ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31ST MARCH 2008
HIGHLIGHTS
Sales increased by 14% to £51.2 million (2007: £45.1 million)
UK retail sales growth of 29%, like for like growth of 10%
8 Mulberry shops and 6 department store concessions opened worldwide during
the year
Marketing expenditure increased by £2.1 million to £4.8 million
Cash net of bank borrowings of £10.2 million (2007: £9.0 million)
Positive current trading outlook – strong order books and UK retail sales 36% ahead
for the first ten weeks (like for like sales up 17%)
Dividend increased by 33% to 2 pence per share (2007: 1.5 pence)
2008
2007
Change
Group revenue
Profit before tax
Basic EPS
Final dividend proposed per share
£51.2m
£5.2m
6.0p
2.0p
£45.1m
£6.2m
8.1p
1.5p
Cash net of bank borrowings
£10.2m
£9.0m
+14%
–16%
–26%
+33%
+13%
5 YEAR REVENUE GROWTH
(£m)
43.4
45.1
51.2
30.1
25.3
2004*
2005*
2006*
2007
2008
*prepared under UK GAAP
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
1
●
●
●
●
●
●
●
CONTENTS
Highlights
Chairman and Chief Executive’s review
Financial review
Directors, Secretary and advisers
Corporate governance
Directors’ remuneration report
Directors’ report
Statement of Directors’ responsibilities
Independent auditors’ report
Consolidated income statement
Consolidated statement of recognised income and expense
Consolidated balance sheet
Consolidated cash flow statement
Notes to the consolidated financial statements
Company financial statements
Notice of Annual General Meeting
Group five year summary
2
MULBERRY GROUP PLC
Page
1
3
5
7
8
10
12
16
17
18
18
19
20
21
51
59
60
CHAIRMAN AND CHIEF EXECUTIVE’S REVIEW
The Group has completed a successful year with sales growth of 14% to £51.2 million (2007: £45.1 million). The rate of
growth accelerated throughout the year with sales in the second half increasing by 22% compared to the same period
in 2007.
Profit before tax was ahead of market expectations at £5.2 million (2007: £6.2 million) and a final dividend of 2 pence per
share is being recommended (2007: 1.5 pence).
We continue to invest in the business both in the UK and internationally, using the retained profits and cash flow to invest
in the opening of new shops and to significantly increase the expenditure on marketing. This strategy reduces profits in
the short term, as we spend today to build for the future, but is the key to developing future shareholder value.
The Group’s balance sheet has strengthened further during the year, with shareholders’ funds rising by 33% to
£22.5 million (2007: £16.9 million). Cash generation continues to be strong and at 31 March 2008 the Group had cash net
of bank borrowings of £10.2 million (2007: £9.0 million). Group stocks of prior season items are at low levels. The
combination of this strong stock and cash position means that the Group is able to pursue its growth objectives without
being constrained by the difficult economic climate.
BUSINESS REVIEW
Accessories remain our core business and continue to account for over 90% of Group sales. The iconic Bayswater handbag
continues to sell strongly supported by the new Mabel and Roxanne Tote handbags which have joined the bestseller lists.
The design team have been successful in broadening our product offer to meet the specific requirements of our emerging
markets in USA, Asia and the Middle East.
We have continued the work of expanding our own retail network in the UK where we have opened shops in Glasgow,
Covent Garden, Stansted Airport and Heathrow Terminal 5, as well as four concessions in House of Fraser department
stores and a new outlet store in Cheshire Oaks, near Liverpool.
For the year to 31 March 2008 sales from our UK shops which benefited from the full year trading of the shops opened
last year and the new openings this year, increased by 29% and like for like sales for the same period increased by 10%.
Our associate company, Mulberry USA LLC, opened its fifth store during May 2007. The five stores have incurred the start
up losses as expected, but sales are growing as they build consumer awareness. This is a long term project. The plan is to
build the individual existing shops to profitability and there is potential to open further shops, which will enable the USA
business to reach critical mass and cover its head office management costs. Our sales from the UK to the USA dipped
slightly in the year following the initial input of stock to start up the shops in the prior year.
In Asia, the shops run by our partner, Club 21, continue to develop satisfactorily. New shops were opened in Terminal 3 at
Changi Airport, Singapore, and in the Elements development in Hong Kong, bringing the total number of Mulberry shops
operated by Club 21 to seven. In Korea, business with our partner SHK has made good progress with the opening of two
additional department store shop in shops, bringing the total to four. Aggregate sales to the Asian markets have started
to grow in the second half as sales move beyond the initial orders for the stock required to open the shops.
CURRENT TRADING AND OUTLOOK
The sales growth experienced during the six months to 31 March 2008 has continued into the new financial year.
Confirmed orders for sales to third parties for the Autumn/Winter 08 season are more than 30% ahead of last year. In the
first ten weeks of the new financial year, total retail sales in the UK are running at 36% above prior year with like for like up
17%. This is a very encouraging start to the new financial year. However, economic conditions are concerning and we
remain cautious, particularly in the light of cost inflation in the supply chain which will put pressure on our margins.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
3
CHAIRMAN AND CHIEF EXECUTIVE’S REVIEW
(continued)
This autumn we will be introducing an exciting new line of women’s shoes exclusively in the Mulberry shops. Distribution
of this line will be restricted to Mulberry shops for the first two to three seasons.
We continue to expand the business both in the UK and internationally. During May 2008, we have opened a new shop in
Leeds and reopened our original shop in St Christopher’s Place, London, after refurbishment. During the autumn, we will
open a new store in the luxury mall development at White City, London.
We have appointed a new partner for Greece and a new shop will open in Athens later this year. Our existing partner in
Denmark will open a new shop at Copenhagen Airport this summer to build on their extremely successful business.
In Asia, a new shop opened in Shanghai during April and our partner in Korea plans to open two more department store
shop in shops during the autumn. Business through our partner in Japan has not met our requirements for growth and
market penetration. We have agreed to terminate the arrangement during January 2009. We will develop a new approach
to this market in due course.
In the Middle East our partners plan to open in Dubai, Jeddah and Kuwait by the end of the year.
The next project for us in the USA is to extend our website to trade in US dollars.
It should be noted that as a consequence of our business expansion, we have outgrown our London office and showroom
premises and so are planning to relocate before the end of the financial year.
DIVIDENDS
The Board is recommending the payment of a final dividend on the ordinary shares of 2 pence per share (2007: 1.5 pence)
which will be paid on 15 August 2008 to ordinary shareholders on the register on 18 July 2008.
STAFF
I would like to thank all of our staff for their enthusiasm and commitment which are so important to the brand’s future
development. The achievements of the last year are a direct result of their efforts and would not have been possible
without them.
Godfrey Davis
Chairman and Chief Executive
18 June 2008
4
MULBERRY GROUP PLC
FINANCIAL REVIEW
GROSS MARGIN
Group gross profit as a percentage of revenue was 60% compared to 58% in 2007. This increase reflects the change in
sales mix, where there has been an increase in the proportion of Retail sales against Design sales.
OPERATING EXPENSES
Operating expenses for the year increased by £6.2 million to £25.8 million (2007: £19.6 million). This increase reflects the
planned £2.1 million of extra marketing investment in building the international Mulberry brand and the £2.8 million
additional costs associated with the expanding retail network in the UK and France.
SHARE OF RESULTS OF ASSOCIATES
Income of £0.1 million has been recognised in the year in relation to the Group’s investment in Mulberry Oslo AS, which
operate a retail store in Norway. In the prior year, losses included £0.5 million of start-up losses for Mulberry USA LLC.
FINANCE INCOME AND EXPENSE
The increase in net finance income of £0.3 million has resulted from the conversion of the B preference shares (see below)
and the increase in cash balances held on deposit throughout the year.
TAXATION
The Group reported a 33.7% effective tax rate (2007: 35.8%) on profit before tax, resulting in a tax charge of £1.8 million
(2007: £2.2 million). The effective rate has declined due to the reduction in expenses not deductible for tax purposes.
During 2007, the disallowable expenditure included the £0.1 million charge for share based payments and the Group’s
share of losses in Mulberry USA LLC of £0.5 million.
BALANCE SHEET
Capital expenditure on tangible fixed assets for the year totalled £2.6 million (2007: £2.8 million) and included the fit out
of the new stores opened during the year. The expenditure of £0.4 million on intangible fixed assets reflects the ongoing
investment in the Group’s new ERP system.
Stock levels increased by £1.1 million to £7.8 million resulting from the growth of the business and the additional stock
held at the new retail outlets.
CASHFLOW
The principal source of funds was cash flow generated from operations which amounted to £6.1 million (2007: £7.9 million)
during the year. The cash balance has remained stable at £10.2 million.
A property loan of £1.25 million was repaid during February 2008. The Group had further committed but unutilised
facilities of £6.25 million at the end of the year which comprises a £3.5 million multicurrency overdraft which is renewable
annually and a revolving credit facility of £2.75 million which expires during June 2009.
SHAREHOLDER RETURN
The basic earnings per share for the year declined by 26% to 6.0p. This reflects the increase in the number of shares
resulting from the preference share conversion during April 2007 and the lower profit after tax generated during the year
due to the additional spend on marketing and store expansion.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
5
FINANCIAL REVIEW
CONVERSION OF THE B PREFERENCE SHARES
On 16 April 2007, at the request of the shareholder, Challice Limited, as the relevant conditions set out in the Company’s
Articles of Association has been met, the Company converted 8,000,000 B preference shares of 5p each issued to Challice
Limited to 8,000,000 ordinary shares of 5p each. This increased Challice Limited’s holding to 34,212,144 shares which is
59.6% of the issued share capital of the Company.
ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (‘IFRS’)
This is the Group’s first set of consolidated financial statements prepared under IFRS. The transition to IFRS has resulted
in a number of immaterial numerical adjustments to the previously reported consolidated financial statements which were
prepared under United Kingdom Generally Accepted Accounting Principles (UK GAAP) and these are detailed in note 33.
The comparative information has been restated in accordance with IFRS.
Roger Mather
Group Finance Director
18 June 2008
6
MULBERRY GROUP PLC
DIRECTORS, SECRETARY AND ADVISERS
Directors:
Godfrey Pawle Davis FCA
Roger Thomas Mather FCA
Robert (Robin) Edward Graeme Gibson
Andrew Christopher (Chris) Roberts FCCA
Steven Grapstein
Bernard Lam Kong Heng
Edward Vandyk
Registered Office:
The Rookery, Chilcompton, Bath, Somerset BA3 4EH
Secretary:
Roger Thomas Mather FCA
Nominated Adviser and
Nominated Broker:
Landsbanki Securities (UK) Ltd
Beaufort House
15 St. Botolph Street
London
EC3A 7QR
Registered Auditors:
Deloitte & Touche LLP
Bristol
Solicitors:
Principal Bankers:
Registrars:
Osborne Clarke
Bristol
HSBC Bank plc
Bristol
Computershare Investor Services plc
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
7
CORPORATE GOVERNANCE
The Company is listed on the Alternative Investment Market and is not required to comply with the 2006 Combined Code
issued by the Financial Reporting Council on Corporate Governance. However, the Directors support the principles
contained in these requirements and apply these where they consider they are appropriate to Mulberry Group plc.
THE BOARD OF DIRECTORS
The Board comprises of 2 Executive Directors and 5 Non-Executive Directors, but for the period from 31 December 2007
to 7 May 2008 it comprised of 1 Executive Director and 5 Non-Executive Directors. Details of the Directors are set out on
page 7. Since the roles of Chairman and Chief Executive are not separated, as recommended by the Combined Code, the
Directors consider it important that the Board should include Non-Executive Directors who bring strong independent
judgement and considerable knowledge and experience to the Board’s deliberations.
The Board meets formally on a bi-monthly basis and is responsible inter alia for overall Group strategy, investments and
capital projects and for ensuring that an appropriate framework of internal control is in place throughout the Group.
The Executive Directors are each employed under a contract of employment which can be terminated on not more than
one year’s notice. The Non-Executive Directors provide their services under 12 month agreements renewed annually
in January.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee is chaired by a Non-Executive Director, Robin Gibson. The Committee was
formed during the year (previously the Committee’s terms of reference related only to remuneration matters). It is now
responsible for nominating Executive Directors to the Board and then determining the remuneration and terms and
conditions of employment of Executive Directors and senior employees of the Group. The Directors’ remuneration report
is set out on pages 10 and 11.
AUDIT COMMITTEE
The Audit Committee is chaired by a Non-Executive Director, Chris Roberts. It is the opinion of the Board that all Directors
should attend Audit Committee meetings where possible as part of the programme to maintain the Group’s systems of
internal control. The Committee may examine any matters relating to the financial affairs of the Group. This includes
review of the annual financial statements prior to their approval by the Board, together with accounting policies and
compliance with accounting standards, and of internal control procedures and monthly financial reporting, and other
related functions as the Committee may require. The Non-Executive Directors have access to the Group’s auditors and
legal advisers at any time without Executive Directors being present.
INTERNAL FINANCIAL CONTROL
The Board has overall responsibility for the Group’s systems of internal financial control and for monitoring their
effectiveness.
The Directors place considerable importance on maintaining full control and direction over appropriate strategic,
financial, organisational and compliance issues, and have put in place an organisational structure with formally defined
lines of responsibility and delegation of authority. There are established procedures for planning and capital expenditure,
for information and reporting systems and for monitoring the Group’s business and its performance. Adherence to
specified procedures is required at all times and the Board actively promotes a culture of quality and integrity. Compliance
is monitored by the Directors.
8
MULBERRY GROUP PLC
The systems of internal financial control are designed to provide reasonable, but not absolute, assurance against material
misstatement or loss. They include comprehensive budgeting systems with an annual budget approved by the Board,
monthly consideration of actual operational results compared with budgets, forecasts and regular reviews by the Board of
year end forecasts. The Board reports to shareholders half-yearly.
The Group’s control systems address key business and financial risks. Matters arising are reviewed on a regular basis.
Performance indicators are reviewed at least monthly to assess progress towards objectives. Variances from approved
plans are followed up vigorously.
The auditors are engaged to express an opinion on the financial statements. They review and test the system of internal
financial control and the data contained in the financial statements to the extent necessary to express their audit opinion.
GOING CONCERN
Based upon its review of the Group’s working capital requirements for the next twelve months and borrowing facilities
expected to be available, the Board considers that the Group has adequate cash resources to continue in operational
existence for the foreseeable future. Accordingly, the financial statements have been prepared on the going concern
basis.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
9
DIRECTORS’ REMUNERATION REPORT
Mulberry Group plc is listed on the Alternative Investment Market and therefore is not required to prepare a Directors’
remuneration report.
The following narrative disclosures are prepared on a voluntary basis and are not subject to audit.
The Nomination and Remuneration Committee comprises:
Robin Gibson (Chairman and Non-Executive Director)
Chris Roberts (Non-Executive Director)
Steven Grapstein (Non-Executive Director)
Bernard Heng (Non-Executive Director)
Edward Vandyk (Non-Executive Director)
The Committee decides the remuneration policy that applies to Executive Directors and the Group’s other senior
management. In setting the policy it considers a number of factors including:
the basic salaries and benefits available to Executive Directors of comparable companies;
the need to attract and retain Directors of an appropriate calibre; and
the need to ensure Executive Directors’ commitment to the continued success of the Group by means of incentive
schemes.
The Committee meets at least once a year in order to consider and set the annual salaries for Executive Directors, having
regard to personal performance. Executive Directors’ salaries are reviewed on 31 March each year, along with the
remuneration of all other Group employees.
REMUNERATION OF NON-EXECUTIVE DIRECTORS
The Non-Executive Directors each receive a fee for their services, which is agreed by the Board taking into account the
role to be undertaken.
The Non-Executive Directors are appointed for a twelve month term. Non-Executive Directors do not receive any pension
or other benefits from the Company apart from a small allowance of Mulberry products, nor do they participate in any of
the bonus, incentive or share option schemes.
REMUNERATION POLICY FOR EXECUTIVE DIRECTORS
The Company’s remuneration policy for Executive Directors is to:
have regard to the Directors’ experience and the nature and complexity of their work in order to pay a competitive
salary that attracts and retains Directors of the highest quality;
link individual remuneration packages to the Group’s long-term performance through the award of share options and
incentive schemes;
provide post-retirement benefits through the Group’s pension schemes; and
provide employment-related benefits including the provision of a company car or cash alternative, life assurance,
insurance relating to the Director’s duties, medical insurance and permanent health insurance.
10 MULBERRY GROUP PLC
●
●
●
●
●
●
●
SALARIES AND INCENTIVE BONUSES
Each Executive Director receives a base salary and an annual incentive bonus which shall not in any year exceed 50% of
the basic salary for the Director, without the prior sanction of the Nomination and Remuneration Committee. The base
salary reflects job responsibility, market value and the sustained level of individual performance.
The incentive bonus scheme for the Executive Directors and management team has been revised by the Nomination and
Remuneration Committee to include a balance of benefits to reward current performance and long-term commitment.
A new unapproved share option scheme was introduced in April 2008 and a deferred share plan has commenced
in June 2008.
The following information is required by the Companies Act and is subject to audit.
Executive Director
Godfrey Davis
Non-Executive Directors
Robin Gibson
Chris Roberts
Steven Grapstein
Bernard Heng
Edward Vandyk
Previous Directors
Guy Rutherford
John Rogers
Total
Fees/Basic
Salary
£’000
Bonus
£’000
Taxable
Pension
benefits contributions
£’000
£’000
2008
Total
£’000
2007
Total
£’000
201
25
22
50
298
290
17
17
17
17
17
–
–
–
–
–
1
–
–
–
1
–
–
–
–
–
18
17
17
17
18
17
16
16
16
16
100
–
––––––––
386
–
–
––––––––
25
––––––––
––––––––
––––––––
––––––––
10
–
––––––––
34
––––––––
––––––––
14
–
––––––––
64
124
–
––––––––
509
––––––––
––––––––
––––––––
––––––––
185
14
––––––––
570
––––––––
––––––––
The emoluments disclosed above do not include any amounts for the value of share options to subscribe for ordinary
shares in the Company granted to or held by the Directors. Details of the options are as follows:
Godfrey Davis
Godfrey Davis
Guy Rutherford
Guy Rutherford
31 March
2007
105,000
100,000
100,000
100,000
Exercised
Forfeited
31 March
2008
Exercise
price (£)
Gains
£’000
105,000
–
100,000
–
–
–
–
100,000
–
100,000
–
–
0.495
1.455
0.495
1.455
221
–
211
–
The outstanding options are exercisable between 4 August 2008 and 4 August 2015.
The market price of the ordinary shares at 31 March 2008 was 133p (2007: 186p) and the range during the year was
282p to 111p (2007: 228.5p to 162.5p).
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
11
DIRECTORS’ REPORT
For the year ended 31 March 2008
The Directors present their report on the affairs of the Group, together with the financial statements and independent
auditors’ report, for the year ended 31 March 2008.
BUSINESS REVIEW AND PRINCIPAL ACTIVITIES
The Group’s principal activities are the design and manufacture or sourcing of fashion accessories and clothing and their
subsequent sale through wholesale channels or the Group’s own shops in home and export markets. There have not been
any significant changes in these activities in the year under review. The Directors are not aware, at the date of this report,
of any likely major changes in the Group’s activities during the next year.
The Company’s principal activity is that of a holding company.
The Group continues to invest in design and development in order to develop and market four accessory and two clothing
collections per year. This results in the continuous introduction of new products and updates to existing products. The
Directors regard this investment in design and product development as necessary for continuing success in the medium
to long term future.
The Chairman and Chief Executive’s review on page 3 and the Financial review on page 5 provide a review of the business
for the year and future developments.
PRINCIPAL RISKS AND UNCERTAINTIES
The management of the business and the execution of the Group’s growth strategies are subject to a number of risks,
which could adversely affect the Group’s future development.
Competitive pressure and changes in consumer demand and fashion are continuing risks, which could result in the loss of
sales to key competitors. The Group manages this risk by the continuous investment in the design of new products and
marketing to stimulate customer interest, having fast response times not only in supplying products but in handling all
customer queries, and by maintaining strong relationships with customers.
The current international credit squeeze and adverse economic climate could affect sales. A significant amount of our
sales are generated in the UK. As a result a downturn that reduced spending by consumers in the UK on luxury goods
could materially affect our trading results. Success of the Group’s strategy to increase penetration of international markets
is expected to reduce the impact of this risk. The impact on current trading is discussed further in the Chairman and Chief
Executive’s review.
A major terrorist attack, particularly in central London, could seriously affect our operations. The Group has developed a
business continuity plan to mitigate the impact on the business, where possible.
The Group continues to engage in a substantial programme of change. The first phase of the implementation of a new
Group ERP system, replacing the Group’s existing systems was successfully completed in the prior year. Over the next two
years, the implementation will cover all of the Group’s systems including retail, merchandising, distribution, planning,
manufacturing and sourcing. If this project were to be unsuccessful, it could have a significant impact on operations. A
comprehensive management process and significant pre-implementation testing are part of an intensive process
designed to minimise the risks of the project.
12 MULBERRY GROUP PLC
The Group’s sales are made in Sterling, Euros and US Dollars and so it is exposed to the movement in the Euro/US Dollars
to Sterling exchange rates. The Group manages this risk by building a natural hedge of Euro and US Dollar denominated
sales and purchases whereby the in and outflows of Euros and Dollars are similar and covers the balance through foreign
exchange contracts.
RESULTS AND DIVIDENDS
The results for the year are set out in the Income Statement. The Directors are recommending the payment of a final
dividend of 2.0p per ordinary share (2007: 1.5p), to be paid on 15 August 2008 to ordinary shareholders on the register on
18 July 2008.
TREASURY AND FOREIGN EXCHANGE
The Group has continued a policy of balancing its currency exchange exposures which arise through normal trading. This
is achieved through the natural hedge which exists in which the total inflows and outflows generated from normal trading,
principally in the Euro and US Dollar, are balanced to similar levels. This minimises the potential impact on the Group of
movements in exchange rates.
Where necessary the Group enters into forward foreign exchange contracts to manage the currency risks arising from the
Group’s operations and its sources of finance not covered by the natural hedge. There were no open forward foreign
exchange contracts at the year end. The Group’s policy is and has been throughout the year that no trading in financial
instruments shall be undertaken.
The Group’s financial instruments, other than derivatives comprise borrowings, principally in the form of finance leases,
bank overdrafts and bank loans, cash and liquid resources and various items such as trade debtors and trade creditors that
arise directly from its operations.
DIRECTORS AND THEIR INTERESTS
The Directors who served during the year and subsequently are shown below.
Executive Directors
Godfrey Davis FCA, 59, is Chairman and Chief Executive. He is a fellow of the Institute of Chartered Accountants in
England and Wales and joined Mulberry as Group Finance Director in 1987 after 15 years at Arthur Andersen, where he
was an international partner. He became Chairman and Chief Executive in November 2002.
Roger Mather FCA, 43, is the Group Finance Director. He is a fellow of the Institute of Chartered Accountants in England
and Wales having trained professionally with Price Waterhouse. He joined Mulberry during November 2007 after spending
the previous 10 years in senior finance and commercial roles within the multi-national Otto Group based both in Hong
Kong and the UK. At Mulberry he is responsible for finance, information technology, human resources, logistics,
infrastructure and corporate planning. He was appointed as Company Secretary on 20 December 2007 and was
appointed as a Director on 7 May 2008.
Guy Rutherford resigned as Group Finance Director on 31 December 2007.
Non-Executive Directors
Robin Gibson, 66, is Chairman of the Nomination and Remuneration Committee. He was appointed on 1 May 1996.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
13
DIRECTORS’ REPORT
(continued)
Andrew Christopher Roberts FCCA, 44, is Chairman of the Audit Committee. He was appointed on 6 June 2002. Chris is
Finance Director of Blue Oar plc, an AIM quoted financial services group. He is a fellow of the Chartered Association of
Certified Accountants.
Steven Grapstein, 50, was appointed on 17 November 2003. He is presently the Chief Executive Officer of Kuo Investment
Company (USA), an international investment group with extensive interests in the retail and hotel industries; Chairman
of Presidio International dba A/X Armani Exchange, a fashion retail company, and serves as the Lead Director on the
Board of Directors of Tesoro Petroleum Corporation, a US publicly held Fortune 500 company engaged in the oil and
gas industry. He is a certified public accountant.
Bernard Lam Kong Heng, 62, was appointed on 17 November 2003. He is presently the Chief Executive of Como
Holdings (UK) Ltd. a Singapore based company which has extensive retail, hotel and real estate operations in the UK
and internationally.
Edward Vandyk, 60, was appointed on 6 June 2002. Previously he was Chief Executive of Blue Oar plc, an AIM quoted
financial services group.
Directors’ interests in the shares of the Company are as follows:
Godfrey Davis
Robin Gibson
5p ordinary
5p ordinary
shares
2008
1,669,558
10,029
shares
2007
1,669,558
17,029
The other Directors had no interests in the shares of the Company. Details of Directors’ share options are disclosed in the
Directors’ remuneration report.
SUBSTANTIAL SHAREHOLDINGS
At 17 June 2008 the Company had been notified of the following interest in 3% or more of the share capital of the
Company, other than those of the Directors above:
Challice Limited
Kevin Stanford
34,212,144
14,585,720
SUPPLIER PAYMENT POLICY
The Company’s current policy concerning the payment of its suppliers is:
settle the terms of payment with those suppliers when agreeing the terms of each transaction;
ensure that those suppliers are made aware of the terms of payment; and
abide by the terms of payment, subject to the terms and conditions being met by the supplier.
At the year end, trade creditors expressed as a number of days purchases outstanding was nil for the Company (2007: nil).
For Mulberry Company (Design) Limited, the main trading subsidiary, it was 32 days (2007: 37 days).
14 MULBERRY GROUP PLC
●
●
●
EQUAL OPPORTUNITIES
The Group is committed to an active equal opportunities policy. It is our policy to promote an environment free from
discrimination, harassment and victimisation, where everyone will receive equal treatment regardless of gender, colour,
ethnic or national origin, disability, age, marital status, sexual orientation or religion. We apply employment practices
which are fair, equitable and consistent with the skills and abilities of our employees and the needs of the business.
DISABLED EMPLOYEES
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the
applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their
employment with the Group continues and that appropriate training is arranged. It is the policy of the Group that the
training, career development and promotion of disabled persons should, as far as possible, be identical with that of
other employees.
EMPLOYEE CONSULTATION
The Group places considerable value on the involvement of its employees and has continued its previous practice of
keeping them informed on matters affecting them as employees and on the various factors affecting the performance of
the Group, which is achieved through formal and informal meetings. Employee representatives are consulted regularly on
a wide range of matters affecting their current and future interests.
CHARITABLE AND POLITICAL DONATIONS
The Group made charitable donations of £67,000 (2007: £13,000) during the year. The Group made no political donations.
AUDITORS
In the case of each of the persons who are Directors of the Company at the date when this report was approved:
so far as each of the Directors is aware, there is no relevant audit information (as defined in the Companies Act 1985)
of which the Company’s auditors are unaware; and
each of the Directors has taken all the steps that he ought to have taken as a Director to make himself aware of any
relevant audit information (as defined) and to establish that the Company’s auditors are aware of that information.
A resolution to re-appoint Deloitte & Touche LLP as the Company’s auditors will be proposed at the forthcoming Annual
General Meeting.
By order of the Board
Roger Mather
Secretary
18 June 2008
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
15
●
●
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. The Directors are required to
prepare the Group financial statements under International Financial Reporting Standards (IFRSs) as adopted by the
European Union. The Group financial statements are also required by law to be properly prepared in accordance with the
Companies Act 1985.
International Accounting Standard 1 requires that IFRS financial statements present fairly for each financial year the
company's financial position, financial performance and cash flows. This requires the faithful representation of the effects
of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities,
income and expenses set out in the International Accounting Standards Board’s ‘Framework for the preparation and
presentation of financial statements’. In virtually all circumstances, a fair presentation will be achieved by compliance with
all applicable IFRSs. However, Directors are also required to:
properly select and apply accounting policies;
present information, including accounting policies, in a manner that provides relevant, reliable, comparable and
understandable information; and
provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable
users to understand the impact of particular transactions, other events and conditions on the entity's financial
position and financial performance.
The Directors have elected to prepare the parent company financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). The parent
company financial statements are required by law to give a true and fair view of the state of affairs of the Company.
In preparing these financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent; and
state whether applicable UK Accounting Standards have been followed, subject to any material departures
disclosed and explained in the financial statements.
The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time
the financial position of the Company and enable them to ensure that the parent company financial statements comply
with the Companies Act 1985. They are also responsible for safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
16 MULBERRY GROUP PLC
●
●
●
●
●
●
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF MULBERRY GROUP PLC
We have audited the Group financial statements of Mulberry Group plc for the year ended 31 March 2008 which comprise
the consolidated income statement, the consolidated statement of recognised income and expense, the consolidated
balance sheet, the consolidated cash flow statement, and the related notes 1 to 33. These Group financial statements
have been prepared under the accounting policies set out therein. We have also audited the information in the Directors’
remuneration report that is described as having been audited.
We have reported separately on the parent company financial statements of Mulberry Group plc for the year ended
31 March 2008.
This report is made solely to the Company’s members, as a body, in accordance with section 235 of the Companies Act
1985. Our audit work has been undertaken so that we might state to the Company’s members those matters we are
required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our
audit work, for this report, or for the opinions we have formed.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
The Directors’ responsibilities for preparing the Annual Report, the Directors’ remuneration report and the Group financial
statements in accordance with applicable law and International Financial Reporting Standards (IFRSs) as adopted by the
European Union are set out in the Statement of Directors' responsibilities. Our responsibility is to audit the Group financial
statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK
and Ireland).
We report to you our opinion as to whether the Group financial statements give a true and fair view, and whether the
Group financial statements have been properly prepared in accordance with the Companies Act 1985 and whether the
part of the Directors’ remuneration report described as having been audited has been properly prepared in accordance
with the Companies Act 1985. We also report to you whether in our opinion the information given in the Directors' report
is consistent with the Group financial statements. The information given in the Directors’ report includes that specific
information presented in the Chairman and Chief Executive’s review and Financial review that is cross referred from the
Business review section of the Directors' report. In addition we report to you if, in our opinion, we have not received all
the information and explanations we require for our audit.
We read the other information contained in the Annual Report as described in the contents section and consider whether
it is consistent with the audited Group financial statements. We consider the implications for our report if we become
aware of any apparent misstatements or material inconsistencies with the Group financial statements. Our responsibilities
do not extend to any further information outside the Annual Report.
BASIS OF AUDIT OPINION
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing
Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the
Group financial statements and the part of the Directors’ remuneration report to be audited. It also includes an
assessment of the significant estimates and judgements made by the Directors in the preparation of the Group financial
statements, and of whether the accounting policies are appropriate to the Group's circumstances, consistently applied
and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary
in order to provide us with sufficient evidence to give reasonable assurance that the Group financial statements and the
part of the Directors’ remuneration report to be audited are free from material misstatement, whether caused by fraud or
other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information
in the Group financial statements and the part of the Directors’ remuneration report to be audited.
OPINION
In our opinion:
the Group financial statements give a true and fair view, in accordance with IFRSs as adopted by the European Union,
of the state of the Group's affairs as at 31 March 2008 and of its profit for the year then ended;
the Group financial statements have been properly prepared in accordance with the Companies Act 1985;
the information given in the Directors’ report is consistent with the Group financial statements; and
the part of the Directors’ remuneration report described as having been audited has been properly prepared in
accordance with the Companies Act 1985.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditors
Bristol, United Kingdom
18 June 2008
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
17
●
●
●
●
CONSOLIDATED INCOME STATEMENT
Year ended 31 March 2008
Revenue
Cost of sales
Gross profit
Administrative expenses
Other operating income
Operating profit
Share of results of associates
Finance income
Finance expense
Profit before tax
Tax
Profit for the year
Attributable to:
Equity holders of the parent
Basic earnings per share
Diluted earnings per share
All activities arise from continuing operations.
Note
5
5
18
10
11
12
26
14
14
2008
£’000
51,174
(20,622)
––––––––
30,552
(25,979)
201
––––––––
4,774
63
473
(124)
––––––––
5,186
(1,750)
––––––––
3,436
––––––––
––––––––
2007
£’000
45,078
(18,818)
––––––––
26,260
(19,804)
216
––––––––
6,672
(498)
324
(298)
––––––––
6,200
(2,219)
––––––––
3,981
––––––––
––––––––
3,436
––––––––
––––––––
3,981
––––––––
––––––––
pence
pence
6.0
6.0
8.1
7.4
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
Year ended 31 March 2008
Net profit for the year
Exchange differences on translation of foreign operations
Total recognised income and expense for the year
Attributable to:
Equity holders of the parent
18 MULBERRY GROUP PLC
2008
£’000
2007
£’000
3,436
309
––––––––
3,745
––––––––
––––––––
3,981
(94)
––––––––
3,887
––––––––
––––––––
3,745
––––––––
––––––––
3,887
––––––––
––––––––
CONSOLIDATED BALANCE SHEET
At 31 March 2008
Non-current assets
Intangible assets
Property, plant and equipment
Interests in associates
Deferred tax asset
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Current tax liabilities
Obligations under finance leases
Non-current liabilities
Borrowings
Preference shares
Deferred tax liabilities
Obligations under finance leases
Total liabilities
Net assets
Note
2008
£’000
2007
£’000
15
16
18
22
19
20
20
24
23
21
21
22
23
2,095
8,454
242
–
––––––––
10,791
––––––––
7,785
5,548
10,237
––––––––
23,570
––––––––
34,361
––––––––
(10,894)
(917)
(10)
––––––––
(11,821)
–
–
(17)
(4)
––––––––
(21)
––––––––
(11,842)
––––––––
22,519
––––––––
––––––––
1,587
6,997
152
174
––––––––
8,910
––––––––
6,688
3,869
10,271
––––––––
20,828
––––––––
29,738
––––––––
(7,950)
(892)
(37)
––––––––
(8,879)
(1,250)
(2,564)
(149)
(27)
––––––––
(3,990)
––––––––
(12,869)
––––––––
16,869
––––––––
––––––––
Equity
Share capital
Share premium account
Revaluation reserves
Capital redemption reserve
Special reserve
Foreign exchange reserve
Retained earnings
2,474
4,633
49
154
1,467
(94)
8,186
––––––––
16,869
––––––––
––––––––
The financial statements were approved by the Board of Directors and authorised for issue on 18 June 2008. They were
signed on its behalf by:
2,871
7,007
18
154
1,467
215
10,787
––––––––
22,519
––––––––
––––––––
25, 26
26
26
26
26
26
26
Total equity
Godfrey Davis
Director
Roger Mather
Director
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
19
CONSOLIDATED CASH FLOW STATEMENT
At 31 March 2008
Operating profit for the year
Adjustments for:
Depreciation of property, plant and equipment
Impairment of property, plant and equipment
Amortisation of intangible assets
Loss on sale of property, plant and equipment
Effects of foreign exchange
Share based payments (credit)/charge
Operating cash flows before movements in working capital
Increase in stocks
(Increase)/decrease in debtors
Increase/(decrease) in creditors
Cash generated by operations
Corporation taxes paid
Interest paid
Preference dividends paid
Net cash from operating activities
Investing activities:
Interest received
Purchases of property, plant and equipment
Proceeds from sale of property, plant and equipment
Acquisition of intangible fixed assets
Net cash used in investing activities
Financing activities:
Dividends paid
Repayments of borrowings
Repayments of obligations under finance leases
Proceeds on issue of shares
New bank loans raised
Net cash (used in)/from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
20 MULBERRY GROUP PLC
2008
£’000
4,774
1,231
–
137
12
(61)
(5)
2007
£’000
6,672
999
37
31
2
–
102
––––––––
6,088
––––––––
7,843
(1,097)
(1,679)
2,772
(721)
1,093
(289)
––––––––
6,084
––––––––
7,926
(1,685)
(121)
(56)
(1,987)
(43)
(196)
––––––––
4,222
––––––––
5,700
––––––––
––––––––
473
(2,418)
32
(389)
324
(2,335)
10
(1,517)
––––––––
(2,302)
––––––––
(3,518)
––––––––
––––––––
(861)
(1,250)
(50)
207
–
––––––––
(1,954)
––––––––
(34)
10,271
––––––––
10,237
––––––––
––––––––
(490)
–
(43)
90
1,250
––––––––
807
––––––––
2,989
7,282
––––––––
10,271
––––––––
––––––––
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year ended 31 March 2008
1 General information
Mulberry Group plc is a company incorporated in the United Kingdom under the Companies Act 1985. The address
of the registered office is given on page 59. The nature of the Group’s operations and its principal activities are set
out in note 6 and in the Directors’ report on pages 12 to 15.
These financial statements are presented in pounds sterling because that is the currency of the primary economic
environment in which the Group operates. Foreign operations are included in accordance with the policies set out
in note 3.
2 Adoption of new and revised Standards
The Group’s financial statements for the year ended 31 March 2008 are the first to be prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted for use in the European Union.
Details of the changes in accounting policies arising from the adoption of IFRS, together with the restated information
for the year ended 31 March 2007, have been provided in note 33.
At the date of authorisation of these financial statements, the following Standards and Interpretations which have not
been applied in these financial statements were in issue but not yet effective:
Operating segments
Service Concession Arrangements
IFRS 8
IFRIC 12
IFRIC 13 Customer Loyalty Programmes
IFRIC 14
IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
The Directors anticipate that the adoption of these Standards and Interpretations in future periods will have no
material impact on the financial statements of the Group except for additional segment disclosures when IFRS 8
comes into effect for the financial year commencing 1 April 2009.
3
Significant accounting policies
Basis of accounting
The financial statements have been prepared in accordance with IFRSs adopted by the European Union.
The financial statements have been prepared on a historical cost basis. The principal accounting policies adopted are
set out below.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by
the Company (its subsidiaries) made up to 31 March each year. Control is achieved where the Company has the power
to govern the financial and operating policies of each investee entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of in any year are included in the consolidated income statement from
the date of acquisition or up to the date of disposal.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies
used into line with those used by the Group.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
21
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
3
Significant accounting policies (continued)
Goodwill
Goodwill written off to reserves under UK GAAP prior to 1998 has not been reinstated and is not included in
determining any subsequent profit or loss on disposal.
Intangible assets
Intangible assets that are acquired by the Group are stated at cost less accumulated amortisation. Amortisation is
charged to the income statement on a straight line basis over the estimated useful life of the asset.
Computer software that is integral to a related item of hardware is included as property, plant and equipment. All
other computer software is recorded as an intangible asset and is amortised over the estimated useful life of the asset.
Research and development
Expenditure on research is written off against profits as incurred. An internally generated intangible asset arising from
the Group’s product development is recognised only if the following conditions are met:
An asset is created that can be identified;
It is probable that the asset created will generate future economic benefits; and
The development cost of the asset can be measured reliably.
Internally generated intangible assets are amortised on a straight line basis over the useful lives. Where no internally
generated intangible asset can be recognised, development expenditure is recognised as an expense in the period
in which it is incurred.
Property, plant and equipment
Items of property, plant and equipment are stated at cost or deemed cost less accumulated depreciation and any
recognised impairment loss.
Depreciation is charged so as to write off the cost or valuation of assets over their estimated useful lives, using the
straight line method, on the following bases:
Freehold buildings
Short leasehold land and buildings
Fixtures, fittings and equipment
Plant and equipment
Motor vehicles
Freehold land is not depreciated.
5%
over the term of the lease
10% to 33%
20%
25%
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets
or, where shorter, over the term of the relevant lease.
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales
proceeds and the carrying amount of the asset and is recognised in income.
Assets in the course of construction are not depreciated. Depreciation on these assets commences when the assets
are ready for intended use.
22 MULBERRY GROUP PLC
●
●
●
3
Significant accounting policies (continued)
Impairment of tangible and intangible assets
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where
the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs. An intangible asset with an indefinite useful life is
tested for impairment annually and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset for which the estimates of future
cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is
recognised as an expense immediately. Where an impairment loss subsequently reverses, the carrying amount of the
asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased
carrying amount does not exceed the carrying amount that would have been determined had no impairment loss
been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised as
income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the
impairment loss is treated as a revaluation increase.
Investments in associates
An associate is an entity over which the Group is in a position to exercise significant influence, but not control or joint
control, through the participation in the financial and operating policy decisions of the investee. Significant influence
is the power to participate in the financial and operating policy decisions of the investee but is not control or joint
control over these policies. The results and assets and liabilities of associates are incorporated in these financial
statements using the equity method of accounting. Investments in associates are carried in the balance sheet at cost
as adjusted by post-acquisition changes in the Group’s share of the net assets of the associate, less any impairment
in the value of individual investments. Losses of the associates in excess of the Group’s interest in those associates are
recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on
behalf of the associate.
Any excess of the cost of acquisition over the Group’s share of the fair values of the identifiable net assets of the
associate at the date of acquisition is recognised as goodwill. Any deficiency of the cost of acquisition below the
Group’s share of the fair values of the identifiable net assets of the associate at the date of acquisition (i.e. discount
on acquisition) is credited in profit or loss in the period of acquisition.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises materials, direct labour costs and
those overheads incurred in bringing the inventories to their current location and condition. Cost is calculated using
the standard cost method. Net realisable value represents the estimated selling price less all estimated costs of
completion and costs to be incurred in marketing, selling and distribution.
Revenue recognition
Revenue represents amounts receivable for goods provided in the normal course of business, net of discounts, VAT
and other sales-related taxes and intra-group transactions. Sales of goods are recognised at the point of sale, or for
the wholesale business, when goods are delivered and title has passed. Sales of gift vouchers are recognised on
presentation of the voucher for payment of goods.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
3
Significant accounting policies (continued)
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate
applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to that asset’s net carrying amount.
Royalty income is accrued on a time basis as the income is earned and is recognised as other operating income.
Operating profit
Operating profit is stated after charging restructuring costs but before the share of results of associates, finance
income and finance expense.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in
the income statement because it excludes items of income or expense that are taxable or deductible in other years
and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated
using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit,
and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all
taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable
profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are
not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition
(other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit
nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and
associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it
is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the
asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged
or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the
Group intends to settle its current tax assets and liabilities on a net basis.
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards
of ownership to the lessee. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets of the Group at their fair value or, if lower, at the present
value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to
the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between
finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are charged directly against income.
24 MULBERRY GROUP PLC
3
Significant accounting policies (continued)
Rentals payable under operating leases are charged to income on a straight line basis over the term of the relevant
lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight
line basis over the lease term.
Retirement benefit costs
Payments to employees’ personal pension plans are charged as an expense as they fall due. Payments made to state
managed retirement benefit schemes are dealt with as payments to defined contribution schemes where the Group’s
obligations under the schemes are equivalent to those arising in a defined contribution retirement benefit scheme.
Provisions
A provision is recognised when the Group has a present legal or constructive obligation as a result of a past event,
and where it is probable that an outflow will be required to settle the obligation. Provisions are measured at the
Directors’ best estimate of the expenditure required to settle the obligation at the balance sheet date and are
discounted to present value where the effect is material.
Share based payments
The Group has applied the requirements of ‘IFRS 2 Share based payments’ to all grants of equity instruments after
November 2002 that were unvested at 1 April 2006.
The Group issues equity-settled share based payments to certain employees. Equity-settled share based payments
are measured at fair value (excluding the effect of non market-based vesting conditions) at the date of grant. The fair
value determined at the grant date of the equity-settled share based payments is expensed on a straight line basis
over the vesting period, based on the Group’s estimate of shares that will eventually vest and adjusted for the effect
of non market-based vesting conditions.
Fair value is measured by use of the Black Scholes model. The expected life used in the model has been adjusted,
based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural
considerations.
Foreign currencies
The individual financial statements of each Group company are presented in the currency of the primary economic
environment in which it operates (its functional currency). For the purpose of the consolidated financial statements,
the results and financial position of each Group company are expressed in pounds sterling, which is the functional
currency of the Company, and the presentation currency for the consolidated financial statements.
In preparing the financial statements of the individual companies, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the
transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies
are retranslated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are
denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was
determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not
retranslated.
Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are
included in profit or loss for the period. Exchange differences arising on the retranslation of non-monetary items
carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of
non-monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary
items, any exchange component of that gain or loss is also recognised directly in equity.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
25
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
3
Significant accounting policies (continued)
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign
operations are translated at exchange rates prevailing on the balance sheet date. Income and expense items are
translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that
period, in which case the exchange rates at the date of the transactions are used. Exchange differences arising, if any,
are classified as equity and transferred to the Group’s foreign exchange reserve. Such translation differences are
recognised as income or as expenses in the period in which the operation is disposed of.
Financial instruments
Financial assets and financial liabilities are recognised in the Group’s balance sheet when the Group becomes a party
to the contractual provisions of the instrument.
Trade receivables
Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances
for estimated irrecoverable amounts.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid
investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes
in value.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements
entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after
deducting all of its liabilities.
Bank borrowings
Interest-bearing bank loans and overdrafts are recorded at the fair value of the proceeds received, net of direct issue
costs. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are
accounted for on an accruals basis against profit or loss using the effective interest rate method and are added to the
carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
Convertible shares
Convertible shares are regarded as compound instruments, consisting of a liability component and an equity
component. At the date of issue, the fair value of the liability component is estimated using the prevailing market
interest rate for similar non-convertible debt. The difference between the proceeds of issue of the convertible shares
and the fair value assigned to the liability component, representing the embedded option to convert the liability into
equity of the Group, is included in equity.
Issue costs are apportioned between the liability and equity components of the convertible shares based on
their relative carrying amounts at the date of issue. The portion relating to the equity component is charged directly
against equity.
Trade payables
Trade payables are not interest-bearing and are stated at their nominal value.
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
26 MULBERRY GROUP PLC
4 Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group’s accounting policies the Directors are required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the
revision and future periods if the revision affects both current and future periods.
The critical judgements undertaken by the Directors relate to the key sources of estimation uncertainty. The following
estimates that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year, are discussed below.
Impairment of property, plant and equipment
Property, plant and equipment are reviewed for impairment if events or changes in circumstances indicate that the
carrying amount may not be recoverable. When a review for impairment is conducted, the recoverable amount is
determined based on value in use calculations prepared on the basis of management’s assumptions and estimates.
Depreciation of property, plant and equipment
Depreciation is charged so as to write off the cost of assets over their estimated useful lives. The selection of the
estimated lives requires the exercise of management judgement.
Recoverability of intangible asset
The carrying value of the lease premium and related costs for the shop in Rue St Honoré, Paris, is reassessed each
year based on the ongoing performance of the store and the realisable value of the lease.
Stock provisions
The Group designs, produces and sells luxury goods and as such is at risk that the net realisable value of stock will be
less than the carrying value. Stock provisions for raw materials are calculated based on the expected future usage and
for finished goods on the saleability of finished goods and age and condition of the items.
5
Revenue
Sales of goods
Royalty income
Finance income
Total revenue
2008
£’000
2007
£’000
51,174
201
473
––––––––
51,848
––––––––
––––––––––––––––
45,078
216
324
––––––––
45,618
––––––––
––––––––––––––––
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
27
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
6
Business and geographical segments
a) Business segments
For management purposes, the Group is currently organised into two operating divisions - Retail and Design
businesses. These divisions are the basis upon which the Group reports its primary segment information. The principal
activities are as follows:
Retail – sale of Mulberry branded fashion accessories and clothing through a number of shops and department store
concessions.
Design – brand management, marketing, product design, manufacture, sourcing and wholesale distribution for the
Mulberry brand.
Inter-segment sales for both years are charged at market prices in line with our third party wholesale customers.
Segment information about these businesses is presented below.
Retail
2008
£’000
Design Eliminations
2008
£’000
2008
£’000
31,722
–
––––––––
31,722
––––––––
––––––––––––––––
19,452
12,860
––––––––
32,312
––––––––
––––––––––––––––
–
(12,860)
––––––––
(12,860)
––––––––
––––––––––––––––
3,595
––––––––
––––––––––––––––
1,312
––––––––
––––––––––––––––
759
––––––––
––––––––––––––––
Total
2008
£’000
51,174
–
––––––––
51,174
––––––––
––––––––––––––––
5,666
(892)
––––––––
4,774
63
473
(124)
––––––––
5,186
(1,750)
––––––––
3,436
––––––––
––––––––––––––––
1,743
850
––––––––
––––––––––––––––
1,144
383
––––––––
––––––––––––––––
–
–
––––––––
––––––––––––––––
2,887
1,233
––––––––
––––––––––––––––
2008
Income Statement
External sales
Inter-segment sales
Total revenue
Segment operating profit
Unallocated corporate expenses
Operating profit
Share of results of associates
Finance income
Finance expense
Profit before tax
Tax
Profit for the year
Other information
Capital additions
Depreciation and amortisation
28 MULBERRY GROUP PLC
6
Business and geographical segments (continued)
Retail
2008
£’000
Design Eliminations
2008
£’000
2008
£’000
Total
2008
£’000
Balance sheet
Assets
Segment assets
Interests in associates
Unallocated corporate assets
Consolidated total assets
Liabilities
Segment liabilities
Unallocated corporate liabilities
Consolidated total liabilities
2007
Income statement
External sales
Inter-segment sales
Total revenue
Segment operating profit
Unallocated corporate expenses
Operating profit
Share of results of associates
Finance income
Finance expense
Profit before tax
Tax
Profit for the year
Other information
Capital additions
Depreciation and amortisation
14,695
––––––––
––––––––––––––––
19,470
––––––––
––––––––––––––––
(3,002)
––––––––
––––––––––––––––
9,349
––––––––
––––––––––––––––
16,527
––––––––
––––––––––––––––
(15,171)
––––––––
––––––––––––––––
Retail
2007
£’000
Design Eliminations
2007
£’000
2007
£’000
23,718
–
––––––––
23,718
––––––––
––––––––––––––––
21,360
9,601
––––––––
30,961
––––––––
––––––––––––––––
–
(9,601)
––––––––
(9,601)
––––––––
––––––––––––––––
2,490
––––––––
––––––––––––––––
3,978
––––––––
––––––––––––––––
997
––––––––
––––––––––––––––
1,241
660
––––––––
––––––––––––––––
816
250
––––––––
––––––––––––––––
–
–
––––––––
––––––––––––––––
31,163
242
2,956
––––––––
34,361
––––––––
––––––––––––––––
10,705
1,137
––––––––
11,842
––––––––
––––––––––––––––
Total
2007
£’000
45,078
–
––––––––
45,078
––––––––
––––––––––––––––
7,466
(794)
––––––––
6,672
(498)
324
(298)
––––––––
6,200
(2,219)
––––––––
3,981
––––––––
––––––––––––––––
2,057
910
––––––––
––––––––––––––––
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
29
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
6
Business and geographical segments (continued)
Balance sheet
Assets
Segment assets
Interests in associates
Unallocated corporate assets
Consolidated total assets
Liabilities
Segment liabilities
Unallocated corporate liabilities
Consolidated total liabilities
Retail
2007
£’000
Design Eliminations
2007
£’000
2007
£’000
11,657
––––––––
––––––––––––––––
18,792
––––––––
––––––––––––––––
(3,904)
––––––––
––––––––––––––––
8,498
––––––––
––––––––––––––––
15,755
––––––––
––––––––––––––––
(16,420)
––––––––
––––––––––––––––
Total
2007
£’000
26,545
152
3,041
––––––––
29,738
––––––––
––––––––––––––––
7,833
5,036
––––––––
12,869
––––––––
––––––––––––––––
b) Geographical segments
The following table provides an analysis of the Group’s sales by geographical market, irrespective of the origin of
the goods:
Europe
North America
Rest of the World
Sales revenue by
geographical market
–––––––––––––––––––––
2007
£’000
2008
£’000
45,998
1,319
3,857
––––––––
51,174
––––––––
––––––––––––––––
39,324
1,623
4,131
––––––––
45,078
––––––––
––––––––––––––––
The Group’s operations are mainly located in Europe and as such no additional geographical analysis has been
provided.
7
Profit for the year
Profit for the year has been arrived at after charging/(crediting):
Net foreign exchange gains
Depreciation of property, plant and equipment:
Owned
Held under finance leases and hire purchase contracts
Impairment of property, plant and equipment
Amortisation of intangible assets
Operating lease rentals
Write downs of inventories recognised as an expense
Staff costs (see note 9)
Impairment of trade receivables
Loss on disposal of property, plant and equipment
30 MULBERRY GROUP PLC
2008
£’000
(390)
2007
£’000
(123)
1,219
12
–
137
2,931
162
11,925
135
12
––––––––
––––––––––––––––
837
162
37
31
2,610
365
10,089
58
2
––––––––
––––––––––––––––
8 Auditors’ remuneration
The analysis of auditors’ remuneration is as follows:
Fees payable to the Company’s auditors for the audit of the Company’s
annual accounts
Fees payable to the Company’s auditors and their associates for other
services to the Group:
The audit of the Company’s subsidiaries pursuant to legislation
Total audit fees
Tax services
Other services
Total non-audit fees
Fees payable to the Company’s auditors in respect of associated
pension schemes
Other services in 2008 includes assistance with the conversion to IFRS and the interim review.
2008
£’000
10
2007
£’000
6
40
––––––––
50
––––––––
––––––––––––––––
3
33
––––––––
36
––––––––
––––––––––––––––
40
––––––––
46
––––––––
––––––––––––––––
9
7
––––––––
16
––––––––
––––––––––––––––
–
––––––––
––––––––––––––––
1
––––––––
––––––––––––––––
9
Staff costs
The average monthly number of employees (including Executive Directors and those on a part time basis) was:
Production
Sales and distribution
Administration
Their aggregate remuneration comprised:
Wages and salaries
Social security costs
Other pension costs (see note 29)
Share based payments (see note 28)
2008
£’000
250
353
42
––––––––
645
––––––––
––––––––––––––––
10,629
994
307
(5)
––––––––
11,925
––––––––
––––––––––––––––
2007
£’000
221
262
41
––––––––
524
––––––––
––––––––––––––––
8,826
862
299
102
––––––––
10,089
––––––––
––––––––––––––––
Details of Directors’ remuneration and interests are provided in the audited section of the Directors’ remuneration
report and should be regarded as integral to this note.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
10 Finance income
Interest income on cash balances
11 Finance expense
Interest on bank overdraft and loans
Dividends on redeemable cumulative B preference shares classified as financial liabilities
Interest on obligations under finance leases
12 Tax
Current tax
Adjustment to prior year corporation tax
Deferred tax (note 22)
The charge for the year can be reconciled to the profit per the income statement as follows:
Profit before tax
Tax at the UK corporation tax rate of 30% (2007: 30%)
Preference dividends payable
Tax effect of expenses that are not deductible in determining taxable profit
Capital allowances in excess of depreciation
Short-term timing differences
(Losses)/profit carried forward to offset against future profits
Current tax expense for the year
2008
£’000
2007
£’000
473
––––––––
––––––––––––––––
324
––––––––
––––––––––––––––
2008
£’000
114
7
3
––––––––
124
––––––––
––––––––––––––––
2008
£’000
1,700
8
42
––––––––
1,750
––––––––
––––––––––––––––
2007
£’000
44
249
5
––––––––
298
––––––––
––––––––––––––––
2007
£’000
1,905
(16)
330
––––––––
2,219
––––––––
––––––––––––––––
2008
£’000
2007
£’000
5,186
––––––––
––––––––––––––––
6,200
––––––––
––––––––––––––––
1,556
2
239
(146)
63
(14)
––––––––
1,700
––––––––
––––––––––––––––
1,860
75
287
(56)
(278)
17
––––––––
1,905
––––––––
––––––––––––––––
32 MULBERRY GROUP PLC
12 Tax (continued)
The tax charge in future periods will be affected by the following:
The corporation tax rate in the UK will reduce to 28% from 1 April 2008;
The UK rate of tax writing down allowances will be reduced from 25% to 20% on plant and machinery and from
25% to 10% on fixtures and fittings from 1 April 2008; and
The rate of Industrial Buildings Allowances will be reduced by 1% per annum from April 2008 until they are
abolished in April 2011. As of 31 March 2008, these changes had not been substantively enacted and as such the
impact has not been reflected. If they had been reflected, the deferred tax expense for 2008 would have
increased by approximately £140,000 and the effective rate of corporation tax by 2.7 percentage points.
13 Dividends
The dividends approved and paid in the year are as follows:
1.5p (2007: 1p) per share on 5p ordinary shares
2008
£’000
2007
£’000
861
––––––––
––––––––––––––––
490
––––––––
––––––––––––––––
The Directors are recommending the payment of a final dividend of 2.0p per ordinary share (2007: 1.5p) to be
paid on 15 August 2008 to ordinary shareholders on the register as at 18 July 2008. This proposed final dividend
is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these
financial statements.
14 Earnings per share
Basic earnings per ordinary share has been calculated by dividing the profit for the year by 56,968,275
(2007: 48,974,442) ordinary shares, being the weighted average number of ordinary shares in issue during the year.
Diluted earnings per share has been calculated by dividing the profit for the year excluding the interest and finance
costs relating to the preference shares by 57,832,347 (2007: 57,381,518) potential ordinary shares. These shares take
into account the exercise of unexercised options and the diluting effect of the preference shares prior to their
conversion in April 2007.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
33
●
●
●
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
15 Intangible assets
Cost
At 1 April 2006
Additions
At 1 April 2007
Additions
Exchange differences
At 31 March 2008
Amortisation
At 1 April 2006
Charge for the year
At 1 April 2007
Charge for the year
Exchange differences
At 31 March 2008
Carrying amount
At 31 March 2008
At 31 March 2007
Software
£’000
24
77
––––––––
101
389
–
––––––––
490
––––––––
–
13
––––––––
13
71
–
––––––––
84
––––––––
406
––––––––
88
––––––––
––––––––––––––––
Lease
costs
£’000
–
1,517
––––––––
1,517
–
258
––––––––
1,775
––––––––
–
18
––––––––
18
66
2
––––––––
86
––––––––
1,689
––––––––
1,499
––––––––
––––––––––––––––
Total
£’000
24
1,594
––––––––
1,618
389
258
––––––––
2,265
––––––––
–
31
––––––––
31
137
2
––––––––
170
––––––––
2,095
––––––––
1,587
––––––––
––––––––––––––––
Lease costs comprise the lease premium and related costs associated with the Group’s shop on Rue St Honoré in Paris
which are being amortised over the effective lease term of twenty seven years.
Included within software is £49,000 (2007: £154,000) of assets in the course of construction in respect of the new
ERP system which have not been put into operation at the balance sheet date and so have not been amortised.
34 MULBERRY GROUP PLC
16 Property, plant and equipment
Cost
At 1 April 2006
Additions
Disposals
At 1 April 2007
Additions
Disposals
Exchange differences
At 31 March 2008
Accumulated depreciation
At 1 April 2006
Charge for the year
Impairment losses
Disposals
At 1 April 2007
Charge for the year
Disposals
Exchange differences
At 31 March 2008
Carrying amount
At 31 March 2008
At 31 March 2007
Freehold
land and
buildings
£’000
2,728
868
–
––––––––
3,596
133
–
–
––––––––
3,729
––––––––
906
82
–
–
––––––––
988
96
–
–
––––––––
1,084
––––––––
2,645
––––––––
––––––––––––––––
2,608
––––––––
––––––––––––––––
Short
Fixtures,
leasehold
Plant and fittings and
land and
buildings equipment equipment
£’000
£’000
£’000
3,107
7
–
––––––––
3,114
40
(15)
18
––––––––
3,157
––––––––
1,080
242
37
–
––––––––
1,359
215
(5)
4
––––––––
1,573
––––––––
1,584
––––––––
––––––––––––––––
1,755
––––––––
––––––––––––––––
2,530
577
–
––––––––
3,107
554
(69)
–
––––––––
3,592
––––––––
2,304
122
–
–
––––––––
2,426
232
(60)
–
––––––––
2,598
––––––––
994
––––––––
––––––––––––––––
681
––––––––
––––––––––––––––
4,769
1,389
(966)
––––––––
5,192
1,886
(187)
72
––––––––
6,963
––––––––
3,703
535
–
(954)
––––––––
3,284
668
(176)
1
––––––––
3,777
––––––––
3,186
––––––––
––––––––––––––––
1,908
––––––––
––––––––––––––––
Motor
vehicles
£’000
110
–
–
––––––––
110
34
(45)
–
––––––––
99
––––––––
47
18
–
–
––––––––
65
20
(31)
–
––––––––
54
––––––––
45
––––––––
––––––––––––––––
45
––––––––
––––––––––––––––
Total
£’000
13,244
2,841
(966)
––––––––
15,119
2,647
(316)
90
––––––––
17,540
––––––––
8,040
999
37
(954)
––––––––
8,122
1,231
(272)
5
––––––––
9,086
––––––––
8,454
––––––––
––––––––––––––––
6,997
––––––––
––––––––––––––––
Freehold land of £997,000 (2007: £997,000) has not been depreciated.
At 31 March 2008 included in short leasehold land and buildings, plant and equipment, motor vehicles and fixtures,
fittings and equipment are items acquired under hire purchase contracts and finance lease arrangements with a net
book value of £13,000 (2007: £268,000). The assets under these contracts and arrangements are secured against
the assets to which they relate and guarantees provided by the Company. The Group does not hold the title to
these assets.
At 31 March 2008, the Group had entered into contractual commitments for the acquisition of property, plant and
equipment amounting to £349,000 (2007: £377,000).
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
17 Subsidiaries
A list of the significant investments in subsidiaries and associates, including the name, country of incorporation,
proportion of ownership interest is given in note 36 to the Company’s separate financial statements.
18 Interests in associates
Aggregated amounts relating to associates
Total assets
Total liabilities
Revenues
Loss
Aggregated amounts recognised relating to associates
Share of profits/(losses) recognised for the year
Share of losses not recognised for the year
Cumulative losses not recognised
2008
£’000
2007
£’000
6,020
(10,348)
3,837
(3,586)
––––––––
––––––––––––––––
63
(1,850)
(1,858)
––––––––
––––––––––––––––
5,446
(6,250)
2,626
(1,543)
––––––––
––––––––––––––––
(498)
(8)
(8)
––––––––
––––––––––––––––
A list of the significant investments in associates, including the name, country of incorporation, proportion of
ownership interest is given in note 36 to the Company’s separate financial statements.
19 Inventories
Raw materials
Work-in-progress
Finished goods
20 Other financial assets
Trade and other receivables
Amount receivable for the sale of goods
Allowance for doubtful debts
Amounts owed by associate undertakings
Other debtors
Prepayments and accrued income
36 MULBERRY GROUP PLC
2008
£’000
840
193
6,752
––––––––
7,785
––––––––
––––––––––––––––
2007
£’000
472
254
5,962
––––––––
6,688
––––––––
––––––––––––––––
2008
£’000
3,674
(115)
––––––––
3,559
504
575
910
––––––––
5,548
––––––––
––––––––––––––––
2007
£’000
3,121
(85)
––––––––
3,036
297
13
523
––––––––
3,869
––––––––
––––––––––––––––
20 Other financial assets (continued)
Trade receivables
The average credit period taken on the sale of goods is 55 days (2007: 52 days). No interest is charged on the
outstanding receivables.
The Group has provided for the estimated irrecoverable amount from the sale of goods, where there is doubt as
to the recoverability of the receivables balance. Before accepting any new customer, the Group, in association with
a credit insurance company, assesses the potential customer’s credit quality and defines individual credit limits
by customer.
The Group’s receivables comprise primarily its overseas associates, franchise partners and concessions. Those
customers who represented more than 10% of the total balance of trade receivables at the year end were Mulberry
USA LLC, Club 21 and House of Fraser (Stores) Limited.
Included in the Group’s trade receivables balance are debtors with a carrying amount of £732,000 (2007: £508,000)
which are past due at the reporting date for which the Group has not provided as there has not been a significant
change in credit quality and the amounts are still considered recoverable. The Group retains retention of title for the
goods sold.
Ageing of past due but not impaired receivables
0-30 days overdue
31-60 days overdue
2008
£’000
622
110
––––––––
732
––––––––
––––––––––––––––
2007
£’000
422
86
––––––––
508
––––––––
––––––––––––––––
Given the relatively small nature of the provision for receivables no further analysis is provided.
Cash and cash equivalents
Cash and cash equivalents
2008
£’000
2007
£’000
10,237
––––––––
––––––––––––––––
10,271
––––––––
––––––––––––––––
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity
of three months or less. The carrying amount of these assets approximates to their fair value.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
21 Borrowings
Unsecured borrowing at amortised cost
Redeemable cumulative B preference shares
Secured borrowing at amortised cost
Bank loans
Finance leases
Total borrowings
Amount due for settlement within 12 months
Amount due for settlement after 12 months
2008
£’000
2007
£’000
–
2,564
–
14
––––––––
14
––––––––
––––––––––––––––
10
4
––––––––
––––––––––––––––
1,250
64
––––––––
3,878
––––––––
––––––––––––––––
37
3,841
––––––––
––––––––––––––––
The principal features of the Group’s borrowings are as follows:
Bank overdrafts are repayable on demand. The multicurrency overdraft facilities of £3,500,000 (2007: £3,500,000)
have been secured by a charge over the Group’s assets. The interest rates are determined based on 1% over the
bank base rate.
The Sterling bank loan drawn down on 2 January 2007 was fully repaid on 14 February 2008. The loan had an
original term of five years and was secured by a charge over certain of the Group’s properties and assets dated
10 April 1990. The loan carried interest at a rate of 0.75% above the bank base rate.
Redeemable cumulative B preference shares of £2,800,000 were issued on 11 September 2000 at an issue price
of 35p per share. The shares carried 7% interest and were converted into ordinary shares on 16 April 2007. See
note 25 for further details.
The weighted average interest rates paid during the year were as follows:
Bank loans
Redeemable cumulative preference shares
2008
5.5%
–
2007
2.2%
7%
Undrawn borrowing facilities
At 31 March 2008, the Group had available £6,250,000 (2007: £6,250,000) of undrawn committed borrowing facilities
in respect of which all conditions precedent had been met.
38 MULBERRY GROUP PLC
●
●
●
22 Deferred tax
The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon
during the current and prior reporting periods.
At 1 April 2006
Charge/(credit) to income
At 1 April 2007
Charge/(credit) to income
Effect of change in tax rate
– income statement
At 31 March 2008
Accelerated
tax
depreciation
£’000
Tax
Short-term
timing
losses differences
£’000
£’000
43
65
––––––––
108
92
(13)
––––––––
187
––––––––
––––––––––––––––
(297)
297
––––––––
–
–
–
––––––––
–
––––––––
––––––––––––––––
(98)
(35)
––––––––
(133)
(49)
12
––––––––
(170)
––––––––
––––––––––––––––
Total
£’000
(352)
327
––––––––
(25)
43
(1)
––––––––
17
––––––––
––––––––––––––––
Certain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred tax balances
(after offset) for financial reporting purposes:
Deferred tax assets
Deferred tax liabilities
23 Obligations under finance leases
Amounts payable under finance leases:
Within one year
In the second to fifth years
Less: future finance charges
Present value of lease obligations
Less:
– amount due for settlement within 12 months
(shown under current liabilities)
Amount due for settlement after 12 months
2008
£’000
187
(170)
––––––––
17
––––––––
––––––––––––––––
2007
£’000
108
(133)
––––––––
(25)
––––––––
––––––––––––––––
Minimum
lease payments
–––––––––––––––––––––
2007
£’000
2008
£’000
Present value
of lease payments
–––––––––––––––––––––
2007
£’000
2008
£’000
11
4
––––––––
15
(1)
––––––––
14
––––––––
––––––––––––––––
40
29
––––––––
69
(5)
––––––––
64
––––––––
––––––––––––––––
10
4
––––––––
14
n/a
––––––––
14
37
27
––––––––
64
n/a
––––––––
64
(10)
––––––––
4
––––––––
––––––––––––––––
(37)
––––––––
27
––––––––
––––––––––––––––
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
23 Obligations under finance leases (continued)
It is the Group’s policy to lease certain of its fixtures and equipment under finance leases. The average lease term is
for four years. For the year ended 31 March 2008, the average effective borrowing rate was 14.9% (2007: 14.9%).
Interest rates are fixed at the contract date. All leases are on a fixed repayment basis and no arrangements have been
entered into for contingent rental payments.
All lease obligations are denominated in Sterling. The assets under finance lease arrangements are secured against
the assets to which they relate and guarantees provided by the Group.
The fair value of the Group’s lease obligations approximates their carrying amount.
24 Other financial liabilities
Trade and other payables
Trade creditors
Accruals and deferred income
Other creditors
2008
£’000
5,239
5,138
517
––––––––
10,894
––––––––
––––––––––––––––
2007
£’000
3,399
4,226
325
––––––––
7,950
––––––––
––––––––––––––––
Trade creditors and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The
average credit period taken for trade purchases is 32 days (2007: 37 days). For most suppliers no interest is charged
on the trade payables for the first 60 days from the date of the invoice. Thereafter, interest is charged on the
outstanding balances at various interest rates. The Group has financial risk management policies in place to ensure
that all payables are paid within the credit timeframe.
The Directors consider that the carrying amount of trade payables approximates to their fair value.
25 Share capital
Authorised
65,000,000 ordinary shares of 5p each (2007: 57,000,000)
Nil 7% convertible redeemable B preference shares of 5p each (2007: 8,000,000)
Issued and fully paid
57,419,505 ordinary shares of 5p each (2007: 49,014,505)
Nil 7% convertible redeemable B preference shares of 5p each (2007: 8,000,000)
Less: classified within financial liabilities (see note 21)
2008
£’000
2007
£’000
3,250
–
––––––––
3,250
––––––––
––––––––––––––––
2,871
–
––––––––
2,871
–
––––––––
2,871
––––––––
––––––––––––––––
2,850
400
––––––––
3,250
––––––––
––––––––––––––––
2,451
400
––––––––
2,851
(377)
––––––––
2,474
––––––––
––––––––––––––––
The Company has not granted options in respect of 5p ordinary shares during the year (2007: nil).
40 MULBERRY GROUP PLC
25 Share capital (continued)
405,000 ordinary shares of 5p each (2007: 140,043) with a nominal value of £20,250 (2007: £7,002) were allotted during
the year for a total consideration of £207,475 (2007: £89,937) due to the exercise of options.
The 7% convertible redeemable B preference shares were converted into ordinary shares on 16 April 2007 at the
request of the shareholder as the conditions for conversion had been met. The B preference shares were convertible
into ordinary shares on the basis of one ordinary share for each one B preference share (equivalent to a conversion
price of 35 pence) after the later of the second anniversary of their subscription and the opening of four outlets in the
United States and the contracting for a fifth outlet, one of which was to be the flagship store in Manhattan, by
Mulberry USA LLC. If Mulberry USA LLC had not opened the required number of outlets in the United States, the
B preference shares would not have been converted into ordinary shares and would have been redeemed by the
Company at 35 pence each on 11 September 2008 being the eighth anniversary of their subscription.
Until the date of conversion, the B preference shares had a right to receive a fixed cumulative dividend of 7% per
annum on their subscription price in priority to all other dividends or distributions made by the Company.
As a result of the conversion of the preference shares on 16 April 2007, the overall authorised share capital of the
Company remained the same but the amount of authorised 5p ordinary shares was increased by 8,000,000 to
65,000,000 and the amount of authorised 7% convertible redeemable B preference shares was reduced to nil.
26 Reserves
Share
capital
£’000
Capital
Share Revaluation redemption
reserve
reserve
£’000
£’000
premium
£’000
Special
reserve*
£’000
Foreign
exchange
reserve
£’000
Profit
and loss
account
£’000
Total
£’000
Balance at 1 April 2006
2,467
4,547
80
154
1,467
Charges for employee share
based payments
New shares issued
Amortisation of revaluation
surplus
Currency translation difference
Profit for the year
Ordinary dividends paid
Finance costs on preference
shares
Balance at 1 April 2007
Charges for employee share
–
7
–
–
–
–
–
83
–
–
–
–
–
–
(31)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(94)
–
–
4,562
13,277
102
–
31
–
3,981
(490)
102
90
–
(94)
3,981
(490)
–
–––––––
2,474
3
–––––––
4,633
–
–––––––
49
–
–––––––
154
–
–––––––
1,467
–
–––––––
(94)
–
–––––––
8,186
3
–––––––
16,869
based payments
New shares issued
Conversion of preference shares
Amortisation of revaluation surplus
Currency translation differences
Profit for the year
Ordinary dividends paid
Balance at 31 March 2008
–
20
377
–
–
–
–
–––––––
2,871
–––––––
––––––––––––––
–
187
2,187
–
–
–
–
–––––––
7,007
–––––––
––––––––––––––
–
–
–
(31)
–
–
–
–––––––
18
–––––––
––––––––––––––
–
–
–
–
–
–
–
–––––––
154
–––––––
––––––––––––––
–
–
–
–
–
–
–
–––––––
1,467
–––––––
––––––––––––––
–
–
–
–
309
–
–
–––––––
215
–––––––
––––––––––––––
(5)
–
–
31
–
3,436
(861)
–––––––
10,787
–––––––
––––––––––––––
(5)
207
2,564
–
309
3,436
(861)
–––––––
22,519
–––––––
––––––––––––––
* created as part of a capital restructuring of the Group in 2004.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
27 Operating lease arrangements
Minimum lease payments under operating leases recognised as an expense in the year
2008
£’000
2007
£’000
2,931
––––––––
––––––––––––––––
2,610
––––––––
––––––––––––––––
At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under
non-cancellable operating leases, which fall due as follows:
Within one year
In the second to fifth years inclusive
After five years
£’000
£’000
2,795
9,744
12,996
––––––––
25,535
––––––––
––––––––––––––––
2,401
8,219
11,904
––––––––
22,524
––––––––
––––––––––––––––
Operating lease payments represent rentals payable by the Group for certain of its retail stores, warehouse and
offices. The leases are for a varied length of time with the longest lease running until 2023. Leases are typically subject
to rent reviews at specified intervals and some payments are contingent upon levels of revenue above minimum
thresholds. The amount paid under this contingent element in the year was £282,000 (2007: £67,000).
28 Share based payments
The Group operated the following scheme during the year.
The Mulberry Group plc 1996 Company Share Option Scheme
The scheme was open to all employees. The exercise price is equal to the market value of the shares on the date of
grant. The vesting period is three years. If the options remain unexercised after a period of ten years from the date
of grant, the options expire. Options may be forfeited if the employee leaves the Group.
Details of the share options outstanding during the year are as follows:
Outstanding at beginning of period
Forfeited during the period
Exercised during the period
Outstanding at the end of the period
Exercisable at the end of the period
2008
2007
Weighted
average
exercise
price
(in p)
100.1
140.2
51.5
146.0
–
Number
of share
options
880,000
(250,000)
(405,000)
––––––––
225,000
––––––––
––––––––––––––––
–
––––––––
––––––––––––––––
Number
of share
options
1,057,428
(37,385)
(140,043)
––––––––
880,000
––––––––
––––––––––––––––
200,000
––––––––
––––––––––––––––
Weighted
average
exercise
price
(in p)
96.9
134.5
64.2
100.1
53.0
The weighted average share price at the date of exercise for share options exercised during the period was 263.0p
(2007: 198.2p). The options outstanding at 31 March 2008 had a weighted average remaining contractual life of
0.3 years (2007: 1.0 years).
42 MULBERRY GROUP PLC
28 Share based payments (continued)
The inputs into the Black Scholes model are as follows:
Share price
Exercise price
Expected volatility
Expected life
Risk-free rate
Expected dividend yields
2008
2007
50.0p - 145.5p
50.0p - 145.5p
33.57% - 35.15%
5 years
4.09% - 5.05%
0% - 0.7%
49.5p - 145.5p
49.5p - 145.5p
22.58% - 35.15%
5 years
4.09% - 5.05%
0% - 0.7%
Expected volatility was based on historical volatility over the expected life of the schemes. The expected life is
based upon historical data and has been adjusted based on management’s best estimate for the effects of
non-transferability, exercise restrictions, and behavioural considerations.
The Group recognised total income of £5,000 related to equity-settled share based payment transactions
(2007: £102,000 expense).
29 Retirement benefit schemes
The Group contributes to personal pension plans for all qualifying employees. The total cost charged to income of
£307,000 (2007: £299,000) represents contributions payable to these schemes by the Group at rates specified in the
rules of the plans. As at 31 March 2008, there were no contributions due in respect of the current reporting period
which had not been paid over to the schemes (2007: nil).
30 Financial instruments
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while
maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure
of the Group consists of cash and cash equivalents and equity attributable to equity holders of the parent, comprising
issued capital, reserves and retained earnings as disclosed in notes 25 to 26. The Group had an outstanding bank loan
as at 31 March 2007 but this was repaid during the year.
Externally imposed capital requirement
The Group is not subject to externally imposed capital requirements.
Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset,
financial liability and equity instrument are disclosed in note 3 to the financial statements.
Categories of financial instruments
Financial assets
Loans and receivables (including cash and cash equivalents)
Financial liabilities
Amortised cost
Carrying values
–––––––––––––––––––––
2007
£’000
2008
£’000
13,796
––––––––
––––––––––––––––
13,307
––––––––
––––––––––––––––
10,910
––––––––
––––––––––––––––
11,828
––––––––
––––––––––––––––
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
30 Financial instruments (continued)
Financial risk management objectives
The Group’s Finance Director is responsible to the Board for the Group’s financial risk management. This includes
analysing the Group’s exposure by degree and magnitude of risks. These risks include market risk (including currency
risk and interest rate risk), credit risk and liquidity risk.
The Group seeks to minimise the effects of these risks where possible. It does this by maintaining bank accounts in
all of the major currencies in which it trades and it operates its own internal hedging by offsetting currency receipts
on sales against purchases in related currencies. Where there is significant risk remaining, and the Group deems it
necessary, it uses derivative financial instruments to hedge these risk exposures. The Group does not enter into or
trade financial instruments, including derivative financial instruments, for speculative purposes.
Market risk
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and
interest rates. The Group reviews the need to enter into financial instruments on a regular basis but has not entered
into any during the current or previous periods. Having repaid the bank loan during the year the Group is not
significantly exposed to interest rate risk on its financial liabilities and continues to seek to maximise the returns from
its bank deposits wherever possible.
Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate
fluctuations arise. The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary
liabilities at the reporting date are as follows:
Euro
US Dollar
Liabilities
Assets
–––––––––––––––––––––
2007
£’000
2008
£’000
–––––––––––––––––––––
2007
£’000
2008
£’000
1,163
193
––––––––
––––––––––––––––
1,118
256
––––––––
––––––––––––––––
1,795
1,429
––––––––
––––––––––––––––
1,114
514
––––––––
––––––––––––––––
Foreign currency sensitivity analysis
The Group is mainly exposed to the US Dollar and Euro currencies.
The following table details the Group’s sensitivity to a 10% increase and decrease in Sterling against the relevant
foreign currencies. 10% is the sensitivity rate which represents management’s assessment of the reasonably possible
change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated
monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. A positive
number below indicates an increase in profit and other equity where Sterling strengthens 10% against the relevant
currency. For a 10% weakening of Sterling against the relevant currency, there would be an equal and opposite impact
on the profit and other equity, and the balances below would be negative or positive.
Euro currency
impact
–––––––––––––––––––––
2007
£’000
2008
£’000
US Dollar currency
impact
–––––––––––––––––––––
2007
£’000
2008
£’000
(12)
––––––––
––––––––––––––––
5
––––––––
––––––––––––––––
(63)
––––––––
––––––––––––––––
(23)
––––––––
––––––––––––––––
Profit or loss
44 MULBERRY GROUP PLC
30 Financial instruments (continued)
Interest rate risk management and sensitivity analysis
The Group’s exposure to interest rate risk on borrowings is limited as there is no outstanding debt within the Group,
other than in relation to finance lease borrowings which are on fixed rate terms. The Group’s exposures to interest
rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note.
The Group’s sensitivity to changes in interest rates has been illustrated based on a 1% increase or decrease in interest
rates. For floating rate deposits and liabilities, the analysis is prepared assuming the amount of liability outstanding
at the balance sheet date was outstanding for the whole year. A 1% increase or decrease has been applied to
represent management’s assessment of the reasonably possible change in interest rates.
If interest rates had been 1% higher and all other variables were held constant, the Group’s profit for the year ended
31 March 2008 would increase by £66,000 (2007: increase by £54,000). This is mainly attributable to the Group’s
exposure to interest rates on its cash deposits.
The Group’s sensitivity to interest rates has increased during the current period mainly due to the net increase in the
funds on which interest is received.
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to
the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient
credit insurance, as a means of mitigating the risk of financial loss from defaults.
Trade receivables consist of a large number of customers. Credit evaluation is performed on the financial condition
of accounts receivable and, where appropriate, credit insurance cover is purchased.
The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties
having similar characteristics, other than as disclosed in note 20. The Group defines counterparties as having similar
characteristics if they are connected entities.
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate
liquidity risk management framework for the management of the Group’s short, medium and long-term funding and
liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking
facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the
maturity profiles of financial assets and liabilities. Included in note 21 is a description of additional undrawn facilities
that the Group has at its disposal to reduce further liquidity risk.
Liquidity and interest risk tables
The Group’s financial assets all contractually mature within the next year. Trade receivables do not accrue interest. The
weighted average interest rate on cash and cash equivalents was 5.6% (2007: 4.5%)
The following tables detail the Group’s remaining contractual maturity for its financial liabilities. The tables have been
drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group
can be required to pay. The table includes both interest and principal cash flows.
2008
Weighted
average Less than 1
year
interest
£’000
rate
Trade and other payables
Leases
–
14.9%
10,896
11
––––––––
10,907
––––––––
––––––––––––––––
1 to 2
years
£’000
–
4
––––––––
4
––––––––
––––––––––––––––
2 to 3
years
£’000
–
–
––––––––
–
––––––––
––––––––––––––––
3 to 4
years
£’000
–
–
––––––––
–
––––––––
––––––––––––––––
4 to 5
years
£’000
–
–
––––––––
–
––––––––
––––––––––––––––
Total
£’000
10,896
15
––––––––
10,911
––––––––
––––––––––––––––
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
30 Financial instruments (continued)
2007
Weighted
average Less than 1
year
interest
£’000
rate
Trade and other payables
Leases
Bank loans
Preference shares
–
14.9%
5.5%
7.0%
7,950
40
–
–
––––––––
7,990
––––––––
––––––––––––––––
1 to 2
years
£’000
–
29
–
2,564
––––––––
2,593
––––––––
––––––––––––––––
2 to 3
years
£’000
–
–
–
–
––––––––
–
––––––––
––––––––––––––––
3 to 4
years
£’000
–
–
–
–
––––––––
–
––––––––
––––––––––––––––
4 to 5
years
£’000
–
–
1,250
–
––––––––
1,250
––––––––
––––––––––––––––
Total
£’000
7,950
69
1,250
2,564
––––––––
11,833
––––––––
––––––––––––––––
Fair value of financial instruments
The carrying amounts of financial assets and financial liabilities recorded at amortised cost in the financial statements
approximate to their fair values.
31 Related party transactions
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 Group and its associates are
disclosed below.
Trading transactions
During the year, Group companies entered into the following transactions with related parties who are not members
of the Group:
Mulberry Oslo AS
Mulberry USA LLC
MUL 21 (UK) Limited*
Club 21 Retail (Hong Kong) Limited*
Club 21 Pte Limited*
Club 21 (Thailand) Co Limited*
Club 21 Pte Limited Taiwan Branch*
Sale of goods
–––––––––––––––––––––
2007
£’000
2008
£’000
Amounts owed by
related parties
–––––––––––––––––––––
2007
£’000
2008
£’000
498
1,319
–
971
629
239
158
503
1,623
538
776
292
261
193
191
313
–
141
260
49
43
226
219
–
97
53
24
41
* These are related parties of the Group as they are all associated companies of Challice Limited, the majority
shareholder of the Group.
All sales of goods have been made on an arm’s length basis. The amounts outstanding are unsecured and will be
settled in cash. No guarantees have been given or received. No provisions have been made for doubtful debts in
respect of the amounts owed by related parties.
In addition to the transactions above, MUL 21 (UK) Limited operated the Mulberry store at 171-175 Brompton Road,
London under the terms of a franchise agreement which was signed during November 2001. On 4 December 2007 a
subsidiary of Mulberry Group plc, Mulberry Company (Sales) Limited, took over the operation of the store, purchased
the stock and shop fittings and took over the lease. All related party transactions take place on an arm’s length basis.
46 MULBERRY GROUP PLC
31 Related party transactions (continued)
Remuneration of key management personnel
The remuneration of the Directors, who are the key management personnel of the Group, is set out below in
aggregate for each of the categories specified in IAS 24 ‘Related Party Disclosures’. Further information about the
remuneration of individual Directors is provided within the audited part of the Directors’ remuneration report.
Short-term employee benefits
Post-employment benefits
Share based payments
2008
£’000
445
64
(1)
––––––––
508
––––––––
––––––––––––––––
2007
£’000
504
66
47
––––––––
617
––––––––
––––––––––––––––
32 Controlling party
At the year end, Challice Limited controlled 59.6% of the issued share capital of the Company.
33 Transition statements
This is the first year that the Company has presented its financial statements under IFRS. The following disclosures are
required in the year of transition. The following reconciliations and explanatory notes thereto describe the effects of
the transition on the IFRS opening balance sheet as at 1 April 2006 and for the year ended 31 March 2007. Additionally
they show the reconciliation of the profit and loss reported under UK GAAP for the year ended 31 March 2007 to IFRS.
All explanations should be read in conjunction with the IFRS accounting policies of the Group as disclosed in note 3.
Notes to the IFRS transition statements
(a) Under UK GAAP lease incentives were recognised over the period to the first market rent review or the end of
the lease whichever is the shorter period. Under IFRS lease incentives are required to be recognised over the
entire lease term.
As a result the Group’s IFRS opening balance sheet as at 1 April 2006 includes additional deferred lease incentives
income of £250,000 and an associated tax asset adjustment of £75,000. In respect of the six months ended
30 September 2006 and the year ended 31 March 2007 adjustments have been made to decrease the deferred
lease incentives amortisation by a further £8,000 and £10,000 respectively, with an associated deferred tax
adjustment of £2,000 and £3,000 respectively.
(b) Under IFRS, computer software is classified as an intangible asset ‘where the software is not an integral part of
the related hardware’. This means that application software costs that have been capitalised as tangible fixed
assets must now be reclassified to intangible assets. The effect is to increase the intangible assets and reduce
property, plant and equipment by £24,000 and £88,000 being the net book value of software at 1 April 2006 and
31 March 2007 respectively.
(c) Under IFRS, cumulative translation differences that arise on translation of foreign operations are shown as a
separate reserve within equity.
(d) This is the tax effect of the adjustments (a) to (c).
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
33 Transition statements (continued)
Reconciliation of UK GAAP consolidated profit and loss account to IFRS consolidated income statement for the
year ended 31 March 2007
Revenue
Cost of sales
Gross profit
Administrative expenses
Operating profit
Share of results of associates
Finance income
Finance expense
Profit before taxation
Taxation
Profit for the period
Attributable to:
Equity holders of the parent
UK GAAP
in IFRS
format
£’000
45,078
(18,818)
––––––––
26,260
(19,578)
––––––––
6,682
(498)
324
(298)
––––––––
6,210
(2,222)
––––––––
3,988
––––––––
––––––––––––––––
(a)
IAS 17
Lease
incentives
£’000
(d)
IAS 12
Deferred
tax
£’000
–
–
––––––––
–
(10)
––––––––
(10)
–
–
–
––––––––
(10)
–
––––––––
(10)
––––––––
––––––––––––––––
–
–
––––––––
–
–
––––––––
–
–
–
–
––––––––
–
3
––––––––
3
––––––––
––––––––––––––––
IFRS
(restated)
£’000
45,078
(18,818)
––––––––
26,260
(19,588)
––––––––
6,672
(498)
324
(298)
––––––––
6,200
(2,219)
––––––––
3,981
––––––––
––––––––––––––––
3,988
––––––––
––––––––––––––––
(10)
––––––––
––––––––––––––––
3
––––––––
––––––––––––––––
3,981
––––––––
––––––––––––––––
48 MULBERRY GROUP PLC
33 Transition statements (continued)
Reconciliation of UK GAAP to IFRS consolidated balance sheet as at 1 April 2006 (date of transition)
Non-current assets
Intangible assets
Property, plant and equipment
Interests in associates
Deferred tax assets
Current assets
Inventories
Trade and other receivables
Cash and equivalents
Total assets
Current liabilities
Trade and other payables
Tax liabilities
Obligations under finance leases
Non-current liabilities
Preference shares
Deferred tax liabilities
Obligations under finance leases
Total liabilities
Net assets
Equity
Share capital
Share premium
Revaluation reserve
Capital redemption reserve
Special reserve
Retained earnings
Forex reserve
Total equity and reserves
UK GAAP
in IFRS
format
£’000
(a)
IAS 17
Lease
incentives
£’000
(b)
IAS 38
Reclassify
software
£’000
(d)
IAS 12
Deferred
tax
£’000
–
5,228
730
277
––––––––
6,235
5,967
4,962
7,282
––––––––
18,211
––––––––
24,446
––––––––
(7,386)
(987)
(42)
––––––––
(8,415)
(2,514)
–
(65)
––––––––
(2,579)
––––––––
(10,994)
––––––––
13,452
––––––––
––––––––––––––––
2,467
4,547
80
154
1,467
4,737
–
––––––––
13,452
––––––––
––––––––––––––––
–
–
–
–
––––––––
–
–
–
–
––––––––
–
––––––––
–
––––––––
(250)
–
–
––––––––
(250)
–
–
–
––––––––
–
––––––––
(250)
––––––––
(250)
––––––––
––––––––––––––––
–
–
–
–
–
(250)
–
––––––––
(250)
––––––––
––––––––––––––––
24
(24)
–
–
––––––––
–
–
–
–
––––––––
–
––––––––
–
––––––––
–
–
–
––––––––
–
–
–
–
––––––––
–
––––––––
–
––––––––
–
––––––––
––––––––––––––––
–
–
–
–
–
–
–
––––––––
–
––––––––
––––––––––––––––
–
–
–
194
––––––––
194
–
–
–
––––––––
–
––––––––
194
––––––––
–
–
–
––––––––
–
–
(119)
–
––––––––
(119)
––––––––
(119)
––––––––
75
––––––––
––––––––––––––––
–
–
–
–
–
75
–
––––––––
75
––––––––
––––––––––––––––
IFRS
£’000
24
5,204
730
471
––––––––
6,429
5,967
4,962
7,282
––––––––
18,211
––––––––
24,640
––––––––
(7,636)
(987)
(42)
––––––––
(8,665)
(2,514)
(119)
(65)
––––––––
(2,698)
––––––––
(11,363)
––––––––
13,277
––––––––
––––––––––––––––
2,467
4,547
80
154
1,467
4,562
–
––––––––
13,277
––––––––
––––––––––––––––
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
33 Transition statements (continued)
Reconciliation of UK GAAP to IFRS consolidated balance sheet as at 31 March 2007
UK GAAP
in IFRS
format
£’000
(a)
IAS 17
Lease
incentives
£’000
(b)
IAS 38
Reclassify
software
£’000
(c)
IAS 21
Forex
reserve
£’000
(d)
IAS 12
Deferred
tax
£’000
Non-current assets
Intangible assets
Property, plant and equipment
Interests in associates
Deferred tax assets
Current assets
Inventories
Trade and other receivables
Cash and equivalents
Total assets
Current liabilities
Trade and other payables
Tax liabilities
Obligations under finance leases
Non-current liabilities
Bank loans
Preference shares
Deferred tax liabilities
Obligations under finance leases
Total liabilities
Net assets
Equity
Share capital
Share premium
Revaluation reserve
Capital redemption reserve
Special reserve
Retained earnings
Forex reserve
Total equity and reserves
1,499
7,085
152
–
––––––––
8,736
6,688
3,869
10,271
––––––––
20,828
––––––––
29,564
––––––––
(7,690)
(892)
(37)
––––––––
(8,619)
(1,250)
(2,564)
(53)
(27)
––––––––
(3,894)
––––––––
(12,513)
––––––––
17,051
––––––––
––––––––––––––––
2,474
4,633
49
154
1,467
8,274
–
––––––––
17,051
––––––––
––––––––––––––––
–
–
–
–
––––––––
–
–
–
–
––––––––
–
––––––––
–
––––––––
(260)
–
–
––––––––
(260)
–
–
–
–
––––––––
–
––––––––
(260)
––––––––
(260)
––––––––
––––––––––––––––
–
–
–
–
–
(260)
–
––––––––
(260)
––––––––
––––––––––––––––
88
(88)
–
–
––––––––
–
–
–
–
––––––––
–
––––––––
–
––––––––
–
–
–
––––––––
–
–
–
–
–
––––––––
–
––––––––
–
––––––––
–
––––––––
––––––––––––––––
–
–
–
–
–
–
–
––––––––
–
––––––––
––––––––––––––––
–
–
–
–
––––––––
–
–
–
–
––––––––
–
––––––––
–
––––––––
–
–
–
––––––––
–
–
–
–
–
––––––––
–
––––––––
–
––––––––
–
––––––––
––––––––––––––––
–
–
–
–
–
94
(94)
––––––––
–
––––––––
––––––––––––––––
–
–
–
174
––––––––
174
–
–
–
––––––––
–
––––––––
174
––––––––
–
–
–
––––––––
–
–
–
(96)
–
––––––––
(96)
––––––––
(96)
––––––––
78
––––––––
––––––––––––––––
–
–
–
–
–
78
–
––––––––
78
––––––––
––––––––––––––––
IFRS
£’000
1,587
6,997
152
174
––––––––
8,910
6,688
3,869
10,271
––––––––
20,828
––––––––
29,738
––––––––
(7,950)
(892)
(37)
––––––––
(8,879)
(1,250)
(2,564)
(149)
(27)
––––––––
(3,990)
––––––––
(12,869)
––––––––
16,869
––––––––
––––––––––––––––
2,474
4,633
49
154
1,467
8,186
(94)
––––––––
16,869
––––––––
––––––––––––––––
50 MULBERRY GROUP PLC
Mulberry Group plc
Company financial statements
31 March 2008
Contents
Independent auditors’ report
Company balance sheet
Notes to the Company financial statements
Page
52
53
54
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
51
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF MULBERRY GROUP PLC
We have audited the parent company financial statements of Mulberry Group plc for the year ended 31 March 2008 which
comprise the Company balance sheet and the related notes 34 to 44. These parent company financial statements have
been prepared under the accounting policies set out therein.
We have reported separately on the Group financial statements of Mulberry Group plc for the year ended 31 March 2008.
This report is made solely to the Company’s members, as a body, in accordance with section 235 of the Companies Act
1985. Our audit work has been undertaken so that we might state to the Company’s members those matters we are
required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for
our audit work, for this report, or for the opinions we have formed.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
The Directors’ responsibilities for preparing the Annual Report and the parent company financial statements in
accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted
Accounting Practice) are set out in the Statement of Directors’ responsibilities.
Our responsibility is to audit the parent company financial statements in accordance with relevant legal and regulatory
requirements and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the parent company financial statements give a true and fair view and whether
they have been properly prepared in accordance with the Companies Act 1985. We also report to you whether in our
opinion the Directors’ report is consistent with the parent company financial statements.
In addition we report to you if, in our opinion, the Company has not kept proper accounting records, if we have not
received all the information and explanations we require for our audit, or if information specified by law regarding
Directors’ remuneration and other transactions is not disclosed.
We read the other information contained in the Annual Report as described in the contents section and consider whether
it is consistent with the audited parent company financial statements. We consider the implications for our report if we
become aware of any apparent misstatements or material inconsistencies with the parent company financial statements.
Our responsibilities do not extend to any further information outside the Annual Report.
BASIS OF AUDIT OPINION
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing
Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the
parent company financial statements. It also includes an assessment of the significant estimates and judgements made by
the Directors in the preparation of the parent company financial statements, and of whether the accounting policies are
appropriate to the Company’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary
in order to provide us with sufficient evidence to give reasonable assurance that the parent company financial statements
are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also
evaluated the overall adequacy of the presentation of information in the parent company financial statements.
OPINION
In our opinion:
the parent company financial statements give a true and fair view, in accordance with United Kingdom Generally
Accepted Accounting Practice, of the state of the Company’s affairs as at 31 March 2008;
the parent company financial statements have been properly prepared in accordance with the Companies Act 1985;
and
the information given in the Directors’ report is consistent with the parent company financial statements.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditors
Bristol, United Kingdom
18 June 2008
52 MULBERRY GROUP PLC
●
●
●
COMPANY BALANCE SHEET
At 31 March 2008
Fixed assets
Tangible assets
Investments
Current assets
Debtors
Creditors: amounts falling due within one year
Net current assets
Total assets less current liabilities
Creditors: amounts falling due after more than one year
Provision for liabilities
Net assets
Capital and reserves
Called up share capital
Share premium account
Revaluation reserve
Capital redemption reserve
Special reserve
Profit and loss account
Shareholders’ funds
Note
2008
£’000
2007
£’000
37
36
38
39
39
40
42
43
43
43
43
43
44
2,770
13,202
––––––––
15,972
2,762
13,202
––––––––
15,964
1,610
2,142
(646)
––––––––
964
––––––––
(624)
––––––––
1,518
––––––––
16,936
17,482
–
(3,814)
–
––––––––
16,936
––––––––
––––––––––––––––
(104)
––––––––
13,564
––––––––
––––––––––––––––
2,871
7,007
18
154
4,187
2,474
4,633
49
154
4,187
2,699
––––––––
16,936
––––––––
––––––––––––––––
2,067
––––––––
13,564
––––––––
––––––––––––––––
The financial statements were approved by the Board of Directors and authorised for issue on 18 June 2008. They were
signed on its behalf by:
Godfrey Davis
Director
Roger Mather
Director
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
53
NOTES TO THE COMPANY FINANCIAL STATEMENTS
Year ended 31 March 2008
34 Significant accounting policies
Basis of accounting
The separate financial statements of the Company are presented as required by the Companies Act 1985. They have
been prepared under the historical cost convention and in accordance with applicable United Kingdom Accounting
Standards and law.
The principal accounting policies are summarised below. These have been applied consistently throughout the year
and the preceding year.
Tangible fixed assets
Fixed assets are shown at cost less accumulated depreciation and any provision for impairment.
Depreciation is provided at rates calculated to write off the cost, less estimated residual value, of each asset on a
straight line basis over its expected useful life at the following rates per annum:
Freehold buildings
Short leasehold property
Fixtures, fittings and equipment
5%
term of the lease
10% to 33% per annum
Freehold land is not depreciated.
Investments
Fixed asset investments in subsidiaries and associates are shown at cost less provision for impairment.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements
entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after
deducting all of its liabilities.
Bank borrowings
Interest-bearing bank loans are recorded at the proceeds received, net of direct issue costs. Finance charges,
including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals
basis in profit or loss using the effective interest method and are added to the carrying amount of the instrument to
the extent that they are not settled in the period in which they arise.
Equity instruments
Equity instruments issued by the Company are recorded as the proceeds received, net of direct issue costs.
Foreign exchange
Transactions denominated in foreign currencies are translated into Sterling at the rates ruling at the dates of the
transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are
translated at the rates ruling at that date. These translation differences are dealt with in the profit and loss account.
Pension costs
Payments to employees’ personal pension plans are charged as an expense as they fall due.
54 MULBERRY GROUP PLC
34 Significant accounting policies (continued)
Taxation
Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been
enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance
sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less
tax in the future have occurred at the balance sheet date. Timing differences are differences between the Company’s
taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in
tax assessments in periods different from those in which they are recognised in the financial statements. A net
deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available
evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future
reversal of the underlying timing differences can be deducted. Deferred tax is measured at the average tax rates that
are expected to apply in the periods in which the timing differences are expected to reverse, based on tax rates
and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is measured on a
non-discounted basis. The taxation liabilities are reduced wholly or in part by the surrender of tax losses by fellow
group undertakings for which payment is made.
Cash flow statement
A cash flow statement has not been prepared as the consolidated financial statements include a consolidated cash
flow statement.
35 Profit for the year
As permitted by section 230 of the Companies Act 1985 the Company has elected not to present its own profit
and loss account for the year. Mulberry Group plc reported a profit for the financial year ended 31 March 2008 of
£1,467,000 (2007: £1,385,000).
The auditors’ remuneration for audit and other services is disclosed within note 8 to the consolidated financial
statements. The only employees of the Company are the Directors whose emoluments are disclosed in the Directors’
remuneration report.
36 Fixed asset investments
Cost
At 1 April 2007 and 31 March 2008
Provision for impairment
At 1 April 2007 and 31 March 2008
Net book value
End and beginning of year
Subsidiaries Subsidiaries Associates
shares
£’000
shares
£’000
loans
£’000
Total
£’000
2,858
11,804
571
15,233
(1,460)
––––––––
–
––––––––
(571)
––––––––
(2,031)
––––––––
1,398
––––––––
––––––––––––––––
11,804
––––––––
––––––––––––––––
–
––––––––
––––––––––––––––
13,202
––––––––
––––––––––––––––
The Company has investments in the following subsidiaries and associates which principally contributed to the profits
or net assets of the Group.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
55
NOTES TO THE COMPANY FINANCIAL STATEMENTS
(continued)
36 Fixed asset investments (continued)
Country of
incorporation
Principal
activity
Holding of
ordinary shares
Subsidiaries
Mulberry Company (Design) Limited
England and Wales
Mulberry Company (France) SARL
France
Mulberry Company (Sales) Limited
England and Wales
Kilver Street Inc
Associates
Mulberry USA LLC
USA
USA
Mulberry Oslo AS***
Norway
* Owned by Mulberry Company (Europe) Limited
** Owned through Kilver Street Inc
*** Accounting reference date of 31 December
37 Tangible fixed assets
Cost
At 1 April 2007
Additions
Disposals
At 31 March 2008
Depreciation
At 1 April 2007
Charge for the year
At 31 March 2008
Net book value
End of year
Beginning of year
Design and manufacture of
clothing and fashion accessories
in the UK
Establishment and operation of
retail shops in France
Establishment and operation of
retail shops in the UK
Holding Company
Establishment and operation of
retail shops in the USA and
distributor for the USA
Operation of a retail shop
in Oslo
100%
100%
100%*
100%
50%**
50%*
Freehold
land and
buildings
£’000
3,596
133
–
––––––––
3,729
––––––––
988
96
––––––––
1,084
––––––––
2,645
––––––––
––––––––––––––––
2,608
––––––––
––––––––––––––––
Short
Fixtures,
leasehold
land and fittings and
buildings equipment
£’000
£’000
304
17
(7)
––––––––
314
––––––––
150
39
––––––––
189
––––––––
125
––––––––
––––––––––––––––
154
––––––––
––––––––––––––––
528
–
–
––––––––
528
––––––––
528
–
––––––––
528
––––––––
–
––––––––
––––––––––––––––
–
––––––––
––––––––––––––––
Total
£’000
4,428
150
(7)
––––––––
4,571
––––––––
1,666
135
––––––––
1,801
––––––––
2,770
––––––––
––––––––––––––––
2,762
––––––––
––––––––––––––––
Freehold land of £997,000 (2007: £997,000) has not been depreciated.
56 MULBERRY GROUP PLC
38 Debtors
Amounts falling due within one year:
Amounts owed by Group undertakings
Amounts owed by associate undertakings
Prepayments and accrued income
Other debtors
39 Creditors
Amounts falling due within one year:
Amounts owed to Group undertakings
Other creditors – corporation tax
Accruals and deferred income
Amounts falling due after more than one year:
Bank loans
Preference shares (see note 42)
Balance at 31 March 2008
2008
£’000
2007
£’000
1,485
94
1
30
––––––––
1,610
––––––––
––––––––––––––––
1,958
167
17
–
––––––––
2,142
––––––––
––––––––––––––––
2008
£’000
2007
£’000
478
38
130
––––––––
646
––––––––
–
–
––––––––
–
––––––––
646
––––––––
––––––––––––––––
380
63
181
––––––––
624
––––––––
1,250
2,564
––––––––
3,814
––––––––
4,438
––––––––
––––––––––––––––
Details of the borrowings and preference shares are provided within note 21 of the consolidated financial statements.
40 Deferred tax
Excess of capital allowances over depreciation on fixed assets
Short-term timing differences
At 1 April 2007
Credit for the year
At 31 March 2008
41 Related party transactions
2007
£’000
(104)
–
––––––––
(104)
––––––––
––––––––––––––––
2008
£’000
13
17
––––––––
30
––––––––
––––––––––––––––
(104)
134
––––––––
30
––––––––
––––––––––––––––
Details of related party transactions are provided in note 31 of the consolidated financial statements. The Company
has taken advantage of the exemption in FRS 8 not to disclose details of transactions with other Group companies.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
57
NOTES TO THE COMPANY FINANCIAL STATEMENTS
(continued)
42 Called up share capital
Authorised
65,000,000 ordinary shares of 5p each (2007: 57,000,000)
Nil 7% convertible redeemable B preference shares of 5p each (2007: 8,000,000)
Issued and fully paid
57,419,505 ordinary shares of 5p each (2007: 49,014,505)
Nil 7% convertible redeemable B preference shares of 5p each (2007: 8,000,000)
Less: classified within financial liabilities (see note 39)
2008
£’000
2007
£’000
3,250
–
––––––––
3,250
––––––––
––––––––––––––––
2,871
–
––––––––
2,871
–
––––––––
2,871
––––––––
––––––––––––––––
2,850
400
––––––––
3,250
––––––––
––––––––––––––––
2,451
400
––––––––
2,851
(377)
––––––––
2,474
––––––––
––––––––––––––––
The preference shares were converted into ordinary shares on 16 April 2007 as the conditions for conversion had been
met. The full details regarding this conversion and details on the issue of ordinary shares in the year are provided in
note 25 of the consolidated financial statements.
43 Reserves
Capital
Share Revaluation redemption
reserve
reserve
£’000
£’000
premium
£’000
Balance at 1 April 2007
Credit for share based payments
Premium arising on issue of new shares
Premium arising on conversion of preference shares
Amortisation of revaluation surplus
Profit for the year
Ordinary dividends paid
Balance at 31 March 2008
4,633
–
187
2,187
–
–
–
––––––––
7,007
––––––––
––––––––––––––––
49
–
–
–
(31)
–
–
––––––––
18
––––––––
––––––––––––––––
154
–
–
–
–
–
–
––––––––
154
––––––––
––––––––––––––––
Special
reserve*
£’000
4,187
–
–
–
–
–
–
––––––––
4,187
––––––––
––––––––––––––––
Profit
and loss
account
£’000
2,067
(5)
–
–
31
1,467
(861)
––––––––
2,699
––––––––
––––––––––––––––
* created as part of a capital restructuring of the Group in 2004.
The cumulative amount of goodwill resulting from acquisitions in earlier financial years which has been written off is
£165,000 (2007: £165,000).
44 Reconciliation of movements in shareholders’ funds
Balance at 1 April 2007
Issue of new shares net of costs
Credit for share based payments
Ordinary dividends paid
Profit for the financial year
Balance at 31 March 2008
58 MULBERRY GROUP PLC
£’000
13,564
2,771
(5)
(861)
1,467
––––––––
16,936
––––––––
––––––––––––––––
NOTICE OF ANNUAL GENERAL MEETING
Notice is given that the Annual General Meeting of Mulberry Group plc will be held at Landsbanki Securities (UK) Ltd’s offices, 5th Floor, Beaufort
House, St Botolph Street, London EC3A 7QR on 12 August 2008 at 11 am for the following purposes:
Ordinary Business:
To consider and, if thought fit, pass the following resolutions, which will be proposed as ordinary resolutions:
1. Adoption of financial statements
That the report of the Directors and the financial statements for the year ended 31 March 2008 together with the independent auditors' report
be received and adopted.
2. Dividend declaration
To declare a final dividend of 2.0 pence per ordinary share for the year ended 31 March 2008.
3. Re-election of retiring Directors
That Mr B L K Heng who retires as a Director by rotation in accordance with the Company's Articles of Association be re-elected as a Director.
That Mr S Grapstein who retires as a Director by rotation in accordance with the Company's Articles of Association be re-elected as a Director.
4. Appointment of auditors
That Deloitte & Touche LLP be re-appointed as auditors of the Company until the conclusion of the next general meeting before which
accounts are laid and, that their remuneration be agreed by the Directors.
Special Business:
To consider and, if thought fit, pass the following resolution, which will be proposed as an ordinary resolution:
5. Directors' power to allot securities
That in substitution for any equivalent authorities and powers granted to the Directors prior to the passing of this resolution, the Directors be
and they are generally and unconditionally authorised pursuant to Section 80 of the Companies Act 1985 ("the Act") to allot relevant securities
(as defined in that section) up to an aggregate nominal amount of £379,024 to such persons at such times and on such terms as they think
proper during the period expiring at the conclusion of the next Annual General Meeting of the Company after the passing of this resolution
or such earlier date (if any) on which this authority is revoked, save that the Company may prior to the expiry of such period make any offer or
agreement which would or might require relevant securities to be allotted after the expiry of this period and the Directors may allot relevant
securities in pursuance of any such offer or agreement notwithstanding the expiry of the authority given by this paragraph.
To consider and, if thought fit, pass the following resolution, which will be proposed as a special resolution:
6. Waiver of statutory pre-emption rights
That in substitution for any equivalent authorities and powers granted to the Directors prior to the passing of this resolution, the Directors be
and they are empowered pursuant to Section 95(1) of the Act to allot equity securities (as defined in Section 94(2) of the Act) of the Company
for cash pursuant to the authority of the Directors under Section 80 of the Act conferred by Resolution 6 set out in the Notice of Annual General
Meeting convened on 12 August 2008 as if Section 89(1) of the Act did not apply to such allotment and at any time prior to the expiry of the
power conferred by this resolution to make any offer or agreement which would or might require equity securities to be allotted after the expiry
of such power notwithstanding the expiry of such power provided that such power shall, subject as aforesaid, cease to have effect at the
conclusion of the next Annual General Meeting of the Company after the passing of this resolution or such earlier date (if any) on which the
said authority is revoked, and provided that the power conferred by this resolution shall be limited to the allotment of ordinary shares up to a
maximum amount of £143,548 representing less than 5% of the issued share capital of the Company.
By order of the Board
Roger Mather
Secretary
Registered office:
The Rookery
Chilcompton
Bath
BA3 4EH
Notes:
Date: 18 June 2008
1 All members holding ordinary shares are entitled to attend, speak and vote at the meeting. Such members may appoint a proxy to attend, speak and vote instead of
them. A proxy need not also be a member of the Company but must attend the Annual General Meeting in order to represent you. A member may appoint more than one proxy
provided each proxy is appointed to exercise rights attached to different shares (so a member must have more than one share to be able to appoint more than one proxy).
A form of proxy is enclosed. The notes to the form of proxy include instructions on how to appoint the Chairman of the Annual General Meeting or another person as proxy and
how to appoint a proxy electronically or by using the CREST proxy appointment service. To be effective the form must reach the Company's registrar, Computershare Investor
Services PLC, at The Pavilions, Bridgwater Road, Bristol BS99 6ZY by 11am on 10 August 2008.
2
3
In order to facilitate voting by corporate representatives at the meeting, arrangements will be put in place at the meeting so that (a) if a corporate shareholder has appointed the
Chairman of the meeting as its corporate representative to vote on a poll in accordance with the directions of all of the other corporate representatives for that shareholder at the
meeting, then on a poll those corporate representatives will give voting directions to the Chairman and the Chairman will vote (or withhold a vote) as corporate representative in
accordance with those directions; and (b) if more than one corporate representative for the same corporate shareholder attends the meeting but the corporate shareholder has
not appointed the Chairman of the meeting as its corporate representative, a designated corporate representative will be nominated, from those corporate representatives who
attend, who will vote on a poll and the other corporate representatives will give voting directions to that designated corporate representative. Corporate shareholders are referred
to the guidance issued by the Institute of Chartered Secretaries and Administrators on proxies and corporate representatives (www.icsa.org.uk) for further details of this procedure.
The guidance includes a sample form of appointment letter if the Chairman is being appointed as described in (a) above.
The register of Directors’ interests in the shares of the Company and copies of the Directors’ service contracts, other than those expiring or determinable without payment of
compensation within one year, are available for inspection at the registered office of the Company during the usual business hours on any weekday (Saturday and public holidays
excluded) from the date of this notice until the Annual General Meeting and will be available for inspection at the place of the Annual General Meeting for at least 15 minutes
prior to and during the meeting.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
59
GROUP FIVE YEAR SUMMARY
UK GAAP
Results
Revenue
Operating profit
Profit/(loss) before tax
Profit/(loss) attributable to equity holders
Assets employed
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
Key statistics
Earnings/(loss) per share
Diluted earnings/(loss) per share
––––––––––––––––––––––––––––––––––
2006
£’000
2005
£’000
2004
£’000
25,327
––––––––
––––––––––––––––
540
––––––––
––––––––––––––––
(204)
––––––––
––––––––––––––––
(214)
––––––––
––––––––––––––––
5,458
11,251
(3,912)
(3,178)
––––––––
9,619
––––––––
––––––––––––––––
30,064
––––––––
––––––––––––––––
2,137
––––––––
––––––––––––––––
1,705
––––––––
––––––––––––––––
1,738
––––––––
––––––––––––––––
4,964
11,084
(4,383)
(53)
––––––––
11,612
––––––––
––––––––––––––––
43,406
––––––––
––––––––––––––––
6,157
––––––––
––––––––––––––––
6,135
––––––––
––––––––––––––––
4,831
––––––––
––––––––––––––––
5,958
18,488
(8,415)
(2,579)
––––––––
13,452
––––––––
––––––––––––––––
IFRS
–––––––––––––––––––––
2008
£’000
2007
£’000
45,078
––––––––
––––––––––––––––
6,672
––––––––
––––––––––––––––
6,200
––––––––
––––––––––––––––
3,981
––––––––
––––––––––––––––
8,910
20,828
(8,879)
(3,990)
––––––––
16,869
––––––––
––––––––––––––––
51,174
––––––––
––––––––––––––––
4,774
––––––––
––––––––––––––––
5,186
––––––––
––––––––––––––––
3,436
––––––––
––––––––––––––––
10,791
23,570
(11,821)
(21)
––––––––
22,519
––––––––
––––––––––––––––
(0.5)p
(0.5)p
3.6p
3.5p
9.9p
8.8p
8.1p
7.4p
6.0p
6.0p
The amounts disclosed for 2006, 2005 and 2004 are stated on the basis of UK GAAP because it is not practicable to restate
amounts for periods prior to the date of transition to IFRSs. The principal differences between UK GAAP and IFRSs are
explained in note 33 to the consolidated financial statements.
60 MULBERRY GROUP PLC
MULBERRY GROUP PLC THE ROOKERY CHILCOMPTON SOMERSET BA3 4EH
T. 01761 234 500 F. 01761 234 555 MULBERRYGROUPPLC.COM MULBERRY.COM