Directors’ report

The directors present their report and the audited financial statements for the 52 weeks ended 28 February 2009 (‘the period’).

Principal activities and business review

The Group’s principal activities comprise home and general merchandise retailing. The chairman’s statement, review of the business and financial statements report on performance of the business during the period, the position at the period end, likely future developments, the principal risks and uncertainties facing the Group and financial key performance indicators, and are incorporated by reference into this directors’ report. Details of corporate responsibility, including charitable donations, employee involvement and policy on the employment of disabled persons are also set out in the review of the business and are incorporated by reference into this directors’ report, as is the Group’s statement on corporate governance.

There were no material acquisitions or disposals during the period.

Profit and dividends

The Group’s consolidated income statement shows a loss after exceptional items for the period of £413.1m. The directors recommend the payment of a final dividend of 10.0p per ordinary share, to be paid on 22 July 2009 to shareholders on the register at the close of business on 22 May 2009. An interim dividend of 4.7p per ordinary share was paid on 21 January 2009, giving a total dividend for the year of 14.7p per ordinary share.

Directors

The names and biographical details of the directors are shown in the Board of Directors and Operating Board section. There has been no change in the directors during the period. Particulars of directors remuneration and service contracts are shown in the directors’ remuneration report. Details of the service contracts of the directors, and how a change of control will affect the service contracts of the executive directors, are summarised within the directors’ remuneration report. Neither contract for the executive directors provides for extended notice periods or compensation in the event of termination or a change of control.

The directors retiring at the 2009 Annual General Meeting are Oliver Stocken and Richard Ashton who, each being eligible, offer themselves for re-election.

During the period, the Group maintained liability insurance and thirdparty indemnification provisions for its directors, under which the Company has agreed to indemnify the directors to the extent permitted by law in respect of all liabilities to third parties arising out of, or in connection with, the execution of their powers, duties and responsibilities as directors of the Company and any of its associated companies. These indemnities are Qualifying Third Party Indemnity Provisions as defined in Section 309A-B of the Companies Act 1985 and copies are available for inspection at the registered office of the Company during business hours on any weekday except public holidays.