Marks and Spencer 2010 Annual Report Download

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Annual report and financial statements 2010
marksandspencer.com
Quality, Value, Service, Innovation and Trust

Table of contents

  • Page 1
    Annual report and financial statements 2010 Quality, Value, Service, Innovation and Trust

  • Page 2
    ... Home Food How we sell Multi-channel Where we sell International Efficient delivery IT, Logistics & Supply Chain How we do business Plan A Our people Being an employer of choice Financial review p16 28 32 34 36 40 42 Governance 44 46 58 72 77 Overview and Board of Directors Governance report...

  • Page 3
    ... Marks & Spencer is one of the UK's leading retailers with over 21 million customers visiting our stores every week. We sell high quality, great value clothing and home products and outstanding quality food. We source our products responsibly from 2,000 suppliers around the world. Over 76,000 people...

  • Page 4
    ... (52 weeks) Adjusted earnings per share 5.5p+9.5p Total dividend 2009/10 =15.0p 33.0p +17.9% (53 weeks) 30.0p +7.1% (52 weeks) For all our full and detailed key performance indicators See p10 10% off Register for online communications and get your 10% off voucher for marksandspencer.com. See...

  • Page 5
    ... sight of our long-term plan or our core values. We remain committed to building a world-class retailer through increasing the pace of change and driving operational excellence in the business; building our multi-channel capability; growing our international portfolio; and, as the economy returns to...

  • Page 6
    ... an organisation, such as a school or a local community group. Your Green Idea invited people to share their ideas for new, 'green actions' that M&S could implement under Plan A, so that all of our 21 million customers can get involved in helping the environment. Despite the economic challenges, we...

  • Page 7
    ....com/annualreport2010 03 Overview Performance & KPIs Brand & Marketplace  p14 p20 Operating & financial review p26 Governance Financial statements p50 p78 Well Suited Over the last 12 months we've strengthened our share of the menswear market to 10.4% by value. We've sharpened our...

  • Page 8
    ... this year we launched 'Shop Your Way', a new ordering service that has been rolled-out to over 300 stores, allowing customers to place orders either in stores, online or over the phone, for delivery to either a nominated address or free of charge to their nearest store. Our International sales were...

  • Page 9
    ... up to date with key trends and making our prices much more competitive. We now offer stylish, good value and great quality products for all our customers - regardless of their age, lifestyle or budget. Six years ago, for example, only 12% of our total clothing offer was at our opening price points...

  • Page 10
    06 Marks and Spencer Group plc Annual report and financial statements 2010 Directors' report Overview Chairman's overview continued 6 10 3 4 8 9 5 7 1 2 MANAGEMENT BOARD 1. Sir Stuart Rose Chairman* 2. Marc Bolland Chief Executive** 3. Ian Dyson Group Finance and Operations Director*** 4. ...

  • Page 11
    ...com/annualreport2010 07 Overview Performance & KPIs Brand & Marketplace  p14 p20 Operating & Financial review p26 Governance Financial statements p50 p78 Introduction 12 11 Marks & Spencer is a great brand and I am very proud to have the opportunity to lead a company with such a unique...

  • Page 12
    ..., our International business delivered a strong performance, with sales up 5.7%. GM has seen market share growth in both value and volume, with sales up 4.0%. Continued investment in our margins has helped Food return to positive like-for-like sales of +0.3%. M&S Direct has delivered another good...

  • Page 13
    ... Brand & Marketplace p01 p20 Operating & Financial review p26 Governance Financial statements p50 p78 SERVICE Above: Say it with ï¬,owers On Valentines Day this year we delivered just under 30,000 bouquets of ï¬,owers to customers up and down the UK. QUALITY Above: Store design We have now...

  • Page 14
    10 Marks and Spencer Group plc Annual report and financial statements 2010 Directors' report Page Title overview Performance Page Key performance Title continued indicators Financial performance These financial performance indicators are based on the statutory 53 week period ended 3 April 2010....

  • Page 15
    ...before property disposals and exceptional items. How we sell Building our Multi-channel business M&S Direct sales Analysis: We continue to invest in our Direct business as part of our commitment to become a multi-channel retailer and remain firmly on track to reach our £500m target next year. See...

  • Page 16
    12 Marks and Spencer Group plc Annual report and financial statements 2010 Directors' report Our brand by Steven Sharp Steven Sharp Executive Director, Marketing Our marketing campaigns remain a visible - and important way - of communicating with our customers. Over the last 12 months we have ...

  • Page 17
    ...Overview Performance & KPIs Brand & marketplace Operating & financial review p26 Governance Financial statements p01 p14 p50 p78 New faces This year, Twiggy was joined by a new line-up of celebrity faces - popstar VV Brown, featured on page 17, joins X-Factor judge Dannii Minogue, Capital FM...

  • Page 18
    ... clothing market return to growth this year. Price remains one of the main drivers for purchases, resulting in the continued growth of the value market. However, after a year of economising consumers have moved beyond a wardrobe made up of cheaper staples and started to invest in quality versatile...

  • Page 19
    ... newest products, mainly from our Cook! range. See page 24 for more detail. FOOD MARKET TRENDS Over the year price inï¬,ation has worked its way out of the market to the point of deï¬,ation, with falling food prices masking the fact UK customers were buying more. Deals continued to be a key driver...

  • Page 20
    ... Group plc Annual report and financial statements 2010 Directors' report What we sell Womenswear Kate Bostock Executive Director, General Merchandising M&S remains the nation's favourite in womenswear and over the last 12 months we've grown our market share to 10.7% by value, up 0.2%, as women...

  • Page 21
    ....com/annualreport2010 17 Overview Performance & KPIs Brand & marketplace Operating & financial review Governance Financial statements p01 p14 p20 p50 p78 Tribal prints Hot off the catwalk tribal and animal prints are a fierce fashion trend for Summer 2010. We've translated this...

  • Page 22
    18 Marks and Spencer Group plc Annual report and financial statements 2010 Directors' report What we sell Womenswear continued VALUE Right: Quick fix Women loved these on trend studded leather ankle boots, a simple solution to bring an outfit right up to date. Autograph A contemporary range,...

  • Page 23
    ... we want to make sure our customers can have the product they want, in the right size, colour and style every time they shop with M&S. As part of our wider Business Foundation Programme, discussed on page 34, we have invested in our stock management systems. This will help us improve how we tailor...

  • Page 24
    20 Marks and Spencer Group plc Annual report and financial statements 2010 Directors' report What we sell Lingerie Lingerie value market share 25.9% +0.7% pts Lingerie volume market share When it comes to lingerie we are the UK's number one choice, with one in four women buying M&S underwear. ...

  • Page 25
    ... we sell Menswear Performance & KPIs Brand & marketplace Operating & financial review Governance Financial statements p50 p78 Menswear value market share 10.4% +0.2% pts Menswear volume market share We remain the market leaders in menswear and this year have grown market share by 0.2% to 10...

  • Page 26
    22 Marks and Spencer Group plc Annual report and financial statements 2010 Directors' report What we sell Kidswear Kidswear value market share 6.1% +0.7% pts Kidswear volume market share It has been another strong year for kidswear and we have grown market share to 6.1% by value, up 0.7% and ...

  • Page 27
    ...nancial review Governance Financial statements p50 p78 Total Home Sales £546.1m* +2.1% includes Beauty, which was not stated as part of the 2008/09 Home sales figure. M&S Home has performed well in a difficult market with sales up 2.1% on last year. During 2009/10 we have improved the way we...

  • Page 28
    ... Marks and Spencer Group plc Annual report and financial statements 2010 Directors' report What we sell Food John Dixon Executive Director, Food Over the last year we have strengthened our position as the leading retailer of fine quality fresh food in the UK. Our Food business has now returned...

  • Page 29
    ... to manage weight sensibly through balanced menu planning the site offers healthy recipe ideas, nutritional advice and practical tools. Find out more at marksandspencer.com/health 25 Overview Performance & KPIs Brand & marketplace Operating & financial review Governance Financial statements p01...

  • Page 30
    ...bars or M&S cafés - the UK's third largest coffee chain. VALUE Last year we invested in margin to improve our prices whilst maintaining or improving the quality of our food. We extended 'Wise Buys' to highlight our great value on every day products with guaranteed M&S quality. There are now around...

  • Page 31
    ... on our improved value position and further developing our promotional offers, to give our customers the best quality and excellent value for money. Over the next two years, operational improvements will ensure we get more of the right products on to our shelves at the right time. By enhancing on...

  • Page 32
    .... Driving a Multi-channel business Customers shop with M&S in many ways. Whether they are shopping in store, at home, in the office or over the phone, our aim is that every customer receives the same consistently high level of service from purchase through to delivery. Online 30 Total square...

  • Page 33
    ... a displacement ventilation system, low energy lighting accompanied by sensors and controls and CO2 food refrigeration. 29 Overview Performance & KPIs Brand & marketplace Operating & financial review Governance p01 p14 p20 p50 p78 Find out more at marksandspencer.com Financial statements

  • Page 34
    30 Marks and Spencer Group plc Annual report and financial statements 2010 Directors' report How we sell Multi-channel continued Launched in February 2009, M&S TV is part of our website and uses video to showcase our latest products and services, using M&S experts to give advice on everything ...

  • Page 35
    ... in remote purchasing, be it via a mobile or on the internet. Our customers trust us to deliver, whichever way they shop with us. INNOVATION Right: Cheshire Oaks At 150,000 sq ft Cheshire Oaks store will be the largest new store built by Marks & Spencer for over 10 years. Due to open in autumn...

  • Page 36
    32 Marks and Spencer Group plc Annual report and financial statements 2010 Directors' report Where we sell International SERVICE Above: Product tailoring In India we sell polo shirts in three times the number of colour variations as we do in the UK, to cater for the local market's taste for ...

  • Page 37
    ... in Hong Kong. The new store offers a work closely with our partner Marinopoulos comprehensive range of chilled products, a Group to keep stocks tight and manage first for M&S in the international market. We the business, to give us more ï¬,exibility in now have 11 stores in the region and plan to...

  • Page 38
    ... Group plc Annual report and financial statements 2010 Directors' report Efficient delivery IT, Logistics & Supply Chain PLAN A - TEAR DROP TRUCKS The fuel used in logistics transport accounts for around 8% of our operational carbon emissions. We've already achieved our 2012 Plan A target...

  • Page 39
    ... 35 Overview Performance & KPIs Brand & marketplace Operating & financial review Governance Financial statements p01 p14 p20 p50 p78 SERVICE Above: On shelf service Staff across our stores are receiving training on the new stock management software, which provides real time data to help us...

  • Page 40
    ... major retailer by 2015. Over the past three years Plan A has helped us improve our environmental performance, develop more sustainable products and services and improve the lives of people in communities where we trade. As well as being the right thing to do, it's also been good for business and...

  • Page 41
    ... & financial review Governance Financial statements p01 p14 p20 p50 p78 Think Green The Your Green Idea judging panel is chaired by Sir Stuart Rose, joined by new CEO, Marc Bolland. The panel also includes the well-known green faces of wildlife TV presenter, Kate Humble; former director of...

  • Page 42
    38 Marks and Spencer Group plc Annual report and financial statements 2010 Directors' report How we do business Plan A continued TRUST & QUALITY Left: From farm to fork Paul Luney is one of our food technologists, specialising in fish. As part of his role he regularly visits our suppliers to ...

  • Page 43
    ... Longer conferences around the world. range, developed in collaboration with the 2009/10 was the sixth year of our Marks Aberdeen University, to help people eat less & Start work experience programme - by feeling full for longer. Healthier food now providing work experience to some 700 makes up 38...

  • Page 44
    40 Marks and Spencer Group plc Annual report and financial statements 2010 Directors' report Our people Being an employer of choice M&S number of employees 76,267 Employee turnover rate 14.0% Percentage of our people who have been with us for over five years 45.5% Percentage of our people ...

  • Page 45
    ... employee views on matters relating to work and employment, leading consultation processes on behalf of stores and head office. Director Breakfasts Informal Q&A sessions for store colleagues with business unit leaders. In-store listening groups Regularly hosted by store managers so any issues...

  • Page 46
    42 Marks and Spencer Group plc Annual report and financial statements 2010 Directors' report Financial review* Summary of results 2009/10 £m (53 wks) 2009/10 £m (52 wks) 2008/09 £m (52 wks) change % (52 wks) Group revenue Operating profit before property disposals Profit before tax and ...

  • Page 47
    ... Operating & financial review Governance Financial statements p01 p14 p20 p50 p78 Net finance costs 52 weeks ended 27 March 2010 £m 28 March 2009 £m Interest payable Interest income Net interest payable Unwinding of discount on partnership liability to the Marks and Spencer UK Pension...

  • Page 48
    ...'s overview trading, key risks and mitigation. Directors also have a duty to take into account the long-term, employees, relationships with suppliers, customers and others, local communities, the environment and how business is conducted. Therefore, the Management Board, operational committees and...

  • Page 49
    ... luxury goods group until 2004. 13 Amanda Mellor Group Secretary and Head of Governance Age 46. Appointed on 8 July 2009. Amanda joined Marks & Spencer in 2004 as Head of Investor Relations. Her previous roles include Director of Corporate Relations at Arcadia Group plc, and over 10 years working in...

  • Page 50
    ... plans for our business as well as the issues that matter on the ground and what our management and people are doing day-to-day. What is our approach to governance? Governance helps us do the right thing, the right way - for our shareholders and our customers, employees, suppliers, local communities...

  • Page 51
    ... strategy aimed at making sure we have the right people and processes in place - Discussed with management the introduction of a new remuneration and performance framework for all employees - Reinvigorated our employee communication through Business Involvement Groups, Director breakfasts, in-store...

  • Page 52
    ... Committees and functions are listed below along with an overview of their activities and the key person responsible. Corporate Governance Group Board (Sir Stuart Rose) relies on management to run the business and on our people to give customers great service every time they shop with us. The Board...

  • Page 53
    ... the right thing by our people". This year we gave considerable emphasis to leadership development through the Lead to Succeed programme, which was attended by our directors and the top management team. The Management Board reviewed feedback from Lead to Succeed participants; the annual employee...

  • Page 54
    ...Marks and Spencer Group plc Annual report and financial statements 2010 Directors' report Governance report Effectiveness continued Action Plan 2010/11 Overall we felt we had addressed all the points on our 2009/10 action plan. The Board has strengthened its structures and approach and is working...

  • Page 55
    ... right thing, the right way at Marks & Spencer. Audit Committee We review the effectiveness of internal audit which focuses its work on business priorities identified by the Group Risk Profile. We track their key findings and the responsiveness of management. To do this we made more time to meet...

  • Page 56
    ... pension valuation, property values, code of ethics and Plan A. Remuneration Committee - Agreed remuneration arrangements for new Chief Executive and outgoing Chairman; - Reviewed total reward framework for directors and senior managers, including long-term and short-term incentives and performance...

  • Page 57
    .../annualreport2010 53 Operating & Financial review p16 Governance Financial statements   ïƒ p78 PENSION SCHEME GOVERNANCE The Group operates a defined benefit ('DB') scheme for all employees with an appointment date prior to 1 April 2002 and a defined contribution ('DC') scheme open to...

  • Page 58
    54 Marks and Spencer Group plc Annual report and financial statements 2010 Directors' report Governance report Accountability How do we manage our risks and controls? Our aim is to build a sustainable business through consistent, profitable growth and to make sure that our customers and wider ...

  • Page 59
    ...ficant investment we are making in supply chain and IT systems to meet our multi-channel ambitions. Independent feedback on investor relations is provided to the Board through an annual presentation by Makinson Cowell. This contains major investor views on Company management and performance, based...

  • Page 60
    ...out of their supply base - Adapting product ranges to meet changing customer needs - Comparative shops and feedback with core customer panels - Targeted marketing strategy in place to respond to new competitors in key locations - Maintenance of our opening price point values - Regular forecasting of...

  • Page 61
    ... to day-to-day operations impacts our business Day-to-day operation We are the UK's leading retailer of quality clothing, food and home products, with more than 21 million UK customers and over 2,000 suppliers. Stock management Ineffective stock management impacts availability in stores and online...

  • Page 62
    ...fied would meet their performance targets and pay out had Marc remained in their employ. The Committee also agreed the remuneration for Stuart's transition to Chairman at the end of July 2010. In 2009/10, the Company clearly outperformed the targets set both in the internal operating plan and those...

  • Page 63
    ... review of all share plan performance measures against 2008/09 year end targets; - review and approval of all awards made under the Performance Share Plan, taking into account the total value of all awards made under these plans; - review of and agreement to all executive director and senior manager...

  • Page 64
    ... business; and - the role and responsibility of the individual director - provided on a market competitive basis - aligned to total reward structure for all employees - affordability - monthly in cash - reviewed annually with any increases normally awarded from 1 January Benefits - Group Pension...

  • Page 65
    ... resignation on 5 May 2010 The value placed on long-term incentives compromises the expected cash value to executive directors after three years, discounted back to its present value, of (i) bonus compulsorily deferred into shares and (ii) performance shares awarded under the Performance Share Plan.

  • Page 66
    ...statements 2010 Directors' report Remuneration report continued What are the pay and benefits received by the Board? Executive directors' remuneration Salary In setting salary levels for 2010, the Committee considered current market conditions, the Company's performance in 2009/10 and the general...

  • Page 67
    ... primary long-term incentive for executive directors and senior managers in the Company. The plan normally allows awards up to 200% of salary, although up to 400% of salary may be awarded to recognise exceptional performance or to address key recruitment and retention issues. The performance targets...

  • Page 68
    ... 2010 Directors' report Remuneration report continued All-Employee Share Schemes - long-term incentive Executive directors can participate in Sharesave, the Company's Save As You Earn (SAYE) scheme which is open to all employees. The current scheme was approved by shareholders for a 10-year...

  • Page 69
    ...65 Operating & Financial review p16 Governance Financial statements   ïƒ p78 Contracts What are the current service contracts and terms of employment for directors? Executive directors All executive directors and senior managers have service contracts that can be terminated by the Company...

  • Page 70
    ... salary is at date of appointment and the share market value is measured at the current date. All current executive directors currently have met, or are on target to meet, their required shareholding. Total shareholder return Performance graph The graph illustrates the performance of the Company...

  • Page 71
    ... awarded in 2008 and 2009 under the Restricted Share Plan that vested during 2009/10. 8 For all executive directors, 40% of the total bonus earned is paid in cash as shown in the table, and 60% paid in shares as part of the Deferred Share Bonus Plan, as described under the Annual Cash Bonus Scheme...

  • Page 72
    ... Marks and Spencer Group plc Annual report and financial statements 2010 Directors' report Remuneration report continued Directors' interests in long-term incentive schemes Share Schemes Maximum shares receivable at 29 March 2009 or date of Date of award appointment Shares awarded during the year...

  • Page 73
    ...review p16 Governance Financial statements   ïƒ p78 Maximum shares receivable at 29 March 2009 or date of Date of award appointment Shares awarded during the year Shares vested during the year Shares lapsed during the year Maximum shares receivable at 3 April 2010 Market value on date...

  • Page 74
    70 Marks and Spencer Group plc Annual report and financial statements 2010 Directors' report Remuneration report continued Share Option Schemes Maximum options receivable at 29 March 2009 or date of appointment Maximum options receivable at 3 April 2010 Date of grant Options granted during the ...

  • Page 75
    ... review p16 Governance Financial statements   ïƒ p78 Directors' pension information a) Pension benefits John Dixon is the only executive director who is a member of the Company's Defined Benefit Pension Scheme. Details of the pension benefits earned by John Dixon during the year ending...

  • Page 76
    ...Marks & Spencer Group of companies (the 'Group'). We are one of the UK's leading retailers with over 21 million customers visiting our stores every week. We sell high quality, great value clothing and home products and outstanding quality food. We source our products responsibly from 2,000 suppliers...

  • Page 77
    ... the Pension Fund or to increase the rate at which compensatory interest accrues on any annual payments that Marks and Spencer plc has elected to defer. The Company does not have agreements with any director or employee that would provide compensation for loss of office or employment resulting from...

  • Page 78
    ... visit stores and discuss with employees matters of current interest and concern to them and the business through meetings with local Business Involvement Groups, specific listening groups and informal discussion. Share schemes are a long-established and successful part of our total reward package...

  • Page 79
    ...and âˆ' pay in accordance with its contractual and other legal obligations. The main trading company, Marks and Spencer plc, has a policy concerning the payment of trade creditors as follows: âˆ' general merchandise payments are received between 19 and 26 days after the stock was delivered; âˆ' food...

  • Page 80
    ... LLP as auditors of the Company and to authorise the Audit Committee to determine their remuneration will be proposed at the 2010 AGM. Annual general meeting The AGM of Marks and Spencer Group plc will be held at the Royal Festival Hall, London on 14 July 2010. The Notice is given, together with...

  • Page 81
    ... Marks and Spencer Group plc for the 53 weeks ended 3 April 2010 which comprise the Consolidated and Company income statement, Consolidated statement of comprehensive income, Consolidated and Company statement of financial position, Consolidated statement of changes in equity and Company statement...

  • Page 82
    78 Marks and Spencer Group plc Annual report and financial statements 2010 Financial statements Consolidated income statement 53 weeks ended 3 April 2010 £m 52 weeks ended 28 March 2009 £m Notes Revenue Operating profit Finance income Finance costs Profit on ordinary activities before ...

  • Page 83
    ... the Marks & Spencer UK Pension Scheme Derivative financial instruments Provisions Deferred tax liabilities Total liabilities Net assets Equity Called-up share capital - equity Share premium account Capital redemption reserve Hedging reserve Other reserve Retained earnings Total shareholders' equity...

  • Page 84
    80 Marks and Spencer Group plc Annual report and financial statements 2010 Financial statements Consolidated statement of changes in equity Ordinary share capital £m Share Capital premium redemption account reserve £m £m Hedging reserve £m Other reserve1 £m Retained earnings2 £m Total £m ...

  • Page 85
    ...facility Issue of medium-term notes Redemption of medium-term notes Payment of liability to the Marks & Spencer UK Pension Scheme Decrease in obligations under finance leases Equity dividends paid Shares issued on exercise of employee share options Shares purchased in buy back Purchase of own shares...

  • Page 86
    ... that used for internal reporting. It has been implemented by the Group from 29 March 2009, and has had no impact on the results or net assets of the Group but has resulted in revised disclosures. - IAS 1 (Revised) - 'Presentation of Financial Statements' is effective for the year ended 3 April 2010...

  • Page 87
    ... 83 Directors' report Financial statements Other information p01   ïƒ p117 1 Accounting policies continued A credit representing the expected return on the assets of the retirement benefit schemes during the year is included within finance income. This is based on the market value of...

  • Page 88
    84 Marks and Spencer Group plc Annual report and financial statements 2010 Financial statements Notes to the financial statements continued 1 Accounting policies continued Transactions denominated in foreign currencies are translated at the exchange rate at the date of the transaction. Foreign ...

  • Page 89
    ... and defined benefit obligation of the Group's defined benefit pension schemes depends on the selection of certain assumptions which include the discount rate, inflation rate, salary growth, mortality and expected return on scheme assets. Differences arising from actual experiences or future changes...

  • Page 90
    ...operating profit includes a contribution of £30.4m (last year £24.8m) in respect of fees received from HSBC in relation to M&S Money. Adjustments relate to revenue items recognised in cost of sales for management accounting purposes. Other segmental information 2010 UK International £m £m Total...

  • Page 91
    ... and exceptional items £m 2009 Total £m Total £m Revenue Cost of sales Gross profit Selling and marketing expenses Administrative expenses Other operating income Profit on property disposals Exceptional costs (see note 5) Exceptional pension credit (see note 5) Operating profit 9,536.6 (5,918...

  • Page 92
    ...Interest payable on medium-term notes Interest payable on finance leases Fair value movements on financial instruments designated as fair value through profit and loss Unwinding of discount on partnership liability to the Marks & Spencer UK Pension Scheme Finance costs Net finance costs 2.1 10.8 12...

  • Page 93
    ... 89 Directors' report Financial statements Other information p01   ïƒ p117 7 Income tax expense A. Taxation charge 2010 £m 2009 £m Current tax UK corporation tax at 28% (last year 28%) - current year - prior years Overseas current taxation Total current taxation Deferred tax (see note...

  • Page 94
    90 Marks and Spencer Group plc Annual report and financial statements 2010 Financial statements Notes to the financial statements continued 8 Earnings per share continued A. Basic earnings per share Pence Pence Basic earnings per share Property disposals per share Exceptional costs per share ...

  • Page 95
    ... to former directors of £187,000 (last year £252,000). 11 Retirement benefits 8,380 6,240 The Group provides pension arrangements for the benefit of its UK employees through the Marks & Spencer UK Pension Scheme. This has a defined benefit section, which was closed to new entrants with effect...

  • Page 96
    ... Marks and Spencer Group plc Annual report and financial statements 2010 Financial statements Notes to the financial statements continued 11 Retirement benefits continued B. Financial assumptions A full actuarial valuation of the UK Defined Benefit Pension Scheme was carried out at 31 March 2009...

  • Page 97
    ....com/annualreport2010 93 Directors' report Financial statements Other information p01   ïƒ p117 11 Retirement benefits continued The expected long-term rates of return are: 2010 % 2009 % Property partnership interest UK equities Overseas equities Government bonds Corporate bonds Swaps...

  • Page 98
    ...Marks and Spencer Group plc Annual report and financial statements 2010 Financial statements Notes to the financial statements continued 11 Retirement benefits continued G. Retirement benefit obligations Changes in the present value of retirement benefit obligations are as follows: 2010 £m 2009...

  • Page 99
    ... operates are provided in the Remuneration report on pages 58 to 71. A. Save As You Earn Share Option Scheme Under the terms of the scheme, the Board may offer options to purchase ordinary shares in the Company once in each financial year to those employees who enter into an HM Revenue & Customs...

  • Page 100
    96 Marks and Spencer Group plc Annual report and financial statements 2010 Financial statements Notes to the financial statements continued 12 Share-based payments continued B. Executive Share Option Scheme Under the terms of the Executive Share Option Scheme, last approved by shareholders in ...

  • Page 101
    ... to acquire the number of shares that the total savings will buy when the contract matures, at a discounted price set at the start of the scheme. The price at which the options may be offered is 80% of the average mid-market price for three consecutive days preceding the offer date. Options cannot...

  • Page 102
    ... for the value in use calculations are those regarding the discount rate, growth rates and changes in income and costs. The Group prepares discounted cash flow forecasts based on financial forecasts approved by management covering a three year period, which takes account of both past performance and...

  • Page 103
    ...Directors' report Financial statements Other information p01   ïƒ p117 14 Property, plant and equipment Land and buildings £m Fixtures, Assets in the course of fittings and equipment construction £m £m Total £m At 29 March 2008 Cost Accumulated depreciation Net book value Year ended...

  • Page 104
    ... Marks and Spencer Group plc Annual report and financial statements 2010 Financial statements Notes to the financial statements continued 15 Investment property 2010 £m 2009 £m Cost At start of year Reclassification to property, plant and equipment At end of year Depreciation At start of year...

  • Page 105
    ... card payment received within 48 hours. The carrying amount of these assets approximates their fair value. The effective interest rate on short-term bank deposits is 0.29% (last year 0.33%); these deposits have an average maturity of five days (last year three days). 20 Trade and other payables 2010...

  • Page 106
    ...and other financial liabilities 2010 £m 2009 £m Current Bank loans and overdrafts1 Syndicated bank facility2 Finance lease liabilities Partnership liability to the Marks & Spencer UK Pension Scheme (see note 25) Non-current Bank loans 6.375% £308m (last year £375m) medium-term notes 20113 5.875...

  • Page 107
    ... funding strategy ensures a mix of funding sources offering flexibility and cost effectiveness to match the requirements of the Group. - Operating subsidiaries are financed by a combination of retained profits, bank borrowings, medium-term notes and committed syndicated bank facilities. At year end...

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    104 Marks and Spencer Group plc Annual report and financial statements 2010 Financial statements Notes to the financial statements continued 22 Financial instruments continued The table below analyses the Group's short-term investments and derivative assets by credit exposure excluding bank ...

  • Page 109
    ...%) of the Group's gross borrowings. The effective interest rates at the balance sheet date were as follows: 2010 % 2009 % Committed and uncommitted borrowings Medium-term notes Finance leases Partnership liability to the Marks & Spencer UK Pension Scheme Derivative financial instruments 2010 Assets...

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    106 Marks and Spencer Group plc Annual report and financial statements 2010 Financial statements Notes to the financial statements continued 22 Financial instruments continued Sensitivity analysis The table below illustrates the estimated impact on the income statement and equity as a result of ...

  • Page 111
    ...-term liquidity by £200m. In order to maintain or re-align the capital structure, the Group may adjust the number of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. 23 Provisions UK Overseas restructuring restructuring £m £m Total...

  • Page 112
    ... ordinary shares having a nominal value of £2.7m were bought back and subsequently cancelled during the year in accordance with the authority granted by shareholders at the Annual General Meeting in July 2007. The aggregate consideration paid was £40.9m. Marks & Spencer UK Pension Scheme interest...

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    ... Directors' report Financial statements Other information p01   ïƒ p117 26 Business combinations £m Net liabilities at fair value (100%) Net liabilities acquired Cash consideration Transaction costs Total consideration Goodwill arising on acquisition On 31 March 2009, Marks and Spencer...

  • Page 114
    ... Marks and Spencer Group plc Annual report and financial statements 2010 Financial statements Notes to the financial statements continued 28 Analysis of cash flows given in the cash flow statement Cash flows from operating activities 53 weeks ended 3 April 2010 £m 52 weeks ended 28 March 2009...

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    ... with the Marks & Spencer Pension Scheme are set out in notes 11 and 21. E. Key management compensation 2010 £m 2009 £m Salaries and short-term benefits Termination benefits Share-based payments Total 9.6 0.2 3.1 12.9 6.0 1.1 1.8 8.9 Key management is comprised of Board directors only. Further...

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    112 Marks and Spencer Group plc Annual report and financial statements 2010 Financial statements Company income statement 53 weeks ended 3 April 2010 £m 52 weeks ended 28 March 2009 £m Notes Operating profit Income from shares in Group undertakings Profit and total comprehensive income for ...

  • Page 117
    ... Directors' report Financial statements Other information Company statement of changes in shareholders' equity Called up share capital £m Share premium account £m Capital redemption reserve £m p01   ïƒ p117 Merger reserve £m Retained earnings £m Total £m At 30 March 2008 Profit...

  • Page 118
    ...The Company's financial risk is managed as part of the Group's strategy and policies as discussed in note 22 of the Group financial statements. C2 Employees The Company had no employees during the current or prior year. Directors received emoluments in respect of their services to the Company during...

  • Page 119
    ... to subsidiary undertakings whose results or financial position, in the opinion of the directors, principally affected the financial statements. C6 Related party transactions During the year, the Company has received dividends from Marks and Spencer plc of £239.4m (last year £356.3m) and has...

  • Page 120
    116 Marks and Spencer Group plc Annual report and financial statements 2010 Financial statements Key performance measures 2010 53 weeks £m 2009 52 weeks £m 2008 52 weeks £m 2007 52 weeks £m 2006 52 weeks £m Income statement Revenue - continuing operations UK International Operating profit -...

  • Page 121
    ...and July each year. We encourage shareholders to have dividends paid directly into their bank account to ensure efficient payment and cleared funds on the payment date. Those selecting this payment method receive an annual consolidated tax voucher in January, showing both payments in the respective...

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    118 Marks and Spencer Group plc Annual report and financial statements 2010 Other information Shareholder information continued Analysis of share register Ordinary shares As at 3 April 2010, there were 217,541 holders of ordinary shares whose shareholdings are analysed below. Number of holdings ...

  • Page 123
    ...4 June 2010 7 July 2010 14 July 2010 16 July 2010 Ex-dividend date - Final dividend Record date to be eligible for the final dividend Results - Quarter 1 Interim Management Statement†Annual General Meeting Final dividend payment date for the year to 3 April 2010 6 October 2010 9 November 2010 17...

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    ... in voting rights International Financial Reporting Standards International Inventories Investment property J Joint venture K Key Performance Indicators Key Performance Measures Kidswear Page 88 102 100 102 84, 102 116 42 116 24 10 76 98 80 23 N Nomination and Governance Committee P People Plan...

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    This report is printed on Revive Pure uncoated, a 100% recycled paper made from post-consumer collected waste. Revive Pure uncoated is manufactured to the certified environmental management system ISO 14001. Designed and produced by Radley Yeldar ry.com Printed by Royle Print

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