ANNUAL
REPORT
AND
ACCOUNTS
For the year ended
31 March 2012
Mulberry Annual Report and Accounts
Year ended 31 March 2012
FINANCIAL HIGHLIGHTS
●●
●●
●●
●●
Total revenues increased by 38% to £168.5 million (2011: £121.6 million)
Profit before tax up 54% to £36.0 million (2011: £23.3 million)
Basic earnings per share up 47% to 43.9p (2011: 29.8p)
Proposed dividend of 5.0p per share (2011: 4.0p per share)
OPERATING HIGHLIGHTS
●●
●●
Bruno Guillon appointed CEO, with Godfrey Davis moving to Non-Executive Chairman
14 new stores opened during the year in the UK, the Netherlands, the USA, Korea, Singapore, Thailand and Taiwan
●● Global expansion continued with international revenues growing 61% to £65.2 million (2011: £40.5 million),
accounting for 39% of Group revenues (2011: 33%)
●● Online sales grew 58% to £14.5 million, accounting for 9% of Group revenues (2011: 8%)
●● UK factory extension completed, increasing UK production capacity by 30% and creating 60 jobs
9 YEAR REVENUE GROWTH
180
160
140
120
100
80
60
40
20
0
£m
2004
2005
2006
2007
2008
2009
2010
2011
2012
21726.04 06/07/2012 Proof 5 Mulberry Annual Report and Accounts
Contents
Chairman’s review
Chief Executive’s report
Financial review
Directors, secretary and advisers
Corporate governance
Directors’ remuneration report
Directors’ report
Directors’ responsibilities statement
Independent auditor’s report
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated cash flow statement
Notes to the consolidated financial statements
Independent auditor’s report
Company balance sheet
Notes to the company financial statements
Notice of Annual General Meeting
Group five year summary
Page
3
4
5
6
7
9
12
17
18
19
19
20
21
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23
51
52
53
59
64
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Mulberry Group plc21726.04 06/07/2012 Proof 5
Chairman’s review
Year ended 31 March 2012
The Group has continued to deliver strong sales and profit growth. Sales increased 38% to £168.5 million for the
year to 31 March 2012 (2011: £121.6 million) and profit before tax increased 54% to £36.0 million (2011: £23.3 million).
International sales were £65.2 million, 61% up on the prior year. Gross margin increased to 66.2% (2011: 65.4%). As a
result of sustained investment over a number of years, we have been successful in developing international demand
for the Mulberry brand. This investment in people, product design, marketing and new store openings is the driving
force behind the growing international success of our business which continues to become less dependent upon
customers in the UK or any other single market. Looking forward, we will continue our strategy of building the brand in
international markets by opening new stores and progressively increasing our marketing activity to drive sales growth.
RETAIL
Retail sales from our own stores, department store concessions and online have increased by 36% compared to the
prior year to £99.7 million (like-for-like up 26%). UK retail sales in our own 45 stores and department store concessions
increased for the year by 30% to £77.2 million (like-for-like up 27%). In December, we opened a store in the Westfield
development in Stratford ahead of the 2012 London Olympics. Online sales grew by 58% to £14.5 million during the
year, accounting for 9% of Group sales (2011: 8%). In addition to being a profitable and growing sales channel, the
mulberry.com website is a key marketing tool for the brand. We are currently developing a new platform which will give
us even greater functionality and creative freedom and this will be launched by the end of the 2012/13 financial year.
During the year we opened a flagship store on Spring Street, New York. This helped to increase North American retail
sales to £5.4 million, up 69% compared to the prior year (like-for like up 20%). In Europe, retail sales from France and
the Netherlands were £2.6 million, up 53% compared to the prior year (like-for-like up 7%), reflecting the opening of a
new full price store in Amsterdam during November and an outlet store in Roermond during March 2012.
WHOLESALE
Wholesale shipments to customers during the year were £68.8 million, up 43% compared to the prior year. The
wholesale business includes sales to our European franchise partners, UK, European and North American independent
retailers and department stores, as well as sales to our international distribution partners in Asia-Pacific and the Middle
East. In Asia-Pacific, sales to our partner stores and wholesale accounts grew by 70% to £25.1 million. Asia-Pacific
is now our largest geographical segment for wholesale sales, representing 36% of the total. During the year, ten
Mulberry stores have been opened by our partners in Singapore, Taiwan, Thailand and Korea (seven).
PRODUCTS
Leather goods and accessories remain our core business, with women’s and men’s bags accounting for 77% of Group
sales (2011: 76%). In Spring/Summer 2010 we launched the Alexa bag, which was an immediate success and added
an extra dimension to sales growth in the year to 31 March 2011. A key challenge for the year to 31 March 2012 was to
consolidate this bag family into our core business and build upon it. The results for the year show that this has been
achieved and the Alexa has joined the Bayswater, Daria and Lily families of best-selling bags which underpin sales from
one season to the next. We continue to develop the women’s apparel and women’s footwear businesses which were
the fastest growing categories during the year.
NEW CHIEF EXECUTIVE
One of the strengths of our business is the quality of our people. We pay particular attention to succession planning
in order to meet the needs of the business as it grows and roles change. In keeping with this approach, Bruno Guillon
joined Mulberry as Chief Executive on 1 March 2012. He brings with him a wealth of luxury goods experience, having
previously worked for Hermès and LVMH. We have worked closely together for his first few months to ensure a smooth
management transition and, from the end of June 2012, I will move to Non-Executive Chairman. On a personal note, I
would like to thank all of the Mulberry team, our partners around the world and our shareholders for their enthusiasm,
commitment and support over the last ten years whilst I have been Chief Executive. I would also like to wish Bruno
every success in his new role.
2
3
Godfrey Davis
Chairman
13 June 2012
Mulberry Group plc21726.04 06/07/2012 Proof 5 Chief Executive’s report
Year ended 31 March 2012
I have joined Mulberry at a very exciting time. The team has produced another set of strong results for the year to
31 March 2012, continuing to build market share internationally, whilst generating positive cash flows that will allow us
to invest for future growth. The opportunity for the Mulberry brand is significant, with the profits earned from its strong
domestic position supporting the increasing pace of international expansion. The challenge for the next few years is
to build upon the solid foundations that have been laid, seize the international opportunity in a way that maintains
the careful positioning of the brand within the luxury market, whilst continuing to make the enduring quality of our
products central to everything we do.
UK MANUFACTURING
Mulberry is a luxury fashion brand, anchored by the quality of our products and our heritage of English craftsmanship.
With this in mind, during the year we completed the extension of our Somerset factory allowing us to increase UK
capacity by 30% and create 60 jobs. We are also delighted to announce that we will be opening a second factory in
Somerset. This project will create 300 jobs and double our UK capacity. Our investment in the new factory will be
approximately £7.5 million, with £2.5 million coming from the Regional Growth Fund to support the recruitment and
training of new employees. We expect to open the new factory by December 2013.
CURRENT TRADING
Demand for Mulberry products has continued since the year-end. During the 10 weeks to 1 June 2012 total retail sales
were 12% above the same period last year (like-for-like up 3%). UK full price retail sales have grown by 14% like-for-
like and the outlet business has decreased by 24% like-for-like largely due to the tough comparative figures during
the same period last year when outlet sales increased by 56%. Within the 10 week period, April saw slower growth,
but over the last six weeks UK full price sales have improved, up 21% like-for-like. However, we remain cautious as a
result of the adverse macro-economic climate. The Autumn/Winter 2012 season has started well with the third-party
wholesale order book 11% higher than the Autumn/Winter 2011 season at the same time last year.
OUTLOOK
During May 2012, we launched the new Del Rey bag, inspired by the American artist Lana Del Rey. The product
illustrates the elegance and timeless luxury of Mulberry and has been well received which is encouraging for the
rest of the Autumn/Winter 2012 season. Sales of women’s apparel and footwear remain strong. These categories
remain central to our strategy and we will also expand other product categories, such as small leather goods, men’s
accessories and other fashion accessories. The Group’s balance sheet remains strong with cash of £27.3 million and
no debt at 31 March 2012. This means that we continue to have the capacity to invest in new retail opportunities and
other projects.
In Europe, we opened a store in Zurich on 24 May. In Germany, we will be opening shop-in-shops within the KaDeWe
and Oberpollinger department stores in Berlin and Munich respectively and a store in Frankfurt Airport. We have
signed leases for stores in Cologne and Berlin which will open around the end of the financial year. In North America,
a store opened in the Short Hills Mall, New Jersey on 23 May and our first West Coast store will open in San Francisco
during June. We will open a store in Washington DC later in the year. Our partner in Korea, which started the current
year with 19 stores, has already opened another store and is planning a further four before the end of March 2013. Club
21, our partner for the rest of Asia-Pacific, plans to open stores in Singapore, Japan and Shanghai.
In total, we are targeting 15 to 20 new international store openings for the current financial year (with three already
opened and another 13 confirmed to date).
DIVIDEND
The Board is recommending the payment of a dividend on the ordinary shares of 5.0p per ordinary share (2011: 4.0p)
which will be paid on 17 September 2012 to shareholders on the register on 17 August 2012.
Bruno Guillon
Chief Executive
13 June 2012
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Mulberry Group plc21726.04 06/07/2012 Proof 5 Financial review
Year ended 31 March 2012
GROSS MARGIN
The Group’s gross profit as a percentage of revenue has increased to 66.2% from 65.4% for the prior year. This increase
is due primarily to the economies of scale achieved from increased volume.
NET OPERATING EXPENSES
Net operating expenses for the year increased by £19.6 million to £76.1 million (2011: £56.5 million). The main
elements of this increase were: £5.7 million increased employee costs; £4.3 million additional spend on advertising
and promotion; £3.8 million variable rents and agents’ commissions directly linked to the sales growth and £3.3 million
costs relating to the operating costs of new stores.
EXCEPTIONAL ITEMS
There are no exceptional items in the current year. In the prior year, an exceptional cost of £1.0 million was incurred
in relation to deferred consideration for the USA business and £0.9 million of exceptional income was recognised
following the surrender of the lease on the former flagship store on New Bond Street.
SHARE OF RESULTS OF ASSOCIATES
Our associate in Norway had another successful year with our share of its results increasing to £0.6 million (2011:
£0.3 million).
FINANCE INCOME AND EXPENSE
The decrease in net finance income to £22,000 (2011: £30,000) has resulted from the continued low rates of interest
available in the market.
TAXATION
The Group has an effective tax rate of 29.7% for the year (2011: 26.9%) resulting in a tax charge of £10.7 million
(2011: £6.3 million). We expect to see a future decrease in the effective tax rate in line with the announced reduction
in the UK corporation tax rates over the next three years to 22%.
BALANCE SHEET
Investments in property, plant and equipment for the year totalled £10.0 million (2011: £12.8 million) and included
£1.2 million investment in the extension of our existing Somerset factory and £8.2 million investment in new stores.
The expenditure of £2.4 million on intangible assets reflects the on-going development of the Group’s ERP system
online capabilities.
Inventory levels have increased by £10.1 million to £32.5 million (2011: £22.4 million) which reflects the increased scale
of the business and a build-up of inventory to meet Autumn/Winter orders.
CASH FLOW
The cash generated from operations for the year amounted to an inflow of £30.1 million (2011: inflow of £26.6 million).
The net cash balance has increased to £27.3 million at 31 March 2012 (2011: £21.4 million) due to the operational
performance of the Group.
EARNINGS PER SHARE
The basic earnings per share for the year increased by 47% to 43.9p (2011: 29.8p).
Roger Mather
Group Finance Director
13 June 2012
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5
Mulberry Group plc21726.04 06/07/2012 Proof 5 Directors:
Directors, secretary and advisers
Year ended 31 March 2012
Godfrey Pawle Davis FCA
Bruno Daniel Thierry Guillon
Roger Thomas Mather FCA
Robert (Robin) Edward Graeme Gibson
Andrew Christopher (Chris) Roberts FCCA
Steven Grapstein CPA
Bernard Lam Kong Heng
Melissa Ong
Registered Office:
The Rookery
Chilcompton
Bath
Somerset
BA3 4EH
Secretary:
Kate Anthony Wilkinson LLB
Nominated Adviser:
Altium Capital Limited
London
Nominated Broker:
Barclays Capital
London
Registered Auditor:
Deloitte 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
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Mulberry Group plc21726.04 06/07/2012 Proof 5 Corporate governance
Year ended 31 March 2012
The Company is listed on the Alternative Investment Market and is not required to comply with the provisions set out
in the UK Combined Code. 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
During the year the Board comprised of two Executive Directors and five Non-Executive Directors. Post year-end,
following the appointment of Bruno Guillon, the Board comprised of three Executive Directors and five Non-Executive
Directors. Details of the Directors and the changes during the year and subsequently are set out on page 9. Since the
roles of Chairman and Chief Executive were not separated until April 2012, as recommended by the Combined Code,
the Directors considered it important that the Board should include Non-Executive Directors who bring 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 twelve month agreements renewed
annually in January.
NOMINATIONS AND REMUNERATION COMMITTEE
The Nominations and Remuneration Committee is chaired by a Non-Executive Director, Robin Gibson. It is responsible
for nominating Directors to the Board and then determining the remuneration and terms and conditions of employment
of Directors and senior employees of the Group. The Directors’ remuneration report is set out on pages 9 to 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 the 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
auditor and legal advisers at any time without the 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. During the year, this has included issuing guidance and internal
procedures following the introduction of the Bribery Act 2010.
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Mulberry Group plc21726.04 06/07/2012 Proof 5 Corporate governance
(continued)
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 auditor is 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.
8
9
Mulberry Group plc21726.04 06/07/2012 Proof 5 Directors’ remuneration report
Year ended 31 March 2012
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.
During the year, the Nominations and Remuneration Committee comprised:
●●
Robin Gibson (Chairman and Non-Executive Director)
●● Chris Roberts (Non-Executive Director)
●●
●●
Steven Grapstein (Non-Executive Director)
Bernard Heng (Non-Executive Director)
●● Melissa Ong (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. They 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 share option or bonus schemes. As an exception,
on becoming Non-Executive Chairman in June 2012, Godfrey Davis will retain his outstanding options and share
awards as they relate to his position as Chief Executive. No new options or share awards will be issued to him. In the
current year due to the additional time spent on the recruitment of the new Chief Executive additional fees were
awarded.
The Non-Executive Directors are appointed for a twelve month term.
REMUNERATION POLICY FOR EXECUTIVE DIRECTORS
The Company’s remuneration policy for Executive Directors is to:
●●
●●
●●
●●
have regard to the Director’s 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 annual bonuses
and share-based incentive schemes;
provide post-retirement benefits through contributions to individual’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.
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Mulberry Group plc21726.04 06/07/2012 Proof 5 Directors’ remuneration report
(continued)
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 Nominations and Remuneration Committee. The
base salary reflects job responsibility, market value and the sustained level of individual performance.
The long-term incentive strategy for the Executive Directors and management team has been set up by the
Nominations and Remuneration Committee to include a balance of benefits to reward current performance and long-
term commitment. The strategy comprises of the following:
●●
●●
●●
an unapproved share option scheme which was introduced in April 2008. Options granted in this scheme vest
after three years.
a Deferred Bonus Plan which represents a long-term award scheme where participants receive all or part of their
annual bonus in shares. These shares are held as deferred shares in the Mulberry Group Plc Employee Share Trust
for a period of two years. Matching shares are then granted and vest after a period of two years conditional upon
the participant remaining an employee of the Group and the original deferred shares remaining in the Trust.
a Co-ownership Equity Incentive Plan where participants are granted an interest in shares which are co-owned
by the Mulberry Group Plc Employee Share Trust and participate in the value to the extent that the Mulberry
share price exceeds 20% above the market price at the date of grant. The vesting period is generally three years,
after which the employee has the right to sell the beneficial interest in the shares. This plan was established in
August 2009.
The following information is required by the Companies Act and is subject to audit.
Basic
salary/fees
£’000
350
52
220
75
75
75
75
35
–
957
Bonus
£’000
280
836
200
–
–
–
–
–
–
Taxable
benefits
£’000
Pension
contributions
£’000
27
2
21
1
1
–
1
–
–
–
–
31
–
–
–
–
–
–
2012
Total
£’000
657
890
472
76
76
75
76
35
–
2011
Total
£’000
613
–
428
19
19
18
18
10
9
1,316
53
31
2,357
1,134
Executive Directors
Godfrey Davis
Bruno Guillon(1)
Roger Mather(2)
Non-Executive Directors
Robin Gibson
Chris Roberts
Steven Grapstein
Bernard Heng
Melissa Ong
Previous Directors
Edward Vandyk(3)
Total
Notes:
(1) The bonus awarded to Bruno Guillon represents the monies paid to him to enable him to purchase his share of
the jointly owned shares held under the Co-ownership Equity Incentive Plan (see section c below for details of the
grant made on joining the Group).
(2) Half of the bonus awarded to Roger Mather (£100,000) has been awarded in deferred shares under the Deferred
Bonus Plan. The post-tax element of this cost is being charged to the income statement over a three-year period
(being the length of service the award relates to). An expense of £67,000 has been recognised for this half of his
bonus in respect of the year ended 31 March 2012.
(3) Edward Vandyk resigned from the Board on 7 September 2010.
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Mulberry Group plc21726.04 06/07/2012 Proof 5 The emoluments disclosed above do not include any amounts for the value of share options or share awards granted
to or held by the Directors. These are detailed as follows:
a) Options granted under the unapproved share option schemes
31 March
2011
Granted
Exercised
31 March
2012
Exercise
price (£)
Date of
exercise
Market
price on
exercise (£)
Godfrey Davis
Godfrey Davis
100,000
150,000
Roger Mather
250,000
–
–
–
100,000
60,000
–
90,000
{
130,000
30,000
90,000
–
–
–
1.455
1.445
1.447
1.447
1.447
24 Jan 12
24 Jan 12
14 Apr 11
18 Jul 11
24 Jan 12
16.00
16.00
12.75
17.53
16.00
The outstanding options are exercisable between 25 July 2011 and 25 July 2018.
b) Matching shares granted under the Deferred Bonus Plan
31 March
2011
Granted
Exercised
31 March
2012
Exercise
price (£)
Date of
exercise
Market
price on
exercise (£)
Godfrey Davis
Roger Mather
53,969
39,104
–
–
24,602
12,140
29,367
26,964
Nil
Nil
24 Jan 12
24 Jan 12
16.00
16.00
The matching shares vest between 30 June 2012 and 30 June 2013. Each of the matching shares relates to vested and
unvested shares held in the Mulberry Group Plc Employee Share Trust.
c) Jointly owned shares under the Co‑ownership Equity Incentive Plan
31 March
2011
Granted
Exercised
Forfeited
31 March
2012
Exercise
price (£)
Godfrey Davis
Roger Mather
Bruno Guillon
300,000
250,000
–
–
–
200,670
–
–
–
–
–
–
300,000
250,000
200,670
1.458
1.458
23.02
For the awards held by Godfrey Davis and Roger Mather, the right to exercise their interest in the shares will vest on
9 October 2012 and remain exercisable until 9 October 2019. The market price of these shares at the date of the
award was £1.21½.
For Bruno Guillon, the beneficial interest will vest in three equal tranches on 6 March 2014, 6 March 2015 and 6 March
2016 respectively and remain exercisable for ten years from the date of grant. The market price of the shares on the
date of the award was £18.89½.
Share price information
The market price of Mulberry Group plc ordinary shares at 31 March 2012 was £20.04 (2011: £13.72) and the range
during the year was £12.95 to £20.04 (2011: £1.85 to £14.15).
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Mulberry Group plc21726.04 06/07/2012 Proof 5 Directors’ report
Year ended 31 March 2012
The Directors present their report on the affairs of the Group, together with the financial statements and independent
auditor’s report, for the year ended 31 March 2012.
BUSINESS REVIEW AND PRINCIPAL ACTIVITIES
The Group’s principal activities are the design and manufacture or sourcing of luxury accessories, clothing and footwear
and their subsequent sale through wholesale channels or the Group’s own stores and concessions in home and export
markets. There have not been any significant changes in these activities during 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 accessory, clothing and
footwear collections for Spring/Summer and Autumn/Winter each 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.
The Chairman’s review, Chief Executive’s report and the Financial review 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. The principal risks are listed below:
●●
Economic climate. During the current year, the Group has shown continued resilience to the wider global economic
climate but any further deterioration could affect sales both in the UK and internationally. A significant amount
of Mulberry sales are generated in the UK. As a result, a decline in the UK economy that reduced consumer
spending on luxury goods could materially affect trading results. The Group’s continuing strategy to increase the
penetration of international markets is expected to reduce the impact of this risk over time. The impact on current
trading is discussed further in the Chairman’s review and Chief Executive’s report.
●● Currency risk. The Group’s sales and purchases are made in Sterling, Euros and US Dollars and so it is exposed to
the movement in the Euro and the US Dollar to Sterling exchange rates. The Group manages this risk by, wherever
possible, building a natural hedge of Euro and US Dollar denominated sales and purchases whereby the inflows
and outflows of Euros and US Dollars are roughly equal. If significant currency positions were to develop, forward
foreign exchange contracts would be used to mitigate the exposure.
In particular, with the current uncertainty in Europe and the potential impact on the Euro, possible risk of sovereign
default and banking instability, the Group is continuing to monitor the situation closely and ensure that risk is
mitigated where possible. This includes only depositing funds with large financial institutions and minimising any
Euro exposures. A relatively small part of the business is in the countries at the centre of the Euro crises. During
the current year, Greece, Spain and Portugal, account for only 0.4% of Group revenue.
●● Competition. Competitive pressures, changes in luxury fashion and hence consumer demand are continuing
risks which could result in the loss of sales. The Group manages this risk by the continuous investment in the
design of new products and marketing to stimulate customer interest and by maintaining strong relationships
with customers.
●●
●●
Loss of people. The risk of the loss of key personnel is mitigated by regular reviews of remuneration packages
(including long-term incentive schemes) and succession planning within the management team.
Trademarks. As with all brands, the Group is exposed to risk from unauthorised use of the Group’s trademarks and
other intellectual property. These are not included on the balance sheet but any infringement could lead to a loss
in profits and have a negative impact on image and continued success. Trademarks are registered and where any
infringements are identified, appropriate legal action is taken.
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Mulberry Group plc21726.04 06/07/2012 Proof 5 ●●
●●
Terrorist activity. A major terrorist attack, particularly in central London, could seriously affect the Group’s
operations, as would a fire or significant disruption to the Group’s warehouse. The Group has developed a
business continuity plan to mitigate the impact, as well as making sure that adequate insurance is in place.
Systems. The Group continues to engage in a substantial programme of change. Over the next year, the Group
plans to implement the remaining modules of its ERP system covering product development and manufacturing
and to complete the implementation of a new internet platform and retail EPOS system throughout the rest of
its stores. If these projects were to be unsuccessful, it could have an impact on operations. Senior management
involvement and significant pre-implementation testing are part of the carefully designed project to minimise the
risks of the roll-out.
●● Cash. The management of cash is of fundamental importance. The large growth in sales has led to a significant cash
inflow. This has partly been offset by the capital expenditure programme during the year, so that at the year end
the Group had a cash balance of £27.3 million (2011: £21.4 million). As discussed in the Chief Executive’s report,
the Group has agreed various capital expenditure plans for the coming year which will be financed by the Group’s
operating cash flow. The Group currently has no debt but nonetheless has organised facilities of £4.5 million
(including £2.0 million of a multi-currency overdraft facility). These banking facilities are in place until 31 May 2013.
As such, the Group is on a firm financial footing and confident of its ability to continue as a going concern.
GOING CONCERN
As discussed under principal risks and uncertainties, the Group has considerable financial resources together with a
customer base split across different geographic areas and between own retail stores, partner stores and wholesale
accounts. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully
despite the uncertain economic outlook.
After making enquiries, the Directors have a reasonable expectation that the Company will have adequate resources
to continue in operational existence for the foreseeable future. More information on how the Board assesses and
controls the principal risks of the business (including going concern) is given within the Directors’ report. Accordingly,
they continue to adopt the going concern basis in preparing the Annual Report and financial statements.
RESULTS AND DIVIDENDS
The results for the year are set out in the Consolidated income statement. The Directors are recommending the
payment of a final dividend of 5.0p per ordinary share (2011: 4.0p), to be paid on 17 September 2012 to ordinary
shareholders on the register on 17 August 2012.
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 would enter 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 cash and liquid resources and items such as trade
debtors and trade creditors that arise directly from its operations.
12
13
Mulberry Group plc21726.04 06/07/2012 Proof 5 Directors’ report
(continued)
DIRECTORS AND THEIR INTERESTS
The Directors who served during the year and subsequently are shown below.
Executive Directors
Godfrey Davis FCA, 63, is currently Executive Chairman, having been joint Chairman and Chief Executive until 25 April
2012. He will become Non-Executive Chairman on 30 June 2012 on completion of the handover to Bruno Guillon.
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. He is also a Director of Hestercombe Gardens Limited, a Trustee of Hestercombe
Gardens Trust and a Director of Woodard Schools (Taunton) Limited.
Bruno Guillon, 46, joined the Group as Chief Executive on 1 March 2012 and was appointed to the Board on 25 April
2012. Bruno joined Mulberry from Hermès Sellier SARL where he was Managing Director of French subsidiary Hermès
France, a position he held for four years. He joined Hermès in 2001, having previously worked at LVMH and Nina Ricci.
Roger Mather FCA, 47, 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. He was appointed as a Director on 7 May 2008, and resigned as the Company
Secretary on 17 August 2011.
Non-Executive Directors
Robin Gibson, 70, is Chairman of the Nominations and Remuneration Committee. He was appointed on 1 May 1996.
Andrew Christopher Roberts FCCA, 48, is Chairman of the Audit Committee. He was appointed on 6 June 2002. He
is a fellow of the Chartered Association of Certified Accountants. He was previously Finance Director of Astaire Group
plc, an AIM listed financial services group, and is currently a Director of Como Holdings (UK) Ltd, which has retail, hotel
and real estate operations in the UK. Como Holdings (UK) Ltd is a company ultimately owned by Mr Ong Beng Seng
and Mrs Christina Ong.
Steven Grapstein CPA, 54, was appointed on 17 November 2003. He is presently the Chief Executive Officer of
Como Holdings USA Inc., 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 Chairman of
the Board of Directors of Tesoro Petroleum Corporation, a US publicly held Fortune 150 company engaged in the oil
and gas industry. Como Holdings USA Inc is ultimately owned by, and Presidio International is 50% owned by, Mr Ong
Beng Seng.
Bernard Lam Kong Heng, 66, was appointed on 17 November 2003. He is presently the Chief Executive of Como
Holdings (UK) Ltd. a company which has extensive retail, hotel and real estate operations in the UK and internationally.
Como Holdings (UK) Ltd is a company ultimately owned by Mr Ong Beng Seng and Mrs Christina Ong.
Melissa Ong, 38, was appointed on 7 September 2010. She is also a Director of Club 21 (Singapore) Pte Ltd, which is
ultimately owned by Mr Ong Beng Seng and Mrs Christina Ong.
Directors’ beneficial interests in the shares of the Company at year-end were as follows:
Godfrey Davis
Roger Mather
Robin Gibson
5p Ordinary
Shares
2012
5p Ordinary
Shares
2011
689,160
13,538
7,029
916,404
43,282
5,029
14
15
Mulberry Group plc21726.04 06/07/2012 Proof 5
Melissa Ong does not hold any shares directly in the Company. However, she is the daughter of Mr Ong Beng Seng
and Mrs Christina Ong, who together are beneficially interested in 56.32% of the Company’s total voting rights.
The other Directors had no interests in the shares of the Company. Details of Directors’ share options, share awards
(including jointly owned shares issued under the Co-ownership Equity Incentive Plan) and other interests in shares are
disclosed in the Directors’ remuneration report.
COMPANY SECRETARY
On 17 August 2011, Roger Mather resigned as Company Secretary and was replaced by Kate Anthony Wilkinson.
SUBSTANTIAL SHAREHOLDINGS
At 13 June 2012 the Company had been notified of the following interests of 3% or more of the share capital of the
Company, other than those of the Directors above:
●● Challice Limited – 56.32%
●●
Banque Havilland SA – 24.46%
SUPPLIER PAYMENT POLICY
The Company’s current policy concerning the payment of its suppliers is to:
●●
●●
●●
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 (2011:
nil). The Group uses its cash resources to take advantage of early payment terms with suppliers. As such, for Mulberry
Company (Design) Limited, the main purchasing subsidiary, it was 20 days (2011: 16 days).
CORPORATE SOCIAL RESPONSIBILITY
Our approach is to make a positive difference to our people, environment and communities we work in. For example,
we ensure that our suppliers adhere to our Global Sourcing Principles and therefore create the right environment for
their workers. We have reviewed our packaging and are continuously looking for other ways to reduce our waste and
the impact we have on the environment. In 2006 we started an apprenticeship programme in our Somerset Factory
which has been extremely successful and is complemented by our investment in graduate internships and training for
NVQ qualifications within our UK retail and production sites.
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.
14
15
Mulberry Group plc21726.04 06/07/2012 Proof 5 Directors’ report
(continued)
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 £30,000 (2011: £44,000) during the year. The Group made no political
donations.
AUDITOR
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 of which the Company’s auditor is
unaware; and
each of the Directors has taken all the steps that he/she ought to have taken as a Director to make himself/herself
aware of any relevant audit information and to establish that the Company’s auditor is aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of Section 418 of the Companies
Act 2006.
Deloitte LLP have expressed their willingness to continue as auditor and a resolution to re-appoint them will be
proposed at the forthcoming Annual General Meeting.
By order of the Board
Roger Mather
Director
13 June 2012
16
17
Mulberry Group plc21726.04 06/07/2012 Proof 5 Directors’ responsibilities statement
Year ended 31 March 2012
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. Under that law the Directors
are required to prepare the Group financial statements in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union and Article 4 of the IAS Regulation and 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). Under company law the Directors must not approve the accounts
unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or
loss of the Company for that period.
In preparing the parent company financial statements, the Directors are required to:
●●
select suitable accounting policies and then apply them consistently;
●● make judgements and accounting estimates that are reasonable and prudent;
●●
●●
state whether applicable UK Accounting Standards have been followed, subject to any material departures
disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Company will continue in business.
In preparing the Group financial statements, International Accounting Standard 1 requires that Directors:
●●
●●
●●
properly select and apply accounting policies;
present information, including accounting policies, in a manner that provides relevant, reliable, comparable and
understandable information;
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; and
●● make an assessment of the Company’s ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the Companies Act 2006. 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
17
Mulberry Group plc21726.04 06/07/2012 Proof 5 Independent auditor’s 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 2012 which
comprise the consolidated income statement, the consolidated statement of comprehensive income, the consolidated
balance sheet, the consolidated statement of changes in equity, the consolidated cash flow statement and the related
notes 1 to 33. The financial reporting framework that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the European Union.
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. 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 auditor’s 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 AUDITOR
As explained more fully in the Directors’ responsibilities statement, the Directors are responsible for the preparation
of the Group financial statements and for being satisfied that they give a true and fair view. Our responsibility is to
audit and express an opinion on the Group financial statements in accordance with applicable law and International
Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s
Ethical Standards for Auditors.
SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or
error. This includes an assessment of: whether the accounting policies are appropriate to the Group’s circumstances
and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates
made by the Directors; and the overall presentation of the financial statements. In addition, we read all the financial
and non-financial information in the Annual Report to identify material inconsistencies with the audited financial
statements. If we become aware of any apparent misstatements or inconsistencies we consider the implications for
our report.
OPINION ON FINANCIAL STATEMENTS
In our opinion the Group financial statements:
●●
●●
●●
give a true and fair view of the state of the Group’s affairs as at 31 March 2012 and of its profit for the year then
ended;
have been properly prepared in accordance with IFRSs as adopted by the European Union; and
have been prepared in accordance with the requirements of the Companies Act 2006.
OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion the information given in the Directors’ report for the financial year for which the Group financial
statements are prepared is consistent with the Group financial statements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to
you if, in our opinion:
certain disclosures of Directors’ remuneration specified by law are not made; or
●●
●● we have not received all the information and explanations we require for our audit.
OTHER MATTERS
We have reported separately on the parent company financial statements of Mulberry Group plc for the year ended
31 March 2012.
In our opinion the part of the Directors’ remuneration report to be audited has been properly prepared in accordance
with the provisions of the Companies Act 2006 that would have applied were the Company a quoted company.
David Hedditch (Senior statutory auditor)
for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor
Bristol, United Kingdom
13 June 2012
18
19
Mulberry Group plc21726.04 06/07/2012 Proof 5 Consolidated income statement
Year ended 31 March 2012
Revenue
Cost of sales
Gross profit
Administrative expenses
Other operating income
Operating profit
Operating profit before exceptional items
Share of results of associate
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
2012
£’000
2011
£’000
5
168,451
121,645
(56,964)
(42,144)
111,487
(76,565)
495
79,501
(58,147)
1,656
35,417
23,010
35,417
23,110
562
72
(50)
305
74
(44)
36,001
(10,700)
23,345
(6,282)
25,301
17,063
25,301
17,063
pence
pence
43.9
43.4
29.8
29.1
5
7
19
11
12
13
8
15
15
Consolidated statement of comprehensive income
Year ended 31 March 2012
Profit for the year
Exchange differences on translation of foreign operations
Total comprehensive income for the year
Attributable to:
Equity holders of the parent
2012
£’000
2011
£’000
25,301
17,063
(207)
1
25,094
17,064
25,094
17,064
18
19
Mulberry Group plc21726.04 06/07/2012 Proof 5 Consolidated balance sheet
At 31 March 2012
Note
2012
£’000
2011
£’000
16
17
19
23
20
21
21
24
3,984
24,212
357
–
2,134
18,207
210
69
28,553
20,620
32,546
14,912
27,293
22,408
12,186
21,373
74,751
55,967
103,304
76,587
(34,627)
(6,188)
(30,476)
(4,079)
(40,815)
(34,555)
23
(26)
–
25
26
(40,841)
(34,555)
62,463
42,032
2,982
11,578
(3,966)
154
1,467
179
50,069
2,943
7,007
(621)
154
1,467
386
30,696
62,463
42,032
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
Non‑current liabilities
Deferred tax liability
Total liabilities
Net assets
Equity
Share capital
Share premium account
Own share reserve
Capital redemption reserve
Special reserve
Foreign exchange reserve
Retained earnings
Total equity
The financial statements of Mulberry Group plc (company number 01180514) were approved by the Board of Directors
and authorised for issue on 13 June 2012. They were signed on its behalf by:
Bruno Guillon
Director
Roger Mather
Director
20
21
Mulberry Group plc21726.04 06/07/2012 Proof 5
Consolidated statement of changes in equity
Year ended 31 March 2012
Share
capital
£’000
Share
premium
account
£’000
Own
share
reserve
£’000
Capital
redemption
reserve
£’000
Special
reserve*
£’000
Foreign
exchange
reserve
£’000
Retained
earnings
£’000
Total
£’000
Balance at
1 April 2010
Total comprehensive
income for the year
Charge for employee
share-based payments
Exercise of share options
Own shares
Ordinary dividends paid
Balance at
31 March 2011
Total comprehensive
(expense)/income for
the year
Issue of share capital
Charge for employee
share-based payments
Exercise of share options
Own shares
Ordinary dividends paid
Balance at
31 March 2012
2,943
7,007
(107)
154
1,467
385
14,616
26,465
–
–
–
–
–
–
–
–
–
–
–
–
–
(514)
–
–
–
–
–
–
–
–
–
–
–
1
–
–
–
–
17,063
17,064
701
(418)
–
(1,266)
701
(418)
(514)
(1,266)
2,943
7,007
(621)
154
1,467
386
30,696
42,032
–
10
–
29
–
–
–
3,782
–
789
–
–
–
–
–
–
(3,345)
–
–
–
–
–
–
–
–
–
–
–
–
–
(207)
–
25,301
–
25,094
3,792
–
–
–
–
701
(4,319)
–
(2,310)
701
(3,501)
(3,345)
(2,310)
2,982
11,578
(3,966)
154
1,467
179
50,069
62,463
* The special reserve was created as part of a capital restructuring of the Group in 2004.
20
21
Mulberry Group plc21726.04 06/07/2012 Proof 5
Consolidated cash flow statement
Year ended 31 March 2012
Operating profit for the year
Adjustments for:
Depreciation and 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 charge
2012
£’000
2011
£’000
35,417
23,010
3,992
494
(8)
(109)
701
2,261
837
152
24
701
Operating cash flows before movements in working capital
40,487
26,985
Increase in inventories
Increase in receivables
Increase in payables
Cash generated from operations
Corporation taxes paid
Interest paid
Net cash inflow from operating activities
Investing activities:
Interest received
Dividend received from associate
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Acquisition of intangible fixed assets
Net cash used in investing activities
Financing activities:
Dividends paid
Proceeds on issue of shares
Settlement of share awards
Investment in own shares
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
(10,151)
(2,750)
2,530
(13,318)
(3,848)
16,805
30,116
26,624
(8,495)
(50)
(3,856)
(44)
21,571
22,724
96
408
(8,632)
33
(2,153)
47
308
(11,176)
–
(503)
(10,248)
(11,324)
(2,310)
818
(4,358)
447
(1,266)
–
(418)
(514)
(5,403)
(2,198)
5,920
9,202
21,373
12,171
27,293
21,373
22
23
Mulberry Group plc21726.04 06/07/2012 Proof 5 Notes to the consolidated financial statements
Year ended 31 March 2012
1. GENERAL INFORMATION
Mulberry Group plc is a company incorporated in England and Wales. The address of the registered office is
given on page 6. The nature of the Group’s operations and its principal activities are set out in note 6 and in the
Directors’ report.
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
During the current year the following new and revised Standards and Interpretations have been adopted but have
not had an impact on the Group:
●●
IAS 24: Related party disclosures
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:
●●
●●
●●
●●
IFRS 9: Financial instruments
IFRS 10: Consolidated Financial Statements
IFRS 11: Joint Arrangements
IFRS 12: Disclosure of Interests in Other Entities
●● Amendment to IAS 27: Separate Financial Statements
●● Amendment to IAS 28: Investments in Associates and Joint Ventures
●●
●●
IFRS 13: Fair Value Measurement
IAS 19: Employee Benefits
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.
3. SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting
The financial statements have been prepared in accordance with IFRSs adopted by the European Union.
For the year ended 31 March 2012, the financial year runs for the 53 weeks to 31 March 2012 (2011: 52 weeks ended
26 March 2011).
The financial statements are prepared under the historical cost convention. The principal accounting policies
adopted are set out below.
Going concern
The Group’s business activities, together with the factors likely to affect its future development, performance and
position are given in the Chairman’s review and Chief Executive’s report. The financial position of the Company, its
cash flows, liquidity position and borrowing facilities are described in the Financial review and Directors‘ report.
In addition, notes 21, 22, 24 and 31 to the consolidated financial statements include the Company’s objectives,
policies and processes for managing its capital; its financial risk management objectives; and its exposures to
credit risk and liquidity risk.
22
23
Mulberry Group plc21726.04 06/07/2012 Proof 5 Notes to the consolidated financial statements
Year ended 31 March 2012
3. SIGNIFICANT ACCOUNTING POLICIES (continued)
Going concern (continued)
The Group has considerable financial resources together with a customer base split across different geographic
areas and between own retail stores, partner stores and wholesale accounts. As a consequence, the Directors
believe that the Group is well placed to manage its business risks successfully despite the uncertain economic
outlook.
The Directors have, at the time of approving the financial statements, a reasonable expectation that the Company
and the Group have adequate resources to continue in operational existence for the foreseeable future. Thus they
continue to adopt the going concern basis of accounting in preparing the financial statements. Further details are
contained in the Directors’ report.
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.
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 (typically four to five years).
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. Assets in the course of construction are carried at cost less any recognised
impairment loss. Cost includes professional fees.
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
5%
over the term of the lease
10% to 33%
20%
25%
Freehold land and assets under the course of construction are not depreciated. Depreciation on assets commences
when the assets are ready for intended use.
24
25
Mulberry Group plc21726.04 06/07/2012 Proof 5 3. SIGNIFICANT ACCOUNTING POLICIES (continued)
Property, plant and equipment (continued)
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.
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.
The 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 net 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.
Where a Group entity transacts with an associate of the Group, profits and losses are eliminated to the extent of
the Group’s interest in the relevant associate.
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.
24
25
Mulberry Group plc21726.04 06/07/2012 Proof 5 Notes to the consolidated financial statements
Year ended 31 March 2012
3. SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
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.
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.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a
third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and
the amount of the receivable can be measured reliably.
26
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Mulberry Group plc21726.04 06/07/2012 Proof 5 3. SIGNIFICANT ACCOUNTING POLICIES (continued)
Provisions (continued)
Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous
contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting the
obligations under the contract exceed the economic benefits expected to be received under it.
Share‑based payments
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 the proportion 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.
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.
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 title has passed. Sales of gift vouchers are recognised on presentation of the
voucher for payment of goods.
Interest income is accrued on a time basis by reference to the principal outstanding and at the effective interest
rate applicable. This 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 recognised on an accruals basis in accordance with the substance of the relevant agreement and
is disclosed as other operating income.
Operating profit
Operating profit is stated before the share of results of associates, finance income and finance expense.
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.
26
27
Mulberry Group plc21726.04 06/07/2012 Proof 5 Notes to the consolidated financial statements
Year ended 31 March 2012
3. SIGNIFICANT ACCOUNTING POLICIES (continued)
Foreign currencies (continued)
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.
For the purposes 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.
Derecognition of financial assets
The Group derecognises financial assets when the contractual rights to the cash flows from the asset expire,
or when it transfers the financial asset and substantially all of the risks and rewards of ownership of the asset to
another entity.
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.
Trade payables
Trade payables are not interest-bearing and are stated at their nominal value.
28
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Mulberry Group plc21726.04 06/07/2012 Proof 5 3. SIGNIFICANT ACCOUNTING POLICIES (continued)
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged,
cancelled or they expire.
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. Provisions for raw materials are calculated based upon expected future usage and
for finished goods upon the saleability of finished goods and age and condition of the items.
28
29
Mulberry Group plc21726.04 06/07/2012 Proof 5
Notes to the consolidated financial statements
Year ended 31 March 2012
5. REVENUE
Sale of goods
Royalty income
Other income
Finance income
Total revenue
2012
£’000
168,451
200
295
72
2011
£’000
121,645
385
1,271
74
169,018
123,375
Included within other income in 2011 is £900,000 received on the exit of the former flagship store lease on New
Bond Street, London (see note 7).
6. BUSINESS AND GEOGRAPHICAL SEGMENTS
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the
Group that are regularly reviewed by the Chief Operating decision maker, defined as the Chief Executive to
allocate resources to the segments and to assess their performance.
(A) Business segments
For management purposes, the Group is currently organised into two operating divisions – the Retail business and
Design business. 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, clothing and footwear 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.
Revenue
External sales
Inter-segment sales
Total revenue
Segment result
Central administration costs
Share of results of associate
Net finance income
Profit before tax
Design
2012
£’000
68,845
39,770
Retail
2012
£’000
Eliminations
2012
£’000
Group
2012
£’000
99,606
–
–
(39,770)
168,451
–
108,615
99,606
(39,770)
168,451
17,834
18,606
–
36,440
(1,023)
562
22
36,001
30
31
Mulberry Group plc21726.04 06/07/2012 Proof 5 6. BUSINESS AND GEOGRAPHICAL SEGMENTS (continued)
Revenue
External sales
Inter-segment sales
Total revenue
Segment result
Central administration costs
Share of results of associate
Net finance income
Profit before tax
Design
2011
£’000
48,148
27,113
Retail
2011
£’000
Eliminations
2011
£’000
Group
2011
£’000
73,497
–
–
(27,113)
121,645
–
75,261
73,497
(27,113)
121,645
15,817
8,283
–
24,100
2012
Design
£’000
2012
Retail
£’000
2012
Total
£’000
2011
Design
£’000
2011
Retail
£’000
(1,090)
305
30
23,345
2011
Total
£’000
Other information
Capital expenditure
Depreciation and
amortisation
2,629
8,062
10,691
1,236
4,373
5,609
1,254
1,968
3,222
1,456
1,439
2,895
In addition, £1,752,000 (2011: £7,646,000) of capital expenditure and £1,263,000 (2011: £203,000) of depreciation
was incurred by the parent company which is not included in the segments above.
Balance sheet
Segment assets
Interests in associates
Unallocated corporate
assets
Consolidated assets
2012
Design
£’000
2012
Retail
£’000
2012
Total
£’000
2011
Design
£’000
2011
Retail
£’000
2011
Total
£’000
43,437
48,644
92,081
42,962
22,917
65,880
357
10,866
103,304
210
10,497
76,587
Segment liabilities
16,782
10,052
26,834
16,792
7,581
24,373
Unallocated corporate
liabilities
Consolidated liabilities
14,007
40,841
10,182
34,555
30
31
Mulberry Group plc21726.04 06/07/2012 Proof 5
Notes to the consolidated financial statements
Year ended 31 March 2012
6. BUSINESS AND GEOGRAPHICAL SEGMENTS (continued)
(B) Geographical segments
The following table provides an analysis of the Group’s sales and non-current assets by geographical market,
irrespective of the origin of the goods:
UK
Rest of Europe
Asia
North America
Rest of World
Sales revenue by
geographical market
2011
£’000
2012
£’000
Non‑current assets by
geographical market
2011
£’000
2012
£’000
103,285
27,628
26,042
8,367
3,129
81,051
18,100
15,503
5,200
1,791
21,620
2,313
–
4,620
–
18,005
2,134
–
481
–
168,451
121,645
28,553
20,620
7. EXCEPTIONAL INCOME AND EXPENSES
There were no exceptional income or expenses in the current year.
On 5 October 2009, a transaction to assume operational control of the two New York stores and the distribution
rights to the North American market previously held by our joint venture partner, Mulberry USA LLC, was
completed. As part of this agreement, deferred consideration of up to £1,000,000 would become payable to
Challice Limited (the remaining shareholder of Mulberry USA LLC and the majority shareholder of Mulberry
Group plc) on a stepped basis if sales generated from the USA operations during the third year post-completion
exceeded certain agreed thresholds. The consideration was to be payable in cash or, at Mulberry Group plc’s
option, new Mulberry shares, the number of shares being calculated at the then prevailing share price. Following
the growth in the USA operations, as at 31 March 2011 the Directors concluded that it was probable that the
deferred consideration would become payable and as such a provision for £1,000,000 was made and disclosed as
an exceptional cost. This has subsequently been paid in full during April 2012.
As part of the Group’s future growth strategy, the decision was made during the year ended 31 March 2010 to
relocate the flagship New Bond Street store to an alternative site on New Bond Street. An agreement was made
with the landlord to take back the lease of the old New Bond Street store in return for a payment to the Group of
£900,000. This was received during January 2011 and disclosed as exceptional income.
8. PROFIT FOR THE YEAR
Profit for the year has been arrived at after charging/(crediting):
Net foreign exchange loss
Depreciation and impairment of property, plant and equipment:
Owned assets
Amortisation of intangible assets
Write-downs of inventories recognised as an expense
Cost of inventories recognised as expense
Staff costs (see note 10)
Impairment of trade receivables
(Profit)/loss on disposal of property, plant and equipment
2012
£’000
2011
£’000
77
76
3,992
494
823
56,642
28,053
295
(8)
2,261
837
353
42,583
21,847
183
152
32
33
Mulberry Group plc21726.04 06/07/2012 Proof 5 9. AUDITOR REMUNERATION
The analysis of auditor’s remuneration is as follows:
Fees payable to the Company’s auditor for the audit of the Company’s
annual accounts
The audit of the Company’s subsidiaries
Total audit fees
Corporate finance services
Other taxation advisory services
Other services
Total non‑audit fees
2012
£’000
2011
£’000
19
40
59
16
37
53
£’000
£’000
30
51
3
84
–
85
3
88
In 2012, the corporate finance services relate to work in connection with the Regional Growth Fund for our new
Somerset factory. Tax services in both years include advice in relation to international structuring and company
share schemes.
10. 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 30)
Share-based payments (see note 29)
2012
Number
2011
Number
362
465
116
943
313
436
72
821
£’000
£’000
24,634
2,197
521
701
18,726
1,964
456
701
28,053
21,847
Details of Directors’ remuneration and interests are provided in the audited section of the Directors’ remuneration
report and should be regarded as part of these financial statements.
32
33
Mulberry Group plc21726.04 06/07/2012 Proof 5 Notes to the consolidated financial statements
Year ended 31 March 2012
11. FINANCE INCOME
Interest income on cash balances
12. FINANCE EXPENSE
Interest on bank overdraft
13. TAX
Current tax
Adjustment to prior year corporation tax
Deferred tax (note 23)
Adjustment to prior year deferred tax
2012
£’000
2011
£’000
72
74
2012
£’000
2011
£’000
50
44
2012
£’000
9,915
690
123
(28)
10,700
2011
£’000
6,416
(103)
(13)
(18)
6,282
The charge for the year can be reconciled to the profit per the consolidated income statement as follows:
Profit before tax
Tax at the UK corporation tax rate of 26% (2011: 28%)
Tax effect of items that are not deductible/(deductible) in determining taxable profit
Tax effect of expenses not deductible for tax purposes – fixed assets
Profits offset against prior year losses
Losses carried forward to offset against future profits
Chargeable gain on disposal of lease
Short-term timing differences
Effect of change in corporation tax rate
Prior year adjustments
Tax expense for the year
2012
£’000
2011
£’000
36,001
23,345
9,360
316
343
(56)
67
13
–
(5)
662
10,700
6,537
(360)
156
(74)
–
–
23
–
–
6,282
In the Budget on 21 March 2012 the UK Government announced that legislation will be introduced in the Finance
Bill 2012 to reduce the main rate of corporation tax from 26% to 24% from 1 April 2012, to 23% from 1 April 2013
and to 22% by April 2014. On 26 March 2012 a resolution approving the rate change to 24% was passed and
therefore 24% has been used to calculate the position on deferred tax at 31 March 2012 (2011: 26%). The further
phased reduction to 22% has not yet been enacted. The Directors are not aware of any other factors that will
materially affect the future tax charge.
34
35
Mulberry Group plc21726.04 06/07/2012 Proof 5 14. DIVIDENDS
The dividends approved and paid during the year are as follows:
Final dividend for the year ended 31 March 2011 of 4p
per share paid in August 2011 (2011: 2.2p)
Proposed final dividend for the year ended 31 March 2012
of 5p per share (2011: 4p)
2012
£’000
2011
£’000
2,310
1,266
2,982
2,367
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.
15. EARNINGS PER SHARE (‘EPS’)
Basic earnings per share
Diluted earnings per share
Adjusted basic earnings per share
Adjusted diluted earnings per share
Earnings per share is calculated based on the following data:
Profit for the year for basic and diluted earnings per share
Deferred consideration
Lease income
Tax impact of exceptional lease income
2012
pence
2011
pence
43.9
43.4
43.9
43.4
2012
£’000
25,301
–
–
–
29.8
29.1
30.4
29.7
2011
£’000
17,063
1,000
(900)
252
Adjusted profit for the year for adjusted basic and diluted earnings per share
25,301
17,415
Weighted average number of ordinary shares for the purpose of basic EPS
Effect of dilutive potential ordinary shares: share options
Weighted average number of ordinary shares for the purpose of diluted EPS
2012
million
2011
million
57.6
0.7
58.3
57.3
1.4
58.7
The weighted average number of ordinary shares in issue during the year excludes those held by the Mulberry
Group Plc Employee Share Trust.
34
35
Mulberry Group plc21726.04 06/07/2012 Proof 5
Notes to the consolidated financial statements
Year ended 31 March 2012
16. INTANGIBLE ASSETS
Cost
At 1 April 2010
Additions
Exchange differences
At 1 April 2011
Additions
Disposals
Exchange differences
At 31 March 2012
Amortisation
At 1 April 2010
Charge for the year
Exchange differences
At 1 April 2011
Charge for the year
Disposals
Exchange differences
At 31 March 2012
Carrying amount
At 31 March 2012
At 31 March 2011
At 31 March 2010
Software
£’000
1,192
503
–
1,695
2,425
(48)
–
4,072
440
768
–
1,208
422
(48)
–
1,582
2,490
487
752
Lease
costs
£’000
1,992
–
(35)
1,957
–
–
(98)
1,859
245
69
(4)
310
72
–
(17)
365
1,494
1,647
1,747
Total
£’000
3,184
503
(35)
3,652
2,425
(48)
(98)
5,931
685
837
(4)
1,518
494
(48)
(17)
1,947
3,984
2,134
2,499
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 27 years.
At 31 March 2012, the Group had entered into contractual commitments for the acquisition of software of £467,000
(2011: £615,000). Included within software is £1,074,000 of projects still in development and where depreciation
will not commence until the projects are complete and the assets come into use (2011: £128,000).
36
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Mulberry Group plc21726.04 06/07/2012 Proof 5 17. PROPERTY, PLANT AND EQUIPMENT
Freehold
land and
buildings
£’000
Short
leasehold
land and
buildings
£’000
Plant and
equipment
£’000
Fixtures,
fittings and
equipment
£’000
Motor
vehicles
£’000
Cost
At 1 April 2010
Additions
Disposals
Exchange differences
At 1 April 2011
Additions
Disposals
Exchange differences
At 31 March 2012
Accumulated depreciation
At 1 April 2010
Charge for the year
Disposals
Exchange differences
At 1 April 2011
Charge for the year
Disposals
Exchange differences
At 31 March 2012
Carrying amount
At 31 March 2012
At 31 March 2011
At 31 March 2010
3,848
752
–
–
4,600
1,362
–
–
5,962
1,295
109
–
–
1,404
178
–
–
1,582
4,380
3,196
2,553
3,573
8,581
(3,051)
–
9,103
4,978
–
11
4,691
511
–
–
5,202
2,256
(1,873)
–
8,922
2,907
(2,179)
(14)
9,636
1,312
(2,302)
(30)
14,092
5,585
8,616
2,894
262
(2,978)
–
178
1,432
–
1
1,611
12,481
8,925
679
3,266
500
–
–
3,766
801
(1,873)
–
5,762
1,366
(2,100)
(6)
5,022
1,555
(2,288)
(23)
2,694
4,266
2,891
1,436
1,425
4,350
4,614
3,160
Total
£’000
21,133
12,752
(5,230)
(14)
28,641
10,019
(4,247)
(19)
34,394
13,257
2,261
(5,078)
(6)
10,434
3,992
(4,222)
(22)
10,182
99
1
–
–
100
111
(72)
–
139
40
24
–
–
64
26
(61)
–
29
110
24,212
36
59
18,207
7,876
Included within the table above, are the following assets under the course of construction which are not being
depreciated:
At 31 March 2012
At 31 March 2011
–
752
1,219
–
The Group has the following contractual commitments:
At 31 March 2012
At 31 March 2011
50
748
2,653
–
13
–
–
–
1,018
–
190
–
–
–
–
–
2,250
752
2,893
748
Freehold land of £997,000 (2011: £997,000) has not been depreciated.
36
37
Mulberry Group plc21726.04 06/07/2012 Proof 5 Notes to the consolidated financial statements
Year ended 31 March 2012
18. SUBSIDIARIES
A list of the significant investments in subsidiaries, including the name, country of incorporation and proportion of
ownership interest is given in note 36 to the Company’s separate financial statements.
19. INTERESTS IN ASSOCIATES
Total assets
Total liabilities
Total net assets
Total revenue
Profit for the year
Group’s share of profit of associate
2012
£’000
2,031
(1,961)
2011
£’000
1,177
(1,040)
70
137
3,884
1,125
562
2,060
610
305
A list of the significant investments in associates, including the name, country of incorporation and proportion of
ownership interest is given in note 36 to the Company’s separate financial statements.
20. INVENTORIES
Raw materials
Work-in-progress
Finished goods
21. 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
2012
£’000
2,475
758
29,313
2011
£’000
1,684
655
20,069
32,546
22,408
2012
£’000
11,047
(698)
10,349
155
998
3,410
2011
£’000
8,977
(403)
8,574
386
696
2,530
14,912
12,186
38
39
Mulberry Group plc21726.04 06/07/2012 Proof 5 21. OTHER FINANCIAL ASSETS (continued)
Trade receivables
The average credit period taken on the sale of goods is 42 days (2011: 39 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 assesses the
potential customer’s credit quality and defines individual credit limits by customer.
The Group’s receivables comprise primarily department stores, franchisee partners and associates, and wholesale
customers. Those customers who represented more than 10% of the total balance of trade receivables at the year-
end were Club 21, House of Fraser (Stores) Limited and SHK Holdings (franchisee partner in Korea).
Included in the Group’s trade receivables balance are debtors with a carrying amount of £1,804,000 (2011:
£1,494,000) 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 ageing of past due but not impaired receivables were:
0 to 30 days overdue
31 to 60 days overdue
2012
£’000
1,804
–
1,804
2011
£’000
1,494
–
1,494
Given the relatively small nature of the provision for receivables no further analysis is provided.
Cash and cash equivalents
Cash and cash equivalents
2012
£’000
2011
£’000
27,293
21,373
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.
22. BORROWINGS
The Group’s borrowing facilities comprise bank overdrafts which would be repayable on demand. The multi-
currency overdraft facilities of £2,000,000 (2011: £2,000,000) have been secured by a charge over the Group’s
assets. The interest rates are determined based on 1% over the bank base rate. In addition the Group has available
trade facilities of £2,500,000 (2011: £2,500,000).
No borrowings were outstanding at the year-end (2011: nil).
38
39
Mulberry Group plc21726.04 06/07/2012 Proof 5
Notes to the consolidated financial statements
Year ended 31 March 2012
23. 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 2010
Charge/(credit) to income
At 1 April 2011
Charge to income
Net deferred tax liability/(asset) as at 31 March 2012
Accelerated
tax
depreciation
£’000
Short‑term
timing
differences
£’000
170
14
184
20
204
(208)
(45)
(253)
75
(178)
Total
£’000
(38)
(31)
(69)
95
26
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 liability
Deferred tax asset
24. OTHER FINANCIAL LIABILITIES
Trade and other payables
Trade payables
Accruals and deferred income
Other payables
2012
£’000
2011
£’000
204
(178)
26
184
(253)
(69)
2012
£’000
12,696
18,644
3,287
2011
£’000
9,171
18,527
2,778
34,627
30,476
Trade creditors and accruals principally comprise amounts outstanding for trade purchases and ongoing costs.
The average credit period taken for trade purchases is 20 days (2011: 16 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.
Included within accruals is the £1,000,000 provision for the USA deferred consideration (2011: £1,000,000) (note 7),
£5,890,000 relating to deferred income for lease incentives (2011: £4,717,000), £2,600,000 relating to management
bonuses (2011: £2,000,000) and £1,374,000 accruals for fixed assets (2011: £1,537,000).
The Directors consider that the carrying amount of trade payables approximates to their fair value.
40
41
Mulberry Group plc21726.04 06/07/2012 Proof 5 25. SHARE CAPITAL
Authorised
65,000,000 ordinary shares of 5p each (2011: 65,000,000)
Issued and fully paid
59,635,175 ordinary shares of 5p each (2011: 58,869,505)
The following share issues have been made during the year:
2012
£’000
2011
£’000
3,250
3,250
£’000
£’000
2,982
2,943
●● On 14 April 2011, 300,000 5p ordinary shares were issued at a premium of £1.40 per share for the exercise of
share options;
●● On 25 January 2012, 265,000 5p ordinary shares were issued at a premium of £1.39½ per share for the exercise
of share options; and
●● On 6 March 2012, 200,670 5p ordinary shares were issued at a premium of £18.84½ per share to the Mulberry
Group Plc Employee Share Trust for share awards.
The Company has not granted any options in respect of 5p ordinary shares during the year (2011: 80,000).
26. RESERVES
The own share reserve represents 1,715,893 5p ordinary shares (2011: 1,634,857) at a cost of £3,966,000 (2011:
£621,000). The shares have been purchased in the market or issued as new shares by the Company, and are held
by the Mulberry Group Plc Employee Share Trust to satisfy the deferred and matching shares under the Deferred
Bonus Plan and Co-ownership Equity Incentive Plan.
During the year, the reserve increased due to the purchase of 200,670 5p ordinary shares following an issue of
share capital by the Company at the open market value of £3,390,000 and reduced by the vesting of 119,634
shares with a value of £45,000.
27. OPERATING LEASE ARRANGEMENTS
2012
£’000
2011
£’000
Minimum lease payments under operating leases recognised as an expense in the year
8,339
7,387
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
9,937
41,575
46,481
7,565
32,905
43,688
97,993
84,158
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 2035. 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 £2,098,000 (2011: £1,383,000).
40
41
Mulberry Group plc21726.04 06/07/2012 Proof 5 Notes to the consolidated financial statements
Year ended 31 March 2012
28. CONTINGENT LIABILITIES
Mulberry Group plc has acted as a guarantor on various property leases entered into between its subsidiaries and
third-party lessors. No amounts were outstanding at the year-end in respect of such guarantees (2011: nil).
29. SHARE‑BASED PAYMENTS
The Group operated the following schemes during the year.
Mulberry Group plc 2008 Unapproved Share Option Scheme
The scheme was established on 14 April 2008 and is open to all employees of Mulberry Group plc and its
subsidiaries. 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 for both schemes during the year are as follows:
Outstanding at beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year
2012
Weighted
average
exercise
price (in £)
2.13
–
–
1.45
Number
of share
options
1,361,000
–
–
(920,000)
Number
of share
options
1,366,000
80,000
(20,000)
(65,000)
Outstanding at the end of the year
441,000
3.40
1,361,000
Exercisable at the end of the year
186,000
1.45
100,000
2011
Weighted
average
exercise
price (in £)
1.46
12.05
1.45
1.45
2.13
1.46
The weighted average share price at the date of exercise for share options exercised during the period was £13.77
(2011: £1.45). The options outstanding at 31 March 2012 had a weighted average remaining contractual life of 0.6
years (2011: 0.5 years). The weighted average fair value of options granted during the year was nil (2011: £3.41).
The inputs into the Black-Scholes model are as follows:
Share price
Exercise price
Expected volatility
Expected life
Risk-free rate
Expected dividend yields
2012
2011
£1.44½ to £12.05
£1.44½ to £12.05
50.21% to 62.41%
3.25 years
1.88% to 4.93%
0.3% to 1.6%
£0.50 to £12.05
£0.50 to £12.05
33.57% to 62.41%
3.25 years
1.88% to 5.05%
0% to 1.88%
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.
42
43
Mulberry Group plc21726.04 06/07/2012 Proof 5 29. SHARE‑BASED PAYMENTS (continued)
Mulberry Group plc 2008 Deferred Bonus Plan
The plan was established on 8 August 2008 and is open to all employees of Mulberry Group plc and its subsidiaries.
The share-based payments charge relates to the cost of matching shares awarded to employees participating in
this plan. The vesting period is two years. If the matching shares remain unexercised after a period of ten years
from the date of grant, the award expires. The matching shares 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 the year
Granted during the year
Exercised during the year
Outstanding at the end of the year
Exercisable at the end of the year
2012
Number of
matching
shares
2011
Number of
matching
shares
238,717
–
(58,594)
216,685
33,270
(11,238)
180,123
238,717
18,210
10,034
The options outstanding at 31 March 2012 had a weighted average remaining contractual life of 0.4 years (2011:
1.3 years) and have an exercise price of nil. The weighted average fair value of options granted during the year
was nil (2011: £12.84).
The inputs into the Black-Scholes model are as follows:
Share price
Exercise price
Expected volatility
Expected life
Risk-free rate
Expected dividend yields
2012
2011
£1.21½ to £13.72
nil
65% to 76.07%
2 years 6 months
1.59% to 1.96%
0.3% to 1.6%
£1.21 to £1.94
nil
43.93% to 76.07%
2 years 6 months
1.59% to 4.52%
1.23% to 1.6%
Expected volatility was based on historical volatility over the expected life of the scheme. 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.
42
43
Mulberry Group plc21726.04 06/07/2012 Proof 5 Notes to the consolidated financial statements
Year ended 31 March 2012
29. SHARE‑BASED PAYMENTS (continued)
Mulberry Group plc 2009 Co‑ownership Equity Incentive Plan
The plan was established on 20 August 2009. The vesting period is generally three years. The jointly owned shares
may be forfeited if the employee leaves the Group prior to vesting and the rights of the participants lapse if the
award has not been exercised after a period of seven years from the date of vesting.
Details of the share awards outstanding during the year are as follows:
Outstanding at beginning of the year
Granted during the year
Number
of share
options
1,325,000
200,670
Outstanding at the end of the year
1,525,670
4.29
1,325,000
Exercisable at the end of the year
–
–
–
2012
Weighted
average
exercise
price (in £)
2011
Weighted
average
exercise
price (in £)
Number
of share
options
1.46
23.02
1,325,000
–
1.46
–
1.46
–
The co-owned share rights outstanding at 31 March 2012 had a weighted average remaining contractual life of
0.8 years (2011: 1.5 years). The weighted average fair value of awards granted during the year was £4.57 (2011: nil).
The inputs into the Black-Scholes model are as follows:
Share price
Exercise price
Expected volatility
Expected life
Risk-free rate
Expected dividend yields
2012
2011
£1.21½ to £18.89½
£1.46 to £23.02
47.96% to 53.79%
2 years 3 months to 4 years
0.41% to 2.16%
0.4% to 1.6%
£1.21½
£1.46
53.79%
2 years 3 months
2.16%
1.6%
Expected volatility was based on historical volatility over the expected life of the scheme. 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 the following expenses related to share-based payments:
Mulberry Group plc 2008 Unapproved Share Option Scheme
Mulberry Group plc 2008 Deferred Bonus Plan
Mulberry Group plc 2009 Co-ownership Equity Incentive Plan
2012
£’000
2011
£’000
187
348
166
701
440
107
154
701
44
45
Mulberry Group plc21726.04 06/07/2012 Proof 5 30. RETIREMENT BENEFIT SCHEMES
The Group contributes to personal pension plans for all qualifying employees. The total cost charged to income
of £521,000 (2011: £456,000) represents contributions payable to these schemes by the Group at rates specified in
the rules of the plans. As at 31 March 2012, contributions due in respect of the current reporting period which had
not been paid over to the schemes were £65,000 (2011: £69,000).
31. 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 shareholders 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 the consolidated statement of
changes in equity and notes 25 and 26.
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
Financial risk management objectives
Carrying values
2012
£’000
2011
£’000
37,797
30,333
12,696
9,171
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. As the Group has no debt, it is not significantly exposed
to interest rate risk on its financial liabilities and continues to seek to maximise the returns from its bank deposits.
44
45
Mulberry Group plc21726.04 06/07/2012 Proof 5 Notes to the consolidated financial statements
Year ended 31 March 2012
31. FINANCIAL INSTRUMENTS (continued)
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
2012
£’000
2,972
506
2011
£’000
2,045
522
2012
£’000
5,947
5,745
2011
£’000
3,822
3,933
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 or 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
2012
£’000
2011
£’000
US Dollar currency
impact
2012
£’000
2011
£’000
Profit or loss
270
161
476
309
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. 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 2012 would have increased by £87,500 (2011: increase by £118,000). 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.
46
47
Mulberry Group plc21726.04 06/07/2012 Proof 5 31. FINANCIAL INSTRUMENTS (continued)
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
letters of credit where deemed appropriate, 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 21. 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 and
banking facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of
financial assets and liabilities. Included in note 22 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 0.7% (2011: 0.5%).
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.
Weighted
average
interest
rate
Less than
1 year
£’000
1 to
2 years
£’000
2 to
3 years
£’000
3 to
4 years
£’000
4 to
5 years
£’000
Total
£’000
2012
Current liabilities
–
40,815
–
–
–
–
40,815
Weighted
average
interest
rate
Less than
1 year
£’000
1 to
2 years
£’000
2 to
3 years
£’000
3 to
4 years
£’000
4 to
5 years
£’000
Total
£’000
2011
Current liabilities
–
34,555
–
–
–
–
34,555
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.
46
47
Mulberry Group plc21726.04 06/07/2012 Proof 5 Notes to the consolidated financial statements
Year ended 31 March 2012
32. 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.
USA transaction
On 5 October 2009, a transaction to assume operational control of the two New York stores and the distribution
rights to the North American market previously held by our joint venture partner, Mulberry USA LLC, was completed.
As part of this agreement, deferred consideration of up to £1,000,000 became payable to Challice Limited (the
remaining shareholder of Mulberry USA LLC and the majority shareholder of Mulberry Group plc) on a stepped
basis if sales generated from the USA operations during the third year post completion exceeded certain agreed
thresholds. The consideration was to be payable in cash or, at Mulberry Group plc’s option, new Mulberry shares,
the number of shares being calculated at the then prevailing share price. Following the growth in the USA
operations, as at 31 March 2011 the Directors concluded that it was probable that the deferred consideration
would become payable and as such a provision for £1,000,000 was made and disclosed as an exceptional cost.
This has subsequently been paid in full during April 2012.
Trading transactions
During the year, Group companies entered into the following transactions with related parties which are not
members of the Group:
Mulberry Oslo AS
Club 21 Retail (Hong Kong) Limited*
Club 21 Pte Limited*
Club 21 (Thailand) Co Limited*
Club 21 Pte Limited Taiwan Branch*
Club 21 Distribution (S) Pte Limited*
Club Twenty-One Retail (M) Sdn Bhd*
Club 21 Australia Pty Ltd*
Club 21 Japan Company Ltd*
Sale of goods
2012
£’000
1,744
5,688
1,521
921
474
–
415
578
872
2011
£’000
1,433
3,103
1,038
454
227
–
375
396
–
Amounts owed by
related parties
2012
£’000
2011
£’000
155
632
369
77
35
(9)
13
25
3
386†
343
186
41
13
–
66
110
–
* These are related parties of the Group as they are all related companies of Challice Limited, the majority
shareholder of the Company.
† Includes £nil of dividend income outstanding at the year-end (2011: £214,000).
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.
48
49
Mulberry Group plc21726.04 06/07/2012 Proof 5 32. 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
33. CONTROLLING PARTY
2012
£’000
2,326
31
215
2,572
2011
£’000
1,057
77
302
1,436
At the year-end, Challice Limited controlled 56.53% of the issued share capital of the Company. The ultimate
controlling parties of Challice Limited are Mr Ong Beng Seng and Mrs Christina Ong. As at the date of signing the
financial statements, Challice Limited controlled 56.32% of the issued share capital of the Company.
48
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Mulberry Group plc21726.04 06/07/2012 Proof 5 Company financial statements
Contents
Independent auditor’s report
Company balance sheet
Notes to the company financial statements
Notice of Annual General Meeting
Group five year summary
Page
51
52
53
59
64
50
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Mulberry Group plc21726.04 06/07/2012 Proof 5
Independent auditor’s 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 2012
which comprise the parent company balance sheet and the related notes 34 to 45. The financial reporting framework
that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United
Kingdom Generally Accepted Accounting Practice).
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. 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 auditor’s 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 AUDITOR
As explained more fully in the Directors’ responsibilities statement, the Directors are responsible for the preparation of
the parent company financial statements and for being satisfied that they give a true and fair view. Our responsibility
is to audit and express an opinion on the parent company financial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices
Board’s Ethical Standards for Auditors.
SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud
or error. This includes an assessment of: whether the accounting policies are appropriate to the parent company’s
circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant
accounting estimates made by the Directors; and the overall presentation of the financial statements. In addition,
we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with
the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we
consider the implications for our report.
OPINION ON FINANCIAL STATEMENTS
In our opinion the parent company financial statements:
●●
●●
●●
give a true and fair view of the state of the parent company’s affairs as at 31 March 2012;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion the information given in the Directors’ report for the financial year for which the financial statements are
prepared is consistent with the parent company financial statements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to
you if, in our opinion:
●●
●●
●●
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of Directors’ remuneration specified by law are not made; or
●● we have not received all the information and explanations we require for our audit.
OTHER MATTERS
We have reported separately on the Group financial statements of Mulberry Group plc for the year ended 31 March 2012.
50
51
David Hedditch (Senior statutory auditor)
for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor
Bristol, United Kingdom
13 June 2012
Mulberry Group plc21726.04 06/07/2012 Proof 5 Company balance sheet
At 31 March 2012
Fixed assets
Tangible fixed assets
Investments
Current assets
Debtors
Creditors: amounts falling due within one year
Net current assets
Total assets less current liabilities
Provision for liabilities
Net assets
Capital and reserves
Called up share capital
Share premium account
Own share reserve
Capital redemption reserve
Special reserve
Profit and loss account
Shareholders’ funds
Note
37
36
38
39
40
43
44
44
44
44
44
45
2012
£’000
10,660
13,242
2011
£’000
10,171
13,202
23,902
23,373
17,087
(14,364)
11,211
(9,615)
2,723
1,596
26,625
(174)
24,969
(178)
26,451
24,791
2,982
11,578
(3,966)
154
4,187
11,516
2,943
7,007
–
154
4,187
10,500
26,451
24,791
The financial statements of Mulberry Group plc (company number 01180514) were approved by the Board of Directors
and authorised for issue on 13 June 2012. They were signed on its behalf by:
Bruno Guillon
Director
Roger Mather
Director
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Mulberry Group plc21726.04 06/07/2012 Proof 5
Notes to the company financial statements
Year ended 31 March 2012
34. SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting
The separate financial statements of the Company are presented as required by the Companies Act 2006 and
have been prepared in accordance with applicable United Kingdom Accounting Standards and law. They have
been prepared under the historical cost convention and under the going concern assumption. Further details of
the Directors’ considerations in relation to going concern are included in the Directors’ report.
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 and fittings
5%
term of the lease
10% to 33%
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.
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.
Share‑based payments
The Company participates in a number of executive and employee share schemes. For all grants of share options,
the fair value as at the date of grant is calculated using the Black-Scholes model and the corresponding expense
is recognised on a straight-line basis over the vesting period based on the Company’s estimate of the proportion
of the shares that will actually vest.
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Mulberry Group plc21726.04 06/07/2012 Proof 5 Notes to the company financial statements
Year ended 31 March 2012
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 408 of the Companies Act 2006 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 2012 of
£6,944,000 (2011: £8,836,000).
The auditor’s remuneration for audit and other services is disclosed within note 9 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
Subsidiaries Subsidiaries
loans
£’000
shares
£’000
Cost
At 1 April 2011
Additions
At 31 March 2012
Provision for impairment
At 1 April 2011
Charge for the year
At 31 March 2012
Net book value
End of year
Beginning of year
2,858
40
2,898
1,460
–
1,460
1,438
1,398
Total
£’000
14,662
40
11,804
–
11,804
14,702
–
–
–
1,460
–
1,460
11,804
13,242
11,804
13,202
During the year, the Company established subsidiaries in Germany and Switzerland.
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Mulberry Group plc21726.04 06/07/2012 Proof 5 36. FIXED ASSET INVESTMENTS (continued)
The Company has investments in the following subsidiaries and associates which principally contributed to the
profits or net assets of the Group:
Country of
incorporation
Principal activity
Subsidiaries
Mulberry Company (Design) Limited
England and Wales
Mulberry Company (France) SARL
France
Mulberry Company (Sales) Limited
England and Wales
Mulberry Company (Europe) Limited
Kilver Street Inc
England and Wales
USA
Mulberry Group Plc Employee
Share Trust
Mulberry Company (Germany) GmbH Germany
Guernsey
Mulberry Company (Switzerland)
GmbH
Associates
Mulberry Oslo AS†
Switzerland
Design and manufacture of
clothing and fashion accessories
in the UK
Establishment and operation of
retail stores in France
Establishment and operation of
retail shops in the UK
Intermediary holding company
Establishment and operation of
retail stores in the USA
Operation of an employee
share trust
Establishment and operation of
retail stores in Germany
Establishment and operation of
retail stores in Switzerland
Holding of
ordinary
shares
100%
100%
100%*
100%
100%
100%
100%
100%
Norway
Operation of a retail store in Oslo
50%*
* Owned by Mulberry Company (Europe) Limited
† Accounting reference date of 30 September
37. TANGIBLE FIXED ASSETS
Cost
At 1 April 2011
Additions
At 31 March 2012
Depreciation
At 1 April 2011
Charge for the year
At 31 March 2012
Net book value
End of year
Beginning of year
Freehold
land and
buildings
£’000
Short
leasehold
land and
buildings
£’000
Fixtures
and
fittings
£’000
4,600
1,309
5,909
1,404
178
1,582
4,327
3,196
6,288
408
6,696
118
954
1,072
5,624
6,170
805
35
840
–
131
131
709
805
Total
£’000
11,693
1,752
13,445
1,522
1,263
2,785
10,660
10,171
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Mulberry Group plc21726.04 06/07/2012 Proof 5 Notes to the company financial statements
Year ended 31 March 2012
37. TANGIBLE FIXED ASSETS (continued)
Freehold land of £997,000 (2011: £997,000) has not been depreciated.
At 31 March 2012, the Company had entered into contractual commitments for the acquisition of property of £nil
(2011: £748,000). There are no assets under the course of construction where depreciation has not yet commenced
(2011: £752,000 of freehold land and buildings).
38. DEBTORS
Amounts falling due within one year:
Amounts owed by Group undertakings
Prepayments and accrued income
39. CREDITORS
Amounts falling due within one year:
Amounts owed to Group undertakings
Accruals and deferred income
40. PROVISION FOR LIABILITIES
Deferred tax – accelerated capital allowances
Deferred tax liability at 1 April 2011
Credit for the year
Deferred tax liability at 31 March 2012
2012
£’000
16,827
260
2011
£’000
11,185
26
17,087
11,211
2012
£’000
6,877
7,487
14,364
2011
£’000
4,439
5,176
9,615
2012
£’000
2011
£’000
174
178
£’000
178
(4)
174
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Mulberry Group plc21726.04 06/07/2012 Proof 5 41. RELATED PARTY TRANSACTIONS
Details of related party transactions are provided in note 32 of the consolidated financial statements. The Company
has taken advantage of the exemption in FRS 8 not to disclose details of transactions with other wholly owned
Group companies.
42. CONTINGENT LIABILITIES
Mulberry Group plc has acted as a guarantor on various property leases entered into between its subsidiaries and
third-party lessors. No amounts were outstanding at the year-end in respect of such guarantees (2011: nil).
43. CALLED UP SHARE CAPITAL
Authorised
65,000,000 ordinary shares of 5p each (2011: 65,000,000)
Issued and fully paid
59,635,175 ordinary shares of 5p each (2011: 58,869,505)
The following share issues have been made during the year:
2012
£’000
2011
£’000
3,250
3,250
£’000
£’000
2,982
2,943
●● On 14 April 2011, 300,000 5p ordinary shares were issued at a premium of £1.40 per share for the exercise of
share options;
●● On 25 January 2012, 265,000 5p ordinary shares were issued at a premium of £1.39½ per share for the exercise
of share options; and
●● On 6 March 2012, 200,670 5p ordinary shares were issued at a premium of £18.84½ per share to the Mulberry
Group Plc Employee Share Trust for share awards.
The Company has not granted any options in respect of 5p ordinary shares during the year (2011: 80,000).
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Mulberry Group plc21726.04 06/07/2012 Proof 5 Notes to the company financial statements
Year ended 31 March 2012
44. RESERVES
Balance at 1 April 2011
Profit for the year
Ordinary dividends paid
Charge for share-based
payments
Exercise of share options
Issued share capital
Own shares
Share
capital
£’000
2,943
–
–
–
–
39
–
Share
premium
£’000
Own
share
reserve
£’000
Capital
redemption
reserve
£’000
7,007
–
–
–
–
4,571
–
–
–
–
–
–
–
(3,966)
154
–
–
–
–
–
–
Special
reserve*
£’000
4,187
–
–
–
–
–
–
Profit
and loss
account
£’000
10,500
6,944
(2,310)
701
(4,319)
–
–
Balance at 31 March 2012
2,982
11,578
(3,966)
154
4,187
11,516
* 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 (2011: £165,000).
The own share reserve represents 1,715,893 5p ordinary shares (2011: 1,634,857) at a cost of £3,966,000 (2011:
£621,000). The shares have been purchased in the market or issued as new shares by the Company, and are held
by the Mulberry Group Plc Employee Share Trust to satisfy the deferred and matching shares under the Deferred
Bonus Plan and Co-ownership Equity Incentive Plan.
45. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS
Balance at 1 April 2011
Profit for the year
Ordinary dividends paid
Charge for share-based payments
Exercise of share options
Issued share capital
Own shares
Balance at 31 March 2012
£’000
24,791
6,944
(2,310)
701
(4,319)
4,610
(3,966)
26,451
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Mulberry Group plc21726.04 06/07/2012 Proof 5 Notice of Annual General Meeting
Year ended 31 March 2012
Notice is given that the Annual General Meeting of Mulberry Group plc will be held at Mulberry Group plc’s offices,
30 Kensington Church Street, London, W8 4HA on 12 September 2012 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:
Adoption of financial statements
1. That the report of the Directors and the financial statements for the year ended 31 March 2012 together with the
independent auditor’s report be received and adopted.
Dividend declaration
2. To declare a final dividend of 5.0 pence per ordinary share for the year ended 31 March 2012.
Election of Directors
3. To elect Mr B D T Guillon as a Director who, having been appointed since the last Annual General Meeting, offers
himself for re-election in accordance with the Company’s Articles of Association.
Re-election of retiring Directors
4. That Mr G P Davis who retires as a Director by rotation in accordance with the Company’s Articles of Association
be re-elected as a Director.
5. That Mr R T Mather who retires as a Director by rotation in accordance with the Company’s Articles of Association
be re-elected as a Director.
Appointment of auditors
6. That Deloitte 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 resolutions, of which resolution 7 will be proposed as an ordinary
resolution, and resolutions 8 and 9 will be proposed as special resolutions:
Directors’ power to allot relevant securities
7. 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 551 of the
Companies Act 2010 (“the Act”) to exercise all powers of the Company to allot shares in the Company, and grant
rights to subscribe for or to convert any security into shares of the Company (such shares, and rights to subscribe
for or to convert any security into shares of the Company being “relevant securities”) up to an aggregate nominal
amount of £993,920, provided that, unless previously revoked, varied or extended, this authority shall expire on
the conclusion of the Annual General Meeting of the Company to be held in 2013, except that the Company may
at any time before such expiry make an offer or agreement which would or might require relevant securities to be
allotted after such expiry and the Directors may allot relevant securities in pursuance of such an offer or agreement
as if this authority had not expired.
Waiver of statutory pre-emption rights
8. That the Directors be and they are empowered pursuant to Section 570(1) of the Act to allot equity securities (as
defined in Section 560(1) of the Act) of the Company wholly for cash pursuant to the authority of the Directors
under Section 551 of the Act conferred by resolution 7 above, and/or by way of a sale of treasury shares (by virtue
of Section 573 of the Act), in each case as if Section 561(1) of the Act did not apply to such allotment, provided
that:
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Mulberry Group plc21726.04 06/07/2012 Proof 5 Notice of Annual General Meeting
(continued)
(a) the power conferred by this resolution shall be limited to:
(i)
the allotment of equity securities in connection with an offer of equity securities to the holders of ordinary
shares in the capital of the Company in proportion as nearly as practicable to their respective holdings of
such shares, but subject to such exclusions or other arrangements as the Directors may deem necessary
or expedient to deal with fractional entitlements or legal or practical problems arising under the laws or
requirements of any overseas territory or by virtue of shares being represented by depository receipts or
the requirements of any regulatory body or stock exchange or any other matter whatsoever; and
(ii) the allotment, otherwise than pursuant to sub-paragraph (i) above, of equity securities up to an aggregate
nominal value equal to £149,088; and
(b) unless previously revoked, varied or extended, this power shall expire on the conclusion of the Annual General
Meeting of the Company to be held in 2013 except that the Company may before the expiry of this power
make an offer or agreement which would or might require equity securities to be allotted after such expiry
and the Directors may allot equity securities in pursuance of such an offer or agreement as if this power had
not expired.
Authority to purchase ordinary shares (market purchases)
9. That the Company be and is hereby unconditionally and generally authorised for the purposes of Section 701 of
the Act to make market purchases (within the meaning of Section 693(4) of the Act) of its ordinary shares of 5p
each (“Ordinary Shares”) provided that:
(a) the maximum number of Ordinary Shares authorised to be purchased is 2,981,759;
(b) the minimum price which may be paid for any such Ordinary Share is 5p;
(c) the maximum price which may be paid for an Ordinary Share shall be an amount equal to 105% of the average
middle market prices for an Ordinary Share as derived from the London Stock Exchange Daily Official List
for the five business days immediately preceding the day on which the Ordinary Share is contracted to be
purchased; and
(d) this authority shall, unless previously renewed, revoked or varied, expire on the earlier of the date falling 18
months after the date of the passing of this resolution and the conclusion of the Annual General Meeting of
the Company to be held in 2013, but the Company may enter into a contract for the purchase of Ordinary
Shares before the expiry of this authority which would or might be completed (wholly or partly) after its expiry.
By order of the Board
Kate Anthony Wilkinson
Secretary
13 June 2012
Registered office: The Rookery, Chilcompton, Bath, Somerset, BA3 4EH
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Mulberry Group plc21726.04 06/07/2012 Proof 5 Notes:
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 AGM in order to represent his appointer. 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 AGM 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 11 am on 10 September 2012.
2. Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only those
persons registered in the register of members of the Company at 6.00 pm on 10 September 2012 (or if the AGM is
adjourned, 48 hours before the time fixed for the adjourned AGM) shall be entitled to attend and vote at the AGM
in respect of the number of shares registered in their name at that time. Any changes to the register of members
after such time shall be disregarded in determining the rights of any person to attend or vote at the AGM.
3. Please note that communications regarding the matters set out in this Notice of Annual General Meeting will not
be accepted in electronic form other than as specified in the enclosed form of proxy.
4. As at 13 June 2012 (being the last business day prior to the publication of this Notice) the Company’s issued share
capital consists of 59,635,175 ordinary shares, carrying one vote each. Therefore, the total voting rights in the
Company as at 13 June 2012 are 59,635,175.
5. The following documents are available for inspection at the registered office of the Company during the usual
business hours on any weekday (Saturday, Sunday or public holidays excluded) from the date of this Notice until
the conclusion of the AGM and will also be available for inspection at the place of the AGM from 10.45 am on the
day of the AGM until its conclusion:
(a) the register of Directors’ interests in the shares of the Company; and
(b) copies of the Executive Directors’ service contracts with the Company and letters of appointment of the Non-
Executive Directors.
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Mulberry Group plc21726.04 06/07/2012 Proof 5 Notice of Annual General Meeting
(continued)
Explanatory notes to the Special Business to be transacted at the meeting
Resolution 7 – Directors’ power to allot relevant securities
Resolution 7, which will be proposed as an ordinary resolution, grants the Directors authority to allot shares in the
capital of the Company and other relevant securities up to an aggregate nominal value of £993,920, representing
approximately one-third of the nominal value of the issued ordinary share capital of the Company as at 13 June 2012,
being the latest practicable date before publication of this Notice. The Directors do not have any present intention
of exercising the authorities conferred by this resolution but they consider it desirable that the specified amount of
unissued share capital is available for issue so that they can more readily take advantage of possible opportunities in
the future.
Unless revoked, varied or extended, this authority will expire at the conclusion of the next Annual General Meeting of
the Company or the date falling 18 months from the passing of the resolution, whichever is the earlier.
Resolution 8 – waiver of statutory pre-emption rights
Resolution 8, which will be proposed as a special resolution, authorises the Directors in certain circumstances to allot
equity securities for cash other than in accordance with statutory pre-emption rights (which require a company to
offer all allotments for cash first to existing shareholders in proportion to their holdings). The relevant circumstances
are either where the allotment takes place in connection with a rights issue or the allotment is limited to a maximum
nominal amount of £149,088, representing approximately 5% of the nominal value of the issued ordinary share capital
of the Company as at 13 June 2012, being the latest practicable date before publication of this Notice. Unless revoked,
varied or extended, this authority will expire at the conclusion of the next AGM of the Company or 18 months after the
passing of the resolution, whichever is the earlier.
The Company may hold any shares it buys back “in treasury” and then sell them at a later date for cash rather
than simply cancelling them. Any such sales are required to be made on a pre-emptive, pro-rata basis to existing
shareholders unless shareholders agree by special resolution to disapply such pre-emption rights. Accordingly, in
addition to giving the Directors power to allot unissued ordinary shares on a non pre-emptive basis, resolution 8 will
also give the Directors power to sell ordinary shares held in treasury on a non pre-emptive basis, subject always to the
limitations noted above.
The Directors consider that the power proposed to be granted by resolution 8 is necessary to retain flexibility in
relation to the management of the Company’s share capital, although they do not have any intention at the present
time of exercising such power.
Resolution 9 – authority to purchase ordinary shares (market purchases)
Resolution 9, which will be proposed as a special resolution, authorises the Directors to make market purchases of up
to 2,981,759 ordinary shares (representing approximately 5% of the Company’s issued ordinary shares as at 13 June
2012, being the latest practicable date before publication of this Notice). Shares so purchased may be cancelled or
held as treasury shares as noted above. The authority will expire at the end of the next Annual General Meeting of
the Company or 18 months from the passing of the resolution, whichever is the earlier. The Directors intend to seek
renewal of this authority at subsequent Annual General Meetings.
The minimum price that can be paid for an ordinary share is 5p, being the nominal value of an ordinary share. The
maximum price that can be paid is 5% over the average of the middle market prices for an ordinary share, derived from
the Daily Official List of the London Stock Exchange, for the five business days immediately before the day on which
the share is contracted to be purchased.
The Directors intend to exercise this right only when, in light of the market conditions prevailing at the time and taking
into account all relevant factors (for example, the effect on earnings per share), they believe that such purchases are in
the best interests of the Company and shareholders generally. The overall position of the Company will be taken into
account before deciding upon this course of action. The decision as to whether any such shares bought back will be
cancelled or held in treasury will be made by the Directors on the same basis at the time of the purchase.
62
63
Mulberry Group plc21726.04 06/07/2012 Proof 5 62
63
Mulberry Group plc21726.04 06/07/2012 Proof 5 Group five year summary
Year ended 31 March 2012
Results
Revenue
Operating profit
Profit before tax
Profit attributable to equity holders
Assets employed
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
Key statistics
Earnings per share
Diluted earnings per share
2008
£’000
2009
£’000
2010
£’000
2011
£’000
2012
£’000
51,174
58,585
72,052
121,645
168,451
4,774
5,186
3,436
3,930
4,177
2,581
4,856
5,096
2,972
23,010
35,417
23,345
36,001
17,063
25,301
10,791
23,570
(11,821)
(21)
11,694
24,572
(11,750)
(132)
10,760
29,524
(13,819)
–
20,620
55,967
(34,555)
–
28,553
74,751
(40,815)
(26)
22,519
24,384
26,465
42,032
62,463
6.0p
6.0p
4.5p
4.5p
5.2p
5.2p
29.8p
29.1p
43.9p
43.4p
64
64
Mulberry Group plc21726.04 06/07/2012 Proof 5 Mulberry Group plc
The Rookery Chilcompton Somerset BA3 4EH
Tel +44 (0)1761 234 500 Fax +44 (0)1761 234 555 mulberry.com