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Financial statements Marks and Spencer Group plc Annual report and financial statements 2012 105
Overview Strategic review Financial review Governance Financial statements and other information
27 Analysis of net debt
A. Reconciliation of movement in net debt
At
3 April
2011
£m
Cash flow
£m
Exchange and
other non-cash
movements
£m
At
31 March
2012
£m
Net cash
Bank loans, overdrafts and syndicated bank facility (note 20) (289.1) 247.8 2.6 (38.7)
Less: amounts treated as financing (see below) 82.4 (41.4) (2.6) 38.4
(206.7) 206.4 – (0.3)
Cash and cash equivalents (note 18) 470.2 (272.2) (1.9) 196.1
Net cash per statement of cash flows 263.5 (65.8) (1.9) 195.8
Current financial assets (see note 16) 215.9 44.8 (0.2) 260.5
Debt financing
Bank loans and overdrafts treated as financing (see above) (82.4) 41.4 2.6 (38.4)
Medium-term notes (2,147.7) 12.1 (2.0) (2,137.6)
Finance lease liabilities (note 20) (78.3) 13.0 (0.2) (65.5)
Partnership liability to the Marks & Spencer UK Pension Scheme (note 12) (71.9) 71.9 (71.9) (71.9)
Debt financing (2,380.3) 138.4 (71.5) (2,313.4)
Net debt (1,900.9) 117.4 (73.6) (1,857.1)
B. Reconciliation of net debt to statement of financial position
2012
£m
2011
£m
Statement of financial position and related notes
Cash and cash equivalents 196.1 470.2
Current financial assets (note 16) 260.5 215.9
Bank loans and overdrafts (note 20) (38.7) (289.1)
Medium-term notes – net of hedging derivatives (2,181.8) (2,194.0)
Finance lease liabilities (note 20) (65.5) (78.3)
Partnership liability to the Marks & Spencer UK Pension Scheme (note 12) (71.9) (71.9)
(1,901.3) (1,947.2)
Interest payable included within related borrowing 44.2 46.3
Total net debt (1,857.1) (1,900.9)
28 Related party transactions
A. Subsidiaries
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and
are not disclosed in this note. Transactions between the Company and its subsidiaries are disclosed in the Company’s separate
financial statements.
On 30 March 2012 the Group acquired the remaining 50 per cent shareholding of Marks & Spencer Marinopoulos BV for €1,
taking its share in the Balkan states (Greece, Romania, Croatia, Slovenia, Bulgaria, Serbia, and Montenegro) to 100 per cent.
At the same time, the Group sold 20 per cent of the share capital of Marks & Spencer Greece SA (‘Greece’) to Marinopolous
Holding Sarl for €1, leaving the Group’s effective share in Greece at 80 per cent. The sale and purchase agreement includes call
and put options over this 20 per cent of the share capital of Greece, exercisable in five or ten years time. The fair value of the put
option at 31 March 2012 was £nil. On an undiscounted basis this liability has a value of £nil.
Both of these transactions have been accounted for through equity, as the Group already controlled these entities and
consolidated them as subsidiaries.
B. Hedge End joint venture
A loan of £5.0m was received from the joint venture on 9 October 2002. It is repayable on five business days’ notice and was
renewed on 1 January 2012. Interest was charged on the loan at 2.0% until 31 December 2009 and 0.5% thereafter.
C. Lima (Bradford) joint venture
A loan facility was provided to the joint venture on 11 August 2008. At 31 March 2012, £25.4m (last year £25.4m) was drawn
down on this facility. Interest was charged on the loan at 1.1% above 3-month LIBOR. The Group has entered into a rental
agreement with the joint venture and £4.5m (last year £4.5m) of rental charges were incurred. There was no outstanding balance
at March 2012.