Directors’ report

The directors present their report and the audited financial statements for the 52 weeks ended 1 March 2008 ("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.

There were no material disposals during the period. In October 2007 a contract was signed for the purchase of 27 leasehold properties from Focus DIY, at a purchase price of £40m.

The Group’s statement on corporate governance is incorporated by reference into this directors’ report. Details of charitable donations, employee involvement and policy on the employment of disabled persons are set out in the review of the business and are incorporated by reference into this directors' report.

Profit and dividends

The Group’s consolidated income statement shows a profit for the period of £294.6m. The directors recommend the payment of a final dividend of 10.0p per ordinary share to be paid on 23 July 2008 to shareholders on the register at the close of business on 23 May 2008. An interim dividend of 4.7p per ordinary share was paid on 23 January 2008‚ 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.

The directors retiring at the 2008 Annual General Meeting are Terry Duddy and John Coombe, who, each being eligible, offer themselves for re-election.

During the period, the Group maintained liability insurance and third–party 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.