Marks and Spencer 2009 Annual Report Download - page 76

72 Marks and Spencer Group plc Annual report and financial statements 2009 Directors’ report
Business review
The Companies Act 2006 requires the Company to set out in the
Directors’ report a fair review of the business of the Group during
the financial year ended 28 March 2009 including an analysis of
the position of the Group at the end of the financial year, and a
description of the principal risks and uncertainties facing the Group
(known as a ‘Business review’). The purpose of the Business review
is to enable shareholders to assess how the directors have
performed their duty under section 172 of the Companies Act 2006.
The information that fulfils the Business review requirements
can be found in the following sections of this report.
– Chairman’s overview on pages 1 to 11
– Governance overview on pages 12 to 13
– Managing through the recession on pages 14 to 16
– Performance & KPIs on pages 18 to 19
– Brand & Marketplace on pages 20 to 23
– Operating & Financial review on pages 26 to 49
– Principal risks and uncertainties on pages 56 to 57
– Financial Risk Management on pages 102 to 106
– Social, environmental and ethical matters on pages 42 to 47 and
within the How We Do Business Report available on our website
at marksandspencer.com/annualreport09
Pages 1 to 76 inclusive (together with the sections of the Annual
Report incorporated by reference) comprise a Directors’ report
that has been drawn up and presented in accordance with and
in reliance upon applicable English company law and the liabilities
of the directors in connection with that report shall be subject to
the limitations and restrictions provided by such law.
An index to other Directors’ report disclosures is given on page 76.
Principal activities
Marks and Spencer Group plc is the holding company of the
Marks & Spencer Group of companies (the ‘Group’). We are
‘Your M&S’, having grown up from the Penny Bazaar stall to
become the UK’s leading retailer of clothing, food and home
products. As well as having more than 21 million UK customers,
we are also an expanding international force, now in 40 territories.
A team of 78,000 people and 2,000 suppliers form the bedrock of
our business, ensuring our brand will continue to be synonymous
with Quality, Value, Service, Innovation and Trust.
Profit and dividends
The profit for the financial year, after taxation, amounts to
£508.0m (last year £821.7m). The directors have declared dividends
as follows:
Ordinary shares £m
Paid interim dividend of 8.3p per share
(last year 8.3p per share) 130.5
Proposed final dividend of 9.5p per share
(last year 14.2p per share) 145.9
Total ordinary dividend, 17.8p per share
(last year 22.5p per share) 276.4
The final ordinary dividend will be paid on 10 July 2009 to
shareholders whose names are on the Register of Members
at the close of business on 29 May 2009.
Share capital
The Company’s authorised and issued ordinary share capital as at
28 March 2009 comprised a single class of ordinary shares. Details
of movements in the issued share capital can be found in note 25
to the financial statements on page 107. Each share carries the right
to one vote at general meetings of the Company. During the period,
2,217,763 ordinary shares in the Company were issued as follows:
– 142,559 shares under the terms of the 2002 Executive Share
Option Scheme at prices between 270p and 353p; and
– 2,075,204 shares under the terms of the United Kingdom
Employees’ Save As You Earn Share Option Scheme at prices
between 156p and 559p.
Restrictions on transfer of securities
There are no specific restrictions on the transfer of securities in
the Company, which is governed by the Articles and prevailing
legislation, nor is the Company aware of any agreements between
holders of securities that may result in restrictions on the transfer
of securities or that may result in restrictions on voting rights.
Variation of rights
Subject to applicable statutes the Companies Act 1985 and 2006
(in this section the ‘Companies Acts’), rights attached to any class
of shares may be varied with the written consent of the holders of
at least three quarters in nominal value of the issued shares of that
class, or by a special resolution passed at a separate general
meeting of the shareholders.
Rights and obligations attaching to shares
Subject to the provisions of the Companies Acts, any resolution
passed by the Company under the Companies Acts and other
shareholders’ rights, shares may be issued with such rights and
restrictions as the Company may by ordinary resolution decide,
or (if there is no such resolution or so far as it does not make specific
provision) as the Board (as defined in the Articles) may decide.
Subject to the Articles, the Companies Acts and other shareholders’
rights, unissued shares are at the disposal of the Board.
Powers in relation to the Company issuing or buying back
its own shares
The Company was authorised by shareholders, at the July 2007
AGM, to purchase in the market up to 170 million shares,
representing 10% of its issued share capital, as permitted under
the Company’s Articles. The Company engages in share buy backs
to create value for its shareholders, when cash flow permits and
there is not an immediate alternative investment use for the funds.
The Company announced on 6 November 2007 that it would
begin a share buy back programme to purchase up to 10% of the
Company’s issued share capital. The Company continued to buy
back shares until 19 June 2008, buying back a total of 136,643,168
of the ordinary shares in issue, with a nominal value of 25p each.
Of this total amount, 10,901,267 shares were bought back and
cancelled in the 2008/09 financial year representing 0.64% of the
Company’s issued capital at 10 July 2007, the date of the 2007
AGM. No shares have been bought back under the authority granted
at the 2008 AGM. An up-to-date summary of all share buy back
transactions is available on our website. This standard authority is
renewable annually; the directors will seek to renew this authority
at the 2009 AGM. It is the Company’s present intention to cancel
any shares it buys back, rather than hold them in treasury.
Other disclosures