Marks and Spencer 2010 Annual Report Download - page 90

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Marks and Spencer Group plc Annual report and financial statements 2010 Financial statements 86
Notes to the financial statements continued
2 Segmental information
The Group has adopted IFRS 8 – ‘Operating Segments’ with effect from 29 March 2009. IFRS 8 requires operating segments to be identified
on the basis of internal reporting about components of the Group that are regularly reviewed by the chief operating decision maker to allocate
resources to the segments and to assess their performance. In contrast, the predecessor Standard (IAS 14 – ‘Segment Reporting’) required
the Group to identify two sets of segments (business and geographical), using a risks and rewards approach, with the Group’s system of
internal financial reporting to key management personnel serving only as the starting point for the identification of such segments.
The chief operating decision maker has been identified as the executive directors. The executive directors review the Group’s internal
reporting in order to assess performance and allocate resources. The operating segments are UK and International which are reported
in a manner consistent with the internal reporting to the executive directors.
The UK segment consists of the UK retail business and UK franchise operations. The International segment consists of Marks & Spencer
owned businesses in the Republic of Ireland, Europe and Asia, together with international franchise operations.
The executive directors assess the performance of the operating segments based on a measure of operating profit. This measurement
basis excludes the effects of exceptional items from the operating segments as well as gains or losses on the disposal of assets.
Central costs are all classified as UK costs and presented within UK operating profit. The executive directors also monitor revenue within
the segments. To increase transparency, the Group has decided to include an additional voluntary disclosure analysing revenue within the
reportable segments.
The following is an analysis of the Group’s revenue and results by reportable segment:
53 weeks ended 3 April 2010 52 weeks ended 28 March 2009
Management
£m
Adjustment2
£m
Statutory
£m
Management
£m
Adjustment2
£m
Statutory
£m
General erchandise 4,186.2 (34.2) 4,152.0 3,944.4 (26.1) 3,918.3
Food 4,455.5 (39.6) 4,415.9 4,282.3 (36.3) 4,246.0
UK revenue 8,641.7 (73.8) 8,567.9 8,226.7 (62.4) 8,164.3
Wholesale 297.7 – 297.7 272.3 – 272.3
Retail 673.1 (2.1) 671.0 627.2 (1.7) 625.5
International revenue 970.8 (2.1) 968.7 899.5 (1.7) 897.8
Group revenue 9,612.5 (75.9) 9,536.6 9,126.2 (64.1) 9,062.1
UK operating profit1 701.2 – 701.2 652.8 – 652.8
International operating profit 142.7 – 142.7 116.1 – 116.1
Group operating profit (adjusted) 843.9 – 843.9 768.9 – 768.9
Profit on property disposals 8.1 6.4
Exceptional costs – (135.9)
Exceptional pension credit – 231.3
Group operating profit 852.0 870.7
Finance income 12.9 50.0
Finance costs (162.2) (214.5)
Profit before tax 702.7 706.2
1 UK 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.
2 Adjustments relate to revenue items recognised in cost of sales for management accounting purposes.
Other segmental information
2010 2009
UK
£m
International
£m
Total
£m
UK
£m
International
£m
Total
£m
Additions to tangible and intangible assets (excluding goodwill) 360.0 29.3 389.3 611.8 40.2 652.0
Depreciation and amortisation 398.7 29.2 427.9 384.4 24.6 409.0
Assets 6,242.7 910.5 7,153.2 6,530.8 727.3 7,258.1
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