The financial statements of Marks and Spencer plc (M&S) are presented in Appendix E. The company's complete annual report, including the notes to the financial statements, is available online. Click here to view Appendix E Refer to M&S's financial statements and the accompanying notes to answer the following questions. (c) Your answer is incorrect Compute M&S's gross profit for each of the years 2016 and 2017. (Round answers to 1 decimal place, eg. 52.5.) 2016 2017 Gross profit m m Appendix E Specimen Financial Statements: Marks and Spencer plc Marks and Spencer (M&S) plc is one of the United Kingdom's leading retailers, with over 1,330 stores worldwide. The company is committed to delivering sustainable high quality food, clothing, and home products. CONSOLIDATED INCOME STATEMENT 53 weeks ended 1 April 2017 Underlying Non-underlying Em Em 10,622.0 Total Em Notes 53 weeksended 2 April 2018 Underlying Non-underlying m m 105554 Total Em 10555.4 Revenue 2.3 10.622.0 Operating profit 2,3,5 690.6 (4374) 253.2 7849 (2008) 584.1 Finance income Finance costs 6 6 36.2 (113.0) 362 (113.0) 21.1 (1164) 21.1 (1164) Profit before tax Income tax expense Profit for the year 4,5 7 613.8 (122.4) 4914 (437.4) 61.7 (375.7) 176.4 (60.7) 115.7 6896 (118 B) 5708 (2008) 344 (166.4) ) 4888 (844) 404.4 Attributable to: Owners of the parent Non-controlling interests (375.7) (1664) 492.8 (1.4) 491.4 - 117.1 (1.4) 115.7 5733 ( (25) 5708 4069 (25) 4044 (375.7) (1664) Basic earnings per share Diluted earnings per share 8 8 30.4p 30 2p 72p 72p 350p 349p 249p 24 8p CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 53 weeks ended 1 April 2017 Em 115.7 53 weeks ended 2 April 2016 om Notes 4044 Profit for the year Other comprehensive income: Items that will not be reclassified to profit or loss Remeasurements of retirement benefit schemes Tax charge/credit)on items that will not be reclassified 11 3462 (68.9) 25.3 (43.6) (456) 3006 31.0 73 Items that will be reclassified subsequently to profit or loss Foreign currency translation differences Cash flow hedges and net investment hedges ---fair value movements recognised in other comprehensive income -redassified and reported in profit or loss - amount recognised in inventories Tax credit on cash flow hedges and net investment hedges 56.1 (72.4) (20.1) 4.1 (1.3) (44.9) 70.8 (30.1) (22.1) 59 65 (325) 268,1 6725 Other comprehensive expense/income for the year net of tax Total comprehensive income for the year Attributable to: Owners of the parent Non-controlling interests 722 (1.4) 70.8 6750 (25) 6725 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 1 April 2017 Em At 2 April 2016 Em Notes 14 15 709.0 4,837.8 15.5 7.0 3.0 706.0 234.1 56.8 8028 5,0271 155 69 30 8510 234.7 740 16 11 17 21 23 6,569.2 70150 16 758.5 14.5 318.6 163.1 17 21 Assets Non-current assets Intangible assets Property.plant and equipment Investment property Investment in joint ventures Other financial assets Retirement benefit asset Trade and other receivables Derivative financial instruments Deferred tax assets Current assets Inventories Other financial assets Trade and other receivables Derivative financial instruments Current tax assets Cash and cash equivalents Total assets Liabilities Current liabilities Trade and other payables Partnership liability to the Marks & Spencer UK Pension Scheme Borrowings and other financial liabilities Derivative financial instruments Provisions Current tax liabilities Non-current liabilities Retirement benefit deficit Trade and other payables Partnership liability to the Marks & Spencer UK Pension Scheme Borrowings and other financial liabilities Derivative financial instruments Provisions Deferred tax liabilities 7999 19.1 321.1 721 16 2476 1.4614 8,4764 18 468.6 1,723.3 8.292.5 19 12 20 21 22 1,553.8 71.9 518.0 10.5 147.2 66.6 2,368.0 16177 719 2975 285 140 752 2,1048 11 19 12 20 21 22 23 13.2 328.5 324.6 1,711.7 0.8 113.5 281.8 2,774.1 5,142.1 3,150.4 269 3530 3838 1,774.7 02 520 3376 29282 5.033.0 3,4434 24 Total liabilities Net assets Equity Issued share capital Share premium account Capital redemption reserve Hedging reserve Other reserve Retained earnings Total shareholders' equity Non-controlling interests in equity Total equity 406.2 416.4 2,210.5 17.3 (6,5422) 6,648.1 3,156.3 (5.9) 3,150.4 4058 4113 22105 323 (65422) 6,9275 3,4452 (18) 3,4434 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Non- Ordinary Share Captal Foreign share premium redemption Hedging Other exchange Retained controlling capital account reserve reserve reserve reserve earnings Total interest Total Em Em Em Em Gm Em Em Em Em Em 4120 3924 2 2026 643 (65422) (126) 6683.1 3.1996 (08) 3,198 8 4069 4069 (25) 4044 (05) 78 111 3462 (456) 73 346.2 (456) 73 3462 (456) (83) (218) (22.1) 59 (30.1) (22.1) 59 (301) (22.1) 59 As at 29 March 2015 Profit/(loss) for the year Other comprehensive (expense)'income: Foreign currency translation Remeasurements of retirement benefit schemes Tax charge on items that will not be reclassified Cash flow hedges and net investment hedges -fair value movement recognised in other comprehensive income - reclassified and reported in profit or loss -amount recognised in inventories Tax on cash flow hedges and net investment hedges Other comprehensive income/(expense) Total comprehensive income (expense) Transactions with owners Dividends Transactions with non-controlling shareholders Shares issued on exercise of employee share options Purchase of own shares held by employee trusts Shares purchased in buy back Credit for share-based payments Deferred taxon share schemes As at 2 April 2016 ili !!! 65 (320) (320) III 78 78 2923 6992 65 268.1 675.0 65 2681 (25) 6725 I (3017) (3017) (301.7) 15 15 17 189 20.6 (109) (79) 79 (1507) 206 (109) (109) (1507) (1507) 172 172 (39) (39) (4.8) 69323 3.4452 172 (39) (18) 3,443,4 4058 4113 22105 323 (65422) - III II! TI TI III As at 3 April 2016 405.8 411.3 2.210.5 32.3 (6,542.2) (4.8) 6,932.3 3,4452 (1.8)3,443.4 Profit/(loss for the year 117.1 117.1 (1.4) 115.7 Other comprehensive (expensey'income: Foreign currency translation (4.3) 35.3 31.0 31.0 Remeasurements of retirement benefit schemes (68.9) (68.9) (68.9) Tax credit on items that will not be reclassified 25.3 25.3 25.3 Cash flow hedges and net investment hedges -fair value movement recognised in other comprehensive income 77.7 (21.6) 56.1 56.1 -reclassified and reported in profit or loss (72.4) (72.4) (72.4) -amount recognised in inventories (20.1) (20.1) (20.1) Tax on cash flow hedges and net investment hedges 4.1 4.1 4.1 Other comprehensive income/(expense) (15.0) 35.3 (652) (44.9) (449) Total comprehensive income (expense) (15.0) 35.3 51.9 722 (1.4) 70.8 Transactions with owners Dividends (377.5) (377.5) (377.5) Transactions with non-controlling shareholders (2.7) (2.7) Shares issued on exercise of employee share options 0.4 5.1 5.5 5.5 Purchase of own shares held by employee trusts Credit for share-based payments 13.5 13.5 Deferred taxon share schemes (2.6) (2.6) (2.6) As at 1 April 2017 4062 416.4 2.210.5 17.3 (6,5422) 30.5 6.617.6 3,156.3 (5.9) 3,150.4 1. The Other reserve was originally created as part of the capital restructuring that took place in 2002. t represents the difference between the nominal value of the shares issued prior to the capital reduction by the Company (being the carrying value of the investment in Marics and Spencer plc) and the share capital share premium and capital redemption reserve of Marks and Spencer plc at the date of the transaction 2. Amounts reclassilied and reported in profit or loss'includes the evaluation of the cross currency swaps.offsetting the revaluation of the US dollar hedged bonds within finance costs. 3. In the prior year financial statements, the foreign exchange reserve was presented within Retained earnings. III II! II II - II 13.5 CONSOLIDATED STATEMENT OF CASH FLOWS 53 weeks ended 1 April 2017 Em 53 weeks ended 2 April 2016 Em Notes 26 13113 Cash flows from operating activities Cash generated from operations Income tax paid Net cash inflow from operating activities 1,165.7 (98.0) 1,067.7 (993) 12120 Cash flows from investing activities Proceeds on property disposals Purchase of property, plant and equipment Purchase of intangible assets Reduction/purchase) of current financial assets Interest received Acquisition of subsidiary Net cash used in investing activities 27.0 (309.1) (101.1) 4.6 6.6 306 (3633) (1868) (72) 68 (562) (576.1) (372.0) (1135) 3.1 (199) Cash flows from financing activities Interest paid' Cash (outflowyinflow from borrowings Repayment of syndicated loan notes Issuance of medium-term notes Decrease in obligations under finance leases Payment of liability to the Marks & Spencer UK Pension Scheme Equity dividends paid Shares issued on exercise of employee share options Purchase of own shares by employee trust Share buy back Net cash used in financing activities (111.2) (32.7) (215.3) 300.0 (2.0) (57.9) (377.5) 5.5 (24) (560) (3017) 206 (109) (150.7) (6314) (491.1) 45 Net cash inflow from activities Effects of exchange rate changes Opening net cash Closing net cash 1. Includes interest on the partnership libility to the Marks & Spencer LIK Pension Scheme. 204.6 5.6 196.0 4062 3.7 1878 196.0 27 53 weeks ended 1 April 2017 Em 53 weeks ended 2 April 2016 Em Notes Reconciliation of net cash flow to movement in net debt Opening net debt Net cash inflow from activities (Decrease)increase in current financial assets Decrease in debt financing Exchange and other non-cash movements Movement in net debt Closing net debt (2,138.3) 204.6 (4.6) 7.9 (4.3) 203.6 (1,934.7) (22232) 45 72 752 (20) 849 (2.1383) 27