RNS Number : 5022A

Marks & Spencer Group PLC

02 June 2021

Marks and Spencer Group plc (the "Company")

Annual Report and Financial Statements 2021

In compliance with Listing Rule 9.6.1, the Company announces that the following documents have today been submitted to the UK Listing Authority, and will shortly be available for inspection via the National Storage Mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism:

   --           Annual Report and Financial Statements 2021; 

-- Notice of Annual General Meeting of the Company, which will be held at and broadcast from Waterside House, 35 North Wharf Road, London W2 1NW at 11am on Tuesday 6 July 2021; and

   --           Proxy form for the 2021 Annual General Meeting. 

In accordance with DTR 6.3.5(3) the Annual Report and Financial Statements 2021 and the Notice of Annual General Meeting are accessible on corporate.marksandspencer.com/investors .

A condensed set of Marks and Spencer Group plc financial statements and information on important events that have occurred during the year and their impact on the financial statements were included in the Company's preliminary results announcement on 26 May 2021. That information together with the information set out below which is extracted from the Annual Report and Financial Statements constitute the requirements of DTR 6.3.5 which is to be communicated via an RIS in unedited full text. This announcement is not a substitute for reading the full Annual Report and Financial Statements. Page and note references in the text below refer to page numbers in the Annual Report and Financial Statements 2021. To view the preliminary results announcement, visit the Company website: corporate.marksandspencer.com/investors .

For further information, please contact:

Group Secretariat: +44 (0)20 3934 3043

Additional Information

Principal risks and uncertainties

Below are details of our principal risks and uncertainties and the mitigating activities in place to address them. It is recognised that the Group is exposed to risks wider than those listed. However, we have disclosed those we believe are likely to have the greatest impact on our business at this moment in time and those that have been the subject of debate at recent Board or Audit Committee meetings.

 DESCRIPTION & CONTEXT                                                MITIGATING ACTIVITIES 
  Failure of our Food and/or Clothing                                *    Strong senior leadership team capabilities in both 
  & Home business to effectively                                          Food and Clothing & Home through continued targeted 
  and rapidly respond to the pressures                                    recruitment. 
  of an increasingly competitive 
  and changing retail environment, 
  including recovery from the pandemic,                              *    An established operating model consisting of a family 
  would adversely impact customer                                         of accountable businesses who share M&S brand values, 
  experience, operational efficiency                                      support functions, technology and customer data. 
  and business performance. 
   *    M&S competes with a diverse range of retailers in an 
        increasingly challenged sector faced with continued          *    Managing Directors for each of these businesses with 
        cost and pricing pressures, shifts in consumer                    full accountability for their performance. 
        behaviours and a broad range of macroeconomic 
        uncertainties, all of which have been exacerbated by 
        Covid-19.                                                    *    Operating Reviews to enable executive oversight and 
                                                                          effective governance of each business. 
   *    Responding with commercial agility as we emerge from 
        the pandemic to deliver the right product ranges and         *    Continued delivery and discipline around cost, range, 
        style credentials from source to shelf, with clear                value, prices and availability to broaden customer 
        pricing architecture and availability, has become                 appeal. 
        more imperative. Our ability to predict and meet 
        changing customer expectations and demand as 
        conditions 'normalise' will impact our success in            *    Expanded initiatives to make products available 
        doing this.                                                       conveniently to customers through contactless home 
                                                                          delivery and Scan & Shop. 
   *    Underpinning our recovery is our programme of 
        transformational improvements, delays to which could        Key developments 
        stem our recovery and negatively impact our                  *    Our Never the Same Again programme clearly aligned 
        performance.                                                      with the strategy and objectives for each area of the 
  Oversight by Executive Committee 
                                                                     *    Established an integrated online division, MS2, to 
                                                                          turbocharge online growth for Clothing & Home, and 
                                                                          introduced new brands. 
                                                                     *    Relaunched "Remarksable" in Food to promote trusted 
                                                                          value, and established our "Food Innovation Hub". 
                                                                     *    Proactive management of excess stock resulting from 
                                                                          he lockdowns. 
                                                                     *    Expanded our International online business, with 
                                                                          launch of new websites providing access to more 
                                                                     *    Evolved our Sparks programme to reach 10m users, with 
                                                                          access to more customer data linked to driving 
                                                                          commercial decisions and personalised relationships. 
  A failure to execute our transformation                            *    Continued focus on our Never the Same Again approach 
  and cultural change initiatives                                         to prioritise transformation delivery, balanced with 
  with pace, consistency and cross-                                       robust cash management disciplines. 
  business buy-in will impede our 
  ability to improve operational 
  efficiency, competitiveness,                                       *    Applying programme governance principles for all core 
  and to restore the business to                                          projects with clear accountabilities and milestones 
  sustainable profitable growth.                                          in place. 
  Critical projects underpinning 
  our transformation include: 
   *    Continuing to evaluate our transformation programme          *    Maintained momentum to deliver supply chain 
        in response to longer-term changes in customer                    capabilities and efficiencies across the Food and 
        behaviour, including those directed by the pandemic               Clothing & Home businesses. 
        and Brexit. 
                                                                    Key developments 
   *    Reshaping, modernising and delivering a UK store             *    Set up of our Strategy and Transformation Office to 
        estate that is fit for the future, with the right                 drive Group-level focus, consistency and challenge. 
        stores in the right spaces, improved integration 
        between online and store experience as well as 
        creating shopping facilities that drive omni-channel         *    Key online growth initiatives executed and planned 
        growth and meet the expectations of our target                    through Ocado Retail and MS2. 
                                                                     *    Reshaping the store estate strategy to direct 
   *    Modernising our supply chain and logistics activities             accelerated transformation, including prioritised 
        to improve speed, operational effectiveness and                   site redevelopments, delivery of more new format 
        availability and to reduce costs. Supported by                    stores and planned closures. 
        investment in legacy systems. 
                                                                     *    Continued development of the Vangarde Supply Chain 
   *    Functionally led transformations relating to people,              Programme in Food, which is delivering improved 
        technology, and digital and data are key to                       availability. 
        supporting overall business change. 
  Oversight by Executive Committee, 
  Strategy and Transformation Office 
  Failing to mitigate the continuing                                 *    A cross-business working party remains in place to 
  costs and friction arising from                                         coordinate post-Brexit activity, including scenario 
  the complexities surrounding                                            planning with financial and operational impact 
  the border and further developments                                     assessments as long-term implications are understood. 
  in the Trade and Cooperation 
  Agreement ("TCA") may have a 
  significant and long-term impact                                   *    Risk assessments undertaken by each of our businesses 
  on our trading performance.                                             to enable them to plan and execute the operational 
  As a result of the implications                                         changes needed to manage Brexit. 
  of the UK's exit from the European 
  Union (EU), our EU businesses 
  need to be reconfigured to manage                                  *    Regular updates to the Board and Audit Committee 
  new challenges. In addition,                                            outlining risks and actions being undertaken. 
  a number of uncertainties still 
  remain following Brexit that 
  are largely outside of our control                                 *    Continued engagement with key government and industry 
  and require continued monitoring                                        bodies to represent M&S's views, including the UK 
  and flexibility in our response.                                        Border Development Group, with access to the 
  Key implications of these include:                                      Department for Environment, Food & Rural Affairs, HM 
   *    Permanent increases in cost base and time relating to             Revenue & Customs and the Food Standards Agency. 
        the movement of goods across borders and compliance 
        with the TCA (including the evolving requirements of 
        the Northern Ireland Protocol and eventual end of the       Key developments 
        EU-GB grace period).                                         *    Worked quickly to expand our understanding of the TCA 
                                                                          and address immediate operational issues of product 
                                                                          flow to our European markets. 
   *    Increased complexity and cost in effective markets, 
        particularly the Republic of Ireland, Northern 
        Ireland and France.                                          *    Continued to actively work with government and 
                                                                          industry bodies to drive a simpler customs and 
                                                                          exports process. 
   *    Access to and availability of labour for our business 
        and within the supply chain. 
                                                                     *    Investigated tariff mitigation for the re-export of 
                                                                          product, including working with HMRC to reduce the 
   *    Costs passed on from our suppliers as they set their              burden of tariffs, for example, Returned Goods 
        post-Brexit policies.                                             Relief. 
   *    Viability of most-impacted suppliers and impact on           *    Implemented a UK customs warehouse environment. 
        product availability. 
                                                                     *    Improved and automated activities linked to the 
  Oversight by Brexit Steering                                            customs process to reduce administration costs. 
  Committee, the Board 
     A failure to effectively manage                                 *    M&S nominated directors are part of the Ocado Retail 
     the strategic and operational                                        Board, with collective sign-off of business plans 
     relationship with Ocado Retail                                       directing the growth of Ocado Retail. 
     would significantly impact the 
     achievement of our multi-channel 
     food strategy and our ability                                   *    Established data and technology interfaces with Ocado 
     to deliver shareholder value.                                        Retail. 
      *    The investment in Ocado Retail is part of our 
           strategy for improving our online reach and 
           capability. Since the launch in September 2020, we        *    Continued communication under lockdown with the Board, 
           have seen growth in the online grocery market with an          senior management and among the M&S-Ocado Retail 
           upward trajectory for the future that offers us the            operational teams. 
           opportunity to strengthen our investment. 
                                                                     *    Continued operation of a dedicated M&S Ocado delivery 
      *    There are two core aspects of our relationship with            team, supported by senior leadership, to coordinate 
           Ocado Retail that we are actively focusing on:                 sourcing, product development, product ranging, 
                                                                          customer data and marketing. 
      *    Developing our working relationship with Ocado Retail 
           and evolving our ways of working to ensure alignment     Key developments 
           of our strategies in a way that supports innovation       *    Completed transition of M&S products (Food and 
           and growth.                                                    Clothing & Home) to the Ocado platform. 
      *    Maintaining a seamless supply process to support          *    Invested to expand capacity with the launch of a new 
           customer fulfilment - existing and in line with                customer fulfilment centre in March, and plans for 
           future growth - and seeking opportunities to expand            two more this calendar year. 
           and refine product ranges. 
     Oversight by Ocado Retail Board 
  Our inability to evolve the culture                                *    Continued investment in external hires to strengthen 
  of our business as well as develop                                      capability, improve quality and diversity of talent 
  and retain the right talent and                                         at all levels. 
  capabilities will influence our 
  means to expand the business 
  with agility and appropriate                                       *    Investment in internal talent to strengthen the 
  commercial acumen. This will                                            leadership pipeline and develop our future leaders. 
  also impede the execution of 
  our transformation programme 
  and impact our broader strategic                                   *    Embedded quality new starter experience across all 
  objectives and performance.                                             areas to allow effective onboarding, engagement and 
   *    M&S is fortunate to employ a vast number of talented              retention. 
        individuals and it is essential that we have the 
        right processes in place to identify, develop and 
        retain this talent for the future.                           *    Continued the project to update our HR systems. 
   *    Understanding the changing retail landscape is core          *    Business Involvement Group which is actively involved 
        to the strategic decisions we make on the skills and              in colleague engagement and representation throughout 
        capabilities needed for our business. From driving a              the business, including Board meetings. 
        digitally focused mindset to managing change, our 
        strategic choices and investment are focused on the 
        knowledge and skills needed for the future.                  *    Capitalising on the popularity of our M&S Alumni to 
                                                                          engage, energise and re-attract great talent. 
   *    The challenge of effectively managing talent, 
        performance and succession using systems that have          Key developments 
        become outdated could result in increased resource           *    Direct Executive Committee member ownership of HR 
        management and development costs.                                 matters. 
   *    The need to effectively engage, motivate and connect         *    Progressed our plans for enhancing skills and 
        with our colleagues across a multi-generational,                  capabilities through targeted talent, recruitment and 
        diverse workforce is key to delivering productivity               development programmes. 
        and supporting the transformation of our business 
        while driving customer loyalty through a 
        differentiated service proposition.                          *    Launch of an updated performance management process. 
   *    The broader implications of Brexit on the                    *    Total reward review completed with benchmarking of 
        availability of labour and key skills continue to be              all pay and benefit components and transparency on 
        monitored.                                                        fair pay, including gender, ethnicity, disability and 
                                                                          age. Commenced implementing initiatives that reflect 
                                                                          colleague expectations. 
  Oversight by Executive Committee 
                                                                     *    Launch of a digital-specific apprenticeship programme 
                                                                          driving digital literacy and capability building. 
  Failure to prevent or effectively                                  *    Food Safety Policy and Standards, with clear 
  respond to a food safety incident,                                      accountability set at all levels. 
  or to maintain the integrity 
  of our products, could impact 
  business performance, customer                                     *    Defined Terms of Trade, manufacturing standards, 
  confidence and our brand.                                               specifications for "from farm to fork" and operating 
   *    Food safety and integrity remain vital for our                    procedures. 
        business. We need to manage the potential risks to 
        customer health and consumer confidence that face all 
        food retailers. This includes considering how                *    Risk-based store, supplier and warehouse audit 
        external pressures on the food industry and wider                 programmes by an independent third party, including 
        economic and environmental changes could impact the               franchise operations. 
        availability and integrity of our food, the ability 
        to operate all routine controls, our reputation and 
        shareholder value.                                           *    Qualified Food Technology team, with continuing 
                                                                          professional development. 
   *    Many of these external pressures, including 
        inflationary costs, labour quality and availability,         *    Risk assessment process in place for new food 
        increased regulatory scrutiny and animal disease are              initiatives. 
        heightened to a degree by the pandemic and our exit 
        from the European Union. These are also largely 
        outside our control but are nevertheless monitored           *    Quarterly internal review of our control framework. 
        and mitigated where possible. 
                                                                     *    Established processes for the development and legal 
  Oversight by Consumer Brand Protection                                  sign-off for product packaging. 
                                                                     *    Food Industry Intelligence Network membership at 
                                                                          Board and Executive Committee level. 
                                                                     *    Live and tested crisis management plan for food 
                                                                    Key developments 
                                                                     *    Updated operating procedures in response to lockdown 
                                                                          restrictions and for the new initiatives launched, 
                                                                          e.g. home delivery channels in the UK and 
                                                                     *    Remote audit and assurance programme launched for new 
                                                                          and existing suppliers. 
                                                                     *    Covid-19 tests for technologists to enable urgent 
                                                                          site visits. 
                                                                     *    Enhanced monitoring of quality and customer 
                                                                     *    Additional reporting to the leadership team of 
                                                                          Covid-19 implications on our supplier assurance 
  An inability to maintain short-                                       *    A GBP1.1bn undrawn, revolving credit facility in 
  and long-term funding to meet                                              place until April 2023 and GBP674.4m of cash and cash 
  business needs or to effectively                                           equivalents. 
  manage associated risks may influence 
  our ability to transform at pace, 
  as well as have an adverse impact                                     *    Measures implemented to manage cash and liquidity at 
  on business viability.                                                     the start of the pandemic continue to be maintained, 
   *    While we have continued to actively manage our cash,                 including: 
        liquidity and debt position during the pandemic, 
        resulting in a more positive out-turn than 
        anticipated, our focus on this remains strong.                  *    Increased scrutiny and challenge over expenditure 
                                                                             such as discretionary and capital spend. 
   *    Availability of, and access to, appropriate sources 
        and levels of funding is important for the continued            *    Dividend deferral. 
        operation of business activity, as well as successful 
        and timely delivery of our transformation. Our 
        ability to repay debt and fund working capital,                 *    Use of government support measures like the temporary 
        capital expenditures and other expenses depends on                   furlough of colleagues, business rates holiday and 
        our operating performance, ability to generate cash                  deferral of tax payments. 
        and to refinance existing debt. 
                                                                        *    Agreement to relax/waive covenant conditions for our 
   *    Recoverability of our trading performance will                       revolving credit facility. 
        influence our cash position as we emerge more fully 
        from the pandemic. 
                                                                        *    Close monitoring and stress testing of projected cash 
                                                                             and debt capacity, financial covenants and other 
   *    We also have pension fund commitments that require                   rating metrics. 
        active management and monitoring. 
                                                                        *    Maintained counterparty credit risk and limits in 
  Oversight by Executive Committee,                                          line with our risk appetite and treasury policy. 
  the Board 
                                                                        *    Continued dialogue with the market and rating 
                                                                        *    Pension fund assets fully offset pension scheme 
                                                                       Key developments 
                                                                        *    Implemented a robust three-year plan underpinned by 
                                                                             financial processes linked to strategic priorities. 
                                                                        *    Active debt management with the issue of a GBP300m 
                                                                             bond and partial tender of the December 2021 bond 
                                                                        *    Focus on working capital management to continue to 
                                                                             improve cash flow and reduce reliance on bank 
                                                                        *    Agreement received from the syndicate of lending 
                                                                             banks to extend the relaxation of covenant measures 
                                                                             on the revolving credit facility up to March 2022. 
  RESPONSIBILITY                                                     *    Established ethical audit programme, aligned with 
  Increasingly our customers, colleagues                                  Sedex, including annual factory audits for 
  and investors demand reassurance                                        manufacturers globally. 
  that we are managing ethical 
  and environmental issues across 
  our business, including supply                                     *    Risk-based ethical assessment programme in Food 
  chains. Our inability to uphold                                         across all suppliers maintained. 
  adequate oversight of, and respond 
  to, our responsibility commitments 
  may result in failing to meet                                      *    Code of Conduct and Global Sourcing Principals in 
  their expectations.                                                     place, shared with third parties and included in 
   *    We continue to operate increasingly complex supply                legal agreements. 
        chains where changes in the external environment and 
        challenging economic conditions, including the impact 
        of Covid-19 across the globe, make ethical and social        *    Product and raw material standards outlining 
        issues open to mismanagement and exploitation. We                 environmental considerations, such as deforestation. 
        recognise that these could occur anywhere in our 
        supply chain networks as well as our own operations. 
                                                                     *    Clothing Quality Charter and Environmental and 
                                                                          Chemical Policy in place for all suppliers. 
   *    Setting and adhering to appropriate environmental, 
        human rights, animal welfare and ethical standards 
        and commitments is important in maintaining our              *    Modern slavery training rolled out across relevant 
        reputation as a responsible company.                              teams. 
  Oversight by Executive Committee,                                  *    Human Rights & Modern Slavery Policy shared with 
  ESG Committee                                                           International owned-business and franchise teams. 
                                                                     *    Mandated use of the Sustainable Apparel Coalition's 
                                                                          Higg Facility Environmental Module, that measures 
                                                                          social and environmental impacts of factories. 
                                                                     *    Live and tested capabilities and protocols to respond 
                                                                          immediately to an incident. 
                                                                    Key developments 
                                                                     *    Group Plan A programme reset with clear 
                                                                          accountabilities set for each area in our family of 
                                                                          businesses to address environmental and ethical 
                                                                          standards in products, packaging, greenhouse gas 
                                                                          emissions and waste. 
                                                                     *    ESG Committee established. 
                                                                     *    Continued strengthening of our due diligence 
                                                                          approaches with the roll out of a Worker Voice 
                                                                          programme in the Food business and piloting of 
                                                                          transparency initiatives within Clothing and Home. 
                                                                     *    Modern Slavery Intelligence Network launched to alert 
                                                                          M&S to issues in the Food supply chain. 
                                                                     *    Minimum standards for responsibility set for Clothing 
                                                                          and Home third-party brands. 
  A failure to simplify and improve                                  *    An omni-channel technology strategy, supported by 
  our core technology, enhance                                            prioritised investment and aligned with Group and 
  our digital capabilities and                                            individual business strategies. 
  reduce our dependency on legacy 
  systems could limit our ability 
  to keep pace with market competition                               *    Quarterly benefits tracking of key programmes in line 
  and customer expectations, preventing                                   with spend targets and value outcomes. 
  successful transformation. 
   *    The digital world continues to evolve at an 
        unrelenting pace, influencing consumer expectations          *    Further investment in technology and digital 
        and behaviours, as well as placing increasing demands             innovation and capabilities to enhance both customer 
        on our technology and ways of working.                            and colleague experience in store, like supporting 
                                                                          the '10x' store plan. 
   *    Data underpins everything we do and we remain focused 
        on equipping colleagues with the right tools and             *    Improved IT infrastructure, including increased 
        capabilities to drive effective decision-making.                  bandwidth. 
   *    A simplified operating model, applications and               *    Continued the shift to cloud-based technology. 
        architecture will support us in continuing to deliver 
        capability, flexibility and cost-efficiency 
        improvements.                                                *    Ongoing collaboration with our technology partners to 
                                                                          drive our Digital First ambition, e.g. TCS and 
   *    Increasing the use of tools such as AI and machine 
        learning is fundamental to providing insights and a 
        differentiated service to our customers.                     *    Ongoing focus on technology risk, assurance maturity 
                                                                          and roll-out of a structured IT control methodology. 
  Oversight by Executive Committee 
                                                                    Key developments 
                                                                     *    New technology strategy and three-year investment 
                                                                          plan that is aligned with business strategies and 
                                                                     *    Increased adoption of our mobile app by existing and 
                                                                          new customers providing access to valuable data. 
                                                                     *    Successful launch of our BEAM Data Academy with 
                                                                          digital learning programmes for all colleagues. 
                                                                     *    Increased personalisation of our end-to-end digital 
                                                                          customer experiences using in-house capability. 
                                                                     *    Transforming our M&S Bank product and service 
                                                                          offerings to create a digitally enabled shopping and 
                                                                          payment experience for customers. 
  Failures or resilience issues                                      *    A dedicated and experienced Business Continuity (BC) 
  at key business locations, such                                         team with an established Group Crisis Management 
  as at Castle Donington, our primary                                     process that continued to operate throughout the 
  online Clothing & Home distribution                                     pandemic. 
  centre, could result in significant 
  business interruption. More broadly, 
  an inability to effectively respond                                *    Maintained updated BC plans for key activities across 
  to global events, such as the                                           our operations, including offices, warehouses and IT 
  pandemic or a supply chain disruption,                                  sites in response to changing government guidance. 
  would also significantly impact 
  business performance. 
   *    As our online business grows, the scale of risk to           *    Group Incident Management procedures in place, 
        our sales and growth ambitions increases from a                   including for critical third parties. 
        sustained period offline and an inability to fulfil 
        online orders due to a major incident at our Castle 
        Donington fulfilment centre.                                 *    Risk-based BC assessments for stores, sourcing 
                                                                          offices and warehouses and validation of key supplier 
   *    The loss of other locations, such as the dedicated 
        warehouses that store beers, wines & spirits and 
        frozen goods in the UK, or support facilities (like          *    Insurance to cover remediation and business 
        for IT), could also impact us.                                    interruption. 
   *    Our dependency on major suppliers, service providers         *    Enhanced capabilities at Castle Donington to manage 
        and business partners means that significant                      technology failure. 
        incidents, long-term resilience issues and 
        recoverability for these third parties would impact 
        our own business.                                            *    Active engagement with the Retail BC Association and 
                                                                          government-led forums. 
   *    The risk stemming from the complexity and fragility 
        of global supply chains continues to be emphasised by        *    National Counter Terrorism Information exchange 
        the pandemic - notably, the initial impact from China             member. 
        and in turn from key sourcing locations like 
        Bangladesh and India where we have a high supply 
        dependency.                                                 Key developments 
                                                                     *    Expanded fulfilment capabilities through "buy online 
                                                                          ship from store" (BOSS) and the use of other 
  Oversight by Executive Committee,                                       warehouses in our network to meet online growth. 
  Crisis Management Team 
                                                                     *    Continued supporting suppliers through disruptions 
                                                                          caused by the pandemic and Brexit. 
                                                                     *    Colleagues globally continued to work from home 
                                                                          without the loss of any business-critical systems. 
                                                                     *    BC dashboard launched to shift our governance 
                                                                          programme to a live digital platform. 
  Failure to adequately prevent                                      *    Dedicated Information Security function, with 
  or respond to a data breach or                                          multi-disciplinary specialists, supported by a 
  cyber-attack could adversely                                            24-hour Security Operation Centre and mature Incident 
  impact our reputation, resulting                                        Management. 
  in significant fines, business 
  disruption, loss of information 
  for our customers, employees                                       *    Information Security Improvement programme delivery, 
  or business and/or loss of stakeholder                                  aligned with our digital and data protection 
  and customer confidence.                                                strategy. 
   *    The increasing sophistication and frequency of 
        cyber-attacks in the retail industry and within 
        supply chains highlight an escalating information            *    Information security obligations included in 
        security threat.                                                  appropriate third party contracts and a risk-based 
                                                                          assurance programme to monitor our exposure. 
   *    Our reliance on several third parties hosting 
        critical services and holding M&S and customer data          *    Information security and data protection policies in 
        also means weaknesses in their cyber and data                     place, with a mandatory training programme for 
        controls may impact us, and requires continued                    colleagues. 
        assessment and oversight. 
                                                                     *    Active detection of our threat environment, with 
   *    The profile of information technology will change as              continued improvement in controls, policies and 
        we develop our data and digital capabilities, expand              procedures. 
        online services, adopt cloud more widely, deliver 
        'intelligent' stores, and increase our reliance on 
        insightful data.                                             *    Embedded security throughout digital product 
                                                                          lifecycle and operations model. 
   *    Longer-term changes stemming from the pandemic such 
        as the increase in customers using e-commerce, the           *    Focused security assurance, security architecture and 
        growing number of digital and mobile shopping                     security hygiene around significant change 
        channels and changes in the pattern of office/home                activities. 
        working, all impact the overall risk. 
                                                                     *    Network of Data Protection and Security Compliance 
  Oversight by Executive Committee                                        Managers in priority business areas. 
                                                                    Key developments 
                                                                     *    Prioritised investment to improve our ability to 
                                                                          detect and respond to the increase in breaches during 
                                                                          the pandemic. 
                                                                     *    Completion of two independent cyber security reviews. 
                                                                     *    Formal review of security controls in international 
                                                                     *    Targeted information security and Cyber Resilience 
                                                                          review of key suppliers. 
 Corporate compliance and responsibility 
  Failure to deliver against our                                     *    Code of Conduct in place and underpinned by policies 
  legal and regulatory obligations,                                       and procedures in core areas of regulation and 
  as well as responsibility commitments                                   responsibility, including human rights, modern 
  would undermine our reputation                                          slavery, anti-bribery and corruption, health and 
  as a responsible retailer, may                                          safety, food safety, national minimum wage, equal pay, 
  result in legal exposure or regulatory                                  cyber, data security and privacy, and financial 
  sanctions, and could negatively                                         services and consumer credit regulations. 
  impact our ability to operate 
  and/or remain relevant to our 
  customers.                                                         *    Business-wide mandatory training programme for 
   *    The increasingly broad and stringent legal and                    higher-risk regulatory areas, like health and safety, 
        regulatory framework for retailers creates pressure               anti-bribery and corruption, data privacy, and 
        on business performance and market sentiment                      information security. 
        requiring continual improvements in how we operate to 
        maintain compliance. 
                                                                     *    Established in-house regulatory legal team in place, 
                                                                          including specialist solicitors, which conducts 
   *    New and evolving regulatory requirements needing                  horizon scanning on key regulatory and legislative 
        focus and appropriate capabilities to comply with                 changes. 
        including mandatory Task Force on Climate-related 
        Financial Disclosures ("TCFD") recommendations, 
        plastics recycling targets, new restrictions on the          *    Issue leaders embedded in the business to drive 
        promotion of foods high in fat, sugar and salt and                compliance in key risk areas, e.g. GSCOP (Groceries 
        the proposed EU Directive on Corporate Due Diligence              Supply Code of Practice) and ethical sourcing. 
        and Accountability that envisages mandating due 
        diligence of key issues within end-to-end business 
        supply chains.                                               *    Continued proactive engagement with regulators, 
                                                                          legislators, trade bodies and policy makers. 
   *    Non-compliance may result in fines, criminal 
        prosecution for M&S or colleagues, litigation,               *    Maintained monitoring and regulatory reporting 
        additional investment to rectify breaches, disruption             commitments on environmental and social issues. 
        or cessation of business activity, as well as 
        impacting our reputation. 
                                                                     *    Continued operating auditing and monitoring systems. 
  Oversight by Executive Committee, 
  Fire, Health & Safety Committee,                                   *    Customer feedback and public sentiment on regulatory 
  Consumer Brand Protection Committee,                                    compliance is monitored, including social media 
  Bank and Services Compliance                                            trends. 
  Monitoring Committee 
                                                                    Key developments 
                                                                     *    First cycle of reporting Code of Conduct compliance 
                                                                          to the Audit Committee. 
                                                                     *    Continued to manage compliance with evolving 
                                                                          government guidelines in relation to Covid-19. 
                                                                     *    Established remote audit programmes for owned and 
                                                                          third-party operations during the lockdowns globally. 

The risks listed do not comprise all those associated with Marks & Spencer and are not presented in any order of priority. In addition to the risks disclosed, a wide range of lesser impacting risks and uncertainties that Marks & Spencer is exposed to, or could be exposed to in the near future, are actively monitored and managed. These less material risks are kept in view in case their likelihood or impact should show signs of increasing.

Further information on the financial risks we face and how they are managed is provided on pages 164 to 175.

Directors' Responsibility Statement

The 2021 Annual Report contains the following statements regarding responsibility for the financial statements in compliance with DTR 4.1.12. Responsibility is for the full Annual Report and Financial Statements 2021 and not the condensed statements required to be set out in the Annual Financial Report announcement.

The directors are responsible for preparing the Annual Report, the Remuneration Report and Policy 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 accounting standards in conformity with the requirements of the Companies Act 2006 and International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group and the Company for that period.

In preparing these 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 IFRS (as adopted by the EU) have been followed, subject to any material departures disclosed and explained in the financial statements.

- Prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business.

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. They are also responsible for safeguarding the assets of the Group and 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 Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Each of the current directors, whose names and functions are listed on pages 62 and 63, confirms that, to the best of their knowledge:

- The Group financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole.

- The Management Report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

- The Annual Report, taken as a whole, is fair, balanced and understandable, and provides the necessary information for shareholders to assess the Group's position, performance, business model and strategy.

The Directors of Marks and Spencer Group plc are listed in the Group's 2021 Annual Report, and on the Group's website: corporate.marksandspencer.com.

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(END) Dow Jones Newswires

June 02, 2021 05:00 ET (09:00 GMT)

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