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121
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
OUR BUSINESSOUR PERFORMANCEGOVERNANCEFINANCIAL STATEMENTS
28 ANALYSIS OF NET DEBT CONTINUED
B. Reconciliation of net debt to statement of fi nancial position
2016
£m
2015
£m
Statement of fi nancial position and related notes
Cash and cash equivalents (see note 18) 247.6 205.9
Current fi nancial assets (see note 16) 19.1 11 . 6
Bank loans and overdrafts (see note 20) (297.3) (279.0)
Medium-term notes – net of hedging derivatives (1,656.1) (1,652.0)
Finance lease liabilities (see note 20) (48.6) (48.6)
Partnership liability to the Marks & Spencer UK Pension Scheme (see notes 12 and 21) (455.7) (512.9)
(2,191.0) (2,275.0)
Interest payable included within related borrowing and the partnership liability to the
Marks & Spencer UK Pension Scheme 52.7 51.8
Total net debt (2,138.3) (2,223.2)
29 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 fi nancial statements.
B. Hedge End joint venture
A loan of £5.0m was received from the joint venture on 9 October 2002. It is repayable on fi ve business days’ notice and was renewed on
1 January 2015. Interest was charged on the loan at 2.0% until 31 December 2009 and 0.5% thereafter.
C . L i ma (B r adfo rd ) j oin t ve ntu re
A loan facility was provided to the joint venture on 11 August 2008, on which interest was charged at 2.7% above 3-month LIBOR. On 29
February 2016, Marks and Spencer plc purchased the remaining 50% share in the joint venture Lima (Bradford) S.à r.l. At this date £24.0m
was drawn down on the loan facility and this was fully repaid on acquisition. In addition, the Group had entered into a rental agreement
with the joint venture and £4.5m (last year £4.9m) of rental charges were incurred up to the date of acquisition. Refer to note 25 for further
disclosures regarding this acquisition.
D. Marks & Spencer Pension Scheme
Details of other transactions and balances held with the Marks & Spencer UK Pension Scheme are set out in notes 11 and 12.
E. Key management compensation
2016
£m
2015
£m
Salaries and short-term benefi ts 7.5 7. 3
Share-based payments 0.3 0.3
Total 7.8 7.6
Key management comprises Board directors only. Further information about the remuneration of individual directors is provided in
the Remuneration Report. During the year, key management have purchased goods at the Group’s usual prices less a 20% discount.
This discount is available to all sta employed directly by the Group in the UK.
F. Other related party transactions
Supplier transactions occurred during the year between the Group and a company controlled by Martha Lane Fox’s partner. Martha served
as a non-executive director of the Group up to 2 April 2016. These transactions amounted to £2.6m during the year (last year £2.5m) with an
outstanding trade payable of £0.2m at 2 April 2016 (last year £0.2m).
30 SUBSEQUENT EVENTS
On 25 May 2016 the directors announced proposals for a signifi cant base rate increase for Qualifi ed Customer Assistants to £8.50 per hour
outside London and £9.65 in Greater London, as well as pay rises for Section Coordinators and Section Managers, with e ect from April 2017.
The directors also announced proposals for a fairer, simpler and more consistent approach to pay and premiums.
In addition, also e ective from April 2017, the directors are proposing to make changes to the UK defi ned benefi t (DB) pension scheme,
which has been closed to new members since 2002, to close it to future accrual. We would enrol current defi ned benefi t members in the
defi ned contribution savings plan from April 2017. This has had no impact on the results for the year ended 2 April 2016.
These proposals are subject to consultation and the potential non-underlying charges for both the pay and pension changes for year
ending 1 April 2017 could be in the range of c£100m to £150m. This non-underlying charge is largely driven by the DB pension changes
because when current active members become deferred members, the annual increase in their pensionable salary is linked to CPI as
opposed to being capped at 1%.