fees of the chairman and nonexecutive directors were 
increased by 2 in february 2014 in line with the wider company 
cost of living awards  the chairman will be paid an annual fee 
of £260100 201314 £255000  the basic nonexecutive director 
fee is £53550 201314 £52500 with a further £10710 201314 
£10500 paid to the chairmen of the audit and remuneration 
committees and to the senior independent director
annual report and accounts january 2014
49 2315804  proof 2  14032014
remuneration report
the following principles will be applied on an internal appointment or the recruitment of an external candidate 
to the board
the policies as set out above would apply to the promotion of an existing group employee to the board  
for such appointments and unless agreed otherwise with the new director the company will honour the 
contractual entitlements and other incentives eg  options granted under the next management share option 
plan awarded prior to the board appointment
for external recruits the committee will also aim to structure and agree a package which is in line with the 
same policies for existing executive directors as set out above  however consistent with the new regulations the 
committee reserves the right not to apply the caps contained within the policy for fixed pay either on joining or 
for any subsequent review within the life of this policy although the committee would not envisage exceeding 
these caps in practice  in addition the committee may offer cash or sharebased incentives when considered 
to be necessary to secure a candidate and in the best interests of the company and its shareholders  it may be 
necessary to make such awards on more bespoke terms which differ from next’s existing annual and sharebased 
pay structures  however the committee will not authorise the payment of more than it considers necessary and 
will abide by the caps for such elements within the general policy
additional awards may be made to compensate for forfeiture of incentive awards in the previous employer and 
may not be subject to the caps applied to next’s annual bonus plan or the ltip  all such awards for external 
appointments whether made under the annual bonus plan ltip or otherwise will be limited to the commercial 
value of the amounts forfeited and will take account of the nature time periods and performance requirements 
of those awards  in particular the committee’s starting point will be that any forfeited awards which are subject 
to continued service or performance requirements are replaced by next awards with broadly equivalent terms  
however the committee may relax these requirements in exceptional circumstances and where the committee 
considers it to be less expensive for shareholders for example where service periods are materially complete and
or the replacement awards are materially discounted to reflect the conditions on forfeited awards  the committee 
will only authorise guaranteed or non prorated awards under the annual bonus plan where the committee 
considers it is necessary to secure a recruitment
for external and internal appointments the committee may agree the company will meet such relocation 
expenses it considers appropriate andor make a contribution towards legal fees in agreeing employment terms
the company has not made an external appointment of an executive director for over 25 years and therefore 
no recruitment awards were made during the year  all such appointments during this time have been through 
internal promotions so it is challenging to set out principles for an event that has not occurred in practice  therefore 
the above principles particularly for external appointments represent guidelines considered reasonable by the 
committee and the committee will consider their application in practice taking account when appropriate of 
evolving best practice
annual report and accounts january 2014
50 2315804  proof 2  14032014
additional information parent company accounts consolidated accounts governance business reports
share ownership guidelines
share ownership guidelines do not form part of directors’ remuneration but the committee has determined that 
these should be observed by executive directors
the chief executive’s minimum shareholding is 15 times salary and for other executive directors 1 times salary  
an executive director has up to five years from date of appointment to acquire the minimum shareholding and 
only shares owned beneficially are counted  all executive directors including the new appointees have met the 
minimum shareholding and lord wolfson christos angelides and david keens each hold numbers of next shares 
with a value significantly in excess of the applicable guidelines
service contracts
executive directors
the company’s policy on notice periods and in relation to termination payments is set out above  apart from their 
service contracts no director has had any material interest in any contract with the company or its subsidiaries
nonexecutive directors
letters of appointment for the chairman and nonexecutive directors do not contain fixed term periods however 
they are appointed in the expectation that they will serve for a minimum of six years subject to satisfactory 
performance and reelection at annual general meetings
dates of appointment and notice periods for nonexecutive directors are set out below
date of appointment notice period
chairman
john barton 17 may 2006 12 months
nonexecutive directors
steve barber 1 june 2007 1 month
christine cross 19 january 2005 1 month
jonathan dawson 13 may 2004 1 month
caroline goodall 1 january 2013 1 month
francis salway 1 june 2010 1 month
annual report and accounts january 2014
51 2315804  proof 2  14032014
remuneration report
illustration of application of remuneration policy
the committee’s objective is to ensure that the remuneration paid to senior executives is appropriate in both 
amount and structure is directly linked to the company’s annual and longer term performance and aligned 
with the interests of shareholders  careful consideration is given to ensuring there is an appropriate balance in 
the remuneration structure between annual and long term rewards as well as between cash and sharebased 
payments  the charts below indicate the level of remuneration that could be received by each executive director 
in accordance with the directors’ remuneration policy in the first year to which the policy applies ie  year to 
january 2015 at different levels of performance  
lord wolfson
0 500 1000 1500 2000 2500 3000 3500
total £3664k
total £1918k
total £1063k
fixed pay
fixed pay
midpoint
median
maximum
annual bonus
ltip multiple period
41
15
30
30
29
55
100
amount £’000
christos angelides
0 500 1000 1500 2000 2500
total £2410k
total £1278k
total £793k
fixed pay
midpoint
median
maximum
45
17 21
22 33
62
100
fixed pay
annual bonus
ltip multiple period
amount £’000
david keens
0 500 1000 1500 2000
total £2080k
total £1039k
total £592k
fixed pay
fixed pay
midpoint
median
maximum
annual bonus
ltip multiple period
48
19 24
24 28
57
100
amount £’000
annual report and accounts january 2014
52 2315804  proof 2  14032014
additional information parent company accounts consolidated accounts governance business reports
michael law
0 200 400 600 800 1000 1200
total £1293k
total £650k
total £375k
fixed pay
fixed pay
midpoint
median
maximum
annual bonus
ltip multiple period
47
19 23
24 29
58
100
amount £’000
jane shields
0 200 400 600 800 1000 1200
total £1299k
total £656k
total £381k
fixed pay
fixed pay
midpoint
median
maximum
annual bonus
ltip multiple period
47
19 23
24 29
58
100
amount £’000
in the above scenarios the following assumptions have been made
fixed and performancerelated pay assumptions 
fixed ❚ base salary for 2014 see page 43
 ❚ benefits as at february 2014
 ❚ pensionrelated salary supplements calculated at 15 of base salary for 2014 and
 ❚ pension amounts based on 201314 single total figure of remuneration pension values for lord 
wolfson and christos angelides only
midpoint
median
includes the performancerelated pay a director would receive in the scenario where
 ❚ 50 of maximum annual bonus is earned being the midpoint and
 ❚ ltip
1
 pay out is at median and therefore 20 of the maximum award would vest  ltip values 
apply to both awards made in the year
maximum includes the performancerelated pay a director would receive in the scenario where performance 
equalled or exceeded maximum targets
 ❚ 100 of the annual bonus and
 ❚ 100 vesting of ltip
1

1
 the ltip is a sharebased award and the scenario charts use the face value of shares at the date of the award and do not make any assumptions 
for share price movement  the ltip scheme does not allow for the benefit of dividend grossup
annual report and accounts january 2014
53 2315804  proof 2  14032014
remuneration report
the table below illustrates when the various payments in the charts above would actually be made or released to 
executive directors  
settlement of remuneration awarded during the financial year to january 2015
to be settled during financial year ending
jan 2015 jan 2016
jan
2017 jan 2018
jan
2019 jan 2020
base salary
benefits
annual performance for 
the year to january 2015 is 
measured against targets 
and any annual cash 
bonus is paid  for the 
chief executive any bonus 
in excess of 100 of base 
salary is deferred for two 
years and payable in shares 
dependent on continued 
employment
ltip awards vest and are 
payable in shares if tsr is 
at or above median for the 
comparator group and 
general economic underpin 
condition satisfied  directors 
must retain these shares 
after payment of tax and 
nic for a further two years
any bonus earned by the 
chief executive for the jan 
2015 year in excess of 100 
of base salary payable in 
shares is released
ltip shares which vested in 
the year to january 2018 
are released after two year 
retention
annual report and accounts january 2014
54 2315804  proof 2  14032014
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next employment conditions generally 
the remuneration policy operates for the executive directors and senior management of the group  pay structures 
and employment conditions for other group employees are driven by market and role comparatives and are also 
considered by the committee to ensure that any differences for directors are justified  salary increases for the 
wider employee group are taken into consideration when determining increases for executive directors and senior 
management  for the last 3 years the base salary increases for the executive directors have generally been in line 
with wider company awards
in common with executive directors all other employees are eligible to participate in annual bonus arrangements  
the targets for these are linked to performance of the group their operating function or personal performance
these other employees are provided with a competitive package of benefits that includes the opportunity to 
participate in the group’s pension arrangements and staff discount on group merchandise  in addition the 
next management share option plan provides for options over shares exercisable between three and ten years 
following their grant to be allocated to group employees  this plan is primarily aimed at middle management 
and senior store staff  options are set at the prevailing market price at the time of grant and are generally granted 
annually  in order to encourage wider employee share ownership the company also operates allemployee 
save as you earn share schemes in the uk and ireland in which all permanent employees including executive 
directors are eligible to participate  
the company did not consult with employees when drawing up the directors’ remuneration policy  the committee 
does not generally use any formal internal comparison metrics when setting directors’ remuneration other than 
the consideration of employee pay as described above but has sought advice from fit remuneration consultants 
llp from time to time on the appropriateness and competitiveness of remuneration structures in place within the 
company  no formal benchmarking exercise was undertaken during the year
consideration of shareholder views
the remuneration committee has written to and consulted with major shareholders on a proactive basis when 
any significant change in remuneration policy has been considered and has taken full account of their feedback  
shareholder views about remuneration are also communicated to the committee on an ongoing basis through 
inclusion in board reports of shareholder feedback and statements made by representative associations  in 
addition the committee chairman and the chairman of the board have from time to time engaged directly 
with shareholders and representative bodies on any particular matters they may have raised  shareholders and 
representative bodies are able to contact the committee chairman directly if they have any concerns regarding 
remuneration
annual report and accounts january 2014
55 2315804  proof 2  14032014
56
remuneration report
part 3 annual report on remuneration
sections of the annual report on remuneration which have been subject to audit are noted accordingly
single total figure of remuneration audited 
directors’ remuneration £’000
    fixed pay     performancerelated pay 
salaryfees benefits
1
pension
2
salary 
supplement
3
subtotal annual bonus
4
ltip
5
share matching 
plan
6
sharesave subtotal
total
remuneration
201314 201213 201314 201213 201314 201213 201314 201213 201314 201213 201314 201213 201314 201213 201314 201213 201314 201213 201314 201213 201314 201213
chairman
john barton 255 250 – – – – – – 255 250 – – – – – – – – – – 255 250
executive directors
lord wolfson 729 714 49 45 160 280 109 27 1047 1066 1093 1064 2500 2500 – – 6 – 3599 3564 4646 4630
christos angelides 529 519 33 33 140 220 79 19 781 791 529 514 2500 2500 2749 2103 – – 5778 5117 6559 5908
david keens 487 477 21 19 – – 73 72 581 568 487 472 1801 1450 2529 2042 4 – 4821 3964 5402 4532
michael law
†
175 na 16 na – na 26 na 217 na 239 na 783 na 449 na – na 1471 na 1688 na
jane shields
†
175 na 17 na – na 26 na 218 na 239 na 783 na 454 na 5 na 1481 na 1699 na
andrew v arley
†
121 355 7 27 – – 18 53 146 435 – 351 631 1078 – 1468 – – 631 2897 777 3332
nonexecutive directors
steve barber 63 60 – – – – – – 63 60 – – – – – – – – – – 63 60
christine cross 53 50 – – – – – – 53 50 – – – – – – – – – – 53 50
jonathan dawson 74 70 – – – – – – 74 70 – – – – – – – – – – 74 70
caroline goodall 53 4 – – – – – – 53 4 – – – – – – – – – – 53 4
francis salway 53 50 – – – – – – 53 50 – – – – – – – – – – 53 50
2767 2549 143 124 300 500 331 171 3541 3344 2587 2401 8998 7528 6181 5613 15 – 17781 15542 21322 18886
 as detailed in the remuneration committee chairman’s statement lord wolfson waived his entitlement to the april 2011 smp award which would have matured in april 2014 at an estimated value of £38m  
lord wolfson also waived his entitlement to the june 2010 smp award which matured in 2013 and would have had a value at that date of £3m  had he not done so lord wolfson’s total remuneration would 
have been £8435000 for 201314 and £7601000 for 201213
†
   andrew varley stepped down from the board on 31 may 2013 since then he has continued in his role as group property director and received the same rate of salary  michael law and jane shields joined 
the board on 1 july 2013  the values disclosed for salary benefits and salary supplement for these three directors relate only to the period of their executive directorship  ltip remuneration of £631000 was 
paid to andrew varley after he stepped down from the board and relates to the three year performance period ending july 2013  performancerelated remuneration for michael law and jane shields in 
the above table includes pay relating to the period before they became executive directors but paid after their appointment  
total emoluments paid to directors salaryfees benefits salary supplements and annual bonus for the year to january 2014 were £5828000 2013 £5245000
annual report and accounts january 2014 2315804  proof 2  14032014
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57
note 1 benefits
carcash allowance fuel
medical insurance
 next clothing 
allowance total
2014
£’000
2013
£’000
2014
£’000
2013
£’000
2014
£’000
2013
£’000
2014
£’000
2013
£’000
lord wolfson 40 36 7 7 2 2 49 45
christos angelides 24 24 7 7 2 2 33 33
david keens 19 18 – – 2 1 21 19
michael law 13 na 2 na 1 na 16 na
jane shields 11 na 4 na 2 na 17 na
andrew v arley 5 19 2 7 – 1 7 27
note 2 pension 
pension values are calculated using the method required by the new regulations ie the total pension accrued at  
january 2014 less the total pension accrued at the end of the previous year adjusted for inflation and multiplied by 
a factor of 20 it does not necessarily represent the economic value of the pension rights accrued and this benefit 
is not immediately available to the director 
in summary the pension entitlements of the directors are as follows
age at 
january 
2014
years of 
pensionable 
service
accrued 
annual 
pension 
£’000
change in 
accrued 
annual 
pension 
£’000
change in 
accrued 
annual 
pension 
net of 
inflation 
£’000
transfer value  
of accrued 
annual 
pension
increase
decrease 
in transfer  
value less 
director’s 
contributions 
£’000
2014
£’000
2013
£’000
lord wolfson 46 19 324 16 8 4370 4333 1
christos 
angelides 50 21 286 14 7 4805 4802 23
david keens 60 25 188 6 – 4832 5696 864
michael law 52 25 122 3 – 2295 2335
1
40
jane shields 50 19 118 3 – 2003 2013
1
10
1  michael law and jane shields were promoted to the board on 1 july 2013  as they were already employed by 
next the transfer value disclosed above is calculated at the year start
years of pensionable service shown above may include boughtin service from the transfer of other pension 
entitlements into the plan  directors’ pension arrangements are subject to the same actuarial reduction as other 
employees on termination or early retirement
note 3 salary supplement in lieu of pension
supplements of 15 of base salary are paid in lieu of pension provision after the directors became deferred 
members of the defined benefit section of the next group pension plan  david keens jane shields and andrew 
varley received this supplement from 2011 michael law from april 2012 and lord wolfson and christos angelides 
from november 2012
note 4 annual bonus
the performance targets for the annual bonus are set out on page 43  for the year to january 2014 actual pre
tax eps achieved was 4600p growth of 176  accordingly a bonus of 150 of salary for the chief executive and 
100 of salary for the other executive directors was earned  
to provide a retention element in the case of the chief executive any annual bonus in excess of 100 of base 
salary is payable in shares deferred for a period of two years and subject to forfeiture if he voluntarily resigns prior 
to the end of that period  
note 5 ltip
the performance targets for the ltip are set out on page 43  in april 2013 the committee reviewed the company’s 
financial performance for the three year performance period to january 2013 in light of underlying economic 
and other conditions ‘the economic underpin’  during this period the company’s compound annual growth 
in underlying eps and pretax profits was 165 and 71 respectively well ahead of rpi 41  dividends had 
also increased in line with eps and some £736m was returned to shareholders through share buybacks  as 
the company’s performance also compared favourably against its principal retail competitors and ftse100 
companies the committee confirmed that the economic underpin performance condition had been satisfied  as 
a consequence 98 of the award for this period vested  
for the three year performance period to july 2013 tsr ranked fourth in the comparator group of 21 and 100 of 
the grant made in the second half of 2010 vested  the committee assessed the performance of the company and 
noted that eps compound annual growth of 162 and pretax profit compound annual growth of 64 over the 
three year period were significantly ahead of rpi 37  in addition dividends had continued to increase in line 
with eps and £768m had been returned to shareholders through buybacks  the committee also assessed earnings 
growth against selected comparable major uk retailers and concluded that next had performed favourably  
taking these factors into account the committee determined that the economic underpin performance condition 
for the award had been satisfied  the awards were cash settled for all executives
for the performance period to january 2014 tsr ranked third against the comparator group of 21 which corresponds 
to an expected vesting of 100 of the maximum award made in january 2011  in march 2014 the remuneration 
committee assessed the performance of the company on the same basis as described above and noted that 
eps compound annual growth of 182 and pretax profit compound growth of 8 over the three year period were 
significantly ahead of rpi 33  in addition dividends had continued to increase in line with eps and £827m had 
been returned to shareholders through buybacks  the committee also assessed earnings growth against selected 
comparable major uk retailers and concluded that next had performed favourably  taking these factors into 
account the committee determined that the economic underpin performance condition for the award had been 
satisfied and it should vest in full
ltip values for the january 2014 single figure table comprise the actual value of awards that have vested and been 
paid for the performance period ending in july 2013 together with the estimated value of awards that will vest for the 
performance period ending in january 2014 based on the average next share price over the last financial quarter of 
£5647  for january 2013 these are the actual values of the ltip awards that vested in respect of performance periods 
ending in that financial year
the maximum value of ltip awards that vest for a participant in a year is capped at £25m  this cap was applied 
to awards that vested in the year to january 2013 for lord wolfson and christos angelides and payments to them 
were reduced by £397k and £75k respectively  for the awards vesting in the year to january 2014 the cap will again 
be applied and payments to lord wolfson and christos angelides will be reduced by an estimated £1097k and 
£762k respectively
note 6 smp
the smp was introduced to encourage ownership of next shares amongst executive directors and other senior 
executives and to act as a further retention incentive  it also continues to support the committee’s approach of 
ensuring close long term alignment of management’s interests with shareholders  for the 2011 grant which is 
due to vest in april 2014 some 25 senior executives were able to reinvest part or all of their annual cash bonus 
in next shares  
the performance targets for the smp are set out on page 68  smp values for january 2014 assume a maximum 
vesting in april 2014 and are based on the average next share price over the last financial quarter of £5647  the 
strong growth in eps means the maximum performance target for the smp has been exceeded and therefore the 
2011 smp will vest in full in april 2014 subject to the continued employment of participants
executive directors will no longer be granted awards under the smp after january 2014 and participation will be 
restricted to senior executives below board level
as noted below the single figure of remuneration table lord wolfson waived his entitlement to the april 2011 smp 
award and to the june 2010 smp award  in respect of the smp award which will vest in april 2014 the estimated 
total 2014 pretax value for the other executive directors is £62m of which £37m 60 derives from the growth in 
next’s share price since investment in 2011
the smp values for january 2013 are actual values at the date of vesting   2315804  proof 2  14032014
remuneration report
executive directors’ external appointments
no current executive director holds any nonexecutive directorships outside the group  andrew varley who 
stepped down from the board in 2013 is a nonexecutive director of londonmetric property plc and the committee 
approved his retention of the director’s fee of £50000 per annum for this appointment
pension entitlements audited 
in october 2013 all active members of the next group pension plan the “next plan” were transferred to the 
new 2013 next group pension plan the “2013 plan” so that pensioners of the next plan could be issued with 
individual policies with aviva  most deferred pensioners and pensioners who had not previously been subject 
to a buyin through aviva were also transferred to the 2013 plan  benefits within the 2013 plan mirror those in the  
next plan
executive directors are now members of the 2013 plan which has been approved by hm revenue  customs and 
consists of defined benefit and defined contribution sections  
the trustee of both plans is a limited company next pension trustees limited the “trustee”  the board of the 
trustee includes members of the 2013 plan a pensioner member and a chairman who is an independently 
appointed person with no other association with next  two of the directors are member nominated directors and 
cannot be removed by next the other directors including the independent director are appointed by and can 
be removed by next  all directors of the trustee receive a fee for their services including those directors who are 
also employees of next  no director of the company is a director of the trustee
the plans’ investments are kept separate from the business of the next group and the trustee holds them in 
separate trusts  responsibility for investment of the plans’ funds has been delegated to professional investment 
managers
the group operates a salary sacrifice scheme whereby members from either section can elect to receive a 
reduced gross salary in exchange for enhanced employer pension contributions  the participation of members 
in the salary sacrifice scheme does not result in any overall increase in costs to the group
defined contribution section
employees of the group can join the defined contribution section of the 2013 plan  members elect to pay either 
3 or 5 of their pensionable earnings which is matched by the company  for death prior to retirement a lump 
sum of three times the member’s base salary at the previous april is payable along with the current value of the 
member’s fund  
annual report and accounts january 2014
58 2315804  proof 2  14032014
additional information parent company accounts consolidated accounts governance business reports
defined benefit section
the defined benefit section was closed to new members in 2000  in 2012 the group reviewed this section for 
remaining employee members and following a consultation process the future accrual of pension benefits has 
been based on pensionable salary frozen at october 2012 rather than final earnings  in addition those employees 
can elect to receive up to a 15 salary supplement or additional contributions to the defined contribution section  
the defined benefit section now provides members with a retirement benefit of one sixtieth or one eightieth 
depending on the member’s chosen contribution rate of pensionable earnings at october 2012 for each year 
of pensionable service  
lord wolfson christos angelides and a small number of senior employees on completion of at least 20 years’ 
pensionable service at age 65 receive a retirement benefit of twothirds of pensionable earnings at october 
2012 which accrues uniformly throughout their pensionable service  the deferred pensions for david keens jane 
shields and michael law are based on their pensionable earnings at the time they became deferred pensioners 
and accrued uniformly throughout their pensionable service  
the defined benefit section provides a lump sum death in service benefit and dependants’ pensions on death in 
service or following retirement  pensions are only payable to deceased members’ children after death in service  
in the case of illhealth retirement only the accrued pension is payable  all benefits are subject to 2013 plan limits  
increases to pensions in payment are at the discretion of the trustee although pensionable service post1997 is 
subject to limited price indexation  from 2006 sales and profit related bonuses were excluded from pensionable 
earnings and the normal retirement age under the plan was increased from 60 to 65  there are no additional 
benefits which become receivable by a director in the event of early retirement
members contribute 3 or 5 of pensionable earnings whilst the company currently makes contributions at the 
rate of 175  the last full triennial valuation of the next plan was carried out as at march 2013 and the first triennial 
valuation of the 2013 plan was carried out as at october 2013  as calculated in accordance with international 
financial reporting standards the surplus in the 2013 plan at january 2014 was £703m further details are given 
in note 21 to the financial statements
certain members including lord wolfson and christos angelides whose accrued or projected pension fund 
value exceeds their personal lifetime allowance are provided with benefits through an unfunded unapproved 
arrangement  the relevant members contribute towards the additional cost of providing these benefits by a 
payment of 5 on all pensionable earnings  since april 2011 where existing members have reached either the 
annual or lifetime pension contributions limits the company has offered those members the choice of leaving 
the defined benefit section and either joining the defined contribution section with an enhanced company 
contribution or taking a salary supplement in both cases equal to 10 or 15 of their salary depending on their 
existing contributions and benefits  
autoenrolment
following the introduction of autoenrolment ae in 2012 most employees now have the option of joining the 
2013 plan the statutory ae plan or opting out of pension provision through the company  contributions to ae 
commenced in february 2013
annual report and accounts january 2014
59 2315804  proof 2  14032014
remuneration report
directors’ shareholding and share interests audited
directors’ interests
the company has a formal share ownership requirement for executive directors as set out on page 51  all executive 
directors have met this requirement  directors’ beneficial interests in shares at the beginning of the financial year 
and at the end of the year were as follows
ordinary shares
deferred 
bonus shares
1
   ltip
2
   smp
2
sharesave
3
2014 2013 2014 2013 2014 2013 2014 2013 2014 2013
lord wolfson 1514128 1520505 9844 18922 149221 180829 9204
4
67098
4
364 1826
christos angelides 105073 77171 –  93440 134888 63986 103214 431 431
steve barber 5000 5000 –  –  –  – 
john barton 14000 16000 –  –  –  – 
christine cross 5598 5598 –  –  –  – 
jonathan dawson 5000 5000 –  –  –  – 
caroline goodall nil nil –  –  –  – 
david keens 201950 165535 –  74715 90544 58414 96306 388 477
michael law 11627 na –  34493 na 13282 na 431 na
francis salway 7790 9258 –  –  –  – 
jane shields 37065 na –  34493 na 13318 na 494 na
andrew v arley
5
79885 69817 –  55531 67303 40020 72224 431 431
1  full details of deferred bonus are set out on pages 42 and 43
2  the ltip and smp amounts above are the maximum potential awards that may vest subject to performance conditions described on pages 
42 to 45
3  executive directors can participate in the company’s sharesave scheme see details on page 46 and the amounts above are the options 
which will become exercisable at maturity
4  as disclosed on page 39 lord wolfson has waived his potential entitlement under the 2011 smp 67098 options  
5   andrew varley stepped down from the board in may 2013
the company’s 2013 525 corporate bonds were redeemed during the year so david keens no longer has a 
beneficial bond holding 2013 £83000 nominal value
save for the waiver of lord wolfson’s 2011 smp entitlement there have been no other changes to directors’ interests 
in the shares of the company from the end of the financial year to 19 march 2014  full details of directors’ interests 
in the shares and share options of the company are contained in the register of directors’ interests which is open 
to inspection
annual report and accounts january 2014
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the table below summarises those share awards made to executive directors that have not yet vested or in the 
case of awards made under historic share option schemes have not yet been exercised
awards 
during 
financial 
year end 
january
date of 
award
market 
price at 
award 
date
£
option 
price
£
maximum 
share 
potential 
awarded
options 
waived
1
shares 
vested in 
the year
vesting 
date
exercisable 
dates
2
lord wolfson
deferred bonus shares 2012 apr 2011 2024 na 17020 17020
3
apr 2013
2013 apr 2012 2933 na 1902 apr 2014
2014 apr 2013 4408 na 7942 apr 2015
ltip 2011 mar 2010 2013 nil 34228 24347
4
jan 2013
2011 sept 2010 2114 nil 32592 32592 jul 2013
2012 mar 2011 2070 nil 33684
5
jan 2014
2012 sept 2011 2302 nil 30289 jul 2014
2013 mar 2012 2660 nil 26861 jan 2015
2013 sept 2012 3083 nil 23175 jul 2015
2014 mar 2013 3739
6
nil 19492 jan 2016
2014 sept 2013 4636
6
nil 15720 jul 2016
smp 2012 apr 2011 2237 nil 67098 67098 apr 2014 – apr 2021
2014 apr 2013 4381 nil 9204 apr 2016 – apr 2023
sharesave 2009 oct 2008 917 1826 1826
8
dec 2013 – jun 2014
2014 oct 2013 4112 364 dec 2018 – jun 2019
christos angelides
ltip 2011 mar 2010 2013 nil 31048 28692
4
jan 2013
2011 sept 2010 2114 nil 29565 29565 jul 2013
2012 mar 2011 2070 nil 30556
5
jan 2014
2012 sept 2011 2302 nil 16486 jul 2014
2013 mar 2012 2660 nil 14619 jan 2015
2013 sept 2012 3083 nil 12614 jul 2015
2014 mar 2013 3739
6
nil 10609 jan 2016
2014 sept 2013 4636
6
nil 8556 jul 2016
smp 2011 jun 2010 2023 nil 46132 46132
7
jun 2013
2012 apr 2011 2237 nil 48690 apr 2014 – apr 2021
2013 apr 2012 3032 nil 8392 apr 2015 – apr 2022
2014 apr 2013 4381 nil 6904 apr 2016 – apr 2023
sharesave 2012 oct 2011 2084 431 dec 2014 – jun 2015
notes to this table are on page 63
annual report and accounts january 2014
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awards 
during 
financial 
year end 
january
date of 
award
market 
price at 
award 
date
£
option 
price
£
maximum 
share 
potential 
awarded
options 
waived
1
shares 
vested in 
the year
vesting 
date
exercisable 
dates
2
david keens
ltip 2011 mar 2010 2013 nil 17139 16796 jan 2013
2011 sept 2010 2114 nil 16320 16320 jul 2013
2012 mar 2011 2070 nil 16866
5
jan 2014
2012 sept 2011 2302 nil 15166 jul 2014
2013 mar 2012 2660 nil 13449 jan 2015
2013 sept 2012 3083 nil 11604 jul 2015
2014 mar 2013 3739
6
nil 9759 jan 2016
2014 sept 2013 4636
6
nil 7871 jul 2016
smp 2011 jun 2010 2023 nil 44796 44796
7
jun 2013
2012 apr 2011 2237 nil 44796 apr 2014 – apr 2021
2013 apr 2012 3032 nil 6714 apr 2015 – apr 2022
2014 apr 2013 4381 nil 6904 apr 2016 – apr 2023
sharesave 2011 oct 2010 1782 319 319
8
dec 2013 – jun 2014
2012 oct 2011 2084 158 dec 2014 – jun 2015
2014 oct 2013 4112 230 dec 2018 – jun 2019
michael law
ltip 2012 mar 2011 2070 nil 7333
5
jan 2014
2012 sept 2011 2302 nil 6594 jul 2014
2013 mar 2012 2660 nil 5851 jan 2015
2013 sept 2012 3083 nil 5048 jul 2015
2014 mar 2013 3739
6
nil 4814 jan 2016
2014 sept 2013 4636
6
nil 4853 jul 2016
smp 2012 apr 2011 2237 nil 7952 apr 2014 – apr 2021
2013 apr 2012 3032 nil 2862 apr 2015 – apr 2022
2014 apr 2013 4381 nil 2468 apr 2016 – apr 2023
sharesave 2012 oct 2011 2084 431 dec 2014 – jun 2015
jane shields
ltip 2012 mar 2011 2070 nil 7333
5
jan 2014
2012 sept 2011 2302 nil 6594 jul 2014
2013 mar 2012 2660 nil 5851 jan 2015
2013 sept 2012 3083 nil 5048 jul 2015
2014 mar 2013 3739
6
nil 4814 jan 2016
2014 sept 2013 4636
6
nil 4853 jul 2016
smp 2012 apr 2011 2237 nil 8032 apr 2014 – apr 2021
2013 apr 2012 3032 nil 2820 apr 2015 – apr 2022
2014 apr 2013 4381 nil 2466 apr 2016 – apr 2023
sharesave 2009 oct 2008 917 1497 1497
8
dec 2013 – jun 2014
2010 oct 2009 1434 195 dec 2014 – jun 2015
2014 oct 2013 4112 299 dec 2018 – jun 2019
annual report and accounts january 2014
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awards 
during 
financial 
year end 
january
date of 
award
market 
price at 
award 
date
£
option 
price
£
maximum 
share 
potential 
awarded
options 
waived
1
shares 
vested in 
the year
vesting 
date
exercisable 
dates
2
andrew varley 
ltip 2011 mar 2010 2013 nil 12742 12487 jan 2013
2011 sept 2010 2114 nil 12133 12133 jul 2013
2012 mar 2011 2070 nil 12536
5
jan 2014
2012 sept 2011 2302 nil 11273 jul 2014
2013 mar 2012 2660 nil 9995 jan 2015
2013 sept 2012 3083 nil 8624 jul 2015
2014 mar 2013 3739
6
nil 7253 jan 2016
2014 sept 2013 4636
6
nil 5850 jul 2016
smp 2011 jun 2010 2023 nil 32204 32204
7
jun 2013
2012 apr 2011 2237 nil 33306 apr 2014 – apr 2021
2013 apr 2012 3032 nil 6714 apr 2015 – apr 2022
sharesave 2012 oct 2011 2084 431 dec 2014 – jun 2015
1  as disclosed on page 39 lord wolfson has waived his potential entitlement under the 2011 smp options over 67098 shares
2  for ltip awards the date in this column is the end of the three year performance period  actual vesting will be the date on which the 
committee determines whether any performance condition has been satisfied
3  the market value of shares at the time the deferred bonus vested was £4408
4  for ltip awards made prior to february 2014 the maximum value of ltip awards that vest for a particular year is capped at £25m  the cap was 
applied to the awards that vested in the year to january 2013 for lord wolfson and christos angelides  the impact of this cap was to reduce 
the shares vested by 9196 and 1735 respectively  
5  see page 57 for details of the performance conditions and vesting levels applicable to the ltip schemes vesting in the year
6  the ltip price at award date is next’s average share price over the three months prior to the start of the performance period
7  christos angelides david keens and andrew varley exercised their smp options at the date of vesting when the market price for the shares was 
£4558
8  the market price for the shares at the date of sharesave exercise was £5400 for lord wolfson and jane shields and £5495 for david keens
9  within the above table all awards are subject to prevesting performance conditions except for sharesave options and deferred bonus shares  
annual report and accounts january 2014
63 2315804  proof 2  14032014
remuneration report
the ltip performance periods which mature after january 2014 are not yet complete and no entitlement has yet 
been earned  a charge of £26845000 for the year 2013 £23368000 has been made in the accounts in respect 
of these ltip grants of which approximately £10962000 2013 £9554000 related to the executive directors
for all ltip participants the total maximum shares receivable at january 2013 was 1084471 january 2012 
1364175  during the year grants over 385956 shares vested 2013 517192 grants over 52296 shares including 
10931 shares subject to the maximum cap lapsed 2013 57545 in total including 23344 capped shares 
and further grants over 217087 shares were issued 2013 295033  at january 2014 the total maximum shares 
receivable was 863306 excluding the impact of any cap on the total value which may apply with an average 
remaining contractual life of 16 years 2013 16 years
the aggregate gains of directors arising from the exercise of options granted under the smp and sharesave 
scheme and ltip awards that vested in the year totalled £14150000 2013 £7011000
scheme interests awarded during the year to january 2014 audited 
ltip
face value in respect of the ltip awards granted during the year to january 2014 the maximum “face 
value” of awards ie  the maximum number of shares that would vest if all performance 
measures are met multiplied by the average share price used to determine the award is 
summarised below
mar 2013 
£’000
sep 2013 
£’000
total 
£’000
lord wolfson 729 729 1458
christos angelides 397 397 794
david keens 365 365 730
michael law
1
180 225 405
jane shields
1
180 225 405
andrew v arley
2
271 271 542
1 march 2013 award granted prior to promotion to executive director and therefore at 60 of annual salary
2 ltip award prior to andrew varley stepping down from the board
vesting if minimum 
performance 
achieved
20 of the entitlement will be earned for relative tsr at median and full vesting requires 
relative tsr at upper quintile
performance 
period
march 2013 grant period from february 2013 to january 2016  
september 2013 grant period from august 2013 to july 2016
performance 
measures
the ltip performance measures are detailed on page 43  the companies in the tsr 
comparator group for the awards granted during the financial year are 
asos
burberry
carpetright
carphone 
warehouse
debenhams
dixons retail
dunelm
halfords
home retail  
group
j sainsbury
jd sports
1
kesa
1
kingfisher 
marks  spencer
morrisons
mothercare
n brown
supergroup
ted baker
tesco
w h smith
1 jd sports replaced kesa in the comparator group for the three year performance period commencing july 2013
annual report and accounts january 2014
64 2315804  proof 2  14032014
additional information parent company accounts consolidated accounts governance business reports
smp
face value  in respect of the smp awards granted during the financial year the maximum potential “face 
value” of awards ie  the maximum number of shares that would vest if all performance 
measures are met multiplied by the average share price used to determine the number of 
shares awarded is summarised below
£’000
lord wolfson 403
christos angelides 302
david keens 302
michael law
1
108
jane shields
1
108
1  2013 award granted prior to promotion to executive director and therefore a lower bonus was earned and capped  
further details of these awards are provided on page 62  
vesting if minimum 
performance 
achieved
for each investment share 05 matched share will be earned at the end of a three year 
performance period for fully diluted eps for the financial year ending january 2016 of 3145p 
and 2 matched shares will be earned for eps of 3650p
performance 
period
february 2013 to january 2016  
performance 
measures
the smp performance measures are detailed on page 45  
deferred bonus
in addition to the scheme interests detailed above any annual bonus in excess of 100 of base salary payable to 
the chief executive is deferred for a period of two years and subject to forfeiture if he voluntarily resigns prior to the 
end of that period  the value of the deferred bonus £364k is included in the single total figure of remuneration 
table on page 56
payments to past directors audited 
there were no payments to past directors during the financial year ending january 2014  
payments for loss of office audited 
there were no payments made to any director in respect of loss of office
pay and performance
performance graph 
the graph below illustrates the performance of the company when compared with the ftse all share and ftse 
general retailers index  these have been selected to illustrate the company’s total shareholder return performance 
against a wide uk index and a sector specific index for the five year period ending january 2014
2009   2010   2011   2012   2013   2014 
660
580
500
420
340
260
180
100
20
next ftse general retailers
rebased to 31 january 2009  100
ftse all share
next plc performance chart 20092014 total shareholder return
annual report and accounts january 2014
65 2315804  proof 2  14032014
remuneration report
analysis of chief executive’s pay over 5 years
financial y ear to 
january
single figure of total 
remuneration 
£’000
annual bonus payout 
against maximum 
opportunity
1
ltip payout against 
maximum opportunity
2
smp payout against 
maximum opportunity
2014 4646 100 two semiannual 
awards vested at 
100 each however 
total value capped 
at £25m
entitlement waived
3
2013 4630 99 two semiannual 
awards vested at 
96 
and 98 however 
total value capped 
at £25m
entitlement waived
3
2012 4106 72 two semiannual 
awards vested at 
100 and 83 
however total value 
capped at £25m
na
2011 3010 100 65 na
2010 2833 100 100 na
1  the maximum bonus for the chief executive is 150 of salary
2  the first of semiannual rather than annual awards vested in july 2011
3  lord wolfson waived his entitlement to these smp awards  had he not done so his total remuneration would have been £8435000 for january 
2014 and £7601000 for 2013  
the remuneration committee continues to focus strongly on the alignment of executive remuneration and long 
term growth in shareholder value  the graph below charts total annual remuneration of lord wolfson against tsr 
over the last 10 years and shows that tsr grew by 440 more than the chief executive’s remuneration or by 260 
excluding the smp waivers  
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 
700
600
500
400
300
200
100
0
total remuneration total remuneration before smp waiver tsr
10 year ceo pay and next tsr
£20m
£19m
£18m
£12m
£15m
£28m £30m
£41m
£46m
£76m
£84m
£45m
annual report and accounts january 2014
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additional information parent company accounts consolidated accounts governance business reports
change in remuneration of chief executive
the table below shows the percentage changes in lord wolfson’s remuneration ie  salary taxable benefits and 
annual bonus between 201314 and 201213 compared with the percentage changes in the average of each 
of those components of pay for group employees in the uk and eire  this group has been selected as the most 
appropriate comparator and represents almost 90 of the group’s workforce
salary 
increase 
annual 
bonus 
increase 
taxable 
benefits 
increase 
lord wolfson 20 27 89
ukeire employees average per fte 26 187 22
relative importance of spend on pay
the graph below illustrates for the years ended january 2014 and 2013 the relative and actual spend on total 
remuneration paid to all employees of the group together with other significant distributions and payments ie  
for share buybacks and dividends  
£1477m
£2413m
£2958m
£5101m
£5319m
£1648m
all employee remuneration compared with other disbursements
total wages  salaries buybacks dividends
2014
2013
implementation of remuneration policy in the financial year to january 2015 
the committee will implement the policy set out on pages 41 to 55 subject to approval by shareholders of that 
policy at the 2014 agm  the policy table sets out the performance targets for smp and ltip awards which will be 
made during the year to january 2015 and summarised below is that same information for all outstanding awards 
made under the ltip and smp schemes
ltip
details of potential awards granted to executive directors for outstanding performance periods are as follows
3 year performance periods commencing
maximum potential award granted  of base salary
lord wolfson
christos angelides  
david keens
jane shields  
michael law
august 2011 february 2012 august 2012 
and february 2013 100 75 60
august 2013 100 75 75
the comparator group for the ltip three year performance periods ending january 2015 july 2015 january 2016 
and july 2016 is the same as the group detailed on page 64 for the three year performance period ending july 
2014 hmv was included in place of dunelm
annual report and accounts january 2014
67 2315804  proof 2  14032014
remuneration report
share matching plan
vesting of awards is dependent solely on achieving the fully diluted posttax eps targets detailed below  
required fully diluted eps pence
date of grant for 051 match for 11 match for 21 match
april 2011 for this award the matching 
ratio is after grossing up for income tax and 
employees’ national insurance
2313 2402 2581
april 2012 for this award no grossing up  
was applied prior to the matching award 
2672 2815 3102
april 2013 for this award no grossing up  
was applied prior to the matching award
3145 3313 3650
these targets require a minimum three year growth in eps of 12 before any shares vest and a maximum award 
is only achieved if eps growth reaches 25 2011 award and 30 2012 and 2013 awards over three years  the 
effective matching ratio will be calculated on a straight line basis for eps falling between each of the threshold 
points  details of the calculation of fully diluted eps are provided in note 9  
dilution of share capital by employee share plans
the company monitors and has complied with dilution limits in its various share scheme rules and has not issued 
a significant number of new or treasury shares in satisfaction of share schemes in the last 10 years  sharebased 
incentives are usually satisfied from shares purchased and held by the esot – see note 26  
consideration of matters relating to directors’ remuneration 
remuneration committee
during the year the committee comprised the following independent nonexecutive directors
jonathan dawson committee chairman 
steve barber 
john barton 
christine cross 
francis salway 
caroline goodall
the committee met six times during the year under review  all meetings were fully attended except that christine 
cross and jonathan dawson were each unable to attend one meeting
role of remuneration committee
the committee determines the remuneration of the group’s chairman and executive directors and reviews that of 
senior executives  it is also responsible for determining the targets for performancerelated pay schemes approves 
any award of the company’s shares under share option or incentive schemes to employees and oversees any 
major changes in employee benefit structures  the committee members have no conflicts of interest arising from 
crossdirectorships and no director is permitted to be involved in any decisions as to his or her own remuneration  
the remuneration of nonexecutive directors is decided by the chairman and executive directors of the board  the 
committee’s terms of reference are available on the company’s website wwwnextplccouk or on request from 
the company secretary
annual report and accounts january 2014
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additional information parent company accounts consolidated accounts governance business reports
assistance to the committee
during the period the committee received input from the chief executive and group finance director  aon hewitt 
and fit remuneration consultants llp also provided independent external advice mostly of a technical nature 
and related to share plans and the implementation of the new directors’ remuneration reporting regime  these 
advisers have no other connection with the company and were appointed by the committee based on their 
expertise in the relevant areas of interest  based on the nature of the advice the relatively small fees and no other 
connection existing with these advisers the committee was satisfied that the advice received was objective and 
independent  pricewaterhousecoopers provided independent verification services of total shareholder returns 
for next and the comparator group of companies under the long term incentive plan  each of these firms is a 
member of the remuneration consultants group being the professional body for remuneration consultants and 
have confirmed to us that they adhere to its code of conduct
during the year aon hewitt fit remuneration consultants llp and pricewaterhousecoopers were paid less than 
£20k each and their fees were charged at an hourly rate
voting at general meeting
a resolution to approve the directors’ remuneration report was passed at the company’s 2013 agm  of the 
total votes cast 109m 997 were voted for the resolution and 03 against 18m votes were withheld which 
represented 11 of the total number of shares in issue at the date of the agm
votes for

for votes against

against
total votes  
cast
votes  
withheld
to approve the directors’ 
remuneration report 108929272 997 357212 03 109286484 1837922
on behalf of the board
jonathan dawson 
chairman of the remuneration committee
annual report and accounts january 2014
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independent auditor’s report to the members of next plc
we have audited the group financial statements of next 
plc for the year ended 25 january 2014 which comprise the 
consolidated income statement the consolidated statement 
of comprehensive income the consolidated balance 
sheet the consolidated statement of changes in equity the 
consolidated cash flow statement and the related notes 1 to 
32  the financial reporting framework that has been applied in 
their preparation is applicable law and international financial 
reporting standards ifrss as adopted by the european union  
this report is made solely to the company’s members 
as a body in accordance with chapter 3 of part 16 of the 
companies act 2006  our audit work has been undertaken so 
that we might state to the company’s members those matters 
we are required to state to them in an auditor’s report and for 
no other purpose  to the fullest extent permitted by law we do 
not accept or assume responsibility to anyone other than the 
company and the company’s members as a body for our 
audit work for this report or for the opinions we have formed  
respective responsibilities of directors 
and auditor 
as explained more fully in the directors’ responsibilities 
statement set out on page 31 the directors are responsible 
for the preparation of the group financial statements and 
for being satisfied that they give a true and fair view  our 
responsibility is to audit and express an opinion on the group 
financial statements in accordance with applicable law and 
international standards on auditing isas uk and ireland  
those standards require us to comply with the auditing 
practices board’s ethical standards for auditors  
scope of the audit of the financial 
statements 
an audit involves obtaining evidence about the amounts 
and disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free 
from material misstatement whether caused by fraud or error  
this includes an assessment of whether the accounting 
policies are appropriate to the group’s circumstances and 
have been consistently applied and adequately disclosed 
the reasonableness of significant accounting estimates made 
by the directors and the overall presentation of the financial 
statements  in addition we read all the financial and non
financial information in the annual report and accounts to 
identify material inconsistencies with the audited financial 
statements and to identify any information that is apparently 
materially incorrect based on or materially inconsistent with 
the knowledge acquired by us in the course of performing 
the audit  if we become aware of any apparent material 
misstatements or inconsistencies we consider the implications 
for our report  
our assessment of risks of material 
misstatement
we consider that the following areas present the greatest 
risk of material misstatement in the financial statements and 
consequently have had the greatest impact on our audit strategy  
the allocation of resources and the efforts of the engagement 
team including the more senior members of the team
 ❚ the assessment of the directory debt provision 
 ❚ the assessment of inventory provisions
 ❚ the assessment of underlying risk and valuation of financial 
instruments and
 ❚ the risk of misstatement arising from management override 
of internal controls with regard to estimates and other 
provisions relevant to the retail environment  
our application of materiality
we apply the concept of materiality both in planning 
and performing our audit and in evaluating the effect of 
misstatements on our audit and on the financial statements  
for the purposes of determining whether the financial 
statements are free from material misstatement we define 
materiality as the magnitude of misstatement that makes 
it probable that the economic decisions of a reasonably 
knowledgeable person relying on the financial statements 
would be changed or influenced
we also determine a lower level of performance materiality 
which we use to determine the extent of testing needed to 
reduce to an appropriately low level the probability that the 
aggregate of uncorrected and undetected misstatements 
exceeds materiality for the financial statements as a whole
when establishing our overall audit strategy we determined 
a magnitude of uncorrected misstatements that we judged 
would be material for the financial statements as a whole  we 
determined materiality for the group to be £35 million which is 
approximately 5 of preexceptional pretax profit  
on the basis of our risk assessments together with our 
assessment of the group’s overall control environment our 
judgement is that performance materiality for the group 
should be 50 of materiality namely £175 million  our 
approach is designed to have a reasonable probability of 
ensuring that the total of uncorrected and undetected audit 
differences does not exceed our materiality for the financial 
statements as a whole
we agreed with the audit committee that we would report to 
the committee all audit differences in excess of £17 million 
as well as differences below that threshold that in our view 
warranted reporting on qualitative grounds
an overview of the scope of our audit
the retail and directory business operations accounting 
for 95 of the group’s revenue and 93 of total segment 
profit were subject to a full scope audit  the overseas 
group purchasing division lipsy and property management 
contribute 5 of total segment profit and were subject to 
specific scope audits in areas where we assessed there was a 
risk of material misstatement  for the remaining components 
of the group we performed other procedures to confirm there 
were no significant risks of material misstatement in the group 
financial statements
annual report and accounts january 2014
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additional information parent company accounts consolidated accounts governance business reports
in view of the nature of the main risk areas noted above the 
group audit team is supported by experts in auditing the 
financial instruments and their valuation
the principal way in which we scoped our response to the risks 
noted above was as follows
 ❚ we checked management’s categorisation of the debtor 
book based on payment in accordance with agreed 
terms  we challenged the reasonableness of the key 
assumptions in determining management’s provision for 
future default being the group’s assumed default rates 
which represent the likelihood of eventual default for 
debt within each category and expected recovery rates 
on such debts in combination with evidence of historical 
default and recovery rates current performance and any 
observed changes in debtor profile in the current period  
we checked the arithmetical accuracy of the provision 
based on management’s assumptions and compared 
the underlying debtor book categorisation to the 
financial accounting system and the mapping of external 
affordability data
 ❚ the adequacy of the inventory provision depends on the 
level of stock on hand which is expected to be sold below 
cost plus attributable selling costs  we examined the 
group’s historical trading patterns of stock sold at full price 
stock marked down below full price in a sale period and 
the element of inventory that is passed to clearance along 
with the related margins achieved for each of these sales 
channels  we then challenged the reasonableness of the 
inventory provision taking into account a combination of 
the evidence of these historical trading patterns and any 
observed changes to the current year buying cycle
 ❚ we determined the different types of financial instruments 
held by the group and the level of risk inherent in each 
of the transaction types  we analysed the features of a 
selected sample of financial instruments by comparison to 
the originating contractual agreements  with our experts 
we challenged the reasonableness of the valuation of the 
selected sample where the group’s valuation was outside 
a reasonable tolerance of our own expectations  
 ❚ we performed analytical procedures and journal entry 
testing in order to identify and test the risk of misstatement 
arising from management override of controls which in 
addition to the risks disclosed above focused on accruals 
and provisions of a judgemental nature capable of being 
manipulated by management  these comprised of 
accruals for sales returns gift card exposure share based 
payments and ltip arrangements along with provisions 
for dilapidations onerous leases and vacant leasehold 
properties
opinion on financial statements 
in our opinion the group financial statements 
 ❚ give a true and fair view of the state of the group’s affairs as 
at 25 january 2014 and of its profit for the year then ended 
 ❚ have been properly prepared in accordance with ifrss as 
adopted by the european union and 
 ❚ have been prepared in accordance with the requirements 
of the companies act 2006 and article 4 of the ias 
regulation
opinion on other matters prescribed by 
the companies act 2006 
in our opinion
 ❚ the information given in the strategic report and the 
directors’ report for the financial year for which the group 
financial statements are prepared is consistent with the 
group financial statements
matters on which we are required to 
report by exception 
we have nothing to report in respect of the following 
under the isas uk and ireland we are required to report to 
you if in our opinion information in the annual report is 
 ❚ materially inconsistent with the information in the audited 
financial statements or 
 ❚ apparently materially incorrect based on or materially 
inconsistent with our knowledge of the group acquired in 
the course of performing our audit or 
 ❚ is otherwise misleading  
in particular we are required to consider whether we have 
identified any inconsistencies between our knowledge 
acquired during the audit and the directors’ statement 
that they consider the annual report is fair balanced and 
understandable and whether the annual report appropriately 
discloses those matters that we communicated to the audit 
committee which we consider should have been disclosed  
under the companies act 2006 we are required to report to 
you if in our opinion 
 ❚ certain disclosures of directors’ remuneration specified by 
law are not made or 
 ❚ we have not received all the information and explanations 
we require for our audit  
under the listing rules we are required to review 
 ❚ the directors’ statement set out on page 37 in relation to 
going concern and 
 ❚ the part of the corporate governance statement relating to 
the company’s compliance with the nine provisions of the 
uk corporate governance code specified for our review  
other matter 
we have reported separately on the parent company 
financial statements of next plc for the year ended  
25 january 2014 and on the information in the directors’ 
remuneration report that is described as having been audited
 
nigel meredith 
senior statutory auditor 
for and on behalf of ernst  young llp  statutory auditor 
birmingham 
20 march 2014
notes 
1  the maintenance and integrity of the next plc website is the responsibility of the 
directors the work carried out by the auditors does not involve consideration 
of these matters and accordingly the auditors accept no responsibility for any 
changes that may have occurred to the financial statements since they were 
initially presented on the website 
2  legislation in the united kingdom governing the preparation and dissemination 
of financial statements may differ from legislation in other jurisdictions
annual report and accounts january 2014
71 2315804  proof 2  14032014
consolidated income statement
for the financial year ended 25 january
2014 2013
notes
underlying 
and total 
£m
underlying 
£m
exceptional 
items 
note 6 
£m
total
£m
continuing operations
revenue 1  2 37400 35478 150 35628
cost of sales 24999 24311 59 24370
gross profit 12401 11167 91 11258
distribution costs 2962 2695 – 2695
administrative expenses 2177 2010 – 2010
other lossesgains 3 59 34 358 392
trading profit 7203 6496 449 6945
share of results of associates  25 06 – 06
operating profit 3 7228 6502 449 6951
finance income 5 07 04 – 04
finance costs 5 283 290 – 290
profit before taxation 6952 6216 449 6665
taxation 7 1420 1485 94 1579
profit for the year 5532 4731 355 5086
profit for the year attributable to
equity holders of the parent company 5532 4732 355 5087
noncontrolling interest – 01 – 01
profit for the year 5532 4731 355 5086
2014 2013
underlying 
and total underlying total
basic earnings per share 9 3661p 2977p 3201p
diluted earnings per share 9 3556p 2899p 3117p
annual report and accounts january 2014
72 2315804  proof 2  14032014
additional information parent company accounts governance consolidated accounts business reports
consolidated statement of comprehensive income
for the financial year ended 25 january
notes
2014
£m
2013
£m
profit for the year 5532 5086
other comprehensive income and expenses
items that will not be reclassified to profit or loss
actuarial losses on defined benefit pension scheme 21 126 197
tax relating to items which will not be reclassified 50 59
subtotal items that will not be reclassified 76 138
items that may be reclassified to profit or loss
exchange differences on translation of foreign operations 30 –
lossesgains on cash flow hedges 219 16
transferred to income statement on cash flow hedges 149 45
transferred to the carrying amount of hedged items on cash flow hedges 85 03
tax relating to items that may be reclassified 53 10
subtotal items that may be reclassified 200 22
other comprehensive expense for the year 276 160
total comprehensive income for the year 5256 4926
attributable to
equity holders of the parent company 5256 4927
noncontrolling interest – 01
total comprehensive income for the year 5256 4926
annual report and accounts january 2014
73 2315804  proof 2  14032014
consolidated balance sheet
as at 25 january
notes
2014
£m
2013
£m
assets and liabilities
noncurrent assets
property plant  equipment 10 5092 5373
intangible assets 11 444 448
interests in associates and other investments 12 79 72
defined benefit pension surplus 21 703 656
other financial assets 15 177 309
deferred tax assets 7 270 –
6765 6858
current assets
inventories 13 3856 3318
customer and other receivables 14 8080 7181
other financial assets 15 12 216
cash and short term deposits 16 2733 1363
14681 12078
total assets 21446 18936
current liabilities
bank loans and overdrafts 17 26 54
corporate bonds 20 – 876
trade payables and other liabilities 18 5940 5372
dividends payable 8 744 –
other financial liabilities 19 838 875
current tax liabilities 797 983
8345 8160
noncurrent liabilities
corporate bonds 20 8008 5668
provisions 22 85 112
deferred tax liabilities 7 – 40
other financial liabilities 19 09 –
other liabilities 18 2137 2100
10239 7920
total liabilities 18584 16080
net assets 2862 2856
total equity 2862 2856
approved by the board on 20 march 2014
 
lord wolfson of aspley guise 
chief executive 
20 march 2014
 
david keens 
group finance director
annual report and accounts january 2014
74 2315804  proof 2  14032014
additional information parent company accounts governance consolidated accounts business reports
consolidated statement of changes in equity
for the financial year ended 25 january
share 
capital
£m
share 
premium
account
£m
capital
redemp
tion
reserve
£m
esot 
reserve
£m
fair 
value 
reserve
£m
foreign 
currency
trans
lation
£m
other 
reserves
£m
retained 
earnings
£m
share
holders’
equity
£m
non
control
ling
interest
£m
total 
equity
£m
at january 2012 169 08 130 1411 115 20 14438 17634 2227 – 2227
profit for the year – – – – – – – 5087 5087 01 5086
other comprehensive 
expense for the year – – – – 32 – – 128 160 – 160
total comprehensive 
income for the year – – – – 32 – – 4959 4927 01 4926
shares issued – 01 – – – – – – 01 – 01
share buybacks  
commitments note 23 08 – 08 – – – – 2200 2200 – 2200
esot share purchases  
commitments note 26 – – – 1435 – – – – 1435 – 1435
shares issued by esot – – – 690 – – – 247 443 – 443
share option charge – – – – – – – 178 178 – 178
tax recognised directly 
in equity – – – – – – – 193 193 – 193
equity dividends – – – – – – – 1477 1477 – 1477
at january 2013 161 09 138 2156 83 20 14438 19040 2857 01 2856
profit for the year – – – – – – – 5532 5532 – 5532
other comprehensive 
incomeexpense for 
the year – – – – 243 30 – 63 276 – 276
total comprehensive 
income for the year – – – – 243 30 – 5469 5256 – 5256
share buybacks  
commitments note 23 06 – 06 – – – – 3119 3119 – 3119
esot share purchases  
commitments note 26 – – – 550 – – – – 550 – 550
shares issued by esot – – – 740 – – – 356 384 – 384
share option charge – – – – – – – 158 158 – 158
equity awards settled 
in cash – – – – – – – 24 24 – 24
tax recognised directly 
in equity – – – – – – – 290 290 – 290
equity dividends – – – – – – – 2389 2389 – 2389
at january 2014 155 09 144 1966 160 50 14438 19069 2863 01 2862
annual report and accounts january 2014
75 2315804  proof 2  14032014
consolidated cash flow statement
for the financial year ended 25 january
2014
£m
2013
£m
cash flows from operating activities
operating profit 7228 6951
 depreciation and amortisation 1174 1172
 impairment of property plant  equipment 29 18
 loss on disposal of property plant  equipment 130 25
 share option charge less amounts settled in cash 134 178
 share of undistributed profit of associates 07 01
 exchange movement 93 32
 increasedecrease in inventories 538 401
 increase in customer and other receivables 909 217
 increase in trade and other payables 507 74
 pension contributions less income statement charge 173 502
cash generated from operations 7668 8067
 corporation taxes paid 1520 1477
net cash from operating activities 6148 6590
cash flows from investing activities
 additions to property plant  equipment 1053 816 
 movement in capital accruals 24 108
 payments to acquire property plant  equipment 1029 924
 net proceeds from disposal of subsidiary – 15
 proceeds from sale of property plant  equipment 04 53
 payment of deferred consideration 01 01
net cash from investing activities 1026 857
cash flows from financing activities
 repurchase of own shares 2958 2419
 purchase of shares by esot 975 1230
 proceeds from disposal of shares by esot 429 434
 bonds issued 2500 –
 bonds redeemed 855 –
 interest paid 215 238
 interest received 05 20
 payment of finance lease liabilities 01 01
 dividends paid 1648 1477
net cash from financing activities 3718 4911
net increase in cash and cash equivalents 1404 822
opening cash and cash equivalents 1309 488
effect of exchange rate fluctuations on cash held 06 01
closing cash and cash equivalents note 31 2707 1309
annual report and accounts january 2014
76 2315804  proof 2  14032014
additional information parent company accounts governance consolidated accounts business reports
group accounting policies
basis of preparation
the financial statements of next plc and its subsidiaries “the group” have been prepared in accordance with 
international financial reporting standards “ifrs” adopted for use in the european union and in accordance 
with the companies act 2006  the financial statements have been prepared on the historical cost basis except 
for certain financial instruments pension assets and liabilities and sharebased payment liabilities which are 
measured at fair value  the financial statements are for the 52 weeks to 25 january 2014 last year 52 weeks to  
26 january 2013
except for the immaterial effect of the amendment to ias 19 described on page 80 there have been no changes 
to our group accounting policies this year or last year and the principal policies adopted are set out below
basis of consolidation
the consolidated financial statements incorporate the financial statements of next plc “the company” and 
its subsidiary undertakings  all intragroup transactions balances income and expenses are eliminated on 
consolidation
the results of any subsidiaries acquired or disposed of during the period are included in the consolidated income 
statement from the effective date of acquisition or up to the effective date of disposal  the results and net assets of 
associated undertakings are incorporated into these financial statements using the equity method of accounting
foreign currencies
the consolidated financial statements are presented in pounds sterling which is the company’s functional and 
presentation currency  the group includes foreign entities whose functional currencies are not sterling  on 
consolidation the assets and liabilities of those entities are translated at the exchange rates at the balance 
sheet date and income and expenses are translated at weighted average rates during the period  translation 
differences are recognised in equity
transactions in currencies other than an entity’s functional currency are recorded at the exchange rate on the 
transaction date whilst assets and liabilities are translated at exchange rates at the balance sheet date  exchange 
differences are recognised in the income statement
revenue
revenue represents the fair value of amounts receivable for goods and services and is stated net of sales taxes 
and returns  sales of goods are recognised on delivery  directory service charge income is accrued on a time 
basis by reference to the principal outstanding and the effective interest rate  revenue from the sale of gift cards 
is deferred until their redemption
underlying profit and exceptional items
exceptional items are significant items of an unusual or nonrecurring nature which are shown separately in the 
income statement to provide a clearer understanding of the underlying financial performance during the year  
further details are given in note 6
property plant  equipment
property plant and equipment are stated at cost less accumulated depreciation and impairment
depreciation is charged so as to write down the cost of assets to their estimated residual values over their remaining 
useful lives on a straight line basis  estimated useful lives and residual values are reviewed at least annually and 
are summarised as follows
freehold and long leasehold property 50 years
plant and fittings
 plant machinery and building works 10 – 25 years
 fixtures and fittings 6 – 15 years
 vehicles it and other assets 2 – 6 years
 leasehold improvements the period of the lease or useful life if shorter
annual report and accounts january 2014
77 2315804  proof 2  14032014
goodwill
goodwill is initially measured at cost being the excess of the acquisition cost over the group’s interest in the assets 
and liabilities recognised  goodwill is not amortised but is reviewed for impairment annually or whenever there is 
an indication of impairment
other intangible assets
separately identifiable intangible assets obtained in a business acquisition are initially recognised at fair value if 
this can be measured reliably and the asset arises from contractual or other legal rights  other intangible assets 
are amortised on a straight line basis over their expected useful lives as follows
lipsy brand names and trademarks 10 years
lipsy customer relationships 4 years
other intangible assets are reviewed for impairment whenever events or changes in circumstances indicate their 
carrying value may not be recoverable
investments
investments in subsidiary companies and equity instruments that do not have a quoted market price in an active 
market and whose fair value cannot be reliably measured are stated at cost subject to review for impairment
impairment
the carrying values of nonfinancial assets are reviewed at each balance sheet date to determine whether there is 
any indication of impairment  if any impairment loss arises the asset value is adjusted to its estimated recoverable 
amount and the difference is recognised in the income statement
pension arrangements
the group offers pension benefits which include both defined benefit and defined contribution arrangements  
pension assets are held in separate trustee administered funds and the group also provides other unfunded 
pension benefits to certain plan members
the cost of providing benefits under the defined benefit and unfunded arrangements are determined using the 
projected unit credit method with actuarial valuations being carried out at each balance sheet date  the net 
defined benefit pension asset or liability represents the fair value of the defined benefit plan assets less the present 
value of the defined benefit and unfunded liabilities  a net pension asset is only recognised to the extent that it is 
expected to be recoverable in the future
actuarial gains and losses are recognised in the statement of comprehensive income in full in the period in which 
they occur  other income and expenses are recognised in the income statement  the accounting impact of an 
amendment to ias 19 employee benefits is explained on page 80
the cost of the defined contribution section is recognised in the income statement as incurred
inventories 
inventories stocks are valued at the lower of standard cost or net realisable value  net realisable value is based 
on estimated selling prices less further costs to be incurred to disposal
directory and other receivables
directory customer receivables represent outstanding customer balances less any allowance for impairment 
which is based on objective evidence and recent default experience by customer account category  other trade 
receivables are stated at invoice value less any allowance for impairment
cash and cash equivalents
for the purposes of the consolidated cash flow statement cash and cash equivalents consist of cash and short 
term deposits less bank overdrafts which are repayable on demand  short term deposits are those with an original 
maturity of three months or less
group accounting policies
annual report and accounts january 2014
78 2315804  proof 2  14032014
additional information parent company accounts governance consolidated accounts business reports
corporate bonds and bank borrowings
corporate bonds and bank borrowings are initially recognised at fair value and subsequently adjusted where 
hedge accounting applies see interest rate derivatives below  accrued interest is included within other creditors 
and accruals
sharebased payments
the fair value of employee share options is calculated when they are granted using a blackscholes model  the 
resulting cost is charged in the income statement over the vesting period of the option and is regularly reviewed 
and adjusted for the expected and actual number of options vesting
for cashsettled sharebased payments including the long term incentive plan the fair value of the liability is 
determined at each balance sheet date and the cost is recognised in the income statement over the vesting 
period  
taxation
taxation comprised of current and deferred tax is charged or credited to the income statement unless it relates to 
items in other comprehensive income or directly in equity  in such cases the related tax is also recognised in other 
comprehensive income or directly in equity
current tax liabilities are measured at the amount expected to be paid based on tax rates and laws that are 
enacted or substantively enacted at the balance sheet date
deferred tax is accounted for using the balance sheet liability method and is calculated using rates of taxation 
enacted or substantively enacted at the balance sheet date which are expected to apply when the asset or 
liability is settled
deferred tax liabilities are generally recognised for all taxable temporary differences  deferred tax assets are 
only recognised to the extent that it is probable that taxable profits will be available against which deductible 
temporary differences can be utilised  deferred tax is not recognised in respect of investments in subsidiaries and 
associates where the reversal of any taxable temporary differences can be controlled and are unlikely to reverse 
in the foreseeable future
other financial assets and liabilities derivative financial instruments and hedge 
accounting
derivative financial instruments “derivatives” are used to manage risks arising from changes in foreign currency 
exchange rates relating to the purchase of overseas sourced products and changes in interest rates relating to 
the group’s debt  in accordance with its treasury policy the group does not enter into derivatives for speculative 
purposes  foreign currency and interest rate derivatives are stated at their fair value being the estimated amount 
that the group would receive or pay to terminate them at the balance sheet date based on prevailing foreign 
currency and interest rates
foreign currency derivatives
changes in the fair value of foreign currency derivatives which are designated and effective as hedges of future 
cash flows are recognised in equity in the fair value reserve and subsequently transferred to the carrying amount of 
the hedged item or the income statement  realised gains or losses on cash flow hedges are therefore recognised 
in the income statement in the same period as the hedged item
hedge accounting is discontinued when the hedging instrument expires or is sold terminated or exercised or 
no longer qualifies for hedge accounting  at that time any cumulative gain or loss on the hedging instrument 
previously recognised in equity is retained in equity until the hedged transaction occurs  if the hedged transaction 
is no longer expected to occur the net cumulative gain or loss recognised in equity is then transferred to the 
income statement
changes in the fair value of foreign currency derivatives which are ineffective or do not meet the criteria for hedge 
accounting in ias 39 are recognised in the income statement
annual report and accounts january 2014
79 2315804  proof 2  14032014
group accounting policies
interest rate derivatives
the group uses interest rate derivatives to hedge part of the interest rate risk associated with the company’s 
corporate bonds  the carrying values of the relevant bonds are adjusted only for changes in fair value attributable 
to the interest rate risk being hedged  the adjustment is recognised in the income statement and is offset by 
movements in the fair value of the derivatives
changes in the fair value of interest rate derivatives which are ineffective or do not meet the criteria for hedge 
accounting in ias 39 are recognised in the income statement
share buybacks
the group has regularly returned surplus cash to shareholders through share buybacks  shares purchased for 
cancellation are deducted from retained earnings at the total consideration paid or payable  the company also 
uses contingent share purchase contracts and irrevocable closed period buyback programmes  the obligation 
to purchase shares is recognised in full at the inception of the contract even when that obligation is conditional 
on the share price  any subsequent reduction in the obligation caused by the expiry or termination of a contract 
is credited back to equity at that time
shares held by esot
the next employee share ownership trust “esot” provides for the issue of shares to group employees principally 
under share option schemes  shares in the company held by the esot are included in the balance sheet at cost 
as a deduction from equity  the esot may also use contingent share purchase contracts and irrevocable closed 
period share purchase programmes which are accounted for as described above
provisions
a provision is recognised where the group has a legal or constructive obligation as a result of a past event and it 
is probable that an outflow of economic benefits will be required to settle the obligation
leasing commitments
rentals payable under operating leases are charged to income on a straight line basis over the period of the 
lease  contingent rentals payable based on store revenues are accrued in line with the related sales
premiums payable rent free periods and capital contributions receivable on entering an operating lease are 
released to income on a straight line basis over the lease term
the group does not have significant finance leases
significant areas of estimation and judgement
the preparation of the financial statements requires judgements estimations and assumptions to be made that 
affect the reported values of assets liabilities revenues and expenses  the nature of estimation means that actual 
outcomes could differ from those estimates  significant areas of estimation for the group include the expected 
future cash flows applied in measuring impairment of directory customer receivables note 14 estimated selling 
prices applied in determining the net realisable values of inventories note 13 and inventories policy above 
and the actuarial assumptions applied in calculating the net retirement benefit obligation note 21  the audit 
committee section of the corporate governance report page 34 contains further information on the judgmental 
areas considered by the committee during the year  
changes to accounting standards 
an amendment to ias 19 employee benefits was published in june 2011 and became effective during the current 
year  this affects the accounting for defined benefit pension schemes and has been applied this year
if applied retrospectively the effect of the amendment on last year would have been to increase pension costs in 
the income statement by £26 million and to increase actuarial gains in the statement of comprehensive income 
by an equivalent amount  there is no impact on the balance sheet  as the impact is not material prior year figures 
have not been restated and remain as reported last year
various other new accounting standards and amendments were issued during the year none of which have had 
or are expected to have any significant impact on the group
annual report and accounts january 2014
80 2315804  proof 2  14032014
additional information parent company accounts governance consolidated accounts business reports
notes to the consolidated financial statements
1 segmental analysis
the group’s operating segments under ifrs 8 have been determined based on management accounts reviewed 
by the board  the performance of operating segments is assessed on profits before interest and tax excluding 
equity settled share option charges recognised under ifrs 2 sharebased payment and unrealised foreign 
exchange gains or losses on derivatives which do not qualify for hedge accounting  the activities products and 
services of the operating segments are detailed in the strategic report on page 18  the property management 
segment holds properties and property leases which are sublet to other segments and external parties  
external revenue internal revenue total revenue
2014
£m
2013
£m
2014
£m
2013
£m
2014
£m
2013
£m
next retail 22276 21909 98 60 22374 21969
next directory 13410 11926 53 37 13463 11963
next international retail 856 777 – – 856 777
next sourcing 110 88 5602 4983 5712 5071
36652 34700 5753 5080 42405 39780
lipsy 629 581 19 05 648 586
property management 48 203 1929 1920 1977 2123
total segment revenues 37329 35484 7701 7005 45030 42489
third party distribution 71 144 – – 71 144
eliminations – – 7701 7005 7701 7005
total 37400 35628 – – 37400 35628
2014 2013
segment profit
underlying 
 total
£m
underlying
£m
exceptional
items 
note 6
£m
total
£m
next retail 3477 3311 – 3311
next directory 3585 3021 – 3021
next international retail 121 84 – 84
next sourcing 341 308 – 308
7524 6724 – 6724
lipsy 27 20 – 20
property management 18 35 91 126
total segment profit 7569 6779 91 6870
central costs and other 149 139 358 219
share option charge 158 178 – 178
unrealised foreign exchange 59 34 – 34
trading profit 7203 6496 449 6945
share of results of associates 25 06 – 06
finance income 07 04 – 04
finance costs 283 290 – 290
profit before tax 6952 6216 449 6665
transactions between operating segments are made on an arm’s length basis in a manner similar to those with 
third parties  segment revenue and segment profit include transactions between business segments which are 
eliminated on consolidation  the majority of next sourcing’s revenues and profits are derived from sales to next 
retail and next directory
annual report and accounts january 2014
81 2315804  proof 2  14032014
1 segmental analysis continued
property plant 
 equipment capital expenditure depreciation
2014
£m
2013
£m
2014
£m
2013
£m
2014
£m
2013
£m
next retail 3478 3741 880 732 1018 1014
next directory 807 845 84 67 118 109
next international retail 09 11 04 – 04 05
next sourcing 24 26 08 06 09 10
lipsy 47 68 09 08 19 23
property management 725 680 66 02 01 02
other 02 02 02 01 01 01
total 5092 5373 1053 816 1170 1164
analyses of the group’s external revenues by customer location and noncurrent assets excluding investments 
the defined benefit pension surplus other financial assets and deferred tax assets by geographical location are 
detailed below
external revenue by geographical location
2014
£m
2013
£m
united kingdom 34470 33193
rest of europe 1977 1711
middle east 465 342
asia 196 139
rest of world 292 243
37400 35628
noncurrent assets by geographical location
2014
£m
2013
£m
united kingdom 5141 5379
rest of europe 75 120
middle east 43 45
asia 276 276
rest of world 01 01
5536 5821
there were no discontinued operations in the current or previous year
2 revenue by type
2014
£m
2013
£m
sale of goods 35645 33766
rendering of services 1588 1548
rental income 48 53
royalties 119 111
sale of property development stock exceptional item see note 6 – 150
revenue 37400 35628
rendering of services includes £1518m 2013 £1404m of service charge on directory customer receivables  
notes to the consolidated financial statements
annual report and accounts january 2014
82 2315804  proof 2  14032014
additional information parent company accounts governance consolidated accounts business reports
3 operating profit 
group operating profit is stated after chargingcrediting
2014
£m
2013
£m
depreciation on tangible assets
 owned 1169 1163
 leased 01 01
loss on disposal of property plant  equipment 130 25
amortisation of intangible assets 04 08
impairment charges
 tangible assets 29 18
operating lease rentals
 minimum lease payments net of amortisation of incentives 1985 1955
 contingent rentals payable 71 68
net foreign exchange lossesgains 68 34
cost of inventories recognised as an expense 13635 13522
write down of inventories to net realisable value 807 751
14442 14273
trade receivables 
 impairment charge 290 283
 amounts recovered  46 47
2014
£m
2013
£m
auditor’s remuneration
audit of the financial statements 193 181
audit of subsidiaries 279 267
total audit fees 472 448
other services
 tax compliance 6 7
 tax advisory services – 2
 corporate finance 2026 bond issue 82 –
 other assurance services 31 18
591 475
gains and losses on cash flow hedges removed from equity and included in the income statement for the period 
comprise gains of £149m 2013 gains of £45m included in cost of sales
cost of inventories recognised as an expense consists of those costs which are directly attributable to goods sold 
in the year including packaging and inbound freight costs
other lossesgains reported in the income statement represent foreign exchange losses of £59m 2013 gains 
of £34m in respect of derivative contracts which do not qualify for hedge accounting under ias 39 and the prior 
year exceptional pension items explained in note 6
annual report and accounts january 2014
83 2315804  proof 2  14032014
4 staff costs and key management personnel
total staff costs were as follows
2014
£m
2013
£m
wages and salaries 5319 5101
social security costs 360 327
other pension costs including £358m net exceptional gains in the prior year 160 252
5839 5176
sharebased payments expense – equity settled 158 178
sharebased payments expense – cash settled 268 234
6265 5588
equity settled sharebased payments comprise management options sharesave options and potential awards 
under the share matching plan details of which are given in note 25 cash settled sharebased payments  
relate to the long term incentive plan “ltip” details of which are given in the remuneration report
total staff costs by business sector were made up as follows
2014
£m
2013
£m
next retail and directory 5807 5400
next international retail 28 32
next sourcing 264 236
other activities 166 278
exceptional pension credit see note 6 – 358
total 6265 5588
average employees fulltime equivalents
2014
number
2013
number
2014
number
2013
number
next retail and directory 48417 50707 24618 24710
next international retail 204 277 164 217
next sourcing 3573 3148 3573 3148
other activities 339 375 213 226
total 52533 54507 28568 28301
aggregate compensation for key management personnel including employer’ s national insurance contributions 
being the directors of next plc was as follows
2014
£m
2013
£m
short term employee benefits 66 60
postemployment benefits 03 03
sharebased payments 142 132
211 195
directors’ remuneration is detailed in the remuneration report
notes to the consolidated financial statements
annual report and accounts january 2014
84 2315804  proof 2  14032014
additional information parent company accounts governance consolidated accounts business reports
5 finance income and costs
2014
£m
2013
£m
interest on bank deposits 07 03
other interest receivable – 01
total finance income 07 04
interest on bonds and other borrowings 253 244
other fair value movements 30 46
total finance costs 283 290
directory service charge is presented as a component of revenue
6 exceptional items
footnote
2014
£m
2013
£m
pension credit a – 421
pension charge b – 63
sale of property development stock c – 91
– 449
associated tax charge – 94
– 355
there were no exceptional items during the current year  last year’s exceptional items were as follows 
a the group reviewed the operation of the defined benefit section of its pension plan  from november 2012  
the future accrual of benefits for remaining employee members is based on pensionable earnings at that time 
rather than final earnings  this change gave rise to a oneoff accounting gain of £421m last year
b a tranche of pensions in payment were subject to a buyin arrangement in 2012  the contract also  
allows for the buyin to be converted to a buyout and steps are being taken to proceed on this basis   
accordingly the transaction was accounted for as a settlement with the £63m accounting charge presented 
in the income statement as an exceptional item
c the group sold its last remaining stock from its property development activities for £150m last year which 
had a book value of £59m  the £91m gain was presented as an exceptional item because of its size and  
nonrecurring nature  
annual report and accounts january 2014
85 2315804  proof 2  14032014
7 taxation
2014
£m
2013
£m
current tax
uk corporation tax on profits of the year 1665 1593
adjustments in respect of previous years 206 81
1459 1512
overseas tax
on profits of the year 41 28
adjustments in respect of previous years – 01
total current tax 1500 1539
deferred tax
origination and reversal of temporary differences 93 01
adjustments in respect of previous years 13 41
tax expense reported in the consolidated income statement 1420 1579
last year’s total tax charge includes £94m relating to exceptional items see note 6  adjustments in respect of  
previous years relate to release of provisions for items subsequently agreed with hm revenue  customs and overseas  
tax authorities
the tax rate for the current year varied from the standard rate of corporation tax in the uk due to the following 
factors
2014

2013

uk corporation tax rate 232 243
nondeductible expenses 05 10
deferred tax not previously recognised property development losses – 02
overseas tax differentials 05 07
tax overprovided in previous years 28 06
deferred tax rate change – 01
effective total tax rate on profit before taxation 204 237
the 2013 effective tax rate stated above is based on total profit including exceptional items  
notes to the consolidated financial statements
annual report and accounts january 2014
86 2315804  proof 2  14032014
additional information parent company accounts governance consolidated accounts business reports
7 taxation continued
in addition to the amount charged to the income statement tax movements recognised in other comprehensive 
income and directly in equity were as follows
2014
£m
2013
£m
current tax
pension benefit obligation 34 27
exchange differences on translation of foreign operations 06 –
deferred tax
pension benefit obligation 16 32
fair value movements on derivative instruments 59 10
tax credit in other comprehensive income 103 69
2014
£m
2013
£m
current tax
sharebased payments 134 81
deferred tax
sharebased payments 156 112
tax credit in the statement of changes in equity 290 193
deferred tax assetliability
2014
£m
2013
£m
accelerated capital allowances 75 175
revaluation of derivatives to fair value 49 23
pension benefit obligations 141 151
sharebased payments 411 280
other temporary differences 26 29
270 40
the deferred tax movement in the year is as follows
2014
£m
2013
£m
at january 2013 40 154
recognised in the income statement
 accelerated capital allowances 100 54
 revaluation of derivatives to fair value 13 09
 pension benefit obligations 06 95
 sharebased payments 25 10
 other temporary differences 03 –
recognised in other comprehensive income 75 42
recognised in the statement of changes in equity 156 112
at january 2014 270 40
no recognition has been made of the following deferred tax assets
gross value 
2014 
£m
unrecognised 
deferred tax 
2014 
£m
gross value 
2013 
£m
unrecognised 
deferred tax 
2013 
£m
capital losses 743 149 830 191
the benefit of unrecognised capital losses will only accrue if taxable profits are realised on future disposals of the 
group’s capital assets
annual report and accounts january 2014
87 2315804  proof 2  14032014
8 dividends
2014
£m
2013
£m
amounts recognised as distributions to equity holders in the year
final dividend for the year to january 2013 of 74p 2012 625p per share 1114 997
interim dividend for the year to january 2014 of 36p 2013 31p per share 534 480
dividends paid in the year 1648 1477
special interim dividend of 50p per share paid 3 february 2014 744 –
proposed final dividend for the year to january 2014 of 93p 2013 74p per share 1392 1114
the special interim dividend was announced on 3 january 2014 and shares in next plc traded exdividend 
from 15 january  the liability of £744m is recorded in the january 2014 balance sheet on the basis that it  
could not realistically have been cancelled after the exdividend date  the special dividend was paid on 3 
february 2014
the proposed final dividend is subject to approval by shareholders at the annual general meeting and has not 
been included as a liability in these financial statements  the trustee of the esot has waived dividends paid in the 
year on the shares held by the esot
9 earnings per share
2014 2013
basic earnings per share
total 3661p 3201p
underlying 3661p 2977p
basic earnings per share is based on the profit for the year attributable to the equity holders of the parent company 
and the weighted average number of shares ranking for dividend less the weighted average number of shares 
held by the esot during the period
underlying earnings per share is based on profit before the exceptional items described in note 6
2014 2013
diluted earnings per share
total 3556p 3117p
underlying 3556p 2899p
diluted earnings per share is based on the weighted average number of shares used for the calculation of 
basic earnings per share as increased by the dilutive effect of potential ordinary shares  dilutive shares arise  
from employee share option schemes where the exercise price is less than the average market price of 
the company’s ordinary shares during the period  their dilutive effect is calculated on the basis of the  
equivalent number of nilcost options  where the option price is above the average market price the option is 
not dilutive and is excluded from the diluted eps calculation  there were no such share options in the current year 
2013 nil
notes to the consolidated financial statements
annual report and accounts january 2014
88 2315804  proof 2  14032014
additional information parent company accounts governance consolidated accounts business reports
9 earnings per share continued
2014 2013
fully diluted earnings per share
total 3471p 3019p
underlying 3471p 2808p
fully diluted earnings per share is based on the weighted average number of shares used for the calculation of 
basic earnings per share increased by the weighted average total employee share options outstanding during 
the period  fully diluted earnings per share is used for the purposes of the share matching plan described  
further in the remuneration report
the table below shows the key variables used in the earnings per share calculations
2014
£m
2013
£m
profit after tax attributable to equity holders of the parent company 5532 5087
less exceptional items see note 6 – 355
total underlying profit for underlying eps 5532 4732
weighted average number of shares millions
weighted average shares in issue 1579 1649
weighted average shares held by esot 68 60
weighted average shares for basic eps 1511 1589
weighted average dilutive potential shares 45 43
weighted average shares for diluted eps 1556 1632
weighted average shares for basic eps 1511 1589
weighted average total share options outstanding 83 96
weighted average shares for fully diluted eps 1594 1685
annual report and accounts january 2014
89 2315804  proof 2  14032014
10 property plant  equipment
freehold 
property 
£m
leasehold 
property 
£m
plant and 
fittings
 £m
total 
£m
cost
at january 2012 735 83 14020 14838
exchange movement – – 13 13
additions 02 – 814 816
disposals 42 – 238 280
at january 2013 695 83 14583 15361
exchange movement – – 09 09
additions 54 11 988 1053
disposals – – 623 623
at january 2014 749 94 14939 15782
depreciation
at january 2012 82 14 8923 9019
exchange movement – – 11 11
provided during the year – – 1164 1164
impairment charge – – 18 18
disposals 02 – 200 202
at january 2013 80 14 9894 9988
exchange movement – – 07 07
provided during the year – – 1170 1170
impairment charge 19 – 10 29
disposals – – 490 490
at january 2014 99 14 10577 10690
carrying amount
at january 2014 650 80 4362 5092
at january 2013 615 69 4689 5373
at january 2012 653 69 5097 5819
the carrying amount of plant and fittings above includes an amount of £03m 2013 £03m in respect of assets 
held under finance lease contracts
at 25 january 2014 the group had entered into contractual commitments for the acquisition of property plant 
and equipment amounting to £182m 2013 £154m
notes to the consolidated financial statements
annual report and accounts january 2014
90 2315804  proof 2  14032014
additional information parent company accounts governance consolidated accounts business reports
11 intangible assets
brand 
names  
trademarks 
£m
customer 
relationships 
£m
goodwill 
£m
total 
£m
cost
at january 2012 january 2013 and january 2014 40 20 441 501
amortisation and impairment
at january 2012 13 16 16 45
provided during the year 04 04 – 08
at january 2013 17 20 16 53
provided during the year 04 – – 04
at january 2014 21 20 16 57
carrying amount
at january 2014 19 – 425 444
at january 2013 23 – 425 448
at january 2012 27 04 425 456
customer relationships relates to contractual and other arrangements with corporate customers of lipsy that 
existed at the date of acquisition
the carrying amount of goodwill is allocated to the following cash generating units
2014
£m
2013
£m
next sourcing 305 305
lipsy 120 120
425 425
goodwill is tested for impairment at the balance sheet date on the basis of value in use  as this exceeded  
carrying value for each of the cash generating units concerned no impairment loss was recognised 2013 £nil
next sourcing
the key assumptions in the calculation are the future sourcing requirements of the group and the ability of next 
sourcing to meet these requirements based on past experience  in assessing value in use the most recent  
financial results and internal budgets for the next year were used and extrapolated for four further years with no 
subsequent growth assumed and discounted at 10 2013 10
lipsy
in assessing the recoverable amount of goodwill and intangibles the most recent financial results and internal 
budgets for next year were used and extrapolated for nine further years using a growth rate of 2 2013 2 
and discounted at 12 2013 15  the reduction in the discount rate is to reflect the increasing maturity 
of lipsy’s business and has no bearing on the outcome  the key assumption is that lipsy will continue to  
trade profitably through its different sales channels
for both next sourcing and lipsy the calculated value in use significantly exceeded the carrying value of the 
goodwill and other intangible assets and no further sensitivity calculations were necessary to conclude that there 
was no impairment
annual report and accounts january 2014
91 2315804  proof 2  14032014
12 interests in associates and other investments
2014
£m
2013
£m
interests in associates 69 62
other investments 10 10
79 72
during the year the group sold goods and services in the normal course of business to its associated undertakings 
as follows
sales amounts receivable
2014 
£m 
2013 
£m
2014 
£m
2013 
£m
choice discount stores limited 56 56 05 04
cotton traders limited 59 69 05 04
115 125 10 08
13 inventories
2014
£m
2013
£m
merchandise stocks 3856 3318
14 customer and other receivables
2014
£m
2013
£m
directory customer receivables 8064 7266
less allowance for doubtful debts 1242 1254
6822 6012
other trade receivables 216 212
less allowance for doubtful debts 02 02
7036 6222
amounts due from associated undertakings 10 08
other debtors 94 83
prepayments 940 868
8080 7181
no interest is charged on directory customer receivables if the statement balance is paid in full otherwise balances 
bear interest at a variable annual percentage rate of 2599 2013 2599  
expected irrecoverable amounts on overdue balances are provided for based on past default experience  
receivables which are impaired other than by age or default are separately identified and provided for as 
necessary
notes to the consolidated financial statements
annual report and accounts january 2014
92 2315804  proof 2  14032014
additional information parent company accounts governance consolidated accounts business reports
14 customer and other receivables continued
the credit quality of customer receivables that are neither past due nor impaired can be assessed by reference to 
the historical default rate for the preceding 365 days of approximately 1 2013 1 although default rates over 
shorter periods may show significant variations
other debtors and prepayments do not include impaired assets  the maximum exposure to credit risk  
at the reporting date is the carrying value of each class of asset  the group does not hold any collateral  
over these balances
ageing of customer and other trade receivables
2014
£m
2013
£m
not past due 6872 6097
0 – 30 days past due 464 400
30 – 60 days past due 104 92
60 – 90 days past due 38 35
90 – 120 days past due 28 22
over 120 days past due 556 639
otherwise impaired 218 193
total customer and other trade receivables 8280 7478
movement in the allowance for doubtful debts
2014
£m
2013
£m
opening position 1256 1137
charged to the income statement 290 283
written off as uncollectible 256 117
recovered during the year 46 47
closing position 1244 1256
15 other financial assets
2014 2013
current 
£m
non
current 
£m
current 
£m
non
current 
£m
foreign exchange contracts 12 – 108 –
interest rate derivatives – 177 108 309
12 177 216 309
foreign exchange contracts comprise forward contracts and options the majority of which are used to hedge 
exchange risk arising from the group’s overseas purchases note 27  these instruments are primarily for  
us dollars and euros  interest rate derivatives relate to the corporate bonds note 20
annual report and accounts january 2014
93 2315804  proof 2  14032014
16 cash and short term deposits
2014
£m
2013
£m
cash at bank and in hand 700 421
short term deposits 2033 942
2733 1363
cash at bank earns interest at floating rates based on daily bank deposit rates  short term deposits are made for 
varying periods of between one day and three months depending on the cash requirements of the group and 
earn interest at market short term deposit rates
17 bank loans and overdrafts
2014
£m
2013
£m
bank overdrafts and overnight borrowings 26 54
unsecured bank loans – –
26 54
bank overdrafts are repayable on demand and bear interest at a margin over bank base rates  overnight 
borrowings and unsecured bank loans bear interest at a margin above libor  the group has medium term bank 
facilities of £300m 2013 £300m committed until may 2019  none of this facility was drawn down at january 2014 
or january 2013
18 trade payables and other liabilities
2014 2013
current 
£m
non
current 
£m
current 
£m
non
current 
£m
trade payables 1948 – 1892 –
other taxation and social security 751 – 640 –
deferred revenue from sale of gift cards 690 – 657 –
property lease incentives received 257 1956 272 1907
sharebased payment liability 194 160 178 139
other creditors and accruals 2099 19 1732 51
finance leases 01 02 01 03
5940 2137 5372 2100
trade payables do not bear interest and are generally settled on 30 day terms  other creditors and accruals do 
not bear interest  property lease incentives are classified as noncurrent to the extent that they will be credited to 
the income statement more than one year from the balance sheet date
notes to the consolidated financial statements
annual report and accounts january 2014
94 2315804  proof 2  14032014
additional information parent company accounts governance consolidated accounts business reports
19 other financial liabilities
2014 2013
current 
£m
non
current 
£m
current 
£m
non
current 
£m
foreign exchange contracts 254 – 08 –
interest rate derivatives – 09 34 –
own equity share purchase contracts 584 – 833 –
838 09 875 –
foreign exchange contracts comprise forward contracts and options the majority of which are used to hedge 
exchange risk arising from the group’s overseas purchases note 27  these instruments are primarily for  
us dollars and euros  interest rate derivatives relate to the corporate bonds note 20  
own equity share purchase contracts relate to liabilities of £584m 2013 £423m arising under an irrevocable 
closed season buyback agreement for the purchase of the company’s own shares note 23 and net liabilities 
of £nil 2013 £410m arising under contingent purchase contracts for the company’s own shares entered into by 
the esot note 26
20 corporate bonds
balance sheet value nominal value
2014 
£m
2013 
£m
2014 
£m
2013 
£m
corporate bond 525 repaid 2013 – 876 – 855
corporate bond 5875 repayable 2016 2165 2185 2126 2126
corporate bond 5375 repayable 2021 3369 3483 3250 3250
corporate bond 4375 repayable 2026 2474 – 2500 –
8008 6544 7876 6231
the 525 2013 corporate bond was repaid in september 2013 and was therefore classified as a current 
liability at january 2013  the group uses interest rate derivatives to manage the interest rate risk associated  
with its bonds the profile of which is shown below
2014  
nominal 
value 
£m
2014 
effective 
interest
rate
2013 
nominal 
value 
£m
2013 
effective 
interest 
rate
2013 bonds
floating – na 855 6m libor  09
2016 bonds
fixed 1626 5875 1626 5875
floating 500 6m libor  17 500 6m libor 17
2126 2126
2021 bonds
fixed 1500 5375 1500 5375
floating 1750 6m libor  19 1750 6m libor  19
3250 3250
2026 bonds
floating 2500 6m libor 14 – na
total 7876 6231
 £50m of which reverts to a fixed rate of 52 from october 2016  
the fair values of the corporate bonds are shown in note 29
annual report and accounts january 2014
95 2315804  proof 2  14032014
21 pension benefits
the group’s uk pension arrangements include defined benefit and defined contribution sections  the 
group also provides unfunded retirement benefits to some plan members whose benefits would otherwise 
be restricted by the lifetime allowance  pension assets are held in separate trustee administered funds  
which have equal pension rights with respect to members of either sex and comply with the employment equality 
regulations 2006  further information on the group’s pension arrangements is given in the remuneration  
report on pages 58 and 59
the defined benefit section was closed to new members in 2000 and over recent years the group has taken steps 
to manage the ongoing risks associated with it
 ❚ in 2010 most pensions in payment were subject to a buyin contract with an insurance company  this was 
followed up in 2012 by a further buyin contract for pensions that had come into payment since 2010
 ❚ from november 2012 the future accrual of benefits for remaining employee members is based on 
pensionable earnings frozen at that time rather than final earnings  those employees receive either additional  
contributions to the defined contribution section or a salary supplement  this change resulted in an  
accounting gain last year of £421m which was included in the income statement as an exceptional item
 ❚ to enable the conversion of the buyin to buyout in 2013 a new plan was established for existing employee 
members whose pensions are not insured through the buyin contracts and the associated assets and liabilities 
were transferred across  it is intended that the pensions and matching insurance contracts held by the original 
plan will be converted to buyout and the original plan can then be dissolved
the following table summarises the principal risks associated with the group’s defined benefit arrangements
investment risk the present value of defined benefit liabilities is calculated using a discount rate set by reference 
to high quality corporate bond yields  to the extent that the return on plan assets is lower than 
the discount rate the pension surplus may reduce and a deficit may emerge
interest rate risk a fall in bond yields would increase the value of the liabilities  this would be only partially offset 
by an increase in the value of bond investments held
inflation risk an increase in inflation would increase the value of pension liabilities
longevity risk the present value of the defined benefit liabilities is calculated having regards to a best 
estimate of the mortality of plan members  if members are expected to live longer this will 
increase the liabilities  
the buyin contracts represent approximately 24 of the total pension liabilities and provide a partial hedge to the 
risks described above
the components of the net benefit expense recognised in the consolidated income statement are as follows
2014 2013
new 2013
plan
£m
original
plan 
£m
unfunded 
£m
total 
£m
funded 
£m
unfunded 
£m
total 
£m
current service cost 20 47 03 70 79 05 84
interest on benefit obligation 53 192 04 249 241 04 245
interest on plan assets 66 218 – 284 284 – 284
administration costs 02 12 – 14 – – –
curtailment gain on 
pensionable pay freeze – – – – 393 28 421
settlement loss on 
buyinbuyout – – – – 63 – 63
net benefit expensecredit 09 33 07 49 294 19 313
 included as exceptional items in the prior year income statement see note 6
actual return on plan assets 237 261 – 498 683 – 683
the expected average duration of the original plan is 13 years and the new 2013 plan is 26 years
notes to the consolidated financial statements
annual report and accounts january 2014
96 2315804  proof 2  14032014
additional information parent company accounts governance consolidated accounts business reports
21 pension benefits continued
changes in the present value of defined benefit pension obligations are analysed as follows
2014 2013
new 2013
plan
£m
original 
plan 
£m
unfunded 
£m
total 
£m
funded 
£m
unfunded 
£m
total 
£m
opening obligation – 5347 85 5432 4956 94 5050
current service cost 20 47 03 70 79 05 84
interest cost 53 192 04 249 241 04 245
curtailment gains – – – – 393 28 421
employee contributions – 01 – 01 02 – 02
benefits paid 08 111 – 119 124 – 124
transferred to new 2013 plan 3913 3913 – – – – –
actuarial losses 
— financial assumptions 259 04 07 270 563 10 573
— experience 43 18 – 25 42 – 42
— demographic assumptions 35 10 – 45 65 – 65
closing pension benefit 
obligation 4315 1559 99 5973 5347 85 5432
changes in the fair value of defined benefit pension assets were as follows
2014 2013
new 2013
plan
£m
original 
plan 
£m
unfunded 
£m
total 
£m
funded 
£m
unfunded 
£m
total 
£m
opening assets – 6088 – 6088 5401 – 5401
employer contributions 74 148 – 222 189 – 189
employee contributions – 01 – 01 02 – 02
benefits paid 08 111 – 119 124 – 124
transferred to new 2013 plan 4825 4825 – – – – –
settlements buyin contract – – – – 63 – 63
interest income on assets 66 218 – 284 284 – 284
return on plan assets greater 
than discount rate 171 43 – 214 399 – 399
administrative costs 02 12 – 14 – – –
closing pension benefit assets 5126 1550 – 6676 6088 – 6088
the fair value of plan assets was as follows
2014 2013
new 2013
plan
£m
original
plan 
£m
total
 £m  
total 
£m  
equities 3403 – 3403 510 2968 487
bonds 1069 – 1069 160 1007 165
gilts 350 – 350 52 356 58
property 234 – 234 35 211 35
insurance contracts – 1429 1429 214 1469 241
other cash deposits 70 121 191 29 77 14
5126 1550 6676 1000 6088 1000
the fair values of the above equity and debt instruments are determined based on quoted prices in active markets
annual report and accounts january 2014
97 2315804  proof 2  14032014
21 pension benefits continued
the net defined benefit pension assetliability is analysed as follows
2014 2013
new 2013
plan
£m
original
plan 
£m
unfunded 
£m
total 
£m
funded 
£m
unfunded 
£m
total 
£m
total assets 5126 1550 – 6676 6088 – 6088
benefit obligation 4315 1559 99 5973 5347 85 5432
net pension assetliability 811 09 99 703 741 85 656
the most recent full actuarial valuation was undertaken as at march 2013  the ias 19 valuation of the  
defined benefit obligation was undertaken by an independent qualified actuary as at january 2014 using the 
projected unit credit method  the principal actuarial assumptions used in the valuation were as follows
2014 2013
original 
plan
new 2013 
plan pensioners
non
pensioners
discount rate 415 440 425 475
inflation – rpi 340 335 330 345
inflation – cpi 240 235 230 245
2014 2013
pensioner
aged 65
non
pensioner 
aged 45
pensioner
aged 65
non
pensioner 
aged 45
life expectancy at age 65 years
 male 226 248 226 248
 female 250 273 250 273
the key sensitivities in the calculation are the discount rate and the inflation assumption  a decrease of 025  
in the discount rates used would increase the gross liabilities by approximately £35m which would be partly 
mitigated by an increase of approximately £48m on the insurance assets  an increase of 025 in the inflation 
assumption would increase the gross liabilities by £24m offset by an increase of approximately £24m on the 
insurance assets
members of the defined benefit section contribute 3 or 5 of pensionable earnings whilst the employer contribution 
rate is 175  members of the defined contribution section contribute 3 or 5 of pensionable earnings which is 
matched by the employing company  contribution rates are expected to remain the same for the year ahead
total employer contributions of £325m 2013 £243m were made during the year including special contributions 
of £150m 2013 £110m £91m 2013 £54m in respect of the defined contribution section and £12m in respect 
of automatic enrolment contributions which commenced in february 2013
an amendment to ias 19 employee benefits was published in june 2011 and became effective during the current 
year  this affects the accounting for defined benefit pension schemes and has been applied this year  
the main change is that instead of using an assumed return on pension assets the income statement charge 
is calculated by applying the discount rate to the net pension surplus or liability  if applied retrospectively the 
effect of the amendment on last year would have been to increase pension costs in the income statement by 
£26m and to increase actuarial gains in the statement of comprehensive income by an equivalent amount  
there is no impact on the balance sheet  as the impact is not material prior year figures have not been  
restated and remain as reported last year
notes to the consolidated financial statements
annual report and accounts january 2014
98 2315804  proof 2  14032014
additional information parent company accounts governance consolidated accounts business reports
22 provisions
vacant 
property 
costs 
£m
at january 2013 112
 provisions made in the year 36
 utilisation of provisions 43
 release of provisions 24
 unwind of discount 04
at january 2014 85
provision is made for the committed cost of future rentals or estimated exit costs of properties no longer occupied 
by the group the average remaining lease term is three years 2013 four years
23 share capital
2014  
shares 
‘000
2013 
shares 
‘000
2014 
£m
2013 
£m
allotted called up and fully paid
ordinary shares of 10p each
at january 2013 161234 168740 161 169
shares issued – 4 – –
purchased for cancellation 6202 7510 06 08
at january 2014 155032 161234 155 161
the table below shows the movements in equity from share purchases and commitments during the year
2014 2013
shares 
‘000 £m
shares 
‘000 £m
shares purchased for cancellation in the year 6202 2958 7510 2413
less commitment at start of year 1050 423 2425 636
add commitment at end of year 1000 584 1050 423
amount shown in statement of changes in equity 3119 2200
all £423m of the commitment outstanding at january 2013 expired unfulfilled
at 19 march 2014 all £584m of the january 2014 commitment was also unfulfilled and had expired and will 
therefore be credited back to equity
24 other reserves
other reserves in the consolidated balance sheet comprise the reserve created on reduction of share capital 
through the scheme of arrangement under section 425 of the companies act 1985 £14607m less share 
premium account £38m and capital redemption reserve £87m at the time of the capital reconstruction 
in 2002 plus the accumulated amount of goodwill arising on acquisition after taking into account subsequent 
disposals £07m less the unrealised component of revaluations of properties arising under previous accounting 
standards £51m as at the date of transition to ifrs
annual report and accounts january 2014
99 2315804  proof 2  14032014
25 equity settled sharebased payments
the group operates a number of sharebased payment schemes  details of the long term incentive 
plan ltip and the share matching plan smp are set out in the remuneration report  other  
sharebased payment schemes in operation are
management share options
the next management share option plan provides for options over shares exercisable between three and ten 
years following their grant to be allocated to group employees at the discretion of the remuneration committee  
this plan is primarily aimed at middle management and senior store staff  no options were granted to any  
directors or changes made to existing entitlements in the year under review  no employee is entitled to  
be granted options under the scheme and be included in next’s ltip or the smp in the same year
the total number of options which can be granted is subject to shareholder approved limits and there are no cash 
settlement alternatives  options are set at the prevailing market price at the time of grant  the maximum total 
market value of shares ie  the acquisition price of shares over which options may be granted to any person 
during any financial year of the company is three times salary excluding bonuses and benefits in kind  this 
limit may be increased to five times salary in circumstances considered by the committee to be exceptional for 
example on the grant of options following recruitment  grants are generally made annually  
sharesave options
the company’s save as you earn sharesave scheme is open to all employees  invitations to participate are 
generally issued annually and the scheme is subject to hmrc rules which limited the maximum monthly savings 
for the schemes detailed below to £250  options are granted at the prevailing market rate less a discount of  
20 and are exercisable three five or seven years from the date of grant
management and sharesave options
the following table summarises the movements in management and sharesave options during the year
2014 2013
no  of 
options
weighted 
average 
exercise
price
 no  of 
options
weighted 
average 
exercise 
price
outstanding at beginning of year 7951797 £2152 9219193 £1767
granted 1611943 £4152 2069776 £2910
exercised 2265840 £1884 2933737 £1475
forfeited 284258 £2749 403435 £2157
outstanding at end of year 7013642 £2675 7951797 £2152
exercisable at end of year 1188164 £1760 1259065 £1598
options were exercised on a regular basis throughout the year and the weighted average share price during this 
period was £4829 2013 £3154  options outstanding at january 2014 are exercisable at prices ranging between 
£917 and £4170 2013 £889 and £2967 and have a weighted average remaining contractual life of 61 years 
2013 63 years as analysed below 
2014 2013
no  of 
options
weighted 
average 
remaining 
contractual
life years
no  of  
options
weighted 
average 
remaining 
contractual 
life years
exercise price range 
£917– £1782 838769 33 1711497 34
£2070 1722901 72 1834505 82
£2084 – £2189 1065861 34 2421024 58
£2756 – £2967 1845187 67 1984771 76
£4112 – £4170 1540924 75 – –
7013642 61 7951797 63
notes to the consolidated financial statements
annual report and accounts january 2014
100 2315804  proof 2  14032014
additional information parent company accounts governance consolidated accounts business reports
25 equity settled sharebased payments continued
share matching plan
the following table summarises the movements in nil cost share matching plan options during the year
2014 
no  of 
options
2013 
no  of 
options
outstanding at beginning of year 675046 679232
granted 53490 61004
exercised 290650 –
forfeited 82982 65190
outstanding at end of year 354904 675046
the weighted average remaining contractual life of these options is 77 years 2013 80 years  these options  
were exercised at different times in the year and the weighted average share price during this period was 
£4812  no smp options were exercised in the previous year  12338 options were exercisable at the end of the  
period 2013 nil
fair value calculation
the fair value of management sharesave and share matching plan options granted is calculated at the date 
of grant using a blackscholes option pricing model  expected volatility was determined by calculating the  
historical volatility of the company’s share price over a period equivalent to the expected life of the option  the 
expected life applied in the model is based on historical analyses of exercise patterns taking into account any 
early exercises  the following table lists the inputs to the model used for options granted in the years ended 25 
january 2014 and 26 january 2013 based on information at the date of grant
management share options granted in april 2014 2013 
weighted average share price at date of grant £4170 £2967
weighted average exercise price £4170 £2967
volatility 247 379
expected life 4 years 4 years
risk free rate 045 070
dividend yield 224 271
weighted average fair value per option £638 £712
sharesave plans granted in october 2014 2013
weighted average share price at date of grant £5140 £3444
weighted average exercise price £4112 £2756
volatility 218 254
expected life 34 years 33 years
risk free rate 087 046
dividend yield 204 261
weighted average fair value per option £1182 £804
share matching plan granted in april 2014 2013
weighted average share price at date of grant £4381 £3032
weighted average exercise price nil nil
volatility 224 260
expected life 3 years 3 years
risk free rate 034 063
dividend yield 240 297
weighted average fair value per option £4077 £2774
annual report and accounts january 2014
101 2315804  proof 2  14032014
26 shares held by esot
the next 2003 employee share ownership trust “esot” has an independent professional trustee resident in 
jersey and provides for the issue of shares to group employees including share issues under share options at 
the discretion of the trustee  all management and sharesave options which were exercised during the year were 
satisfied by shares issued from the esot
at 25 january 2014 the esot held 6190747 2013 6531837 ordinary shares of 10p each in the company the 
market value of which amounted to £3888m 2013 £2651m  details of outstanding share options are shown in 
note 25
the consideration paid for the ordinary shares of 10p each in the company held by the esot at 25 january 2014 
and 26 january 2013 has been shown as an esot reserve and presented within equity for the company and the 
group  all other assets liabilities income and costs of the esot have been incorporated into the accounts of the 
company and the group
the table below shows the movements in equity from esot share purchases and commitment movements during 
the year
2014 2013
shares 
‘000 £m
shares 
‘000 £m
shares purchased by esot in the year 2136 960 3859 1225
less commitment at start of year 1062 410 825 200
add commitment at end of year – – 1062 410
amount shown in statement of changes in equity 550 1435
shares issued on employee option exercises 2477 384 2965 443
proceeds of £429m 2013 £434m were received on the exercise of management and saye options  the amount 
shown in the statement of changes in equity of £384m 2013 £443m is after the issue of nilcost ltip  smp and 
deferred bonus shares  the weighted average cost of shares issued by the esot was £740m 2013 £690m
of the £410m commitment at january 2013 £63m was fulfilled in the current year and £348m was not fulfilled 
and expired
at 19 march 2014 employee share options over 106334 shares had been exercised subsequent to the balance 
sheet date and had been satisfied by ordinary shares issued by the esot
27 financial instruments risk management and hedging activities
next operates a centralised treasury function which is responsible for managing the liquidity interest and foreign 
currency risks associated with the group’s activities  as part of its strategy for the management of these risks the 
group uses derivative financial instruments  in accordance with the group’s treasury policy derivative instruments 
are not entered into for speculative purposes  treasury policy is reviewed and approved by the board and specifies 
the parameters within which treasury operations must be conducted including authorised counterparties 
instrument types and transaction limits and principles governing the management of liquidity interest and foreign 
currency risks
the group’s principal financial instruments other than derivatives are cash and short term deposits bank 
overdrafts and loans and corporate bonds  the main purpose of these financial instruments is to raise finance 
for the group’s operations  in addition the group has various other financial assets and liabilities such as trade 
receivables and trade payables arising directly from its operations
notes to the consolidated financial statements
annual report and accounts january 2014
102 2315804  proof 2  14032014
additional information parent company accounts governance consolidated accounts business reports
27 financial instruments risk management and hedging activities continued
liquidity risk
the group manages its cash and borrowing requirements centrally to minimise net interest expense within 
risk parameters agreed by the board whilst ensuring that the group has sufficient liquid resources to meet the 
operating needs of its businesses  the forecast cash and borrowings profile of the group is monitored to ensure 
that adequate headroom remains under committed borrowing facilities
the table below shows the maturity analysis of the undiscounted remaining contractual cash flows including 
interest of the group’s financial liabilities
2014
less than 
1 year 
£m
1 to 2 
years 
£m
2 to 5 
years 
£m
over 5 
years 
£m
total 
£m
bank loans and overdrafts 26 – – – 26
trade and other payables 3809 10 – – 3819
finance lease liabilities 01 01 01 – 03
corporate bonds 409 409 3103 7149 11070
other liabilities 584 – – – 584
4829 420 3104 7149 15502
derivatives net settled 77 26 18 30 151
derivatives gross settled
 cash inflows 8197 61 – – 8258
 cash outflows 8458 61 – – 8519
total cash flows 5013 394 3086 7119 15612
2013
less than 
1 year 
£m
1 to 2 
years 
£m
2 to 5 
years 
£m
over 5 
years 
£m
total 
£m
bank loans and overdrafts 54 – – – 54
trade and other payables 3455 25 – – 3480
finance lease liabilities 01 01 02 – 04
corporate bonds 1200 300 2900 3949 8349
other liabilities 833 – – – 833
5543 326 2902 3949 12720
derivatives net settled 130 45 118 113 406
derivatives gross settled
 cash inflows 7879 509 – – 8388
 cash outflows 7725 493 – – 8218
total cash flows 5259 265 2784 3836 12144
at january 2014 the group had borrowing facilities of £300m 2013 £300m in respect of which all conditions 
precedent have been met and which are committed to december 2016 2013 december 2016  none of this 
facility was drawn down at january 2014 2013 £nil  subsequent to the year end date the facility was extended 
to may 2019
interest rate risk
the group is exposed to fair value interest rate risk on its fixed rate corporate bonds and cash flow interest rate risk 
on floating rate bank loans and overdrafts  the forecast cash and borrowings profile of the group is monitored 
regularly to assess the mix of fixed and variable rate debt and the group uses interest rate derivatives where 
appropriate to reduce its exposure to changes in interest rates and the economic environment  
interest rates  fair value hedges
the group has interest rate swap agreements in place as fair value hedges of part of the interest rate risk associated 
with the company’s corporate bonds  under the terms of the swaps which have the same key features as the 
bonds the group receives a fixed rate of interest equivalent to the relevant coupon rate and pays a variable rate  
details of the effective rates payable are given in note 20
annual report and accounts january 2014
103 2315804  proof 2  14032014
27 financial instruments risk management and hedging activities continued
the fair values of the group’s interest rate swaps including accrued interest are as follows
2014
£m
2013
£m
derivatives in designated fair value hedging relationships 168 340
other interest rate derivatives – 43
total interest rate derivatives 168 383
other interest rate derivatives related to economic hedges of variable rate interest payments due under swaps 
relating to the 2013 corporate bond which were not able to be hedge accounted under ias 39
the fair values of derivatives have been calculated by discounting the expected future cash flows at prevailing 
interest rates and are based on market prices at the balance sheet date
foreign currency risk
the group’s principal foreign currency exposures arise from the purchase of overseas sourced products  group 
policy allows for these exposures to be hedged for up to 24 months ahead in order to fix the cost in sterling  this 
hedging activity involves inter alia the use of spot forward and option contracts
the market value of outstanding foreign exchange contracts is reported regularly at board level and reviewed 
in conjunction with percentage cover taken by season and current market conditions in order to assess and 
manage the group’s ongoing exposure
the group does not have a material exposure to currency movements in relation to translation of overseas 
investments and consequently does not hedge any such exposure  the group’s net exposure to foreign currencies 
taking hedging activities into account is illustrated by the sensitivity analysis in note 30
foreign currency cash flow hedges
the fair values of foreign exchange derivatives are as follows
2014
£m
2013
£m
derivatives in designated hedging relationships 200 83
other foreign exchange derivatives 42 17
total foreign exchange derivatives 242 100
the total notional amount of outstanding foreign exchange contracts at the balance sheet date is as follows
2014
£m
2013
£m
us dollar 7528 7703
euro 648 641
other 82 44
8258 8388
the group also supplies its associated company cotton traders with us dollars  the notional value of contracts 
outstanding at january 2014 was £366m 2013 £280m  
credit risk
investments of cash surpluses borrowings and derivative instruments are made through banks and companies 
which must fulfil credit rating and investment criteria approved by the board  concentrations of risk are mitigated 
by the use of various counterparties at any one time  all customers who wish to trade on credit terms are subject 
to credit verification procedures  receivable balances are monitored on an ongoing basis and provision is made 
for estimated irrecoverable amounts  the concentration of credit risk is limited due to the directory customer base 
being large and diverse  the group’s outstanding receivables balances are detailed in note 14
notes to the consolidated financial statements
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additional information parent company accounts governance consolidated accounts business reports
27 financial instruments risk management and hedging activities continued
capital risk
the capital structure of the group consists of debt as analysed in note 31 and equity attributable to the equity 
holders of the parent company comprising issued capital reserves and retained earnings as shown in the 
consolidated statement of changes in equity  the group manages its capital with the objective that all entities 
within the group continue as going concerns while maintaining an efficient structure to minimise the cost of 
capital  the group is not restricted by any externally imposed capital requirements
as part of its strategy for delivering sustainable long term growth in earnings per share the group has been 
returning capital to shareholders by way of share buybacks in addition to dividends including more recently 
special dividends  share buybacks are transacted through both onmarket purchases and contingent contracts 
for offmarket share purchases
28 financial instruments categories
2014
£m
2013
£m
financial assets
 derivatives at fair value through profit and loss – held for trading 08 100
 derivatives in designated hedging relationships 181 425
 loans and receivables 7124 6308
 cash and short term deposits 2733 1363
 available for sale financial assets 10 10
financial liabilities
 derivatives at fair value through profit and loss – held for trading 50 40
 derivatives in designated hedging relationships 213 02
 corporate bonds 8008 6544
 amortised cost 4429 4367
 finance lease obligations 03 04
all derivatives are categorised as level 2 under the requirements of ifrs 13 as they are valued using techniques 
based significantly on observed market data
29 financial instruments fair values
the fair values of each category of the group’s financial instruments are the same as their carrying values in the 
group’s balance sheet other than as noted below
2014 2013
carrying 
amount 
£m
fair 
value 
£m
carrying 
amount 
£m
fair 
value 
£m
corporate bonds
in hedging relationships 4882 5135 3418 3478
not in hedging relationships 3126 3530 3126 3588
8008 8665 6544 7066
the fair values of corporate bonds are their market values at the balance sheet date ifrs 13 level 1  market 
values include accrued interest and changes in credit risk and interest rate risk and are therefore different to the 
reported carrying amounts
annual report and accounts january 2014
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30 financial instruments sensitivity analysis
foreign currency sensitivity analysis
the group’s principal foreign currency exposures are to us dollars and the euro  the table below illustrates the 
hypothetical sensitivity of the group’s reported profit and closing equity to a 10 increase and decrease in the 
us dollarsterling and eurosterling exchange rates at the year end date assuming all other variables remain 
unchanged  the sensitivity rate of 10 represents the directors’ assessment of a reasonably possible change 
based on historic volatility
the analysis assumes that exchange rate fluctuations on currency derivatives that form part of an effective 
cash flow hedge relationship affect the fair value reserve in equity and the fair value of the hedging derivatives   
for foreign exchange derivatives which are not designated hedges movements in exchange rates impact the 
income statement
positive figures represent an increase in profit or equity
income statement equity
2014 
£m
2013 
£m
2014 
£m
2013 
£m
sterling strengthens by 10
us dollar 38 128 434 412
euro 03 08 36 21
sterling weakens by 10
us dollar 08 08 447 365
euro 12 10 35 19
year end exchange rates applied in the above analysis are us dollar 165 2013 158 and euro 121 2013 117  
strengthening and weakening of sterling may not produce symmetrical results depending on the proportion and 
nature of foreign exchange derivatives which do not qualify for hedge accounting
interest rate sensitivity analysis
the table below illustrates the hypothetical sensitivity of the group’s reported profit and closing equity to a 05 
increase or decrease in interest rates assuming all other variables were unchanged  the sensitivity rate of 05 
represents the directors’ assessment of a reasonably possible change based on historic volatility
the analysis has been prepared using the following assumptions
 ❚ for floating rate assets and liabilities the amount of asset or liability outstanding at the balance sheet date is 
assumed to have been outstanding for the whole year
 ❚ fixed rate financial instruments that are carried at amortised cost are not subject to interest rate risk for the 
purpose of this analysis
positive figures represent an increase in profit or equity
income statement equity
2014 
£m
2013 
£m
2014 
£m
2013 
£m
interest rate increase of 05 11 10 11 10
interest rate decrease of 05 11 10 11 10
notes to the consolidated financial statements
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additional information parent company accounts governance consolidated accounts business reports
31 analysis of net debt
january 
2013 
£m
cash flow 
£m
other 
noncash 
changes 
£m
january 
2014 
£m
cash and short term deposits 1363 2733
overdrafts 54 26
cash and cash equivalents 1309 1404 06 2707
corporate bonds 6544 1645 181 8008
fair value hedges of corporate bonds 313 – 183 130
finance leases 04 01 – 03
total net debt 4926 240 08 5174
32 operating lease commitments
future minimum rentals payable under noncancellable operating leases where the group is the lessee
2014
£m
2013
£m
within one year 2270 2168
in two to five years 7849 7785
over five years 7863 8399
17982 18352
at january 2014 future rentals receivable under noncancellable subleases where the group is the lessor were 
£157m 2013 £234m
the group has entered into operating leases in respect of vehicles equipment warehouses office equipment and 
retail stores  these noncancellable leases have remaining terms of between 1 month and approximately 20 years  
contingent rentals are payable on certain retail store leases based on store revenues  the majority of the group’s 
operating leases provide for their renewal by mutual agreement at the expiry of the lease term
additional information on the group’s leasing commitments as at january 2014 is detailed in the table below
minimum 
lease 
payments
£m
less 
sublease 
income
£m
net total
£m
year to january 2013 actual 2084 54 2030
year to january 2014 actual 2185 48 2137
year to january 2015 2270 47 2223
year to january 2016 2186 38 2148
year to january 2017 2049 21 2028
year to january 2018 1889 16 1873
year to january 2019 1725 15 1710
subtotal 5 years to january 2019 10119 137 9982
5 years from february 2019 to january 2024 5363 20 5343
10 years from february 2024 to january 2034 2188 – 2188
2034 and beyond 312 – 312
total future obligations 17982 157 17825
annual report and accounts january 2014
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independent auditor’s report – parent company
independent auditor’s report to the 
members of next plc
we have audited the parent company financial 
statements of next plc “the company” for the year 
ended 25 january 2014 which comprise the balance 
sheet the statement of changes in equity and 
the related notes c1 to c5  the financial reporting 
framework that has been applied in their preparation 
is applicable law and united kingdom accounting 
standards united kingdom generally accepted 
accounting practice including financial reporting 
standard 101 ‘reduced disclosure framework’
this report is made solely to the company’s members 
as a body in accordance with chapter 3 of part 16 of 
the companies act 2006  our audit work has been 
undertaken so that we might state to the company’s 
members those matters we are required to state to them in 
an auditor’s report and for no other purpose  to the fullest 
extent permitted by law we do not accept or assume 
responsibility to anyone other than the company and the 
company’ s members as a body for our audit work for this 
report or for the opinions we have formed  
respective responsibilities of directors 
and auditor
as explained more fully in the directors’ responsibilities 
statement set out on page 31 the directors are 
responsible for the preparation of the parent company 
financial statements and for being satisfied that they 
give a true and fair view  our responsibility is to audit and 
express an opinion on the parent company financial 
statements in accordance with applicable law and 
international standards on auditing uk and ireland  
those standards require us to comply with the auditing 
practices board’s ethical standards for auditors
scope of the audit of the financial 
statements
an audit involves obtaining evidence about the 
amounts and disclosures in the financial statements 
sufficient to give reasonable assurance that the financial 
statements are free from material misstatement whether 
caused by fraud or error  this includes an assessment 
of whether the accounting policies are appropriate to 
the parent company’s circumstances and have been 
consistently applied and adequately disclosed the 
reasonableness of significant accounting estimates 
made by the directors and the overall presentation of 
the financial statements  in addition we read all the 
financial and nonfinancial information in the annual 
report and accounts to identify material inconsistencies 
with the audited financial statements and to identify 
any information that is apparently materially incorrect 
based on or materially inconsistent with the knowledge 
acquired by us in the course of performing the audit  
if we become aware of any apparent material 
misstatements or inconsistencies we consider the 
implications for our report
opinion on financial statements
in our opinion the parent company financial statements
 ❚ give a true and fair view of the state of the company’s 
affairs as at 25 january 2014
 ❚ have been properly prepared in accordance with 
united kingdom generally accepted accounting 
practice and
 ❚ have been prepared in accordance with the 
requirements of the companies act 2006
opinion on other matters prescribed by 
the companies act 2006
in our opinion
 ❚ the part of the directors’ remuneration report to be 
audited has been properly prepared in accordance 
with the companies act 2006 and
 ❚ the information given in the strategic report and the 
directors’ report for the financial year for which the 
financial statements are prepared is consistent with 
the parent company financial statements
matters on which we are required to 
report by exception
we have nothing to report in respect of the following 
matters where the companies act 2006 requires us to 
report to you if in our opinion
 ❚ adequate accounting records have not been kept 
by the parent company or returns adequate for our 
audit have not been received from branches not 
visited by us or
 ❚ the parent company financial statements and the 
part of the directors’ remuneration report to be 
audited are not in agreement with the accounting 
records and returns or
 ❚ certain disclosures of directors’ remuneration 
specified by law are not made or
 ❚ we have not received all the information and 
explanations we require for our audit
other matter
we have reported separately on the group financial 
statements of next plc for the year ended 25 january 
2014  
 
nigel meredith senior statutory auditor 
for and on behalf of ernst  young llp  
statutory auditor birmingham 
20 march 2014
notes 
1  the maintenance and integrity of the next plc website is the responsibility of the 
directors the work carried out by the auditors does not involve consideration 
of these matters and accordingly the auditors accept no responsibility for any 
changes that may have occurred to the financial statements since they were 
initially presented on the website 
2  legislation in the united kingdom governing the preparation and dissemination 
of financial statements may differ from legislation in other jurisdictions
annual report and accounts january 2014
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additional information governance consolidated accounts parent company accounts business reports
parent company balance sheet
as at 25 january
notes
2014 
£m
2013 
£m
fixed assets
investments c2 24757 24757
other financial assets c3 177 309
 24934 25066
current assets
debtors 123 212
cash at bank and in hand 2033 962
 2156 1174
total assets 27090 26240
creditors amounts falling due within one year c4 3967 4720
net current liabilities 1811 3546
total assets less current liabilities 23123 21520
creditors amounts falling due after more than one year c4 8017 5668
total liabilities 11984 10388
net assets 15106 15852
capital and reserves
called up share capital c5 155 161
share premium account 09 09
capital redemption reserve 144 138
esot reserve c5 1966 2156
other reserves c5 9852 9852
profit and loss account 6912 7848
total equity 15106 15852
approved by the board on 20 march 2014
 
lord wolfson of aspley guise 
chief executive 
20 march 2014
 
david keens 
group finance director
annual report and accounts january 2014
109 2315804  proof 2  14032014
parent company statement of changes in equity
for the financial year ended 25 january
share 
capital 
£m
share 
premium 
account 
£m
capital 
redemption 
reserve 
£m
esot
reserve 
£m
other
reserves 
£m
profit 
and loss 
account
£m
total
equity 
£m
at january 2012 169 08 130 1411 9852 6807 15555
profit for the year – – – – – 4787 4787 
other comprehensive income 
for the year – – – – – – –
total comprehensive income 
for the year – – – – – 4787 4787 
shares issued – 01 – – – – 01
share buybacks and 
commitments note c5 08 – 08 – – 2200 2200
esot share purchases and 
commitments note c5 – – – 1435 – – 1435
shares issued by esot – – – 690 – 247 443
share option charge – – – – – 178 178
equity dividends – – – – – 1477 1477
at january 2013 161 09 138 2156 9852 7848 15852
profit for the year – – – – – 4788 4788
other comprehensive income 
for the year – – – – – – –
total comprehensive income 
for the year – – – – – 4788 4788
share buybacks and 
commitments note c5 06 – 06 – – 3119 3119
esot share purchases and 
commitments note c5 – – – 550 – – 550
shares issued by esot – – – 740 – 356 384
share option charge – – – – – 158 158
equity awards settled in cash – – – – – 24 24
tax recognised directly in 
equity – – – – – 06 06
equity dividends – – – – – 2389 2389
at january 2014 155 09 144 1966 9852 6912 15106
annual report and accounts january 2014
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additional information governance consolidated accounts parent company accounts business reports
notes to the parent company financial statements
c1 accounting policies
the parent company financial statements of next plc have been prepared in accordance with the companies act 2006 and 
financial reporting standard 101 reduced disclosure framework “frs 101” which was first applied this year after notifying 
shareholders of the proposed change last year  frs 101 enables the financial statements of the parent company to be prepared 
in accordance with euadopted ifrs but with certain disclosure exemptions  the main areas of reduced disclosure are in 
respect of equity settled share based payments financial instruments the cash flow statement and related party transactions 
with group companies  the company’s reported profits and net assets were unaffected by the transition to frs 101 and remain 
consistent with euadopted ifrs which was applied previously  the accounting policies adopted for the parent company next 
plc are otherwise consistent with those used for the group which are set out on pages 77 to 80  as permitted by section 408 of 
the companies act 2006 the income statement of the company is not presented as part of the financial statements  the profit 
after taxation dealt with in the accounts of the holding company was £4788m 2013 profit of £4787m
c2 investments
the company has taken advantage of section 4102 of the companies act 2006 to list only its principal subsidiary and 
associated undertakings at january 2014  all of these are wholly owned by the company or its subsidiary undertakings registered 
in england and wales and operate predominantly in the united kingdom unless otherwise stated
subsidiary undertakings
next group plc intermediate holding company
next retail limited¹ retailing of fashion and home products
next directory² home shopping including international online
next distribution limited¹ warehousing and distribution
lipsy limited¹ fashion retailing
next sourcing limited¹ overseas sourcing services hong kong
next manufacturing pvt limited¹ garment manufacture sri lanka
associated undertakings
choice discount stores limited¹ retailing 40
cotton traders holdings limited¹ home shopping and retailing 33
¹ shareholdings held by subsidiary undertakings 
² the trade of the next directory is carried out by next retail limited
c3 other financial assets
other financial assets comprise interest rate derivatives as detailed in note 15 of the consolidated financial statements which 
are carried at their fair value
c4 current and noncurrent creditors
2014 2013
current 
£m
noncurrent 
£m
current 
£m
noncurrent 
£m
corporate bonds – 8008 876 5668
amounts due to subsidiary undertaking 2523 – 2861 –
dividends payable 744 – – –
derivative financial instruments 584 09 867 –
accruals and other creditors 116 – 116 –
3967 8017 4720 5668
details of the terms of bank overdrafts and unsecured bank loans are given in note 17  further information on the company’s 
corporate bonds is given in note 20  derivative financial instruments include interest rate swaps carried at fair value notes 
15 and 19 and amounts payable under the company’s closed season buyback arrangements and contingent purchase 
contracts including those entered into by the esot for the company’s own shares note 19
c5 share capital esot and other reserves
details of the company’s share capital and share buybacks are given in note 23  esot transactions are detailed in note 26  
other reserves in the company balance sheet of £9852m 2013 £9852m represent the difference between the market price 
and the nominal value of shares issued as part of the capital reconstruction on acquisition of next group plc which has been 
subject to section 131 companies act 1985 merger relief
annual report and accounts january 2014
111 2315804  proof 2  14032014
first
half 
£m
second
half 
£m
year to
jan 2014 
£m
first
half 
£m
second
half 
£m
year to
jan 2013 
£m
revenue
next retail 10006 12270 22276 10099 11810 21909
next directory 5976 7434 13410 5517 6409 11926
next international retail 404 452 856 379 398 777
next sourcing 53 57 110 30 58 88
lipsy 273 356 629 269 312 581
property management 23 25 48 27 176 203
other activities 37 34 71 82 62 144
total 16772 20628 37400 16403 19225 35628
profit before tax
next retail 1243 2234 3477 1227 2084 3311
next directory 1561 2024 3585 1377 1644 3021
next international retail 51 70 121 34 50 84
next sourcing 136 205 341 118 190 308
lipsy 08 19 27 05 15 20
property management 11 07 18 36 01 35
other activities 161 180 341 139 138 277
operating profit  underlying 2849 4379 7228 2658 3844 6502
exceptional items    63 512 449
net finance costs 131 145 276 145 141 286
total 2718 4234 6952 2450 4215 6665
five year history
year to january
2014
£m
2013
£m
2012
£m
2011
£m
2010
£m
continuing operations
revenue 37400 35628 34411 32977 32609
operating profit – underlying 7228 6502 5987 5668 5238
net finance costs – underlying 276 286 284 234 245
profit before taxation – underlying 6952 6216 5703 5434 4993
exceptional items pretax – 449 472 – –
ventura profit before tax discontinued – – 29 80 60
taxation 1420 1579 1456 1505 1413
profit after taxation 5532 5086 4748 4009 3640
total equity 2862 2856 2227 2324 1334
shares purchased for cancellation 62m 75m 125m 100m 59m
dividends per share
– ordinary 1290p 1050p 900p 780p 660p
– special 500p – – – –
basic earnings per share
 underlying 3661p 2977p 2554p 2219p 1885p
 total 3661p 3201p 2820p 2219p 1885p
 the first 50p special dividend was announced on 3 january 2014 and paid on 3 february 2014
half year and sector analysis
annual report and accounts january 2014
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parent company accounts governance consolidated accounts additional information business reports
notice of meeting
this document is important and requires your immediate attention  if you are in any doubt as to 
the action you should take you are recommended to seek your own personal financial advice from your 
stockbroker bank manager solicitor accountant or other financial advisor authorised under the financial 
services and markets act 2000
if you have sold or otherwise transferred all your next shares please send this document together with the 
accompanying form of proxy as soon as possible to the purchaser or transferee or to the stockbroker bank or 
other agent through whom the sale or transfer was effected for delivery to the purchaser or transferee
notice is given that the annual general meeting of next plc will be held at the leicester marriott hotel smith way 
grove park leicester le19 1sw on thursday 15 may 2014 at 930 am  at which the following resolutions will be 
proposed resolutions 1 to 16 and 19 as ordinary resolutions and 17 18 and 20 as special resolutions
further information on these resolutions can be found in the directors’ report on pages 26 to 30 and in the 
appendix to this notice  biographies of directors seeking electionreelection are shown on page 32 of the 
annual report
1 to receive and adopt the accounts and reports of the directors and auditor for the year ended 25 january 
2014
2 to approve the directors’ remuneration policy the full text of which is contained in the remuneration report for 
the year ended 25 january 2014 and set out on pages 41 to 55  
3 to approve the remuneration report excluding the directors’ remuneration policy set out on pages 41 to 55 
for the year ended 25 january 2014
4 to declare a final dividend of 93p per share in respect of the year ended 25 january 2014
5 to reelect john barton as a director  
6 to reelect christos angelides as a director
7 to reelect steve barber as a director
8 to reelect jonathan dawson as a director
9 to reelect caroline goodall as a director
10 to reelect david keens as a director
11 to elect michael law as a director
12 to reelect francis salway as a director
13 to elect jane shields as a director
14 to reelect lord wolfson as a director
15 to reappoint ernst  young llp as auditor and authorise the directors to set their remuneration
annual report and accounts january 2014
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16 directors’ authority to allot shares
 that
a  the directors be authorised to allot equity securities as defined in section 560 of the companies act 2006 
the “2006 act” in the company
i  in accordance with article 7 of the company’s articles of association the “articles” up to a maximum 
nominal amount of £5100000 and
ii  up to a maximum nominal amount of £10200000 as reduced by any equity securities allotted under 
paragraph ai above in connection with an offer by way of a rights issue as defined in article 8 of 
the articles
b  in accordance with article 7 of the articles this authority shall expire at the conclusion of the next annual 
general meeting of the company after the passing of this resolution or if earlier at the close of business on 
1 august 2015 and
c  all previous unutilised authorities under section 551 of the 2006 act shall cease to have effect save to the 
extent that the same are exercisable pursuant to section 5517 of the 2006 act by reason of any offer or 
agreement made prior to the date of this resolution which would or might require shares to be allotted on 
or after that date
17 disapplication of preemption rights
 that 
a  in accordance with article 8 of the company’s articles of association the “articles” the directors be given 
power to allot equity securities for cash
b  the power under paragraph a above other than in connection with a rights issue as defined in article 
8bii of the articles shall be limited to the allotment of equity securities having a nominal amount not 
exceeding in aggregate £775000
c  in accordance with article 8 of the articles this authority shall expire at the conclusion of the next annual 
general meeting of the company after the passing of this resolution or if earlier at the close of business on 
1 august 2015 and
d  all previous unutilised authorities under sections 570 and 573 of the 2006 act shall cease to have effect
18 onmarket purchase of own shares
  that in accordance with the 2006 act the company be granted general and unconditional authority to make 
market purchases as defined in section 693 of the 2006 act of any of its own ordinary shares on such terms 
and in such manner as the directors may determine provided that
a the authority conferred by this resolution shall be limited to the lesser of 23239000 ordinary shares of 10p 
each and no more than 1499 of the issued ordinary shares outstanding at the date of the annual general 
meeting such limit to be reduced by the number of any shares purchased pursuant to the authority granted 
at resolution 19 below
b the minimum price which may be paid for ordinary shares exclusive of expenses is 10p per ordinary share
c the maximum price which may be paid for each ordinary share exclusive of expenses is an amount 
not more than the higher of 105 of the average of the middle market price of the ordinary shares of 
the company according to the daily official list of the london stock exchange for the five business days 
immediately preceding the date of purchase and the amount stipulated by article 51 of the buyback 
and stabilisation regulation 2003
notice of meeting
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d the authority hereby conferred unless renewed shall expire on whichever is the earlier of the conclusion of 
the annual general meeting of the company held in 2015 and 1 august 2015
e the company may make a contract or contracts to purchase ordinary shares under the authority hereby 
conferred prior to the expiry of such authority which will or may be executed wholly or partly after the expiry 
of such authority and may make a purchase of ordinary shares in pursuance of any such contract and
f all existing authorities for the company to make market purchases of its own ordinary shares are revoked 
except in relation to the purchase of shares under a contract or contracts concluded before the date of this 
resolution and which has or have not yet been executed
19 offmarket purchases of own shares
  that in accordance with section 694 of the 2006 act the proposed programme agreements to be entered into 
between the company and any of goldman sachs international ubs ag deutsche bank ag hsbc bank plc 
and barclays bank plc in the form produced to this meeting and initialled by the chairman for the purpose of 
identification the “programme agreements” be and are approved and the company be and is authorised 
to enter into the programme agreements and all and any forward trades which may be effected or made from 
time to time under or pursuant to the programme agreements for the offmarket purchase by the company of 
its ordinary shares of 10 pence each as more fully described in appendix 1 on pages 116 to 117 the authority 
conferred by this ordinary resolution to expire on whichever is the earlier of the conclusion of the next annual 
general meeting of the company held in 2015 and 1 august 2015 unless such authority is renewed prior to that 
time except in relation to the purchase of ordinary shares under any forward trade effected or made before 
the expiry of such authority and which might be completed wholly or partly after such expiry and provided 
that shares purchased pursuant to this authority will reduce the number of shares that the company may 
purchase under the general authority granted under resolution 18 above
20 notice of general meetings
  that in accordance with the company’s articles of association a general meeting other than an annual 
general meeting may be called on not less than 14 clear days’ notice
by order of the board 
seonna anderson 
secretary 
registered office desford road enderby leicester le19 4at 
11 april 2014
annual report and accounts january 2014
115 2315804  proof 2  14032014
notice of meeting
appendix 1
further information on resolution 19 off market purchases of own shares
as noted on pages 28 and 29 in the directors’ report approval will be sought from shareholders to renew the 
company’s authority to make offmarket purchases of its shares  
by virtue of special resolution number 17 passed at the company’s 2013 annual general meeting “agm” 
shareholder authority was given to the company to make onmarket purchases of shares  this authority was 
limited to a maximum of 24169 million shares and expires on the earlier of the date of the agm held in 2014 or  
1 august 2014  at the same agm authority was granted to the company to make offmarket purchases of shares 
for cancellation under contingent purchase contracts to be entered into with any of goldman sachs international 
ubs ag deutsche bank ag hsbc bank plc and barclays bank plc the “banks”  this authority was limited to 
a maximum of 5 million shares and expires on the earlier of the date of the agm to be held in 2014 or 1 august 
2014  pursuant to those authorities and up to 19 march 2014 the company has bought back 5440666 shares for 
cancellation representing 34 of its issued share capital as at the date of the 2013 agm at a total cost of £2634 
million  of these 50000 shares were bought back under contingent purchase contracts
under sections 693 and 694 of the companies act 2006 the “2006 act” the company is not permitted to make 
offmarket purchases or contingent purchases of its shares unless it obtains advance shareholder approval to the 
proposed contract terms  furthermore under the rules of the uk listing authority the “listing rules” the company 
may not purchase its shares at a time when any director is in receipt of unpublished price sensitive information 
about the company  accordingly no purchases of shares would normally be made in periods when the directors 
might be in receipt of unpublished price sensitive information “close periods”  typically these include the  
periods from the company’s half year end up to the announcement of its interim results in september and from 
the january year end up to the announcement of the full year results in march each year  these close periods 
inevitably reduce the number of shares the company is able to purchase
in order to achieve maximum flexibility in its share purchase activities the company is able to enter into 
irrevocable and nondiscretionary programmes to allow it to buy shares during close periods  another method 
of providing flexibility and reducing the cost is for the company to enter into contingent forward purchase 
contracts outside of close periods  as in previous years the company intends to enter into new agreements the  
“programme agreements” with each of the banks under which the company may although it is not obliged to 
enter into contingent forward trades “contingent forward trades” or “cft” from time to time  
the terms of a cft will be agreed between the company and the bank before it is entered into  the company 
is committed to purchase shares under a cft on the day it is executed subject to the terms of the programme 
agreement  the terms of each cft will provide for the company to purchase a fixed number of shares each week 
over a period of between 20 to 30 weeks  the maximum number of shares that can be purchased under each cft 
is limited to 30000 shares per week  
whether or not the company purchases shares in a particular week during the term of a cft is dependent upon 
the company’s share price either not rising to or above a level the “upper suspension level” or if applicable 
falling to or below a level the “lower suspension level”  the suspension levels and duration are determined by 
the company and are set at the time the cft is entered into  the upper suspension level must be set between 
104 and 110 of the company’s share price at the start of the cft  if the company chooses to incorporate a 
lower suspension level it must be set between 80 and 95 of the price at the start of the cft  the inclusion of 
a lower suspension level would help mitigate the company’s financial commitment under a cft if its share price 
was to fall below this level after the cft had been executed  if the lower suspension level is not included the level 
of discount to the market share price would be higher
the price at which the company may purchase shares during the term of a cft the “forward price” shall also 
be fixed at the start of the cft  the forward price will be determined by the bank with reference to the volume 
weighted average price for shares traded in next on the day the cft is entered into  the forward price is subject 
to a maximum of 99 of the share price at the start of the contract and a minimum of 10 pence the par value 
of an ordinary share  the minimum and maximum amount of time between entering a cft and shares being 
purchased is 5 days and 30 weeks respectively  the company will announce the details of each cft on the 
day it is entered into and any subsequent termination via the uk listing authority’s regulatory news service  this 
structure would allow the company to purchase shares at a discount to the market price as at the time each 
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cft commences for so long as the suspension levels are not reached without breaching the listing rules  if any 
suspension level is reached the cft would terminate automatically at that time and no further shares would be 
purchased under that contract
under the provisions of sections 693 and 694 of the 2006 act the programme agreements and contingent forward 
trades are contingent purchase contracts to purchase shares by the company offmarket  accordingly resolution 
19 which will be proposed as an ordinary resolution seeks shareholder approval to the terms of the programme 
agreements to be entered into between the company and each of the banks  the programme agreements will 
have a duration of the shorter of the period to the date of the next agm to be held in 2015 or 1 august 2015 and will 
incorporate the terms of an isda master agreement and schedule  the programme agreements will be entered 
into and each cft will be effected outside a close period but shares may be purchased during a close period by 
the company  
should shareholder approval be granted any number of cft may be effected with the banks at any time provided 
that 
 ❚ the total maximum number of shares which the company is permitted to purchase pursuant to this authority 
would be 40 million representing circa 26 of its issued share capital at 19 march 2014
 ❚ the total cost of shares that the company would be permitted to purchase pursuant to this authority may not 
exceed £200 million including costs
 ❚ the forward price may not exceed the higher of 105 of the average middle market closing price of the 
company’s shares as derived from the official list of the london stock exchange for the five days immediately 
preceding the day on which the cft was effected and the amount stipulated by article 51 of the buyback 
and stabilisation regulation 2003 
 ❚ the forward price will be no more than 99 of the share price at the time the contingent forward trade was 
effected
 ❚ the minimum price that can be paid for any share is £010 and
 ❚ only one contingent forward trade will be entered into on any particular day  
shares purchased under the programme agreements will reduce the number of shares that the company may 
purchase under any authority granted at the agm on 15 may 2014 for onmarket purchases  no shares will be 
purchased under that authority on the same day that a cft is entered into  the authority granted to the company 
under this resolution will expire at the conclusion of the agm of the company held in 2015 or on 1 august 2015 
whichever is the earlier unless such authority is renewed prior to that time except in relation to the purchase of 
shares under any cft effected before the expiry of such authority and which might be completed wholly or partly 
after such expiry  the purchase of shares under the programme agreements will always be physically settled by 
delivery of shares to the company except in the case of certain events of default or termination events  
a copy of each of the programme agreements will be available at the agm on 15 may 2014  copies will also be 
available for inspection at the company’s registered office at desford road enderby leicester le19 4at and at the 
offices of pinsent masons 30 crown place earl street london ec2a 4es during usual business hours until the date 
of the agm and at the meeting itself
the total number of employee share options to subscribe for shares outstanding at 19 march 2014 was 7242592  
this represents 47 of the issued share capital at that date  if the company were to buy back the maximum 
number of shares permitted pursuant to both the existing authority for offmarket purchases granted at the 2013 
agm which will expire at the 2014 agm and the authority sought by this special resolution then the total number 
of options to subscribe for shares outstanding at 19 march 2014 would represent 50 of the reduced issued share 
capital
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attendance voting and questions
all members who hold ordinary shares are entitled to attend and vote at the agm  a member who is entitled 
to attend and vote may appoint one or more proxies to attend and vote instead of him provided that each 
proxy is appointed to exercise the rights attached to a different share or shares held by him  a proxy need not 
also be a member  a proxy may vote on any other business which may properly come before the meeting   
if you do not intend being present at the meeting please either sign and return a hard copy form of proxy so as 
to reach the company’s registrars at least 48 hours before the meeting or follow the instructions for electronic 
proxy appointment through crest or through wwwsharevotecouk where full instructions are provided   
the return by a member of a fully completed form of proxy will not preclude any such member from attending in 
person and voting at the meeting
a person to whom this notice is sent who is a person nominated under section 146 of the 2006 act to enjoy 
information rights a “nominated person” may under an agreement between them and the shareholder by 
whom they were nominated have a right to be appointed or to have someone else appointed as a proxy for the 
agm  if a nominated person has no such proxy appointment right or does not wish to exercise it they may under 
any such agreement have a right to give instructions to the shareholder as to the exercise of voting rights
the statements of the rights of members in relation to the appointment of proxies in the above paragraph and in 
the paragraphs headed “electronic proxy appointment through crest” and “proxy card” below do not apply to a 
nominated person  the rights described in these paragraphs can only be exercised by registered members of the 
company  nominated persons are reminded that they should contact the registered holder of their shares and 
not the company on matters relating to their investments in the company
any corporation which is a member can appoint one or more corporate representatives who may exercise on its 
behalf all of its powers as a member provided that they do not do so in relation to the same shares
in the case of joint holders where more than one of the joint holders purports to appoint a proxy only the 
appointment submitted by the most senior holder will be accepted the senior holder being the first named of the 
joint holders to appear in the company’s share register
a member who appoints as their proxy someone other than the chairman is responsible for ensuring that the 
proxy attends the meeting and is aware of the voting intention of the member  if no voting instruction is given the 
proxy has discretion on whether and how to vote
if a member submits more than one valid proxy appointment the appointment received last before the latest time 
for the receipt of proxies will take precedence  
the company pursuant to regulation 41 of the uncertificated securities regulations 2001 and its articles of 
association specifies that only those shareholders registered in the register of members of the company as at 
6pm on 13 may 2014 shall be entitled to attend or vote at the aforesaid general meeting in respect of the number 
of shares registered in their name at that time  changes to entries on the relevant register of securities after 6pm 
on 13 may 2014 or 6pm on the day that is two days before any adjourned meeting shall be disregarded in 
determining the rights of any person to attend or vote at the meeting
all resolutions will be put to poll votes  this means that the votes of all shareholders including those who cannot 
attend the meeting but who validly appoint a proxy are counted  the procedures for the poll votes will be  
explained at the agm
in respect of resolution 19 on offmarket share purchase contracts the 2006 act provides that this resolution will 
not be effective if any member of the company holding shares to which it relates ie  those which may be 
purchased pursuant to the programme agreements exercised the voting rights carried by any of those shares in 
voting on the resolution and the resolution would not have been passed if they had not done so  therefore next 
intends to disregard any poll votes which are cast in favour of resolution 19 attaching to 40 million shares being 
the total maximum number of shares which the company is permitted to purchase pursuant to the programme 
agreements from both the total number of votes cast in favour of this resolution and the total number of votes 
cast
notice of meeting notice of meeting
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as at 19 march 2014 being the latest practicable date prior to the publication of this notice the company’s 
issued share capital consists of 155032317 ordinary shares  all of the ordinary shares carry one vote each and 
there are no shares held in treasury  
a member attending the meeting has the right to ask questions  the company must ensure any such question 
relating to the business being dealt with at the meeting is answered but no such answer need be given if a to do 
so would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information 
b the answer has already been given on a website in the form of an answer to a question or c it is undesirable 
in the interests of the company or the good order of the meeting that the question be answered
electronic proxy appointment through crest
crest members who wish to appoint a proxy or proxies through the crest electronic proxy appointment service 
may do so for the agm to be held on 15 may 2014 and any adjournments thereof by using the procedures 
described in the crest manual  crest personal members or other crest sponsored members and those  
crest members who have appointed a voting service providers should refer to their crest sponsor or voting 
service providers who will be able to take the appropriate action on their behalf
in order for a proxy appointment or instruction made using the crest service to be valid the appropriate crest 
message a “crest proxy instruction” must be properly authenticated in accordance with euroclear uk  ireland 
limited’s specifications and must contain the information required for such instructions as described in the crest 
manual  the message regardless of whether it constitutes the appointment of a proxy or is an amendment to the 
instruction given to a previously appointed proxy must in order to be valid be transmitted so as to be received 
by the issuer’s agent id ra19 by the latest times for receipt of proxy appointments specified in the notice 
of meeting  for this purpose the time of receipt will be taken to be the time as determined by the timestamp 
applied to the message by the crest applications host from which the issuer’s agent is able to retrieve the 
message by enquiry to crest in the manner prescribed by crest  after this time any change of instructions to  
proxies appointed through crest should be communicated to the appointee through other means
crest members and where applicable their crest sponsors or voting service providers should note that 
euroclear uk  ireland limited does not make available special procedures in crest for any particular messages  
normal system timings and limitations will therefore apply in relation to the input of crest proxy instructions  it is  
the responsibility of the crest member concerned to take or if the crest member is a crest personal member 
or sponsored member or has appointed a voting service providers to procure that his crest sponsor or voting 
service providers takes such action as shall be necessary to ensure that a message is transmitted by means 
of the crest system by any particular time  in this connection crest members and where applicable their crest 
sponsors or voting service providers are referred in particular to those sections of the crest manual concerning 
practical limitations of the crest system and timings  the crest manual is available at wwweuroclearcom
the company may treat as invalid a crest proxy instruction in the circumstances set out in regulation 355a of 
the uncertificated securities regulations 2001
documents available for inspection
the following documents will be available for inspection at the registered office of the company during usual 
business hours and will be available for fifteen minutes prior to and for the duration of the agm
 ❚ copies of the terms of appointment of the nonexecutive directors
 ❚ copies of each of the programme agreements pursuant to resolution 19
copies of each of the programme agreements pursuant to resolution 19 will be available for inspection at the 
offices of pinsent masons 30 crown place earl street london ec2a 4es during normal working hours until the close 
of the annual general meeting  
you may not use any electronic address provided in this notice of meeting to communicate with the company for 
any purposes other than those expressly stated
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other information
registered office
desford road enderby leicester le19 4at 
registered in england no  4412362
company website
a full copy of this annual report together with those for prior years and other information required by section 311a 
of the 2006 act can be found on the next plc website at wwwnextplccouk
under section 527 of the 2006 act members meeting the threshold requirements set out in that section have the 
right to require the company to publish on a website a statement setting out any matter relating to i the audit 
of the company’s accounts including the auditor’s report and the conduct of the audit that are to be laid 
before the annual general meeting or ii any circumstance connected with an auditor of the company ceasing 
to hold office since the previous meeting at which annual accounts and reports were laid in accordance with 
section 437 of the 2006 act  the company may not require the members requesting such website publication to 
pay its expenses in complying with sections 527 or 528 of the 2006 act and it must forward the statement to the 
company’s auditor not later than the time when it makes the statement available on the website  the business 
which may be dealt with at the annual general meeting includes any statement that the company has been 
required under section 527 of the 2006 act to publish on its website
payment of dividend
the recommended final dividend if approved will be paid on 1 august 2014 to holders of ordinary shares registered 
at close of business on 11 july 2014  the ordinary shares will trade exdividend from 9 july 2014
annual general meeting
the annual general meeting will be held at 930am on thursday 15 may 2014 at the leicester marriott hotel 
smith way grove park leicester le19 1sw  the notice of the meeting on pages 113 to 119 sets out business to be  
transacted  full access is available to the venue for those with special requirements
proxy card
completed proxy cards should be sent to our registrars equiniti and must be received by 930am on 13 may 
2014 or 48 hours before any adjourned meeting  as an alternative to completing and returning this form of proxy 
you may submit your proxy electronically by accessing the registrar’s website wwwsharevotecouk  you will be 
asked to enter your unique voting id task id and shareholder reference number as printed on your form of proxy  
the use by members of the electronic proxy appointment service will be governed by the terms and conditions 
of use which appear on the website  electronic proxies must be completed and lodged in accordance with the 
instructions on the website by no later than 48 hours before the annual general meeting  a member must inform 
the registrar in writing of any termination of the authority of a proxy
share price data 
stock exchange code nxtl
2014 2013
share price at financial year end £6280 £4059
market capitalisation £9736m £6544m
share price movement during year
high midmarket quotation £6365 £4059
low midmarket quotation £4058 £2619
registrars and transfer office
equiniti aspect house spencer road lancing west sussex bn99 6da
telephone 0871 384 2164  calls to this number are charged at 8p per minute plus network extras  overseas 
shareholder helpline number 44 0121 415 7047  lines are open 830am to 530pm monday to friday
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discount voucher
the company offers a discount voucher to any first named registered shareholder holding 500 or more 
ordinary shares as at 1 april each year  the voucher entitles the recipient or their immediate family to a 25  
discount against most purchases at any one time of full price merchandise in next retail stores  it cannot be 
used in conjunction with any other discount voucher or offer nor can it be used for the purchase of gift cards 
sale merchandise electrical goods nonnext branded goods or at any branch of next clearance or purchases 
from next directory  the voucher has no monetary purchase limit and expires on 31 october of the same year  
shareholders holding shares in nominee or pepisa accounts are also eligible but must request the voucher 
through their nominee or pepisa account manager who should email alysonwenlocknextcouk
shareholder enquiries
the company’s share register is maintained by equiniti  please contact them if you have any enquiries about your 
next plc shareholding including the following matters
 ❚ change of name and address
 ❚ loss of share certificate dividend warrant or tax voucher
 ❚ if you receive duplicate sets of company mailings as a result of an inconsistency in name or address and wish 
if appropriate to combine accounts
the shareview portfolio service from our registrar equiniti gives you more online information about your next plc 
shares and other investments  for direct access to information held for you on the share register including recent 
balance movements and a daily valuation of investments held in your portfolio visit wwwshareviewcouk
for shareholders with disabilities equiniti provides the following
 ❚ if requested future communications produced by them will be sent in the appropriate format
 ❚ textphone number 0871 384 2255 for shareholders with hearing difficulties
 ❚ hearing loop facilities in their buildings for use by visiting shareholders
crest
the company’s ordinary shares are available for electronic settlement
payments of dividends to mandated accounts
shareholders who do not at present have their dividends paid directly into a bank or building society may wish to 
do so  a mandate form is attached to your dividend warrant and tax voucher or is available to download from the 
next plc website on wwwnextplccouk or from equiniti telephone 0871 384 2164
forward looking statements
this report and accounts contains “forward looking statements” which are all matters that are not historical facts 
including anticipated financial and operational performance business prospects and similar matters  these 
forward looking statements are identifiable by words such as “aim” “anticipate” “believe” “budget” “estimate” 
“expect” “forecast” “intend” “plan” “project” and similar expressions  these forward looking statements reflect 
next’s current expectations concerning future events and actual results may differ materially from current 
expectations or historical results  any such forward looking statements are subject to risks and uncertainties 
including but not limited to those risks described in “risks  uncertainties” on pages 20 to 22 failure by next 
to predict accurately customer fashion preferences decline in the demand for merchandise offered by next 
competitive influences changes in level of store traffic or consumer spending habits effectiveness of next’s 
brand awareness and marketing programmes general economic conditions or a downturn in the retail industry 
the inability of next to successfully implement relocation or expansion of existing stores insufficient consumer 
interest in next directory acts of war or terrorism worldwide work stoppages slowdowns or strikes and changes 
in financial or equity markets  these forward looking statements do not amount to any representation that they 
will be achieved as they involve risks and uncertainties and relate to events and depend upon circumstances 
which may or may not occur in the future and there can be no guarantee of future performance  undue reliance 
should not be placed on forward looking statements which speak only as of the date of this document  next does 
not undertake any obligation to update publicly or revise forward looking statements whether as a result of new 
information future events or otherwise except to the extent legally required
this report has been printed on recycled paper
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wwwnextcouk
wwwnextplccouk


Summary:
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chief executive’s review
overview
next has had another good year achieving 54 growth in sales and 118 growth in underlying profit before tax  
strong cash generation enabled us to buy back 38 of shares outstanding without increasing financial leverage 
which along with a lower tax rate resulted in earnings per share eps growing much faster than profits
in the year to january 2014 underlying posttax eps grew by 23  our full year dividend is being increased in 
line with eps to 129p in total  we have announced two special dividends each of 50p per share  the first was  
paid on 3 february and the second is payable on 1 may
revenue excluding v at
january 
2014 
£m
january 
2013 
£m
next retail 22276 21909 17
next directory 13410 11926 124
next brand 35686 33835  55
other 1714 1643  43
total 37400 35478  54
profit and eps 
underlying excluding 2013 exceptionals
january 
2014 
£m
january 
2013 
£m
next retail 3477 3311  50
next directory 3585 3021 187
other 166 170
operating profit 7228 6502 112
net interest 276 286
profit before tax 6952 6216 118
taxation 1420 1485
profit after tax 5532 4731 169
eps 3661p 2977p 230
ordinary dividends per share 1290p 1050p 229
additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2014
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strategic report
next plc economics
2014 profit drivers
the table below sets out the main drivers of the group’s profit and loss account for the year  this shows how the 
sales from 1 new retail space and 2 online increased profit  our existing stores 3 made the same profit as 
last year  it also shows how 4 cost inflation has been more than offset by 5 cost savings
profit year ending jan 2013 £622m
profit from sales increasesdecreases
1 profit from new space  £12m
2 profit from additional online sales growth  £48m
3 costprofit of existing stores –
 £60m  97
cost increases and savings 
4 inflation in cost base – £59m
5 cost savings  £72m
 £13m  21
profit year ending jan 2014 £695m 118
  
 
201213
£622m
201314
£695m
directory
£48m
space
£12m
cost savings
£72m
cost increases
£59m
550 560 570 580 590 600 610 620 630 640 650 660 670 680 690 700 710
straightforward objectives
next’s operating objectives
the company has five operational objectives as set out in the table below  these aims remain broadly  
unchanged from those given in this report last year  the only significant change is the addition of  
improving customer service as a goal for the year ahead
develop the next 
brand
develop improve and expand our product ranges with particular emphasis on 
improving design across all our ranges
invest in online 
growth
invest in growth from our online business through improving uk delivery services 
developing new overseas markets and expanding our online product offer   
invest in profitable 
new space
open profitable new retail space maintaining the company’s strict payback and 
profitability hurdles of 15 net store profit before central overheads and payback on 
net capital invested in 24 months   
improve service improve the quality of our service to customers provided by staff both in stores and in 
our call centres
control costs control costs through constantly developing more efficient ways of operating  this must 
be done without detracting from the quality of our products and services   
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next’s financial objective
for the last ten years next has had one clear financial objective to deliver long term sustainable growth in 
earnings per share eps  this objective is grounded in the belief that over time share price growth will follow 
growth in eps  the graph below shows how our share price has indeed tracked eps over the last 15 years  
albeit that some patience has been required
1999 00 01 02 03 04 05 06 07 08 09 10 11 12 2013
■ pe ratio
■ eps
    share price right hand scale
 2013 pe based on share price of £65
255p
£70
£60
£50
£40
£30
£20
£10
£0
39p
46p
58p
69p
94p
120p
127p
146p
169p
156p
188p
222p
298p
366p
127 167 163 111 138 132 133 133 82 70 104 90 103 136 178
the graph also demonstrates the historically high rating the shares currently enjoy  in our annual report last 
year we set out the criteria by which we would decide the maximum price we would pay to buy back shares  
we introduced the concept of equivalent rate of return err  err is the return required from an alternative  
investment if that investment were to produce the same level of earnings enhancement as the proposed buyback
we set the minimum err at 8 which we consider a reasonable target for a return on equity investments  in 
november last year as our shares continued to rise the err on share buybacks fell below the 8 threshold  
as a result we introduced rolling special dividends in place of buybacks  we intend to continue distributing  
surplus cash through special dividends paid on a quarterly basis until such time as the err rises above 8  
whilst the underlying financial objective of the group remains unchanged in principle the introduction of special 
dividends mean that our financial goal is now better expressed as the delivery of long term sustainable growth 
in total shareholder returns where total shareholder returns are defined as growth in eps added to the total 
annual dividend yield
additional information parent company accounts governance consolidated accounts business reports
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strategic report
product and the next brand
unlike many high street retailers next designs and directly sources the vast majority of its products  we can  
do more to leverage our design resources and sourcing base to produce better quality fabrics print designs 
trim detailing and make up  in particular we will continue to push our design teams to adopt new trends in  
depth and with conviction  this approach of taking greater fashion risks may sound counterintuitive but in today’s 
fast moving fashion environment to fall back on “safe” historical ranges would merely guarantee failure  on  
the whole our experience is that where we have been braver in buying into new trends we have been successful
we have also adjusted our buying cycle to reflect the continuing trend for consumers to buy closer to the point 
at which they need the clothing  our aim is to increase the availability of cold weather clothing in january 
february and march and warm weather clothing in august and september  going forward we will move  
away from a two season buying cycle to a four season cycle and our customers will see a bigger change from 
spring into summer in april and autumn into winter in october
over the last 6 years we have made significant progress in developing our home business  trading space has  
more than doubled to 17 million square feet and home sales now account for 18 of our total turnover  over  
the next few years we intend to grow home further by adding retail space and improving our online functionality
retail
retail sales
total retail sales were 17 ahead of last year of which new space contributed 31
full price sales grew by 29  markdown sales were 11 down as a result of stock for sale being 15 lower than 
last year  this unusually low level of markdown came as a result of a last minute sales surge immediately before the 
summer and winter sales  in the year ahead we expect markdown levels to return to more normal levels
retail space expansion
space added in the year
trading space increased by 280000 square feet over the year taking us to 7 million as shown below  
store 
numbers
sq  ft
000’s
january 2013  540 6728
new stores 11 192
closures –10 – 67
resites 8 and extensions 13 – 155
january 2014 541 7008  4
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portfolio shape and profitability
whilst our space increased by 4 the number of stores barely changed  much of our new space has come 
from extending and relocating in existing trading locations  stores in new locations have been offset by the 
closure of smaller less profitable shops  as a result of this active management of our less profitable stores  
our mainline portfolio remains highly profitable despite continuing negative like for like sales in many locations  
more than 90 of our sales come from stores which deliver more than 15 profit contribution on sales  
mainline store profitability percentage of turnover
20
15
10
5
0
76
91
96
98
995
rental inflation remains very low with most stores experiencing little or no increase at rent review  in the vast 
majority of cases when stores reach the end of their lease we have been able to reduce rents
returns on capital and profitability
profitability of stores opened in the last 12 months is forecast to average 22 and payback on the net capital 
invested is expected to be 19 months  both figures are within company investment hurdles of 15 store profitability 
and 24 months capital payback  
new space
sales vs 
target
forecast 
profitability
forecast 
payback
fashion  44 22 19 months
large home format  35 21 22 months
total  43 22 19 months
retail space – pipeline 
we continue to look for opportunities to profitably increase uk selling space  for the coming year we expect  
to add 360000 square feet net of closures  we expect 113000 of this to come from three large home  
format outoftown stores  for two of these shops maidstone kent and hedge end near southampton they  
are being built from the ground up to our own design enabling us to ensure that the architecture of the building 
reflects the aspirations of our brand
retail service
if our customers were to be asked to rate next’s service we believe many would say it was generally good 
but not consistently exceptional  we think that we have an opportunity to improve both the consistency and  
quality of our retail customer service  during the last six months we have changed our recruitment processes  
appraisal systems training materials manhour planning systems and monthly bonus scheme with a view 
to focussing our store teams on providing better service  initial results have been encouraging but there is a  
way to go  
in addition we aim to improve the levels of staff experience in the business by increasing the average weekly 
contract worked by our staff  this change will take time and will be achieved through natural staff turnover  so 
that as and when staff leave the business some of their hours will be reallocated to existing team members  
who want the extra work
additional information parent company accounts governance consolidated accounts business reports
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strategic report
retail profit analysis 
full year operating margin improved by 05 to 156  the table below sets out significant margin movements by 
major heads of costs  
net operating margin last year 151
boughtin gross 
margin 
in line with last year 00
lower markdown retail stock for sale was down 15 with markdown sales down only 11  
margin improved as a result of 1 higher participation of full price sales during 
the year and 2 improved clearance rates of sale stock
 08
reduction in freight 
fabric and stock loss
lower freight costs improved fabric utilisation and reduced stock loss all 
served to increase margin
 05
reduction in store 
payroll
instore efficiency initiatives covered the cost of the annual pay review  01
increase in store 
occupancy
rents and rates increased as a percentage of sales due to 1 negative like for 
like sales 2 business rates and some rent inflation and 3 additional repair 
and store equipment write off costs
 07
central overheads increased cost mainly due to staff incentives  02
net operating margin this year 156
directory
sales analysis
directory sales were 124 ahead of last year  the table below shows the contribution to growth made by our uk 
and overseas online businesses
contribution to 
sales growth
uk 85
international 39
total sales growth 124
new customers
directory active customer numbers increased year on year by 108 to 37 million with growth coming from uk 
credit uk cash and overseas customers
average customers ‘000s
jan  
2014
jan 
2013 change
contribution 
to customer 
growth
 uk cash customers  633 493
 uk credit customers 2798 2697
total uk customers 3431 3190  241 72
overseas customers 268 148  120 36
total active customers 3699 3338  361 108
annual report and accounts january 2014
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directory development – uk
service improvements
in october of this year we introduced free nextday delivery to stores for customers who ordered before 10pm   
this service is now available in 341 stores which account for 74 of our retail turnover  as a result the  
percentage of orders made from home and delivered to store has risen from 30 to around 45  in the  
year ahead we intend to extend this service to stores accounting for 99 of our retail turnover
going forward we will increase focus on improving the reliability of our directory services  we fail to deliver  
around 2 of our parcels at the promised time but know that there is an opportunity to improve this reliability  
however whatever improvements we make there will always be a small number of errors  how our staff handle 
these rare events is central to developing our reputation  a company’s ability to rectify mistakes is for many  
customers the litmus test of great service  we can do much to respond better to these occasions through  
improved recruitment staff training and systems  
directory product offer 
our retail stores receive injections of new lines roughly every six weeks with the year being divided into nine 
retail phases  directory has been reliant on the publication of four big catalogues and has missed out on some  
of the newest retail stock  in future we will be adding stock to our website to coincide with our retail  
phases this stock will be supported by a number of “newin” brochures
for some years now next has sold noncompeting nonnext brands through the next directory  this year  
we are further expanding the branded offer in the directory itself and more importantly trialling a standalone 
publication devoted exclusively to third party brands  this publication which is currently called label  
has been distributed to 400000 customers
directory development – international
we continue to make good progress developing our internet business overseas  international online sales grew by 
86 and contributed 39 to directory growth  however with a turnover of just over £100m it is still relatively small 
and it would be a mistake to overemphasise its importance  all overseas sales are currently serviced from our uk 
warehouses through third party distribution networks
sales initiatives
growth has been driven through a combination of improved pricing site translations the acceptance of new 
domestic currencies and the development of new territories  of these factors permanent price reductions  
have been by far the most important  the table below sets out the international growth drivers for last  
year and those planned for the year ahead  in addition to the initiatives listed in the table we will be investigating 
ways to improve our delivery service in key territories
growth driver completed january 2014 planned by january 2015
lower prices prices lowered in 28 territories representing 
52 of turnover
prices to be lowered in 5 countries 
representing only 23 of turnover
translations traditional chinese script taiwan new languages including french 
spanish polish arabic simplified 
chinese script and hebrew 
domestic currencies five countries converted to domestic 
currency
11 countries converting to domestic 
currencies
new territories china egypt brazil oman saudi 
arabia belarus libya malta cyprus 
lebanon and azerbaijan
new tender types qiwi russian ewallet paypal klarna germany
additional information parent company accounts governance consolidated accounts business reports
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strategic report
online overseas profitability and the year ahead
net margins on our overseas business fell from 19 to 18 reflecting keener prices and some marketing initiatives  
we expect net margins in the year ahead to remain at 18  
going forward we expect growth rates to ease a little as the price adjustments made in 2013 begin to 
annualise  we are currently forecasting for international online sales to grow by 50 to £150m  the table  
below sets out the last two years sales profits and net margins alongside our budget for the current year
£m
january 
2013
january 
2014
january 
2015 e
sales £54m £101m £150m
net profit £10m £18m £27m
net margin 19 18 18
directory profit analysis
full year operating margin improved by 14 to 267  the table below sets out significant margin  
movements by major heads of costs  
net operating margin last year 253
boughtin gross margin boughtin gross margin improved due to a planned reduction in 
sales of lower margin electrical products
 02
lower markdown directory stock for sale was down 9 whereas markdown sales were 
level  margin improved as a result of 1 higher participation of full  
price sales during the year and 2 improved clearance rates of  
sale stock
18
freight fabric and stock loss lower freight costs improved fabric utilisation and reduced stock loss  02
service charge  bad debt service charge income increased but at a lesser rate than total sales 
due to the increased participation of international and uk cash sales
– 04
increase in warehouse and 
distribution costs
international sales increased distribution costs reducing margin by 
07  using our store network for more uk parcel collections and 
returns improved margin by  02
– 05
catalogue production costs catalogue production costs increased but at a lesser rate than sales  02
central overheads reduced margin mainly due to increased staff incentives – 01
net operating margin this year 267
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cost inflation and cost control
this year we have more than offset cost increases with cost savings  the tables below outline the main  
contributors to cost increases and cost savings over the last year  cost control remains at the heart of the  
business and we remain determined that cost savings must come through innovation and efficiency rather than 
any compromise to our product quality or services  
cost increases £m
cost of living awards other wage related inflation and staff incentives 28
rent rates  other occupancy costs 13
costs of directory delivery service improvements 9
warehouse capacity 5
systems investments and other 4
total cost increases 59
cost savings £m
lower markdown 18
freight fabric and stock loss 15
directory operating efficiencies 15
retail manpower efficiencies and other cost savings 13
nonstock purchasing improvements eg  paper 7
other 4
total cost savings 72
in the year ahead we expect cost increases of around £44m  anticipated wage increases account for £27m  
of this rise the majority of which comes from our annual cost of living award  we expect these cost  
increases to be more than offset by cost savings
head office warehouse and systems projects 201415
the rapid growth of our online and home businesses means that we have an unusual number of big systems 
and warehousing projects starting in the current year   these projects will give some operational benefits but are  
mainly required to facilitate continued growth or replace obsolete systems  most systems development costs  
are revenue costs and written off in the year they are incurred  hardware and other infrastructure are depreciated 
over the life of the asset  
the table below sets out the largest projects and their estimated capital and revenue costs
project
life y ears
revenue 
costs e 
capital 
costs e
store till back office and payment systems upgrade 1 £3m £8m
mainframe upgrade and modernisation 2 £3m –
international website rewrite and convergence with uk 2 £1m –
systems office refurbishment and data centres 1 – £5m
home warehouse expansion including £8m for land 2 – £11m
total £7m £24m
total likely to be incurred in year ending january 2015 £5m £20m
additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2014
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strategic report
other group businesses
next sourcing
next sourcing ns had a good year increasing sales and achieving a profit of £34m  ns competes for  
business against the many other suppliers to next retail and next directory it continued to provide more than 
40 of next brand stock  each of its incountry offices operates in a very competitive environment both against  
external suppliers and other ns offices
£m 2014 2013
sales  5712 5071 13
operating profit 341 308 11
operating margin 60 61
we are forecasting next sourcing profits of £36m in the year ahead
international retail and franchise stores
our franchise business with partners operating 173 stores in 35 countries continued to grow both sales and 
profits  the number of directly owned stores has been reduced to 16 and they broke even for the first time  
our 11 stores in central europe made a small profit offset by a small loss in china  we do not aim to expand  
our directly owned international stores  revenue and profit are set out below
£m 2014 2013
franchise income 710 615
owned store sales 146 162
total revenue 856 777 10
operating profit 121 84  44
we are budgeting for international retail to make a profit of £14m in the year ahead
lipsy
full year sales of £63m and operating profit of £5m before amortisation and profit share of £2m was the best 
performance in our five years of ownership  lipsy’s retail sales were £20m taken from 49 stores trading 57000 
square feet and sales to wholesale customers were £22m  online sales through lipsy’s own site and the next 
directory were £21m  we expect further sales and profit growth from lipsy in the years ahead
annual report and accounts january 2014
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central costs and other activities
the table below sets out other group and nontrading activities
£m 2014 2013
property management 18 35
central costs 333 353
pension variation 26 36
unrealised foreign exchange 59 34
associates 25 06
total 323 242
unrealised foreign exchange ias 39
the £6m loss for the year compares with a £3m gain in the prior year  at this time it is not possible to predict the 
year ahead so group profit guidance assumes no ias 39 gain or loss
interest and taxation
the interest charge was £28m £1m less than last year  for the coming year we expect net debt to  
again range between £500m and £750m  this will result in an interest charge of £30m due to the higher  
level of bond debt and low interest rates available on cash deposits
our tax rate reduced as expected to 204 due to the reduction in headline uk corporation tax rates and 
agreement of prior year items with hmrc  we expect our effective rate will be no higher than 21 in each  
of the next two years
balance sheet and ordinary dividends
the balance sheet remains strong with year end net debt of £517m and forecast peak borrowing requirements 
being very securely financed by our bonds and committed bank facilities of £1088m  during the last six  
months we repaid the 2013 bond issued a new 12 year bond and extended our bank facility all as set out below
£m
2016 bonds 213
2021 bonds 325
2026 bonds 250
total bonds nominal value 788
2019 committed bank facility 300
total debt facilities available 1088
final dividend
we have proposed raising our final dividend to 93p taking the total dividend for the year to 129p  the increase  
of 23 is in line with growth in underlying eps  dividend cover remains at 28 times
additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2014
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strategic report
cash generation share buybacks and special dividends
cash generation
over the last year we generated £326m of surplus cash after capex interest dividends and tax of which £26m 
was used to maintain our esot  the balancing £300m was returned to shareholders through share buybacks and 
permanently increasing the level of cover in our esot which enhances eps by as much as a buyback  
we expect to generate around the same amount of free cash in the year ahead and are again budgeting 
to return £300m of cash to shareholders during the year  we paid a £75m special dividend in february and 
have committed to a further £75m special dividend which will be paid in may  assuming the share price  
remains at its current level and our profit expectations remain unchanged it is our intention to carry on paying 
quarterly special dividends for the remainder of the current year  
share buyback price limit going forward
in the chief executive’s review last year we set out the criteria by which we would decide the maximum price 
the company would pay to buy back shares  we introduced the concept of equivalent rate of return err   
err is the return required from an alternative investment if that investment were to produce the same level 
of earnings enhancement as the proposed buyback  we set the minimum err at 8 which we consider  
a reasonable target for a return on equity investments
over the course of the year we have discussed this concept with our shareholders  most agree that the 8  
limit is reasonable but many have commented that it would be more logical to use the company’s guidance for 
forward profits as a basis for calculating the 8 err rather than historic profits  we agree with this point and going  
forward will set our price limit on the basis of the midpoint of our forward guidance
for year ending january 2015 the midpoint of our guidance is for profit before tax to be £750m see below   
on this basis a buyback of £300m at £6245 would give an err of 8 and this figure now represents our upper 
limit for share buybacks  for clarity in order for us to revert back to a buyback programme we would need  
to be convinced that any share price move below our target was likely to be sustained and that our profit 
expectations had not changed
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outlook for 2014
the consumer economy
the consumer economy has steadily improved over the course of the last year  this modest improvement  
looks set to continue  however conditions are likely to remain far from buoyant and there are real risks  
to the sustainability of the current recovery 
employment remains strong
the most positive aspect of the economy remains employment which continues to rise to record highs  
300m
295m
290m
285m
jan 10 jan 11 jan 12 jan 13 jan 14
three month rolling average
source ons 19 feb 2014
total uk employment
dec 2013
3015m
credit constraints recede
consumer credit has been steadily flowing back into the market  the graph below shows the reversal of  
credit flows back into the market during 2013 with positive flows of around £7bn during the year which equates 
to around 1 of uk earnings  mortgage approvals are also growing strongly and housing transactions are  
following suit this change has been reflected in strong growth in our home division over the last six months
15bn
10bn
05bn
00bn
05bn
10bn
jan 10 jul 10 jan 11 jul 11 jan 12 jul 12 jan 13 jul 13 jan 14
uk credit flow
source bank of england 3 march 2014
additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2014
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strategic report
real earnings pressure easing but still negative
throughout 2013 growth in earnings began to close the gap with inflation  encouragingly in january there was 
little or no decline in real earnings  if this trend continues and real earnings move into growth it will be good  
news for the uk consumer environment  it would be the first time we have seen growth in real earnings for  
over five years  
jan 10
uk real earnings  cpi and earnings growth
60
50
40
30
20
10
00
jul 10 jan 11 jul 11 jan 12 jul 12 jan 13 jul 13 jan 14
■ cpi
■ average earnings
nonetheless it is worth noting that last year’s increase in spending appears to have been driven through 
increased credit see above  if anything has been learnt from the last ten years it is that credit cannot  
continue to grow faster than wages forever  until we see significant increase in the supply side of the 
economy profitable investment and improved productivity we cannot bank on a return to sustained growth   
consequently we remain cautious in our budgeting for the year ahead
outlook for next brand sales 2014
we are budgeting for total next brand sales growth of between 4 and 8 in the year ahead this compares 
to the 1 to 4 estimate we gave at this time last year  it reflects the underlying improvement in the economy  
and the fact that we are opening 1 more new space than last year
some might argue that our sales range is conservative when compared to the 55 growth we achieved last 
year  however last year’s total was significantly enhanced by the exceptional last quarter  in the year ahead we  
expect the fourth quarter to provide tough comparatives and it will be hard to beat  accordingly we are  
budgeting very cautiously for the final quarter  the chart below illustrates the anomalous performance in q4
q1 2013
201314 full year growth 55
2013 q1  q3 growth 30
next brand quarterly sales growth 201314
12
11
10
9
8
7
6
5
4
3
2
1
0
q2 2013 q3 2013 q4 2013 201415  e
low 4
top end
guidance 8
25 43 115 22
annual report and accounts january 2014
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guidance – group profits and eps for the year ahead
the table below sets out our guidance for the full year  for the purposes of this guidance we have assumed that 
surplus cash of £300m is returned as special dividends in reality this will depend on the prevailing share price as 
explained above
guidance estimates 
lower end  
of guidance
upper end  
of guidance
total brand sales  growth  4  8
profit before tax £730m £770m
profit before tax  growth  5 11
ordinary dividend yield assuming £65 share price  2  2
special dividend yield assuming £65 share price  3  3
total shareholder returns 10 16
interim management statement
our next statement will cover the first thirteen weeks of the year to 26 april 2014 and is provisionally scheduled for 
wednesday 30 april 2014
lord wolfson of aspley guise 
chief executive  
20 march 2014
additional information parent company accounts governance consolidated accounts business reports
annual report and accounts january 2014
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