Marks and Spencer 1999 Annual Report Download - page 20

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REPO RT O F THE D IRECTO RS
The directors have pleasure in submitting their report and the financial
statements of the Company and its subsidiaries for the year ended
31 March 2000.
PRINCIPAL ACTIVITIES
The principal activities of the Group are Retailing and Financial Services.
Retailing consists of the Group’s retail activities under the
Marks & Spencer, Brooks Brothers and Kings Super Markets brand
names and includes the activity of M&S D irect.
Financial Services consists of the operations of the Group’s Retail
Financial Services companies, which provide account cards, personal
loans, unit trust management, life assurance and pensions.The Group’s
Captive insurance company is also included in this segment as a
significant part of its business is generated from the provision of
related insurance services.
REVIEW OF ACTIVITIES AN D FUTURE PERFORMANCE
A review of the Group’s activities and of the future development of the
Group is contained in the Chairman’s Statement and the Chief Executive’s
Review within the Annual Review and Summary Financial Statement.
POST BALANCE SHEET EVENTS
Since the year end, the Group has announced the closure of
its Canadian operations and the rationalisation of its UK store
management. See note 31 for further details.
PROFIT AND DIVIDENDS
The profit for the financial year, after taxation and minority interests,
amounts to £372.1m. The directors have declared dividends as follows:
£m
O rdinary shares
Interim paid, • p per share (last year 3.7p)
Proposed final, • p per share (last year 10.7p)
Total ordinary dividends, • p per share (last year 14.4p)
The final dividend will be paid on 30 July 2000 to shareholders whose
names are on the Register of Members at the close of business on
• May 2000.
CHANGES IN SHARE CAPITAL
D uring the year ended 31 March 2000, • ordinary shares in the
Company were issued as follows:
A• under the terms of the 1984 Senior Staff Share O ption Scheme
at prices between • p and • p each.
B• under the terms of the 1987 Senior Staff Share O ption Scheme
at prices between • p and • p.
C• under the terms of the United Kingdom Employees’ Save As You
Earn Share O ption Scheme at prices between • p and • p.
SUBSTANTIAL SHAREHOLDINGS
As at 10 May 1999, the Company had been notified of the following
interests in accordance with sections 198 to 208 of the Companies
Act 1985:
(i) The Prudential Corporation and its subsidiaries were interested in
a total of 124,206,359 ordinary shares (representing approximately
4.33% of the Company’s issued ordinary share capital);and
(ii) Brandes Investment Partners, L.P. were interested in a total of
89,814,905 ordinary shares (representing approximately 3.13%
of the Company’s issued ordinary share capital).
Save as disclosed above, as at 10 May 1999, the Company had
not received notification that any other person was interested in
3% or more of the Company’s issued ordinary share capital.
CREDITOR PAYMENT POLICY
The Company’s policy concerning the payment of its trade creditors
is as follows:
In the UK, General Merchandise is automatically paid for 11
working days from the end of the week of delivery. Foods are paid for
13 working days from the end of the week of delivery (based on the
timely receipt of an accurate invoice).
UKdistribution suppliers are paid monthly, for costs incurred in
that month, based on estimated annual contracts, and payments are
adjusted quarterly to reflect any variations to estimate.
Trade creditor days of the Company for the year ended
31 March 2000 were 12.9 days (9.2 working days), based on the
ratio of Company trade creditors at the end of the year to the
amounts invoiced during the year by trade creditors.
Suppliers to overseas subsidiaries (for merchandise and distribution)
and foreign merchandise suppliers of the UK Company are paid
on average within 30 days of the receipt of invoice or delivery
documentation.
For all trade creditors, it is the Company’s policy to:
– Agree the terms of payment at the start of business with
that supplier,
– Ensure that suppliers are aware of the terms of payment,
– Pay in accordance with its contractual and other legal obligations.
UNITED KINGDOM EMPLOYEES’
PROFIT SHARING SCHEMES
The amount of profit which will be allocated this year, in the form
of ordinary shares in the Company, has been fixed at £• m
(last year £14.8m), representing • % (last year 3%) of the earnings
of • (last year 43,550) eligible employees..
These shares are now purchased in the market:• ordinary shares
were purchased by the Profit Sharing Trustees in respect of the
1998/99 allocation.
ANNUAL REPORT AND FIN ANCIAL STATEMENTS 1999