TIDMMKS
RNS Number : 5383H
Marks & Spencer Group PLC
08 June 2017
8 June 2017
Marks and Spencer Group plc (the "Company")
Annual Report and Financial Statements 2017
In compliance with Listing Rule 9.6.1, the Company announces
that the following documents have today been submitted to the UK
Listing Authority, and will shortly be available for inspection via
the National Storage Mechanism at morningstar.co.uk/uk/NSM:
-- Annual report and financial statements 2017;
-- The Notice of Annual General Meeting of the Company which
will be held at Wembley Stadium, Wembley, London HA9 0WS at 11am on
Tuesday 11 July 2017; and
-- Proxy forms for the 2017 Annual General Meeting.
In accordance with DTR 6.3.5(3) the Annual Report and Financial
Statements 2017 is accessible on annualreport.marksandspencer.com.
The Notice of Annual General Meeting is available on
marksandspencer.com/investors.
A condensed set of Marks and Spencer Group plc financial
statements and information on important events that have occurred
during the year and their impact on the financial statements were
included in the Company's preliminary announcement on 24 May 2017.
That information together with the information set out below which
is extracted from the Annual Report and Financial Statements
constitute the requirements of DTR 6.3.5 which is to be
communicated via an RIS in unedited full text. This announcement is
not a substitute for reading the full Annual Report and Financial
Statements. Page and note references in the text below refer to
page numbers in the Annual Report and Financial Statements 2017. To
view the preliminary announcement, visit the Company website:
marksandspencer.com/thecompany.
Principal risks and uncertainties
As with any business, we face risks and uncertainties on a daily
basis. It is the effective management of these that places us in a
better position to be able to achieve our strategic objectives and
to embrace opportunities as they arise.
Below are details of our principal risks and uncertainties and
the mitigating activities in place to address them. It is
recognised that the Group is exposed to risks wider than those
listed. However, we have disclosed those we believe are likely to
have the greatest impact on our business at this moment in time and
those that have been the subject of debate at recent Board or Audit
Committee meetings.
DESCRIPTION MITIGATING ACTIVITIES
------------------------------- ----------------------------------------------------------------
Clothing & Home Recovery
Our future performance * Clothing & Home strategy and supporting workstreams
will be impacted in place to drive sales, target market share, control
if we fail to meet costs and drive profitability.
customer expectations.
As we continue to
reassert our Clothing * Monthly monitoring and challenge of delivery against
& Home credentials, strategy and performance indicators.
we are focused on
ensuring that product
relevance, pricing * Continued focus on product quality and style,
and quality meet including adherence to our Clothing Quality Charter.
customer expectations.
Meeting our customers'
needs in all respects * Ongoing engagement through customer panels and our
is key to driving Customer Insight Unit.
improved performance
in an increasingly
competitive market.
------------------------------- ----------------------------------------------------------------
Food Safety and Integrity
A food safety or * Dedicated Food Technology team responsible for
integrity related ensuring products are safe for consumption through
incident occurs or rigorous controls and processes.
is not effectively
managed.
Our brand is based * Long-established store, supplier and depot auditing
on trust and our programme in place.
customers have high
expectations of both
the quality and integrity * Visible response to emerging customer concerns.
of our food. It is
of paramount importance
that we effectively * Proactive horizon scanning for future issues,
manage safety and including focus on fraud and adulteration.
integrity, especially
as we continue to
grow our global food * Crisis management plan in place.
business.
------------------------------- ----------------------------------------------------------------
Corporate Responsibility
Our reputation as * Continued commitment to and development of Plan A
a sustainable retailer objectives to allow risks to be identified, mitigated
relies on our ability and monitored.
to meet our social
responsibility agenda
and stakeholder expectations. * Overarching governance of processes through Plan A
Our sustainability leadership.
credentials have
historically been
a key differentiator * Mature supplier ethical auditing programme, including
in the retail market. independent third party auditors, across our Clothing
As our peers place & Home and Food businesses.
greater focus on
this and the regulatory
environment continues * Policy on supplier selection processes.
to develop, it is
essential that we
continue to evolve * Business-wide human rights policy and ownership.
our aims, maintain
strong ethical standards
and meet stakeholder * Updated Global Sourcing Principles to incorporate
expectations. requirements of Modern Slavery Act.
* Signatory to United Nations Global Compact principles
covering human rights, the environment and ethical
behaviour.
* Membership of the Ethical Trading Initiative.
------------------------------- ----------------------------------------------------------------
Information Security
(including Cyber) * Established security controls, including policies,
We experience a major procedures and use of security technologies.
information security
breach.
Our business, and * Dedicated Head of Data Governance.
society, continues
to be subject to
external threats * Data Governance Group in place.
to security - including
external hackers
and viruses, physical * Dedicated Corporate Security team with ongoing focus
security attacks on improving physical security environment.
or sensitive data
being lost or accessed
without authorisation. * Dedicated Head of Cyber Security, leading a team of
cyber security experts and analysts, with 24/7
monitoring and defence tools.
* Third party cyber maturity assessment performed.
* Ongoing monitoring of developments in cyber security
threats, engaging with third party specialists as
appropriate.
* Control of sensitive data through limited and
monitored access and the roll-out of systems with
enhanced security.
* Specific team dedicated to managing security
requirements for M&S.com.
------------------------------- ----------------------------------------------------------------
Technology
To support future * Digital lab in place developing new technology
profitable growth, enabled solutions.
we need to keep pace
and develop our technology
capability. Our business * Proactive simplification of IT infrastructure through
needs to identify, clearly defined technology roadmaps for all business
keep pace with and areas.
embrace developments
in technology.
This will encompass * Structured deployment of Smarter Working principles
a range of technology and enabling technologies.
demands driven by
the needs of our
customers, deployment * Overall review of future IT strategy under way.
of tools that promote
effective and flexible
working and maintaining
an overarching IT
infrastructure that
enables resilient
business delivery.
------------------------------- ----------------------------------------------------------------
Customer Proposition
& Experience * Appointed dedicated Head of Customer Experience.
Our performance and
reputation will be
impacted if we fail * Omnichannel approach adopted to drive consistent
to deliver a competitive experiences online and in store.
and reliable customer
proposition and experience
across all channels. * Proactive monitoring of social media to observe and
Notwithstanding the respond to trends in customer experience.
growth delivered
and expected to continue
in our M&S.com business, * Further integration of M&S.com functions within core
we need to ensure teams to drive consistency across all channels.
that we meet expectations
however our customers
choose to shop or * Robust business continuity plans, incident reporting
have their order and management procedures in place across all
delivered. channels.
* Ongoing review of future strategic opportunities to
meet customer needs.
------------------------------- ----------------------------------------------------------------
Talent & Succession
We need to attract, * Completion of top tier talent review.
develop, motivate
and retain the right
individuals to achieve * Review of cross-Group talent management processes
our operational and under way.
strategic objectives.
Effective talent
management is essential * Third party review completed to help support and
to deliver current develop skill set of senior leadership group.
and future business
requirements. We
recognise the importance * Targeted development programmes in place.
of both developing
internal talent and
successfully integrating * Clear line manager responsibility for succession
external hires. planning supported by appropriate people forums.
* Ongoing focus on enhancing recruitment processes
across the business.
------------------------------- ----------------------------------------------------------------
Margin
Sourcing or cost * Clearly defined margin targets across the business
pressures impact with performance monitored and reported to
our margin performance. management.
While our business
continues to
face challenging * Comprehensive sourcing plans in place for key
foreign currency products/suppliers.
headwinds, other
factors place significant
pressure on margin * Currency strategy to actively manage foreign exchange
performance. These rate fluctuations.
include the availability
of raw materials
and pricing strategies * Ongoing monitoring of pricing strategy in the context
in the context of of the wider retail market.
the overall retail
market.
* Strong engagement with buying teams to communicate
fluctuations in raw material prices and foreign
exchange rates.
* Enhanced Clothing & Home product development system
in place, improving efficiency to leverage margin
growth.
------------------------------- ----------------------------------------------------------------
Brand
Our brand needs to * Focus on clearly defined brand purpose to Make Every
evolve with consumer Moment Special, connecting with customers through our
lifestyles and attitudes Spend It Well campaigns with greater focus on
for us to successfully lifestyle and outlook.
attract and retain
customers.
We need to ensure * Engagement with customers through our Customer
that we recruit, Insight Unit and focus groups, providing rich
engage and retain insights and quantifiable data.
customers
through the ongoing
relevance of the * Strengthened Customer Insight Unit leadership.
M&S brand.
* Continued investment in the development of Sparks.
------------------------------- ----------------------------------------------------------------
UK Store Estate
We fail to maintain * Full review of our UK store portfolio during 2016/17.
and develop a UK
store estate that
is relevant to future * Multi-year programme under way to improve our estate
customer preferences to better meet customers' needs.
and supports business
performance.
As consumer behaviours * Strengthened property capabilities, including
continue to evolve, appointment of senior external hires.
our physical store
estate planning must
align to our business * Cross-business Steering Group and working groups set
strategy, providing up to manage and monitor the store estate change
better range programme.
authority in more
convenient locations,
while generating * Property Board approval process and governance
higher space productivity. framework in place.
* Continued expansion of our Simply Food business
alongside improvements to the UK store estate.
------------------------------- ----------------------------------------------------------------
Profitable Growth
To drive profitable * Customer Insight Unit provides horizon scanning of
growth our business changes in consumer behaviour.
needs to innovate
as well as successfully
deliver additional * Review of innovation processes underway.
space and strong
like-for-like
performance. * New operating model implemented to drive efficiency
To generate long-term and effective decision-making.
shareholder
value, we need to
identify alternative * Business restructure completed to help drive our
revenue streams and business objectives and strategic aims.
opportunities to
leverage growth,
while also ensuring * Ongoing focus on establishing foundations for new
that we drive the paths to growth.
performance of our
existing products
and services.
------------------------------- ----------------------------------------------------------------
Third Party Management
To drive value for * Ongoing Board-level review of key relationships and
our business we need partnerships.
to successfully manage
and leverage our
third party relationships * Dedicated personnel managing key contracts.
and partnerships.
Our business relies
on a number of significant * Defined service level agreements and key performance
third party relationships. indicator standards in place for key contracts.
To ensure that we
continue to
drive value for the * Defined contract governance and oversight standards.
business, it is essential
that we work collaboratively,
clearly define requirements * Strong engagement with in-house Legal and Procurement
and proactively manage teams.
our third parties.
* Periodic, independent review of performance.
------------------------------- ----------------------------------------------------------------
The risks listed do not comprise all those associated with Marks
& Spencer and the numerical referencing does not denote an
order of priority. Additional risks and uncertainties not presently
known to management, or currently deemed to be less material, may
also have an adverse effect on the business. These less material
risks are kept in view in case their likelihood or impact should
show signs of increasing.
Further information on the financial risks we face and how they
are managed is provided on pages 118 to 123.
Directors' Responsibility Statement
The 2017 Annual Report contains the following statements
regarding responsibility for the financial statements in compliance
with DTR 4.1.12. Responsibility is for the full Annual report and
financial statements 2017 and not the condensed statements required
to be set out in the Annual Financial Report announcement.
The directors are responsible for the maintenance and integrity
of the Company's website. Legislation in the UK governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions. Each of the directors,
whose names and functions are listed on pages 36 and 37 of the
Annual Report, confirm that, to the best of their knowledge:
- The Group financial statements, prepared in accordance with
the applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Company and the undertakings included in the
consolidation taken as a whole.
- The Management Report includes a fair review of the
development and performance of the business and the position of the
Company and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and
uncertainties that they face.
- The Annual Report, taken as a whole, is fair, balanced and
understandable, and provides the necessary information for
shareholders to assess the Group's performance, business model and
strategy.
The Directors of Marks and Spencer Group plc are listed in the
Group's 2017 Annual report, and on the Group's website:
corporate.marksandspencer.com.
For further information, please contact:
Group Secretariat: +44 (0)20 8718 9888
END
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