News Release

FULL YEAR RESULTS 23 June 2011 Strictly embargoed For release at 07.00 hours

Dixons Retail plc

Robust performance in challenging markets

Dixons Retail plc, one of Europe’s largest specialist electrical retailing and services companies, today announces preliminary audited results for the 52 weeks ended 30 April 2011.

Key Highlights  Margins and underlying profit before tax, at £85.3 million, maintained in challenging market conditions.  Investment in the customer offer through the Renewal & Transformation plan is delivering.  Increasing market share across most markets and sectors, particularly in the UK and Nordics.  Step change to the customer focused business model, differentiating the offer for customers.  Further benefits to come through rolling out refurbished and megastore formats, the transformation of the services offer through KNOWHOW, upgraded websites and a leaner operating model.

John Browett, Chief Executive, commented: “Maintaining sales, margin and profits is a good performance in such challenging conditions. We are consistently outperforming our markets and gaining share because our Renewal and Transformation Plan continues to deliver a better and more compelling experience for customers.

The store refit programme is progressing well and our relentless focus on customers’ needs is reinforced through our services brand KNOWHOW which gives us a differentiated offer. Self-help has put our business on firm foundations and in a strong position for when we emerge from the current weak consumer environment.”

Outlook The economic backdrop remains challenging, particularly in the first half as we anniversary the World Cup and iPad launch. However the Group is well prepared for this environment. We are creating a market leading differentiated customer offer leaving us well set to emerge from the current climate ahead of the competition.

Dixons Retail plc. Registered in England No. 3847921. Registered Office: Maylands Avenue, Hemel Hempstead, Hertfordshire HP2 7TG. Group media office, Telephone: +44 (0)845 609 0805 Fax: +44 (0)1727 202 688 W ebsite: www.dixonsretail.com. All news releases are issued on a check against delivery basis and any portion of a statement not actually delivered should be regarded as private and confidential.Page 1 of 36

6851_Dixons_Retail_News_Release_1 1 23/5/11 16:28:47 Financial Highlights  Total Underlying Group sales(1) (2) down 2% to £8,154.4 million (2009/10 £8,320.0 million) and down 1% on a constant currency basis.  Total Group sales, including those from businesses to be closed and closed businesses, were £8,341.8 million (2009/10 £8,532.5 million).  Group like for like sales(3) down 4% in the second half and down 2% in the full year.  Underlying Group gross margins were flat in the second half of the year and up 0.1% in the full year.  Underlying Group EBIT(4) of £127.6 million (2009/10 £133.2 million).  Underlying pre-tax profit(1) of £85.3 million (2009/10 £90.9 million).  Underlying diluted earnings per share(1) of 1.6 pence (2009/10(5) 1.5 pence). Basic loss per share for continuing operations of (6.6) pence (2009/10 earnings per share of 2.0 pence).  Total loss before tax, after deducting non-underlying items of £(309.4) million, was £(224.1) million (2009/10 profit before tax of £112.7 million).  Free Cash Flow(6) of £38.9 million before restructuring charges (2009/10 £28.1 million).  As at 30 April 2011 the Group had net debt of £(206.8) million (2009/10 £(220.6) million).  Rephased debt profile following issue of new 2015 Bonds and part repurchase of existing 2012 Bonds in July 2010.

Impairment and restructuring Recognising challenging conditions in some of our markets, and the ongoing business restructuring under the Renewal and Transformation plan, we have reviewed the balance sheet and made impairment and other non underlying charges totalling £309.4 million. The additional cash impact of these charges is estimated as £39 million, of which approximately £8 million was incurred in 2010/11. The impairments primarily relate to the closure of operations in Spain (£70.6 million), the impairment of acquired goodwill in relation to in (£53.2 million) and (£106.3 million).

Business Highlights  Renewal and Transformation plan delivering a market leading offer for customers.  Store transformation programme on track:  360 stores reformatted at the year end;  70 Megastores now open with average annual sales of £20 million;  Over 80 Megastores across the Group, including 40 in the UK and 25 in the Nordics will have been reformatted by Peak;  Newly reformatted stores continue to deliver gross profit uplifts of 20% versus the unreformatted stores in the UK and 15% in the Nordics;  Second year trading for reformatted stores maintained.  Elkjøp performed strongly in all of its markets, gaining significant market share.  New customer services brand KNOWHOW launched in the UK encompassing all after sales and support services.

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 Multichannel internet sales up 13% across the Group, reflecting the continued shift of sales to the multichannel brands.  Closure of loss making PC City operations in Spain ahead of plan.  Cost savings on track:  £50 million savings delivered in the financial year;  £50 million of additional cost savings expected in each of the next three years.

UNDERLYING SALES AND PROFIT ANALYSIS

Underlying sales Underlying profit / (loss)

52 weeks 52 weeks 52 weeks Currency ended 52 weeks ended ended Neutral (7) Like for 30 April ended 30 April 2011 1 May 2010 % change like(3) 2011 1 May 2010 £million £million % change £million £million

UK & Ireland (8) 3,816.1 4,013.5 (5)% (3)% 71.3 71.1

Nordics (9) 2,268.9 2,093.7 +7% +5% 105.6 97.4

Other International (10) 1,226.7 1,291.6 (2)% (5)% (21.6) (8.3)

Pure play e-commerce (11) 842.7 921.2 (5)% (5)% 0.9 11.3

Central Costs - - (15.8) (19.5)

Total Group Retail 8,154.4 8,320.0 (1)% (2)% 140.4 152.0

Property losses (12.8) (18.8)

EBIT 127.6 133.2

Underlying net finance costs (42.3) (42.3)

Group underlying profit before tax 85.3 90.9

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Notes (1) Throughout this statement, references are made to ‘underlying’ performance measures. Underlying results are defined as excluding trading results from businesses to be closed, closed businesses, the amortisation of acquired intangibles, net restructuring and business impairment charges and other one off non-recurring items, profit on sale of investments, net fair value remeasurements of financial instruments and, where applicable, discontinued operations. These excluded items are described as ‘non-underlying’. The financial effect of these items is shown in the analyses on the face of the income statement and in note 3 to the financial information. (2) Business to be closed comprises PC City Spain. Closed businesses comprise the operations of PC City Sweden and Markantalo in Finland. Discontinued operations comprise operations in Poland and Hungary. (3) Like for like sales are calculated based on stores that have been open for a full financial year both at the beginning and end of the financial period and are calculated using constant exchange rates. Customer support agreement sales are excluded from all UK like for like calculations. Operations that are subject to closure have sales excluded as of the announcement date. Stores subject to a refurbishment are excluded during the period of refurbishment. All e- commerce pick up store sales are included in like for like sales. (4) Underlying Earnings Before Interest and Tax (EBIT) equates to underlying operating profit and is defined as underlying earnings from retail operations, after property losses, before deduction of net finance costs and tax. (5) The weighted average number of shares used in the calculation of earnings per share for the period prior to the rights issue, which completed on 9 June 2009, has been multiplied by an adjustment factor to reflect the bonus element of the shares issued under the terms of the rights issue (as described in note 6 to the financial information). The adjustment factor used was 1.2138. (6) Free Cash Flow relates to continuing operations and comprises net cash flow from operating activities before special pension contributions, less net finance costs, less income tax paid and net capital expenditure. (7) Currency neutral change percentage reflects the year on year growth or decline in Underlying Sales, calculated excluding the effect of currency movements. (8) UK & Ireland comprises , CurrysDigital, , PC World, operations in Ireland, DSGi Business and KNOWHOW. Like for like sales exclude DSGi Business. (9) Nordics comprises the Elkjøp group and Dixons Travel Denmark. (10) Other International comprises Greece (Kotsovolos), Italy (Unieuro, combined 2-in-1 Unieuro and PC City stores and Dixons Travel Italy), Czech Republic (ElectroWorld), Slovakia (ElectroWorld) and Turkey (ElectroWorld). (11) Pure play e-commerce division comprises Dixons.co.uk and PIXmania. (12) Unless otherwise noted, throughout this statement figures relate to continuing operations, excluding the results of business to be closed / closed businesses. Total revenue including discontinued operations and business to be closed / closed businesses was £8,341.8 million (2009/10 £8,543.4 million). (13) Certain statements made in this announcement are forward looking. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from any expected future events or results referred to in these forward looking statements. Unless otherwise required by applicable laws, regulations or accounting standards, we do not undertake any obligation to update or revise any forward looking statements, whether as a result of new information, future developments or otherwise.

For further information Investor Relations: David Lloyd-Seed Group Communications Director, Dixons Retail 01727 205065

Press and Media: Mark Webb Head of Media Relations, Dixons Retail 01727 205019

Laura Cummings Zoe Bird Brunswick Group 020 7404 5959

Information on Dixons Retail plc is available at http://www.dixonsretail.com

An audio webcast of the analyst presentation being held this morning will be available from 3.00pm today at http://www.dixonsretail.com (click "financial information", then "presentations").

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BUSINESS PERFORMANCE Underlying Group sales (excluding discontinued operations and closed businesses) were down 2% to £8,154.4 million (2009/10 £8,320.0 million) and down 2% on a like for like basis. Underlying Group sales were down 1% at constant exchange rates. Total Group sales (including closed businesses) were down 2% to £8,341.8 million (2009/10 £8,532.5 million). Group gross margins were up 0.1% across the year.

Group underlying EBIT (underlying profit before interest and tax) was £127.6 million (2009/10 £133.2 million). Group underlying profit before tax was £85.3 million (2009/10 £90.9 million). Total loss before tax, after adding back non-underlying items of £309.4 million, was £(224.1) million (2009/10 profit before tax £112.7 million).

UK & IRELAND Total sales in the UK & Ireland were down 5% to £3,816.1 million (2009/10 £4,013.5 million) and like for like sales were down 3% across the year. Underlying operating profit for the full year was flat year on year at £71.3 million (2009/10 £71.1 million).

This is an encouraging performance in the context of a weak market. During the first half we benefitted from sales of TVs in the lead up to the World Cup. The ‘cash for goals’ promotion caught customers’ imagination and enabled the business to capture more than its market share of the uplift in sales of TVs. The work being done under the Renewal and Transformation plan to improve the store environment and the shopping trip for customers was recognised by Apple when they chose us as their key partner for the launch of the iPad. Trade continued to be robust in the lead up to Christmas and in the early sale period, interrupted only by very poor weather conditions in the two week period preceding Christmas. However, like for like sales in the second half were down 7% as the consumer environment weakened in the fourth quarter. Against this environment Currys and PC World traded ahead of the competition and gained market share. During the year, white goods held up well, computing has been supported by iPad’s and tablets with the new iPad 2 selling very strongly. Television sales benefitted from a strong World Cup, but have been particularly weak since January.

Dixons Travel continues to go from strength to strength with all stores now operating in the new format which allows for more customer focused ranges, with a particular focus on portable items and accessories. The demographic of its customer base in airports has meant the business has been less impacted by the consumer downturn. Dixons Travel now operates in Copenhagen, Dublin, Rome and Milan airports with further opportunities in other airports across Europe.

Internet sales continue to be driven by the shift of consumers and manufacturers to multi-channel retail outlets with significant growth in reserve&collect. At the start of the financial year, the PIXmania e-merchant platform was implemented across the UK websites significantly improving the navigation, operation and customer

Page 5 of 36 experience. Further work to improve the offer and extended ranges on line are planned for the new financial year.

Gross margins in the UK & Ireland were up throughout the year as a result of a number of factors:  Improvements in stock control, enabling the business to exit the year with lower inventory levels than last year despite the very weak markets. This has included improved processes for exiting aged stock, limiting the need for excessive discounting;  Introduction of better promotional planning, enabling better support from suppliers, particularly as they increasingly favour multi-channel operators; and  Cost saving initiatives in the distribution and services infrastructure.

The division made good progress on the Renewal and Transformation plan through the year with 250 stores now refitted in the UK & Ireland, including 31 Megastores. The preferred format for customers and for the business is the combined 2-in-1 Currys and PC World format. All High Street and out of town Superstores will be in this format. The majority of the 70 Megastores the Group is targeting will also be in this format, with a small number of standalone Currys Megastores in larger catchments. The Group’s planned store base for the UK & Ireland is 450 stores, comprising 70 High Street stores, 310 Superstores and 70 Megastores. The portfolio will be managed to this size as existing leases expire and stores in each catchment are refitted.

The Group operates the most comprehensive end to end service offering in electrical retailing in the UK, giving the Group a unique services model versus the competition. In the Spring of 2011 the new services brand of KNOWHOW was launched. This follows an intensive period of investment and significant improvement in our service offering for customers. The new brand was introduced into stores in May 2011 with roll out to all stores being completed by the Autumn. The KNOWHOW brand provides customers with clear easily identifiable value for money services under four distinct categories; Deliver & Install; Set up & Upgrade; Help & Support; and Repair & Protect. Through growth and continuous process improvements the unit costs can be reduced enabling further investment in the services offer.

NORDICS In the Nordic region, Elkjøp delivered another strong performance with sales increasing by 7% in local currency and 8% in sterling to £2,268.9 million (2009/10 £2,093.7 million). Like for like sales were up 9% in the second half and up 5% across the year. Underlying operating profits increased by 8% to £105.6 million (2009/10 £97.4 million).

Elkjøp performed strongly in all of its markets and product categories throughout the year. In the prior year Elkjøp took the opportunity to significantly grow its market share and invested in margins. During the reported year Elkjøp consolidated its position and recovered some of this gross margin investment. New stores and extensions to Megastores were opened towards the end of the first half, which together with increased

Page 6 of 36 marketing, added to cost growth in the business over the Christmas Peak period. Elkjøp improved its cost position towards the end of the year and closed the year with gross margins up 0.5% year on year.

This was an important transitional year for the Elkjøp business as it established clear market leadership in all its markets. The sales and profit performances in Finland, Denmark and Sweden were strong, with particularly good profit conversion in Finland and Denmark. There is a significant opportunity to develop the Elkjøp business further across all four markets through store refurbishments, Megastore roll outs and online.

Elkjøp operates in geographically diverse markets where scale across all four countries provides a strong competitive advantage. Elkjøp operates a centralised warehouse in Sweden and a low cost centralised head office operation supported by efficient local functions in each market. Each operation has high customer recognition for advice and value which enables it to deliver relatively high sales densities. As a result Elkjøp operates on a market leading cost to sales ratio of 19.5%. Competition in each of the markets in the Nordics is typically characterised as buying groups or local independent operators and a small number of local specialists which lack the scale efficiencies Elkjøp enjoys.

Approximately 11% of Elkjøp’s sales are through its successful franchise operation which enables the brand to operate in smaller and less accessible catchments across the Nordics. As the franchisees purchase product from Elkjøp on a wholesale basis, franchising enables Elkjøp to benefit from increased purchasing scale.

Elkjøp has now opened 20 Megastores which have performed particularly well. It has also started a programme to refurbish existing superstores using the same format employed in the UK. These new format stores are delivering gross profit uplifts of approximately 15% versus the rest of the chain. Elkjøp expects to operate 60 Megastores across the Nordics in the medium term.

Elkjøp’s multi-channel offering grew by 34% to 6% of sales during the year driven by its reserve&collect service which continues to be well received by customers.

On 1 June 2011, the Group announced that it had exchanged contracts for the sale and leaseback of the Group’s Nordic distribution centre in Jönköping, Sweden. The sale and leaseback is expected to complete in June 2011 with the Group receiving SEK600 million (approximately £59 million).

OTHER INTERNATIONAL This division now comprises operations in Italy, Greece, the Czech Republic, Slovakia and Turkey. Total sales were down 2% at constant exchange rates and by 5% in sterling to £1,226.7 million (2009/10 £1,291.6 million). Underlying operating losses were £(21.6) million (2009/10 loss of £(8.3) million). Towards the end of the financial year the Group announced that it was closing its PC City operations in Spain. The closure programme is on track, with all stores now closed and a net cash cost of closure of approximately £30 million

Page 7 of 36 across the 2010/11 and 2011/12 financial years. Underlying financials are reported excluding these PC City operations.

Italy This comprises Unieuro, combined 2-in-1 Unieuro and PC City stores and Dixons Travel Italy operating in the airports in Rome and Milan. The business has progressed well against the turnaround plan, with a positive EBITDA delivered for the first time in several years, ahead of plan. The turnaround plan has involved considerable work to improve the ranges in store, as well as availability for customers. Significant progress has been made in improving the stock turn to improve working capital, helping cash generation. Using the same Six Sigma principles as have been employed in the UK & Ireland division, Unieuro has reduced costs. In addition the store network is being upgraded, including store reformatting, again using the work done in the UK & Ireland division, which provides a better, easier to navigate, store environment for customers.

A strong first quarter driven by the World Cup was followed by a weaker sales environment as the business anniversaried the first stages of the regional digital switchover. The consumer environment remained subdued in the second half, but Unieuro continued to outperform the market as it benefitted from a further stage of the digital switchover. As the business becomes cash generative it will start to add Megastores as well as refurbish existing stores to the 2-in-1 Unieuro and PC City format that is proving to be the favoured format for customers. The business is well positioned to make further gains in the years ahead.

Greece Kotsovolos is the market leading specialist electrical retailer in Greece. As a result of the economic situation in Greece the competitive environment is changing and with its strong market position Kotsovolos is increasingly being favoured by both customers and suppliers enabling it to trade ahead of the markets and gaining two to three percentage points of share in the last six months of the financial year. However, because the market has been down approximately 25% across the financial year, it has impacted profitability. Management have partially offset this impact by reducing costs, enabling the business to deliver a positive EBITDA result in the year. The business has also focused on delivering for customers, improving its relative proposition in the market and expanding its channels in e-commerce and franchising.

During the year Kotsovolos refurbished seven stores including two megastores, with 35% of sales now being through new format stores.

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Czech Republic and Slovakia Operations in the Czech Republic have performed well in their markets, despite the weak consumer environments. The Group now operates 20 stores and a multi-channel internet operation in the Czech Republic and three stores in Slovakia which are trading in line with expectations.

Turkey We operate 19 stores in Turkey, including four franchises, under the ElectroWorld brand with our local joint venture partner. These stores are based on the Group’s new large space format, providing a greater product range and exciting retail environments for customers. The business continues to deliver good sales growth as the operations there benefit from the Group’s scale, store formats, in store service and operating model.

PURE PLAY E-COMMERCE DIVISION This comprises PIXmania and Dixons.co.uk. Total sales were down 5% in local currency and down 9% in sterling at £842.7 million (2009/10 £921.2 million). Underlying operating profit was £0.9 million (2009/10 £11.3 million). The pure play e-commerce business forms a core and integrated part of the Group’s overall internet strategy, alongside the multichannel operations of the other main business divisions. Internet sales across the Group represent 16% of total sales.

Several factors have reduced the sales and profits of our pure play e-commerce operations. First, we have been making significant investments in developing the operation. We have implemented a new platform in the UK to support all of our web sites, which has caused disruption while being integrated into the UK systems and trading platforms. We have also been investing in e-merchant which supplies IT services to the Group and other retailers. Second, while it delivered a solid performance in France, PIXmania has strong market positions in Southern Europe which have been adversely impacted by reduced consumer demand. Third, in several markets we have had increased competition from store based brands expanding their e-commerce business. Finally there has been a significant shift of suppliers and customers in favouring multichannel brands and away from pure play internet operators.

In the UK the Group operates the Dixons.co.uk business alongside the multi-channel brands of Currys.co.uk and PC World.co.uk. During the year management directed internet sales activity through the more profitable multichannel brands, particularly as these are becoming the favoured route for customers and suppliers. As a pure play business Dixons.co.uk competes on price and is an important tool in enabling management to understand and compete in the pure play electricals retail section of the market. The implementation of the e- merchant platform and further improvements to the offer have incurred additional costs. However, as Dixons.co.uk is fulfilled from the UK & Ireland’s main warehouse and stockfiles, its cost to serve is relatively low. While the Dixons.co.uk operation is now on a much stronger footing, it has been impacted by the weak consumer environment, impacting profitability of the pure play e-commerce division.

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PIXmania now operates a total of 17 stores. These stores, with an average space of approximately 1,400 square foot per store, combine the ease and value of the internet and the convenience of stores to collect products. It is expected that PIXmania will open further stores as they achieve high sales densities driven by internet pricing in high footfall shopping centre locations.

PIXmania also operates PIXplace which provides a platform for third party resellers under the PIXmania brand. This also enables PIXmania to extend its offer for customers while benefitting from a charge to third party transactions.

In addition, PIXmania is able to provide its proprietary and market leading e-merchant platform and IT services to third party operators. As well as Dixons.co.uk, Currys.co.uk and PCWorld.co.uk, PIXmania provides these services to Bouygues Telecom. The Group considers that there are further opportunities in this area over the medium term.

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FINANCIAL POSITION The year has seen very challenging markets with pressures on sales and margins as well as cost inflation. In spite of these challenges we have delivered a robust trading performance against the financial priorities of profitability and strengthening the balance sheet:  Group Gross Margins were up 0.1% in the year, the second year of flat or growing gross margins in a market where competitors have seen gross margins erode;  Underlying EBIT held at £127.6 million (2009/10 £133.2 million);  Costs reduced by £50 million in the year and a further £50 million being targeted in each of the next three financial years;  Exit of loss making operations of PC City in Spain announced;  Completion of sale and leaseback of Swedish warehouse expected in June, raising £59 million;  Rephased debt profile following issue of new 2015 Bonds and part repurchase of existing 2012 Bonds in July 2010;  Significant headroom maintained on the Group’s revolving credit facility (the “RCF”) throughout the year, with the RCF extended to August 2013;  Agreement in principle reached with the trustee of the UK defined benefit scheme following the triennial valuation which showed a shortfall of assets compared to liabilities of £239 million;  Positive free cash flow, before restructuring items, of £38.9 million was generated;  Net Debt at year end of £206.8 million (2009/10 £220.6 million).

ADJUSTMENTS TO UNDERLYING RESULTS The weak consumer environment impacted the financial performance of certain of the Group’s businesses, with the outlook in Southern Europe, in particular, remaining uncertain. This has resulted in an impairment in the value of goodwill acquired with PIXmania and Kotsovolos in 2006 and 2004, respectively. There is also a non-underlying charge relating to the closure of the PC City business in Spain. Under the Renewal and Transformation plan, a number of re-organisation charges continue to be incurred and as in prior years, these have also been treated as non-underlying charges. The total non-underlying charge is £309.4 million. The additional cash impact of this charge is estimated as £39 million, of which approximately £8 million was incurred in 2010/11. Further details of the non-underlying charges are set out below:

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52 weeks ended 52 weeks ended 30 April 2011 1 May 2010 £million £million Underlying profit before tax 85.3 90.9 Non underlying (charges) / gains: Trading results– Business to be closed / closed businesses (8.5) (0.6)

Other non-underlying items: Amortisation of acquired intangibles (4.5) (4.6)

Net restructuring charges: Strategic reorganisation (17.1) (5.6)

Business impairments (251.6) - Other items (24.9) -

Change in pension benefits - 33.4 Financing items: Net fair value remeasurements (2.8) (0.8) Accelerated amortisation of facility fees (7.8) - Net 2012 Bond redemption gains 7.8 - Other non-underlying items – total (300.9) 22.4 Net non-underlying (charges) / gain (309.4) 21.8 (Loss) / profit before tax (224.1) 112.7

 In April the Group announced closure of PC City Spain, and in the prior year completed closure of PC City in Sweden and Markantalo in Finland. Trading results from the business to be closed / closed businesses comprise the pre-tax losses from these operations, excluding closure costs which are provided for separately below as part of the business impairment.  Amortisation of acquired intangibles of £4.5 million predominantly comprises brand names.  Strategic re-organisation costs of £17.1 million relate predominantly to the UK business transformation and primarily comprise redundancy costs and additional lease liabilities on a vacant head office building following the UK restructuring.  Business impairments include: - Costs of £70.6 million relating to the closure of PC City operations in Spain. This comprises goodwill and other asset write offs together with provisions for onerous lease costs and employee severance; - £106.3 million impairment of goodwill acquired with PIXmania in 2006. PIXmania’s profit performance is behind that envisaged at the time of the acquisition as a result of: o Weakness in the Southern European economies in which it operates; o Investment in the e-merchant platform; and o Changes in the internet retailing market, with the switch in growth to multi-channel.

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- £53.2 million impairment of goodwill relating to Kotsovolos, the Group’s Greek business. Despite gaining market share during the period and remaining cash generative, this follows a period of economic difficulty and uncertainty in the Greek market; and - £21.5 million impairment in respect of the Group’s 40% stake in a Danish associate, F-Group. F- Group has experienced a prolonged period of declining results due to the weak underlying Danish economic environment.  Other items of £24.9 million mainly comprise: - The impairment of capitalised development costs in respect of the Group’s systems in the UK following the decision to defer the project in order to focus on existing process improvements; and - The write off in PIXmania of supplier receivables, dating back to 2008/09 and prior years. This write off has arisen due to the implementation of new systems highlighting the extent of the receivables outstanding and a detailed review of the Group’s ability to recover these balances.  The financing charge comprises the following elements: - £2.8 million of net fair value remeasurement losses on revaluation of financial instruments as required by IAS 32 and 39; - Accelerated amortisation of facility fees which relate to the refinancing activities and comprise the write off of fees relating to the now cancelled credit facility which were previously being amortised over the life of that facility. Equivalent fees relating to the current RCF are being amortised into underlying interest in the same manner as the historical facility fees were; and - Net 2012 Bond redemption gains which arise on the notional cancellation of interest rate swaps used to hedge the £140 million redeemed portion of the 2012 Bonds, offset mainly by the redemption premium paid.  The 2009/10 credit of £33.4 million in respect of the change in pension benefits arose from the curtailment of the defined benefit section of the UK pension scheme whereby this section was closed to future accrual on 30 April 2010.

FREE CASH FLOW Free cash flow, before restructuring items, at £38.9 million (2009/10 £28.1 million) improved on the prior year despite the significant increase in capital invested in the Renewal and Transformation programme. This was driven mainly through improved working capital management and reduced hedge cash outflows. Total free cash flow after restructuring items was £10.0 million (2009/10 outflow of £(17.6) million).

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52 weeks ended 52 weeks ended 30 April 2011 1 May 2010 £million £million Underlying profit before tax 85.3 90.9 closed businesses loss before tax (8.5) (0.6) Depreciation and amortisation 139.4 128.6 Working capital 40.4 39.7 Taxation (26.2) (31.9) Capital expenditure (223.2) (165.3) Proceeds from sale of property (i) 2.0 0.7 Other cash items 29.7 (34.0) Free Cash Flow before restructuring items 38.9 28.1 Net restructuring and impairment (i) (ii) (28.9) (45.7) Free Cash Flow 10.0 (17.6)

(i) Proceeds from sale of property in the prior year excludes £9.0 million relating to the sale of the Group’s former warehouse in Stevenage. These sale proceeds are shown within net restructuring and impairment. (ii) Net restructuring and impairment includes £2.0 million of cash recoveries made in the current year, mainly in relation to closed businesses.

As previously announced, it should be noted that the year end working capital and cash position benefited due to the additional bank holiday at the end of the financial year and the timing of trading cash flows associated with the closure of operations in Spain. This benefit is estimated as approximately £30 million, of which approximately half was as a result of the timing of closing the operations in Spain across the year end. The Group continues to anticipate net closure costs of PC City Spain of approximately £30 million. This represents an incremental cost of £20 million.

Capital expenditure was £223.2 million (2009/10 £165.3 million), up £57.9 million reflecting the increased investment associated with the Renewal and Transformation plan, particularly in the UK and Nordics.

Other cash items of £29.7 million (2009/10 £(34.0) million) mainly comprise the add back of non-cash costs included in profit, such as pension interest, share option charges, and property loss provision charges, and in addition reflect other cash movements such as settlements of certain hedge contracts. The improvement year on year of £63.7 million is primarily due to the £62.2 million of hedge outflows reported in 2009/10.

As previously disclosed, the Group has in place certain historical hedging agreements. The principal outstanding agreements relate primarily to foreign exchange and interest hedges. The majority of these were put in place at the time the Group issued its Bonds in 2002, and in relation to overseas investments. The remaining hedges at year end rates would imply a net future cash outflow of approximately £65million, primarily payable in 2012.

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Net restructuring and impairment mainly reflects the cash outflows relating to the strategic reorganisation activities as announced in previous years. These primarily comprise lease and other property related payments and employee severance costs.

The Group’s priority is to ensure that cash flow is managed to meet the repayment of the 6.125% Bonds due in November 2012 and associated hedge maturities. Alongside the proceeds from the sale and leaseback of the warehouse in Sweden, and further cash generation from operations, management will retain flexibility in the level of capital expenditure in the 2011/12 and 2012/13 financial years. As previously announced capital expenditure will be limited to a maximum of £160 million in the 2011/12 financial year. To date approximately £100 million of capital has been committed for 2011/12, with further commitments to be reviewed against the economic environment and the Group’s performance.

FUNDING Net funds/debt At 30 April 2011 the Group had net debt of £(206.8) million, compared with net debt of £(220.6) million at the end of the previous year.

52 weeks ended 52 weeks ended 30 April 2011 1 May 2010 £million £million Opening net (debt) / funds (220.6) (477.5) Free Cash Flow 10.0 (17.6) Equity Placing and Rights issue - 291.3 Acquisitions and disposals - (7.0) Discontinued operations (0.1) (8.6) Special pension contribution (12.0) (12.0) Other items 15.9 10.8 Other movements in net funds / (debt) 3.8 274.5 Closing net debt (206.8) (220.6)

Since the start of the previous financial year, the Group has improved its financial position significantly through refinancing actions. In the prior year, the proceeds received from the equity placing and rights issue were used to reduce debt and finance the Renewal and Transformation plan. In July 2010 the Group rephased its debt with the issue of £150 million 8.75% Guaranteed Notes repayable in August 2015 (the “2015 Bonds”). The net proceeds of the 2015 Bonds were used to repurchase £140 million of the Group’s existing £300 million 6.125% Bonds (the “2012 Bonds”). The transaction also enabled the extension of the maturity of the Group’s revolving credit facility to August 2013.

Page 15 of 36

The rephasing of debt maturity, coupled with actions to generate funds to reduce net debt, ensures that the Group has an appropriate repayment profile on its debt facilities and has suitable working capital facilities with sufficient headroom to enable it to continue to execute the Renewal and Transformation plan.

On 1 June 2011 the Group announced the exchange of contracts for the sale and leaseback of its Jönköping distribution facility for SEK 600 million (approximately £59 million). Completion of the transaction is expected in June 2011.

The gain on other items in the current year includes a £10.2 million gain arising on the notional cancellation of interest rate swaps which were previously in a designated hedge relationship on the portion of the 2012 bond which has now been redeemed.

Net Debt is stated inclusive of restricted funds of £120.3 million (Full Year 2009/10 £78.9 million, Interim 2010/11 £118.4 million), which predominantly comprise funds held under trust for potential Customer Support Agreement liabilities. As previously reported in our interim results, the increase year on year is primarily as a result of cancellation of letter of credit facilities as part of the refinancing of the RCF in July 2010.

UNDERLYING NET FINANCE COSTS Underlying net finance costs were £(42.3) million (2009/10 (£42.3) million). Although the overall cost has remained unchanged year on year, there have been offsetting impacts from the following key areas:  Net reductions in borrowing costs, arising from lower borrowing levels following the equity placing and rights issue in the prior year, as well as from lower borrowing and amortisation costs following the refinancing of the revolving credit facility; partly offset by increased costs resulting from the higher coupon on the 2015 Bonds;  Lower net pension interest costs, set at the beginning of the financial year, largely as a result of higher asset values compared to the beginning of the previous financial year;  Reduced interest income, predominantly due to one-off interest earned in the prior year relating to overpayments of tax in earlier years.

PROPERTY LOSSES Property losses decreased to £12.8 million (2009/10 £18.8 million loss). They primarily relate to closure or refit of stores as part of the Renewal and Transformation plan in the UK and Nordics. In the prior year costs were also incurred in Greece through store closures and refits, including rebranding of the ElectroWorld chain to Kotsovolos.

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DIVIDENDS The Board believes that Dixons Retail’s existing financial resources should be used to invest in the Renewal and Transformation plan, which is showing encouraging signs of delivering changes in the Group’s performance, as well as repayment of the existing 2012 Bond due in November 2012.

Subject to an assessment of whether certain conditions have been met, and the progress of the Renewal and Transformation plan, the Board aims to resume dividend payments when appropriate, consistent with a sustained recovery in Dixons Retail’s operational and financial performance.

TAX The Group’s tax rate on underlying profit before tax was 37% (2009/10: 45%). The high effective tax rate is affected by the proportion of loss making businesses where tax benefits are not fully utilised.

PENSIONS At 30 April 2011, the IAS 19 accounting deficit of the defined benefit section of the UK pension scheme amounted to £244.0 million (1 May 2010 £263.5 million). The assumptions used for determining the accounting valuation use a consistent basis to that adopted in prior periods but build from the most recent triennial valuation as at 31 March 2010.

The overall decrease is a result of an increase in the assets of the scheme which have continued to recover year on year. This increase has partially been offset by an overall increase in liabilities which are affected by a lower discount rate, reflecting corporate bond yields, and the fact that liabilities are one year closer to crystallising.

A full triennial actuarial valuation of the UK defined benefit pension scheme as at 31 March 2010 was recently completed and shows a shortfall of assets compared with liabilities of £239.0 million. This shortfall and the associated recovery plan have been agreed in principle with the trustee with formal agreement expected shortly. The proposed recovery plan based on this valuation commenced in 2010/11 with payments of £12 million which rise to £16 million in 2011/12, £20 million in 2012/13 and 2013/14 and rising thereafter to £35 million by 31 March 2021. The next triennial valuation is expected to commence in March 2013.

- ENDS – Maylands Avenue John Browett Hemel Hempstead Chief Executive Hertfordshire HP2 7TG 23 June 2011

Report and Accounts publication date 18 July 2011 Annual General Meeting 7 September 2011 Copies of the Report and Accounts will be available from the Company Secretary at the above address and on the Group’s website at http://www.dixonsretail.com Page 17 of 36

Consolidated Income Statement

52 weeks ended 30 April 2011 52 weeks ended 1 May 2010 Non-underlying* Non-underlying* Business to be Under- Business to Under- closed / closed lying* be closed** Other Total lying* businesses** Other Total Note £million £million £million £million £million £million £million £million Continuing operations Revenue 2 8,154.4 187.4 - 8,341.8 8,320.0 212.5 - 8,532.5

Profit / (loss) from operations before associates 128.0 (7.7) (298.1) (177.8) 131.6 (0.2) 23.2 154.6 Share of post-tax results of associates (0.4) - - (0.4) 1.6 - - 1.6 Operating profit / (loss) 2 127.6 (7.7) (298.1) (178.2) 133.2 (0.2) 23.2 156.2

Finance income 58.9 - 12.5 71.4 58.2 - 1.1 59.3 Finance costs (101.2) (0.8) (15.3) (117.3) (100.5) (0.4) (1.9) (102.8) Net finance costs 4 (42.3) (0.8) (2.8) (45.9) (42.3) (0.4) (0.8) (43.5)

Profit / (loss) before tax 85.3 (8.5) (300.9) (224.1) 90.9 (0.6) 22.4 112.7

Income tax (expense) / credit 5 (31.4) - 12.3 (19.1) (40.7) 0.1 (6.1) (46.7) Profit / (loss) after tax – continuing operations 53.9 (8.5) (288.6) (243.2) 50.2 (0.5) 16.3 66.0

Loss after tax – discontinued operations - - (2.1) (2.1) - - (8.7) (8.7)

Profit / (loss) for the period 53.9 (8.5) (290.7) (245.3) 50.2 (0.5) 7.6 57.3

Attributable to: Equity shareholders of the parent company 58.8 8.5 (289.3)(239.0) 52.7 (0.5) 7.6 59.8 Non-controlling interests (4.9) -(1.4) (6.3) (2.5) - - (2.5) 53.9 (8.5) (290.7) (245.3) 50.2 (0.5) 7.6 57.3

Earnings per share (pence) 6 Basic - total (6.6)p 1.7p Diluted - total (6.6)p 1.7p Basic - continuing operations (6.6)p 2.0p Diluted - continuing operations (6.6)p 1.9p

Underlying earnings per share (pence) 6 Basic - continuing operations 1.6p 1.5p Diluted - continuing operations 1.6p 1.5p

* ‘Underlying’ profit and earnings per share measures exclude the trading results of business to be closed / closed businesses, amortisation of acquired intangibles, net restructuring and business impairment charges and other one off, non-recurring items, fair value remeasurements of financial instruments and, where applicable, discontinued operations. Such excluded items are described as ‘Non-underlying’. Further information on these items is shown in notes 1, 3, 4, 5 and 6.

** Business to be closed / closed businesses comprise PC City Spain for which plans for its closure were announced on 14 April 2011 and Markantalo and PC City Sweden whereby these store based businesses were closed on 10 May 2009 and 20 May 2009, respectively. These operations do not meet the definition of discontinued operations as stipulated by IFRS 5 and accordingly the disclosures within non-underlying items differ from those for applicable discontinued operations.

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Consolidated Statement of Comprehensive Income and Expense

52 weeks 52 weeks ended ended 30 April 2011 1 May 2010 £million £million (Loss) / profit for the period (245.3) 57.3

Actuarial gains / (losses) on defined benefit pension schemes - UK 13.1 (156.0) - Nordics (0.3) 1.5 Cash flow hedges Fair value remeasurement losses (8.0) (18.4) Losses transferred to carrying amount of inventories 7.4 15.1 Losses / (gains) transferred to income statement (within cost of sales) 6.7 (3.8) Net investment hedges Fair value remeasurement (losses) / gains (4.9) 2.7 Investments Fair value remeasurement gains 0.2 0.8 Tax on items taken directly to equity (8.5) 44.2 Currency translation movements 31.7 45.3 Net income / (expense) recognised directly in equity 37.4 (68.6)

Total comprehensive expense for the period (207.9) (11.3)

Attributable to: Equity shareholders of the parent company (201.2) (8.9) Non-controlling interests (6.7) (2.4) (207.9) (11.3)

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Consolidated Balance Sheet

30 April 2011 1 May 2010 £million £million Non-current assets Goodwill 970.8 1,116.5 Intangible assets 113.1 130.7 Property, plant & equipment 583.7 541.0 Investments in associates 3.4 26.4 Trade and other receivables 49.6 58.0 Deferred tax assets 163.4 169.4 1,884.0 2,042.0 Current assets Inventories 960.9 972.6 Trade and other receivables 383.2 395.1 Income tax receivable 4.1 1.9 Short term investments 10.5 8.5 Cash and cash equivalents 334.7 295.7 1,693.4 1,673.8 Total assets 3,577.4 3,715.8

Current liabilities Bank overdrafts (5.6) (4.9) Borrowings (130.0) (98.5) Obligations under finance leases (3.1) (2.4) Trade and other payables (1,644.2) (1,605.9) Income tax payable (48.5) (47.0) Provisions (44.4) (22.3) (1,875.8) (1,781.0) Net current liabilities (182.4) (107.2)

Non-current liabilities Borrowings (315.3) (321.4) Obligations under finance leases (98.0) (97.6) Retirement benefit obligations (247.3) (266.8) Other payables (331.0) (325.7) Deferred tax liabilities (17.6) (18.7) Provisions (15.9) (29.5) (1,025.1) (1,059.7) Total liabilities (2,900.9) (2,840.7) Net assets 676.5 875.1

Capital and reserves Called up share capital 90.3 90.2 Share premium account 169.5 169.4 Other reserves (537.7) (537.5) Retained earnings 931.4 1,124.4 Equity attributable to equity holders of the parent company 653.5 846.5 Equity non-controlling interests 23.0 28.6 Total equity 676.5 875.1

The financial statements were approved by the directors on 23 June 2011 and signed on their behalf by:

John Browett Nicholas Cadbury Chief Executive Group Finance Director

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Consolidated Cash Flow Statement

52 weeks 52 weeks ended ended 30 April 2011 1 May 2010 Note £million £million Operating activities – continuing operations Cash generated from operations * 7 292.8 270.3 Special contributions to defined benefit pension scheme (12.0) (12.0) Income tax paid * (26.2) (31.9) Net cash flows from operating activities 254.6 226.4

Investing activities – continuing operations Purchase of property, plant & equipment and other intangibles * (223.2) (165.3) Purchase of subsidiaries - (7.0) Interest received * 17.9 25.5 (Increase) / decrease in short term investments (1.8) 1.3 Disposals of property, plant & equipment and other intangibles * 2.0 9.7 Dividend received from associate 1.1 4.0 Net cash flows from investing activities (204.0) (131.8)

Financing activities – continuing operations Issue of ordinary share capital 0.2 291.3 Additions to finance leases 2.4 - Capital element of finance lease payments (1.5) (1.7) Interest element of finance lease payments * (7.0) (7.1) Increase / (decrease) in borrowings due within one year 31.8 (151.6) Increase in borrowings due after more than one year 5.4 - Interest paid * (46.3) (118.8) Investment from minority shareholder 1.1 5.0 Net cash flows from financing activities (13.9) 17.1

Increase / (decrease) in cash and cash equivalents (i) Continuing operations 36.7 111.7 Discontinued operations (0.1) (8.6) 36.6 103.1

Cash and cash equivalents at beginning of period (i) 7 290.8 187.8 Currency translation differences 1.7 (0.1) Cash and cash equivalents at end of period (i) 7 329.1 290.8

Free Cash Flow (ii) 10.0 (17.6)

(i) For the purposes of this cash flow statement, cash and cash equivalents comprise those items disclosed as “cash and cash equivalents” on the face of the balance sheet, less overdrafts, which are classified within current liabilities on the face of the balance sheet. A reconciliation to the balance sheet amounts is shown in note 7.

(ii) Free Cash Flow comprises those items marked * and comprises cash generated from / (utilised by) continuing operations before special pension contributions, less net finance expense, less income tax paid and net capital expenditure. The directors consider that ‘Free Cash Flow’ provides additional useful information to shareholders in respect of cash generation and is consistent with how business performance is measured internally.

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Consolidated Statement of Changes in Equity

Non- Share Share Other Retained Sub controlling Total capital premium reserves earnings total interests equity £million £million £million £million £million £million £million At 3 May 2009 44.3 169.4 (534.9) 880.1 558.9 26.0 584.9

Profit for the period - - - 57.3 57.3 - 57.3 Other comprehensive income and expense recognised directly in equity - - (2.6) (63.6) (66.2) (2.4) (68.6) Total comprehensive income and expense for the period - - (2.6) (6.3) (8.9) (2.4) (11.3)

Non-controlling interests - increase in capital - - - - - 5.0 5.0 Placing and Rights Issue 45.9 - 245.4 - 291.3 - 291.3 Transfers - - (245.4) 245.4 - - - Share-based payments - - - 4.9 4.9 - 4.9 Tax on share-based payments - - - 0.3 0.3 - 0.3 At 1 May 2010 90.2 169.4 (537.5) 1,124.4 846.5 28.6 875.1

Loss for the period - - - (245.3) (245.3) - (245.3) Other comprehensive income and expense recognised directly in equity - - (0.2) 44.3 44.1 (6.7) 37.4 Total comprehensive income and expense for the period - - (0.2) (201.0) (201.2) (6.7) (207.9)

Non-controlling interests - increase in capital - ---- 1.11.1 Ordinary shares issued 0.1 0.1 - - 0.2 - 0.2 Share-based payments - - - 8.6 8.6 - 8.6 Tax on share-based payments - - - (0.6) (0.6) - (0.6) At 30 April 2011 90.3 169.5 (537.7) 931.4 653.5 23.0 676.5

Non-controlling interests (minority interests) comprise shareholdings in Pixmania S.A.S., (PIXmania), ElectroWorld Iç ve Dis Ticaret AS (ElectroWorld Turkey) and Dixons South-East Europe A.E.V.E. (Kotsovolos).

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Notes to the Financial Information 1 Basis of preparation The financial information, which comprises the consolidated income statement, consolidated statement of comprehensive income and expense, consolidated balance sheet, consolidated cash flow statement, consolidated statement of changes in equity and extracts from the notes to the accounts for 30 April 2011 and 1 May 2010, has been prepared in accordance with the accounting policies set out in the full financial statements.

The financial information set out in this announcement does not constitute statutory accounts within the meaning of Sections 434 to 436 of the Companies Act 2006 and is an abridged version of the Group’s financial statements for the 52 weeks ended 30 April 2011 which were approved by the directors on 23 June 2011. Statutory accounts for the 52 weeks ended 1 May 2010 have been delivered to the Registrar of Companies, the auditors have reported on those accounts, their report was unqualified and did not contain statements under Section 498(2) or (3) of the Companies Act 2006. Statutory accounts for the period ended 30 April 2011 will be delivered following the Company’s annual general meeting. The auditors have reported on those accounts, their reports were unqualified and did not contain statements under Section 498 of the Companies Act 2006.

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, IFRS issued by the International Accounting Standards Board and those parts of the Companies Act 2006 applicable to those companies reporting under IFRS.

The consolidated financial statements incorporate the financial statements of the Company and its subsidiary undertakings for the 52 weeks ended 30 April 2011. Comparative figures are for the 52 weeks ended 1 May 2010. The directors consider that the ‘underlying’ performance measures, together with the associated Income Statement presentation, provide additional useful information for shareholders on underlying performance of the business, and are consistent with how business performance is measured internally. Such measures exclude the trading results of closed businesses, impact of amortisation of acquired intangibles, net restructuring and business impairment charges and other one off, non-recurring items, profit on sale of investments, fair value remeasurements of financial instruments and, where applicable, discontinued operations. These measures may not be directly comparable with ‘adjusted’ profit measures used by other companies.

2 Segmental analysis The Group’s operating segments have been determined based on the information reported to the Board. This information is predominantly based on geographical areas which are either managed separately or have similar trading characteristics such that they can be aggregated together into one segment and in the case of e-commerce, as a business area with geographical territories aggregated. Accounting policies for each operating segment are the same as those for the Group as described in note 1. The Group evaluates each operating segment based on underlying operating profits which excludes those items described in note 1. All segments are involved in the multi-channel sale of high technology consumer electronics, personal computers, domestic appliances, photographic equipment, communication products and related financial and after-sales services. The principal categories of customer are retail, business to business and on-line. During 2009/10, the Group disposed of its operations in Hungary and Poland, both of which have been classified as discontinued operations. The Group’s reportable segments have been identified as follows: ■ UK & Ireland comprises electrical and computing retail chains as well as business to business (B2B) activities. The division is engaged predominantly in multi-channel retail sales, associated peripherals and services and related financial and after sales services and also in business to business sales of computer hardware and software ■ Nordics operates in Norway, Sweden, Finland, Denmark, Iceland, Greenland and the Faroe Islands. The division engages in multi-channel retail sales and provided related product support services to its customers. It also engages in B2B sales of computer hardware, software and services. Across the region, the division operates a successful franchise business, typically in smaller markets. ■ Other International comprises operations in Italy, Greece, the Czech Republic, Slovakia, Turkey and the business to be closed in Spain which is excluded from underlying results. The Other International division engages in retail sales (including multi-channel sales in some countries) and provides related product support services to its customers in all of its markets. It also engages in B2B sales of computer hardware, software and services in Italy, Spain and Greece and has franchise operations in Italy, Greece, the Czech Republic and Turkey. ■ Pure play e-commerce comprises pure play online retailers and operates in all of the countries in which the other divisions operate and across Europe. Business to be closed / closed businesses comprise PC City Spain whereby its closure was announced on 14 April 2011 and Markantalo and PC City Sweden whereby these store operations were closed on 10 May 2009 and 20 May 2009, respectively. Owing to their closure rather than disposal, these operations do not meet the definition of discontinued operations as stipulated by IFRS 5.

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Notes to the Financial Information 2 Segmental analysis continued Income statement 2010/11 External Intersegmental Underlying Total revenue revenue Revenue profit / (loss) profit / (loss) £million £million £million £million £million UK & Ireland 3,816.1 57.8 3,873.9 71.3 50.4 Nordics 2,268.9 3.8 2,272.7 106.0 85.3 Other International 1,414.1 0.6 1,414.7 (21.6) (153.8) Pure play e-commerce 842.7 5.0 847.7 0.9 (120.8) Eliminations - (67.2) (67.2) - - 8,341.8 - 8,341.8 156.6 (138.9) Share of post-tax results of associates (0.4) (0.4) Operating profit / (loss) before central costs and property losses 156.2 (139.3) Central costs (15.8) (26.1) Property losses (12.8) (12.8) Operating profit / (loss) 127.6 (178.2) Finance income 58.9 71.4 Finance costs (101.2) (117.3) Profit / (loss) before tax for the period 85.3 (224.1)

External revenue for Other International includes £187.4 million relating to business to be closed. Reconciliation of underlying profit / (loss) to total profit / (loss) 2010/11 Under- Amortisa- Net Other non- lying tion of restruc- Business underlying Total profit / Business to acquired turing impairment Other financing profit / (loss) be closed intangibles charges charges items items (loss) £million £million £million £million £million £million £million £million UK & Ireland 71.3 - (0.4) (5.6) - (14.9) - 50.4 Nordics 106.0 - - - (21.5) 0.8 - 85.3 Other International (21.6) (7.7) (0.7) - (123.8) - - (153.8) Pure play e-commerce 0.9 - (3.4) - (106.3) (12.0) - (120.8) 156.6 (7.7) (4.5) (5.6) (251.6) (26.1) - (138.9) Share of post-tax results of associates (0.4) ------(0.4) Operating profit / (loss) before central costs and property losses 156.2 (7.7) (4.5) (5.6) (251.6) (26.1) - (139.3) Central costs (15.8) - - (11.5) - 1.2 - (26.1) Property losses (12.8) ------(12.8) Operating profit 127.6 (7.7) (4.5) (17.1) (251.6) (24.9) - (178.2) Finance income 58.9 - - - - - 12.5 71.4 Finance costs (101.2) (0.8) - - - - (15.3) (117.3) Profit / (loss) before tax for the period 85.3 (8.5) (4.5) (17.1) (251.6) (24.9) (2.8) (224.1)

Share of post-tax results of associates relates to the Nordics.

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Notes to the Financial Information 2 Segmental analysis continued Income statement 2009/10 External Intersegmental Underlying Total revenue revenue Revenue profit / (loss) profit / (loss) £million £million £million £million £million UK & Ireland 4,013.5 101.7 4,115.2 71.1 93.7 Nordics 2,094.6 1.7 2,096.3 95.8 95.6 Other International 1,503.2 1.5 1,504.7 (8.3) (9.0) Pure play e-commerce 921.2 3.8 925.0 11.3 7.9 Eliminations - (108.7) (108.7) - - 8,532.5 - 8,532.5 169.9 188.2 Share of post-tax results of associates 1.6 1.6 Operating profit before central costs and property losses 171.5 189.8 Central costs (19.5) (14.8) Property losses (18.8) (18.8) Operating profit 133.2 156.2 Finance income 58.2 59.3 Finance costs (100.5) (102.8) Profit before tax for the period 90.9 112.7

External revenue for the Nordics and Other International includes £0.9 million and £211.6 million relating to closed businesses and business to be closed, respectively. Reconciliation of underlying profit / (loss) to total profit / (loss) 2009/10 Net fair Under- Business to be Amortisation Net restruc- Change in value Total lying profit / closed / closed of acquired turing pension remeasure- profit / (loss) businesses intangibles charges benefits ments (loss) £million £million £million £million £million £million £million UK & Ireland 71.1 - (0.5) (5.6) 28.7 - 93.7 Nordics 95.8 (0.2)- - - - 95.6 Other International (8.3) - (0.7) - - - (9.0) Pure play e-commerce 11.3 - (3.4) - - - 7.9 169.9 (0.2) (4.6) (5.6) 28.7 - 188.2 Share of post-tax results of associates 1.6 - - - - - 1.6 Operating profit / (loss) before central costs and property losses 171.5 (0.2) (4.6) (5.6) 28.7 - 189.8 Central costs (19.5) - - - 4.7 - (14.8) Property losses (18.8) - - - - - (18.8) Operating profit / (loss) 133.2 (0.2) (4.6) (5.6) 33.4 - 156.2 Finance income 58.2 - - - - 1.1 59.3 Finance costs (100.5) (0.4) - - - (1.9) (102.8) Profit / (loss) before tax for the period 90.9 (0.6) (4.6) (5.6) 33.4 (0.8) 112.7

Share of post-tax results of associates relates to the Nordics.

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Notes to the Financial Information

3 Non-underlying items 2010/11 2009/10 Business to be closed / closed Business to businesses be closed Other Total £million Other Total Note £million £million £million £million £million Included in operating profit / (loss): Business to be closed / closed businesses (i) (7.7) - (7.7) (0.2) - (0.2) Amortisation of acquired intangibles -(4.5) (4.5) - (4.6) (4.6) Net restructuring charges (ii) - (17.1) (17.1) - (5.6) (5.6) Business impairment charges (iii) - (251.6) (251.6) - - - Change in pension benefits (iv) --- - 33.4 33.4 Other items (v) - (24.9) (24.9) - - - (7.7) (298.1) (305.8) (0.2) 23.2 23.0 Included in net finance costs: Business to be closed (i) (0.8) - (0.8) (0.4) - (0.4) Net fair value remeasurements of financial instruments (vi) - (2.8) (2.8) - (0.8) (0.8) Accelerated amortisation of facility fees (vii) - (7.8) (7.8) - - - Net 2012 Bond redemption gains (viii) -7.87.8 - - - (0.8) (2.8) (3.6) (0.4) (0.8) (1.2)

Total impact on profit / (loss) before tax (8.5) (300.9) (309.4) (0.6) 22.4 21.8

Included in income tax expense: Business to be closed / closed businesses --- 0.1 - 0.1 Other non-underlying items - 12.3 12.3 - (6.1) (6.1) - 12.3 12.3 0.1 (6.1) (6.0) Total impact on profit / (loss) after tax (8.5) (288.6) (297.1) (0.5) 16.3 15.8

(i) Business to be closed / closed businesses: comprises the operating activities of PC City Spain whereby its closure was announced on 14 April 2011 and Markantalo and PC City Sweden which were closed on 10 May 2009 and 20 May 2009, respectively. (ii) Net restructuring charges - strategic reorganisation:

2010/11 2009/10 £million £million Asset impairments (1.6) (3.3) Property charges (7.4) (2.3) Other charges (8.1) - (17.1) (5.6)

Net restructuring charges relate predominantly to the renewal and transformation of the UK & Ireland business which has been focused mainly on the reformatting and re-organisation of the UK & Ireland store portfolio and the reorganisation of the service offering. Asset impairments relate to intangible assets and items of property, plant & equipment which are to be eliminated from the business over a shorter period than their current useful expected lives and arise from restructuring initiatives which commenced in 2007/08. Such impairments comprise incremental accelerated depreciation charges associated with the economic useful life of these assets being shortened. Property charges comprised onerous lease costs and charges related to vacating properties. Other charges predominantly comprise employee severance.

(iii) Net business impairment charges:

Goodwill Other assets Property Other impairment impairment charges charges Total £million £milion £million £million £million Business to be closed (15.1) (31.8) (6.1) (17.6) (70.6) PIXmania (106.3) - - - (106.3) Greek business (53.2) - - - (53.2) Associate - (21.5) - - (21.5) (174.6) (53.3) (6.1) (17.6) (251.6)

Page 26 of 36

Notes to the Financial Information

3 Non-underlying items continued

Business to be closed relates to PC City Spain following the announcement of the closure of the store operations of this business and comprises the full impairment of goodwill as well as other asset impairments which include other intangible assets, property, plant & equipment and inventory. Property charges comprise onerous lease costs and charges related to vacating properties. Other charges relate predominantly to employee severance. PIXmania: Weakness in the Southern European economies, investment in developing new web platforms and changes in the internet retailing market have caused profit performance to be behind that envisaged at the time of the acquistion of the business and this has therefore led to an impairment to the goodwill being charged. Greek business: Following an extended period of economic difficulty and the expectation that a full recovery will be prolonged, an impairment to the goodwill has been charged. Associate: Relates to a long period of decline in the results of F-Group leading to the conclusion that the carrying value of the investment (which incorporates prior year dividends received) is impaired.

(iv) The change in pension benefits in 2009/10 arose from the closure to future accrual of the defined benefit section of the UK pension scheme which occurred on 30 April 2010. (v) Other items comprise the following:

2010/11 2009/10 £million £million Impairment of other intangibles work in progress (14.9) - Exceptional supplier balance write offs (12.0) - Credits in respect of prior restructurings 2.0 - (24.9) -

Write off of other intangibles work in progress relates to capitalised system costs in the UK from 2008 following the decision to defer the project in order to focus on existing process improvements. This has caused the conclusion that the as yet unamortised work in progress is impaired. The exceptional supplier balance write offs relate to supplier receivables in PIXmania, dating back to 2008/09 and prior years. This write off has arisen due to the culmination of a reconciliation process following the implementation of new systems highlighting the extent of the receivables outstanding and a detailed review of the Group’s ability to recover these balances. Owing to historical nature of the origin of the amounts, coupled with their only recent quantification, the write off has been treated as a non-underlying item. Credits relate mainly to closed businesses and represent cash recoveries from third parties which due to their contingent nature had not previously been recognised. (vi) Net fair value remeasurement gains and losses on revaluation of financial instruments: Items excluded from underlying finance income and expense represent the gains and losses arising from the revaluation of derivative financial instruments under methodologies stipulated by IAS 39 compared with those on an accruals basis (the basis upon which all other items in the financial statements are prepared). Such a treatment is a form of revaluation gain or loss created by an assumption that the derivatives will be settled before their maturity. Such gains and losses are unrealised and in the directors’ view also conflict with both the commercial reasons for entering into such arrangements as well as Group Treasury policy whereby early settlement in the majority of cases would amount to speculative use of derivatives. (vii) On 12 May 2010, the Group signed a new £360 million Revolving Credit Facility (the £360 million Facility) which came into effect on 9 July 2010 when the Group’s pre-existing £400 million Sterling Committed Facility (the £400 million Facility) was cancelled. This cancellation triggered the acceleration of the amortisation of fees from the £400 million Facility which would otherwise have been charged evenly over the period to the pre-existing facility’s maturity in October 2011. (viii) On 23 July 2010, the Group conditionally accepted tenders to repurchase £140 million in nominal amount of its £300 million 6.125% Guaranteed Bonds due November 2012 (the 2012 Bonds), subject to the successful completion of appropriate financing to fund the repurchase. This repurchase was financed by a new issue of £150 million 8.75% Guaranteed Notes due 3 August 2015 and for which proceeds were received on 30 July 2010. As a result of the repurchase, charges relating to the acceleration of the amortisation of fees from the 2012 Bonds which would otherwise have been charged evenly over the period to the 2012 Bonds’ maturity in November 2012 has occurred together with a redemption premium. These have been more than offset by gains arising on the notional cancellation of interest rate swaps which were in place on the portion of the 2012 Bonds which have now been redeemed.

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Notes to the Financial Information 4 Net finance costs 2010/11 2009/10 Note £million £million Bank and other interest receivable 14.2 20.6 Expected return on pension scheme assets 44.7 37.6 Fair value remeasurement gains on financial instruments * 2.3 1.1 2012 Bond redemption gains * 10.2 - Finance income 71.4 59.3

6.125% Guaranteed Bonds 2012 interest and related charges (12.0) (18.3) 8.75% Guaranteed Notes 2015 interest and related charges (9.8) - Bank loans, overdrafts and other interest payable: Non-underlying: business to be closed * (0.8) (0.4) Underlying (22.0) (29.5) Finance lease interest payable (7.1) (7.1) Interest on pension scheme liabilities (50.3) (45.6) Fair value remeasurement losses on financial instruments * (5.1) (1.9) Accelerated amortisation of facility fees * (7.8) - 2012 Bond redemption costs * (2.4) - Finance costs (117.3) (102.8)

Total net finance costs – continuing operations (45.9) (43.5)

Underlying total net finance costs – continuing operations (i) (42.3) (42.3 )

(i) Underlying total net finance costs exclude items marked *. See note 3 for a description of such items. Net finance costs for closed businesses comprise interest on bank loans and overdrafts.

5 Tax (a) Income tax expense 2010/11 2009/10 £million £million Current tax UK corporation tax at 27.83%† - (2009/10 28%) 0.1 0.4 Double tax relief (0.1) (0.4) - - Overseas taxation - underlying 22.7 25.0 Adjustment in respect of earlier periods: UK corporation tax - underlying - (1.8) Overseas taxation - underlying (0.2) 1.3 22.5 24.5 Deferred tax Current period - underlying 18.9 18.0 - non-underlying: business to be closed / closed businesses * - (0.1) - non-underlying items: other * (12.3) 6.1 Adjustment in respect of earlier periods: UK corporation tax - underlying (2.0) (6.0) Overseas taxation - underlying (8.0) 4.2 (3.4) 22.2

Income tax expense – continuing operations 19.1 46.7

Underlying income tax expense – continuing operations 31.4 40.7

Underlying income tax expense excludes those items marked *.

† The UK corporation tax rate for the period was 28% for the period up to 31 March 2011 and 26% thereafter.

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Notes to the Financial Information

6 Earnings per share 2010/11 2009/10 £million £million Basic and diluted earnings Total (continuing and discontinued operations) (239.0) 59.8 Discontinued operations - loss after tax 2.1 8.7 Continuing operations (236.9) 68.5

Adjustments Business to be closed / closed businesses 8.5 0.6 Amortisation of acquired intangibles 4.5 4.6 Net restructuring charges 17.1 5.6 Business impairment charges 251.6 - Other Items 24.9 - Change in pension benefits - (33.4) Net fair value remeasurements of financial instruments 2.8 0.8 Accelerated amortisation of facility fees 7.8 - 2012 Bond redemption gains (7.8) - 309.4 (21.8) Attributable to non-controlling interests (3.6) - Attributable to equity shareholders of the parent company 305.8 (21.8)

Tax on adjustments (12.3) 6.0 Attributable to non-controlling interests 2.2 - Tax on adjustments attributable to equity shareholders of the parent company (10.1) 6.0

Total adjustments (net of taxation) 295.7 (15.8)

Underlying basic and diluted earnings 58.8 52.7

Million Million Basic weighted average number of shares 3,606.6 3,495.6 Employee share option and ownership schemes 12.3 23.9 Diluted weighted average number of shares 3,618.9 3,519.5

Pence Pence Basic earnings per share Total (continuing and discontinued operations) (6.6) 1.7 Discontinued operations - 0.3 Continuing operations (6.6) 2.0 Adjustments (net of taxation) 8.2 (0.5) Underlying basic earnings per share 1.6 1.5

Diluted earnings per share Total (continuing and discontinued operations) (6.6) 1.7 Discontinued operations - 0.2 Continuing operations (6.6) 1.9 Adjustments (net of taxation) 8.2 (0.4) Underlying diluted earnings per share 1.6 1.5

The weighted average number of shares used in the calculation for earnings per share information for the periods prior to the rights issue, which completed on 9 June 2009, has been multiplied by an adjustment factor to reflect the bonus element in the shares issued under the terms of the rights issue. The adjustment factor used was 1.2138. Basic and diluted earnings per share are based on the profit for the period attributable to equity shareholders. Underlying earnings per share are presented in order to show the underlying performance of the Group. Adjustments used to determine underlying earnings are described further in note 3.

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Notes to the Financial Information

7 Notes to the cash flow statement (a) Reconciliation of operating profit to net cash inflow from operating activities

2010/11 2009/10 £million £million Operating (loss) / profit (180.3) 153.2 Operating loss – discontinued operations 2.1 3.0 Operating (loss) / profit – continuing operations (178.2) 156.2 Amortisation of acquired intangibles 4.5 4.6 Amortisation of other intangibles 22.7 25.8 Depreciation 116.7 102.8 Share-based payment charge 8.0 5.7 Share of post-tax results of associates 0.4 (1.6) Loss on disposal of property, plant & equipment 13.6 19.6 Increase in non-underlying provisions 39.2 2.3 Impairment and accelerated depreciation / amortisation 238.8 3.3 Other non-underlying impairments and charges 17.6 - Change in pension benefits - (33.4) Utilisation of non-underlying provisions (30.9) (54.7) Operating cash flows before movements in working capital 252.4 230.6

Movements in working capital: Decrease in inventories 16.2 14.1 Decrease in trade and other receivables 9.1 117.6 Increase / (decrease) in trade and other payables 15.1 (92.0) 40.4 39.7

Cash generated from operations – continuing operations 292.8 270.3

(b) Analysis of net debt Other non-cash Currency 30 April 2 May 2010 Cash flow movements translation 2011 £million £million £million £million £million Cash and cash equivalents † 295.7 37.3 - 1.7 334.7 Bank overdrafts (4.9) (0.7) - - (5.6) 290.8 36.6 - 1.7 329.1

Short term investments 8.5 1.8 0.2 - 10.5

Borrowings due within one year (98.5) (31.8) - 0.3 (130.0) Borrowings due after more than one year (321.4) (5.4) 11.5 - (315.3) Obligations under finance leases (100.0) 1.5 (2.4) (0.2) (101.1) (519.9) (35.7) 9.1 0.1 (546.4) Net debt (220.6) 2.7 9.3 1.8 (206.8)

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Notes to the Financial Information 7 Notes to the cash flow statement - continued (b) Analysis of net debt - continued Cash Other non-cash Currency 3 May 2009 flow movements translation 1 May 2010 £million £million £million £million £million Cash and cash equivalents † 192.6 102.8 - 0.3 295.7 Bank overdrafts (4.8) 0.3 - (0.4) (4.9) 187.8 103.1 - (0.1) 290.8

Short term investments 9.0 (1.3) 0.8 - 8.5

Borrowings due within one year (250.1) 151.6 - - (98.5) Borrowings due after more than one year (322.5) - 1.1 - (321.4) Obligations under finance leases (101.7) 1.7 - - (100.0) (674.3) 153.3 1.1 - (519.9) Net debt (477.5) 255.1 1.9 (0.1) (220.6)

Restricted funds, which predominantly comprise funds held under trust to fund potential customer support agreement liabilities were £120.3 million (2010 £78.9 million). Net debt excluding restricted funds totalled £327.1 million (2010 £299.5 million).

† Cash and cash equivalents are presented as a single class of assets on the face of the consolidated balance sheet. For the purposes of the consolidated cash flow, cash and cash equivalents comprise those amounts presented on the consolidated balance sheet as cash and cash equivalents, less bank overdrafts (which are disclosed separately on the consolidated balance sheet).

8 Related party transactions Transactions between Group undertakings, which are related parties, have been eliminated on consolidation and accordingly are not disclosed.

The Group via its registered charitable trust, the DSG International Foundation (the Foundation) made charitable donations of £5,000 (2009/10 £12,000). The Company made no charitable donations to the Foundation during the period (2009/10 £nil). The Company is the sole benefactor of the Foundation, the principal beneficiaries of which are concerned with education, community affairs, health and disabilities, heritage and the environment.

Steve Rosenblum and Jean-Emile Rosenblum, members of the Executive Committee, together with close family members and companies controlled by them, own 21.9% of PIXmania, a company controlled by the Group. In connection with their management roles with respect to PIXmania, Steve Rosenblum and Jean-Emile Rosenblum received management fees of €260,000 (£221,000) (2009/10 €258,000 (£228,000)). Steve Rosenblum and Jean-Emile Rosenblum together hold call options over additional shares in PIXmania representing 16.8% of the share capital held by the Group. The options can be exercised from 30 April 2011 and are subject to certain conditions including the achievement of targets related to earnings and certain capitalisation values of the PIXmania business. In addition to the call options, Steve Rosenblum and Jean-Emile Rosenblum have certain exit rights exercisable between July 2011 and July 2013 in relation to their holdings in PIXmania.

Steve Rosenblum and Jean-Emile Rosenblum own a building which is occupied and leased by PIXmania. During 2010/11 total rental payments of €653,000 (£553,000) (2009/10 €645,000 (£570,000)) were charged in relation to this property.

9 Post balance sheet event On 1 June 2011, the Group announced that it had exchanged contracts with a syndicate of investors advised by Ness, Risan and Partners AS for the sale and leaseback of the Group’s Nordic distribution centre in Jönköping, Sweden. The sale and leaseback is expected to complete in June 2011 and the total cash consideration receivable on completion is expected to be approximately SEK600 million (£59 million). The estimated book value of the property as at 30 May 2011 was SEK214.5 million (approximately £21 million). The proceeds of the sale will be used for general corporate purposes, including offsetting drawings on the Group’s New Facility and for repayment of the 2012 Bonds.

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Responsibility Statement

The 2010/11 Annual Report and Accounts which will be issued on 18 July 2011, contains a responsibility statement in compliance with DTR 4.1.12 of the Listing Rules which states that as at the date of approval of the Annual Report and Accounts on 23 June 2011, the directors confirm to the best of their knowledge: ■ the Group and unconsolidated Company financial statements give a true and fair view of the assets, liabilities, financial position and profit / (loss) of the Group and Company, respectively; and ■ the business and financial review contained in the Annual Report and Accounts includes a fair review of the development and performance of the business and the position of the Group together with a description of the principal risks and uncertainties they face. At the date of this statement, the directors are those listed in the Group’s 2009/10 Annual Report and Accounts with the exception of the appointment on 27 September 2010 of Dharmash Mistry.

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Risks to Achieving the Group’s Objectives

Risk management is an integral part of business management and it’s something that Dixons takes seriously. The Group has continued to develop its approach during the past year and has taken steps to integrate risk management into business decision making. In addition, the Board and Executive have invested time to identify and assess the key risks facing the business. The principal risks and uncertainties are set out below along with an illustration of what is being done to mitigate them:

1. Macro-Economic Risks

Risk Examples of Mitigating Action Economic environment Risk that the economic downturn is prolonged ■ Ongoing monitoring by Finance and the Executive Committee, including review through 2011, particularly in the UK. of portfolio of the businesses ■ Renewal and Transformation Plan to improve our business performance irrespective of macro economic factors ■ Strategy and business planning which takes into account varying economic scenarios

Market specific characteristics

Seasonality - A substantial proportion of ■ Financial planning takes into account expected peaks and troughs during the revenue and operating profit is generated year and the business is run accordingly. during the third financial quarter, which ■ The proportion of services related business, which offers a regular stream of includes the Christmas and New Year season. income over the course of the year. Adverse trading in this relatively short period is likely to impact significantly the full year’s results.

Price deflation - Price deflation has been a ■ Effective launches of new technology as it becomes available to the market common feature across most electrical goods ■ Growth of services related business to increase the number and value of non- categories for a number of years, primarily product sales driven by technological advances and ■ Improve gross profit uplifts in transformed stores improved production efficiencies. ■ Control of stock and strong management over clearance and exit routes

2. Competitor and Market Place Risks

Risk Examples of Mitigating Action Competition Risk that competitors reduce the Group’s ■ Renewal and Transformation plan is improving our stores, cost structure and market share and/or drive down margins in service proposition specific markets ■ Continuing development of strong online brands, notably PIXmania and Dixons.co.uk ■ Ensuring our prices offer good value, including a customer price index ■ Continuing to take money out of our cost base, and leveraging group-wide benefits where opportunities arise ■ Building ever stronger relationships with suppliers

Changing technology/consumer preferences ■ Strong supplier relationships (e.g. UK launch partner of Apple iPad) Risk that we fail to capitalise on new ■ Delivery of Customer Plan to respond to identified changes in technology technology or emerging trends to maximise ■ Store transformations to take into account emerging trends in store layouts revenues ■ Exciting product launches to make our stores the destination for the latest technology (e.g. 3D TVs)

■ Understanding our customer and monitoring our level of service through Our retail brands fail to meet the expectations mystery shopping, customer exit surveys and analysis of purchase data of our customers ■ Continued focus on ensuring we have an excellent range across all price points, including own label brands ■ Renewal and Transformation plan improving the quality and location of our stores across the Group ■ ‘FIVES’ customer service training for all colleagues and product workshops to improve product knowledge ■ Implementation of the Customer Plan in the UK to improve the customer journey – a clear and focused plan at the heart of the business ■ Innovations in service propositions and improved customer service levels across the Group ■ Clearer and easier navigation of our e-commerce websites

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Risks to Achieving the Group’s Objectives

Risk Examples of Mitigating Action Legislative, contractual, reputational and regulatory risks Risk that as a result of a change in legislation, ■ In-house legal teams communicate on a regular and frequent basis and legal reports a decision by a regulatory authority, or are submitted to the Board exposure in our compliance activities, the ■ Launch of Group Ethical Conduct policy, supported by annual declaration of Group’s business is impacted by reputational compliance by colleagues or financial damage or a need to adapt the ■ Monitoring changes in legislation / regulation Group’s business and processes (e.g. ■ Corporate Responsibility Committee meets regularly to discuss reputational and competition, consumer rights, intellectual regulatory risks property, contractual obligations, health & ■ Quality checks and factory audits for own-branded product assembly safety or compromise of customer ■ Compliance Committee approves activity that may impact the terms of Group credit confidentiality data) facilities ■ Contact with regulatory authorities, such as in relation to the OFT’s market study into extended warranties

3. Operational Risks

Risk Examples of Mitigating Action Employees Risk that we fail to attract, develop and retain ■ Group-wide standardised performance management the necessary talent for our business ■ Talent reviews across the business ■ Store structures which provide a clear career path for all employees ■ Improved quality of training courses and development programmes with specialist focus on service, product, commercial and technical ■ Bonus plans, which include a component relating to individual performance and business performance ■ Reward strategy aligned to retain best talent

Systems Failure and Damage to property & consequential business interruption ■ Contingency plans developed that are tested regularly Risk that a key system becomes ■ Evaluation, planning and implementation analysis carried out before updating unavailable for a period of time or introducing new systems that have an impact on critical functions ■ Ongoing systems implementation in key areas of the business

■ Disaster recovery plans are in place The Group’s ability to distribute merchandise ■ Insurance is purchased to mitigate against business interruption to its stores and to sell and distribute ■ Preventative measures are constantly being updated to reduce the likelihood merchandise to its customers is reliant on its of an incident operational infrastructure, particularly the efficient functioning of its distribution centres and distribution network

Project delivery Risk that a project delivering an element of ■ The portfolio plan is clearly defined and is managed and governed through our Renewal and Transformation plan does regular processes and meetings not deliver its anticipated benefits ■ Post-investment analysis and performance tracking put in place including financial and customer measures ■ Projects under the Customer Plan are aligned to our UK budget

Internet Risk we fail to build a successful internet ■ Execution of online strategy business, both in its own right and as part of ■ Investment in site functionality and customer appeal a multi-channel retailing model ■ Roll-out of our e-Merchant platform across our businesses ■ Successful marketing campaigns to raise profile of online brands

4. Financial

Risk Examples of Mitigating Action Changes in supplier credit Risk that credit insurance is no longer ■ Ongoing engagement with suppliers and credit insurers available to electrical and computing suppliers ■ Improvements in stock turn ■ Innovations in and close scrutiny of working capital together with regular monitoring and review

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Risks to Achieving the Group’s Objectives

Risk Examples of Mitigating Action Finance & Treasury Risk that the Group’s exposure to exchange ■ Detailed group hedging policies reviewed through a separate Tax and Treasury rate, interest rate, liquidity and credit risks Committee have an adverse or unexpected impact on ■ Balance sheet management and reviews results, funding requirements or purchasing ■ Strong cash management ability ■ Regular monitoring of receivables balances ■ Strong pre and post investment appraisal processes ■ Central control of treasury activity

Pension Risk & Policies Risk that the pension funding policy fails to ■ Deficit reduction activities in place. react to or address deficits, which may arise ■ Defined benefit section of UK scheme closed to future accrual. on the Group’s pension schemes

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Retail Store Data

Number of stores Selling space ‘000 sq ft 30 April 2011 1 May 2010 30 April 2011 1 May 2010

UK & Ireland UK 612 654 7,865 7,582 Ireland 30 29 322 307 Total UK & Ireland 642 683 8,187 7,889

Nordics Norway 131 121 1,644 1,506 Sweden 70 69 1,289 1,299 Finland 39 39 616 616 Denmark 32 28 509 481 Iceland 4 3 38 32 Islands 9 9 127 127 Total Nordics † 285 269 4,223 4,061

Other International Italy † 160 158 2,263 2,314 Greece † 107 103 1,107 1,147 Turkey † 19 11 529 367 Southern Europe 286 272 3,899 3,828

Czech Republic† 19 16 473 426 Slovakia 3 3 57 57 Central Europe 22 19 530 483

Total Other International 308 291 4,429 4,311

Pure play e-commerce 17 16 24 23

Continuing Retail 1,252 1,259 16,863 16,261

Business to be closed (Spain) 34 32 414 408

Total Retail 1,269 1,291 17,277 16,669

† Includes franchise stores.

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