COMPANY MEETING

MARKS AND SPENCER LIMITED

MR. SIMON MARKS' REVIEW a. fourteenth annual general meeting of Marks and Spencer, Limited, as held on May 21st in London. Mr. Simon Marks (chairman managing director) presided.

The chairman, in the course of his speech, said: One of your directors, the Rt. Hon. L. S. Amery, P.C., M.P., has had the signal honour to be invited to join Mr. Churchill's Cabinet as Secretary of State for India. His acceptance of Cabinet office involves his resignation from the board. We regret the loss of his collaboration, which has been much valued by his colleagues, and we wish him every success in the great task which he has undertaken.

In November last the board appointed as a director Mr. J. Edward Sieff, who has occupied a responsible position with the company for a number of years. This appointment will prove of advantage to the company.

GOVERNMENT LIMITATION OF DIVIDENDS As you are all aware, the Chancellor of the Exchequer introduced in the Budget certain limitations upon the amount which companies will during the war be entitled to distribute by way of dividend on ordinary share capital. The effect of these proposals in regard to this company has only recently been clarified. It has therefore become necessary, as already announced in the public Press, for the board to modify its original recommendation in relation to the final dividend.

These proposals restrict the total dividend we are permitted to pay on our present issued ordinary and "A" ordinary capital to an amount equivalent to 421 per cent. on the capital as it stood on March 31st, 1939, which we adopt as our standard year. The total distribution your board therefore propose for the year is 384 per cent., or Is. IId. per share. We have paid an interim dividend of 15 per cent., or 9d. per share, leaving 231 per cent., or is. 2d. per share, to be distributed as the final dividend. This will absorb gross a sum of £493,322 14s. 6d., instead of the figure of £581,416 Is. 4d. referred to in the directors' report.

ALLOCATION OF PROFITS The profit for the past year amounted to £2,379,000. There has to be deducted on account of Income Tax and E.P.T., a total of £1,166,000, leaving a balance of £1,213,00o. Adding the balance brought forward from last year of £98,000 makes a total of £1,311,000.

After the payment of dividends on preference shares and the interim dividend on the ordinary and " A" ordinary shares there is left a balance of £889,000. In lieu of the recommendations in their printed report, the directors now recommend the following appropriations : - Staff benevolent and pensions fund ... ... £25,000 Debenture redemption fund ...

13,000 Final dividend on the ordinary and " A "

ordinary shares ... ••• • -•

£491000

Transfer to Income Tax account -•• •••

£33,000

The carrying forward of

£325,000 RESERVES We have built up a general reserve of £2,150,000, freehold proper- ties depreciation reserve of £376,802, whilst the properties contingency reserve stands at £238,375. We do not propose, this year, to add to these reserves.

We have continued the same generous scale of depreciation and repairs to properties, which this year absorbs £481,2o3, as against £431,045 last year, an increase of £5o,00o charged to the accounts. In addition, we have written off the whole of the capital cost of air raid shelter work under the Civil Defence Act, which amounted to a net figure of £86,000 after deduction of the Government grant.

DEPRECIATION AND REPAIRS TO PROPERTIES Depreciation and repairs to properties this year absorb £481,203, is against £431,045. We have written off the whole of the capital cost of air raid shelters, amounting to a net figure of £86,000.

BALANCE SHEET

Trade creditors have risen to £648,000, against £4733000, due to the stock-in-trade we are carrying, which amounts to £2,234,000, an increase on last year of £591,000.

Cash in hands stands at £i,76o,00o, compared with £935,000 a year ago.

SURVEY OF PAST YEAR'S CONDITIONS

The twelve months which we are surveying were throughout exceptional. The first five were heavy with the apprehension of war ; the last seven were wholly under the domination of war. War tarust upon us a host of new problems and difficulties. There was a shift of population owing to evacuation ; there was an enforced il-.ange in shopping hours and habits owing to the black-out ; there

ere heavy calls on our personnel for national service ; there were stresses and strains in the system of production and supply ; there were novel problems in merchandising ; and complicated adjustments of price. These inevitable incidents of the wand crisis te!.ted our organisation, our suppliers, and our customers.

We are indeed indebted to our suppIers for their most helpful and spontaneous co-operation, particularly curing the past seven months, when, in spite of the many difficulties and uncertainties which con- fronted them, they rose to the new situation in a satisfactory manner.

Dula -.it- MADE G :ions During the past ten years between 90 per cent. and 94 pci cent. of our supplies were drawn from British and Empire sources. •roday that percentage has risen to nearly too. That policy placed us in a favourable position in regard to supplies, and made us independent, for the most part, of imports from abroad, so that at the outbreak of war and in the following months we encountered less difficulty than we might have expected in obtaining the greater part of the merchandise w needed.

SUPPLIES Our business calls for large-scale purchases. In regard to textiles, which constitute some 6o per cent. of our volume, our main prob'ems were to ensure an even flow of manufactured goods in adequate quantities, of a standard quality and at the lowest prices. To ..chieve these objectives we planned, in conjunction with some of the fore- most produces and processers of the basic materials, large-scale purchases of their products, to be delivered in accordance with a budget of estimated needs. By this means of centralised buying, with and on behalf of cur manufacturers, they were assured of the proper quantities of raw materials they needed at the right time ; and we were able to regulate the flow of goods into our stores in accordance with the volume of sales.

As our business ranges over many departments other than textiles we are developing those sections which can increasingly satisfy our customers' needs. During the last few years we have given special attention to the development of our food departments. The large expansion of volume of sales of food-stuffs, particularly in the war months, has proved that the public welcomes this development, and has confidence in our quality and value. It is interesting to observe that our food departments now constitute more than 25 per cent. of our total business.

There is little doubt that, in common with all other traders, many difficult problems of supply will await us in the future. You may rest assured that your board will do what they can within the limits imposed by natiohal necessity to meet those difficulties.

STAFF

Our staff have responded with loyalty and devotion to additional tasks and responsibilities. I would like to express our thanks to them for the manner in which they have discharged their duty. Out of a total of 2,000 men, 55o are serving in H.M. Forces, and a further goo have registered, or will register, before the end of the month. We recognise that with the return of peace it will be our duty, as it is our desire, to take back into our service those who have joined the Forces. We wish them all good fortune and a safe return. We are supple- menting the pay of our men serving in the Forces to enable them to make provision for their dependants.

WELFARE.

Our welfare services continue to expand, and their success is proved by the smallness of our labour turnover. Over 5,000 members of our staff have been trained in the Civil Defence Services.

A National Savings Group has been formed, through which our staff is subscribing over £1,000 per week, and they are giving generous support to the Red Cross Penny-a-Week Fund.

DIVIDENDS

I will now propose that the accounts to March 31st, 1940, as submitted, and the directors' report as amended, be received and adopted, and that the cumulative dividend of to per cent. per annum, less tax, for the year to March 31st, 1940, already paid to the to per cent. preference shareholders, be and is hereby confirmed ; that the cumulative dividend of 7 per cent, per annum, less tax, for the year to December 3tst, 1939, and paid to the 7 per cent, preference share- holders, be and is hereby confirmed ; that the interim dividend of 15 per cent., less tax, paid on January 1st, 1940, to ordinary and "A" ordinary shareholders, be confirmed ; and that a final dividend at the rate of 231 per cent., less tax, making 381 per cent, on the ordinary and "A" ordinary shares for the year ended March 31st, 194o, be declared and paid by warrant to be posted on June 18th to those members whose names appeared in the register of members on May 6th, 1940. (Applause.)

I will now ask Mr. Sieff to second the resolution.

Mr. I. M. Sieff: I have much pleasure in seconding the resolution.

The Chairman: Before putting the resolution to the meeting, are there any questions? There being no questions I will formally put the resolution.

The resolution was carried unanimously.

Resolutions were passed re-electing Mr. Harry Sacher and Mr.

J. Edward Sieff, the directors who retired under the provisions of the Articles of Association, also reappointing Messrs. Delonte, Plender, Griffiths & Co. as auditors for the ensuing year at a fee for such audit of 1,250 guineas.